By Craig W. Anderson
Gov. Gavin Newsom signed an executive order allowing employees to apply for workers’ compensation if they contract the coronavirus with a presumption that it was work-related unless employers can prove otherwise.
The order notes that “any COVID-19 related illness of an employee shall be presumed to arise out of and in the course of employment for purposes of awarding workers’ compensation benefits” if the employee tests positive or is diagnosed with the disease within 14 days after being employed, following the governor’s statewide stay-at-home order of March 19.
The order will be in effect retroactively from March 20 through the end of 2020, which raises the question: will the new workers’ compensation order continue after the end of the year?
In a letter to the governor, SJFB President David Strecker wrote, “We have seen some horrible ideas surface. Allowing essential workers to go on workers’ compensation without any medical reason to do so will bankrupt that program.”
Strecker also pointed out that with the pandemic still affecting agriculture this “…is not the right time to burden the agricultural sector with distractions of rulemaking and regulatory program comments” and that regulatory development be postponed or temporarily stayed “…until such time as the crisis passes and normalcy returns to the economy of California.”
Billions at stake
The state’s Workers’ Compensation Insurance Rating Bureau’s cost evaluation of Newsom’s alteration reported that it could cost from $2.2 billion to $33.6 billion annually, depending on the details. However, the mid-range estimate of about $11.2 billion a year amounts to about 61% of the entire estimated cost of the pre-pandemic workers’ compensation program.
“We’ll see higher and escalating workers’ comp rates and I hope legal minds are getting together to determine the legality of this executive order,” said SJFB Executive Director Bruce Blodgett. “The state’s falling in love with ridiculous ideas.”
“This executive order is an ugly thing,” said SJFB Second Vice President Jake Samuel. “Employers will have to do extra due diligence and we’re operating under the question: will this remain or will it go away for 2021?”
He said insurance companies are undoubtedly “looking at it very closely” and that the implications of the order “have yet to be known.”
Samuel said, “I find it hard to believe that insurance companies will go for this, that the mere presumption the virus was contracted at work means the worker was infected there.”
The order creates a conclusive presumption, i.e., no ability by the employer to dispute that an injury was work related, for anyone deemed “essential” during the COVID-19 response time of 14 days. This applies to all farm workers and those in food processing and transportation.
According to the California League of Food Producers (CLFP), the order allows California workers to receive workers’ compensation from employers “regardless of whether they contracted COVID-19 at work or otherwise.”
Increased costs for ag
“This is another thing that makes agriculture more expensive and more difficult for dairies, farmers with higher prices for consumers,” said SJFB First Vice President Ken Vogel. “This comes at the worst possible time and it amounts to the state piling another burden on ag.”
According to the CLFP, some of the “piling on” incudes extending the definition of injury to “exposure to COVID-19 even without symptoms or actual illness” thus creating payments for individuals “with no injury at all.”
Any doctor will do
The CLFP said costs to business would include temporary quarantine housing for individuals “regardless of actual illness.” The order also allows for a presumption of injury to arise – without any formal testing if any type of doctor (including chiropractors, orthopedists, podiatrists) “concludes someone has COVID-19.”
Businesses, insurers and local government organizations noted in a letter to Newsom that employees are already covered by California’s no fault employer-funded system provided they could show they contracted the illness on the job.
But Newsom’s order creates the legal assumption that the illness was job-related unless an employer can prove otherwise.
Farm groups speak out
Four farm organizations – CFBF, the Agricultural Council of California, California Fresh Fruit Association and Western Growers – said the executive order “will add more financial weight at a very difficult time.”
The farm groups went on to say, “If the goal is to restart California’s economy, then the added economic burden of medical claims related to COVID-19 should be borne by the government, not the essential industries providing a public good during a global pandemic.”
The California Chamber of Commerce checked in with “…many employees already are covered under the federal Pandemic Unemployment Assistance Program without putting more strain on the state’s employers.”
“The state should be helping employers, not making farming more expensive and difficult,” Blodgett said. “Currently we’re dealing with a new flood district assessment, the Department of Pesticide Regulation telling ag commissioners to fine more farmers for applying materials near schools and where home schooling’s going on. And now this. The state government’s delaying our economic recovery.”
State not helping
“California doesn’t promote agriculture as a positive economic element,” Vogel said. “I don’t think our legislators understand that agriculture is a business essential to the health of California. They should help, not hinder, agriculture.”