Alert: New Law Creates COVID-19 Workers’ Comp Framework

Governor Newsom has signed legislation that creates a new framework for COVID-19-related workers’ compensation claims.

SB 1159, which takes effect immediately, partly replaces an executive order that Newsom made on March 18 and which expired on July 5. That order required all employees working outside the home who contracted COVID-19 be eligible for workers’ compensation benefits.

The new law also creates a rebuttable presumption that all cases of COVID-19 among front-line workers be considered work-related for workers’ compensation purposes. Finally, the law creates a rebuttable presumption that a workers’ COVID-19 diagnosis is work-related when there was an outbreak in their workplace during the prior 14 days.

The new law is retroactive to July 6, the day after Newsom’s executive order expired, and is set to expire Jan. 1, 2023.

SB 1159’s presumption that an illness or death resulting from COVID-19 has arisen out of and in the course and scope of employment, can be disputed by the employer if they have:

  • Proof of measures they put in place to reduce the potential transmission of COVID-19 in the workplace,
  • Evidence of the employee’s non-occupational risks of contracting COVID-19,
  • Proof of statements made by the employee, or
  • Any other evidence normally used to dispute a work-related injury.

Employers with fewer than five employees are exempt under the statute.

The law also requires new reporting provisions to allow workers’ compensation claims adjusters to track cases to know when the presumption applies and requires a faster review of claims to accept or deny compensability than is typical.

SB 1159’s three parts

The first part codifies Newsom’s prior executive order that provided a rebuttable presumption of work-relatedness to all employees working outside of the home that contracted COVID-19.

The second provides a rebuttable presumption that front-line workers (like firefighters, law enforcement officers, health care workers, home care workers, and IHSS workers) who contract COVID-19, contracted it in the workplace.

The third creates a rebuttable presumption that worker’s COVID-19 diagnosis is work-related within 14 days of a company outbreak. Under SB 1159, an outbreak is defined as when four employees test positive at a specific place of employment with 100 or fewer employees and, for larger places of employment, when 4% of the employees test positive.

It’s also deemed a workplace outbreak if the employer had to shut down due to a coronavirus outbreak.

Reporting requirements

Under the new law, when an employer “knows or reasonably should know that an employee has tested positive for COVID-19,” they must report to the insurer the following information within three business days, via e-mail or fax:

  • The date the employee tested positive.
  • The address or addresses of the employee’s specific place(s) of employment during the 14-day period preceding the date of their positive test.
  • The highest number of employees who reported to work at the employee’s specific place of employment in the 45-day period preceding the last day the employee worked at each specific place of employment.

The Rossi Law Group has the following recommendations for employers in California:

  • Keep track of all locations each employee works at, the number of employees on each day at each location, as well as a log of those that test positive (including the date the specimen was collected).
  • If you are aware of any staff who have tested positive between July 6 and Sept. 17, you have 30 days after Sept. 17 to report the positive test to the administrator and include the same information as in the bullet points above.
  • You must also report to the administrator positive COVID-19 results for employees that are not filing claims. In that case, you must omit personal identifying information of the employee.
  • Provide any factual information to the administrator that could help rebut any claim of work-relatedness.

The law also has some teeth: Anyone who submits false or misleading information shall be subjected to a civil fine up to $10,000.

One last thing…

The governor also signed into law AB 685, which requires employers to report an outbreak to local public health officials. Employers must also report known cases to employees who may have been exposed to COVID-19 within one business day.

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