Newsom Considers Passing Pandemic Cost onto Employers Through Workers’ Compensation

Brian GermanAgri-Business, Labor and Immigration

workers compensation

Governor Gavin Newsom is considering an executive order that could significantly increase the cost of workers’ compensation insurance during the COVID-19 pandemic.  The order would substantially expand the criteria of work-relatedness for essential employees as it pertains to compensation benefits.  Employees would be eligible for benefits paid for by employers based simply on exposure to COVID-19 even in the absence of symptoms or actual illness.

“The problem is that it puts in the pockets of employers the responsibility for the costs of COVID-19 illnesses where the exposure and infection could have just as easily happened off the job as on the job,” said Bryan Little, Director of Employment Policy for California Farm Bureau Federation (CFBF).  “It’s going to wind up building that cost into the workers’ compensation system for California employers and at the end of the day, that’s how it’s going to get financed.  It’s going to be higher premiums for California employers that they will have to pay in order to pay back the cost of all of this.”

In an estimate of what the executive order would cost, the Workers Compensation Insurance Rating Board projects the mid-range cost to be around $11 billion.  The overall cost could be as high as $33.6 billion.  “I think that this is just a bad policy choice because at the end of the day you’re building costs into a sector of the economy where it doesn’t necessarily belong and then you’re hobbling that sector of the economy by imposing that cost on them,” Little noted.

CFBF is encouraging the agriculture industry to take action on the issue and engage with legislators. Information on how to contact the Governor’s office, as well as a form that can be filled out to voice concern is being made available through the CFBF website.

“I think the important thing for people to do right now is to get in touch with their legislators and to call the Governor’s office,” said Little.  “That’s what we’re trying to accomplish with the grassroots outreach we’re going with Farm Bureau members right now.”

Listen to the interview below.

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Brian German

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Ag News Director, AgNet West