Workers’ Compensation Liability Is Catching In California

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Seyfarth Synopsis: Senate Bill 1159 was signed into law by Governor Newsom on September 17, 2020, and went into effect immediately. Under the new law, if employees test positive for COVID-19 under specific circumstances, there is a rebuttable presumption that their exposure occurred at the workplace. Unless rebutted, this presumption creates a compensable injury for purposes of qualifying for workers’ compensation benefits. SB 1159 also creates reporting requirements for employers through January 1, 2023.

Who Is Eligible For The New Workers’ Compensation Presumption?

As we previously reported, Executive Order N-62-20 created a rebuttable presumption surrounding certain COVID-19 workplace exposures. SB 1159 codifies Executive Order N-62-20 in new Labor Code section 3212.86. Under this section, there is now a statutory rebuttable presumption of industrial exposure (i.e., the assumption that someone got sick at work) for workers who tested positive or were diagnosed with COVID-19 within 14 days after performing services at their place of employment at their employer’s direction between March 19, 2020, and July 5, 2020. To be entitled to the presumption, an employee diagnosed with COVID-19 must have had the diagnosis confirmed by testing within 30 days of the diagnosis.

Since Governor Newsom’s Executive Order sunset on July 5, 2020, employers have been left in the dark as to whether and how its requirements might be extended. Now, the answer is clear—SB 1159 created a new framework for this rebuttable presumption that went into effect immediately on September 17, 2020.

Under the new Labor Code section 3212.88, there is a rebuttable presumption of workers’ compensation coverage when an employee tests positive for COVID-19 within 14 days after performing services at their place of employment at the employer’s direction if the positive test occurs on or after July 6, 2020, and the positive test occurred during a period of an “outbreak at the workplace.

However, there is a slightly different avenue for people working in healthcare or in public safety positions. For these employees to qualify for the presumption, they must only test positive for COVID-19 within 14 days of performing services at their place of employment on or after July 6, 2020 (regardless of whether there has been an “outbreak”).

Also note that across the board, employees must exhaust all available supplemental COVID-19 sick leave pay, such as the new CA COVID supplemental sick pay, before receiving temporary disability benefits from the worker’s compensation carrier.

What Does It Mean To Have An “Outbreak”?

For purposes of this new law, an “outbreak” is when, within 14 days, any of the following occurs at a place of employment:

  1. The employer has 100 employees or fewer at a specific place of employment, and four employees test positive for COVID-19.
  2. The employer has more than 100 employees at a specific place of employment, and 4% of the workforce at that place test positive for COVID-19.
  3. A specific place of employment is ordered to closed because of COVID-19.

(Note that this definition of “outbreak” is specific to this workers’ compensation presumption. The California Department of Health and other state and local laws use different definitions of “outbreak” for different purposes.)

But I Have A Huge Facility—What Does “Specific Place Of Employment” Mean?

Many employers have sites that cover several acres, encompassing multiple buildings, fields, and processing floors and departments. In these instances, the workers’ compensation liability presumption might not apply if someone works in a different or distinct part of a facility from any other employees who may have contracted COVID-19, because it may not be considered the “specific place of employment” under the new statute.

For purposes of the new law, a “specific place of employment” is defined as “the building, store, facility, or agricultural field where an employee performs work at the employer’s direction.” The employee’s home or residence is excluded unless the employee provides home health care services to another individual at the employee’s home or residence. (And, if that is the case, the home office must be the exclusive location where the employee performs their work.)

So, if an employer has one employee test positive in Building A, and another test positive in Building B on the opposite side of campus (and they don’t otherwise share facilities, like a break room or restroom), the employer may have a good argument the presumption does not apply.

If My Employee Tests Positive For COVID-19, What Do I Have To Do?

In addition to other requirements that may be in place under state or local laws, SB 1159 creates employer reporting requirements. An employer that “knows or reasonably should know” that an employee has tested positive for COVID-19 must report to the workers’ claims administrator in writing—via email or fax—all of the following within three business days:

  1. An employee has tested positive. But the employer must not reveal any personally identifiable information about the employee unless the employee has asserted the infection is work-related or has filed a claim form pursuant to Section 5401.
  2. The date that the employee tested positive, which is the date the specimen was collected for testing.
  3. The specific address of the specific place of employment during the 14-day period preceding the date of the positive test.
  4. The highest number of employees who reported to work at the specific place of employment during the 45-day period preceding the last day the employee worked at each specific place of employment.”

Employers also must retroactively report to their carriers any employees who tested positive on or after July 6, 2020, and prior to September 17, 2020.

Following these reporting requirements is of paramount importance—employers that intentionally submit false or misleading information or fail to submit information when reporting can trigger civil penalties in amounts up to $10,000.

Workplace Solutions

The laws surrounding workers’ compensation and COVID-19 infections have been changing rapidly.

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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