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Tag: 2020 News

Updated FAQs For Employers On The COVID-19 Coronavirus

The Floyd Skeren employment law partner – Fisher Phillips – has assembled a cross-disciplinary taskforce of attorneys across the country to address the many employment-related issues facing employers in the wake of the COVID-19 coronavirus – especially now that the World Health Organization has declared the outbreak as a pandemic.

The COVID-19 Taskforce has created a Frequently Asked Questions (FAQ) document, which has been continually updated since first published on March 3 and will continue to be updated as events warrant. It has been completely updated as of March 12 to address the many additional workplace law rights and responsibilities given the pandemic designation.

Fisher Phillips will continue to monitor this rapidly developing situation and provide updates as appropriate, including updating this FAQ on as-needed basis. You can contact any member of the Taskforce with specific questions, and a full listing of the Taskforce members and their practice areas is at the end of this publication.

SB 1039 Claims “Binary” Classification of Workers is “Outdated”

In the war over legislating the gig economy, a bill introduced by California Senator Cathleen Galgiani last February in the Legislature – SB 1039 – known as “The Independent Worker Rights Act of 2020,” could pave the way for creating a third class of worker.

On January 1, 2020, Assembly Bill 5 went into effect, codifying the decision of the California Supreme Court in Dynamex Operations W. v. Superior Court (2018) 4 Cal.5th 903 (Dynamex) applying the “ABC” test to classify workers as independent contractors or employees.

In enacting AB 5, the Legislature intended to rectify harm to misclassified workers who lose workplace benefits and protections when misclassified, including the guarantee of minimum wage, workers’ compensation, disability insurance and protection from discrimination.

Senator Galgiani wrote that the enactment of AB 5 has led to a reclassification of independent workers as employees, resulting in the loss of opportunities for these workers due to the cessation of businesses operating in California. This has resulted in fewer opportunities for independent workers desiring flexible working conditions in the current economy.

In fact, according to the Federal Reserve, there are currently more than 57,000,000 workers in the gig economy, with 85 percent of those workers pursuing work in the gig economy to supplement income or as a hobby or “just for fun,” and only 16 percent pursuing work in the gig economy as their primary source of income.

She went on to write that as a result, it has become increasingly obvious that a binary system for classifying workers as either independent contractors or employees is outdated and inapposite of the current reality of the labor market and work opportunities presented in the gig economy and the desire of workers seeking flexible working conditions.

Currently, the Governor’s Future of Work Commission is examining the impact of technology on work, workers, employers, jobs, and society to develop a new social compact for California workers.

With executive action towards modernizing worker safety net protections, it is the intent of the proposed law to enhance the efficiency of the labor market by extending many of the legal benefits and protections found in employment relationships to independent workers.

The the purpose of the proposed law is to develop a modern policy framework that facilitates independent work for those who voluntarily choose it by creating a third classification of workers in order to offer basic rights and protections they deserve under the law relative to the work opportunities and circumstances of the work, including a minimum wage, occupational accident coverage if they are injured on the job, protection from discrimination, and paid medical leave where required by law.

A third class of worker could mean big changes for workers’ compensation. This bill is definitely one to watch.

NCCI Reports on Effects of COVID-19 in WC Industry

The COVID-19 virus (coronavirus) is the latest in a series of infectious diseases that have emerged over the last 20 years. Since 2003, the world has seen the emergence of SARS, H1N1, Ebola, and Zika viruses.

While the overall impact of each disease has been well documented, you would be hard pressed to find meaningful information on how or even if the workers compensation system was affected.

The National Council on Compensation Insurance (NCCI) just reported on the potential implications of coronavirus for WC.

Is coronavirus compensable under WC? The answer to that question is “maybe.” While WC laws provide compensation for “occupational diseases” that arise out of and in the course of employment, many state statutes exclude “ordinary diseases of life” (e.g., the common cold or flu).

