Governor Newsom Creates Presumption of Workplace Exposure for COVID-19 Illnesses

May 8, 2020

As California eases restrictions and businesses begin planning to reopen, Governor Gavin Newsom enacted a new time-limited rebuttable presumption that employees diagnosed with COVID-19 contracted it from the workplace. Under the California workers' compensation system, employees must present some medical evidence that an injury is work-related. However, under the new executive order, if an employee contracts COVID-19, it will now be presumed to be work-related without having to prove anything further.

On May 6, 2020, Governor Newsom issued an executive order creating a rebuttable presumption that an employee's COVID-19 illness arose out of the course of employment if the employee tests positive or is diagnosed "within 14 days after a day that the employee performed labor at the employee's place of employment at the employer's direction." The presumption does not apply if the employee is tele-working.

Employees will be eligible if they either (1) test positive for COVID-19 within 14 days after performing work; or (2) are diagnosed with COVID-19 by a licensed physician within 14 days after performing work which is then confirmed by further testing within 30 days of the diagnosis. The illness must occur between March 19, 2020 and July 5, 2020. The presumption will stay in place for 60 days after issuance of the executive order.

The Executive Order also reduces the timeframe insurance companies have to make a compensability decision from the normal 90 days to only 30 days. However, the order allows denials after this period based on newly discovered information.

Practical Consideration

Given the highly communicable nature of COVID-19, it will be a high burden for many employers across a myriad of industries to prove that exposure occurred outside of the workplace. So, while the presumption is rebuttable, the practical result is that employers will likely pay workers' compensation benefits for COVID-19 illnesses even if there is little to no evidence that it was related to work.

Ultimately, this Executive Order underscores the need for California employers reopening their businesses to have clear safety and cleaning protocols that follow CDC and OSHA guidance for minimizing risk of workplace exposure as well as compliance with any local ordinances. As the "new normal" becomes clearer in the weeks to come, employers should work with their employment lawyers and insurance company to determine and implement compliance and other litigation avoidance strategies.

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