In a series of alerts, Michelman & Robinson will address the many issues facing employers once they begin to restart on-site operations as the coronavirus crisis eases and in what is to be the new normal. This installment focuses on workers’ compensation insurance issues employers need to be thinking about as they navigate the pandemic.

COVID-19 has divided the workforce. There are employees who can work remotely, lowering their exposure to the disease and greatly reducing the chance of workplace injury. And then there are those on the front lines who must continue to work on location, such as first responders and employees in the health care, food service, and delivery industries. In either case, workers can and are becoming sick, and as businesses begin to reopen on-site before widespread testing is available, it is inevitable that even more employees will catch COVID-19. This begs the question: will employees who come down with the illness give rise to a spike in related workers' compensation claims?

Workers’ compensation is a state-mandated form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employees’ rights to sue their employers for negligence. The program is intended to eliminate the need for litigation and provide employers a shield against workplace injury claims by having employees give up those claims in exchange for fair payments in a system regulated by state workers’ compensation boards.

It makes sense that employers whose workforces are now remote will face fewer workers’ compensation claims (coronavirus-related or otherwise), though these may certainly increase as businesses reopen. However, employers of essential workers currently working in public are likely to face a significant number of claims as the chance of contracting COVID-19 increases with each day of potential exposure. Additionally, ordinary workplace risks may be exacerbated by factors such as stress, lack of sleep, and short-staffed operations—all prevalent in the present-day working environment.

Are Employees With COVID-19 Entitled to Workers’ Compensation Benefits?

As COVID-19 becomes more and more widespread, this is the question that will be on the minds of employer and employees alike. The traditional test to determine the applicability of benefits is to determine whether there is evidence that an employee sustained an injury or became sick while on the job. That seems easy enough, but when it comes to COVID-19, the analysis is rather complicated given the lack of federal guidance and disparate responses to the public health crisis in various states.

Generally speaking, a workers’ compensation claim resulting from COVID-19 would be valid if the illness was “occupational,” meaning it occurred during the scope of employment, due to workplace exposure, and/or as a “peculiarity” to the manner or type of work. This test requires three questions to be answered: (1) was the employee benefiting the employer when he or she became ill, (2) was the employee at work at the time, and (3) did that work involve a greater risk of exposure to COVID-19?

No doubt, answering these questions is a challenge, at least presently, because widespread testing of COVID-19 is unavailable, and it can be difficult, if not impossible, to determine the precise source or cause of an individual COVID-19 case. Sure, for some categories of workers claiming benefits, the answer may not be as illusive (e.g., emergency medical services personnel, police officers, hospital workers in COVID-19 hotspots, or employees in manufacturing or other facilities hit by a localized outbreak of the virus). For others, however, proving that they were infected with COVID-19 while on-the-job may be impossible.

As referenced above, it is important to note that during these difficult times, many employees are suffering from fatigue, growing anxiety, and mental stress, all of which impacts well-being. In and of themselves, these stress-related maladies may give rise to workers’ compensation claims, as the benefits apply equally to mental injuries and illnesses just as they do to physical ailments. Still, difficulty in proving a connection to the workplace remains a constant, and it is unclear how such COVID-19-related mental health claims will be handled in the wake of the unprecedented circumstances created by the coronavirus.

What’s an Employer to Do in Anticipation of an Uptick in Workers’ Compensation Claims?

Despite the foregoing concerns regarding proof of illness and its origins, employers should begin working with insurers and legal counsel to establish processes for rapidly identifying claims, separating those claims based on their severity and complexity, and conducting factual investigations, to the extent possible. Employers can also request employees’ COVID-19 test results as an initial means of confirmation.

Likewise, employers must be prepared to explain what protective measures they have taken to prevent the spread of COVID-19. It is therefore critical for businesses to have plans in place for when employees test positive for the illness. These plans must determine what actions employers will take upon a positive result, including, but not limited to, contract tracing, requiring other exposed employees to self-quarantine, and/or disinfecting their workplaces.

A Jurisdictional Analysis

Ultimately, workers’ compensation claims will be decided based upon the governing law in any given jurisdiction, including future COVID-10-related decisions from state courts or workers’ compensation boards. For their part, federal employees who develop COVID-19 while in the performance of their duties are entitled to workers' compensation benefits pursuant to the Federal Employees' Compensation Act. At the state level, Pennsylvania has affirmatively stated that workers who are exposed to COVID-19 can bring claims for injury and, potentially, occupational disease. California has gone even further. On March 12, 2020 Governor Gavin Newsom issued an executive order stating that any worker exposed to the novel strain of the coronavirus on the job is eligible for workers’ compensation benefits from their insurer, regardless of immigration status.

On the other end of the spectrum are New Jersey and Washington, which presume “public safety workers” (e.g., first responders, health care professionals, etc.) that contract COVID-19 while responding to the pandemic have become ill on the job, entitling them to workers’ compensation benefits. Yet these states offer no corollary presumption of compensability for “essential workers” (e.g., those working in restaurants, grocery stores, pharmacies, gas stations, and the like), making workers’ compensation coverage for these employees far from guaranteed and, in fact, a challenge at best. Bottom line: the situation remains very fluid, and the best answer from the National Council on Compensation Insurance on whether COVID-19 claims will be paid is “maybe.”

The Hampered Workers’ Compensation Claims Process

The coronavirus pandemic has created significant hurdles relative to the workers’ compensation claims process. While some state workers’ compensation board offices are experimenting with virtual hearings, many other jurisdictions have postponed proceedings altogether. Moreover, claim resources, such as independent medical exams and field investigative services, are limited, leading to increasing delays. Furthermore, employees who had previously sustained injuries and filed claims having nothing to do with the coronavirus may find their recovery delayed, as many health care providers are unable to see non-COVID-19 patients. Routine appointments, elective surgeries, and diagnostic tests have all been postponed or canceled. As for claims currently in litigation, those will remain unresolved until courts and state workers’ compensation boards resume operations.

Hopefully, workers’ compensation boards nationwide will do their best to get the claims process back on track and establish the elements and standards that must be met before a COVID-19 claim is covered. In the meantime, it is recommended that employers remain adaptable and follow CDC and local guidelines for establishing and maintaining safe workplaces and workforces in our new normal.

We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.