SB 1159 And Reporting Fines

By: By Gregory Grinberg Esq.
Gregory Grinberg
Gregory Grinberg

In September of 2020, Governor Gavin Newsom signed into law SB 1159, legislation that codified his prior Executive Order and created presumptions that certain COVID-19 cases are compensable.

Employees who caught COVID-19 no longer has to carry the burden of proof showing that it was their work activities, rather than just being alive in a pandemic, that exposed them to COVID-19.

Among the scenarios where the presumption would apply was an “outbreak” situation, where 4 employees (or 4% of the workforce, if there are more than 100 employees in a single location), had tested positive for COVID-19.  California’s employers, big and small, were suddenly responsible for recording how many employees came to work at each location so that an “outbreak” could be properly calculated.

Well, since then, California’s risk managers, HR representatives, and bosses that wear all hats have been scrambling to comply with the calculation and reporting requirement.  As 2020 melted into 2021, employers also had to contend with the obligations of AB 685, which imposed a duty on employers to notify employees and their unions of COVID cases and potential benefits from COVID exposure at work.

So much so, in fact, that another provision in SB 1159 may not get as much attention as it should: subsection (j) of Labor Code 3212.88 provides for a penalty of up to $10,000 for failure to provide the required information (or knowingly providing false information) pertaining to a potential COVID-19 outbreak.

If the employer miscalculates the highest number of employees to visit the affected worksite in the 45 days prior to the positive COVID-19 test; if the employer hears an employee has flu-like symptoms and is staying home, but doesn’t investigate sufficiently to determine if the cause is COVID or just playing hooky; if the employer doesn’t report the positive COVID-19 test to its claims administrator within 3 business days… all of these are scenarios that might give rise to a claim by the Labor Commissioner that $10,000 is due in penalties.

So, what are employers supposed to do?

Initially, employers should be aware that the reporting requirement applies to ALL positive COVID tests and not just the ones resulting from exposure at work.  If an employee tells a supervisor that there’s a positive COVID-19 test, it doesn’t matter that the employee is 100% sure the exposure occurred on a recent Vegas vacation and will never file a workers’ compensation claim.  The positive test case needs to be reported to the claims administrator, even if it will ultimately be denied as non-industrial, let alone claimed as such.

Second, the employer needs to provide the required information to the claims administrator within 3 business days of knowing of the positive test, or meeting the “reasonably should know” standard – which means the employer might face penalties for failing to investigate or turning a blind eye and declining to ask questions.

Finally, if a citation is sent by the Labor Commissioner, there is absolutely no time to waste.  Employers have 15 days from the service of a citation to contest it, and if requesting a hearing, the hearing is to be held within 30 days of the request.  That means that the employer has precious little time to plead its case and avoid the penalty or penalties (after all, each alleged failure to report can be a separate fine).

California’s employers have a lot on their plate this year – while trying to simply operate and generate enough business to pay the bills in a pandemic, employers have a thick layer of compliance to get through in SB 1159.  But it will not do to beat COVID and lose to fines from the Labor Commissioner.  California’s employers have to be proactive and assertive in fighting citations, and the key to that is to face the issue head on and right away.


Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Gregory Grinberg, Esq. is one of California’s premier workers’ comp defense attorneys. He is a managing partner of GALE, SUTOW & ASSOCIATES, APC.