California Governor Extends Workers' Compensation Benefits to Employees Who Contract COVID-19

May 08, 2020

California has joined a growing number of states that are making employees who contract COVID-19 presumptively eligible for workers’ compensation benefits.

Generally, under state workers’ compensation laws, in order to receive benefits, the burden is on the injured or ill employees to establish the injury or illness they sustained occurred in their workplace.  The compensation is funded by insurance paid for by employers, with the costs determined by the employer’s “experience rating,” or fully carried by the employer if they are self-insured.  

However, California Gov. Gavin Newsom’s executive order creates a rebuttable presumption that an employee’s COVID-19 illness arose out of the course of employment for workers’ compensation purposes if the employee tests positive or is diagnosed “within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction.”

The presumption does not apply if the employee worked from home.

The order is retroactive to March 19 and expires on July 5, 2020.  It is estimated the order could cost up to $33 billion.

Takeaway:  California joins Illinois, Arkansas, Florida, Kentucky, Michigan, Missouri, North Dakota and Washington, which have each taken steps by executive order or amended rules to expand workers’ compensation eligibility to address the pandemic.  More states are expected to follow suit.