California Governor Issues Executive Order Creating Rebuttable Presumption of Entitlement to Workers' Compensation Benefits for Employees Who Must Work Away from Home and Contract COVID-19

Alerts / May 8, 2020

On May 6, 2020, Gov. Gavin Newsom issued Executive Order N-62-20 to “reduce the spread of COVID-19 and otherwise mitigate the effects of COVID-19 among all Californians” and thereby promote public health and safety by providing workers’ compensation benefits related to COVID-19, when appropriate.

There are two primary parts to the Order. The first establishes a presumption that a COVID-19 related illness affecting an employee arises out of and in the course of employment for purposes of awarding workers’ compensation benefits provided the following conditions are met: (1) the employee tested positive for or was diagnosed with COVID-19 within 14 days after a day when the employee worked at the employer's workplace and at the employer’s direction; (2) the day on which the employee worked at the employer's workplace and at the employer’s direction was on or after March 19, 2020; (3) the workplace at which the work was performed was not the employee’s home or residence; (4) the COVID-19 positive diagnosis was done by a physician who holds a physician and surgeon license issued by the California Medical Board and that diagnosis is confirmed by further testing within 30 days of the date of the diagnosis; and (5) the date of injury was within 60 days following the date of the Order, or not later than July 5, 2020. The presumption, however, is deemed "disputable" and may be controverted; but if it is not controverted, the Workers Compensation Appeals Board must reach a determination in accordance with the presumption. Also, the Order provides that unless a claim for a COVID-19 related illness is rejected within 30 days of the date the claim was filed, the illness is deemed compensable unless rebutted with evidence discovered after the 30-day period. Further, the Order makes clear that an employee who experiences a COVID-19 related illness and meets the preceding conditions shall be eligible for all benefits available under the workers’ compensation laws, including full hospital, surgical, medical treatment, disability indemnity, and death benefits.

The second part of the Order addresses temporary disability benefits and declares that an employee is eligible under the Order for temporary disability benefits for COVID-19 illness provided he or she meets the conditions identified above, and must be certified, and recertified, for temporary disability within time periods specified in the Order. The Order also declares that when an employee has paid sick leave benefits specifically available in response to COVID-19, those benefits must be exhausted before any temporary disability benefits are payable.

Finally, the Order clarifies that it does not impact any workers’ compensation statute or regulation not in conflict with the Order or impair any other right or benefit to which an employee is otherwise entitled.

The Order may be viewed as disincentivizing employers to return their employees to their workplace, at least until July 6, 2020, in order to avoid the potential increased costs, or adverse impact on their workers' compensation rating and future rates, that may result from employee workers' compensation claims asserting the employee contracted COVID-19 at the workplace. Employers may also find it challenging to present evidence that could overcome the presumption that the employee contracted the illness at the employer's workplace; however, an employer who becomes aware of such evidence (such as knowledge that the employee resides with an individual who contracted COVID due to their employment or travel), should document and promptly provide information to their workers’ compensation insurance carrier or claims administrator.

For many employers, however, the higher potential costs they may face as a result of workers' compensation claims for COVID-19 illness will not be a determining factor in the decision of whether to return their employees to their workplace. For those employers who must operate or may choose to operate with employees physically present in the employer's workplace, they must remain vigilant in taking all reasonable precautions to keep their employees safe by following CDC guidance and that of other relevant authorities such as state and local health departments, including by providing employees with appropriate face coverings, handwashing stations or hand-sanitizer, adequate distance between employees and the disinfecting of commonly-touched surfaces on a daily basis (or more frequently when required). Doing so not only may help to keep employees healthy and available to continue working, it could decrease workers' compensation claims and related costs.

Authorship Credit: Eric Witt and Sabrina Shadi

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