On May 6, 2020, Governor Newsom signed Executive Order N-62-20 (“Executive Order”), which creates a temporary “rebuttable presumption” for COVID-19 related workers’ compensation claims.

What is a rebuttable presumption?

In workers’ compensation law, employees generally have the burden of proof and must support their claim for workers’ compensation with a reasonable factual basis that they contracted the disease at work or how their work put them at a special risk for contracting the disease. A rebuttable presumption shifts the burden of proof from the employee to the employer and requires the employer to prove that the employee did not get injured or ill at work.

Presumptions are nothing new—California law establishes presumptions for a narrow category of workers and specific types of injuries, for example, police officers and firefighters and other public safety officers are entitled to a presumption for certain types of work injuries such as cancer, blood-borne infectious diseases, exposure to biochemical substances, and lower back pain.

Given what we know, and, more importantly what we do not yet know about the transmission of COVID-19, it is difficult for infected employees to prove that their job caused their contraction of COVID-19. According to the Centers for Disease Control and Prevention, COVID-19 spreads easily and sustainably in the community in many geographic areas. All Californians face a shared risk for exposure and testing for the virus and contact-tracing are limited, which makes it difficult to prove that the employee contracted COVID-19 in the workplace—even for employees with an elevated occupational risk of exposure to the disease. While employers have been accepting some COVID-19 claims, many claims have been denied because community spread is a probable source of COVID-19, and many employees are uncertain about how or when they became infected.

The Executive Order shifts the burden of proof onto employers and now, claims can only be denied if the employer can prove that the COVID-19-related illness did not arise out of and in the course of the employment. Given the rate of community transmission, employers should be prepared to see a spike of COVID-19 related workers’ compensation claims.

Who does the Executive Order apply to?

The Executive Order creates a rebuttable presumption of workers’ compensation coverage for workers who: (1) work outside their homes at the direction of their employers, (2) have a positive COVID-19 diagnosis from a licensed physician within 14 days of the date they performed a labor or service at a place of work after the stay at home order was issued, and (3) the diagnosis is confirmed by testing within 30 days of the date of the diagnosis. The rebuttable presumption will not apply to employees who telework, or work from home, and have not been directed to report to the job site.

Is the Executive Order temporary?

The Executive Order is a temporary measure applicable to workers who were directed to work outside the home from March 19, 2020 until 60 days after the issuance of the Executive Order. While the Executive Order is temporary, COVID-19 will have a lasting toll on the workers’ compensation system. We are just beginning to understand the long-term health consequences of COVID-19. Impaired lung function from COVID-19 could negatively affect other organs like the heart, kidneys, and brain, with significant health impacts that may last after recovering from the infection. Employers should be prepared to handle COVID-19 workers’ compensation claims, even when we are no longer combating the pandemic.

What type of workers’ compensation benefits must be provided?

The Executive Order provides that accepted workers’ compensation claims are eligible for statutory benefits, including the cost of hospital, surgical, and medical treatment; temporary disability payments; longer-term permanent disability benefits; and death benefits.

How much will it cost?

Employers may have to foot a hefty bill for COVID-19 workers’ compensation claims. California employers are required to pay for workers’ compensation benefits and are required to maintain workers’ compensation insurance. For many public entities, the cost of workers’ compensation comes directly out of their annual budgets. The Workers’ Compensation Insurance Rating Bureau’s Cost Evaluation of Potential Conclusive COVID19 Presumption in California Workers’ Compensation, estimated a broad cost range for proposals similar to the Executive Order to be somewhere between $2.2 and $33.6 billion per year, with an approximate mid-range cost estimate of $11.2 billion per year—a 61% increase to the annual estimated cost of California’s workers’ compensation system prior to the impact of the pandemic.

A copy of the Governor’s executive order can be found here.

If you have any questions or concerns, you are welcome to contact the offices of Churchwell White at (916) 468-0950 or email Doug White at Doug@whitebrennerllp.com, Randy Pollack at Randy@whitebrennerllp.com, Debra Hinshaw Vierra at Debra@whitebrennerllp.com, or Barbara Brenner at Barbara@whitebrennerllp.com.