COVID-19 Presumptions

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 contains 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. Executive and legislative efforts have been undertaken to create COVID-19 presumptions for certain workers who have been significantly affected by the outbreak.

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

Executive Order N-62-20

On May 6, 2020, 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 "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 stay in effect for 60 days after its effective date. Therefore, the presumption is effective for employees working from March 19, 2020 through July 4, 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:

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;
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 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 (see "Sullivan on Comp" Section 5.16 Presumption of Injury –– 90-Day Rule). 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 this state, 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 (see "Sullivan on Comp" Section 10.34 Apportionment –– Pre-Existing Disease or Condition).

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 (see "Sullivan on Comp" Section 9.16 Waiting Period).

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

1. 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
2. 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. For further discussion on liability for temporary disability, see "Sullivan on Comp" Chapter 9: Temporary Disability.

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 (see "Sullivan on Comp" Section 12.24 Payment to State –– No Dependent).

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.

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 in order 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, it 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 language 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 would also amend Labor Code § 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 text of Assembly Bill 664 is available on the California Legislative Information website. The proposed bill has not been passed by the Legislature. In the meantime, the debate rages on over the prudence of this bill. The WCIRB has created a page 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.

Senate Bill 1159

Senate Bill 1159 would create a more limited presumption than Assembly Bill 664. It would cover "critical workers who directly interact or previously directly interacted with the public during the COVID-19 pandemic."

The bill defines a "critical worker" as "a public sector or private sector employee who is employed to combat the spread of COVID-19." This definition, however, remains open to interpretation. While doctors and nurses who treat COVID-19 patients would qualify, it would be ambiguous as to whether police officers, firefighters, or medical facility janitors would be "employed to combat the spread of COVID-19."

Under the bill, illness or death resulting from exposure to COVID-19 would be compensable 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.

Thus, the bill would allow a critical employee to claim compensation for COVID-19 based on a physician's diagnosis if a test was not available. However, it would require the employee to miss an unspecified number of days before the presumption is triggered.

Compensation for an employee covered by the presumption would include full hospital, surgical, medical treatment, disability indemnity, and death benefits. Therefore, it only covers regular workers' compensation benefits. It does not authorize reimbursement for personal protective equipment temporary housing as being proposed by Assembly Bill 664.

The presumption under Senate Bill 1159 is rebuttable by "other evidence." It does not limit the evidence that may be used to rebut the presumption. Unless controverted, the appeals board is bound to find in accordance with the presumption.

The bill also includes an unspecified sunset date and would be repealed as of that date. Perhaps this recognizes that COVID-19 may become so ubiquitous that a presumption is unnecessary in the future.

The text of Senate Bill 1159 is available on the California Legislative Information website."