There are occupational groups that arguably would have a higher probability for exposure such as healthcare workers. However, even in those cases, there may be uncertainty as to whether the disease is compensable. Would time away from work during recovery be considered “temporary disability” or is it just normal “sick time”? While these questions linger, at least one state has taken steps to address compensability for WC.

On March 5, the state of Washington’s Department of Labor and Industries announced that it changed its policy related to workers compensation coverage for healthcare workers and first responders. Under the clarified policy, Washington state will provide benefits to these workers during the time that they are quarantined after being exposed to coronavirus on the job. The coverage will pay for medical testing, treatment expenses if a worker becomes ill or injured, and provide indemnity payments for those who cannot work if they are sick or quarantined.

It remains to be seen if other states will take the same measures relative to WC.

However, for general health insurance, at least 10 states have issued mandates for coverage of coronavirus. The mandates vary by state, but they include coverage for testing and visits to emergency rooms or urgent care facilities either in-network or out-of-network without deductibles or copays. These measures, if expanded to more states, could have the impact of limiting claim activity in the WC market in those cases where only testing or quarantine are necessary. Economic Impact

With a focus on worker safety, employers have begun to implement a number of policies related to coronavirus. These include limiting nonessential travel, maximizing telecommuting options, and being flexible on sick leave policies to encourage employees to stay home when they are ill. Some companies have also cancelled large in-person industry conferences.

As a result of these measures, it is reasonable to expect that certain sectors of the economy could begin to see impacts in the near future. The travel and hospitality sectors have been the hardest hit so far. But, over time, other industries could also be impacted depending on how general consumer attitudes and behaviors evolve.

This could have a negative impact on employment levels and the general economy, including the possibility of a recession. This creates some uncertainty about future payroll levels and overall claim frequency for WC, as both have been impacted by previous economic downturns.

Zurich Selects Santa Barbara Company for Fraud Assessments

Zurich has found a new ally in the fight against increasing claims costs.

The insurer is now working with Carpe Data, a Santa Barbara, California-based company whose innovative use of alternative and emerging data provides Zurich with improved claims processing efficiency and a major advantage in fighting fraud.

Carpe Data’s innovative claims monitoring solution “ClaimsX” gives Zurich the power to leverage publicly available web data for real-time assessment and automated decision making, from first notice of loss to settlement.

Through ClaimsX’s highly predictive online content, Zurich proactively audits injury claimants and identifies cases where the claimant’s profile is at odds with the claim presented. This not only stops fraud in its tracks, but also allows legitimate claims to be paid faster.

After a successful pilot in 2019, Zurich UK is now implementing the solution at scale in 2020. “Carpe Data is the latest addition to Zurich’s ongoing innovation programs focused on transforming the future of insurance,” said Zurich Head of Claims Fraud, Scott Clayton.

“[Carpe Data] supports Zurich’s ongoing efforts to improve the claimant experience by expediting low-risk claims, and by providing new insights to help our people make informed, accurate, and timely decisions.”

“Data and technology play an integral role in catalysing change across the insurance industry, and Zurich recognizes that,” said Carpe Data COO and co-founder Geoff Andrews.

“We’re excited to join forces with such a globally-minded and forward-thinking partner to streamline claims and bolster their fraud prevention efforts.”

Carpe Data harnesses the power of emerging and alternative data for insurance carriers around the globe with powerful, proven AI. Through access to continuous monitoring and predictive scoring, insurers gain deeper insight into risks in real-time and significantly enhance many aspects of the insurance life cycle including underwriting, claims, and book assessment.

Governor Newsom Appoints New DIR Director

California Governor Gavin Newsom announced the following appointments that are relevant to the workers’ compensation industry:

Katrina S. Hagen, 47, of Sacramento, has been appointed director of the California Department of Industrial Relations. Hagen has served as chief deputy director at the California Department of Tax and Fee Administration since 2017. She was deputy director of operations at the California Department of Human Resources from 2015 to 2017 and chief of human resources at the California Public Employees’ Retirement System from 2011 to 2015.

