The Story Behind Increasing Commercial Auto Insurance Rates

auto insurance rates

Commercial auto insurance rates have been on the rise since 2011, increasing often by more than 10% a year as accidents and claims costs have soared.

The trucking industry has been the hardest hit by the steep increases, and there are a number of factors contributing to the rate hikes, according to a recent study by Risk Placement Services. One of the biggest factors is that insurers have had trouble keeping up with increasing accidents and spiraling claims costs, leaving them in the red for most of the past decade.

Huge court verdicts, higher maintenance expenses, reduced freight demand, and poor infrastructure, compounded by an aging workforce and a driver shortage, have all resulted in higher insurance rates, according to the study. Here’s what’s in play:

Good drivers are aging and there are fewer of themHalf of all long-haul truck drivers are over 46 years old. The minimum age for obtaining an interstate commercial driver’s license is 21, and many insurers prefer drivers no younger than 24.

As the industry rushes to hire more drivers, who are often in their 20s, they have to contend with having more inexperienced drivers who are more likely to be involved in accidents.

Jury verdicts are huge, and growingThe number of transportation industry damage awards exceeding $10 million for injuries and property damage has been increasing since 2012. Claims for bodily injuries can sometimes take years to resolve, causing insurers to initially underestimate the eventual loss amounts.

High maintenance costsWhile advanced technology has made trucks safer, that tech is expensive to maintain, repair, or replace. The equipment is costly and mechanics with the technical skills to fix it can be hard to find.

However, poor maintenance makes accidents more likely and insurance more expensive.

Distracted drivingTruck drivers and those they’re sharing the road with continue looking at their phones, eating, looking at their navigation systems, and taking their eyes off the road with increasing regularity. This increases the frequency of accidents.

Crumbling infrastructureAmerica’s crumbling roads and bridges are increasing wear and tear on the trucks traveling on them, making accidents more likely.

Expensive cargo — The goods inside the trucks are also requiring larger amounts of insurance at higher rates. For example, shipments of electronics and medicine are magnets for thieves. And if a flatbed trailer carrying expensive machinery flips over, the cargo will likely be damaged beyond repair and the insurer has to pay to replace it.

Products like food, flowers, and some medicines must be refrigerated; if the driver makes a mistake, the entire lot may be ruined.

The takeaway

Because of these high costs, some companies are opting to forgo buying essential coverages such as excess liability (which can protect against those $10 million lawsuits) and cyber insurance. Modern vehicles are increasingly automated and are vulnerable to cybercriminals.

The Risk Placement Services report concludes that businesses with larger vehicle fleets, someone responsible for the safety and that hire quality drivers and practice regular maintenance, will find insurance more affordable and readily available.

For the rest, the rate increases will likely continue.

What Companies are Doing for Holiday Parties During Pandemic

Christmas party Pandemic

One of the hallmarks of the holiday season is the company Christmas party, but with the COVID-19 pandemic in hyperdrive, many companies are rethinking their plans.

A number of businesses have cancelled their parties altogether, but other managers feel that in light of this very difficult year for many people, a company Christmas party might be just what employees need to lift their spirits for a while.

On the other hand, with the Centers for Disease Control even recommending that people not get together for family celebrations like Thanksgiving and Christmas, an office party would completely go against those recommendations.

Also, you could face liability and potential legal action if you do hold an in-person party and members of your staff come down with COVID-19.

Instead of in-person events, many companies are planning Zoom teleconference “parties” and they are asking their workers to join in by getting dressed up and bringing their favorite beverages and snacks to the online do.

According to Challenger, Gray & Christmas, Inc., 55% of human resources professionals surveyed said their company is not having a holiday celebration this year, which is the highest number since the consulting firm started surveying employers about their holiday plans.

Here’s what the survey found:

  • 45% of HR professionals said their company had cancelled holiday party plans due to the pandemic.
  • 3% said cost-cutting was the reason for cancelling their party.
  • 4% said they never host holiday parties.
  • 23% said they were unsure of holiday plans and were awaiting state and local guidance before deciding.

“It is no surprise that many companies are forgoing the holiday party this year,” said Andrew Challenger, senior vice president of Challenger, Gray & Christmas. “It’s difficult to celebrate and implement all the precautions needed to keep everyone safe. The last thing any employer wants is an outbreak due to their year-end party.”

Additionally, the survey found that 55% of respondents continue keeping most of their staff working from home and another 5.5% have all of their employees telecommuting.

