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Tag: 2021 News

CHSWC Releases 2020 Annual Report

The Commission on Health and Safety and Workers’ Compensation (CHSWC) examines the health and safety and workers’ compensation systems in California and makes recommendations to improve their operation. CHSWC is composed of eight members appointed by the Governor, Senate and Assembly to represent employers and labor.

At the request of the Executive Branch, the Legislature and the Commission, CHSWC conducts research, releases public reports, presents findings, and provides information on the health and safety and workers’ compensation systems. They have just released the 247 page 2020 Annual Report.

Some of the highlights of the many topics covered in the Report include:

The Return-to-Work Supplemental Program administers a $120 million fund that makes supplemental payments to workers whose permanent disability benefits are disproportionately low in comparison to their earnings losses. A recent CHSWC study by RAND that evaluated the Return-to-Work Fund found a low rate of receipt of the RTWSP among eligible workers. CHSWC made a number of recommendations including increasing outreach and notification to help increase participation.

Research on the impact of the 2012 workers’ compensation reforms on earnings losses suggests that SB 863 has likely met its primary objective of restoring adequate wage replacement rates, although some inequities still exist in these rates across impairments.

The DWC recently adopted changes in its Physician Services/Non-Physician Practitioner Services Fee Schedule to encourage greater use of telehealth in light of the COVID-19 public health emergency. The Commission recommended that administrators monitor and study the use of telehealth and other medical care changes in WC in light of the COVID-19 pandemic.

In recent years, criminal indictments and prosecutions have highlighted the extent of medical provider fraud in the WC system. Estimates of the cost of this fraud to participants in the WC system are as high as $1 billion per year. They as that officials consider recommendations in the RAND report “Provider Fraud in California Workers’ Compensation” related to provider fraud.

A CHSWC study found that between $15 billion and $68 billion in payroll is underreported annually. A related study on split class codes found that 25 to 30 percent of low-wage payroll is underreported or misreported.

SB 1159 (2020) would require the Commission on Health and Safety and Workers’ Compensation to conduct a study of the impacts of COVID-19 and the specific presumptions created by this bill and report its findings to the Legislature and the Governor.

SB 1159 provides that a preliminary report from CHSWC is due to the Legislature and the Governor by December 31, 2021, and the final report must be delivered by April 30, 2022.

Congress Proposes Solution for Unemployment Insurance Fraud

The massive Unemployment Insurance fraud during the pandemic, including the estimated $11 billion loss by the California Employment Development Department has apparently triggered federal legislators to act. This month they introduced the Unemployment Insurance Technology Modernization Act to help solve the problem.

One of the bill sponsors, Congressman Steven Horsford (Nevada) provided the following rationale.

State unemployment insurance systems have been neglected for decades, with many running on technology from the 1960s. The consequence of these broken systems has been millions of jobless workers waiting months to receive their benefits, and struggling to keep a roof over their heads and put food on the table. These outdated systems are also susceptible to attacks from organized criminal networks that have stolen billions of taxpayer dollars from the program. It is clear that an upgrade is long overdue.”

Rather than invest in 53 state systems, the Unemployment Insurance Technology Modernization Act would invest in federal technology capabilities all states could use to administer their unique unemployment insurance programs. Not only will this approach ensure that all states have access to modern, state-of-the-art technology, but investing in a single set of technology capabilities is far more cost-effective than building 53 separate systems.”

Specifically, the Unemployment Insurance Technology Modernization Act:

– – Requires the U.S. Department of Labor to work with technology experts to develop, operate, and maintain a modular set of technology capabilities to modernize unemployment compensation technology.
– – States will be able to use all of the capabilities or choose to use only those capabilities that meet their needs.
– – The updated technology will help states ensure timely and accurate delivery of payments and better identify fraudulent claims.
– – Prioritizes user experience, including by requiring consultation and testing with claimants, employers, State workforce agency staff, and other users.
– – Requires a study to evaluate unemployment insurance technology needs, with an emphasis on program accessibility and equity.
– – Establishes a new Department of Labor Digital Services Team to expand the Department’s ability to assist states with technological issues.
– – Ensures the use of best practices in cybersecurity, procurement, and transparency during and after the development of the technology capabilities.
– – Includes accessibility requirements for online claim-filing systems.
– – Ensures that the new technology capabilities do not rely on automated decision systems that may produce biased results without impact assessments and public input.

