Standard Club has merged with North to form NorthStandard. Find out more about NorthStandard here or continue on this site to access industry news, publications and expertise, as well as club rules and contacts.
News: California Workers Compensation Programme Legislation
News & Insights 2 November 2020
A recent change in California state law has created questions regarding an owner or operator’s obligations under the US Jones Act and Longshore and Harbor Workers’ Compensation Act (LHWCA). The legislation, SB 1159, was approved by Gavin Newsom, the Governor of California on 17 September 2020. A summary of the legislation is provided here.
A recent change in California state law has created questions regarding an owner or operator’s obligations under the US Jones Act and Longshore and Harbor Workers’ Compensation Act (LHWCA). The legislation, SB 1159, was approved by Gavin Newsom, the Governor of California on 17 September 2020. A summary of the legislation is provided below.
As stated below, the change should not affect members whose only exposure to workers is under the Jones Act or the LHWCA. However, there may be gray areas and members should review and consult their insurance brokers and lawyers.
SB 1159 – Summary of Changes to California Workers’ Compensation Provisions
SB 1159 amends the California Labor Code to expressly extend California’s Workers’ Compensation protections to include COVID-19 (under specified circumstances) until January 1, 2023. The bill also creates a rebuttable presumption that the injury arose out of and in the course of the employment and is compensable after 30 or 45 days (rather than 90 days). The bill creates a presumption of injury for all employees whose fellow employees experience specified levels of positive testing, and whose employer has 5 or more employees.
SB 1159 is Unlikely to Impact Jones Act and LHWCA Claims
Senate Bill 1159 amends California state labor laws as they provide for worker’s compensation benefits to employees working in California. They do not purport to amend or alter the federal compensation schemes that govern the treatment of Jones Act seamen or longshore and harbor workers. The State of California does not have the authority to change the substantive law regarding remedies for seamen under General Maritime Law (GML), the federal Jones Act, nor under the federal LHWCA. This is true even when the shipowner or operator is a California Corporation.
SB 1159 would apply to out-of-state employers with employees working in California who are not subject to LHWCA, GML or the Jones Act, but are subject to California State workers compensation.
Seamen: The General Maritime Law and the Jones Act.
Seamen injury claims are governed by federal, not state, law. This is true even when the ship owner is sued in state court. GML provides that a seaman who contracts a disease while in the service of a vessel will be entitled to Maintenance and Cure (M&C) from his employer. If a seaman were to develop COVID-19 symptoms or test positive while aboard a vessel, he would be entitled to M&C benefits. If, however, the seaman was to develop COVID-19 symptoms or test positive after departing the vessel, there would be a question of fact as to whether COVID-19 manifested itself while he was in the service of a vessel. Notwithstanding the foregoing, this question of fact will generally be resolved in favor of the seaman.
The Jones Act affords a seaman a cause of action for the negligence of their employers and if established, damages in addition to M&C including compensation for all past and future loss of income, expense of medical care, pain and suffering and disability. 46 U.S.C. § 30104. To establish a COVID-19 claim under the Jones Act, a seaman would need to establish not only that he contracted COVID-19 as a result of his employment on the vessel, but also that the vessel owner was negligent.
Similarly, California cannot change the federal LHWCA compensation scheme. Under the LHWCA, the harbor worker has to prove that they suffered an 'accidental injury' or 'occupational disease' in the course of their employment to be entitled to compensation. 33 USC 902(2). Whether COVID will be considered an 'accidental injury' or 'occupational disease' is an open question.
The club would like to thank Ms. Tara Voss, Mr. Glen Piper and Mr. Christopher Tribolet of Peacock Piper for the summary of this legislation. If you have any questions about this alert, please contact your usual claims handler for further assistance.