What Employers Need to know about the Pay and Benefits Continuation Elements of Cal/OSHA’s COVID-19 emergency Rule

By Mark Trapp, Andrew Sommer, and Beeta Lashkari

On November 30, 2020, Cal/OSHA issued its final COVID-19 Emergency Temporary Standard (“ETS”), with all of its provisions effective immediately.  One of those provisions — the exclusion pay and benefits continuation requirements — has been at the center of much controversy.

Typical among these COVID-19 emergency rules, the Cal/OSHA regulations requires employers to exclude from the workplace “COVID-19 cases” as well as employees who experience a “close contact” exposure (i.e., contact within 6′ of a confirmed case for a cumulative 15 minutes). But the Cal/OSHA ETS gets controversial at Sec. 3205(c)(10)(C), where it requires employers to continue and maintain those employees’ earnings, seniority, and all other employment rights and benefits, as if the employee had not been removed from the job. Where permitted by law and when not covered by workers’ compensation, employers may use employer-provided employee sick leave benefits, and may consider benefit payments from public sources, in determining how to maintain earnings, rights and benefits. 

There are several important exceptions to these exclusion pay and benefits continuation requirements.  For example, the ETS provides that the provision does not kick in for any period of time when the employee is not able to work for reasons other than protecting persons at the workplace from possible COVID-19 transmission.  Likewise, the pay and benefits continuation provision does not apply where the employer can demonstrate the employee’s COVID-19 exposure is not work-related.  Finally, although not characterized as an “exception” specific to the exclusion pay and benefits provision, the ETS does also carve-out employees who can be temporarily reassigned to work where they do not have contact with other persons until applicable return-to-work requirements are met.

To provide some clarification about this pay and benefits continuation provision (as well as most other elements of the ETS), Cal/OSHA has issued two batches of FAQs, most recently updated January 8th.  There are now 10 FAQs related to exclusion pay and benefits, most notable among them:

• An employer may require the employee to exhaust paid sick leave benefits before providing exclusion pay, to the extent permitted by law, and may offset payments by the amount an employee receives in other benefit payments.  See FAQ 51. 
• If an employee is unable to work because of his or her COVID-19 symptoms, then he or she would not be eligible for exclusion pay and benefits.  The employee, however, may be eligible for Workers’ Compensation or State Disability Insurance benefits.  See FAQ 52. 
• An employee would typically receive pay for the period the employee is quarantined, which could be up to 14 days (though, for asymptomatic close contacts, and provided certain conditions are met, this may be 10 days, or 7 days for the healthcare, emergency response, or social services, per Executive Order N-84-20). If an employee is out of work for more than a standard quarantine period based on a single exposure or positive test, but still does not meet the regulation’s requirements to return to work, that extended quarantine period may be an indication that the employee is not able and available to work due to illness. If established, this would make the employee ineligible for exclusion pay and benefits. The employee, however, may be eligible for temporary disability or other benefits.  See FAQ 53. 
• Employers need not maintain the exposed employee’s earnings and benefits under the exclusion pay and benefits provision if the employee with COVID-19 exposure from the workplace is unable to work because of reasons other than protecting persons at the workplace from possible COVID-19 transmission (e.g., a business closure, caring for a family member, disability, or vacation). Such employees may be eligible for other benefits, including Disability Insurance, Paid Family Leave, or Unemployment Insurance benefits.  See FAQ 55. 
• For certain workers and workplaces, SB 1159 provides a rebuttable presumption that an employee’s COVID-19-related illness is an occupational injury entitling the employee to workers’ compensation benefits. Rebutting that presumption and proving that COVID-19 exposure is not work related to avoid the ETS’ exclusion pay requirement involve an employer conducting comparable investigations and producing comparable evidence to show it is more likely than not that an employee’s COVID-19 exposure did not occur in the workplace.  See FAQ 57. 
• Cal/OSHA does not consider an employee receiving workers’ compensation temporary disability benefits for wages lost during the period in which they are excluded from the workplace to be “able and available to work” within the meaning of the exclusion pay and benefits provision.  Therefore, an employee cannot receive both types of benefits.  However, if an asymptomatic employee is able and available to work but is not eligible to receive payment through workers’ compensation for lost wages during the period in which they are excluded from work, they should be paid for that time according to section 3205(c)(10).  See FAQs 59-60. 

A frequently asked question that we have field but which is not addressed by Cal/OSHA’s FAQs is whether an employee excluded for reasons other than being a COVID-19 case or experiencing a close contact exposure comes under the exclusion pay and benefits provision.  This is especially relevant for employers who have internal exclusion policies that exceed the requirements of the ETS; e.g., excluding from work all employees within an outbreak testing group, or excluding from work employees in an outbreak testing group who refuse to participate in the testing.  In such circumstances, we do not believe those employees are covered by the exclusion pay and benefits continuation provision.  This is because the provision explicitly states that it is “[f]or employees excluded from work under subsection (c)(10),” and subsection (c)(10) mandates exclusion only in two scenarios: (1) COVID-19 cases; and (2) COVID-19 exposure (i.e., close contacts). 

Not surprisingly, given the substantial burden this provision places on employers, lawsuits challenging the ETS generally, and this exclusion pay and benefits provision specifically, have already been filed.  For example, on December 16, 2020, the National Retail Federation (NRF) and others brought a legal challenge against the California Department of Industrial Relations, Cal/OSHA, and the California Occupational Safety & Health Standards Board, alleging, among other things, that the provisions of the ETS that regulate wages and employee benefits are areas over which Cal/OSHA has not been granted statutory authority.  Specifically, the complaint alleges:

“The regulation of wages, hours, and working conditions, including paid leave, is the domain of the [Department of Labor Standards Enforcement].  DOSH’s attempt to overstep its jurisdiction and regulate wage and paid leave issues is improper and creates considerable confusion about the interaction of the ETS regulations with the various federal and state paid leave mandates and Workers’ Compensation…. Requiring employers to provide unlimited paid exclusion periods does not advance the state’s safety interest…. The ETS regulations improperly seek to regulate employers for a hazard that entered the workplace from outside, and to impose on employers financial responsibility to provide wages for a harm they did not cause.” 

With possible advancements on the legal front looming, an Advisory Committee process to reexamine the Cal/OSHA ETS set to begin in mid-February, as well as the likely promulgation of a Federal OSHA COVID-19 ETS by mid-March, it remains to be seen how the ETS, including its exclusion pay and benefits provision, will be changed (if at all).  We will be sure to keep you updated. 

In the meantime, for more details, plan to join Conn Maciel Carey’s Cal/OSHA team — Andrew Sommer, Fred Walter and Megan Shaked — tomorrow, Tuesday, January 26th, at 12 PM PT / 3 PM ET for a complimentary webinar about Cal/OSHA’s COVID-19 Emergency Temporary Standard.  This program will provide an overview of the regulation, existing and anticipated guidance provided by Cal/OSHA, and enforcement efforts by Cal/OSHA to date.  They will also examine the interplay between the emergency temporary standard and related new California legislation, including AB 685 and SB 1159.

The webinar agenda includes:

• An overview of the ETS and its compliance obligations
• Frequently Asked Questions about the ETS
• Recent Cal/OSHA COVID-19 enforcement trend
• Common pitfalls from trickier sections of the regulation, such as regarding outbreaks and testing

Click here to register for the Cal/OSHA COVID-19 ETS webinar.

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