Coronavirus 2019 and California Workers’ Compensation Liability: Legislative Measures Are Likely

Although the California State Legislature is in recess until May 4, 2020, that hasn’t stopped legislative activity in Sacramento regarding coronavirus 2019 (COVID-19) and workers’ compensation. In fact, one could say that Sacramento is abuzz with concern about the impact of COVID-19 upon essential frontline employees and their employers and potential workers’ compensation liability. A recent analysis from the Workers’ Compensation Insurance Rating Bureau (WCIRB) estimates the cost of COVID-19 workers’ compensation claims of essential workers who contract the virus during the pandemic to range from $2.2 billion to $33 billion annually. No one can deny that frontline workers risk their health and personal safety as they continue to provide essential services to the rest of us during this pandemic, so it should be no surprise that possible legislative solutions are now on the table.

Two separate legislative measures aimed at providing certain workers’ compensation protections for frontline employees have been filed.

AB 664. The first, Assembly Bill 664, sponsored by the California Nurses Association, was introduced on April 17, 2020. It is intended as an urgency measure that would take effect immediately when signed by the Governor. The bill would add a new Labor Code section 3212.18 to the Labor Code, and would create a conclusive presumption of industrial injury for specified employees who become exposed to or contract a communicable disease including COVID-19 that occurs on or after January 1, 2020.

The employees to whom the presumption applies include active firefighters of a city, county, district, public, or municipal agency; firefighters employed by the University of California or State University system; Department of Forestry and Fire Protection firefighters; a county forestry or firefighting department; peace officers; and health care employees who work in general acute care hospitals. The bill defines injury to include a directive issued by a licensed health care professional/public health entity that the employee be quarantined as a result of exposure to or contraction of COVID-19.

The bill clarifies that the employee is entitled to all normal compensation benefits as well as reimbursement for personal protective equipment that provides protection for the employee and others; temporary housing costs if the employee is required to quarantine; and temporary housing costs, as necessary to protect others from being exposed to or contracting COVID-19. It also prohibits any requirement that the eligible employee be required to use accrued vacation, sick leave or other compensatory leave as a prerequisite to reimbursement. Finally, the bill would amend section 4663 to clarify that the presumed industrial injury as set forth in this new section (3212.18) is not subject to apportionment to causation.

Of note, this bill does not include a large number of health care employees designated as “essential critical infrastructure employees” in conjunction with Executive Order N-33-20, issued on March 19, 2020. For example, respiratory therapists, lab employees, health care workers in clinics, hospital housekeeping and dietary services employees, and health care employees who work in skilled nursing or assisted living facilities.

SB 1159. The second bill is Senate Bill 1159, introduced by Senator Jerry Hill of San Mateo County. It would add a new Labor Code section 3212.86 that applies a rebuttable presumption of industrial causation of illness or death resulting from exposure to COVID-19 for critical employees. The bill lists three prerequisites to application of the presumption.

First, the injury must occur or develop during a period in which the employee is in the service of an essential critical infrastructure employer. Second, the injury must be confirmed by a positive laboratory test or, if such is not available, as diagnosed and documented by the employee’s physician based on the employee’s symptoms. Third, the injury results in hospitalization or significant lost time beyond the employee’s work shift at the time of injury of at least a certain (unspecified) days due to the illness.

The bill only applies to “critical workers,” which it defines as a public sector or private sector employee who is employed to combat the spread of COVID-19. Finally, the bill includes an unspecified repeal date.

One very glaring ambiguity in the bill is the definition of a “critical worker.” Is that term meant to encompass the “essential critical infrastructure workers” as designated by the State Public Health Officer in conjunction with Governor Newsom’s Executive Order N-33-20, issued on March 19, 2020? That designation is large and includes grocery store employees, warehouse employees, food service/delivery employees, public works employees, agricultural employees and energy sector employees, to name only a few.

When the Legislature returns to work in Sacramento we can expect hearings and further action on these two measures. The recent cost analysis prepared by the WCIRB underscores the potential economic impact of COVID 19 on our workers’ compensation system. Anticipated annual cost estimates are astronomical. To the extent legislative measures reduce litigation, some cost-savings can be recognized. Toward that end, it is imperative that legislative solutions be drafted in the most thoughtful, clear and unambiguous manner possible. We urge readers to take a close look at both bills since legislative action on these important workers’ compensation concerns seems inevitable.

Any information or opinions contained in this commentary are not necessarily endorsed by LexisNexis® or its affiliates.

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