SDV Insights

As businesses reopen amid rising COVID-19 cases, employers must navigate through the hurdles of maintaining a safe workplace during a pandemic. In an effort to limit exposure and minimize the spread, California introduced a bill that will require public and private employers to provide “specified notifications” to its employees and relevant governmental entities of any potential employee exposure to COVID-19 that the “employer receives notice of.” Failure to abide by the notification requirements would result in a misdemeanor to the employer, punishable by a $10,000 fine.

Currently, there are no laws that specifically mandate employers to notify their employees if someone has tested positive or if there has been a potential exposure in the workplace. However, the practice has been advised by various agencies such as the California Division of Occupational Safety and Health (Cal/OSHA) and the Centers for Disease Control and Prevention (CDC). With the passage of Assembly Bill No. 685, (AB-685), this notification would be mandatory. The bill recognizes in its text that as COVID-19 “continues to ravage California,” the current lack of clarity surrounding notification requirements have led workers and members of the public to live “in fear for their own safety, unaware of where outbreaks may already be occurring.” In addition to protecting employees in the workplace, this bill aims to “track workplace exposure” by gathering thorough and accurate data. The tracking of this data will help minimize the spread, and in doing so, it will diminish the healthcare disparities in Latino, Black, and Asian-Pacific Islander communities where the “infection and deaths [are] disproportionately high.”

Assembly Bill No. 685 - COVID-19: Imminent Hazard to Employees

The bill is situated within the Labor Code section related to occupational safety, expanding employee protections from workplace hazards to include exposure to COVID-19. The proposed addition of section 6406.6 would require employers who receive notice of potential COVID-19 exposure to take the following actions within one business day of the notice:

1) Provide a notice to all employees at the worksite where the exposure occurred that they may have been exposed to COVID-19, in writing in both English and the language understood by the majority of the employees.
2) Notify the exclusive representative, if any, of employees under paragraph (1), with the inclusion of the same information as would be required in an incident report in a Cal/OSHA Form 300 injury and illness log, unless the information is inapplicable or unknown to the employer.
3) Notify all employees and the exclusive representative, if any, of options for exposed employees including, but not limited to, workers’ compensation, and options for exposed employees such as COVID-19-related leave, company sick leave, state-mandated leave, supplemental sick leave, or negotiated leave provisions, as well as anti-retaliation and anti-discrimination protections of the employee.
4) Notify all employees and the exclusive representative, if any, on the cleaning and disinfecting plan that the employer will implement and complete per the CDC guidelines.

The adoption of this bill would also require employers to notify their local public health agency if they are notified of an “outbreak,” as defined by the State Department of Public Health. This notification must include the names, number, occupation, and worksite of employees who have either (1) a laboratory-confirmed cased on COVID-19, (2) a positive COVID-19 diagnosis from a licensed health care provider, (3) a COVID-19-related order to isolate provided by a public health official, or (4) died due to COVID-19. An employer shall also report the business address and NAICS code of the worksite, and “shall continue to give notice to the local health department of any subsequent laboratory-confirmed cases of COVID-19 at the worksite.”

Further, this section protects the interests of the employees by prohibiting (1) an employer from requiring an employee to disclose medical information unless otherwise required by law, (2) an employer from retaliating against a worker for disclosing a positive COVID-19 test, diagnosis, or order to isolate, (3) any identifiable employee information from being subject to a California Public Records Act request, posted on a public internet website, or shared with any other state or federal agency.

If adopted, this section would not apply to employees who conduct COVID-19 testing or provide direct patient care to individuals who are known to have tested positive for COVID-19, are persons under investigation, or are in quarantine or isolation related to COVID-19, unless that individual is an employee at the same worksite.

 Insurance coverage for potential claims made under AB-685

The introduction of this bill is indicative of the changing paradigm of the workplace and the increasing obligations on the employer. In addition to facing potential criminal charges, failure to abide by these requirements may expose employers to civil lawsuits filed by employees who were affected by COVID-19 in the workplace. Ensuring that you have the proper insurance coverage is essential in protecting your company from expensive and burdensome litigation.

For employee lawsuits alleging illness and other COVID-19 related claims, workers’ compensation, employers’ liability, and employment practices liability insurance (EPLI) are the likely sources of coverage.

Workers’ Compensation Insurance

California employers are required by law to pay for workers’ compensation coverage, which provides wage and medical benefits to injured workers and death benefits to the families of those killed on the job. Generally, employees who allegedly contract COVID-19 at the workplace would be limited to workers’ compensation benefits as the “exclusive remedy” for work-related injuries and be barred from suing their employers directly for such injuries. However, there are certain exceptions that may be applicable. Additionally, Governor Newsom issued an executive order in California on May 6, 2020, creating a rebuttable presumption that employees working outside of their homes who test positive for COVID-19 may receive workers compensation benefits. However, this order expired on July 5, 2020. Whether this order will be revived remains to be seen. Although employees who test positive for COVID-19 while performing work outside the home may still seek workers’ compensation benefits, these employees will be required to prove causation between the workplace and their illness without the presumption.

Employers’ Liability Insurance

If the claim meets one of the limited exceptions to the workers compensation’s “exclusive remedy” rule, including dual capacity (meaning the claim is based on an employer’s duty that is independent of the employment relationship); fraudulent concealment; employer assault or ratification; power press; and uninsured employer; or, if the claim is not covered by workers compensation for another reason, employers’ liability insurance may provide coverage. Employers’ liability insurance is designed to provide coverage for employee injuries that is in excess of what is covered by workers’ compensation, including the defense costs for any employee lawsuits.

Employment Practices Liability Insurance (EPLI)

In addition, employees may bring suit based on the employer’s failure to adhere to the requirements in AB-685, which protect the interests of the employees, as stated above. EPLI may provide coverage for lawsuits alleging that the employer violated AB-685 by requiring inappropriate medical disclosure, retaliating against a worker for disclosing a positive COVID-19 test, or making public any identifiable employee information. EPLI policies often exclude coverage for bodily injury. As such, under an EPLI policy, the company would not have coverage for injuries suffered by employees as a direct result of contracting the virus.

Stay safe by keeping up to date

To prepare for potential exposure to COVID-19 related liability, it is imperative that employers stay up to date on current and emerging legislation such as AB-685, and review the adequacy of their insurance coverage. As businesses continue to adapt to new challenges brought on by the pandemic, employers can expect to see an increase of similarly focused legislation shaping the new reality of workplace health and safety.

For more information, please contact Jesse K. Hidell-Carrijo at 951.365.3149 or jkh@sdvlaw.com.

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