With companies continuing to reopen for in-person operations amid the coronavirus (COVID-19) pandemic, many employers are left wondering if they could face increased liability related to employees contracting COVID-19 in the workplace. Liability related to contracting a virus in the workplace could take the form of a negligence action or a claim for workers’ compensation.
Typically, under state workers’ compensation laws, routine transmissible viruses such as the flu or common cold do not provide employees with a valid claim for workers’ compensation. Additionally, even if such diseases are covered by state workers’ compensation laws, employees generally have the burden of proving that their contraction of the virus arose out of and in the course of their employment. Given COVID-19’s transmissibility, this could be a challenging hurdle for employees. However, some states have introduced legislation that either lowers or shifts the burden of proof in workers’ compensation cases. Some of this new legislation is outlined below, but for a comprehensive look at workers’ compensation and employer liability in a particular state, contact the BakerHostetler COVID-19 Employment Issues Coronavirus Task Force.
Both federal and state legislators have begun addressing potential workplace liability with new legislation. Employers should be aware of the laws and orders in place in each jurisdiction where they do business.
In response to concerns of increased workplace liability, Senate Republicans have proposed legislation that would give employees an exclusive cause of action for workplace transmission of COVID-19. Under the proposed legislation, the plaintiff would have to prove (a) that the employer had not reasonably complied with applicable laws and executive orders and (b) that the employer was grossly negligent or engaged in willful misconduct.
The legislation also includes a cap on damages and allows for concurrent state and federal jurisdiction, meaning employers could remove any case filed under this cause of action to federal court. If passed, this legislation would provide significant protection to employers as long as they comply with state and local laws related to reopening during the pandemic.
While federal legislation is still in the works, many states have already passed COVID-19 legislation related to workers’ compensation claims. The following represents an overview of various state legislation schemes.
A number of states have passed bills or signed executive orders creating a presumption of workers’ compensation coverage for first responders, heath care workers and/or essential workers; they include Alaska (SB241), Illinois (HB2455), Kentucky (Executive Order 2020-277), Michigan (Worker’s Disability Compensation Agency March 18, 2020 Emergency Rules), Minnesota (Minn. Stat. 2018, Section 176.011, subdivision 15), New Hampshire (Emergency Order #36), North Dakota (Executive Order 2020-12), Utah (H.B. 3007), Vermont (Act 150) and Washington (Washington Department of Labor and Industries Policy).
In Connecticut, Governor Ned Lamont signed Executive Order 7JJJ, which creates a rebuttable presumption that employees who contracted COVID-19 in the first few months of the pandemic contracted it in the workplace. Employees who meet certain eligibility requirements are therefore eligible for workers’ compensation benefits. An employer may rebut the presumption of coverage only if it can prove that the employee’s contraction of COVID-19 did not occur inside the workplace. In Arkansas, Governor Asa Hutchinson signed Executive Order 20-35, which classifies COVID-19 as an occupational disease. Pursuant to this classification, COVID-19 is excepted from the traditional prohibition on workers’ compensation claims for the transmission of ordinary diseases. However, even in this instance, Arkansas law requires a causal connection between the employment and COVID-19. Assuming employers comply with all public health directives, Executive Order 20-33 exempts businesses from all other civil liability resulting from employee exposure to COVID-19.
Notably, due to the ongoing nature of this pandemic, some states passed initial legislation regarding workers’ compensation that has since expired. For example, in California, Governor Gavin Newsom signed Executive Order N-62-20, which created a rebuttable presumption that any employee who tested positive for COVID-19 contracted it in the course and scope of employment as long as that employee tested positive for the virus within 14 days after working on-site on or after March 19, 2020. However, that executive order expired 60 days after it was signed into law and has not been renewed or extended. Similarly, in Wyoming, legislators passed Senate Bill 1002, which categorizes COVID-19 as an “injury” and creates a presumption of coverage under the state’s workers’ compensation program. This presumption, however, applies only to claims made on or before Dec. 30, 2020.
Finally, a number of states have laws pending that would affect state workers’ compensation programs. For example, New Jersey legislators passed S2380 on July 30, 2020. S2380 creates a presumption of coverage for COVID-19 claims and as written, would apply retroactively to claims filed after March 9, 2020. However, the bill has not yet been signed into law by New Jersey Governor Murphy. Other states, including Pennsylvania, Ohio, North Carolina, California, Massachusetts, Michigan, Rhode Island, South Carolina, Virginia and New York, also have legislation currently pending.
Liability Waivers and Other Practical Guidance
With so many states ensuring workers’ compensation is available to employees, many businesses are asking whether they could mitigate potential liability by having employees sign a liability waiver. This type of waiver is intended to act as an agreement between the employer and the employee in which the employee agrees not to pursue legal remedies if he or she contracts COVID-19 in the workplace.
Ultimately, the best course of action to avoid and minimize employer liability is to understand state and local laws and orders as they relate to COVID-19. Requirements for reopening businesses vary from state to state and even city to city, which can present challenges to businesses operating in various locations. However, compliance with guidelines could insulate businesses from certain forms of liability. Employers should continue to stay on top of guidelines issued by the Centers for Disease Control and Prevention and state health departments and to implement required and recommended health and sanitation practices. Finally, while COVID-19 has brought about the burgeoning availability of workers’ compensation rights, businesses should remember that workers’ compensation provides employees with an exclusive remedy where available. So, while employers may be facing increased workers’ compensation claims, this will foreclose future potential liability from litigation.