When asked when employers plan to bring all workers back to the office, 44% were unsure or did not answer. Another 21% planned to bring all workers back in early 2021, and 8% will wait for a vaccine.

Precautions for an in-person event

The companies that said they would be holding in-person holiday events plan to take steps to reduce the chances of COVID-19 spreading among their workers by taking the following precautions:

  • Requiring social distancing while at the party.
  • Requiring all attendees to wear masks.
  • Providing hand sanitizers, alcohol wipes and face masks.
  • Taking temperatures of all workers when they arrive.
  • Limiting the number of employees at the party.
  • Holding the event in a large area where employees can socially distance from one another (venues should be well-ventilated with several doors and windows).
  • Keeping hand sanitizer in various locations around the office.
  • Hosting outdoor events.
  • Regularly checking the CDC’s website to be up to date on precautions and advice.
  • Keeping up on state and local guidelines to get more accurate information on current case levels in their area.

Other options

Some companies that plan to skip festivities this year have come up with other ways to celebrate and reward their employees during the holidays, including:

  • Organizing virtual gift exchanges or virtual Secret Santa exchanges.
  • Giving away cooking classes or gifts like Apple Airpods or other small electronics (the cost per person will often be less than if you held an actual party and paid for the facility, catering, decorations, entertainment and drinks).
  • Assembling care packages with baked goods or gift certificates and delivering them to employees’ doorsteps.

 

Daunting Emergency COVID-19 Workplace Safety Rules on Tap

Workplace safety

The Cal/OSHA Standards Board is set to vote on new emergency regulations that will impose strict rules on employers to implement safeguards in order to reduce the risk of COVID-19 spreading in the workplace.

The board on Nov. 19 will vote on the sweeping proposal that extends the reach of protections to employer-provided housing and transportation, as well as imposing new reporting requirements on employers who have workers that contract the coronavirus.

The board is expected to approve the new regulations and they could take effect Nov. 30. Employers will therefore need to ramp up quickly to comply with the new rules.

Here are the highlights of the emergency regulations:

  • Physical distancing and mask-wearing are required unless it is not possible to wear masks on the job. If physical distancing is not possible in the workplace, the employer would have to explain why not.
  • Employers must provide face coverings and ensure they are worn by employees over the nose and mouth.
  • At fixed work locations where it is not possible to maintain physical distancing, the employer shall install cleanable partitions that effectively reduce aerosol transmission between employees.
  • Employers must implement cleaning and disinfecting procedures for frequently touched surfaces and objects, such as doorknobs, elevator buttons, equipment, tools, handrails, handles, controls, bathroom surfaces, and steering wheels.
  • Employers will be required to have a written COVID-19 prevention program. Cal/OSHA will allow the program to be incorporated into an organization’s existing injury and illness prevention plan or be stand-alone.
  • Employers must identify and evaluate COVID-19 hazards with participation from employees, and then correct those hazards.
  • Employers must investigate coronavirus cases among their employees. If they discover one of their staff has contracted COVID-19, they will be required to notify all employees or their authorized representatives, independent contractors, or employees at a worksite who might have been exposed, within one day. Workers who may have been exposed must be offered COVID-19 testing at no cost.
  • Employers must report coronavirus cases in their workplaces to local health authorities.
  • Employers must maintain medical records related to COVID-19 and provide those records to the local health department, the California Department of Public Health, Cal/OSHA, and the National Institute for Occupational Safety and Health (upon request).
  • Employers must implement a system of record-keeping to track all COVID-19 cases in the workplace.
  • Employees with COVID-19 symptoms may not return to work until at least 10 days since symptoms first appeared, and not until after 24 hours have passed since the employee had a fever of 100.4 or higher and after all symptoms have passed.

There are even rules for disinfecting and cleaning employee housing and transportation if the company provides them.

The regs also include provisions that are beyond the scope of workplace safety regulations, such as requiring employers to maintain employees’ earnings, seniority and benefits when they are off work because of COVID-19.

Key takeaways

You can find the full proposed emergency regulation here.

With this regulation expected to be approved, California employers may only have until Nov. 30 until the new rules take effect. During that time, companies should:

  • Prepare for new record-keeping requirements,
  • Start writing their COVID-19 prevention programs,
  • Consider implementing testing protocols as per the regulations, and
  • Prepare policies and procedures for notifying affected staff and others of possible COVID-19 exposure.

