Compliance Pointers On Calif. COVID-19 Workers' Comp Law

By Diana Tsudik and Thu Do
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Law360 (October 21, 2020, 2:06 PM EDT) --
Diana Tsudik
Diana Tsudik
Thu Do
Thu Do
Navigating the circuitous route to California S.B. 1159[1] compliance is filled with many a land mine for employers. Compliance requirements were immediate, effective on the date of signature, Sept. 17.

Besides codifying the governor's executive order creating a presumption that certain employees who contract COVID-19 have done so at work and are eligible for workers' compensation benefits,[2] S.B. 1159 added new provisions that:

  • Delineate between those who tested or were diagnosed with COVID-19 after working for an employer at their direction (excluding at their home) between March 19 and July 5, under Labor Code Section 3212.86;[3]

  • Extend a presumption to certain frontline and health care workers by way of Labor Code Section 3212.87;[4] and

  • Add a new class of employees who can qualify for the presumption by testing positive during an outbreak if the employer has five or more employees, by way of Labor Code Section 3212.88.[5]

The latter is arguably the most arduous to comply with as it requires employers, nearly overnight, to implement record-keeping and reporting measures in line with Labor Code Section 3212.88, or risk, among other things, hefty civil penalties.

Specifically, under Labor Code Section 3212.88, employers who know or reasonably should have known that an employee tested positive, must report this information to their workers' compensation claims administrator in writing via electronic mail or fax within three business days, regardless of whether or not a claims form is provided.

The notice to the claims administrator must advise that:

  • An employee has tested positive — no personal information, including the person's name, is needed unless a claim has been filed;

  • The date of the positive test — this means the date the test was taken, not the date of the result;

  • The address of the employment site of that person for 14 days prior; and

  • The highest number of employees at the worksite(s) in the 45 days before the last date worked.

That said, a civil penalty of up to $10,000 may be imposed by the labor commissioner if any misleading or false information is provided. Additionally, employers are tasked with a retrospective review for known positive tests between July 6 and Sept. 17.

Namely, all employers with five or more employees must, within 30 days of Sept. 17, advise the claims administrator of all employees who tested positive on or after July 6, except that the employer must report "the highest number of employees who reported to work at each of the employees' specific places of employment on any given workday between July 6 and the effective date of this section," according to Labor Code Section 3212.88(k)(2).[6]

With the information provided by the employer, this same Labor Code explains that "the claims administrator shall determine if an outbreak has occurred from July 6, 2020."

Also, per Labor Code Section 3212.88, an outbreak has occurred when, within 14 days, any of the following takes place at a specific place of employment:

  • Four employees test positive if the employer has 100 employees or fewer;

  • 4% of the number of employees who reported to the specific place of employment test positive if the employer has more than 100 employees; or

  • A specific place of employment is ordered to close by a local public health department, the California Department of Public Health, the California Division of Occupational Safety and Health, or a school superintendent due to a risk of infection of COVID-19.

Again, for the employer to properly determine whether an outbreak has occurred, they will need to diligently keep track of employees who have tested positive and where they worked.

And while most employers are scrambling to comply, many are looking for guidance on best practices to avoid pitfalls, including the always fraught question of when to provide a claim form — and more specifically, which employees should receive a claim form during an outbreak.

Is it all those who worked during the outbreak? All those who tested positive during the outbreak? Or, just those who tested positive and reported an injury?

What is the significance of providing a claim form? The claim form is the document that initiates a workers' compensation claim, also known as the DWC 1 form. An employer must give or mail an injured worker a claim form within one working day after learning about their injury or illness. Additionally, the deadline to accept or deny a claim is not triggered until the claim form is returned by the employee.

As with most employer obligations, knowledge is key.

Under Labor Code Section 5401(a),[7] employers are required to provide a claim form "[w]ithin one working day of receiving notice or knowledge of injury under Section 5400 or 5402, which injury results in lost time beyond the employee's work shift at the time of injury or which results in medical treatment beyond first aid."

Labor Code Section 5400[8] requires an employee to serve an employer with notice of an injury in writing. However, Labor Code Section 5402[9] states:

Knowledge of an injury, obtained from any source on the part of an employer ... or knowledge of the assertion of a claim of injury sufficient to afford the opportunity to the employer to make an investigation into the facts, is equivalent to service under Section 5400.

The issue then becomes whether an outbreak means the employer is notified of an injury to all employees working during such a period. The answer must be no, given there's no actual injury (just a risk) or knowledge or reasonable certainty (absent a report of an industrial injury). To hold otherwise ignores all potential nonindustrial exposure. Therefore, absent a positive test, the employer cannot be reasonably certain of an injury.

But what if the employer learns of an employee's positive test? Is a claim form due then? Without an outbreak, likely not, as the employer still does not know if it's a work-related injury or not.

On the other hand, if an employer learns of an employee's positive test during an outbreak the answer may be different. Is the employer then reasonably certain enough that an injury has taken place? Not exactly. But is it best practice to err on the side of caution in this instance? Absolutely.

Reasonable certainty is a slippery slope that has been known to result in some defense-friendly rulings. We're in unchartered territory now, however, and every potential employer misstep risks an unfavorable headline.

We can presume then that comparisons will be made between health care workers under Labor Code Section 3212.87 and employees who test positive during an outbreak. We must also consider though, that even health care workers must demonstrate direct contact with a patient who tested positive within 14 days before the presumption applies to them under S.B. 1159.[10]

Should we, therefore, limit provision of claim forms to only those who worked directly with the sources of the outbreak? It's debatable, it's messy and puts a tremendous weight on the already-strained employer. But given what's at stake, the best practice for employers is to provide the claim form in this instance to its employees.



Diana Tsudik and Thu Do are partners at Gilson Daub LLP.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.


[1] https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB1159.

[2] https://www.gov.ca.gov/wp-content/uploads/2020/05/5.6.20-EO-N-62-20-text.pdf.

[3] https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200SB1159&showamends=false.

[4] https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200SB1159&showamends=false.

[5] https://codes.findlaw.com/ca/labor-code/lab-sect-3212-8.html.

[6] https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=201920200SB1159&showamends=false.

[7] https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=5401.&lawCode=LAB.

[8] http://www.search-california-law.com/research/ca/LAB/5400./Cal-Lab-Code-Section-5400/text.html.

[9] https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=5402.&lawCode=LAB.

[10] Labor Code Section 3212.88.

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