California Presumes Workers’ Comp Covers Employee COVID-19

ArentFox Schiff

Arent Fox

During the current COVID-19 pandemic, one question for employers has been whether employees who contract COVID-19 may be able to recover workers’ compensation benefits. In California, a new Executive Order by Governor Newsom significantly increases that likelihood by presuming that many employees’ COVID-19 infections resulted from work.

California requires that employers obtain workers’ compensation insurance for their employees, or qualify to self-insure. State law provides workers’ compensation benefits for injuries or illnesses that employees experience within the course and scope of employment. In California, workers’ compensation benefits serve as an employee’s exclusive remedy for work-related injuries or illnesses, with employees generally barred from suing the employer in court over those conditions. Ordinarily, in any case where causation may be disputed, the employee has the burden of establishing that an injury or illness stemmed from the employee’s work. Until now, the only exceptions have been a few situations involving particular occupations and illnesses – for example, law enforcement and firefighting personnel with a hernia, heart trouble, pneumonia, or tuberculosis – that the California Legislature determined should be presumed to have resulted from work.

Governor Newsom’s Executive Order N-62-20 broadly reverses the usual burden of proof with respect to COVID-19. Instead of an employee having to prove that he or she became infected with COVID-19 while working, the Executive Order creates a rebuttable presumption in many instances that an infection happened in the course of employment and thus is compensable through workers’ compensation benefits. The Governor’s order provides that the presumption “is disputable and may be controverted through other evidence, but unless controverted, the Workers’ Compensation Appeals Board is bound to find in accordance with it.” In other words, in cases meeting the criteria discussed below, an employee’s COVID-19 illness will be presumed to have resulted from work – unless the employer can prove otherwise.

Under the new Executive Order, “[a]ny COVID-19-related illness of an employee shall be presumed to arise out of and in the course of employment for purposes of awarding workers’ compensation benefits,” if the employee meets the following requirements. The employee must have tested positive for, or been diagnosed with, COVID-19 within 14 days “after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction.” That alleged date of infection must have been on or between March 19, 2020, and July 5, 2020. The latter date is 60 days after the date of the Executive Order, which provides that the new presumption shall apply only to alleged dates of injury through that date.

Importantly, the presumption does not apply to work at “the employee’s home or residence.” When a claim involves a COVID-19 diagnosis, the diagnosis must be from a physician with a license from the Medical Board of California, with that diagnosis confirmed by further testing within 30 days of the diagnosis date.

The Executive Order applies to all workers’ compensation insurance carriers writing policies in California and to all employers, including self-insured employers “and any other employer carrying its own risk.” It also is not limited only to particular fields of employees, such as health care employees or first responders. Employees are eligible for all types of workers’ compensation benefits, including medical treatment, hospitalization, disability benefits, and death benefits. Medical care under worker’s compensation comes without any deductibles, co-pays, or share of cost that an employee might otherwise have to pay.

The order requires employees with paid sick leave benefits “specifically available in response to COVID-19” to exhaust those benefits before receiving workers’ compensation temporary disability benefits. But, if an employee has no such paid sick leave, he or she is eligible for temporary disability benefits immediately “from the date of disability.” The order provides that “[i]n no event shall there be a waiting period for temporary disability benefits.”

Given the difficulty that often would apply in proving or disproving that a COVID-19 infection was or was not work-related, the reversal of the burden of proof is a most significant development. In addition to resolving many pending claims in favor of employees, this Executive Order likely will trigger a large number of workers’ compensation claims over COVID-19, with compensability now presumed. The result most likely will be an increase of billions of dollars in workers’ compensation costs, as COVID-19 costs and benefits get pushed into the workers’ compensation system.

Key Takeaways

Employers should provide a workers’ compensation claim form to any employee who requests one or raises the possibility of filing a claim with respect to COVID-19, or if the employer becomes aware that an employee’s COVID-19 infection may be work-related. If an employer files a claim, the employer should promptly respond and work with its insurer or third-party administrator. The employer should immediately provide any available information about non-work-related causation that might be used to overcome the new presumption. Otherwise, if a claim is “not rejected” within 30 days of filing, the illness further will be “presumed compensable, unless rebutted by evidence only discovered subsequent to the 30-day period.”

Written by:

ArentFox Schiff


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