California Governor Expands Workers' Compensation to Include COVID-19

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On May 6, 2020, California Governor Gavin Newsom announced that workers who contract COVID-19 while on the job may be eligible to receive workers’ compensation benefits. Executive Order N-62-20 creates a rebuttable presumption for California employees who access workers’ compensation benefits and work outside of their homes during the stay at home order. The presumption is currently set to expire 60 days after the issuance of the executive order.

Rebuttable presumption is retroactive

The executive order applies retroactively to employees who test positive for COVID-19 and have worked outside the home from March 19, 2020, until July 5, 2020. Thus, those eligible will have the rebuttable presumption if they tested positive for COVID-19 or were diagnosed with “[a]ny COVID-19 related illness.” The diagnosis must be confirmed by a positive test within 14 days of performing the labor or service at the place of work after the stay at home order was issued on March 19.

The executive order applies to all California employees working outside of their home, regardless of whether they were working in “essential” industries or providing “essential” services. However, the presumption does not apply if an employee’s home or residence is his or her “place of employment.”

Rebutting the presumption

Also, California employers may attempt to rebut the presumption. Governor Newsom said when he announced this expansion of existing law that employers would be able to rebut the presumption under strict criteria, but did not give further details. For now, the only guidance comes from the California Department of Industrial Relations’ FAQ website, which states that “the employer bears the burden of proving that the injury or illness did not occur at work.”

Timeframe on diagnosis

The Executive Order reduces the timeframe for insurers to make a compensability decision from the general 90 days to 30 days. However, the order permits denials after this period based on new information. According to the California Department of Industrial Relations, the diagnosis may be made by either a viral test for current infection or with an antibody test to determine if the individual previously had the infection.

Paid Sick Leave

Under the Executive Order, an employee must use all available paid sick leave that the employee received specifically for COVID-19, if any, before any temporary disability payments are payable. The executive order also eliminated any waiting period for COVID-19 temporary disability benefits.

Further Considerations

In light of this expansion of law, California employers may want to review their workers’ compensation policies and claims management protocols. Employers may also want to stay up-to-date on state and federal health mandates and guidance for preventing and minimizing the risk of COVID-19 exposure in the workplace, including CDC and OSHA guidance. Additionally, employers with employees working from home may want to consider keeping them remote where possible to mitigate the risk of spreading COVID-19 at the workplace and the associated risk of workers’ compensation claims.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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