SB 1127 – Changes to Labor Code Sections 4656, 5402, 5414.3
AB 1751 – COVID-19 Presumption and Updates
SB 1127
On September 29, 2022, Governor Newsom signed SB 1127 which provides for, among other things, additional temporary disability benefits for public safety employees, such as firefighters and police officers, in presumptive cancer claims. Now, up to 240 weeks of temporary disability benefits are allowed in connection with cancer conditions that are presumed compensable pursuant to Labor Code Section 3212.1. The prior limitation was 104 weeks within a period of five years from the date of injury, for dates of injury on or after January 1, 2008.
Labor Code Section 4656(d) Added
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SB 1127 amends Labor Code Section 4656, adding section (d), which reads: “Notwithstanding subdivisions (a), (b), and (c), for an employee who suffers from an injury or condition defined in Section 3212.1, aggregate disability payments for a single injury occurring on or after January 1, 2023, causing temporary disability shall not extend for more than 240 compensable weeks.”
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Note that for injuries occurring on or after January 1, 2008, the 104-week limitation does not extend more than five years from the date of injury. Such a limitation is not found in new section (d), above.
Labor Code Section 5402(b)(2) Added
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SB 1127 also adds Labor Code Section 5402 (b)(2), which states that for injuries or illnesses defined in Sections 3212 to 3212.85 and Sections 3212.9 to 3213.2 (establishing presumptions for heart, hernia, pneumonia, cancer, tuberculosis, blood-borne infectious diseases, exposure to biochemical substances, low back impairment for law enforcement officers, PTSD, etc.), if liability is not rejected within 75 days after the date the claim form is filed pursuant to Labor Code Section 5401, the injury shall be presumed compensable under this division. The presumption of this subdivision is rebuttable only by evidence discovered subsequent to the 75-day period.
Labor Code Section 5414.3 Penalties
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Labor Code Section 5414.3(a) states, “Notwithstanding Section 5814, when liability has been unreasonably rejected for claims of injury or illness as defined in Sections 3212 to 3213.2, inclusive, the amount of the penalty shall be five times the amount of the benefits unreasonably delayed due to the rejection of liability, but in no case shall the penalty exceed fifty thousand dollars ($50,000).”
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The only change in SB 1127 relevant to the COVID-19 presumptions is the adoption of Labor Code Section 5414.3, which increases penalties for unreasonably rejecting claims covered by a statutory presumption.
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Because the penalty is inclusive of the injuries or illnesses defined in Labor Code Sections 3212 – 3213.2, it applies to the presumptions for illnesses or deaths related to COVID-19, which are enumerated in Labor Code Sections 3212.86 – 3212.88.
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Although the statute requires the Workers’ Compensation Appeals Board (WCAB) to determine whether the rejection of liability is reasonable, if it determines that an employer unreasonably denied a claim, the statute does not give the Board discretion to determine the amount of the penalty. Unlike Labor Code Section 5814(a), which gives the Board discretion to issue a penalty “up to 25 percent” of the amount unreasonably delayed, up to $10,000, Labor Code Section 5414.3 states that if liability has been unreasonably rejected for a claim covered by a statutory presumption as defined in Labor Code Sections 3212 – 3213.2, the penalty “shall” be five times the amount of the benefits unreasonably delayed, up to $50,000.
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Labor Code Section 5414.3(c) states, “This section shall apply to all injuries, without regard to whether the injury occurs before, on, or after the operative date of this section.” So, although the statute does not go into effect until January 1, 2023, the penalty provisions apply to all dates of injury.
AB 1751
On September 29, 2022, Governor Newsom also signed AB 1751, which extends the presumption of workers’ compensation liability for COVID-19 illness previously established in SB 1159 through January 1, 2024.
Expansion with Respect to Safety Members:
- AB 1751 expands Labor Code Section 3212.87 applicable to firefighters and police officers to include active firefighting members of a fire department at:
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- the State Department of State Hospitals
- the State Department of Developmental Services
- the Military Department
- the Department of Veterans Affairs and to officers of a state hospital under the jurisdiction of the State Department of State Hospitals and State Department of Developmental Services.
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In accord with Labor Code Section 3212.87(f), if liability for a claim of COVID-19-related illness is not rejected within 30 days after the date the claim form is filed pursuant to Labor Code Section 5401, the illness shall be presumed compensable. The presumption of this subdivision is rebuttable only by evidence discovered subsequent to the 30-day period. Labor Code Section 3212.87(f)
Presumption in the Case of an Outbreak:
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Under Labor Code Section 3212.88, there is a presumption available for employees not covered in Labor Code Section 3212.87 who test positive during an outbreak where the employer has 5 or more employees.
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If liability for a claim of COVID-19 related illness under this subsection is not rejected within 45 days after the date the claim form is filed pursuant to Labor Code Section 5401, the illness shall be presumed compensable. The presumption is rebuttable only by evidence discovered subsequent to the 45-day period. Labor Code Section 3212.88(f).
Reporting Requirements:
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Pursuant to Labor Code Section 3212.88(i): When an employer knows or reasonably should know that an employee has tested positive for COVID-19, the employer has 3 business days to report to their claim’s administrator in writing, via electronic mail, or facsimile all of the following:
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De-identified information that an employee has tested positive unless the employee asserts the infection is work related or has filed a claim form pursuant to Labor Code Section 5401.
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The date that the employee tests positive, which is the date the specimen was collected for testing.
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The specific 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.
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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.
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All employers must comply with AB 1751. If these incidents are not reported or false/misleading information is filed, the employer will be subject to penalties as outlined in Labor Code Section 3212.88(j). The full text of AB 1751 can be found here.
This legislative update was prepared by Anne Hernandez, Senior Managing Partner, in our Santa Rosa office.
