Governor asked to tread lightly on comp for COVID-19

Several business groups this week are calling on California Gov. Gary Newsom to be cautious in issuing an executive order that would clear red tape for worker compensation benefits to essential workers suffering from COVID-19, as other states have done.

While the governor has not indicated his position, signs point to a California Assembly Insurance Committee request to the Workers Compensation Insurance Rating Board to provide an estimate of the potential cost impact of presumptions provided to frontline workers in California. The governor’s office did not return requests for comment.

The WCIRB report, issued Monday, projects the mid-range cost to be $11.2 billion, with a range of $2.2 billion to $33.6 billion. The mid-range figure represents 61% of the annual estimated cost of the total workers compensation system prior to the impact of the pandemic, according to the WCIRB.

The Washington, D.C.-based U.S. Chamber of Commerce, whose letter to the governor was made public Wednesday, urged caution: “A presumption under workers’ compensation should be limited in its application and not cover all industries deemed ‘essential.’” The chamber also called for limits to any executive order, such as stopping coverage when restrictions are lifted.

The chamber in its letter also addressed alternatives to workers compensation presumptions, including federal programs such as the Families First Coronavirus Response Act, signed into law March 18 and will provide federal funding for emergency paid sick leave at businesses with fewer than 500 employees. The law allows individuals who are sick up to 80 hours of paid leave at their regular rate of pay up to a maximum of $511 per day.

The California Farm Bureau Federation, a Sacramento-based organization representing agribusiness, called “the potential costs of this possible” executive order “massive,” writing in a statement: “Employers throughout California, including agricultural employers, are struggling to survive the economic hardship imposed by the Governor’s shelter-in-place orders. This order will impose massive new costs that will discourage employers from re-opening, re-employing workers and getting the California economy moving again.”

More insurance and workers compensation news on the coronavirus crisis here.