Governor Newsom Creates Rebuttable Presumption of Workers’ Compensation Eligibility 

May 11, 2020

On May 6, 2020, California Governor Gavin Newsom signed an executive order facilitating access to workers’ compensation benefits for essential workers who contract COVID-19 on the job. Executive Order N-62-20 (order) creates a rebuttable presumption that an employee’s illness arose out of and in the course of employment if the employee tests positive for COVID-19 or was diagnosed with COVID-19 after March 19, 2020, and within 14 days after they performed labor or services at a place of work, and the diagnosis is confirmed with a positive test within 60 days of diagnosis. The employee must have worked outside the home during the relevant time period. The presumption remains in place for 60 days after issuance of the order (May 6, 2020).

Employers may dispute the presumption within 30 days after the claim is filed, but unless controverted within that time frame, the Workers’ Compensation Appeals Board must find in accordance with the presumption. After that 30 day period, the claim may only be disputed by new evidence discovered more than 30 days after the filing.

Benefits for COVID-19 related illnesses under the order include full hospital, surgical, medical treatment, disability indemnity, and death benefits. However, if an employee has paid sick leave benefits specifically applicable in response to COVID-19, those benefits shall be used and exhausted before any temporary disability benefits or benefits under the Labor Code are due and payable. Employees can also be eligible for temporary disability or other Labor Code benefits from the date of disability. There is no waiting period for temporary disability benefits.

A clear victory for employees and labor unions, this order is likely to impact employers both logistically and financially. Indeed, the order applies to all workers’ compensation insurance carriers writing policies that provide coverage in California, as well as self-insured employers and any other employer carrying its own risk, including the state of California. Yet, the order does not limit workers’ compensation insurance carriers from adjusting the costs of their policies, so employers might expect premium hikes if they are nearing or currently drafting new unemployment insurance contracts.

No doubt employers who violate this order will be liable for penalties if they retaliate against employees, and perhaps serious and willful claims if employers fail to implement all the workplace safety practices that Cozen O’Connor is currently covering more thoroughly in our “Deep Dive” series. The order has already been met with resistance and could be challenged on constitutional grounds. The California Chamber of Commerce has expressed concerns that the order will harm employers — a sentiment that has been shared by other businesses and interest groups. Given the continually changing legal landscape, employers should work with counsel to understand how the newly enacted rebuttable presumption impacts their workplace.