Hagen was adjunct faculty at the University of San Francisco from 2000 to 2011, deputy director at California Correctional Healthcare Services from 2006 to 2011 and assistant deputy director at the California Department of Corrections and Rehabilitation from 2002 to 2006.

She earned a Master of Public Administration degree from the University of San Francisco. This position requires Senate confirmation and the compensation is $195,708. Hagen is a Democrat.

Doris Ng, 53, of Berkeley, has been appointed general counsel at the Department of Industrial Relations. Ng has served as staff counsel at the Division of Labor Standards Enforcement since 2014. She was supervising attorney at Asian Pacific Islander Legal Outreach from 2011 to 2013, staff attorney at the Bay Area Legal Aid from 2008 to 2011 and supervising clinical attorney for the women’s employment rights clinic at the Golden Gate University School of Law from 2003 to 2007. Ng was staff attorney at Equal Rights Advocates from 1998 to 2003, associate attorney at Rosen, Bien and Asaro from 1996 to 1998 and a Ruth Chance law fellow at Equal Rights Advocates from 1993 to 1994.

She earned a Juris Doctor degree from the University of California, Los Angeles School of Law. This position does not require Senate confirmation and the compensation is $170,772. Ng is a Democrat.

Judith Freyman, 69, of Rocklin, has been reappointed to the Occupational Safety and Health Appeals Board, where she was served since 2012. Freyman was director and vice president of the western occupational safety and health group at Mercer ORC OSH Consulting from 2001 to 2012. She held several positions at ConAgra Refrigerated Foods from 1980 to 2001, including assistant general counsel and director of OSH and environmental affairs.

Freyman earned a Juris Doctor degree in employment law from Loyola University Chicago School of Law. This position requires Senate confirmation and the compensation is $138,874. Freyman is registered without party preference.

L.A. Restaurant Fined $2.1M for Wage Theft

The California Labor Commissioner’s Office has cited the owners of Genwa Korean BBQ, an upscale restaurant with two locations in Los Angeles and Beverly Hills, $2.1 million for multiple wage theft and labor law violations affecting 325 servers, dishwashers and cooks.

“Requiring restaurant workers to leave and return to work without proper split shift premiums is wage theft,” said Labor Commissioner Lilia García-Brower. “This wage theft tactic and other labor law violations undermine workers and provide an unfair advantage over law-abiding restaurant employers.”

The Labor Commissioner’s investigation began in August 2018 after workers contacted Koreatown Immigrant Workers Alliance and Bet Tzedek to report wage theft at both Genwa Korean BBQ locations. A payroll audit determined that full-time staff at both restaurants were deprived of wages by being forced to go off the clock for one hour up to three times a day during their 11-hour workday. None of the workers were provided proper rest or meal breaks as required by law. Nearly half of the workers were not paid the required minimum hourly wage, while more than half were shorted on overtime pay and not provided proper itemized wage statements. Servers were also forced to attend quarterly meetings without pay, even on their scheduled days off.

The Labor Commissioner’s Office on January 31 issued citations ordering J.B.K. Wilshire Corporation and Genwa, Inc. and corporate officers Jay and Jin Kwon pay a total of $1,428,759 in unpaid wages, overtime, split shift premiums, missed meal periods and rest breaks, liquidated damages and waiting time penalties for the affected employees. Both corporate entities and the officers were also fined $633,800 in civil penalties for the violations. The employers have appealed the citations.

“In cases where corporations commit wage theft, corporate officers can also be held personally liable for wages owed to their employees,” Labor Commissioner García-Brower added.

Jay B. Kwon is president of J.B.K. Wilshire Corp., and his wife Jin W. Kwon is president of Genwa, Inc. All entities and individuals are jointly and severally liable for the full citation amounts due.

Enforcement investigations typically include a payroll audit of the previous three years to determine minimum wage, overtime and other labor law violations, and calculate payments owed and penalties due.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid minimum wages plus interest. Waiting time penalties are imposed when the employer intentionally fails to pay all wages due to the employee at the time of separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days.