California’s COVID-19 Tracking Requirement Challenges Employers

COVID-19 tracking

SB 1159, signed into law in September, requires that when a California employer “knows or reasonably should know” that an employee has tested positive for coronavirus, it must report that positive case to its workers’ compensation carrier within three business days.

There is a lot of ground to cover in these reports and the legislation was passed without much publicity, so many employers may not even know about their obligations. And that could cost them: the fine for non-compliance is $10,000 per incident.

The law goes further than merely reporting a positive case: The report must include a number of details that employment law experts say will place a significant reporting burden on employers:

  • The date the employee tested positive;
  • The address or addresses of the employee’s place or places of employment during the 14-day period preceding the positive test, and
  • The highest number of employees who reported to work in the 45 days preceding the last day the employee worked in the workplace.

The task will be made even more difficult if an employee works at multiple worksites, and an employer could have to spend a significant amount of time doing all that detective work.

Making the task even more difficult, California employers will have to go through the same process every time an employee catches COVID-19.

At its essence, the law creates a presumption that employees who suffer illness or death resulting from COVID-19 between July 6 this year and Jan. 1, 2023, contracted the virus at work, which makes them eligible for workers’ compensation benefits. If a worker dies, their dependents will be eligible for workers’ compensation death benefits that range from $250,000 to $320,000 depending on the number of dependents.

The presumption applies to all employees:

(1) who test positive during an outbreak at the employee’s specific place of employment; and (2) whose employer has five or more employees.

The term “injury” below includes illness or death resulting from COVID-19, and all of the following conditions must exist for the presumption to apply:

  • The employee tests positive for COVID-19 within 14 days after a day that they performed labor or services at their place of employment;
  • The date of injury shall be the last date the employee performed labor or services at the employee’s place of employment at the employer’s direction prior to the positive test.
  • The employee’s positive test occurred during a period of an outbreak at the employee’s specific place of employment.

What is an ‘outbreak’?

An “outbreak” exists if, within 14 calendar days, one of the following occurs at a specific place of employment:

  • If the employer has 100 employees or fewer at a specific place of employment, four employees test positive for COVID-19;
  • If the employer has more than 100 employees at a specific place of employment, 4% of the number of employees who reported to the specific place of employment test positive for COVID-19; or
  • 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 Takeaway: Be Prepared

The most important thing is that you are prepared for the paperwork and detective work you’ll have to engage in in case one of your workers’ contracts the coronavirus. You may want to put systems in place now so that gathering the information will be easier and you can set up an efficient system to get the information you’ll need in case of a COVID-19 infection at your workplace.

Don’t Get Caught without a Business Succession Plan

business succession plan

Many business owners may be good at running their companies, but the majority of them are failing to address essential long-term planning that is critical to sustaining their businesses.

The one area that the majority of business owners often neglect is planning for business continuity if they die or become disabled, according to the “MassMutual Business Owner Perspectives Study.”

While the question of your death or disablement is not one that’s fun to ponder, it makes good sense for business owners to put plans in place in case the worst happens. This is especially important now amid the COVID-19 pandemic which has put the issue front and center for many business owners who want to ensure their company can survive should they become incapacitated or pass on.

One of the main ways to ensure your business’s survival is to have a buy-sell agreement, which would prompt the sale of your company in the event that you are unable to run it any longer.

Business owners in the survey identified these concerns:

  • The effect on the business of the death or disability of the owner or key employee.
  • Protecting the business from disability and death of an owner or key employee had the second and third highest levels of importance (44% versus 42%, respectively). However, these two pillars were not very top of respondents’ minds, with 55% saying they rarely or never think about the effect of disability and 59% saying they rarely or never think about the effect of death.
  • Of those with a buy-sell agreement in place, just over half said it was funded with life insurance, but only 5% said it was funded with disability buy-out insurance. The rest were either funded with cash flow from the business or not funded at all.

What’s a buy-sell agreement?

A buy-sell agreement, also known as a buyout agreement, is a legally binding agreement between co-owners of a business that governs the situation if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business. If the business has just one owner, then the agreement should specify who would be buying the company and continue its operation.

A buy-sell agreement should be designed to protect the business from the five D’s – death, disability, divorce, departure, and disqualification.

When properly executed, a buy-sell agreement can help ensure the continuity of the business when ownership needs to change hands for any reason. It is a legally binding agreement that requires one party to sell and another party to buy ownership interest in a business when a triggering event occurs, such as the death, disability, or retirement of an owner.

