Tag: 2021 News

The emergence of the COVID-19 worldwide pandemic in December of 2019 and efforts by all levels of government to control the spread of the disease through lock-downs and travel restrictions, has reduced business activity in many industries.

Data released by the Department of Commerce’s Bureau of Economic Analysis (BEA) in late July of 2020 indicated that the country’s GDP decreased by an annual rate of 32.9%. The BEA attributed the decline to “state and local government responses to control the spread of the epidemic”

Consequently, the frequency of musculoskeletal work-related injuries especially in the entertainment, travel and hospitality industries has decreased, as indicated in the California Workers’ Compensation Institute’s interactive app.

As the frequency of the traditional injuries associated with work declined, the risk of exposure to SARS-CoV-2 the virus causing Covid-19, increased significantly for various occupational groups. Many jobs that may typically not be considered high-risk, became high-risk for workers exposed to and infected by SARS-CoV-2.

Recently, a new study published in the Journal of Occupational and Environmental Medicine, sought to determine the industries with the highest proportion of accepted COVID-19 related workers’ compensation claims.

The purpose of this investigation is to quantify the differences in the proportion of COVID- 19 related and non-COVID-19 related injuries and illnesses reported through the workers’ compensation system by industrial classification.

The study included 21,336 WC claims (1,898 COVID-19 and 19,438 other claims) that were filed between Jan 1, 2020 and August 31, 2020 from 11 states in the Midwest U.S.

The overwhelming proportion of all COVID-19 related WC claims submitted and accepted were from healthcare workers (83.77%) followed by individuals employed in retail trades (2.42%) and real estate and leasing (2.37%).

Within healthcare employment, WC claims submitted by workers in medical laboratories had the highest risk.

Conversely, in the study population, employment outside healthcare did not appear to consistently elevate the risk of infection with SARS CoV-2 and filing a claim for workers’ compensation to pay for the medical care and lost time associated with this condition.

The statistics, released on Wednesday by the county’s Department of Health Services, suggest a spread much wider than even the county’s own confirmed toll.

The summary of the statistics reported by the Los Angeles Daily News says that as of Thursday, the county’s total number of officially confirmed positive cases throughout the year was 975,299, with a seven-day average positivity rate of 18.2% – nearly 1 in every 5.

But officials continue to believe that in a region of 10 million people, the virus likely infected many more people who simply have not been tested or exhibited symptoms. Their scientific projections arrived at a one-of-three ratio, or about 3.2 million infections, officials said.

Officials believe that for every reported case, between three and four actual infections have occurred, officials said.  And the results, if traditional patterns of behavior during the pandemic hold up, could spur crisis-level demand at hospitals, if the expected holiday surge takes hold.

But even if there wasn’t more transmission over the holidays, county researchers estimate that 1 in every 115 county residents is infectious to others – a higher rate than a week ago, when 1 in 125 residents were infectious.

The estimated undercount is a function of various patterns of behavior, said Dr. Roger Lewis, director of COVID-19 demand modeling for L.A. County Department of Health Services.

“There’s a period when you may be infected without any symptoms, and some people never ever have symptoms and have no way of ever knowing they got sick,” Lewis said – so they don’t get tested.

Then there are people who have mild symptoms. Maybe a slight cough or a cold. They often feel there’s no reason to be tested. And there’s another group who know they are positive – perhaps they live in a household where another is infected, but they don’t go out or present themselves for care because they don’t want to infect others.

“We’re quite confident that it’s in that range,” Lewis said. “If the truth turns out to be 1 in 4, that’ not inconceivable to me. One in 2 seems less likely. I’m quite confident we are in the right range.”

What has complicated considerations for public health researchers and the healthcare providers is the devious nature of the disease itself.  “It’s a disease that can affect two people who look the same – but one will get over in a week to 10 days and one will end up on on a ventilator or die,” he said.

Dr. Thomas Yadegar, medical director of the Intensive Care Unit at Providence Cedars-Sinai Tarzana Medical Center, knows that complex nature well. He said the 3-to-1 ratio seemed a bit high, “but it wouldn’t surprise me,” if it was accurate, he said.

“But even if the number was that high, that’s still nowhere near where it needs to be for us to have herd immunity,” said Yadegar, who for months has been sounding an alarm about the need to intervene early to prevent out-of-control and inflammatory immune responses called cytokine storms. “I still fear the next few months we are going to continue to be in crisis mode.”

