New Law Extends Workers' Compensation Benefits To COVID-19 Victims

Ervin Cohen & Jessup LLP

Ervin Cohen & Jessup LLP

Governor Newsom has signed Senate Bill 1159, a law that effectively codifies and expands his earlier Executive Order N-62-20, which had expired on July 5, 2020. Effective immediately, this bill defines “injury” for an employee to include illness or death resulting from COVID-19 under specified circumstances. In particular, the employee must have tested positive for or was diagnosed with COVID-19 within 14 days after the employee performed services at the employee’s place of employment and the work must have been performed on or after March 19, 2020, and on or before July 5, 2020. The date of injury is the last date the employee performed labor or services at the employee’s place of employment, which cannot be the employee’s home, unless the employee is providing health care services at his or her home. SB 1159 further specifies that where a diagnosis of COVID-19 is relied upon, the diagnosis must have been done by a licensed physician and surgeon, or state licensed physician assistant or nurse practitioner acting under the review or supervision of a physician and surgeon, and the diagnosis must have been confirmed by a COVID-19 test within 30 days of the date of the diagnosis.

Similar provisions are included for police officers, firefighters, healthcare workers and other specified employees that provide workers compensation benefits for COVID-19 injuries when there has been a positive COVID-19 test within 14 days of working at a worksite on or after July 6, 2020.  In addition, SB 1159 also allows for a presumption of injury for all employees who test positive for COVID-19 within 14 days of working at a worksite on or after July 6, 2020 where there has been an outbreak of the virus. An “outbreak” is defined by the number of employees who test positive for COVID-19 at a specific place of employment with 14 calendar days as follows: if the employer has 100 employees or fewer, four employees; and if the employer has more than 100 employees, 4 percent of the number of employees.  In addition, an outbreak is deemed to exist if a specific place of employment is ordered to close by a local public health department, the State Department of Public Health, the Division of Occupational Safety and Health or a school superintendent due to a risk of infection with COVID-19. 

The bill creates a presumption that the COVID-19 injury arose out of employment and is compensable under the workers’ compensation insurance scheme, including full hospital, surgical, medical treatment, disability indemnity and death benefits. The presumption is disputable and may be controverted with “other evidence”, a term that is defined in other sections of SB 1159 as “evidence of measures in place to reduce potential transmission of COVID-19 in the employee’s place of employment and evidence of an employee’s nonoccupational risks of COVID-19 infection”. For healthcare employees, the presumption does not apply if the employer can establish that the employee did not have contact with a health facility patient within the last 14 days who tested positive for COVID-19. The bill would also make a claim relating to a COVID-19 illness presumptively compensable after 30 days or 45 days, rather than 90 days.

SB 1159 requires the Commission on Health and Safety and Workers’ Compensation to conduct a study of the impact that COVID-19 claims have on the workers’ compensation system. A preliminary report must be delivered to the Legislature and the Governor by December 31, 2021, and a final report shall be delivered to the Legislature and the Governor by no later than April 30, 2022.

SB 1159 will expire on January 1, 2023.

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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