This agreement structures the method and manner in which the business will continue in the event of the owner’s death.

In a 2003 article for Franchising World magazine, Patrick Olearcek explains: “The proprietor and one or more key employees [or partners] enter into an agreement which provides that the proprietor’s estate will sell the business to the employee at death.

By agreeing to buy the company, the key partner, employee, or associate relieves the owner’s family of the responsibility and instead provides them with a lump-sum payment. A key employee, as opposed to the owner’s family, is in a much better position to continue the business operations properly.

Funding the agreement

The majority of buy-sell agreements are funded with life insurance. In the case of a sole proprietorship, a policy covering the life of the owner is typically bought and paid for by the key employee who has agreed to purchase the business.

The employee is also the beneficiary of the policy, which has a death benefit equal to the pre-determined purchase price of the business. Upon the death of the owner, the employee would receive the proceeds of the life insurance policy, then transfer that money to the owner’s heirs in exchange for all interest in and assets of the business.

COVID-19 Workers’ Comp Claims Grow, While Overall Claims Plummet

covid-19 claims

While the number of COVID-19 workers’ compensation cases filed in California continues to grow, total workplace injury and illness claims in the state have fallen nearly 20% so far in 2020 compared to 2019.

Through September, the state had recorded 47,412 COVID-19 workers’ compensation claims, accounting for 11.1% of all claims reported since the start of the year. During that same period, California workers filed 425,280 workers’ compensation claims, down 19% from the first nine months of 2019.

The first COVID-19 cases among California workers were filed in March. They peaked in July and started to decline in August just when parts of the state started opening up on a partial basis. Numbers have continued to fall as you can see at a glimpse of claims counts as of Oct. 21:

  • March: 2,994 (ultimate projected cases for the month: 3,127).
  • April: 4,215 (ultimate projected: 4,382).
  • May: 4,880 (ultimate projected: 5,135).
  • June: 11,761 (ultimate projected: 12,752).
  • July: 14,098 (ultimate projected: 15,253).
  • August: 5,973 (ultimate projected: 6,770).
  • September: 3,316 (ultimate projected: 5,334).

While it’s too early to tell if it’s a harbinger of things to come, the numbers are high enough that employers cannot let their guard down when it comes to preventing the spread of the coronavirus in their workplaces.

Who is filing claims?

The top five sectors reporting COVID-19 workers’ compensation claims during the first seven months of the year are:

  • Health care workers: 16,889 claims (37% of all claims)
  • Public safety/government workers: 6,902 claims (15%)
  • Manufacturing: 3,759 claims (8.3%)
  • Retail workers: 3,593 claims (7.9%)
  • Transportation: 2,255 claims (5%).

Overall claims falling

Due to the severe economic slowdown brought on by the coronavirus pandemic that forced thousands of businesses to shut their doors or have their workers work from home, the number of overall workplace injuries has tumbled.

There were a total of 425,280 workers’ compensation claims filed in California in the first nine months of the year, compared to 526,469 claims in the same period of 2019. That’s a drop of 19.2%. The caseload in September dropped 30% compared to September 2019.

“That decline reflects both the sharp drop in employment, the high number of workers now working from home, and the pandemic-driven slowdown in economic activity in the state,” the California Workers’ Compensation Institute wrote in a report about the numbers.

Handling workers’ comp claims

A new law that took effect in September extends workers’ compensation benefits to California employees who contract COVID-19 while working outside of their homes.

To qualify for the presumption, all of the following conditions must be met:

  • The worker must test positive for or be diagnosed with COVID-19 within 14 days after a day they worked at your jobsite at your direction.
  • The day they worked at your jobsite was on or after June 6.
  • The jobsite is not their home or residence.
  • If your worker is diagnosed with COVID-19, the diagnosis was done by a medical doctor and confirmed by a positive test for COVID-19 within 30 days of the date of the diagnosis.

The takeaway

If you have an employee who is working on site and who tests positive for COVID-19, you should let them know about their rights to file for workers’ compensation if they miss work and/or need treatment.

The state’s insurance commissioner has approved new rules that bar insurers from using any COVID-19 claims against your experience modifier (X-Mod), so it won’t hurt your workers’ compensation experience if a worker files a claim.

New Workers’ Compensation Rate Filing Expands COVID-19 Surcharge Tiers

workers' compensation

The California Workers Compensation Insurance Rating Bureau has amended its 2021 rate filing to make its earlier recommended COVID-19 surcharge more equitable.