According to the language of the proposed Act “Not later than 2 years after the date of enactment of this section, the Secretary shall develop, operate, and maintain a modular set of technology capabilities to modernize the delivery of unemployment compensation.”

Two Counties Sue Handy.com For Worker Misclassification

Two California district attorneys are teaming up to sue a home cleaning and repair gig company for allegedly misclassifying tens of thousands of workers as independent contractors.

The district attorneys of San Francisco and Los Angeles on Wednesday sued the New York-based company Handy, which operates an online application that allows customers to schedule home-cleaning and repair services.

Handy, a company started by Harvard Business School classmates Oisin Hanrahan and Umang Dua in 2012, has scheduled home-cleaning and repair gigs for tens of thousands of workers in California, according to the San Francisco DA’s office.

The lawsuit filed in San Francisco Superior Court accuses Handy of failing to pay minimum wage and overtime wages or reimburse job-related expenses such as cleaning supplies. It also claims the company denied workers sick leave and did not pay unemployment insurance or payroll taxes.

It further accuses the company of illegally imposing fines on workers and deducting pay from their wages. Additionally, it claims the company did not cover quarterly healthcare expenditures for workers in San Francisco as required by a city ordinance.

In an emailed statement, a Handy spokesperson said the lawsuit “has no merit” and is based on a “fundamental misunderstanding” of California law and the rights of Handy and its workers, which it calls “pros.”

“Handy complies with all laws and regulations in California and elsewhere, and we will vigorously defend ourselves in court,” the spokesperson said.

Assistant San Francisco DA Scott Stillman, who runs the office’s Economic Crimes Unit, said Handy cannot satisfy the three requirements necessary to classify workers as independent contractors under state law.

The California Supreme Court established a three-pronged standard, known as the “ABC test,” for determining a worker’s employment status in its 2018 ruling in Dynamex v. Superior Court. That standard was later written into state law with the passage of Assembly Bill 5 in 2019.

Stillman said Handy directly controls workers by monitoring them through an app for several hours before and after their scheduled shifts. The company allegedly fines workers if they show up to assignments late or leave early. Stillman argued that Handy’s gig workers also support the company’s core business function – providing home-cleaning and repair services.

Handy also requires its workers to sign arbitration agreements waiving their right to sue the company in court. Labor disputes, including ones involving employment status, must be resolved through a private arbitration process instead.

The district attorneys seek a court order requiring Handy to classify workers as employees, pay civil penalties and provide restitution to workers for unpaid wages and job expense reimbursement.

Last year, voters approved a ballot measure backed by Uber and Lyft that exempted app-based transportation and delivery workers from California’s labor law, allowing those companies to continue classifying their workers as independent contractors.

DEA Schedules 20th Drug Take Back Day for April 24

With opioid overdose deaths increasing during the pandemic, the Drug Enforcement Administration announced its 20th Take Back Day scheduled for April 24.

At its last Take Back Day in October, DEA collected a record-high amount of expired, unused prescription medications, with the public turning in close to 500 tons of unwanted drugs.

Over the 10-year span of Take Back Day, DEA has brought in more than 6,800 tons of prescription drugs. With studies indicating a majority of abused prescription drugs come from family and friends, including from home medicine cabinets, clearing out unused medicine is essential.

According to the Centers for Disease Control and Prevention, the U.S. has seen an increase in overdose deaths during the COVID-19 pandemic, with 83,544 Americans overdosing during the 12-month period ending July 1, 2020, the most ever recorded in a 12-month period. The increase in drug overdose deaths appeared to begin prior to the COVID-19 health emergency, but accelerated significantly during the first months of the pandemic.

The public can drop off potentially dangerous prescription medications at collection sites which will adhere to local COVID-19 guidelines and regulations in order to maintain the safety of all participants and local law enforcement.

DEA and its partners will collect tablets, capsules, patches, and other solid forms of prescription drugs. Liquids (including intravenous solutions), syringes and other sharps, and illegal drugs will not be accepted. DEA will continue to accept vaping devices and cartridges at its drop off locations provided lithium batteries are removed.

Helping people dispose of potentially harmful prescription drugs is just one way DEA is working to reduce addiction and stem overdose deaths.

Learn more about the event at https://takebackday.dea.gov/, or by calling 800-882-9539.

Exclusive Remedy Dues Not Require Actual Receipt of Benefits

Juan Castro sustained injuries when he fell out of a tree he was trimming at an apartment complex owned by Kirby Manor Corporation and managed by Hallmark Realty.

