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2021 New Laws Series, Part 5

By Kristin Withrow posted 11-09-2020 11:54 AM


2021 New Laws Series, Part 5: COVID-19 Workers’ Compensation Presumptions Under SB 1159

By Debbie Yokota, ARM

On September 17, 2020, Governor Gavin Newsom signed into law Senate Bill 1159, an urgency measure that took effect immediately and sets forth rebuttable presumption standards to establish workers’ compensation coverage for employees who contract COVID-19.

SB 1159 amended existing workers’ compensation laws to address the impact of employees who contract COVID-19 and the extent that such illness is considered industrial, and therefore entitles the employee to workers’ compensation benefits.

Standards for Application of Workers’ Compensation Rebuttable Presumption for an Employee’s COVID-19 Illness
Employees injured in the course and scope of employment are generally entitled to receive workers’ compensation benefits for their injuries. Existing law establishes a series of specific injuries and illnesses for certain public safety employees that are presumed to be industrial in nature and create a rebuttable presumption that will qualify them for workers’ compensation benefits immediately, unless an employer can provide sufficient information to indicate that the injury or illness is non-industrial.

Recognizing the unique challenges posed by the COVID-19 global pandemic, SB 1159 now creates a similar presumption for illness or death resulting from COVID-19 in the following three circumstances:

  1. The bill codifies Executive Order N-62-20, issued by Governor Newsom on May 6, 2020, which expanded the workers’ compensation rebuttable presumption to ANY employee who reported to their place of employment between March 19 and July 5, 2020, and who tested positive for or was diagnosed with COVID-19 within the following 14 days during that time period.
  2. This rebuttable presumption is then extended beyond July 6, 2020, for firefighters, peace officers, fire and rescue coordinators, and certain kinds of health care and health facility workers, including in-home supportive services providers that provide services outside their own home. For health facility employees other than those who provide direct patient care, and other than custodial employees in contact with COVID-19 patients, the presumption does not apply if the employer can show the employee did not have contact with a COVID-19 positive patient within the 14-day period.
  3. For all other employees, the rebuttable presumption is only applied if the employee works for an employer with five or more employees and the employee tests positive for COVID-19 within 14 days after reporting to their place of employment during a COVID-19 “outbreak” at the employee’s specific work place. For purposes of this presumption, a COVID-19 “outbreak” exists if within 14 calendar days one of the following occurs at a “specific place of employment” (which excludes the employee’s home):
  • If the employer has 100 employees or fewer at a specific place of employment, 4 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; 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.

For purposes of administering this “outbreak” presumption, SB 1159 requires employers to report to their workers’ compensation claims administrator in writing within three business days when they know or reasonably should know that an employee has tested positive for COVID-19, along with other relevant information.

How Long is the Presumption Effective?

First let’s discuss what a “rebuttable presumption” is as it pertains to COVID-19. Under SB 1159 an employee who meets the above criteria will be presumed eligible for workers’ compensation benefits if they are diagnosed with COVID-19. However, that presumption is rebuttable which means that the employer can dispute the claim and present evidence that the employee did not contract COVID-19 at work or are otherwise ineligible for the presumption.

SB 1159 states that “disputable presumption” exists for an employee who suffers an illness or death resulting from COVID-19 on or after July 6, 2020 through January 1, 2023. Presumably, if an employee suffers an illness or death resulting from COVID-19 after January 1, 2023, the presumption no longer applies, and the case will be treated under the traditional workers’ compensation framework.

How Long Does the Claims Administrator Have to Deny the Claim?

SB 1159 creates a presumption that an illness or death resulting from COVID-19 has arisen out of and in the course and scope of employment. However, this presumption is disputable. An employer may dispute the presumption with evidence such as: 1) measures in place to reduce potential transmission of COVID-19 in the employee’s place of employment, 2) the employee’s non-occupational risks of COVID-19 infection, 3) statements made by the employee, and 4) any other evidence normally used to dispute a work-related injury.

If the date of injury is before July 6, 2020, the claims administrator only has 30 days to deny the claim. If the date of injury is on or after July 6, 2020, the claims administrator now has 45 days to deny the claim or the injury is presumed compensable. The presumption of compensability is rebuttable but only with evidence discovered subsequent to the applicable investigation period. However, if the employee is an “essential employee” as specified in Labor Code Section 3212.87, then the 30-day denial period applies regardless of the date of injury. Such “essential employees” include but are not limited to certain firefighters, peace officers, frontline healthcare providers and healthcare facility workers.

Application of Other COVID-19 Paid Benefits

However, SB 1159 requires an employee to exhaust any COVID-19 related supplemental paid sick leave benefits (e.g., FFCRA’s Emergency Paid Sick Leave or California’s supplemental paid sick leave under AB 1867) and meet certain certification requirements before receiving temporary disability benefits or an industrial injury leave of absence.

SB 1159 also requires the Commission on Health and Safety and Workers’ Compensation to conduct a study of the impact of COVID-19 on the workers’  compensation system, to deliver a preliminary report to the Legislature and Governor by December 31, 2021, and to deliver a final report to the legislature by April 30, 2022.

Impact of SB 1159 on Employers

As SB 1159 is now law, employers need to be vigilant and prepared to respond to any indication that an employee has contracted COVID-19 and should coordinate with their workers’ compensation insurance carriers and claims adjusters to establish best practices for reporting and responding to potential workers’ compensation claims based on COVID-19.

(SB 1159 adds Sections 77.8, 3212.86, 3212.87, and 3212.88 to the Labor Code.)

Credits: Liebert Cassidy Whitmore and Littler Insight

This article was written by Debbie Yokota, ARM, Chief Risk Officer, Special District Risk Management Authority as part of CSDA’s New Laws Series, where experts explain recently enacted laws and how they will impact special districts moving forward. This article is provided for general information only and is not offered or intended as legal advice. Readers should seek the advice of an attorney when confronted with legal issues, and attorneys should perform an independent evaluation of the issues raised in these materials.

Stay tuned to the New Laws Series in CSDA eNews for more in-depth analyses on new laws affecting special districts.

Missed Part 1? Read it now: Water Districts Must Complete Federal Risk & Resilience Assessment and Emergency Response Plan

Missed Part 2? Read it nowCOVID-19 Paid Sick Leave and Family/Medical Leave Rights Expanded for Special District Employees

Missed Part 3? Read it now: California Mandates COVID-19 Exposure Notification Requirements for Public Employers Starting January 1, 2021

Missed Part 4? Read it now: AB 5 Independent Contractor Law Adjusted for Special DistrictsAB 5 Independent Contractor Law Adjusted for Special Districts