Gov. Gavin Newsom on Wednesday signed an executive order allowing employees across California’s economy to apply for worker’s compensation if they contract the coronavirus, with a presumption that it was work-related unless employers can prove otherwise.
The presumption applies for the next 60 days and is retroactive to March 19, when Newsom first ordered all but essential workers to stay at home to ease the risk of transmitting the virus. He said the change is needed now as California prepares to relax those orders in coming days and weeks.
Similar debates are happening in Congress and across the nation as leaders debate how much legal protection to give companies whose employees are infected.
Employees in California will be eligible if they tested positive for the coronavirus within 14 days after being at work, the maximum known incubation period. And they must have exhausted other state and federal benefits.
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The state’s Workers Compensation Insurance Rating Bureau previously said such a decision could cost from $2.2 billion to $33.6 billion annually, depending on the details. The mid-range estimate of about $11 billion is about 60% of the entire annual estimated cost of the state's workers’ compensation system before the pandemic.
Employers pay for the program, but in turn employees give up their right to sue for liability.
Business, insurers and local government organizations objected that employees already were covered under California’s no fault, employer-funded system if they could show they contracted the virus on the job.
Newsom's order flips that burden of proof by creating the legal presumption that the infection was job-related unless employers can show otherwise under what the governor called “strict criteria.”
Victoria Hassid, chief deputy director at the California Department of Industrial Relations that oversees the program, said the state will provide more details in coming days. She said the presumption will apply to workers including “our nurses, our first-responders, janitors, warehouse workers, farm workers, grocery store workers, and all of those that are putting themselves on the line.”
There is no limit on job classifications in the executive order, and Newsom said it is important that all employees returning to work in coming days are confident that they have protection if they are infected.
“As we move into this second phase, we want to keep workers healthy and keep them safe. The worst thing we can do is have a worker that has tested positive but doesn’t want to tell anybody and can spread the disease because he or she can’t afford not to work,” Newsom said. “And so that’s why expanding to all sectors of our economy this workers’ comp presumption is so important, because we want people to feel confident and comfortable, they’ll have their benefits.”
Newsom, a Democrat, said the discussions leading to his decision were “very passionate” and involved labor and business leaders, who were split in their response.
The California Chamber of Commerce said many employees already are covered under the federal Pandemic Unemployment Assistance Program without putting more strain on the state's employers.
Newsom's order “will unnecessarily and significantly drive up costs for California employers through increased workers’ compensation insurance rates at a time when they are struggling to keep Californians employed,” the chamber said in a statement.
American Property Casualty Insurance Association president David A. Sampson said it potentially “jeopardizes the stability of the workers compensation system.”
But the Service Employees’ International Union hailed his decision as an important protection for health care workers, many of them racial minorities, who daily face the threat of infection on the job.
"The last thing an ill worker or the family of a fallen worker needs is to spend months in court to secure the health care and other benefits they need to keep food on the table during the hardest time in their lives,” said April Verrett, a local president and SEIU executive board member.
For most people, the virus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness and death.
The state Legislature, overwhelming dominated by Democratic lawmakers, had already been considering several similar actions.