California's SB 1159 Codifies Workers' Compensation Presumption to Employees Who Test Positive for COVID-19
Knowledge

California's SB 1159 Codifies Workers' Compensation Presumption to Employees Who Test Positive for COVID-19

Key Takeaways

  • California’s SB 1159 codifies and supersedes the COVID-19 workers’ compensation presumption created by California Governor Gavin Newsom’s May 6, 2020 Executive Order N-62-20

  • SB 1159 provides two new rebuttable presumptions that an employee’s illness related to COVID-19 is an occupational injury and therefore eligible for workers’ compensation benefits under specified criteria

  • New reporting requirement: When an employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer must report certain information to its claims administrator

  • SB 1159 provides that employers may be subject to civil penalties of up to $10,000 for intentionally submitting false or misleading information or for failing to report required information

 

 

California’s Senate Bill (SB) 1159 codifies Executive Order N-62-20 and creates a disputable workers’ compensation presumption that any illness or death related to COVID-19 is an occupational injury and therefore eligible for benefits. The statute takes effect immediately and remains in effect through January 1, 2023. In addition, SB 1159 creates specific reporting requirements when an employer knows or reasonably should know that an employee has tested positive for COVID-19.

Goldberg Segalla’s Employment and Labor and Workers’ Compensation teams jointly provide the following analysis and guidance for California employers.

CODIFIED WORKERS’ COMPENSATION PRESUMPTION


Background

On May 6, 2020, California Governor Gavin Newsom issued Executive Order N-62-20, creating a “disputable” presumption surrounding COVID-19 workplace exposure for all employees, regardless of industry, who worked outside of their home at the employer’s direction and who contracted COVID-19 between March 19, 2020 through July 5, 2020.

Under the California workers’ compensation system, employees typically need to present some medical evidence that their illness or injury was related to work to qualify for workers’ compensation benefits. In other words, they need to establish some reasonable factual basis for asserting that the employee’s workplace caused their illness or injury.

Executive Order N-62-20 changed that. Instead, if any covered worker contracted COVID-19 during the period covered by the order, the illness was automatically “presumed” to be work-related without the employee having to provide further proof.

Executive Order N-62-20 expired on July 5, 2020. SB 1159, however, codifies the expired Executive Order in California Labor Code section 3212.86. Under this new section, there is now a disputable presumption of occupational injury (i.e., an assumption that the employee contracted the virus 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 through January 1, 2023.

When the governor’s executive order first issued, there was considerable debate in the legal community as to whether the governor had the constitutional authority to issue such an order. The passage of SB 1159, however, has now retroactively ended that debate by codifying the order into law. As such, all California employees who worked outside of their homes at the employer’s direction between March 19, 2020 and July 5, 2020 are entitled to the presumption.

For certain workers diagnosed with COVID-19 after July 5, 2020, SB 1159 extends the presumption through January 1, 2023.

Which workers are covered by SB 1159’s presumption?

Executive Order N-62-20 covered all California employees who worked at a jobsite outside their home at the direction of their employer between March 19 and July 5, 2020. SB 1159, however, is slightly narrower and applies to the following categories of employees who get sick or injured due to COVID-19 on or after July 6, 2020 if specified criteria are met:

  1. First Responders and Healthcare Workers: Labor Code section 3212.87 expands the presumption to frontline workers, including active firefighting members of specified fire departments or units; certain peace officers; fire and rescue services coordinators who work for the Office of Emergency Services; employees who provide direct patient care or custodial employees in contact with COVID-19 patients who work for designated health facilities; paramedics and emergency medical technicians; employees providing direct patient care for a home health agency; providers of in-home supportive services; and other employees of designated health facilities.
  2. Other Workers: Labor Code section 3212.88 creates a presumption for employees who do not fit within the first category but who work for (a) an employer with five or more employees and (b) who test positive during an “outbreak” at their workplace.

What requirements must employees meet to create a presumption that COVID-19 arose in the course of employment?

First Responders and Healthcare Workers: Under Labor Code section 3212.87, a COVID-19-related illness is presumed to have arisen out of and in the course of employment for purposes of awarding workers’ compensation benefits if the following three requirements are met:

  1. The employee tests positive for COVID-19 within 14 days after the employee performed work at their place of employment and at the employer’s direction;
  2. The day the employee performed work was on or after July 6, 2020; and
  3. The place of employment where the employee performed work was not the employee’s home or residence.

Other Workers: Under Labor Code section 3212.88, a COVID-19-related illness is presumed to have arisen out of and in the course of employment for purposes of awarding workers’ compensation benefits if the following three requirements are met:

  1. The employee tests positive for COVID-19 within 14 days after the employee performed work at their place of employment and at the employer’s direction;
  2. The day the employee performed work was on or after July 6, 2020; and
  3. The positive test occurred during a period of an “outbreak” at the employee’s specific place of employment.

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

  1. Four employees test positive if the employer has 100 employees or fewer;
  2. Four percent of the number of employees who reported to the specific place of employment test positive if the employer has more than 100 employees; or
  3. 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 of COVID-19.

Note: If an injured worker does not qualify for a presumption under the requirements set forth above, that is not the end of the analysis. An employee may still prove work-related causation by establishing the employment exposed them to a “unique risk” of contraction of the disease, although this is beyond the purview of this article.

