Newsom's Order Creating COVID Presumption Met With Applause, Some Skepticism

Thursday, May 7, 2020 | 3

California Gov. Gavin Newsom on Wednesday issued a long-anticipated executive order creating a rebuttable presumption that COVID-19 is a compensable occupational disease for employees who contract the illness while on the job.

Newsom's order will apply to any worker who has to go to his or her place of employment, not just those who are deemed essential in his stay-at-home order.

The executive order is retroactive to March 19, the effective date of the stay-at-home decree urging all non-essential workers to stay in their residences. And it will last through July 5, which is 60 days from Wednesday’s announcement.

An ill employee would be eligible for the presumption if he or she tested positive or was diagnosed with COVID-19 within 14 days of performing work at the place of employment and at the direction of the employer, according to the order. Employees working from home who catch the virus are not eligible.

The order would also require workers to use specified sick time and other benefits before receiving comp benefits under the presumption.

"Notwithstanding any applicable workers' compensation statute or regulation, 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 Section 4850 are due and payable," the order reads. "Where an employee does not have such sick leave benefits, the employee shall be provided temporary disability benefits or Labor Code Section 4850 benefits if applicable, from the date of disability. In no event shall there be a waiting period for temporary disability benefits."

Labor advocates had been calling on Newsom since March to issue an order while organizations representing employers advised the governor to tread lightly on any sweeping action.

Labor was quick to applaud Wednesday’s announcement.

“Gov. Newsom’s order today adds a vital layer of protection to essential workers putting their lives at risk to provide for our families during this pandemic,” California Labor Federation Executive Secretary-Treasurer Art Pulaski said in a statement. “We commend the governor for taking action to ensure workers on the front lines of this crisis are able to access health care and other benefits from workers’ compensation without costly delays that could acutely endanger their health and safety.”

The California Applicants' Attorneys Association said in a statement that the work comp system might be the only remedy for some who don't have employer-sponsored health insurance or who don't have a viable health plan that would cover the disease without leaving them bankrupt.

"Millions of workers across California are battling on the front lines of the coronavirus pandemic, risking their lives simply by going to work," CAAA's statement reads. "These heroes deserve to know they’ll be protected and have the safety net of workers’ compensation to take care of their medical needs if they get infected with the coronavirus."

Employer groups, on the other hand, said the governor’s actions went too far.

“The executive order issued today will unnecessarily and significantly drive up costs for California employers through increased workers’ compensation insurance rates at a time when they are struggling to keep Californians employed,” the California Chamber of Commerce announced in a statement.

Cal Chamber had previously advised Newsom to use federal Pandemic Unemployment Assistance Program funds to cover worker injury costs before creating a potentially costly COVID-19 presumption.

“The private sector did not cause this crisis and it should not be the safety net used to pay for this crisis — that is the role of government,” the organization said in a statement.

Another group, the Workers’ Compensation Action Network, announced in a statement that it appreciated Newsom’s efforts to help sick workers but was wary of how the presumption could diminish the role of employers in the workers' compensation system.

“Even ‘rebuttable presumptions’ undermine the ability of employers to determine whether the illness is related to work. The practical result is that employers will pay workers’ comp benefits for COVID-19 even where there is no evidence it was related to work,” WCAN’s statement read. “Workers’ comp provides a critical safety net for work-caused injuries and illnesses. But it is not intended or funded to provide coverage beyond work. Stay-at-home orders are expiring, and businesses are reopening across California. Employers do not have the ability to safeguard employees or enforce social distancing outside of work.” 

The executive order comes as four bills proposing different levels of presumptive COVID-19 coverage are pending before state lawmakers.

Assembly Bill 664, by Assemblyman Jim Cooper, D-Elk Grove, and Assemblywoman Lorena Gonzalez, D-San Diego, would create a conclusive presumption that COVID-19 is an occupational disease for firefighters, law enforcement officials and nurses. Assembly Bill 196, by Gonzalez, would create a conclusive presumption that COVID-19 is an occupational disease for any other worker identified as essential in the governor's stay-at-home order.

Senate Bill 1159, by Sen. Gerald Hill, D-San Mateo, would create a rebuttable presumption for public sector and private sector workers who are "employed to combat the spread of COVID-19." The bill includes language declaring the intent of the Legislature that the group of workers be explicitly identified "in order to ensure that they receive all necessary health care through the workers’ compensation system."

And SB 893, by Sens. Anna Caballero, D-Salinas, and Nancy Skinner, D-Berkeley, would create a rebuttable presumption that applies to respiratory diseases contracted by hospital employees. The bill says covered conditions would include chronic obstructive pulmonary disease, asthma, COVID-19 and other conditions caused by “novel pathogens.”

The Workers’ Compensation Insurance Rating Bureau recently released a study predicting the annual cost of the conclusive presumption proposed by AB 664 alone would range from $2.2 billion to $33.6 billion. An approximate midrange was estimated at $11.2 billion, or 61% of the annual estimated cost of the total workers’ compensation system prior to the pandemic.

Rumors were also circulating in Sacramento that the governor was considering an executive order that would create a conclusive presumption covering all essential workers.

“This is better than what we had heard about,” said Jason Schmelzer, of the California Coalition on Workers’ Compensation. “To a degree, employers have been heard. But we've got a long way to go in the Legislature, and there's four other measures out there. Before today, we knew the rules of the road in terms of claims. And to a degree I think things have gotten a bit murkier in some ways. Hopefully, this all kind of comes together. The point is to make this clearer.”