State News : California

By: Brenna Hampton (Office Managing Partner - San Diego)

Governor Newsom just announced an Executive Order creating a temporary, rebuttable presumption of industrial injury for employees at work who contracted COVID-19 between 3/19/2020 – 7/04/2020. Here are the highlights:

– Rebuttable presumption with 4 requirements (all 4 must be satisfied):

• Positive test or confirmed diagnosis required.  Must test positive within 14 days after the EE performed labor / services at their place of employment
• Labor / Services were performed after 3/19/2020.
• Does not apply to work done remotely at the employee’s home or residence
• If presumption is based on a diagnosis (as opposed to a positive test), the diagnosis must have been done by a physician  who holds a physician and surgeon license issued by the California Medical Board, and confirmed by further testing within the 30 days of the date of diagnosis.
  

– The presumption of compensability applies for 60 days from 5/06/2020.

– REDUCED period to deny (30 days instead of 90) – 30 days from filing of the claim form, unless rebutted by evidence discovered after the 30-day period.

– LC4850 / Temporary Disability:

• Must test positive or be diagnosed on or after 5/6/20.
• Must be certified within the first 15 days after the initial diagnosis
• Must be recertified every 15 days within the first 45 days, then every 45 days following diagnosis OR EE who has tested positive may obtain a certification within 15 days of 5/6/20 documenting the period of temporary disability and must be recertified every 15 days thereafter for the first 45 days following diagnosis.
• Paid sick leave benefits available in response to COVID-19 must be used and exhausted before TD/4850 are due/payable. No waiting period for TD benefits.
  

– If death results, no benefits payable to the state (Death without Dependents Unit)

– Apportionment to permanent disability allowed under LC4663 and LC4664.

– Standard workers’ compensation benefits – no specific reimbursement for PPE, lodging or other expenses, like those contemplated by the proposed AB664. The Executive Order makes employers liable for full hospital, surgical, medical treatment, disability indemnity, and death benefits in the event of industrial COVID-19.

Pending Presumptions – AB664,  SB 1159, SB 893 (hospital workers), AB 196 (“essential” workers)

There are now four proposed California state bills addressing issues related to COVID-19. The legislature reconvened this week so we anticipate something soon. Until then, discovery should proceed as usual and employers and their agents should strive to remain in compliance with the 5/06/20 Executive Order.  It can be anticipated that the California legislature as well as the industry at large will assess the response and results from today’s executive order for further guidance.

The four proposed bills discussed below attempt to close gaps, add protection for certain workers, and generally expedite the provision of benefits to injured California employees.  In a rebuttable presumption, the effect is to shift the burden of proof away from the employee such that the employer must disprove that the alleged injury is industrial. With a conclusive presumption, the employer loses the right to do this at all and, once exposure is shown, the employer must provide all related benefits.

Bill #1: Assembly Bill 196 – Presumption for broader group of essential workers, conclusive

This bill was introduced in January, but amended yesterday, 5/05/20 and would create a conclusive presumption of industrial injury for “essential employees” with COVID-19 occurring on/after 3/01/2020 and extending for a period of up to 90 days following the last day of actual work.

The Bill would define essential employees as those defined in Governor Newsom’s Executive Order N-33-20, which alludes to 16 critical infrastructures, or those who are “subsequently deemed essential”. https://www.cisa.gov/identifying-critical-infrastructure-during-covid-19. Certain employees would be excluded – active firefighters, peace officers, and health care employees who provided direct patient care, likely because they are already covered by existing or proposed presumptions for COVID-19.

Here is the link to the proposed text:

http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB196

Bill #2: Senate Bill 893 – Presumption for hospital employees, rebuttable

This bill was proposed 1/28/2020 and would define “injury” for a hospital employee who provides direct patient care in an acute care hospital to include infectious diseases, musculoskeletal injuries, and respiratory diseases when those conditions arise or manifest during employment.  Here is the link to the proposed text:

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB893

Respiratory disease is clearly defined in the proposed bill to include COPD, asthma, COVID-19, and other respiratory diseases caused by novel pathogens. Musculoskeletal injuries are broadly defined to include acute injury or cumulative trauma of the muscles, tendons, ligaments, bursas, peripheral nerves, joints, bones, or blood vessels.”  The proposed bill would create a rebuttable presumption that these types of injuries are industrial.  This is extremely broad language that would open the door for hospital workers providing acute care to receive extensive benefits for a variety of everyday injuries.

The presumption would also be extended for a period of three calendar months for each full year of employment, up to 60 months from the last date actually worked. MRSA infections would extend to a hospital employee following termination of employment for 90 days from the last date of actual work.  Respiratory conditions would be extended for up to 120 months from the last date of work.

One area of concern is the proposed language that if one of these conditions develop in a hospital worker who provides direct patient care in an acute care hospital would not be “attributed to a disease that existed before development or manifestation.”  It sounds as though the intent is to prevent apportionment of permanent disability, though unlike the proposal in AB 664, there is no clear intent to amend LC4663 stated in the proposed SB893.

Bill #3: Senate Bill 1159: Rebuttable presumption, with broader application to “critical employees” of essential employers

This preliminary proposal for SB 1159 is more balanced than AB 664 that has also been proposed. AB 664 wanted to remove apportionment and would create a conclusive presumption that COVID-19 is work-related. SB 1159 would create a “disputable” (rebuttable) presumption, would not alter the laws regarding apportionment, but it would potentially impact a much broader array of employees, which are not fully defined.