Kirby and Hallmark had an agreement that identified Hallmark as both an independent contractor hired by Kirby and Kirby’s agent. Hallmark had hired Marcos Patino to provide landscaping services, including tree-trimming, and Patino, in turn, had hired Castro to help him trim the trees.

Castro filed this negligence action against Kirby and Hallmark. He alleged that he was an employee of the defendants, that he sustained his injuries in the course of his employment, and that during his employment the defendants “failed to secure any worker’s compensation insurance coverage whatsoever to cover any workplace injuries suffered by” him. Castro alleged the defendants’ failure to obtain a worker’s compensation policy entitled him to bring a civil action for negligence under Labor Code section 3706.

Hallmark and Kirby filed a motion for summary judgment. Hallmark conceded Castro was its employee, but contended that it had workers’ compensation insurance when he suffered his injury and that therefore Castro’s exclusive remedy was through the workers’ compensation system. Hallmark submitted a true and correct copy of Hallmark’s workers’ compensation insurance policy in effect at the time of Castro’s accident.

Castro argued, even assuming “there was a valid workers’ compensation policy,” Hallmark had not produced evidence Castro “met the minimum number of hours required to qualify for workers’ compensation coverage.”

The trial court granted the motion for summary judgment, and the Court of Appeal affirmed in the unpublished case of Castro v. Knowlton Manners Apartments.

The Exclusive Remedy rule ordinarily protects an employer from suits by an employee for injuries during the course of employment.

One exception to that rule appears in section 3706, which provides that an injured employee may bring a civil action for damages against “any employer [who] fails to secure the payment of compensation” under the Act, as required by section 3700. An employer complies with its obligation under section 3700 to secure the payment of compensation by either purchasing workers’ compensation insurance or self-insuring.

In a statutory action under section 3706 of the Labor Code, it is the ‘plaintiff’s obligation to plead and prove violation of section 3700 by his employer’s failure to carry workers’ compensation insurance.

The Court noted that “Castro cites several cases he suggests “indicate that a defendant must show a plaintiff received workers’ compensation benefits for the claimed injuries, before a plaintiff can be barred from pursuing a damages action for the same injuries.” None of those cases, however, says anything like that.”

Privette Rule Limits Installer’s Action Against Homeowner

Dina Barron-Ramirez and her husband, Jaime Ramirez, contracted with AT&T to have a home security system installed in their residence.

Jamey Maddas, an electrician employed by Endeavor Telecom, an AT&T subcontractor, was dispatched to the Ramirez home to complete the installation.

During the installation work, as he was descending the stairs from the second to the first floor, when he fell and fractured his leg. After falling, Maddas saw the carpet runner had separated at a seam and detached from some of the stairs. He was not sure what caused his fall, however, he assumed it was due to the carpet runner.

As there was no dispute that Maddas was injured in the course and scope of his employment with Endeavor, he recovered worker’s compensation benefits for his medical expenses and wage loss.

Two years later, after settling his worker’s compensation case, he sued Homeowners claiming the accident was caused by a loose carpet runner, which made the staircase unreasonably dangerous. His form complaint alleges a cause of action for premises liability based on “loose carpet on the stairway.”

The homeowners moved for nonsuit at the end of Maddas’s case-in-chief on the grounds there was no substantial evidence to support a finding that they knew or should have known of a concealed preexisting hazardous condition on the stairs. The trial court granted the motion, and the Court of Appeal affirmed the dismissal in the unpublished case of Maddas v. Ramirez.

The Privette rule (Privette v. Superior Court (1993) 5 Cal.4th 689) holds that as a general rule, the hirer of an independent contractor is not liable for on-the-job injuries to the independent contractor’s employees.

One of Privette’s underpinnings is the availability of workers’ compensation benefits to the injured employee. ” ‘[I]t would be unfair to impose liability on the hiring person when the liability of the contractor, the one primarily responsible for the worker’s on-the-job injuries, is limited to providing worker’s compensation coverage.’ “

Thus, “principally because of the availability of workers’ compensation,” a “useful way” to view these cases “is in terms of delegation.” (Id. at p. 671.) The hirer delegates to the independent contractor the duty to provide the contractor’s employees with a safe working environment. (Ibid.)

The evidence was undisputed that Homeowners were not carpet experts and had never installed carpet themselves. They hired a professional carpet installer to do so in 2004 as part of the carpet’s purchase price. After installation, the carpet covering each stair tread lay perfectly flat and did not move.

