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September 17, 2020

State expands rebuttable presumption for work comp claims

California businesses to assume more COVID-19 liability

On August 31, 2020, the California Legislature enacted SB 1159, a bill that significantly expands Governor Gavin Newsom’s May 6 executive order regarding COVID-19 and workers’ compensation. The new law, which has significant implications for California business, did the following:

  • Codified the presumption of compensability of COVID-19 claims in the Governor’s Executive Order (N-62-20) that applied through July 5, 2020 to workers directed to work outside their home.
  • Provides for a similar disputable presumption from July 6, 2020 to January 1, 2023. This applies to COVID-19 claims of first responders and certain healthcare workers. Additionally, it covers claims of other workers directed to work outside the home if the worker’s employer suffers a COVID-19 “outbreak,” which is defined below.

The Governor’s initial Executive Order created a rebuttable presumption that any employee diagnosed with COVID-19 from March 19 to July 5 and who had visited the workplace at the direction of their employer was presumed to have contracted the disease on the job, if positive results were received within 14 days. As a result, those employees could file a workers’ compensation claim.

Greater Complexity and Risk for Employers
For employers, the new law will impose a new level of complexity and risk, including civil penalties for failure to comply. Comprised of five sections, the law includes the following:

  • A presumption exists if the number of employees who contracted COVID-19 exceeds the threshold defined as an “outbreak” with a 14-day period. For organizations with 100 or fewer employees, an “outbreak” is qualified when four or more people test positive in a “specific place of employment.” For organizations with more than 100 employees, an “outbreak” is reached if 4% of all employees contracted COVID-19 within 14 days.

  •  “Specific place of employment” is a new legal definition that delineates classes of workers. This provision recognizes the different types of work performed by employees and potentially different types of risk exposure. Importantly, the presumption does not carry across work groups. Thus, it is critical for employers to encourage separation of work groups by building, facility and/or by the field. This is both a precaution to stop the spread of COVID-19 and minimize claims.

  • The law establishes several tests for rebutting the presumption. These include 1) Measures in place to reduce potential transmission, and 2) The employee had “nonoccupational risks” of infection. For employers, it is essential to review, incorporate, and remain current with orders from the state Health Department, applicable OSHA regulations, and recommendations from the Center for Disease Control.

  • Under the new law, the period to dispute a claim is 30 days for healthcare and first responders and 45 days for other employees. This period begins on the date the employer has knowledge an employee is claiming a COVID-19 related illness.

Employer Obligations

  • New rules require continuous reporting of positive test results to the claims administrator or insurance company to determine if an “outbreak” occurred. For employers, this section of the law creates burdensome reporting requirements on an ongoing basis.

  • When the employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer shall report to their claims administrator or insurance company in writing via electronic mail or facsimile within three business days all of the following:

    • An employee has tested positive for COVID-19. Unless the employee is filing a work-related injury, the employer should not provide any personally identifiable information regarding the employee who tested positive.

    • The date the employee tests positive, which is the date the specimen was collected for testing.

    • The specific address or addresses of the employee’s specific place of employment during the 14-day period preceding the date of the employee’s 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.

  • Employers are required, within 30 days, to retroactively report positive tests back to July 6, 2020. This provision will determine if any presumption existed between then and the time the law passed.

  • Failure to comply could result in civil penalties up to $10,000.

MMA is Here to Help
While the new law is not expected to significantly impact workers’ comp rates or health care costs immediately, many of the provisions are complex and demand careful analysis. The Marsh & McLennan Agency team encourages employers to review the new law and utilize our extensive resources and experience to assist you with the process.

More information and ongoing updates are available at MMA’s COVID-19 Resource Center.