The Rating Bureau is leaving unchanged its overall recommendation that benchmark rates be increased an average of 2.6% for policies incepting on or after Jan. 1, 2021.

But it modified an earlier recommendation that a COVID-19 surcharge of $.06 per $100 of payroll be applied to all policies in favor of a six-tiered surcharge ranging from one cent per $100 of payroll for the least-risky sectors to a high of 24 cents for the riskiest. All sectors will be placed in one of six tiers depending on their relative share of COVID-19 claims that had been filed through the end of August.

The Insurance Department just wrapped up hearings on the rate filing in early October and will announce whether it approves the rate filing or makes changes.

Had the pandemic not hit, the Rating Bureau would not be asking for a rate increase, but a reduction of 1.5%. The Rating Bureau estimates that estimate that the cost of COVID-19 claims on Jan. 1, 2021 to Aug. 31, 2021 policies is 4.1%, or $0.06 per $100 of payroll to an average of $1.56 per $100 of payroll.

The benchmark rates (or pure premium rates) are published as guideposts for insurers to price their policies and insurers are not required to follow them, although most do to some degree.

While the Bureau earlier said it would not apply COVID-19 claims towards employers’ individual experience modifiers (X-Mods), the surcharge will apply to all employers, even those who have not seen any coronavirus-related illness claims.

Below is a list of the six different surcharge tiers and some of the NAIC industry class codes that would fit into each of them. (Please note that the two digits are the first two numbers of four-digit class codes and all class codes that start with those two digits will see the surcharge applied, unless otherwise noted with a four-digit code).

1 cent

  • Management of Companies and Enterprises (55)
  • Information technology (51)
  • Professional, Scientific, and Technical Services (54)

3 cents

  • Outside Sales (8742)
  • Finance and Insurance (52)
  • Clerical (8810)
  • Mining, Quarrying, and Oil and Gas Extraction (21)
  • Arts, Entertainment, and Recreation (71)
  • Real Estate and Rental and Leasing (53)

6 cents

  • Administrative Support and Waste Management and Remediation Services (56)
  • Wholesale Trade (42)
  • Construction (23)
  • Educational Services (61)
  • Manufacturing (31)
  • Other Services (except Public Administration) (81)

12 cents

  • Public Administration (92)
  • Retail Trade (44)
  • Transportation and Warehousing (48)

18 cents

  • Accommodation and Food Services (72)
  • Agriculture, Forestry, Fishing and Hunting (11)

24 cents

  • Healthcare and Social Assistance (excluding Physicians, Dentists, and Daycare) (62)

The surcharge in many cases amounts to a roughly 30% increase over the indicated rate without a specific surcharge.

Mandatory Employer Sign-ups for CalSavers Have Begun

CalSavers

If your company does not offer its staff a 401(k) plan, you need to be aware of deadlines for registering your employees in the CalSavers Retirement Savings Program.

The program is designed to help California workers who do not have access to an employer-sponsored retirement plan start socking away money for their retirement. Employers with five or more workers are required to give their employees access to the CalSavers program, which was launched in 2019.

Deadlines for when employers have to adopt the program depend on their size:

  • Businesses with more than 100 employees: Sept. 30, 2020
  • Businesses with more than 50 employees: June 30, 2021
  • Businesses with five or more employees: June 30, 2022

Employers that miss adoption deadlines or fail to allow employees to participate in the program, can face penalties of $250 per employee if they don’t comply within 90 days of receiving notice from the state. The penalty increases to $500 per employee if the employer fails to comply within 180 days of receiving notice.

If your business has more than 100 employees and missed the Sept. 30 deadline, you still have time to avoid penalties by signing up now.

How it works

The program enables eligible employees to automatically contribute a portion of their paycheck to a Roth individual retirement account (IRA).

Under the law, any California employer with five or more workers must give them access to CalSavers, unless they offer a 401(k) or similar employer-sponsored retirement plan. While it’s mandatory for employers to offer CalSavers to their employees, workers are not obligated to sign up.

Under the program, employers are not required to make contributions on behalf of their employees and will incur no fees. They will be required to submit employee contributions through automatic payroll deductions.

