California Employers Catch New COVID-19 Reporting Obligations

As soon as Governor Newsom signs the bill, California employers must abide by SB 1159 which creates for some employees an expanded presumption that COVID-19 caused illness or death qualifies for workers’ compensation benefits, and sunsets that presumption for other employees. The bill was enrolled on September 4, 2020 and codifies Governor Newsom’s Executive Order N-62-20 with significant additions. It terminates the presumption for non-frontline workers, but it adds a new classification of workers who will qualify by virtue of an outbreak in their workplace. Additionally, the bill creates a new reporting obligation for employers and imposes a civil penalty of up to $10,000 on an employer who submits false or misleading information about COVID-19 infections to the employer’s workers’ compensation carrier. The governor is expected to sign the bill shortly, and it will become effective immediately as an urgency statute.

Unlike the executive order, SB 1159 does not treat all employees or employers the same. For those employees not specifically identified in the new Labor Code Sections 3212.87 or 3212.88 (all section references hereafter are to the California Labor Code), an employee seeking to qualify for the presumption must have tested positive for or have been diagnosed with COVID-19 within 14 days after working at the employer’s direction at the place of employment (excluding the employee’s home) between March 19, 2020 and July 5, 2020. Carried over from the governor’s executive action is the provision that the employer has 30 days from the filing of the notice of claim to accept or deny the claim. If the claim is not denied within that time limit, the presumption of injury is then rebuttable “only by evidence discovered subsequent to the 30-day period.” Section 3212.86(f).

Section 3212.87 extends the presumption of compensable illness to certain firefighters, peace officers, fire and rescue coordinators, health facility workers who provide direct patient care or are custodial workers at the health facility, registered nurses, medical technicians, providers of in-home supportive services, and employees who provide direct patient care for a home health agency – as each of these is defined in the code. These employees must test positive within 14 days after the employee worked at the employer’s direction at the place of employment on or after July 6, 2020. Again, for these employees the presumption is disputable, but if liability is not rejected within 30 days it may be rebutted only with evidence discovered after the first 30 days. For purposes of this section testing “means a PCR (Polymerase Chain Reaction) test” and does not include antibody testing. Further, except for a provider of home supportive services, the place of employment excludes the employee’s home or residence.

The new class of employees for whom a presumption is available is defined by section 3212.88 as follows: for those employees not covered by section 3212.87, a presumption of compensability will arise if they “test positive during an outbreak at the employee’s specific place of employment, and the employer has 5 or more employees.” An outbreak exists if within a continuous 14 days 4 employees test positive for COVID-19 by PCR test (not an antibody test) and the employer has 100 or fewer employees or if 4 percent of the employees who reported to the specific place of employment test positive and the employer has more than 100 employees. An outbreak also will be attributed to an employer when a place of employment is ordered to close by a local or state health department, school superintendent or by OSHA due to a risk of infection by COVID-19.

To qualify for the presumption of a compensable infection during an outbreak an employee must test positive during the outbreak at the place of employment after July 6, 2020 and within 14 days of having worked there at the employer’s direction. For this class of employees, the employer has 45 days from the date the claim form is filed within which to make a decision on compensability. If the claim is denied or no decision is made timely, the presumption that arises is disputable by evidence that may include “measures in place to reduce potential transmission of COVID-19 in the employee’s place of employment and evidence of an employee’s nonoccupational risks of COVID-19 infection.” The presumption applies to all pending matters but is not a basis to reopen a final award of the WCAB.

Employers also have new reporting obligations to allow the workers’ compensation carrier to determine if an outbreak exists. Section 3212.88(i) obligates an employer to report to their claims administrator in writing within 3 business days all of the following: when any employee has tested positive (the report is to exclude personally identifying information unless the employee claims an industrial injury); the date the employee tested positive; the place or places of employment where the employee worked during the 14 days preceding the positive test; and, the highest number of employees at each place where the employee worked for the previous 45 days. A civil penalty of up to $10,000 may be imposed by the Labor Commissioner if the Commissioner finds that the employer or other person acting on the employer’s behalf intentionally submitted false or misleading information. If this penalty is unsuccessfully contested, the Commissioner shall recover costs and attorney fees.

Additionally, all employers with 5 or more employees must, within 30 days of the effective date of this section, submit the information listed above for all employees who the employer is aware of who tested positive on or after July 6, 2020, except that the employer must report “the highest number of employees who reported to work at each of the employees specific places of employment on any given work day between July 6, 2020 and the effective date of this section.” With the information provided by the employer “the claims administrator shall determine if an outbreak has occurred from July 6, 2020.”

Many questions will likely arise about how this law applies to each unique employment and for many questions, no immediate answers yet exist. Updates will be provided as more information becomes available and developments warrant further exploration.

This document is intended to provide you with information about workers’ compensation and employment & labor related developments. The contents of this document are not intended to provide specific legal advice. If you have questions about the contents of this alert, please contact the authors. This communication may be considered advertising in some jurisdictions.

September 9, 2020