Are You Worried that the COVID-19 pandemic will Cause a CLAIMS Epidemic?

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    Let us work together to achieve equitable results in these difficult times.

    A New Future

    A Changing Legal Landscape

    We are sensitive to the often-tragic consequences of the COVID-19 pandemic. Appropriate workers’ compensation benefits should be provided to those who have legitimately contracted the disease as a result of industrial exposure. After all, the workers’ compensation system is intended as a benefits delivery system. Thus far, California employers have seen well over 20,000 COVID-19 claims.

    The pandemic has given rise to enormous and potentially unprecedented volatility. Emerging law is new and cutting edge. That the judicial system will become involved is a certainty. No one can reliably predict the results.

    The California Legislature has passed two key bills on literally the last day of the most recent legislative session. They are Senate Bill 1159 and Assembly Bill 685. Both are before Governor Gavin Newsome for signature.

    Employers, insurers and claims administrators are strongly encouraged to become familiar with the bills in their entirety. It is absolutely not sufficient to rely on the summaries provided here. These summaries are informational only and are not complete recitations of the bills. They are not intended as legal advice in individual circumstances.

    Senate Bill 1159

    It is obvious from the dizzying language of Senate Bill 1159 that it resulted from numerous compromises among competing interests. Governor Gavin Newsome is widely expected to sign the bill into law as emergency legislation. That means that it would become immediately effective. Attorneys are already looking for loopholes because that is – well – what we do.

    Senate Bill 1159 creates three new Labor Code sections. They provide for “disputable” presumptions of compensability for statutorily defined COVID-19 injuries or death. The presumptions are applicable to employers with five or more employees. These statutes are carefully drafted to pick up from Governor Newsome’s executive order which remained in effect from May 6 to July 5, 2020. The executive order created a “rebuttable” presumption of compensability under specified circumstances. The distinction between “disputable” and “rebuttable” presumptions remains unclear. The bill provisions are to remain in effective until January 1, 2023.

    To qualify as an injured worker an employee must have suffered illness or death from COVID-19. Additionally, the employee must have tested positive or been diagnosed with COVID-19 within 14 days after the employee performed services for the employer. If the diagnosis is rendered without testing, it must be confirmed by such testing within 30 days. The date of loss is defined as the last day an employee worked for the employer.

    For the disputable presumption to be applicable, an employee must test positive during an outbreak. For entities having 5 to 100 employees, a worker’s positive test must have occurred during a period when 4 or more employees tested positive at a specific workplace. An outbreak for employers with more than 100 employees at a specific location is defined as positive testing for 4% of employees reporting to that workplace.

    The outbreak definitions lead to some interesting questions. Does the presumption apply if the employer has the requisite number of positive tests but not all of the affected employees work at the same location? Is the presumption applicable where the required number of employees technically “report” to the same location but perform few, if any, services there? Long-haul truck drivers are an example. We simply do not know the answers. The courts will have to become involved.

    Employers have strict reporting requirements which serve as the basis of a determination that an outbreak exists. When an employer knows or reasonably should have known of a positive employee test it must report that to its claims administrator by email or fax within three business days. A failure to do so or the provision of intentionally misleading information can lead to a Labor Commissioner fine of up to $10,000.00.

    The type and volume of evidence necessary to dispute the presumption, where applicable, promises to be a key point of contention. Senate Bill 1159 specifies that this evidence “may include, but is not limited to, evidence of measures which the employer has used to reduce the potential transmission of COVID-19 and evidence of an employee’s non-occupational risk of COVID-19 infection. Given the pervasive nature of the virus, the latter will certainly be the subject of intense scrutiny during investigation and legal discovery. Additional creative defenses will evolve.

    COVID-19 claimants are entitled to the entire gamut of workers’ compensation benefits. However, there are exceptions under certain circumstances. If an employer provides employees with paid sick leave benefits specifically available for COVID-19, the employee must use and exhaust those benefits before being entitled to any temporary disability payments. Conversely, if such sick leave benefits are not available, the employee shall be entitled to temporary disability benefits from the date of disability without a waiting period. Unlike other claims, the State of California is not entitled to a death benefit for employees who perish without dependents.

