COVID-19-related illnesses of California employees who worked outside their homes from March 19 through July 15, 2020 shall be “presumed to arise out of and in the course of the employment” for workers’ compensation benefits. The California Governor’s Executive Order N-62-20, signed on May 6, 2020, effectively writes this into existing workers’ compensation policies. Here are the key aspects of the Executive Order and its practical impacts.

Key Aspects of the Executive Order

Workers’ compensation coverage generally applies to an employee who has an illness or injury arising out and occurring in the course of their employment that causes disability or the need for medical treatment. Normally, the employee must prove that the illness or injury arose out of or occurred in the course of scope of their employment, but the Executive Order changes this.

Rebuttable Presumption of Coverage for COVID-19-Related Illnesses. Any COVID-19-related illness of an employee shall be presumed to arise out of and in the course of the employment for purposes of awarding workers’ compensation benefits if all of the following requirements are satisfied:

  • a) The employee tested positive for or was diagnosed with COVID-19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction;

    • Note: Where this is satisfied through a diagnosis of COVID-19, the diagnosis was done by a physician who holds a physician and surgeon license issued by the California Medical Board and that diagnosis is confirmed by further testing within 30 days of the date of the diagnosis.
  • b) The day referenced in (a) on which the employee performed labor or services at the employee’s place of employment at the employer’s direction was on or after March 19, 2020; and
  • c) The employee’s place of employment referenced in (a) and (b) was not the employee’s home or residence.

Time Period. The rebuttable presumption of coverage applies to dates of injury occurring March 19 through July 5, 2020.

Failure to Rebut Presumption. If a claim of a COVID-19-related illness is not rejected within 30 days after the date the claim form is filed, it shall be presumed compensable, unless rebutted by evidence only discovered subsequent to the 30-day period. The rebuttable presumption is disputable and may be controverted by other evidence, but unless so controverted, the Workers’ Compensation Appeals Board is bound to find in accordance with it.

Benefits Available. An accepted claim for the COVID-19-related illness shall be eligible for all benefits applicable under the workers’ compensation laws of this state, including full hospital, surgical, medical treatment, disability indemnity, and death benefits.

Applicability. The Executive Order applies to all workers’ compensation insurance carriers writing policies that provide coverage in California, self-insured employers, and any other employer carrying its own risk, including the State of California.

Cost of Insurance Premiums. Nothing in the Executive Order shall be construed to limit the existing authority of insurance carriers to adjust the costs of their policies.

Practical Impacts

The practical impacts may be significant. Employers should be mindful of the following:

Expanded Workers’ Compensation Benefits Similar to Unemployment Insurance Benefits. A rebuttable presumption of workers’ compensation coverage effectively uses the California state workers’ compensation system in a similar way that the federal CARES Act uses the state unemployment insurance systems in getting relief to workers.

Whether to Return to Work. The risk of COVID-19-related employee workers’ compensation claims may deter employers from returning employees to the worksite before July 5, 2020 (when the rebuttable presumption ends), especially because the rebuttable presumption does not apply to employees working from home during this period. See our blog post on reopening the workplace here.

Increased Cost of Coverage. The cost of workers’ compensation coverage will almost certainly increase to account for payout of benefits on covered COVID-19-related claims.

Protection in Civil Lawsuits. COVID-19-related claims addressed through the workers’ compensation system may provide employers with protection in employee civil lawsuits. Civil lawsuits for negligence and wrongful death claiming that the employee contracted the virus at work due to unsafe work practices of the employer are barred by the “workers compensation exclusivity doctrine” to the extent the employee received workers’ compensation benefits. This trade-off may be slight compared to the expected rising costs of coverage.

Revise Safety Policies and Practices. Employers who have employees at work should work with their workers’ compensation carriers and brokers and outside employment counsel to revise and create safety policies and practices aimed at minimizing the risk of employee COVID-19 exposure.

The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.

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