To Report or Not to Report

California SB1159 places onerous and complex reporting responsibilities on employers. TPAs in turn now scramble to provide reporting portals to manage the process. When an employer knows, or should know of a positive COVID-19 test within its workforce, it must inform its TPA. Then it must report the number of employees at each “specific place of employment.” TPAs must determine when and where the outbreak occurred and include that information in any filed claims.

Since SB1159 establishes a rebuttable presumption that illness or death resulting from COVID-19 is compensable for front-line workers and employees who contract the virus from a workplace outbreak, is it logical to think that reporting can be avoided? If an employer decides to accept every case, is reporting really necessary?

It turns out that avoiding reporting requirements may be more onerous, and certainly more costly, than the reporting requirements themselves. The penalties for not reporting, or reporting misleading information, are severe. Moreover, penalties if applied may pertain to multiple cases depending on how many Covid-cases are involved. Under Labor Code 3212.88(i), a fine of $10,000 could be applied for incidences of failure to report, and/or providing inaccurate or misleading information.  Labor Code 3212.11(i) stipulates the reporting actions an employer must take within three days of when they know, or should reasonably have known, that an employee has tested positive.

Although it’s logical to assume that if all claims are accepted, or accepted as presumptively compensable, then no reporting is required, the law does not endorse this approach. Reporting is required regardless of whether or not a claim is filed, and whether or not compensability has been established. An employer could be liable for intentionally submitting false or misleading information, AND for failing to report. The $10,000 penalty could be applied to every case of intentional submission of false or misleading information as well as every incidence of failure to report.

Given the significant financial penalty, it’s a better bet to deal with the burdensome reporting than to risk a huge financial hit for failure to do so.

References: from a blog article originally published by Michael Sullivan & Associates, LLP, authored by Lisa Aquilar and Mike Sullivan.