On September 17, 2020, Governor Newsom signed Senate Bill 1159 effective immediately, which creates a new framework for COVID-19-related workers’ compensation claims. This Bill creates a rebuttable presumption that certain employees who test positive for COVID-19 contracted the virus at work for workers’ compensation purposes and therefore are eligible for benefits, unless the employer can prove otherwise.

The law also requires employers to provide notice to their workers’ compensation carrier of employees who test positive for COVID-19.

Time Frame of Presumption

A “disputable presumption” exists for an employee who suffers illness or death resulting from COVID-19 from July 6, 2020 through January 1, 2023.

Covered Employees

SB 1159 applies to all employees who:

• test positive during an outbreak at the employee’s specific place of employment, and
• whose employer has five or more employees.

The following conditions must exist for the presumption to apply:

• The employee tests positive for 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 day on which the employee performed labor or services at the employee’s place of employment at the employer’s direction was on or after July 6, 2020.
• The employee’s positive test occurred during a period of an outbreak at the employee’s specific place of employment.

Definition of “Outbreak”

An “outbreak” exists if within 14 calendar days one of the following occurs at a specific place of employment:

• If the employer has 100 employees or fewer at a specific place of employment, 4 employees test positive for COVID-19.
• If the employer has more than 100 employees at a specific place of employment, 4% of the number of employees who reported to the specific place of employment test positive for COVID-19.
• A specific place of employment is ordered to close by a local public health department, the State Department of Public Health, the Division of Occupational Safety and Health, or a school superintendent due to a risk of infection with COVID-19.

Definition of Disputable Presumption

SB 1159 creates a presumption that an illness or death resulting from COVID-19 has arisen out of and in the course and scope of employment. However, this presumption is disputable. An employer may dispute the presumption with evidence showing:

• measures in place to reduce potential transmission of COVID-19 in the employee’s place of employment,
• the employee’s non-occupational risks of COVID-19 infection,
• statements made by the employee, and
• any other evidence normally used to dispute a work-related injury.

General Presumption:

If the date of injury is before July 6, 2020, the claim administrator has 30 days to deny the claim. If the date of injury is on or after July 6, 2020, the claim administrator now 45 days to deny the claim. The presumption of compensability is rebuttable only with evidence discovered subsequent to the applicable investigation period.

Presumption for First Responders and Health Care Workers

If the employee is an “essential employee”, then the 30-day denial period applies regardless of the date of injury.  Such “essential employees” include but are not limited to certain firefighters, peace officers, frontline healthcare providers and healthcare facility workers.

Entitlement to Benefits

Under SB 1159, compensation includes “full hospital, surgical, medical treatment, disability indemnity, and death benefits.”[1]

If an employee has paid sick leave benefits specifically available in response to COVID-19, those benefits must be used and exhausted before any temporary disability benefits. However, if an employee does not have those sick leave benefits, the employee must be provided temporary disability benefits from the date of disability without any waiting period.

To qualify for temporary disability, an employee must satisfy either of the following:

• If the employee tests positive or is diagnosed with COVID-19 on or after May 6, 2020, the employee shall be certified for temporary disability within the first 15 days after the initial diagnosis, and shall be recertified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis.
• If the employee tested positive or was diagnosed with COVID-19 before May 6, 2020, the employee must have obtained a certification, no later than May 21, 2020, documenting the period for which the employee was temporarily disabled and unable to work, and shall be recertified for temporary disability every 15 days thereafter, for the first 45 days following diagnosis.

Reporting Requirements

When the employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer must report to its claims administrator the following information within three business days, via e-mail or fax:

• An employee has tested positive. For purposes of this reporting, the employer shall not provide any personally identifiable information regarding the employee who tested positive for COVID-19 unless the employee asserts the infection is work related or has filed a claim form pursuant to Section 5401;
• The date the employee tested positive, which is the date the specimen was collected for testing;
• The address or addresses of the employee’s specific place of employment during the 14-day period preceding the date of the employee’s positive test;
• The highest number of employees who reported to work at the employee’s specific place of employment in the 45-day period preceding the last day the employee worked at each specific place of employment.

The new law also requires covered employers to go back and report any positive tests (and the same information above) to their claims administrator dating back to July 6, 2020.  The due date for catch-up reporting is October 17, 2020.  The claims administrator will use the above information to determine whether an outbreak has occurred.

Potential Ramifications of Non-Compliance

This law has significant ramifications, as it allows the Labor Commissioner to impose up to a $10,000 civil penalty against an employer that submits false or misleading information or fails to submit information in violation of these new reporting requirements.

Call Hill Farrer for Further Questions

Please contact your Hill Farrer attorney or any member of our Labor and Employment department for additional information and assistance with complying with this new law.

[1] Note that the Department of Industrial Relations has waived entitlement to any death benefits under Labor Code Section 4706.5 in the event the deceased employee did not have any dependents.