OSHA Announces Higher Resource Focus on COVID Safety

National Emphasis Programs (NEPs) are temporary programs that focus OSHA’s resources on particular hazards and high-hazard industries.

Existing and potential new emphasis programs are evaluated using inspection data, injury and illness data, National Institute for Occupational Safety and Health (NIOSH) reports, peer-reviewed literature, analysis of inspection findings, and other available information sources.

On March 12, 2021, OSHA announced policies and procedures for implementing a National Emphasis Program to ensure that employees in high-hazard industries or work tasks are protected from the hazard of contracting COVID-19.

The newest NEP augments OSHA’s efforts addressing unprogrammed COVID-19-related activities, e.g., complaints, referrals, and severe incident reports, by adding a component to target specific high-hazard industries or activities where this hazard is prevalent.

The NEP targets establishments that have workers with increased potential exposure to this hazard, and that puts the largest number of workers at serious risk.

In addition, this NEP includes an added focus to ensure that workers are protected from retaliation, and are accomplishing this by preventing retaliation where possible, distributing anti-retaliation information during inspections, and outreach opportunities, as well as promptly referring allegations of retaliation to the Whistleblower Protection Program.

Also on March 12, 2021, OSHA issued an “Updated Interim Enforcement Response Plan for Coronavirus Disease 2019 (COVID-19)” (ERP).

The ERP “provides new instructions and guidance to Area Offices and Compliance Safety and Health Officers (CSHOs) for handling COVID-19 related complaints, referrals, and severe illness reports.” It summarizes the NEP and details how CSHOs are to conduct inspections, and it makes on-site inspections the default method, with remote-only inspections to be conducted only with approval of the area director for CSHO safety reasons.

AG and 5 Counties Sue 10 Skilled Nursing Facilities for Fraud

The California Attorney General joined a coalition of District and City Attorneys, led by Kern County District Attorney Cynthia Zimmer, in filing a lawsuit against Tennessee-based Brookdale Senior Living, Inc., the nation’s largest senior living operator.

The company has over 70,000 staff members and 100,000 residents spread across 800 facilities in 45 states.

The lawsuit, which concerns Brookdale’s ten California skilled nursing facilities, alleges that Brookdale ignored laws that protect patients’ safety when they are discharged from a facility. Senior care centers are paid substantially more by Medicare than by other sources such as Medi-Cal, leading facilities to covet those residents. California accuses Brookdale of pushing out others to make way for the highest bidder – regardless of care and treatment needs – while ignoring patients’ legal protections.

The lawsuit also alleges that Brookdale gave false information to the Centers for Medicare & Medicaid, information which CMS uses to award “star ratings” to skilled nursing facilities so that consumers can choose a quality facility.

By lying to CMS, Brookdale allegedly fraudulently increased its star rating in several categories to attract prospective patients and their families.

The lawsuit also alleges that Brookdale failed to properly notify its patients and families of transfers and discharges. Skilled nursing facilities are required to give notice of transfer or discharge at least 30 days in advance, or as soon as practicable.

Brookdale allegedly failed to timely provide this required notice to its patients, with a copy to the local ombudsmen. Brookdale also allegedly failed to properly prepare its patients for transfer or discharge. As a result of these actions, Brookdale endangered the health of its patients and also left families scrambling to find other places to care for their loved ones.

The lawsuit also alleges that Brookdale misrepresented the quality of its care to the public by reporting false information to CMS. As a means of helping the public to choose a skilled nursing facility, CMS rates facilities on several quality measures on a scale of one to five stars, which are then posted to the CMS website.

The lawsuit alleges that Brookdale over-reported its nursing staffing hours to CMS, and by doing so, Brookdale was awarded undeserved four-and five-star ratings. In the lawsuit, the coalition argues that by engaging in these unfair business practices, Brookdale violated both the Unfair Competition Law and False Advertising Law.

The Attorney General joins the district attorneys of Kern, Alameda, San Diego, and Santa Cruz Counties, as well as the Los Angeles City Attorney.

A Brookdale spokesperson denied the allegations and noted the Golden State has either filed or threatened to file similar actions against other senior facilities.

NCCI Tracking U.S. COVID Workers’ Compensation Legislation

NCCI is tracking legislation to establish or extend workers compensation presumptions for COVID-19 for certain workers.

In 2020, nine states enacted COVID-19 presumption legislation (Alaska, California, Illinois, Minnesota, New Jersey, Utah, Vermont, Wisconsin, and Wyoming.) Many of the COVID-19 workers compensation presumptions are temporary in nature.

