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A coronavirus update from a workers' compensation perspective

Regulatory changes and new guidance continue to reverberate through workers' compensation and OSHA, as businesses face unprecedented struggles in reopening and maintaining a safe workplace. Here's a look at what's happened:

Virginia passes nation's first OSHA standard for COVID-19 and other state actions

While federal OSHA has no plans for an emergency rule related to COVID-19 or an infectious disease standard in the near future, Virginia, which is a "State Plan" (VOSH) that operates its occupational safety and health program under an OSHA grant, became the first state in the nation to adopt an enforceable workplace safety standards. Considered to be the most comprehensive protection in the country, it mandates and, in some instances, exceeds the non-mandatory guidance issued by the U.S. Centers for Disease Control and Prevention (CDC) and OSHA.

The emergency standard also protects employees who raise reasonable concerns about infection control to print, online, social, or other media. Although the standard was opposed by many state industry associations during the public comment period, it covers most private employers as well as all state and local employees.

VOSH will enforce the standard and may cite employers for violations based on the normal scale of violations, ranging from Other-Than-Serious to Willful, with maximum penalties ranging from $13,494 per violation to $134,937 per violation. It took effect July 27 and is set to expire within six months or upon expiration of the Governor's State of Emergency or the enactment of a permanent standard. Oregon has announced plans to create a similar standard.

Since the beginning of the pandemic, thirteen other states created varying levels of enforceable protection for workers, including California, Illinois, Kentucky, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, and Washington. In some states, enforcement is handled by health departments and the attorney general's office, while state OSHA agencies enforce the protection in other states.

In Massachusetts, the Department of Public Health developed a mandatory workplace safety standard, for all reopening workplaces. Violations are expected to carry $300 fines with a cease-and-desist for repeat offenders.Through an executive order, Michigan's Governor required that all companies with on-site employees create COVID-19 preparedness and response plans, among other safety protocols, proposing fines topping $70,000 for violations.

In late June, Philadelphia issued the first city-wide ordinance protecting workers who raise safety or health concerns or refuse to work under unsafe conditions related to COVID-19.

California's governor released a playbook to help protect the state's frontline workers from COVID-19 and aid employers in reopening their businesses on July 24. The statement also noted that the California Division of Occupational Safety and Health has stepped up targeted investigations of high-risk industries that have seen the highest levels of COVID-19 outbreaks and that the agency intends to work with the legislature to require employers to report outbreaks to local health departments to track transmission.

Compensability presumptions

Vermont and Connecticut joined 16 other states in extending presumptive coverage of COVID-19-related workers' comp claims to frontline workers. Vermont enacted legislation on July 13 and Connecticut issued an Executive Order on July 24.

Federal OSHA

OSHA has received over 25,000 employee complaints about employers' response to the pandemic and now provides daily aggregate information on complaints, referrals, closed cases, and inspections by industry and region. While citations have been modest to date, the agency has six months to issue citations and it is too early to assess the vigor of enforcement efforts. Initial focus has been on the healthcare industry and a Cleveland-based health care company was recently cited following inspections of three of its Ohio nursing facilities that reported coronavirus-related hospitalization of seven employees.

Even though the employer provided the necessary N95 respirators to its healthcare workers, OSHA alleges that the employer committed two violations of OSHA's respirator standard: (1) failure to have a written respirator program and (2) failure to provide a medical evaluation to determine employees' ability to use a respirator in the workplace and issued fines totaling $40,482.

OSHA has organized all of its FAQ documents dealing with employer recommendations, along with related information generated by the Centers for Disease Control and Prevention (CDC), into a single FAQ website. It continues to update industry-specific guidance and provide new posters and resources for employers. (see OSHA Watch section for details)

Premiums, preliminary analysis of impact of claims on workers comp system

Falling payrolls, rock-bottom interest rates, and uncertainty surrounding workplace coronavirus-related claims complicated mid-year workers' compensation renewals. While it is too early to know the financial burden that COVID-19 will bring to workers comp, insurers are more cautious and conservative with underwriting health care and customer-facing businesses, particularly those located in states that have expanded workers' comp for COVID-19 exposures. It's important to anticipate some negotiation and be prepared with a solid program for combatting your company's exposure to the virus.