Lewis said a new batch of projections will be out next week, and could be the biggest indicator of whether an expected holiday wave will emerge in the coming weeks.

Fed up with the state’s inability to probe and manage the aftermath of a multi-billion-dollar unemployment fraud fiasco, a California congressman is turning to the IRS to protect his constituents.

Courthouse News reports that Representative Josh Harder is warning that a wave of unsuspecting Californians will soon find out they were caught in the massive identity fraud ring that rocked the state during the early stages of the pandemic via a tax bill from the federal government. On Thursday, the second-term congressman urged the IRS to devise a plan to quickly help the still unknown number of victims.

“The California Employment Development Department is an absolute catastrophe – and the IRS isn’t known for its customer service, but we can’t have thousands of Californians getting a tax bill for benefits they didn’t get,” Harder said in a statement.

In a letter to IRS Commissioner Charles Rettig, Harder pressed the federal government to take a proactive approach and quickly develop a streamlined system for identity fraud victims to clear wrongful tax bills. Noting that tax season is on the horizon, he says the IRS should be working with the unemployment departments of California and others to get ahead of the problem.

California’s department in particular has failed miserably under the strain of the pandemic.

The problems began shortly after the state’s initial lockdown order was issued by Governor Gavin Newsom as millions of freshly unemployed workers filed for first-time benefits. A massive backlog of pending claims followed, leaving hundreds of thousands without income for months.

Criticism flew at the department from every angle, including during emergency legislative sessions last summer.

“I am embarrassed,” said state Assemblymember Tom Lackey last July. “I don’t think government has ever looked more broken than it has right now.”

While Newsom appointed a task force and new leadership to rescue the department, a new, more embarrassing crisis emerged in the fall.

Acting on tips from employees within California jails and prisons, investigators uncovered a massive unemployment fraud scheme being perpetuated by inmates.

According to local and federal prosecutors, at least 35,000 California inmates filed for unemployment from March through August. Benefits were not only sent to death row inmates, but applicants such as “Poopy Britches” and “Dianne Feinstein.”

“Quite frankly, the inmates are mocking us,” said one district attorney.

The next month, police busted a ring in Beverly Hills during which 44 people were arrested and more than $2.5 million in unemployment benefits in the form of pre-loaded debit cards were seized. Police said many of the people arrested were from out of state and traveled to California to collect the fraudulent cards and used them to rent luxury cars, lease short-term rentals and buy high-end items.

The full extent of the fraud is still undetermined, but investigators say it’s likely the state paid out over $8 billion in fraudulent claims since last March. In an attempt to get a handle on the fraud, the department was forced for a stretch to suspend payments to any new applicants.

Nearly a year after the first statewide lockdown and despite promises from Newsom that it would be cleared by the end of the month, the department’s backlog has swelled in recent weeks to over 800,000 cases.

The National Counsel on Compensation Insurance just published it’s Quarterly Economics Briefing for the fourth quarter of 2020.

The Big Four service sectors – Leisure and Hospitality; Retail Trade; Professional, Business, and Other Services; and Education and Health Services – account for about four out of five lost jobs. In general, the Big Four service sectors are characterized by high physical proximity, low essentiality, or both. Physical proximity refers to the degree of interpersonal contact among workers or between workers and customers, and essentiality refers to the degree to which a service is non-discretionary and cannot be postponed.

The Leisure and Hospitality sector continues be hardest hit, with two out of five lost jobs coming from this sector alone. Restaurants lost employment from October to December following six consecutive months of employment increases. One-half of restaurant operators expect staffing levels to decline from December through February.

Employment recovery stalled during the fourth quarter, including a reversal in December following a massive pandemic resurgence. As the coronavirus recession persists, stresses for households and businesses have increased.

Small businesses contribute a big share of US jobs. One-quarter of US workers are employed at firms with fewer than 50 employees, one-half at firms with fewer than 500 employees. Small businesses also contribute to workers compensation premium in greater proportion relative to their employment because they are less likely than large businesses to self-insure and more likely to purchase non-deductible policies.

The coronavirus recession has been hard on small businesses, especially those in service sectors most impacted by reduced demand. A US Census survey from early December found that the 31% of US small businesses had experienced a “large negative” pandemic effect; for small businesses in various Big Four service sectors, this percentage ranged from 30% to nearly 70%.

