COVID-19 Presumptions

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As discussed in "Sullivan on Comp" Section 5.17 Presumption of Injury –– Public Employee in General and Section 5.18 Presumption of Injury –– Public Employee's Covered Condition, the Labor Code enumerates several presumptions in favor of certain employees. The purpose of these statutes "is to favor a special class of employees whose service is vital to the public interest and whose strenuous work makes them especially vulnerable."

During the COVID-19 outbreak, employees deemed to be essential may continue working while nonessential workers are required to stay home. California's executive and legislative branches have created COVID-19 presumptions for certain workers who have been significantly affected by the outbreak.

California Gov. Gavin Newsom signed an executive order for a temporary presumption for a broad range of workers. Permanent presumptions are still being considered by the Legislature. So, although the forthcoming sections discuss general rules regarding how COVID-19 could be deemed compensable, in most cases, whether a COVID-19 claim is compensable probably will be decided by a presumption.

EXECUTIVE ORDER N-62-20

On May 6, 2020, Gov. 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 "remov[e] 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 remain in effect for 60 days after its effective date. So the presumption is effective for employees working from March 19, 2020 through July 5, 2020.

Under the executive order, any illness related to COVID-19 is presumed to arise out of and in the course of the employment for purposes of awarding workers’ compensation benefits if:

1. The employee tested positive for or was diagnosed with COVID-19 within 14 days after a day that he or she performed labor or services at the employee’s place of employment at the employer’s direction.
2. 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.
3. The employee’s place of employment was not the employee’s home or residence. And,
4. 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.

So, the presumption covers any employees who must work outside of their homes during the stay-at-home order at the employer’s direction. All essential workers who were required to report to work are covered, but 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 diagnosis must be confirmed by a test. There are two types of tests generally available: (1) a viral test, which determines if a person has a current infection; and (2) an antibody test, which determines if a person had a previous infection. The executive order doesn't limit the type of test that may be used to confirm the diagnosis. So, an employee who recovered from COVID-19 potentially could bring a claim for any benefits related to the infection using an antibody test provided that the positive test was obtained within 30 days of the initial diagnosis.

The presumption is rebuttable and may be controverted by "other evidence." So, under the executive order, an employer could rebut the presumption with any evidence that the employee contracted COVID-19 outside of the employment.

The executive order requires that a decision denying a claim for an presumptively compensable illness related to COVID-19 be made 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 (see "Sullivan on Comp" Section 5.16 Presumption of Injury –– 90-Day Rule). Until the employer makes a decision, an employee will be eligible for as much as $10,000 in medical treatment for illness related to COVID-19.

The order also says that if a claim is not denied within this time period, it is presumed compensable, unless rebutted by evidence discovered only subsequent to the 30-day period. That probably would 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 employer that denied a claim prior to the executive order is not automatically required to reverse its decision. The employer may reconsider and accept the claim based on the order or stand by the denial.

An accepted claim for the illness related to COVID-19 is eligible for all benefits applicable under the workers’ compensation laws of this state, including full hospital, surgical, medical treatment, disability indemnity and death benefits. The executive order covers only regular workers' compensation benefits. It does not authorize reimbursement for the personal protective equipment or temporary housing proposed by other bills being considered in the Legislature.

The executive order states that illness related to COVID-19 "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 (see "Sullivan on Comp" Section 10.34 Apportionment –– Pre-Existing Disease or Condition).

The order also provides that if an employee has paid sick leave benefits specifically available in response to COVID-19, they should be used and exhausted before any temporary disability benefits or benefits under LC 4850 are due and payable. So if an employer specifically provided sick leave benefits in response to COVID-19, such as under the Families First Coronavirus Response Act or Executive Order N-51-20, such benefits must be exhausted before temporary disability or § 4850 benefits are payable. An employee is not required to use his or her normal sick leave benefits. If an employee does not have such sick leave benefits, he or she 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 (see "Sullivan on Comp" Section 9.16 Waiting Period).

Nevertheless, to qualify for temporary disability benefits or benefits under LC 4850, an employee must satisfy either of these requirements:

• If the employee tests positive or is diagnosed on or after May 6, 2020, he or she 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 he or she 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.

So being diagnosed with COVID-19 does not automatically entitle an employee to temporary disability benefits. The worker still must be certified for temporary disability by a physician licensed by the California Medical Board. The certifying physician may 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, he or she should be certified by a physician of the employee’s choosing who holds a physician and surgeon license. For further discussion on liability for temporary disability, see "Sullivan on Comp" Chapter 9: Temporary Disability.

Finally, the executive order states that the Department of Industrial Relations (DIR) must waive collection on any death benefit payment due pursuant to LC 4706.5 arising out of claims covered by the order. That statute generally directs 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 (see "Sullivan on Comp" Section 12.24 Payment to State –– No Dependent).

