On May 6, 2020, Governor Newsom enacted executive order N-62-20 (the Order), substantially expanding the availability of workers compensation to employees that contract COVID-19.[1]

Under California’s existing workers’ compensation system, for an injury to be covered by workers’ compensation, the death, illness or injury must “arise out of employment” or occur “during the course of employment.”

However, the Order mandates that where an employee worked at the employer’s place of business within 14 days of a positive test or diagnosis, there is a presumption that the employee contracted COVID-19 at work, and as such, workers’ compensation benefits must be approved for the employee. While an employer can rebut the claim, the presumption puts the burden on employers to provide evidence that the worker contracted COVID-19 elsewhere.

The Order applies if within 14 days of any day the employee performed work for the employer at the employer’s place of employment (other than the employee’s home or residence), the employee:

• tested positive for COVID-19; or
• received a diagnosis of COVID-19 by a licensed physician and the diagnosis is confirmed within 30 days of the date of diagnosis.

The Order retroactively applies beginning March 19, 2020 and covers claims filed for injuries occurring 60 days from its enactment (until July 5, 2020). Employees eligible for workers compensation under the Order are eligible for all workers’ compensation benefits including “full hospital, surgical, medical treatment, disability indemnity, and death benefits.” Employees are required to exhaust all COVID-specific sick leave benefits prior to workers’ compensation benefits becoming due and payable.

Impact on businesses and employers:

As businesses prepare to reopen, employers should take into account this expansion and relaxation of workers’ compensation benefits as it relates to COVID-19. Specifically, in light of this newly-established presumption that an employee who contracts COVID-19 is presumed to have done so at work, employers should be prepared for the likelihood of increased workers’ compensation claims, and a corresponding rise in workers’ compensation premiums, when formulating its reopening plans.

[1] Similar legislation has also been passed in Illinois, where several groups are suing to prevent it from taking effect.

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