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SPECIAL BULLETIN: SB 1159 PASSES LEGISLATURE FOR GOVERNOR SIGNATURE

The California Legislature passed Senate Bill (SB) 1159 before the end of its legislative session this week, codifying the prior Executive Order creating a COVID presumption and creating a rebuttable presumption as to health care workers, peace officers, firefighters, and other first responders and emergency workers, as well as a presumption for other employees in the event of an outbreak of COVID at the workplace.  Two other Assembly Bills (AB) that were being considered, AB 196 and AB 664, were not voted on and so will not become law.  AB 196, the most expansive of the proposed legislation, would have essentially created a conclusive presumption that COVID contracted by an essential worker constitutes an industrial injury.

NEW BILL EXTENDS THE PRIOR EXECUTIVE ORDER

SB 1159 not only codified the executive order that issued in May of 2020 but also extended the presumption to the following: workers providing in-home supportive services outside of their home, and to workers in jobs outside of first responder jobs. Such individuals would have to demonstrate a positive test within 14 days of reporting to work and that the positive test occurred during an outbreak at the specific workplace in question.  These additions to codification of the Executive Order were the result of many amendments after intense discussion and analysis between various stakeholders since the time the bill was first proposed.  Many of the amendments were agreed to on the eve of the end of the regular legislative session.  For cases of COVID after July 5, 2020, the bill does away with the distinction between a COVID diagnosis and a COVID test, and refers solely to positive COVID tests.

NEW LABOR CODE SECTION 3212.87

In terms of specifics, the bill adds Section 3212.87 to the Labor Code, which applies a basic presumption to active firefighters, fire and rescue services coordinators, health facility workers providing patient care or custodial employees in contact with COVID-19 patients, registered nurses, medical technicians, paramedics, home health care providers, and peace officers.  For those categories of employees, if an employee has tested 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, on or after July 6, 2020, the disease will be presumed industrial.  It should be noted that the bill does provide an out from the presumption as to health care workers if the employer can establish that the employee did not have contact with a health facility patient within the last 14 days who tested positive for COVID-19. 

The date of injury in these cases is considered the last date worked prior to the positive test, and compensation shall include: full hospital, surgical, medical treatment, disability indemnity, and death benefits (though the Death Without Dependents Unit will not collect any death benefit).  Temporary total disability (TTD) benefits will not be owing under the bill, however, if sick leave benefits are made available by the employer specifically in response to COVID-19 until such benefits are exhausted.  The presumption extends for 14 days following any termination.

The presumption would be rebuttable, though the section requires that any denial be issued within 30 days of the filing of a claim form pursuant to Section 5401.  If not denied within 30 days, the illness shall be presumed compensable, rebuttable thereafter only by evidence only discovered after the 30-day period.  The bill sunsets on January 1, 2023.

NEW LABOR CODE SECTION 3212.87

Those individuals not covered in Labor Code Section 3212.87 are covered under the newly added section, 3212.88. This section creates a presumption of industrial injury for all workers who test positive during an outbreak at the employee’s specific place of employment if the employer has five or more employees.  Similar to the other portions of the bill, to qualify an employee must test 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 for all dates after July 5, 2020. Additionally, employees are not entitled to TTD benefits if the employer has provided specific COVID-19 sick leave until that sick leave is exhausted.  The presumption also extends for 14 days after termination of employment.

CONSIDERATIONS TO REBUT THE PRESUMPTION

The presumption is rebuttable and the bill, interestingly, discusses some of the considerations relevant in considering whether the presumption is rebutted.  Specifically, Labor Code Section 3212.88 sets forth that evidence that an employer put measures in place to reduce transmission and an employee’s nonoccupational risks of COVID-19 infection are relevant when seeking to rebut the presumption.  This section, as opposed to the 30-day window for denial provided to the favored professions, allows employers 45 days to deny a claim before it is presumed industrial and the presumption is rebuttable only with evidence discovered subsequent to the 45-day period.  If any of the criteria to qualify for the presumption are not met, an employee must prove their injury by the preponderance of the evidence in accordance with the rest of the Labor Code.

NUMBERS COUNT

Where an employer has 100 employees or fewer at a specific place of employment, the section defines an outbreak as any time four or more employees test positive for COVID-19 within 14 calendar days at a specific place of employment.  For an employer with more than 100 employees at a specific place of employment, an outbreak occurs when 4% of the number of employees reporting to a specific place of employment test positive for COVID-19.  This portion of the Labor Code also sunsets on January 1, 2023.

EMPLOYER REPORTING REQUIREMENTS

Importantly, the data gathering necessary to determine whether an employee qualifies for the presumption is accounted for in the bill by creating various reporting requirements for employers and subjecting employers to fines for failure to observe reporting requirements.  When an employer knows or reasonably should know that an employee has tested positive for COVID-19, they are to report to their claims administrator via electronic mail or facsimile within three business days.  The report must indicate that an employee has tested positive.  The employee’s name or any personally identifiable information shall not be provided unless the employee asserts the COVID-19 is work-related or files a claim form.

The employer must report the date the employee tested positive, the specific address or addresses of the employee’s specific place or places of employment in the 14 days preceding the date of the positive test, and the highest number of employees who reported to work at the infected employee’s specific place of employment for the 45-day period preceding the last day the employee worked at each specific place of employment.

Where an employer intentionally submits false or misleading information or fails to submit information, they shall be subject to a $10,000 civil penalty.  The section provides the procedure for the assessment of such citations and fines and the adjudication of such citations.  The responsibility for determining whether the presumption applies rests on the claims administrator using the information gathered from the mandatory reporting.

RETROACTIVE REPORTING REQUIRED

Section 3212.88 also creates an obligation that any employer who had an employee who tested positive between July 6, 2020 and the date the bill becomes law must report the above required information within 30 days of the bill’s effective date.  For those retroactive reports, the employer has to report the highest amount of employees who reported to the infected employee’s specific place of employment on any day between July 6, 2020 and the date the bill becomes law.

Carefully monitoring whether an “outbreak” as defined by the bill has occurred is important, as a claim is not subject to the presumption if the requisite number of positive tests per employees has not been met.  Each claim has to be monitored to determine if an “outbreak” occurred during the surrounding 14-day periods (which would create a window of 28 days that needs to be analyzed).

It is mostly a fait accompli at this point that the bill will become law, as Senator Hill worked closely with Governor Newsom’s office in drafting the legislation, and the bill codifies and expands on various aspects of the prior Executive Order.  Mullen and Filippi will be providing another reference guide to assist you in understanding the steps to be taken when faced with a COVID claim that possibly triggers the presumption, as we did previously with the Executive Order.

This Bulletin was written by Jim Cotter, Associate Partner in our Walnut Creek office.