Civil penalties collected are transferred to the state’s General Fund as required by law.

Cal/OSHA Interim Guidelines for Coronavirus Disease (COVID-19)

Cal/OSHA’s regulations require protection for workers exposed to airborne infectious diseases such as COVID-19, first identified in Wuhan City, China in December 2019.

This interim guidance provides employers and workers in health care settings with vital information for preventing exposure to the virus. Employers and employees should review their own health and safety procedures as well as the recommendations and standards detailed below, to ensure workers are protected from COVID-19.

Cal/OSHA requires employers covered by the Aerosol Transmissible Diseases (ATD) Standard (California Code of Regulations, title 8, section 5199) to protect employees from airborne infectious diseases such as COVID-19 and pathogens transmitted by aerosols. The ATD Standard applies to:

1. Hospitals, skilled nursing facilities, clinics, medical offices, outpatient medical facilities, home health care, long-term health care facilities, hospices, medical outreach services, medical transport and emergency medical services
2. Certain laboratories, public health services and police services that are reasonably anticipated to expose employees to an aerosol transmissible disease.
3. Correctional facilities, homeless shelters, and drug treatment programs.
4. Any other locations when Cal/OSHA informs employers in writing that they must comply with the ATD Standard.

Cal/OSHA recommends employers not covered by the ATD Standard follow recommendations from the Centers for Disease Control and Prevention (CDC), Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19), February 2020.

Although the scope of the ATD Standard is limited to certain employers, there are other Cal/OSHA regulations that apply to all employers. These may be applicable to protect employees from exposure to the coronavirus where there is a significant risk in the workplace.

All employers must have an IIPP (title 8 section 3203) to protect employees from workplace hazards. Employers are required to determine if COVID-19 infection is a hazard in their workplace. If it is a workplace hazard, then employers must:

— Implement measures to prevent or reduce infection hazards, such as implementing the CDC recommended actions listed above
— Provide training to employees on their COVID-19 infection prevention methods

Regardless of COVID-19 risk, all employers must provide washing facilities that have an adequate supply of suitable cleansing agents, water and single-use towels or blowers.

Title 8 section 3380 Personal Protective Devices requires employers to conduct a hazard assessment to determine if hazards are present in the workplace that necessitate the use of PPE. If an employer identifies COVID-19 as a workplace hazard, they must select and provide exposed employees with properly fitting PPE that will effectively protect employees.

Stanislaus Poultry Worker Convicted in Comp Fraud Case

The Stanislaus County District Attorney’s Office announced the conviction of a retired Foster Farms employee for workers’ compensation insurance fraud.

Gurmail Singh was employed in the processing facility for the company and reported an on the job injury in November of 2014. Singh filed a workers’ compensation claim and as a result, received medical treatment and workers’ compensation benefits.

He retired from Foster Farms in June of 2015 and continued to receive benefits.

During a subsequent investigation, it was alleged Singh presented false statements and material misrepresentations during his deposition and at a medical appointment. Singh misrepresented facts as it related to his physical abilities and limitations associated with his injury and prior medical history.

On February 28, 2020, Singh pleaded no contest to Insurance Fraud, in violation of Insurance Code section 1871.4(a)(2), in that he unlawfully and knowingly made a false and fraudulent material statement in support of obtaining workers’ compensation insurance benefits.

He was convicted and sentenced to three years probation and ordered to pay restitution in the amount of $3,200 to Foster Farms for reimbursement of investigation costs.

This case was a joint investigation with Foster Farms’ Special Investigation Unit and the Amador County District Attorney’s Workers’ Compensation Fraud Unit.

The Fraud Unit investigates insurance fraud cases in Stanislaus County through a grant provided by the California Department of Insurance.

Feds Pursue Another Spinal Implant Company for Kickbacks

SpineFrontier is a medical technology company that designs, develops and markets both implants and instruments for spine surgery based on the Less Exposure Surgery (LES®). Since its founding in 2006, the company says it has launched 35 new products.

