The coronavirus pandemic sent overall workers’ compensation claims plummeting as California workplaces shut down and fewer employees were injured on the job.
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Californians stricken with COVID-19 took the first step in filing more than 5,000 workers’ compensation claims from January through May, according to state data released to CalMatters.
More than 1,000 of those claims were denied, most of them before Gov. Gavin Newsom signed a May 6 executive order extending protections for essential workers infected on the job on or after March 19, the day California’s lockdown order went into effect. The order presumes that essential workers — including nurses, first responders, farmworkers and grocery workers who contracted COVID-19 — were infected on the job, and puts the burden on employers to prove otherwise.
At the same time, overall workers’ compensation claims plummeted during California’s lockdown as workplaces shut down and fewer employees were injured at work. Only 1,098 claims were filed in May, compared with more than 50,000 in January.
While a number of states have extended similar “presumptive eligibility” protections to varying groups of workers – mostly health care workers and first responders – California goes further than many in protecting all essential workers.
Labor groups praised the executive order as protecting workers from a disease that can have severe and lingering effects, while the Chamber of Commerce and other business groups decried it as too expensive for the states’ employers, many already reeling from the state lockdown and economic downturn.
As of Tuesday, more than 10,000 health care workers have been diagnosed with COVID-19; 63 have died. More than half worked in nursing homes.
The new claims data lands as the state’s cases climbed past 119,000 and California Attorney General Xavier Becerra joined 11 other state attorneys general Tuesday in a letter calling on Walmart to better protect its workers and the public from COVID-19. The retailer has been criticized for inadequate sick leave policies and failing to properly sanitize its stores.
It was not clear Wednesday whether Walmart employees in California have filed COVID-related workers comp claims; the state’s workers’ compensation agency does not make most individual claim details public.
Analysts originally estimated that California employers and their insurers might face COVID claims of up to $33.6 billion annually but later downgraded that to about $2 billion.
COVID-related claims were denied at a rate of 10 to 60 percent depending on the month. In April, about 13 percent of claims were denied. Under Newsom’s executive order, essential workers, such as nurses or first responders, have to show that they were infected within a certain period after the statewide shutdown began; they also had to be diagnosed by a physician.
Greg Gomez, a Sacramento-based attorney for the Ratto workers’ compensation law firm, said the order has helped his client, a certified nurse assistant who believes he was infected after helping a resident in the senior home where he worked. The Sacramento worker’s case has not yet been decided, Gomez said.
The order “made it a level playing field for people who contract COVID-19 at work,” Gomez said, noting that it has traditionally been difficult for workers to prove they contracted a communicable disease at work rather than out in the community.
Gomez advised essential workers who think they were infected on the job to immediately report it to their employers should they choose to file a claim later. “COVID-19 is such a new disease that some effects aren’t known for weeks afterwards,” Gomez said.
Alex Swedlow, president of the California Workers’ Compensation Institute, a think tank largely funded by workers’ comp insurers and self-insured employers, said that even before Newsom’s order took effect, the majority of COVID claims were approved.
The shortage of diagnostic tests — a significant problem for workers in March and April, when most of the claims were filed — may have contributed to some of the denials, Swedlow said. Other workers may have been denied because they tested negative at a time when some COVID-19 tests have produced false negatives.
An Institute report released earlier this month found that about 41 percent of workers’ comp claims were made by health workers, with another 32 percent by first responders including police and firefighters. Some workers were denied because they worked at home; others because they declined to be tested, according to the report.
Swedlow anticipates that denials may decline as workers get more access to testing and California’s workers’ comp system – created more than a century ago to deal with industrial injuries like broken bones – adjusts to dealing with an entirely new disease.
Steve Appell, who manages a workers’ compensation law firm in Van Nuys and represents workers at their hearings, said that even employees whose COVID claims have been denied may get a second chance because of existing legal precedents.
“These denials would probably be overturned should they go to court,” Appell said.
CalMatters COVID-19 coverage, translation and distribution is supported by generous grants from the Penner Family Foundation, Blue Shield of California Foundation and the California Health Care Foundation.