The Department of Insurance has approved emergency workers’ compensation rules dealing with COVID-19 and California employers.
The rules were recommended by the Workers’ Compensation Insurance Rating Bureau to bring fairness for employers’ experience rating during the COVID-19 pandemic amid shelter-at-home orders and for dealing with claims of workers who contract COVID-19 on the job. The following new rules took effect July 1:
1. Classification changes for staff working from home
As a result of the California stay-at-home order, many employers have altered employees’ duties so they can be accomplished from home, and often those duties are clerical-like in nature.
Under the rule, an employee can be assigned payroll classification code 8810 if:
- Their duties meet the definition of a “clerical office employee” while working from home, and
- Their payroll for the balance of the policy period is not assignable to a standard classification that specifically excludes clerical office employees.
There are a number of other classifications that already include clerical operations in their definitions, and those classifications would not be eligible for a change.
If you are reclassifying any employees to 8810, make sure to document all changes and maintain records of those changes. This rule is effective for as long as the statewide state-at-home order by Gov. Gavin Newsom is in effect, and 60 days after the order is lifted.
2. Non-working, paid staff
Salaries paid to workers who are at home not working, yet still collecting a paycheck, will be excluded from payroll for workers’ comp premium calculation purposes when the payments are less than or equal to the employee’s regular rate of pay.
Again, make sure you document these payroll disbursements and maintain records to show they were not working, so that they are not chargeable to your workers’ comp policy.
3. COVID-19-related claims
All claims directly arising from a diagnosis of COVID-19 shall not be reflected in the computation of any employer’s experience modification.
The Rating Bureau said in proposing this change that the since the occurrence of COVID-19 workers’ compensation claims are unlikely to be a strong predictor of future claim costs incurred by an employer, their inclusion in X-Mod calculation would not meet the intended goal of experience rating.
The takeaway
Now that these rules have taken effect, if you are having employees work from home you need to assess if the duties they are performing are largely clerical in nature and discuss with your carrier or us whether you should change the code to reflect their new duties and reduced risk of occupational injury or illness.
You will need to document those changes and keep careful records, as the change would likely affect your premium.
Additionally, under a second Newsom order, it will automatically be presumed that any employee who is working on-site and contracts COVID-19 caught the virus in the scope of their work.
Those claims will be eligible for workers’ compensation benefits under the order. But under the Insurance Department’s decision, any COVID-19 workers’ compensation claims will not affect an employer’s experience and X-Mod.