May 7, 20200

California Governor Gavin Newsom signed an executive order Wednesday, May 6, 2020, extending workers’ compensation benefits to workers if they test positive for coronavirus.  Governor Newsom, during his now daily press conference, reported that the stop gap measure was intended to prevent injured workers from reporting to work while sick because they could not afford to go without income.  

The executive order, N-62-20, creates a rebuttable presumption of compensability for workers contracting COVID-19 if they are diagnosed with COVID-19 within 14 days after a day they performed labor outside of the home at their place of employment at the employer’s direction. 

In terms of important details, the order would require a positive test or diagnosis for a claim to be sustained.  The order only extends to workers who are required to leave their home to work, not to workers who elect to leave the home but have the option to work remotely.  The order is effective for cases contracted between the dates of 3/19/2020 and 7/5/2020 for now.   Governor Newsom stated that eligibility for benefits could be “rebutted” by the employer, “but under strict criteria.”  Governor Newsom did not indicate what those strict criteria are and additional details are expected to be released within the upcoming days. 

Additionally, liability for a COVID-19 claim will be presumed accepted if a claim is not denied within 30 days, as opposed to the usual 90 days allowed for investigation.  Apportionment under Labor Code § 4663 and Labor Code § 4664 is still available for cases where there are comorbidities or causes of disability other than the coronavirus.  If a death does occur and there are no dependents, the state’s Death Without Dependents unit will not collect benefits by the terms of the order.     

In cases where sick leave benefits are available to the injured worker specifically in response to COVID-19, those benefits must be used and exhausted prior to any TTD benefits or Labor Code § 4850 benefits becoming due and payable.  TTD benefits must be recertified every 15 days within the first 45 days following diagnosis.   

The order was signed in the context of California preparing for the initial phases of the reopening of nonessential businesses in the coming weeks.  Currently, around 59,000 cases of COVID-19 have been confirmed in California, resulting in around 2,412 deaths.  California is now testing around 30,000 people a day and has conducted around 800,000 tests.    

There is no question that the Governor can suspend a regulatory statute during a state of emergency under the California Emergency Services Act, Government Code § 8571, though it is less than clear that creating a presumption is a suspension of a regulatory statute as opposed to lawmaking, which could raise questions of constitutionality.  Government Code § 8567 also provides that emergency orders and regulations are no longer operative once the state of emergency is terminated, so the scope of this order will likely be something the courts, the government, and interested parties work out over the coming months and, possibly, years.  It should be noted that the legislature is already considering formal legislation in the form of Assembly Bill 664 and Senate Bill 1159 that would create a presumption of compensability for COVID-19 diagnoses in certain workers, which could make some of the issues arising out of the executive order moot.           

The full text of the executive order can be found here: https://www.mulfil.com/executive-order-n-62-20/

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

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