The Carlo Law Group
Details of California's new executive order on Workers' Compensation:
Yesterday California Gov. Gavin Newsom issued an executive order creating a temporary workers' compensation presumption for employees diagnosed with COVID-19. The Governor explained that the executive order was signed to "remove a burden for workers on the front lines, who risk their own health and safety to deliver critical services to our fellow Californians so that they can access benefits, and be able to focus on their recovery."
The presumption is retroactive to the date of the stay at home order and will stay in effect for 60 days after its effective date. Therefore, the presumption is effective for employees working from March 19, 2020 through July 5, 2020.
Under the executive order, any COVID-19-related illness shall be presumed to arise out of and in the course of the employment for purposes of awarding workers’ compensation benefits if all the following requirements are satisfied:
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; The day 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; The employee’s place of employment was not the employee’s home or residence; and 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.
Thus, the presumption covers any employees who must work outside of their homes during the stay at home order at the employer’s direction. While all essential workers who were required to report to work are covered, the presumption also covers any nonessential workers who performed "labor or services at the employee’s place of employment at the employer’s direction." The presumption would not cover employees who went to their place of employment without their employer's direction.
The presumption is rebuttable and may be controverted by "other evidence." While the Governor gave notice that the presumption could only be rebutted under "strict criteria," the executive order does not limit the evidence that may be used to rebut the presumption. Therefore, under the executive order, an employer could rebut the presumption with any evidence that the employee contracted COVID-19 outside of the employment. However, the Administrative Director is given authority to adopt, amend, or repeal any regulations deemed necessary to implement the order. So, it could well be that the Administrative Director will clarify the evidence that could be used to rebut the presumption.
The executive order requires a claim for a COVID-19-related illness to be rejected within 30 days after the date the claim form is filed. This shortens the time period for denial of a COVID-19 claim from the normal 90 days provided under Labor Code § 5402. It also provides that if a claim is not denied within this time period, it is presumed compensable, unless rebutted by evidence only discovered subsequent to the 30-day period. This would also likely preclude an employer rebutting the presumption with evidence that could have been obtained with the exercise of reasonable diligence within the 30-day period.
An accepted claim for the COVID-19-related illness is eligible for all benefits applicable under the workers’ compensation laws of California, including full hospital, surgical, medical treatment, disability indemnity, and death benefits. The executive order only covers regular workers' compensation benefits. It does not authorize reimbursement for personal protective equipment temporary housing as being proposed by other bills being considered in the Legislature.
The executive order states that a COVID-19-related illness "shall be subject to those laws including Labor Code sections 4663 and 4664, except as otherwise provided in this Order." Those statutes relate to apportionment of permanent disability, and therefore, permanent disability related to COVID-19 is apportionable to other causes.
It also provides that where an employee has paid sick leave benefits specifically available in response to COVID-19, those benefits shall be used and exhausted before any temporary disability benefits or benefits under Labor Code § 4850 are due and payable. Therefore, if an employer specifically provided sick leave benefits in response to COVID-19, then those benefits must be exhausted before temporary disability or § 4850 benefits are payable. An employee is not required to use his/her normal sick leave benefits. If an employee does not have such sick leave benefits, the employee must be provided temporary disability benefits or § 4850 benefits if applicable, from the date of disability. The executive order eliminates the three-day waiting period for temporary disability benefits under § 4652.
Nevertheless, to qualify for temporary disability benefits or benefits under § 4850, an employee must satisfy either of the following:
If the employee tests positive or is diagnosed on or after May 6, 2020, the employee must be certified for temporary disability within the first 15 days after the initial diagnosis, and must be recertified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis; or If the employee tested positive or was diagnosed prior to May 6, 2020, the employee must obtain a certification, within 15 days of the date of the order, documenting the period for which the employee was temporarily disabled and unable to work, and must be recertified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis.
Therefore, being diagnosed with COVID-19 does not automatically entitle an employee to temporary disability benefits. An employee must still be certified for temporary disability by a physician licensed by the California Medical Board. The certifying physician can be a designated workers’ compensation physician in an applicable Medical Provider Network or Health Care Organization, a predesignated workers’ compensation physician, or a physician in the employee’s group health plan. If the employee does not have a designated workers’ compensation physician or group health plan, the employee should be certified by a physician of the employee’s choosing who holds a physician and surgeon license.
Finally, the executive order states the Department of Industrial Relations (DIR) shall waive collection on any death benefit payment due pursuant to Labor Code § 4706.5 arising out of claims covered by the order. That statute generally provides that if an employee dies without leaving any person entitled to a dependency death benefit, the employer is required to pay death benefits to the DIR.