Workers' Compensation

COVID-19 Presumption created by Executive Order

By Kia Myers Holsey, RTGR Law, LLP, Oakland, CA

As of May 9, 2020, the Coronavirus pandemic resulted in the infection of 64,561 Californians, claiming the lives of 2,678.  In conjunction with the initial phases of lifting restrictions meant to mitigate the spread of the COVID-19 disease brought on by the Coronavirus and the gradual reopening of California’s economy, on May 6, 2020, California Governor Gavin Newsom issued Executive Order EXECUTIVE ORDER N-62-20. This is article presents a brief overview of the order.

The order creates a rebuttable presumption of COVID-19 injury under limited circumstances. The presumption expires on July 5, 2020. The Executive Order applies to any employee, not just essential healthcare workers or first responders, who meet the conditions provided by the order. Under the order, COVID-19-related illnesses shall be presumed to arise out of and in the course of the employment for purposes of awarding workers’ compensation benefits if all of the following requirements are satisfied:

1. Work Time Proximity: on or after March 19, 2020, the employee performed labor or services at the employer’s direction;

2. Positive Test or Diagnosis: the employee tested positive for or was diagnosed with COVID-19 by a California physician;

3. Diagnosis Time Proximity: that diagnosis is made within 14 days after a workday;

4. Work Place Proximity: that workday occurred at the place of employment, not the employee’s home or residence; and

5. Verified by Testing: if the diagnosis of COVID-19 was made without a contemporaneous positive test result to verify it, that diagnosis must be confirmed by subsequent testing within 30 days of the date of the diagnosis, presumably with an antibody test.

Retroactive Application

The order only applies to employees working from March 19, 2020 to July 5, 2020.  It does not apply to COVID-19 related injuries prior to March 19, 2020.  There will likely be legislative bills to address all COVID-19 related illnesses.

Limited Time to Act

An important caveat to note is the Employer has less time to act than in other industrially –related injuries. The order states thatif the above conditions are met, the claims can only be denied within 30 days of the day “the claim form is filed under Labor Code section 5401,” rather than 90 days allowed under Labor Code section 5402, unless rebutted by evidence only discovered subsequent to the 30-day period. That would arguably include a negative test result that comes in after the 30 days.

If a denial is not issued within 30 days, then the case is presumed to be compensable. The claim may then only be rebutted by evidence that could not have been obtained within the first 30 days of the claim.

Since the order, issued on May 6, 2020, limits the time to deny to 30 days, how does this impact claims filed between March 19, 2020 and April 6, 2020? The order does not address this time period.  This could be problematic for employers who did not deny claims believing they had the 90 days per Labor Code Section 5402.  Would claims not denied within 30 days now be presumed as accepted?  

Presumption Rebuttal

Under the Executive Order, the COVID presumption is rebuttable. Because the presumption is rebuttable and therefore not conclusive, it can be rebutted and the claim denied if the employer can show that the risks of workplace infection are not particular to or characteristic of the claimant’s specific employment, or if there was a known non-industrial cause, such as an infected family member or roommate.

The order authorizes the Administrative Director to adopt, amend, or repeal any regulation necessary to implement the order. The Administrative Director may also clarify the evidence that may be used to rebut the presumption.

UR/IMR

Under the order, UR/IMR regulations seems to still apply to treatment prescribed to treat the COVID-19, as does apportionment of PD.

Temporary Disability

No Waiting Period: In no event shall there be a waiting period for temporary disability benefits.

Sick Leave Offset: Interestingly, where an employer has paid sick leave benefits specifically available in response to COVID-19, those benefits shall be used and exhausted before any TD or Labor Code section 4850 pay is due and payable.

Where an employee does not have such sick leave benefits, the employee shall be provided TD or Labor Code section 4850 benefits if applicable, from the date of disability. Presumably, this offset provision does not apply to normal sick leave or banked PTO.

Indemnity Certification:  To qualify for temporary disability or Labor Code section 4850 benefit payments under the Order, the employee must be certified for temporary disability within the first 15 days after the initial diagnosis, and must be re-certified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis.  If the employee tested positive or was diagnosed prior to May 6, 2020, the employee must obtain a certification by May 21, 2020, documenting the period of TD, and must be re-certified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis.

The temporary disability or 4850 pay must be certified by a physician, including MPN providers, a predesignated 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.

Death Benefit Limited

The order provides for death benefits for COVID-19 related illnesses. However, the death benefit payment that would otherwise be paid to the Department of Industrial Relations’ Death Without Dependents Unit (Labor Code Section 4706.5) is waived.

This is a brief overview of the Executive Order and hope that it is helpful. There are many questions to be answered regarding COVID-19 and Governor Newsom’s Executive Order. Currently, there are several bills being considered regarding COVID-19 and workers’ compensation benefits. Hopefully, the Legislature will pass thorough and comprehensive laws to address this illness and workers’ compensation benefits.

Kia E. Myers Holsey. 

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