This year several of the states that enacted COVID-19 presumption legislation in 2020 are taking additional action to extend and/or expand those presumptions. For example:

– – Vermont enacted legislation (S 9) extending the workers compensation COVID-19 presumption provisions for an employee receiving a positive diagnosis or test between April 2020 and “30 days following the termination of the state of emergency.”
– – Illinois recently enacted legislation (HB 4276) extending the COVID-19 presumption provisions through June 30, 2021
– – Alaska, Minnesota, and Wisconsin are considering legislation to extend their presumptions, expand the types of workers covered under their presumptions, and/or apply their presumptions retroactively

In 2021, additional states, including Connecticut, Iowa, Maryland, Massachusetts, Montana, Nebraska, New Mexico, New York, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Texas, and Virginia, are considering establishing new workers compensation presumptions for COVID-19 for certain workers.

And new trends are emerging. While many of the bills monitored in 2020 focused on establishing presumptions that were applicable primarily to first responders and/or healthcare workers, several of the current legislative proposals establish presumptions for additional categories of workers. For example:

– – Legislation in Maryland, Minnesota, and Texas would establish presumptions for teachers/school employees
– – Legislation in Montana and Texas would establish presumptions for nurses (as a separate category from healthcare workers)
– – Legislation in Connecticut and Iowa would establish presumptions applicable to all employees in the state In 2021, several states have proposed legislation to create workers compensation presumptions of compensability that could be applicable beyond the current COVID-19 pandemic.
– – To date, at least 12 states (Alaska, California, Connecticut, Florida, Iowa, Michigan, Missouri, New Mexico, New York, Rhode Island, Texas, and Washington) have introduced legislation that would establish workers compensation presumptions for infectious diseases and pandemics.
– – While several of these bills specifically mention COVID-19, these proposals also contain terms such as “contagious disease,” “COVID-19 or similar disease,” or “other future qualifying pandemic.” This could mean that the presumption would still be applicable even after the current COVID-19 pandemic ends.
– – Many of these proposals do not include sunset provisions or expiration dates, so they may not be temporary in nature.

Some states have introduced legislation addressing the impact of COVID-19 on the workers compensation exclusive remedy:

– – Hawaii introduced legislation (HB 1224/SB 1415) that proposed an exception to the workers compensation exclusive remedy when an employee, whose employer failed to maintain adequate workplace protections against exposure to COVID-19, contracts the virus
– – The Hawaii legislation also created a presumption that COVID-19 is proximately caused by an employer’s failure to maintain adequate workplace protections. (The Hawaii bills did not make a procedural legislative deadline and are unlikely to advance this legislative session.)
– – Other states, including Arkansas and West Virginia, have also introduced legislation addressing COVID-19 and the exclusive remedy, providing that workers compensation is the exclusive remedy for COVID-19 claims.

Fresno Farm Worker Faces Two Felonies for Comp Fraud

Veronica Catalina Cortes-Ambrosio, 53, of Madera, was charged on two felony counts of insurance fraud after allegedly lying about physical limitations from an injury at work, in an attempt to receive undeserved workers’ compensation benefits.

An investigation by the Department of Insurance revealed on May 6, 2017, Cortes-Ambrosio was working for a farm labor company when she was struck with a gardening tool by a co-worker resulting in injuries to her right shoulder, neck, and back.

She was evaluated and received initial treatment for the alleged injuries, but the workers’ compensation claim she filed was denied.

Cortes-Ambrosio continued to seek medical care and obtained legal counsel to pursue the claim. She claimed to experience severe and nearly constant pain related to the injury and was unable to perform everyday activities such as sitting, standing, walking, reaching, and lifting. Cortes-Ambrosio’s employer offered her modified duties due to her stated limitations, but she refused and did not return to work.

Video surveillance was obtained of Cortes-Ambrosio during the time she claimed physical limitations due to the injury. The video showed her cleaning in and around her home, doing yardwork, ascending and descending stairs, reaching overhead, and lifting – all tasks she claimed she could not perform and prevented her from returning to work.

Cortes-Ambrosio’s alleged fraudulent claims of ongoing pain and an inability to perform basic work functions, led to her employer’s insurance company paying approximately $48,140 in unnecessary medical, investigative, and legal costs.

Cortes-Ambrosio is scheduled to be arraigned on May 26, 2021. This case is being prosecuted by the Fresno County District Attorney’s Office.