California growers and other businesses oppose a proposal by Gov. Gavin Newsom that would increase their workers’ compensation costs by billions of dollars.
Newsom reportedly is contemplating an executive order providing workers’ comp benefits to every “essential” employee who becomes infected with COVID-19.
And, infected employees — including farm, restaurant, and healthcare workers — would get the benefits even if they contracted the virus off the job.
“We are wholeheartedly in support of protecting our employees, we want a healthy and available workforce. But we can’t put an undue burden on the business entity.” — Ian LeMay, president, California Fresh Fruit Association
That’s a major change from the rules in place. Employees presently are required to show that an injury or illness is work-related to receive workers’ comp benefits.
“The problem is that it puts in the pockets of employers the responsibility for the costs of COVID-19 illnesses where the exposure and infection could have just as easily happened off the job as on the job,” Bryan Little, director of employment policy for California Farm Bureau Federation, told AgNet West Radio Network.
The Workers Compensation Insurance Rating Board estimates the order would increase costs at least $2.2 billion. In the worst-case scenario, the added costs soar to $33.6 billion. The board’s mid-range estimate is $11.2 billion.
What Is Newsom’s Motivation?
According to Politico, the governor is being pressured by labor unions to provide blanket workers’ comp benefits.
“Workers on the frontlines of the COVID-19 pandemic put their lives at risk just doing their jobs,” wrote Art Pulaski, head of the California Labor Federation, in a late March letter to Newsom, Politico reported. “If they are infected with COVID-19, the workers’ compensation system must quickly provide medical and indemnity benefits — such workers should not have to fight denials and delays while fighting for their lives.”
But Newsom is being pressured by business interests who say they can’t possibly absorb added workers’ comp costs at a time that they laying off workers and battling to stay afloat.
“Many businesses and their owners are casualties of the necessary economic shutdown,” wrote California Chamber of Commerce President Allan Zaremberg to Newsom and his staff in a letter dated April 7. “They cannot be expected to shoulder a new employer-financed social safety net, with expensive new mandates, at precisely the moment when small businesses are shuttering, employee hours are cut, and uncertainty about the future is the new normal.”
Earlier Newsom Order
On April 17, Newsom signed an executive order providing farm, grocery store, and fast-food employees with two weeks of paid sick leave so they won’t feel pressured to keep working while infected. The order also included delivery drivers.
The order covered those working for large employers and filled a gap left by a federal act that required employers to provide emergency paid sick leave but exempted those with more than 500 workers.
“These workers on the front lines of this crisis are our unsung heroes for continuing to work to ensure that Californians have food on their tables during these challenging times, and we must do everything in our power to make sure they are taken care of at home and in the workplace,” Newsom said. “You are not disposable. You are essential.”
Protect Workers at an Affordable Cost
Ian LeMay, president of the California Fresh Fruit Association, told The Fresno Bee that his members are worried both about their workers and skyrocketing insurance costs.
“We are wholeheartedly in support of protecting our employees, we want a healthy and available workforce,” LeMay said. “But we can’t put an undue burden on the business entity.”
Benefits Without Illness or Injury
An analysis done by a Fresno-based law firm and obtained by GV Wire stated that the executive order “will extend eligibility for benefits to ‘exposure’ to COVID-19 even in the absence of symptoms or actual illness; this will impose workers’ comp costs on employers for employees who have no actual illness or injury.”
In addition, the analysis said the order will “require workers’ comp benefits paid for by employers to bear the cost of temporary housing to quarantine employees, regardless of the presence or absence of actual illness.”
The analysis concluded: “This order will impose massive new costs that will discourage employers from re-opening, re-employing workers and getting the California economy moving again.”
Farm Leaders Try to Kill the Order
Ag leaders are trying to convince Newsom to change his mind.
“I think the important thing for people to do right now is to get in touch with their legislators and to call the governor’s office,” Little said. “That’s what we’re trying to accomplish with the grassroots outreach we’re going with Farm Bureau members right now.”
This is the link to voice concerns about the executive order.