COVID-19: Hospitality Committee Monitors Workers’ Comp. Policy

TRSA Hospitality Committee members have begun sharing information about the possibility that workers’ compensation claims from employees contracting COVID-19 will grow. Chairman Harry Kertenian, Magic Laundry Services, Montebello, CA, has prompted the committee’s attention to the matter in his state, where Gov. Gavin Newsom (D) signed an executive order making it easier for essential workers to obtain such benefits.

Viewed as a win for labor unions that called for the change, the order streamlines claims and shifts the burden of proof that typically falls on workers to companies or insurers to prove employees didn’t get sick at work. The state Chamber of Commerce opposed the change, contending the order would unnecessarily and significantly drive up rates for employers as they struggle to keep Californians employed. The Chamber also noted that the federal Pandemic Unemployment Assistance Program is providing relief funds for employees with symptoms who cannot work.

The National Council on Compensation Insurance’s (NCCI) frequently-asked questions webpage on the pandemic answers whether COVID-19 is compensable under state workers’ compensation laws, as “maybe.” Such laws provide compensation for “occupational diseases” that arise out of and in the course of employment but many state statutes exclude “ordinary diseases of life” such as the common cold or flu. Some occupational groups such as healthcare workers arguably are at greater risk for exposure, NCCI notes, but even in those cases, “there may be uncertainty as to whether the disease is compensable.”

In summary, “some states have enacted legislation and issued executive orders that expand workers’ compensation coverage for certain workers, while other states are considering similar initiatives.” NCCI posts such regulatory and legislative activity on its website.

No specific federal legislative and regulatory initiatives have been advanced that would impact the workers’ compensation system. But the U.S. House of Representatives Committee on Financial Services has proposed considering a Pandemic Risk Insurance Act (PRIA). It could create a federal backstop for pandemics using the framework of the existing Terrorism Risk Insurance Act (TRIA).

The Families First Coronavirus Response Act doesn’t expressly apply to workers’ compensation. The Act doesn’t define payroll and the treatment of payroll for purposes of workers’ compensation is not specifically addressed. NCCI proposes to exclude qualified sick leave and/or family and medical leave payments under the Act from the calculation of premiums.