California SB 1159 Expands COVID-19 Workers? Compensation Liability Presumption, Creates New Requirements for Employers

California Governor Gavin Newsom signed senate bill 1159 into law on 9/17/20 codifying his previous executive order and expanded presumptions for COVID-19 Workers? Compensation Claims in California.

For purposes of SB1159, a presumption of compensability is a legal assumption that the employee contracted COVID-19 due to work. The presumption is rebuttable, however the burden has now shifted from the employee having to prove their COVID-19 is work-related, to the employer having to disprove it. This means the employee does not have to prove they were exposed to the virus due to their employment.

SB1159 turns the prior Executive Order into law, solidifying the existence of a presumption of compensability for ALL employees in California, regardless of industry, for employees who were working outside their homes between 3/19/20 through 7/5/20 and had a positive COVID-19 test within 14 days after a day that the employee performed labor or services at the employer?s direction.

SB1159 extends the timeframe for the presumption, creating an additional presumption of compensability for the period 7/6/20 to 1/1/2023, however limits the presumption to only certain employees. The new presumption applies to frontline workers as well as any employee that has been exposed during a recent, industrial outbreak, and has a positive COVID-19 test.

Frontline workers include active firefighters, peace officers and those healthcare employees, including custodial employees, who have patient contact. For a complete list, please refer to Section 3 of SB1159/new Labor Code ยง 3212.87(a).

If the employee is not a frontline worker, the test must also occur ?during a period of an outbreak at the employee?s specific place of employment.?

To qualify for the new presumption these employees must:

  • Test positive within 14 days after a day that the employee performed labor or services at the employee?s place of employment at the direction of the employer.
    • The presumption extends to employees following termination of service for a period of 14 days, commencing with the last date worked.
  • The place of employment cannot be the employee?s home or residence unless they provide home health care services to another individual at their home or residence.
  • For non-frontline workers to qualifying under the outbreak scenario, the employer must have 5 or more employees.

In order for the claims administrator to determine an ?outbreak? SB1159 creates a new reporting requirement for all employers.

Employers are now required to report to their claims administrator ?in writing via electronic mail or facsimile? the following information:

  • Closure Order: The fact that a specific work location has been ordered to close by a local public health department, the State Department of Public Health, the Division of Occupational Safety and Health, or a school superintendent due to a risk of infection with COVID-19; and/or
  • Employee Infection (industrial or not):
    • The fact that an employee(s) has tested positive;
      • Note that employers are prohibited from disclosing an employee?s personally identifiable information unless that employee has filed a workers? compensation claim form or otherwise ?asserts the infection is work related.?
    • The date when the employee?s specimen was collected for testing that produced the positive test result.
    • All addresses of the employee?s specific places of employment during the 14-day period preceding the positive test date.
    • The highest number of total employees reporting to the same, specific place(s) of employment ?in the 45-day period preceding the last day the employee worked at each specific place of employment.?

This data needs to be reported to the claims administrator within the timeframes below:

  • For the period 9/17/20-1/1/23: employers must report within three (3) business days all of the above data, when the employer ?knows or reasonably should know? that an employee has tested positive for COVID-19.
  • Retroactively for the period 7/6/20-9/17/20: employers must report within thirty (30) business days all of the above data.

SB1159 gives teeth to the new reporting requirement by subjecting employers to a civil penalty of up to $10,000 for the intentional false/misleading reporting or failure to report as required.

Claims Administrators will use the above data to determine whether there is an ?outbreak? that would trigger presumption of a COVID-19 claim.

An ?outbreak? is dependent upon the closure of, or the number of employees working at, a ?specific place of employment? within 14 calendar days of the subject employee?s positive test result, and is deemed to occur when:

  • A COVID-19 order to close is issued ?by a local public health department, the State Department of Public Health, the Division of Occupational Safety and Health, or a school superintendent due to a risk of infection with COVID-19?

OR

  • 4 employees have contracted COVID-19 where 100 or less employees work;

OR

  • 4 percent of employees have contracted COVID-19 where 101 or more employees work.

It is helpful to remember that COVID-19 claims will continue to be excluded from an employer?s Ex-Mod calculation.

SB 1159?s workers? compensation reporting requirement is not the only COVID-19 reporting requirement that California employers must meet. AB685 was also signed into law by Governor Newsom on 9/17/20 and will go into effect 1/1/2021. AB685 will require employers to report an outbreak to local public health officials and to provide written notifications to employees within 1 business day of receiving notice of potential exposure to COVID-19. AB685 provides Cal OSHA with clear authority to close a worksite due to a COVID-19 hazard and to issue citations for serious violations related to COVID-19. Full details of AB685 can be found here.

Best Practices:

Create a spreadsheet to track the new COVID-19 reporting requirements.

Look back at your records for the period 7/6/20 through 9/17/20 for any employees who had positive COVID-19 tests. Cross reference with any sick leave/FFCRA benefits

Your claims administrators will soon be sending out instructions on how to provide them with the new COVID-19 data. Keep an eye out for this and have the data prepared to respond via their forms.

Going forward report all positive COVID-19 tests immediately to the claims administrator.

Do an employer-level investigation for all positive tests

  • Do you have any knowledge of whether the employee may have come in contact with COVID-19 outside the work place?
    • Do they have any family members or friends who may have been exposed?
    • Have they traveled at all within the last 30 days? Locally? Internationally?
    • Is there any information showing it could have been contracted elsewhere?

After completing your investigation, provide a clear and concise summary of why you believe the employee?s claim for COVID-19 may be compensable or non-compensable, along with any supporting documentation/evidence.

  • Provide a description of the employee?s job duties for the 30 days leading up to the diagnosis.
  • Provide the employee?s work schedule for the 30 days leading up to the diagnosis.
  • Provide a list of all the safety measures you have taken to protect your employees from COVID-19. (PPE, Training, Temperature Checks, etc.).
    • SB1159 provides language that rebuttal evidence to overturn the presumption can include, but is not limited to, (i) employer-implemented COVID-19 protective measures to reduce transmission and (ii) an employee?s non-occupational risks of infection.
  • If known, provide the employee?s personal health insurance plan information.
  • Advise the adjuster of any paid sick leave benefits the employee qualifies for.

Start preparing for AB685 now so you will be ready once it goes into effect 1/1/2021.

Questions about this article? Feel free to reach out here.


About Kevin Mui

Kevin Mui has been working in the insurance field for the past decade specializing in Workers? Compensation and risk management across multiple industries. He mitigates the costs of potential and existing claims with preventative risk management techniques, and provides ongoing claims advocacy for his clients. Kevin has a background in financial advising and obtained his Life & Health license, along with the Series 6 and 63 securities licensing. He graduated from the University of California, Riverside with a Bachelor?s of Science in Business Administration.