As businesses across the U.S. continue to deal with the impact of the coronavirus pandemic, a lot of employers have begun wondering what kind of liability they might face from claims that employees contracted the coronavirus at work. What would an infection mean for workers’ compensation law? California Gov. Newsom provided an answer to that question for employers in his state with the recent signing of an executive order that provides new presumption for COVID-19 diagnosis.
According to Executive Order N-62-20, a worker’s coronavirus-related illness will be presumed to arise out of and in the course of employment for purposes of awarding workers’ compensation benefits. An employee can make a claim as long as they test positive for the coronavirus within 14 days of performing “labor of services” at their workplace. The presumption doesn’t apply if the employee worked from home.
Before this order was passed, the burden of proof was typically on employees, and employers were given a 90-day window to conduct an investigation and file a dispute. Under Newsom’s order, the burden has been shifted to employers, who must now provide sufficient evidence for a rebuttal within just 30 days.
The order has received criticism from many organizations, which argue that it will force businesses to downsize or even shut down in order to bear the increased cost of workers’ compensation insurance premiums. The Automotive Recyclers Association (ARA) announced its opposition to any legislative actions that create a presumption that employees infected with COVID-19 contracted the virus at the workplace.
“The biggest concern at the onset of this new rule for auto recycling business owners is only have 30 days to provide existing evidence to rebut the presumption that an employee’s COVID-19 resulted from their employment,” said Sandy Blalock, executive director at ARA.
“Further, with the burden shifted to the employer, overcoming the presumption may prove difficult. Having been dealt this blow while trying to recover their extreme financial losses already incurred will most likely see many more businesses having to downsize or even close their operations. Recyclers and all business owners will bear the burden of the increased cost of workers’ compensation insurance premiums that this will most likely lead to if these regulations remain in place.”
Ten other states have issued presumptions similar to California’s. However, the key difference is that California’s presumption applies to all workers, not just essential or front-line employees. Newsom’s intent is to make sure infected workers in every industry have their medical bills covered and their wages reimbursed.
The full picture of how these presumptions will affect the workers’ comp system is currently unknown. While premiums will likely increase to make up for the cost of claims, employers may also see a reduction in other types of claims due to layoffs, furloughs, and stay-at-home orders.
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