However, there is some encouraging news. In a webinar hosted by the American Academy of Actuaries, it was reported that claims do not appear to be as frequent as feared early on. Workers are covered by other leave programs and severity for most is not high. Fewer than half of the claims filed have been accepted by employers and death benefits are less expensive than anticipated because the deceased workers are older with fewer dependents. However, they caution it is too early to draw conclusions and predict future costs, as there isn't enough data and uncertainty remains. It won't be until September, the end of the third quarter, before actuaries have a better idea of the cost of medical treatments on claims filed in April and May.

According to a research brief published by the New York Compensation Insurance Rating Board, the cost of COVID-19 on the workers' compensation system in New York may be less severe than had been predicted. Although there remains much uncertainty, the state has seen claims drop during lockdown and lower-than-predicted COVID-19 infection rates. Predicted hospitalization costs from March, appear to reflect the actual non-ICU hospitalization cost range of $20,000 to $30,000. However, based on other workers' comp claims for lung issues, the board said it is "reasonable to assume" that some of these COVID-19 lost-time claims involving hospitalizations will exceed $85,000 and that workers who experience acute respiratory distress syndrome will also require mental health care.

COVID-19 lawsuits, liability immunity, waivers, and refusal to return to work


According to data collected by the Fisher Phillips LLC law firm, a total of 283 COVID-19-related lawsuits were filed in federal and state courts through June 30, with 122 of them filed in June. There's also been an increase in class-action lawsuits - 41 have been filed since the start of the pandemic, 16 of which were filed in June.

Employment discrimination claims and work-from-home/leave claims are the most frequent types. Examples include an employee forced to reveal a multiple sclerosis diagnosis to justify accommodation requests who was subsequently terminated and filed a disability discrimination claim, and workers who considered themselves vulnerable because of a medical condition or age who were denied requests to work from home.

The data analytical company, Praedicat Inc. maintains a litigation tracker and reports U.S. courts have seen more than 200 complaints filed against corporations alleging they are responsible for introducing and spreading COVID-19. As of July 13, more than half (55%) of complaints filed involved allegations of personal injury or threat of personal injury among cruise ship passengers, nursing home residents and employees. Industries that have significant clusters of complaints include hospitals, meat packing facilities, restaurants, and warehouses.

Liability immunity, waivers

While there's been a push by many industry groups for federal and state legislation giving businesses protection from COVID-19 related liability suits from employees and consumers, it hasn't happened at the federal level and only a handful of states have passed liability immunity laws with varying protections. These include Arkansas, Louisiana, North Carolina, Oklahoma, Utah, and Wyoming.

Some employers are requiring employees to sign liability waivers when they return to work. While the enforceability of liability waivers is a matter of state law, legal experts point out the presence of a waiver won't be a concrete defense against legitimate negligence claims.

For work-related injuries where there is a rebuttable presumption, workers' compensation will be the remedy. In other cases, proving COVID-19 was contracted at work will be difficult and employers can choose to contest the claim. But employers generally cannot ask employees to waive workers' compensation protection.

In these unparalleled times, COVID-19 waivers are untested in courts and outcomes will likely vary significantly by jurisdiction. While a waiver can be a reasonable precaution, there are negatives to consider, particularly the reaction of employees and public perception. No waiver will replace the need to maintain a safe workplace in compliance with all local and state regulations and guidance from federal agencies.

Refusal to return to work

When a healthy employee refuses to return to work and an employer has made concerted efforts to ensure a safe environment, the first step is to determine why the employee is refusing to return. Some reasons may be legally protected under the ADA, Families First Coronavirus Response Act (FFCRA), or other federal and state laws. If COVID-19 poses an "imminent danger" in your workplace, your employee may be able to refuse to return according to OSHA guidance.

However, if an employee doesn't qualify for these protections nor is protected by a union, employers can take steps to require a return to work. Essentially, a generalized fear of the virus is not a basis for refusing to return to work. It must be specifically related to the workplace, be in good faith, and reasonable to others, according to Courtney Malveaux, Richmond, Virginia-based principal and attorney with Jackson Lewis P.C. East Coast Risk Management, an IWCP member, addresses specific refusal to return-to-work situations in questions 6 - 9 in the FAQ's "Reopening for Business After the Coronavirus Shutdown."

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