The administrative director is given authority to adopt, amend or repeal any regulations deemed necessary to implement the order. Any regulations promulgated by the AD will be exempt from the Administrative Procedures Act. But the director must submit the regulations to the Office of Administrative Law for publication in the California Regulatory Notice Register.

Th DIR answers questions regarding the executive order at: https://www.dir.ca.gov/dwc/Covid-19/FAQs.html. The executive order is available at: https://www.gov.ca.gov/wp-content/uploads/2020/05/5.6.20-EO-N-62-20-text.pdf.

SENATE BILL 1159

Senate Bill 1159 would codify the presumption from the governor’s executive order of May 6, 2020 into Labor Code § 3212.86. Like the executive order, it creates a presumption that potentially applies to "any employee with a COVID-19-related illness."

Per Senate Bill 1159, the term “injury” includes illness or death resulting from COVID-19 if all of the following circumstances apply:

1. 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. For the purpose of this subdivision, an “employee’s place of employment” does not include an employee’s home or residence.
2. The day referenced in #1 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, and on or before July 5, 2020. The date of injury shall be the last date the employee performed labor or services at the employee’s place of employment at the employer’s direction.
3. If #1 is satisfied through a diagnosis of COVID-19, the diagnosis must be done by a physician who holds a physician and surgeon license issued by the California Medical Board and the diagnosis must confirmed by further testing within 30 days of the date of the diagnosis.

Compensation awarded for injury under the bill includes full hospital, surgical, medical treatment, disability indemnity, and death benefits. An accepted claim for a COVID-19-related illness will be subject to the workers’ compensation laws of this state, including §§ 4663 and 4664.

If an employee has paid sick leave benefits specifically available in response to COVID-19, those benefits must be used and exhausted before any temporary disability benefits or benefits under § 4850 are due and payable. If an employee does not have those sick leave benefits, the employee shall be provided temporary disability benefits or § 4850 benefits, if applicable, from the date of injury. There shall not be a waiting period for temporary disability benefits.

To qualify for temporary disability or § 4850 benefits under the bill, an employee must satisfy either of the following:

1. If the employee tests positive or is diagnosed with COVID-19 on or after May 6, 2020, the employee must be certified for temporary disability within the first 15 days after the initial diagnosis, and shall be recertified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis.
2. If the employee tested positive or was diagnosed with COVID-19 before May 6, 2020, the employee shall have obtained a certification, no later than May 21, 2020, documenting the period for which the employee was temporarily disabled and unable to work, and shall be recertified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis.

The worker still must be certified for temporary disability by a physician licensed by the California Medical Board. The certifying physician may 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, he or she should be certified by a physician of the employee’s choosing who holds a physician and surgeon license.

An injury that develops or manifests itself while an employee 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.

Additionally, if liability for a claim of a COVID-19-related illness is not rejected within 30 days after the date the claim form is filed pursuant to § 5401, the illness shall be presumed compensable, unless rebutted by evidence only discovered after the 30-day period.

The Department of Industrial Relations will also waive collection on any death benefit payment due pursuant to § 4706.5 arising out of claims the bill This section applies to all pending matters, unless otherwise specified, but shall not be a basis to rescind, alter, amend, or reopen any final award of workers’ compensation benefits.

The bill establishes a unspecified repeal date of January 1, ____. As of that date, the statute would be repealed.

The text of Senate Bill 1159 is available on the California Legislative Information website at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200SB1159.

ASSEMBLY BILL 664

Assembly Bill 664 would create a presumption in favor of the specified workers who are exposed to or contract a communicable disease, including COVID-19. The term "injury" also would include direction to enter quarantine by a health-care professional, public agency or the employer. So, although a compensable injury normally is required for workers' compensation benefits, the bill would authorize benefits simply because covered workers are quarantined as a result of exposure, even if they don't contract COVID-19. The presumption would apply to a communicable disease on or after Jan. 1, 2020.

The proposal covers normal workers' compensation benefits including hospital, surgical, medical treatment, disability indemnity and death benefits. It also includes benefits that normally may not be covered. Specifically, it would reimburse for personal protective equipment and "reasonable medical expenses for the protection from or treatment of the injury." It's unclear exactly what that means, but it appears to include preventive medicine. Also covered would be reasonable living expenses, other than temporary housing, that exceed the living expenses usually incurred by the person that are a direct result of the injury. A person is not required to have entered quarantine to be reimbursed for such expenses. If quarantined, the employee also must be reimbursed for reasonable temporary housing costs.

The proposed presumption would be conclusive. Once the required conditions are established, the presumption would not be rebuttable by any evidence. Furthermore, the presumption would extend for 90 days following termination of service, commencing with the last date actually worked in the specified capacity.

