California’s Establishes New COVID-19 Requirements – and a $10,000 Fine

Governor Newsom signed Senate Bill 1159 into law in California in September 2020. This new law expands a previous COVID-19 presumption for workers’ compensation claims and creates new reporting requirements enforced with a hefty fine.

The Previous Workers’ Compensation Order

In May 2020, Governor Newsom signed an executive order that created a workers’ compensation presumption for workers who contracted COVID-19. This order made it easier for workers to file a workers’ compensation claim, as long as they tested positive for COVID-19 within 14 days of working outside the home. The order went into effect on March 19, 2020 and stayed in effect until July 5, 2020.

Senate Bill 1159 wasn’t signed until September, but it applies retroactively effective July 6, 2020, thereby filling in the gap left by the expiration of the executive order. Senate Bill 1159 will be in effect until January 1, 2023.

COVID-19 Presumption

Senate Bill 1159 creates two rebuttable presumptions that an employee’s case of COVID-19 is an occupational injury and eligible for workers’ compensation benefits. Employees must exhaust any COVID-19 related paid leave before receiving workers’ comp time loss benefits.

The new law creates presumption for the following:

• First responders and certain types of health care workers
• Employees whose employers have at least five employees and who test positive for COVID-19 during an outbreak at their workplace.

The presumption is rebuttable, which means that employers can dispute the claim that the employee contracted COVID-19 at work. However, the burden has essentially shifted to the employer to prove the employee did not contract COVID-19 on the job.  Employers/insurers have 30 days to make a decision on a claim related to first responders and health care workers and 45 days to make a decision on a claim related to outbreaks.

Claims Made After July 5

Some workers’ compensation claims may have been denied after the executive order expired on July 5 and before this new law went into effect. According to the California Department of Industrial Relations, these denials will not be automatically reversed. However, employers may decide to reverse their denial based on the new law, and if they don’t, the employee may file for a hearing.

COVID-19 Reporting Requirements

Senate Bill 1159 also imposes immediate reporting requirements on employers related to the outbreak presumption. If an employer knows that an employee has tested positive for COVID-19, or if the employer reasonably should have known, the employer must report to the WC claims administrator within three business days.

This is not the same as filing a worker’s comp claim. Instead, most claims administrators have a special SB 1159 reporting form or spreadsheet they’re requesting their insureds use to report positive COVID-19 cases within the three-day time frame.  If employers have not received SB 1159 reporting instructions from their claims administrator, they should reach out immediately to discuss the format for reporting these cases.

If the employee indicates their COVID-19 illness is work related, a claim form must also be provided and reported per normal claim reporting protocols.  This step must be taken in addition to completing the SB 1159 reporting form or spreadsheet to establish the workers’ compensation claim.

This reporting requirement is retroactive.  Employers have 30 days to report Covid-19 positive cases to their claims administrator going back to 7/6/20.

If employers fail to report the required information, or if they intentionally submit false or misleading information, they may be charged up to $10,000 in civil penalties.

If you have any locations in California, make sure you’re complying with this law. Reach out to your Propel advisor if you have any questions.