Newsom’s Latest COVID Sanctions and What They Mean

On September 17, 2020, Governor Gavin Newsom signed Senate Bill 1159 into law. The new law was passed as an emergency measure, making it effective immediately upon signing. SB 1159 imposes new obligations on employers and claims administrators with regard to COVID-19 and can result in significant penalties for non-compliance or fraud. Emplicity clients who are unsure about these obligations or require support can contact the Risk Management department at (714) 230-4763. Emplicity’s Risk Management team is on hand to help avoid confusion and penalties and ensure our clients’ claim information is submitted correctly and in a timely manner.

Essentially, SB 1159 presumes compensability under workers’ compensation insurance for employees in California who test positive for COVID-19 under specific conditions outlined below.  Civil penalties can be up to $10,000 for the employer (and/or any organization or individual acting on behalf of the employer) who intentionally submits false or misleading information or fails to report information to their insurance carrier in a timely manner.

The rebuttable presumptions created by the new law affect three different Labor Code sections:

• LC§3212.86: Executive Order N-62-20
  • While the Governor’s Executive Order N-62-20 expired on July 5, 2020, the new law codifies the order, which means it will be added to the Labor Code.
• LC§3212.87: First Responders & Certain Healthcare Workers
  • Creates a presumption of compensability for front-line workers who test positive for COVID-19.
  • Defines front-line workers as: Firefighters, whether paid or volunteer; Peace Officers engaged in active law enforcement activities; Fire and Rescue personnel who work for Office of Emergency Services (“OES”); Employees providing direct patient care for a home health agency; Employees who provide direct patient care, or custodial employees in direct contact with COVID-19 patients in a health care facility; RNs, EMTs or Paramedics; Employees of a health care facility whose job is not in direct patient care but facility cannot establish that there was no patient contact in last 14 days; and Providers of in-home patient services that are outside own home.
• LC§3212.88: All Other Workers in the Event of an “Outbreak”
  • Creates a presumption of compensability for all other workers not included under LC§3212.87 who test positive during an outbreak at their place of employment.
  • Applies to employers with 5 or more employees
  • Applies to dates of injury on or after July 6, 2020

The third category of workers comes with the obligation of reporting employee infections to the employer’s workers’ compensation insurer in order to keep track of whether or not an outbreak has occurred at a job site. When an employer knows or reasonably should know that an employee has tested positive for COVID-19, they MUST report the required information to their claims administrator in writing via email or fax within 3 business days.

An outbreak is defined as one of the following:

• Four (4) employees test positive for COVID-19 at a job site with 100 or fewer workers;
• 4% of employees test positive for COVID-19 at a job site with more than 100 workers; or
• The job site is ordered to close by a local public health department, the California Department of Public Health (CDPH), Cal/OSHA or a school superintendent due to risk of infection of COVID-19

Another notable feature of SB 1159 is the length of time in which employers are given to respond to COVID-19-related workers’ compensation claims. Typically, employers are given 90 days to respond to employee claims. Under SB 1159, employers have only 30 days to respond to claims covered under the first responder and healthcare worker code, and 45 days to respond to claims covered under the “outbreak” code.

SB 1159 remains effective until it sunsets on January 1^st, 2023, but if the COVID-19 pandemic changes or worsens, the Governor may revisit the law or extend it.