COVID-19 In the Workplace: Employees May Seek Workers’ Compensation

Sue M. Bendavid | Shareholder

September 23, 2020

In May 2020 Governor Gavin Newsom issued an executive order that created a time-limited rebuttable presumption for employees to seek workers’ compensation benefits if they tested positive for COVID-19 while on the job.  The Executive Order expired in July.  On September 17, 2020, Governor Newsom signed SB 1159, extending the presumption for specified employees. SB 1159 took immediate effect and will remain in effect until January 1, 2023.   

Covered Employees

Employees injured in the course and scope of employment are generally entitled to workers’ compensation benefits. SB 1159 creates a rebuttable presumption that a COVID-19 related illness or death is compensable in three different circumstances.

(1) The law covers employees who work for an employer with five or more employees and who test positive for COVID-19 during an “outbreak” (as defined below).  To apply, an employee must suffer an illness or death resulting from COVID-19 and meet all the following conditions:

  • The employee tests positive within 14 days after the employee last worked at the employee’s place of employment at the employer’s direction;
  • The day on which the employee performed work at the employer’s direction was on or after July 6, 2020; and
  • The employee’s positive test occurred during a COVID-19 “outbreak” at the employee’s specific place of employment.

An “outbreak” exists if within 14 calendar days, one of the following occurs:

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

An employer (the workers compensation insurance carrier) has 45 days to determine compensability from the date of the claim. If the claim is denied or a decision is not timely made, the presumption is only rebuttable by evidence discovered after the initial 45-day period.

(2) The law creates a presumption of compensable injury for first responders and health care professionals. Here, there is a limited 30-day period after a claim is made to investigate and determine compensability. If the claim is not rejected within 30 days, it is presumed compensable. 

(3) The law expands the presumption to any employee who reported to their place of employment between March 19 and July 5, 2020 and tested positive or was diagnosed with COVID-19 14-days after the last day the employee worked.  

Relevant evidence to refute the presumption created by SB 1159 includes an employer’s efforts to reduce potential transmission of COVID-19 in the workplace and evidence of an employee’s non-occupational risks of COVID-19 infection (e.g., an an employee’s activities outside of the workplace). 

Notice to Workers’ Compensation Carriers

Under SB 1159, employers must notify their workers’ compensation carriers within three business days when the employer “knows or reasonably should know that an employee has tested positive for COVID-19.” The employer must disclose (i) that an employee has tested positive for the virus; (ii) the date of the employee’s test; (iii)  the specific address where the employee worked during the 14 days preceding the date of the positive test; and (iv) the highest number of employees who reported to work at the employee’s specific place of employment in the 45 days preceding the last day the employee worked at the location. Notably, an employer cannot provide any personally identifiable information regarding an employee unless the employee states the infection is work-related or has filed a claim.  

The law also imposes reporting requirements for employers who are aware that an employee tested positive for COVID-19 between July 6, 2020 through September 17, 2020. These employers must notify their carrier within 30 business days of the date SB 1159 took effect (i.e., by October 17, 2020). As the law does not specifically define “business days,” we recommend employers provide this information to their claims administrator by October 17, 2020.

Employers may be subject to civil penalties up to $10,000 for intentionally submitting false or misleading information, or for failing to report the specified information.

Don’t hesitate to contact a member of our Employment Practice Group if you have any questions. Additional information on COVID-19’s impact on businesses can be found on our COVID-19 Resource Page.

Sue M. Bendavid is an attorney in our Employment Practice Group.

This information provides an overview of a specific developing situation. It is not intended to be, and should not be construed as, legal advice for any particular fact or situation.




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