Governor Gavin Newsom yesterday signed an executive order establishing a rebuttable presumption that any COVID-19 related illness of an employee who worked outside the home, not just those who are essential workers, was the result of employment for workers’ compensation purposes if certain requirements are met.
The presumption dates back to March 19, 2020 and will continue for 60 days from the date of the order (May 6, 2020).
In announcing his signing of the executive order at his May 6 COVID-19 briefing, the Governor said that as the state moves into the next phase of recovery from the COVID-19 crisis, he wanted people to be confident that benefits would be available to them after other benefits are exhausted. The concern is that the order covers any employee working outside the home. As the economy begins to open up, more workers will be working outside the home, thereby increasing the number of employees to whom this order applies. Notably, as the economy reopens, it also increases the likelihood of contracting the virus in the community, not at work.
In a statement following the Governor’s briefing, the California Chamber of Commerce commented:
“It appears that the Pandemic Unemployment Assistance Program provides federally funded benefits to an existing employee who is experiencing symptoms of coronavirus and cannot go to work. The Executive Order issued today will unnecessarily and significantly drive up costs for California employers through increased workers’ compensation insurance rates at a time when they are struggling to keep Californians employed.
“It seems that the Governor’s goals can be achieved using federal dollars without placing even more financial strain on California employers. Imposing a legal presumption that any employee who contracts the coronavirus is covered by workers’ compensation benefits shifts the cost of this pandemic to employers.”
Recently, the Workers’ Compensation Insurance Rating Bureau released a study which found the annual cost of COVID-19 claims on Essential Critical Infrastructure (ECI) workers under a conclusive presumption ranges from $2.2 billion to $33.6 billion with an approximate mid-range estimate of $11.2 billion, or 61% of the annual estimated cost of the total workers’ compensation system before to the impact of the pandemic.
“The private sector did not cause this crisis and it should not be the safety net used to pay for this crisis—that is the role of government,” the CalChamber statement concluded.
According to the executive order, all the following conditions must be satisfied for the employee to receive the workers’ compensation benefits:
a) The employee tested positive for or was diagnosed with COVID19 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;
b) The day referenced in subparagraph (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;
c) The employee’s place of employment referenced in subparagraphs (a) and (b) was not the employee’s home or residence; and
d) Where subparagraph (a) 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.
The executive order notes that the presumption that the COVID-19-related illness is job related is disputable but without evidence to the contrary, the Workers’ Compensation Appeals Board is bound to find the illness is caused by work.
Benefits available under the state workers’ compensation system for eligible claims include full hospital, surgical, medical treatment, disability indemnity, and death benefits.