    As if the above is not complicated enough, the statutory scheme contained in Senate Bill 1159 creates three classes of eligible employees. The first pertains to individuals who tested positive between March 19 and July 5, 2020. Within that class, to qualify for temporary disability, individuals who tested positive on or after May 6, 2020 must be certified for temporary disability within the first 15 days after the initial diagnosis. Recertification is to occur every 15 days thereafter for the first 45 days following the diagnosis. For employees who tested positive before May 6, 2020, certification must be obtained no later than May 21, 2020 retroactively documenting the period during which the employee was unable to work. Again, recertification must occur every 15 days thereafter for the first 45 days post-diagnosis.

    The second category of workers is comprised of firefighters, peace officers and certain health care workers such as registered nurses, emergency medical technicians and paramedics. However, when an employer can establish that a health facility employee did not have contact with a patient testing positive for COVID-19 within the past 14 days, the presumption is inapplicable. Presumably that means the last 14 days that the employee performed services. However, the statute is vague. If the presumption is inapplicable, that employee’s claim shall be evaluated pursuant to Labor Code Sections 3202.5 and 3600. That means that the employee has the burden of proof to establish industrial injury by a preponderance of the evidence.

    The third category pertains to all employees who do not fit within the first two classes of individuals.

    Employers and claims administrators must understand that Senate Bill 1159 markedly accelerates the time period in which to investigate claims. In most cases, that time frame is 90 days from the employee’s filing of a DWC-1 Claim Form. For most cases, the period in which to deny a claim is 90 days from an employee’s filling of a DWC-1 Claim Form. For the first two categories of workers identified above, this period has been reduced to 30 days. A 45-day denial period pertains to the third category.

    Assembly Bill 685

    Assembly Bill 685 mirrors many provisions of the California Occupational Safety and Health Act of 1973 (CAL-OSHA). The bill prohibits employers from engaging in any operation or practice or access to an area of the workplace that exposes workers to an imminent risk of COVID-19 infection. These provisions also “sunset” on January 1, 2023.

    An employer with notice of potential COVID-19 exposure must provide written notice within one business day to all employees within the work site at which the infected worker was employed. Employees of subcontractors providing services at that work site must also be provided written notice. Unlike Senate Bill 1159, the authors of Assembly Bill 685 recognize that in a multi-work site environment the employer is not required to provide notification employees who work at sites other than where the infected employee was employed.

    The written notification to employees who may have been exposed to COVID-19 must inform them of their potential entitlement to all available laws. These include workers’ compensation, company sick leave, state-mandated leave and supplemental sick leave. Additionally, the employees must be informed of their anti-retaliation and anti-discrimination protections in connection with COVID-19 claims.

    The bill contains a rebuttal presumption that a “serious violation” as defined in CAL-OSHA exists if there is a demonstration of a realistic possibility that death or serious physical harm could result from the hazard created by a COVID-19 violation. Although not specified in the bill, the likelihood is that the parameters of “serious violation” are consistent with those contained in California Code of Regulations, Title 8, Section 336(c) which provides for fines of $18,000.00 to $25,000.00 per violation. The employer can rebut that presumption by demonstrating that it did not know and could not have known with the exercise of reasonable diligence that a violation had occurred and that all reasonable measures were taken to anticipate and prevent that violation. Further, the employer is charged with the responsibility of taking effective action to eliminate employee exposure to a serious health hazard.

    Where do we come in?

    It is critical that cooler heads prevail.

    We have the ability and experience to timely and thoroughly investigate claims and to provide appropriate advice. The denial of claims without complete investigation or justification merely fuels extreme measures. Given the substantially reduced period in which to deny claims, time is of the essence in handling COVID-19 matters.

    Let us work together to achieve equitable results in these difficult times.

    Our mission is to build lasting relationships with clients, based on the principles of honesty in action, full understanding of their business vision and total trust.

    Please contact us at:

    Peter R. Nelson Law Offices

    3600 S. Harbor Boulevard, #461

    Oxnard, CA 93035

    Telephone: (805) 402-6737

    Email: Peter@NelsonAttorney.com