SB 1159 provides that the presumption of a work-related illness “is disputable and may be controverted by other evidence.” What does that mean?

This means that even when an employee is presumed to have become ill from COVID-19 at work, an employer may dispute that conclusion. In such a case, however, the employer bears the burden of proving that the injury or illness did not occur at work.

SB 1159 requires that a doctor’s diagnosis be confirmed by a test. What kind of test is acceptable?

The Centers for Disease Control and Prevention (CDC) advise that there are generally two kinds of tests available for COVID-19: viral tests and antibody tests.

  • A viral test tells you if you have a current infection.
  • An antibody test tells you if you had a previous infection.

For injuries that occurred between March 19 and July 5, 2020, under the presumption the employee may use either a viral test or serologic antibody test.

For injuries that occurred on or after July 6, 2020, the employee must test positive using a PCR (Polymerase Chain Reaction) test approved for use or approved for emergency use by the United States Food and Drug Administration (U.S. FDA) to detect the presence of viral RNA. The employee may also use any other viral culture test approved for use or approved for emergency use by the U.S. FDA to detect the presence of viral RNA which has the same or higher sensitivity and specificity as the PCR Test. The employee may not rely on serologic testing, also known as antibody testing.

How long does an employer have to decide whether to accept or deny a claim?

If an employee meets the criteria for the presumption under Section 3212.87 (i.e., the First Responders and Health Care Workers presumption), an employer will have up to 30 days to investigate and make a decision whether to accept or deny a claim. If an employer fails to reject a claim within 30 days, an injury or illness is presumed compensable, and an employer can then rebut that presumption only with evidence it discovered after the 30-day period.

If an employee meets the criteria for the presumption under Section 3212.88 (i.e., the Other Workers presumption), an employer will have up to 45 days to investigate and make a decision whether to accept or deny a claim. If an employer fails to reject a claim within 45 days, an injury or illness is presumed compensable, and an employer can then rebut that presumption only with evidence it discovered after the 45-day period.

Note that these deadlines are significantly shorter than the typical 90 days. As such, it is important for an employer to be in early contact with its carrier and to cooperate with the carrier’s investigation from the outset.

REPORTING REQUIREMENTS


SB 1159 also imposes reporting requirements on employers for purposes of the outbreak presumption. Specifically, when an employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer must report the following information to their claims administrator in writing or via facsimile within three business days:

  1. An employee has tested positive (for purposes of this reporting, no personally identifiable information shall be provided unless the employee asserts the infection is work-related or has filed a claim form pursuant to Labor Code section 5401);
  2. The date the employee tested positive (this means the date the specimen was collected for testing);
  3. The specific address or addresses of the employee’s specific place of employment during the 14-day period preceding the positive test; and
  4. The highest number of employees who reported to work at the employee’s specific place of employment in the 45 days preceding the last day the employee worked at each specific place of employment.

Retroactive reporting of data for the period July 6, 2020 to September 17, 2020

If an employer is aware that an employee tested positive on or after July 6, 2020 and prior to September 16, 2020, the employer must retroactively report to the claims administrator in writing via email or facsimile on or before October 29, 2020 the following:

  1. An employee has tested positive (for purposes of this reporting, no personally identifiable information shall be provided unless the employee asserts the infection is work-related or has filed a claim form pursuant to Labor Code section 5401);
  2. The date the employee tested positive (this means the date the specimen was collected for testing);
  3. The specific address or addresses of the employee’s specific place of employment during the 14-day period preceding the positive test; and
  4. The highest number of employees who reported to work at the diagnosed employee’s specific place(s) of employment on any given work date during that period (July 6, 2020 to September 17, 2020).

Penalties for non-compliance with reporting requirements

Submitting the data above does not amount to an admission that the positive test was work-related, or that the employer has any kind of liability or culpability with respect to the positive test. In fact, employers do not need to provide names or any other identifying information regarding the sick employee at all.

If an employer intentionally submits false or misleading information, or fails to submit information, the employer is subject to a civil penalty of up to $10,000 to be assessed by the Labor Commissioner. If the Labor Commissioner finds that the employer submitted false or misleading information, it may issue a citation. The citation shall be in writing and describe the nature of the violation. The Labor Commissioner may serve the citation personally, by certified mail with return receipt requested, or by registered mail.

PROSPECTIVE HANDLING OF COVID-19 CLAIMS


It is important to note that the foregoing reporting requirements do not change any other aspect of claims handling. Moreover, complying with the SB 1159 reporting requirements does not shield an employer from any other obligation it may have under the Labor Code to timely investigate and report any possible work-related COVID-19 claims to an employer’s carrier.

In this environment, an employee reporting a positive COVID-19 diagnosis is likely sufficient to put an employer on notice of a potential work-related injury. It is therefore incumbent on an employer to ask pertinent follow-up questions to determine whether the employee is making a claim that their COVID-19 diagnosis is work-related. If the employee is, then the employer should promptly provide a DWC-1 claim form and report the potential injury for further investigation.

Employers should take proactive measures now by updating protocols related to COVID-19 illnesses to ensure prompt provision of DWC-1 claim forms.

If you have any questions about your COVID-19 reporting or investigation policies, please reach out to your local Goldberg Segalla office for further recommendations. For the most up-to-date information nationwide, you can also check out the Goldberg Segalla COVID-19 Hub.

Or, for immediate guidance, contact: