California lawmakers are eyeing both rebuttable and conclusive presumptions that COVID-19 claims are compensable as they attempt to create a formal replacement to the rebuttable presumption that Gov. Gavin Newsom created via executive order.
There are currently four legislative proposals seeking to replace or supplement the presumption created by Gov. Newsom, which is set to expire on July 5. If none are approved by July 5, it’s possible that Newsom could issue a new executive order extending the presumption he created.
What appears to be the most popular bill, SB 1159, features a rebuttable presumption. Two of the other leading bills feature conclusive presumptions, which would add billions of dollars of costs to the California workers’ compensation system.
Here are more details about these legislative proposals:
- SB 1159: This bill appears to be the favorite at the moment. It would create a rebuttable presumption covering employees who are defined as “someone employed to combat the spread of COVID-19.” It is unknown at this time if the phrase “critical workers” means all 16 groups of “essential critical infrastructure sectors” as described here, because one could argue that some of the sectors are not “employed to combat the spread of COVID-19.” The Senate Appropriations Committee sent this bill to the “suspense file” hearing set for June 18, which is where they send bills that will have a major fiscal impact on the state budget. The bill is likely to survive the suspense file hearing, and should that happen it would head to the Senate floor for approval by the state Senate. One of the recent amendments to the bill added Assemblyman Tom Daly (D-Anaheim) as a coauthor of the bill. Daly is chairman of the Assembly Insurance Committee and his support for this bill appears to make it the strongest candidate of the four bills. As previously noted, we’d like to see lawmakers amend this bill to clarify which groups of workers it applies to. Maybe the Assembly Insurance Committee is the place where that will happen.
- AB 664: This bill would create a conclusive presumption that first responders’ (police and fire) and health care workers’ COVID-19 claims are industrial in nature. This bill was easily approved by the State Assembly floor vote of 76-0 and is currently making its way through the Senate. It is currently at the Senate Committee on Labor, Public Employment and Retirement, who does not have any meetings scheduled for the moment, but that could change in the near future. Among other things, this bill would also include reimbursement for out-of-pocket costs including temporary housing, medical and living expenses, and personal protective equipment.
- AB 196: This bill proposes a conclusive presumption that COVID-19 is compensable for all essential workers. By “essential workers,” the bill refers to the definition of “essential businesses” in Gov. Gavin Newsom’s original stay-at-home orders from March 2020. If you’re like me and can’t memorize the exact list of the hundreds of different types of “essential workers,” here’s a link to all 13 categories and subcategories. This bill was easily approved by the Assembly and is also currently in the Senate Committee on Labor, Public Employment and Retirement.
- SB 893: This bill proposes the creation of a rebuttable presumption that hospital workers’ COVID-19 claims are industrial. Lawmakers recently amended this bill to add COVID-19 claims to it, but it failed to make it out of committee. If this were a horse race, I’d describe this bill as “bringing up the rear” from last place.
IF SB 1159 DOESN’T REACH THE FINISH LINE, WATCH OUT!
If SB 1159 stalls doesn’t make it to the governor’s desk, it looks like there is a pretty strong chance that lawmakers could approve a conclusive presumption that COVID-19 claims are industrial, with the key distinction being which category of employees it applies to.
It would appear that some of the groups who would enjoy such a presumption are:
- First responders, such as law enforcement, firefighters, and EMTs.
- Doctors and nurses who work in hospitals treating COVID-19 patients.
The groups who are unclear are “essential workers” who worked at businesses that were allowed to remain open during the stay-at-home orders, such as grocers, retailers, media outlets, food manufacturers, and transportation workers just to name a few.
However, the WCIRB has warned that a conclusive presumption inclusive of all essential workers – such as the one mentioned in AB 196 – would cost carriers and employers anywhere from $2.2 billion to $33.6 billion. While that is an incredibly wide range, the WCIRB said the most probable outcome from a conclusive presumption would be a mid-range estimate of $11.2 billion.
How much is $11.2 billion? According to the WCIRB, that was 61% of the annual estimated cost of the workers’ compensation system prior to the pandemic.
WOULD THE GOVERNOR EVEN SIGN A CONCLUSIVE PRESUMPTION?
If the Assembly and state Senate sent a conclusive presumption to the governor’s desk, one has to question as to whether Gov. Gavin Newsom would even sign a conclusive presumption.
The short answer is: nobody knows for sure, and the governor wouldn’t tell us even if we asked. However, one has to imagine that recent large “community spread” events could deter the governor away from signing a conclusive presumption that the virus is industrial.
Here’s a longer analysis: We know that Newsom’s executive order raised a rebuttable presumption, so one could infer that he prefers the less drastic measure of a rebuttable presumption. Furthermore, a rebuttable presumption appears more likely to survive a constitutional challenge than a conclusive presumption, especially if both are applied retroactively.
If 2020 has taught us anything, it’s that the unforeseeable will happen. When Gov. Newsom issued his May 6 executive order, I don’t think anyone anticipated that there would be a series of protests that have state and local politicians have described as superspreader events for the coronavirus. When one adds in the vacationers for the Memorial Day holiday, and anticipates more spread during the upcoming Independence Day holiday, there is no shortage of nonindustrial community spread events for the coronavirus.
Should the workers’ compensation system have to eat the cost of most of that nonindustrial community spread via a conclusive presumption? That doesn’t sound fair to me, especially when one considers that carriers are set to see a huge revenue slash as they prepare to write far less premiums than before due to the millions who suddenly found themselves unemployed. Therefore, one would have to imagine that these recent superspreader events will probably deter Gov. Newsom from approving a conclusive presumption for anyone other than doctors, nurses, and first responders.
Got a question about workers’ compensation defense issues involving the coronavirus? Feel free to contact John P. Kamin. Mr. Kamin is a workers’ compensation defense attorney and partner at Bradford & Barthel’s Woodland Hills location, where he monitors the recent legislative affairs as the firm’s Director of the Editorial Board. Mr. Kamin previously worked as a journalist for WorkCompCentral, where he reported on work-related injuries in all 50 states. Please feel free to contact John at email@example.com or at (818) 654-0411.
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