California Governor Gavin Newsom recently signed Executive Order N-62-20 , establishing a temporary legal presumption that certain employees who develop a COVID-19 related illness did so in the course of their employment, and thus the illness is covered by your workers compensation policy. This Executive Order significantly increases the likelihood that employers will need to foot the bill for COVID-19 workers’ compensation claims.
What Changed.  Workers compensation insurance is only available where an employee’s injury arose out of or in the course and scope of employment. Normally, employees have the burden of proving that their injury was work related. The new executive order flips that burden in certain cases so now employers must prove that the injury was not work related. Given the nature of COVID-19, including the prevalence of asymptomatic carriers and lack of testing, this presents a difficult case for employers to make.
Moreover, the executive order shortens the length of time insurance companies have to reject a workers’ comp claim to 30 days from 90 days . Thus, if an insurance company does not reject the COVID-19 claim within 30 days, the illness is presumed compensable and may only be rebutted with evidence discovered after the 30-day period. 

Eligible Employees.  This new presumption that a COVID-19 related illness is work related (and thus a compensable injury) applies only if all of the following are satisfied:

  • the employee tested positive for COVID-19 or was diagnosed with COVID-19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction;

  • the injury (i.e., employee was working at place of employment) occurred between March 19, 2020 and July 5, 2020;

  • The employee’s place of employment was not his or her home or residence; and

  • If employee was diagnosed with COVID-19, such diagnosis was done by a California licensed physician and was confirmed by further testing within 30 days.

Requirements to Receive Temporary Disability or Cal Lab Code § 4850 Disability Benefit Payments. In order to receive temporary disability benefit payments for a COVID-19 related illness, or benefits under Labor Code § 4850 (disability leave for safety personnel) an employee must be certified for temporary disability within the first 15 days following the initial diagnosis and recertified every 15 days thereafter for 45 days.

Relationship with COVID-19 Paid Sick Leave.  An employee must exhaust any COVID-19 paid sick leave benefits before any temporary or § 4850 benefits are due and payable.

What Employers Can Do.  Employers should closely adhere to CDC , OSHA , and local recommendations regarding the establishment of a safe work environment. While the burden of proving that a worker contracted COVID-19 outside of the workplace is a difficult one, strict adherence to safety recommendations is one step towards rebutting the new presumption. Furthermore, employers should consult with their insurance carriers as their premiums may increase due to the executive order.

We will continue to keep you updated on any major COVID-19 related developments that impact the workplace. If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at 818-508-3700 or visit us online at .
Richard S. Rosenberg
Katherine A. Hren
Charles Foster
Ballard Rosenberg Golper & Savitt, LLP