SB 1159 (not yet law) would create a rebuttable presumption of work-related COVID-19 for “critical employees.” This seems to be defined loosely and will be subject to interpretation (see below): (2) “Critical worker” means a public sector or private sector employee who is employed to combat the spread of COVID-19. It is the intent of the Legislature that this group of workers be explicitly identified in order to ensure that they receive all necessary health care through the workers’ compensation system. 

This bill appears to be aimed at first responders, not just employees of essential businesses. This is likely to be a hot button topic during discussion once the Legislature reconvenes.  With the new Executive Order, the Governor has indicated the intent to cover a broad swath of the workforce, but, again, the definition remains subject to various perspectives and legislative approval.

Here is a link to the proposed bill:

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB1159

(proposed Labor Code Section 3212.86)

 (a) This section applies to critical workers who directly interact or previously directly interacted with the public during the COVID-19 pandemic.

(b) The term “injury,” as used in this division, includes illness or death resulting from exposure to COVID-19 if all of the following circumstances apply:

(1) The injury develops or occurs during a period in which a critical worker is in the service of an essential critical infrastructure employer.

(2) The injury is confirmed by a positive laboratory test or, if a laboratory test was not available, as diagnosed and documented by the critical worker’s physician based on the employee’s symptoms.

(3) The injury results in hospitalization or significant lost time beyond the critical worker’s work shift at the time of injury of at least ____ days due to the illness.

(c) The compensation that is awarded for injury pursuant to this section shall include full hospital, surgical, medical treatment, disability indemnity, and death benefits, as provided by this division.

(d) An injury that develops or manifests itself while a critical worker is employed is presumed to arise out of and in the course of the employment. This presumption is disputable and may be controverted by other evidence. Unless controverted, the appeals board is bound to find in accordance with the presumption.

(e) For purposes of this section, the following definitions apply:

(1) “COVID-19” means coronavirus disease 2019.

(2) “Critical worker” means a public sector or private sector employee who is employed to combat the spread of COVID-19. It is the intent of the Legislature that this group of workers be explicitly identified in order to ensure that they receive all necessary health care through the workers’ compensation system.

(f) This section shall remain in effect only until January 1, ____, and as of that date is repealed.

Bill #4 (Assembly Bill 664) – the conclusive presumption, more liberal benefits contemplated

AB 664 (Cooper and Gonzalez) proposes to amend the California apportionment statute (LC 4663) as well as add COVID-19 to the definition of communicable diseases, a presumption for certain safety officers. This would also add “certain” hospital employees. As of right now, it does not specifically reference any other types of employees, which is surprising, but it appears to be a deliberate effort to streamline objections to the proposed bill and maintain consistency with existing LC3212 presumptions.

Specifically:

– AB 664, if passed, would add Corona Virus cases to the existing presumption for “communicable diseases” as an injury.

– Importantly, as proposed, AB 664 would also change the presumption to a conclusive presumption. Current law holds that the presumption is rebuttable by evidence. Making it a conclusive presumption means that a positive test = industrial injury for those employees, regardless of evidence of other exposure or pre-existing injury.

– The bill would also amend the apportionment statute to prevent employers from reducing permanent disability related to Coronavirus. Let’s say, for example, that an employee subject to this bill (again, if passed) had a history of lung transplant (or even severe pneumonia with lung damage), if the employee contracted coronavirus, any lasting damage to the lungs after coronavirus would be the employer’s burden.

Here is the text, as amended in Committee:

http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB664

Before it becomes law, it will go back to the floor for discussion and approval of the amended bill, there will hopefully be further amendments (ie: to make the presumption rebuttable) and then the Governor would need to review and approve it.

I see this as having two intents: 1) protect safety officers and hospital employees by ensuring a broad swath of benefits and eliminating judicial challenges to their benefits. There is likely great public and political support for this; and 2) an opportunistic taking advantage of the current state of affairs to strengthen existing laws in favor of the injured workers, with the goal of eroding apportionment in the long-term. Apportionment is the principal that employers in California are only liable for permanent disability directly resulting from an industrial injury.

Clarification will be required if this passes in its current form. For example, it is proposed for any COVID diagnosis post 1/1/2020 even though the Shelter in Place order didn’t come down until 3/04/2020. Who would be the excluded hospital employees if only certain hospital employees are covered? Would that be limited to hospital employees in direct contact with COVID-19, or all hospital employees working at a medical facility after 1/01/2020? It would seem that it should only extend for 14 days following termination of service rather than 90 days since the current medical authorities seem to think that’s the period within which symptoms are likely to manifest. Perhaps the 90 days was contemplated based on the 90-day delay period? Much is left open in its present state.

As to a conclusive presumption, the WCIRB has issued an estimate of the potential costs, and it is staggering. The WCIRB has estimated<https://wcirb.com/news/wcirb-releases-cost-evaluation-conclusive-covid-19-presumption> the cost of the presumption in AB 644 could range from $2.2 billion to $33.6 billion. The WCIRB estimates the midrange cost for the bill to be $11.2 billion, including $6.7 billion in medical costs and $3 million in loss adjustment expenses. For context, total work comp payments in 2018 were $23.5 billion, including $6.9 billion in medical benefits and $4.8 billion in loss adjustment expenses. (Click here to read more:

http://ww3.workcompcentral.com/news/story/id/eb701244be964c8e6842d0c7714f85108f6dceef)