The intent of the amendments to the bill is clear –– "to fully compensate the peace officers, firefighters, and health care employees whose lives are placed at risk when they are exposed to or contract COVID-19 or other communicable diseases in the course of performing their duties." The amendment further specifies that the covered employees should not be required to use their accrued vacation leave, personal leave, compensatory leave, sick leave or any other leave.

The proposed bill also would amend LC 4663(e) to include the COVID-19 presumption as one to which apportionment under that statute would not apply. So, even if an employee has a pre-existing lung condition, such as one caused by a smoking habit, if the COVID-19 causes any permanent impairment, the employee would be entitled to the full value of permanent disability without apportionment.

The proposed bill has not been passed by the Legislature. In the meantime, the debate rages on over the prudence of this bill. The Workers' Compensation Insurance Rating Bureau (WCIRB) has a webpage for COVID-19 that, among other things, reports on the prospective cost of the presumption. It's found at https://www.wcirb.com/covid-19. A recent webinar and report (which acknowledged some huge assumptions) estimated about a 60% increase in costs to the system should the presumption be adopted.

The text of AB 664 is available on the California Legislative Information website at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB664.

ASSEMBLY BILL 196

Assembly Bill 196 would create a conclusive presumption for essential employees not otherwise covered by AB 664. The bill would apply to injuries occurring on or after March 1, 2020, and would extend that presumption following termination of service for a period of 90 days, commencing with the last date actually worked.

Other than those covered by AB 664, employees generally covered by AB 196 are workes employed in an occupation or industry deemed essential in the governor’s executive order of March 19, 2020 (Executive Order N-33-20), or those subsequently deemed essential.

Unlike the coverage offered to employees under AB 664, coverage under AB 196 is normal compensation benefits only. Specifically, the compensation awarded for an injury covered by the presumption includes full hospital, surgical, medical treatment, disability indemnity and death benefits.

The text of AB 196 is available on the California Legislative Information website at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB196.

SENATE BILL 893

Senate Bill 893 would create a presumption for hospital employees who provide direct patient care in an acute care hospital, to include infectious diseases, musculoskeletal injuries and respiratory diseases. The bill originally was introduced to cover infectious diseases and musculoskeletal injuries but was amended to include respiratory diseases after the COVID-19 outbreak.

The bill states, "Frontline nurses treating patients with COVID-19 are likely exposed to the highest risk of infection because of their close, frequent contact with patients and longer than usual working hours. By the nature of their profession, health care workers in California are in daily danger of direct exposure to all infectious diseases, including COVID-19." Mindful of that reality, the bill states, "Because health care workers have significantly increased exposure or susceptibility to particular work-related injuries or illnesses, it is appropriate to protect them by guaranteeing access to the workers’ compensation system."

The bill would adopt three new statutes:

1. Labor Code 3212.13 would cover infectious diseases.
2. Labor Code 3212.14 would cover musculoskeletal injuries.
3. Labor Code 3212.145 would cover respiratory diseases.

"Infectious disease" is defined as including "infectious diseases caused by novel pathogens, such as novel coronavirus (COVID-19)." “Musculoskeletal injury” is defined as "acute injury or cumulative trauma of the muscles, tendons, ligaments, bursas, peripheral nerves, joints, bones, or blood vessels." “Respiratory disease” is defined as including "chronic obstructive pulmonary disease, asthma, novel coronavirus (COVID-19), and other respiratory diseases caused by novel pathogens."

Under those statutes, an infectious disease, musculoskeletal injury or respiratory disease that develops or manifests in a hospital employee who provides direct patient care in an acute care hospital would be presumed to arise out of and in the course of the employment.

The presumptions would be rebuttable by "other evidence." The bill does not limit the evidence that may be used to rebut the presumptions. Unless controverted, the appeals board is bound to find in accordance with the presumption.

The text of Senate Bill 893 is available on the California Legislative Information website at: http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB893.

ASSEMBLY BILL 2447

Assembly Bill 2447 would establish a presumption that post-traumatic stress is compensable for a person employed by a private sector agency that's contracted by a state, local, tribal or special district to provide emergency medical services. Notably, the presumption as currently written does not cover public sector emergency medical services personnel. It also applies only to injuries occurring on or after Jan. 1, 2021. So it wouldn't cover workers currently treating COVID-19 patients who file claims before Jan. 1, 2021.

This presumption is rebuttable and may be controverted by "other evidence," without limitation. Furthermore, the presumption would not apply unless the employee was employed for at least six months, although the six months of employment need not be continuous.

The text of Assembly Bill 2447 is available on the California Legislative Information website at: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB2447.

SEE ALSO

• When Is COVID-19 Work Related?
• The Basic Rule — Increased Risk and the General Public

REFERENCES

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