Here’s what your employees need to know about CalSavers:

  • Accounts are portable and can be moved to another job.
  • The funds are owned by the saver, regardless of whether they leave their job.
  • Their IRA offers investment options, so the saver can choose where to park their money.
  • Employees can choose how much they want to set aside of each paycheck, up to 8%.
  • Employees can set aside a maximum of $6,000 a year into the account, or $7,000 if they are age 50 and over.
  • Fees are less than $1 per $100 deposited (they range from 0.825% to 0.95%).
  • Employees can opt out at any time.

Setting up your business’s account

Employers that want to sign up their staff can apply here (www.employer.calsavers.com).

When setting up the account you’ll need to:

  • Create a payroll list to enroll employees.
  • Assign a person in your human resources to manage the account and transfers.
  • If you use a payroll service, you will need to give them access to your account to handle the transfers.

Once you’ve created your company account, you can set up auto-enrollment for all of your new employees. Once you add a new employee to your account, they will receive an e-mail containing plan details and default elections.

Thirty days later, the deductions will be automatically withdrawn from their next paycheck and deposited in their Roth IRA.

The Big Question: Can Employers Require Workers to Vaccinate?

COVID-19 vaccine

As the COVID-19 pandemic rages on and more employers bring staff back to the workplace, many businesses are considering implementing mandatory vaccination policies for seasonal flus as well as the coronavirus.

A safe and widely accessible vaccine would allow businesses to open their workplaces again and start returning to a semblance of normalcy. But employers are caught in the difficult position of having to protect their workers and customers from infection in their facilities as well as respecting the wishes of individual employees who may object to being required to be vaccinated. 

The issue spans Equal Opportunity Employment Commission regulations and guidance, as well as OSHA workplace safety rules and guidance. With that in mind, employers mulling mandatory vaccination policies need to consider:

  • How to decide if such a policy right for the company,
  • How they will enforce the policy,
  • The legal risks of enforcing the policy, and
  • Employer responsibilities in administering the policy.

Proceed with caution

A number of law firms have written blogs and alerts on the subject of mandatory vaccinations, and the overriding consensus recommendation is to proceed with caution.

In 2009 pandemic guidance issued during the H1N1 influenza outbreak, the EEOC stated that both the Americans with Disabilities Act and Title VII bar an employer from compelling its workers to be vaccinated for influenza regardless of their medical condition or religious beliefs — even during a pandemic.

The guidance stated that under the ADA, an employee with underlying medical conditions should be entitled to an exemption from mandatory vaccination (if one was requested) for medical reasons. And Title VII would protect an employee who objects due to religious beliefs against undergoing vaccination.

In these cases, the employer could be required to provide accommodation for these individuals (such as working from home).

Additionally, the employer would have to enter into an interactive process with the worker to determine whether a reasonable accommodation would enable them to perform essential job functions without compromising workplace safety. This could include:

  • The use of personal protective equipment,
  • Moving their workstation to a more secluded area,
  • Temporary reassignment,
  • Working from home, or
  • Taking a leave of absence.

One issue that employment law attorneys say may not have any legal standing is if an employee objects to inoculation based on being an “anti-vaxxer,” or someone who objects to vaccines believing that they are dangerous. In this case, depending on which state your business is located, you may or may not be able to compel an anti-vaxxer to get a vaccine shot.

Protecting your firm

To mount a successful defense of a vaccination policy if sued, you would need to be able to show that the policy is job-related and consistent with business necessity. And that the rationale is based on facts, tied to each employee’s job description and that you enforce the policy consistently without prejudice or favoritism.

Also, you must ensure that any employee who requests accommodation due to their health status or religious beliefs does not suffer any adverse consequences. In other words, you cannot punish someone that is covered by the ADA or Title VII for refusing a vaccine.

Also, you will need to project and safeguard your employees’ medical information, under the law.

The takeaway

A number of employment law experts say that once a vaccine is widely available, most employers will likely have the right to require that workers get it, as long as they heed the advice above about the ADA and Title VII. Until then, you may want to consider following the 2009 guidance.

If you do implement a policy requiring vaccination, consider:

  • Fully covering vaccine costs if they are not fully covered by your employees’ health insurance.
  • Allowing employees to opt out entirely if they have medical or religious objections.
  • In the event of a medical or religious objection, you must engage in an interactive process to determine whether the individual’s objections can be accommodated.
  • Including safeguards for keeping your employees’ medical information confidential.
  • Not abandoning your other efforts to keep your workplace safe, such as the use of social distancing, regular cleaning and disinfecting, and the use of personal protective equipment.

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

outdoor workers

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.