What is workers’ compensation, anyway?
Before we dive into the details, first things first: if you need a refresher on what workers comp is, check out What’s Workers’ Comp and How Does It Work? Long story short: it’s small business insurance that covers your business and your employees if they become injured or contract an illness while at work—or while they’re commuting to work, and any number of things adjacent to work. Workers’ comp covers medical bills, lost income, and survivor benefits to name a few. Typically, if an employee receives workers’ comp, they can’t sue the employer. It’s generally good to have, and it’s also required for most employers in most states.
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California just passed COVID-19 worker’s comp legislation. So, what’s changed?
Typically, an employee must provide medical evidence of an illness or injury along with proof that the illness or injury occurred in the workplace or was a result of the workplace environment or requirements.
However, under a May 2020 Executive Order from Governor Gavin Newsom, employees in California who worked outside the home during shelter-in-place and contracted COVID-19 were presumed to have contracted the virus at work—unless proven otherwise. That executive order expired on July 5th, 2020.
Senate Bill 1159—which covers this topic—was recently passed by the California legislature on September, 17 2020 and solidifies covered employees’ rights to workers’ compensation if they test positive for COVID-19. The law is in effect now and has been backdated to July 6, 2020. It will remain in effect until January 1, 2023.
Which employees can file worker’s comp claims for COVID-19 under California laws?
It depends on when the claim was filed.
Let’s start by going back in time to May 2020. When Governor Newsom issued Executive Order N-62-20, there was some question regarding the legality of it. However, this new law explicitly legitimizes that executive order.
So, when it comes to which employees are covered, if a claim was filed during the period that Governor Newsom’s Executive Order N-62-20 covered, the categories of workers listed in the order are covered by those terms. (This applies to most employees who worked outside the home during shelter-in-place.) To be clear: the executive order expired on July 5, 2020 and the new law doesn’t extend the executive order, it just validates it. So if you filed a claim during that time, that order is probably binding. Always check with your legal counsel.
The new law also creates a similar rebuttable presumption that applies to certain first responders who contract COVID-19 within 14 days of reporting to work. First responders include: firefighters, peace officers, employees of health facilities who provide in-person patient care or janitorial services … the list goes on, and there’s fine print—but you get the gist.
But here’s where you should really pay attention: for small business employers, the new law also applies to private or public workspaces in which the following has occurred:
- Five or more workers are employed at your business,
- One or more employees has contracted COVID-19 within 14 days of coming to work during a COVID-19 outbreak within the workspace
How an outbreak is defined depends on the size of your business. For employers with 100 or fewer employees, an outbreak is defined as 4 or more employees testing positive for COVID-19 within 14 calendar days.
For employers with more than 100 employees, an outbreak is defined as 4% or more of employees testing positive within 14 calendar days. An outbreak is also defined to include situations in which an employer’s business is ordered closed by public authorities due to a risk of infection.
Can I contest my employee’s workers compensation claim?
Yes. This is a little tricky due to something called a “rebuttable presumption.” Basically, this means that an assumption is made that something is taken to be true unless proven otherwise (like in the US, there is a presumption of innocence: a citizen is presumed to be innocent of a crime unless proven otherwise).
So how does a “rebuttable presumption” apply to this law? Well, in certain cases (when there is an “outbreak”) a presumption will apply and it will then be the burden of the employer to prove that the illness or injury did not occur at work.
Even in cases when the presumption does not apply (when there is no “outbreak” as defined by the law), an employee is still entitled to file a workers’ compensation claim for COVID-19 related illness. But in those cases, the employee will need to meet certain thresholds to establish eligibility, including proving that their illness or injury arose from their employment.
Depending on which presumption applies (the one applicable to first responders or other employers where there is an outbreak), if you want to contest a claim, you only have 30 or 45 days to investigate and make a decision as to whether to accept or deny a claim, so act fast and consult with a lawyer.
If my employees contracted COVID -19 after July 6th but I’ve since closed by business and no longer hold workers’ comp insurance, am I liable?
Yes. Even in cases where an employer shuts down, employees are still entitled to file for workers’ compensation. In those cases, your workers’ compensation carrier is typically still liable to cover and pay out on claims that fall within the period of time covered by the policy.
What should I do if my employee tests positive for COVID-19?
First, execute your safety plan to ensure you keep the rest of your employees healthy and limit the spread. Also, California employers are required to notify employees who may have been exposed to the infected employee; read the reporting law and understand your responsibilities.
But if you know or reasonably know that an employee has tested positive, then you must report the following to your worker’s compensation carrier within three days:
- Provide the date that the COVID-19 test was administered. This is the date that a specimen was collected for testing —which is not to be confused with the date when they received the results. So let’s say your employee, Jason, takes a COVID-19 test on October 1st, and he receives positive results on October 20th. He tested positive on October 1st—that’s the date you’ll report.
- Provide all the addresses of the employee’s places of employment for 14 days prior to the date when the COVID-19 test was administered. If Jason tested positive on October 1st, you’ll list every place of employment since September 17th.
- Report the largest number of employees who came to work within the 45 days preceding the date that Jason tested positive.
If you don’t submit the proper notification on time, it could be considered a civil penalty. Employers can be fined up to $10,000 for providing false or misleading information, or for failing to submit the required information.
What about employees who tested positive for COVID-19 between July 6 and September 17?
You’ll need to report any positive test results retroactively to July 6, 2020—and you need to do it within 30 or 45 days after the new law was enacted (again, depending on the presumption that applies. This means you have until October 17, 2020 to file your reports so that employees who were impacted during this timeframe receive the benefits to which they’re entitled.
What paperwork do I need to provide to my employee?
You must provide your employee with this California worker’s comp claim form within one day. You are also required to inform your employee whether the claim has been accepted or denied.
Should I test all of my employees for COVID-19?
There’s no one-size-fits-all answer to this one, so we’ve dedicated an entire post on what’s required and what’s recommended when it comes to testing employees for COVID-19.
What if I followed all of the state, federal, and CDC guidelines for operating my business, and an employee still contracted COVID-19 at work?
Few safety precautions are 100% guaranteed. If an employee is impacted by COVID-19, it’s important that you understand what next steps you need to take to ensure that they receive the benefits to which they’re entitled. We know you probably don’t read workers’ comp articles just for fun, so hats off to you! You’re off to a good start.