SACRAMENTO, CA, Aug. 10, 2020 – IIABCal is opposing three legislative proposals drafted in response to COVID-19—expanding the scope of workers’ compensation coverage, increasing paid Family Leave rights, and imposing new reporting obligations—that would substantially add to the burdens the pandemic has already inflicted upon small business, said IIABCal Lobbyist John Norwood said.

Workers’ Compensation

The arguably worst set of proposals is aimed at reimposing a rebuttable presumption that would make COVID-19 injuries compensable under workers’ compensation.

Gov. Gavin Newsom signed an Executive Order (EO) imposing a limited presumption on employers, applicable between March 19 and July 5.  Organized labor is now pushing aggressively to make the presumption permanent, and retroactive.  Three bills were amended on this subject, AB 196, AB 664, and SB 1159. Both AB 196 and AB 664 proposes a conclusive presumption. IIABCal, along with hundreds of employers and trade associations, signed a letter this week in opposition to SB 1159 scheduled to be heard in the Assembly Insurance Committee on Tuesday, August 11.

“Employers are bearing the financial cost of health care for their employees and the costs associated with making changes to their businesses, such as installing safety equipment and providing PPE for their employees,” Norwood said. “Adding increased costs of workers’ compensation is a triple hit on employers at the worst possible time, especially because the majority of workers spend over 70% of their time away from the work environment, even if they work a 40-hour week.”

Both AB 664 and SB 1159 have been amended to impose a rebuttable presumption on employers of first responders, medical personnel, and grocery workers. However, SB 1159 would extend that presumption to all employers if the employer has either five (5) workers or 5% of their workers, depending on the size of their workforce, who contract COVID-19 within a 14-day period.

COVID-19 Reporting

AB 685 would require employers to provide specified notices to employees, the Division of Occupational Safety and Health, the Department of Public Health, and others if an employee is exposed to COVID-19.

“The stated goal of the bill is not necessarily objectionable, given the current crisis,” Norwood said. “However, there is a very serious issue relative to the implementation of the bill and the potential penalties on employers who would not be able to comply with the requirements of the bill.”

Norwood said AB 685 requires that, if an employee is exposed to COVID-19, an employer must take all of the following actions within 24 hours from when the employer knew or reasonably should have known of exposure to the employee:

• Provide a notice to all employees at the worksite where the exposure occurred that they may have been exposed to COVID-19. This notification shall be, at a minimum, in writing in both English and the language understood by the majority of the employees. Employers shall also make every reasonable effort necessary to notify workers verbally.
• Notify the employees’ union, if any. The notice requirement for the employees’ union must also be in writing in both English and the language understood by the majority of the employees. Employers shall also make every reasonable effort necessary to notify the union verbally.
• Notify all employees and the union, if any, of options for exposed employees including COVID-19-related leave, company sick leave, state-mandated leave, supplemental sick leave, or negotiated leave provisions.
• Notify all employees and the union, if any, on the cleaning and disinfecting plan the employer plans to implement prior to resuming work.
• Notify the Division of Occupational Safety and Health of the number of employees by occupation with a COVID-19 positive test, diagnosis, order to quarantine, or death that could be COVID-19 related.
• Notify the California Department of Public Health and the appropriate local public health agency of the number of employees by occupation with a COVID-19 positive test, diagnosis, order to quarantine, or death that could be COVID-19 related.

In addition, AB 685 provides that any failure to provide any of the required notifications is a misdemeanor and be punishable by a $10,000 fine.

However, Norwood said, unlike many classic workplace injuries or illnesses, this may be impossible for an employer can reasonably be asked to know if a worker fell through a floor, slipped and fell, or was exposed to a noxious chemical, but in the era of asymptomatic COVID-19 carriers, this is far more difficult.

Additionally, Norwood said, how an employer finds out about a COVID-19 exposure is different than a normal occupational hazard. In theory, an employee could notify their employer and say they have a positive test. However, an employee does not need to do that – California has strict privacy protections to protect workers from divulging medical information. Many employers are going to find out about a positive COVID-19 test or exposure event from a public health official (with a notice that will not include the worker’s name) or the filing of a workers’ compensation claim.

AB 664 passed the Senate Labor Committee on August 5, but there is much additional work that needs to be done on this bill for it to be workable for employers, Norwood said.

Family Rights Act

The third legislative proposal being opposed by IIABCal is SB 1383, a bill that would expand the California Family Rights Act (CFRA) to allow employees to use unpaid job-protected leave to care for a domestic partner, grandparent, grandchild, sibling, or parent-in-law who has a serious health condition. Specifically, Norwood said, SB 1383:

• Expands CFRA to cover domestic partners, grandparents, grandchildren, siblings, and parents-in-law.
• Defines “employer” as any person who directly employs five (5) or more persons to perform services for a wage or salary, or the state and any political or civil subdivision of the state and cities.
• Requires an employer to maintain and pay for health coverage of an employee for the duration of the leave under the conditions that coverage would have been provided if the employee had continued employment continuously for the duration of the leave.

A coalition of employer organizations argues that the proposal disproportionately impacts small employers in California with only five employees, exposes small employers to costly litigation even for unintentional mistakes, imposes a significant administrative burden, and adds costs to small employers even though it is not paid, he said

“Employers in California, with between 5-10 employees, are limited in their ability to manage this leave and face a special challenge to cover those on leave since an inevitable effect of their size is that very few co-workers are available to cover the work when someone is absent,” Norwood said. “In addition, employers with only five employees do not have a dedicated human resources team or in-house counsel to advise them on how to properly administer this leave, document it, track it, and obtain medical verifications.”

The coalition further argues this bill adds costs to small employers even though it is not paid. The leave is ‘protected,’ meaning an employer must return the employee to the same position the employee had before going out on leave. This means holding a position open for three months or more.

“While an employer can temporarily fill the position with a new employee, that replacement usually comes at a premium,” Norwood said,  “Also, many jobs require an extensive amount of time and money to train a new employee, adding another cost. Some employers shift the work to other existing employees, which often leads to overtime pay. In addition, most of the leaves of absence require employers to maintain health benefits while the employee is out.