The U.S. Attorney’s Office is suing SpineFrontier and an associated consulting firm, Impartial Medical Experts (IME), as well as executives of both companies alleging they paid $8 million in kickbacks to induce surgeons to use the device company’s products.

Prosecutors also announced they had settled civil health care fraud claims against five physicians, each of whom admitted to seeking and obtaining kickbacks from SpineFrontier, via IME, for consulting work They did not perform.

Each physician also admitted that SpineFrontier, CEO Kingsley Chin, or CFO Aditya Humad specifically instructed them to bill “consulting” hours to SpineFrontier for each surgery in which they used a SpineFrontier device, regardless of whether they spent any time actually consulting.

The government alleges that SpineFrontier and IME paid more than $8 million in kickbacks to surgeons, which generated more than $100 million in revenue, with the vast majority of SpineFrontier’s total domestic sales revenues coming from kickback-tainted surgeries.

Each of the five settling surgeons cooperated with the government’s investigation into the defendants, according to prosecutors, who said they took that cooperation into account in these settlements.

In connection with the filing of its complaint, the government intervened in two private whistleblower lawsuits that had been filed under seal pursuant to the False Claims Act. The cases are United States ex rel. Birchall v. SpineFrontier, Inc. et al., No. 15-cv-12877 and United States ex rel. Miller & Bennett v. SpineFrontier, Inc. et al., No. 15-cv-12908.

And SpineFrontier FDA compliance problems date back many years. One started when Patricia Katz, a new accountant with SpineFrontier, Inc., enrolled in two compliance classes. By the time this story ends, Katz is fired and suing her former employer under the whistleblower protection law.

Katz says she learned that the company’s lot tracking and tracing procedures violated federal safety regulations for medical devices. When reviewing usage forms, Katz said she immediately noticed that the lot numbers associated with SpineFrontier’s medical devices were rarely, if ever, recorded.

Katz sent an anonymous email to the FDA to determine whether or not SpineFrontier was in fact required to record lot numbers.

When she received confirmation from the FDA that what she had learned in compliance training was correct and that what she had been told by SpineFrontier officials was wrong, she forwarded her correspondence with an FDA agent to three company officials.

She alleges that the company, in spite of positive job performance reviews, fired her for that behavior.

Coventry Outlines Benefits of a Pharmacy Nurse

According to a new Coventry whitepaper, engaging a pharmacy nurse as soon as potential risks are identified is the most proactive approach to patient education and safety.

Pharmacy nurses are specially trained case managers who focus on at-risk claims due to emerging and complex pharmacy utilization, and communicate with prescribing physicians, injured workers, and claims handlers to positively impact drug utilization.

By using a wider lens to manage all aspects of the claim, these nurses:

— Ensure patient engagement, safety, and education.
— Confirm pharmacy utilization is medically appropriate and supports a timely recovery.
— Enable timely medical stability and return-to-work.
— Consult with case managers when complex pharmacy issues are identified on open claims.
— Provide consultation to claims handlers on pharmacy questions and issues.
— Review monthly pharmacy trend reports.
— Collaborate with clinical pharmacists on alternative medications.
— Utilize drug utilization assessment (DUA) to assist in provider discussions.

A pharmacy nurse can work quickly to identify concerning medications to reduce the likelihood of addiction. During early narcotic intervention, pharmacy nurses can call the prescriber to discuss alternative treatment plans to influence future prescribing habits and decrease narcotic utilization.

From first opioid utilization through discontinuation, a pharmacy nurse can support patients at each step of therapy, advocating for the safe and effective discontinuation of opioids for injured workers.

For employers dealing with existing claims, pharmacy nurses can also step in and make significant impacts on older claims with sizeable pharmacy utilization. The nurse reviews the pharmacy history and collaborates with the pharmacy benefit manager (PBM), provider, and injured worker to identify opportunities to reduce overall drug utilization while improving patient safety.