The coronavirus pandemic galvanized remote work. While only 6% of the workforce was full-time remote before the pandemic, an estimated 24% worked from home in December. Several surveys conducted during 2020 found that most workers able to work from home would like to continue to do so after the pandemic, at least part-time.

Employer acceptance of remote work also increased during the pandemic. However, a review of recent research concludes that 60% or more of US workers cannot work remotely. As a general observation, occupations most easily adapted to remote settings involve tasks that can be performed on a computer, the internet, or by telephone.

It is increasingly clear that the post-COVID economy will be different than the pre-COVID economy. Changes affecting labor markets are also likely to affect workers compensation in a number of ways. The slowing rate of job recovery and increasing share of permanent layoffs at year-end 2020 suggests that US employment, and hence total workers compensation premium, is likely to recover more slowly during 2021 than during the summer and fall of 2020.

Last November, a putative class action was filed in Solano County Superior Court by Maria Johnson, on behalf of herself and other similarly situated current and former employees of Lowe’s Home Centers, LLC, and as a proxy for the State of California.

She began working for Lowe’s in 2015 and worked California, until her employment as a delivery coordinator ended in October of 2020.

This class and representative action challenges alleged systemic employment practices resulting in violations of the California Labor Code against individuals who worked for Defendants. The Complaint addresses Defendants’ violations of Labor Code sections 201-202, 204,226,233, and 246, and seeks penalties, damages, and other relief pursuant to, among other provisions, Labor Code sections 203,210,218,218.5, 218.6, 248.5, and 2698 et seq., and the Unfair Competition Law, codified in the Business and Professions Code.

Maria Johnson alleges four causes of action; (1) Unpaid Sick Pay (including derivative penalties for such unpaid sick pay, including waiting time penalties); (2) Inaccurate Itemized Wage Statements; (3) Unfair or Unlawful Business Practices; and (4) Violations of the California Labor Code §§ 2698, et seq.

With respect to the first cause of action, plaintiffs allege that “As a matter of policy and practice, Defendants pay Plaintiff and the Sick Pay Class for sick time at the incorrect rate of pay. Defendants pay Plaintiff and the Sick Pay Class at the base hourly rate of pay, as opposed to the regular rate of pay, which would take into account all non-discretionary remuneration in addition to their base hourly wages, including for example incentives or bonuses, or the rate resulting from dividing the employees’ total wages, not including overtime premium pay, by the employees’ total hours worked in the full pay periods of the prior 90 days of employment, as required by Section 246. This results in underpayments of sick pay wages to Plaintiff and the Sick Pay Class.“

They support this claim by saying “The California Supreme Court has explained that “[c]ourts have recognized that ‘wages’ also include those benefits to which an employee is entitled as a part of his or her compensation, including money, room, board, clothing, vacation pay, and sick pay.” Murphy v. Kenneth Cole Prods., Inc., 40 Cal. 4th 109 4, 1103 (2007) ( emphasis added).”

According to Lowe’s data, there were approximately 18,799 full-time, non-exempt individuals employed by Lowe’s in California who were paid sick pay wages at any time during the period of November 23, 2017 to December 21, 2020.

On January 15, 2021 Lowe’s provided Notice that it had filed documents to remove the case to the United States District Court for the Eastern District of California. In this regard they allege “Removal of a class action is proper if: (1) there are at least 100 members in the putative class; (2) there is minimal diversity between the parties, such that at least one class member is a citizen of a state different from any defendant; and (3) the aggregate amount in controversy exceeds $5 million, exclusive of interest and costs.”

Lowe’s maintains that this action was improperly filed in state court because “Plaintiff agreed to binding individual arbitration of the claims she has asserted in this action. Lowe’s also intends to oppose class certification on multiple grounds, including that (a) Plaintiff must arbitrate her claims against Lowe’s individually pursuant to the binding and enforceable arbitration agreement and class action waiver executed by Plaintiff, and (b) class treatment is inappropriate under these circumstances in part because there are many material differences between the named Plaintiff and the putative class members Plaintiff seeks to represent, as well as amongst the putative class members.”

Lowe’s avers, for the purposes of meeting the jurisdictional requirements for removal only, that if Plaintiff were to prevail on every claim and allegation in her Complaint on behalf of the putative class, the requested monetary recovery would exceed $5 million.