Thursday, April 9, 2020

Continuing COVID-19 Related Employment Developments: Modifications to Workers Compensation Coverage and Unemployment Benefits

Author: Dean LeDoux

In the continued wake of the COVID-19 pandemic, numerous states have recently taken steps, through either new legislation or executive orders issued by governors, to expand both workers compensation and unemployment benefits in circumstances tied to COVID-19. We highlight Minnesota developments as examples.

Workers Compensation Benefits for Essential Workers:  

Newly enacted legislation in Minnesota creates a presumption of workers’ compensation coverage for various categories of workers who contract COVID-19. Categories of covered workers include first responders, health care workers, and childcare workers. Frequently Asked Questions on the new law can be found here. Other states, such as Missouri, have taken similar steps, regarding at least first responders. 

Workers compensation laws, including Minnesota’s statute, typically require an employee seeking coverage for an occupational disease to show a direct causal connection between the disease or illness and the workplace. Under the new Minnesota law, the employer now has the burden to show that the employment was not a direct cause of the illness (a heightened proof standard). 

Unemployment Benefits:   

Minnesota Governor Walz recently amended a previous executive order addressing eligibility for unemployment insurance benefits in light of the COVID-19 pandemic. That initial executive order (EO 20-05) “suspends strict compliance with” the unemployment insurance benefits statute and made several modifications to the pre-existing requirements for benefits eligibility. The executive order also provides that benefits paid as a result of the pandemic shall not be computed when setting the future unemployment tax rate for an employer.

The amendments to EO 20-05 include further suspension of pre-existing statutory limitations on the receipt of unemployment insurance benefits and set out an employee notification requirement. The first amendment suspends enforcement of a statutory limitation “which delays unemployment benefits for any week an applicant is receiving, has received, or will receive vacation pay, sick pay, or personal time off (PTO) pay.” 

The executive order also requires Minnesota employers that separate employees to notify the employees of their right to file for unemployment.  Most states have adopted a similar requirement, because the new Federal Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) includes such a notice mandate as a requirement for participation in the federal unemployment benefit programs. The CARES Act provides for additional, supplemental unemployment benefits tied to COVID-19, if certain conditions are satisfied. Although the Minnesota executive order does not mandate that the notice be in writing, we believe best practice to be to do so. That would allow easy proof of compliance. The executive order does not specifically address furloughs, but the safest approach would be to provide similar written notice to furloughed employees.  

Employers in all states should ensure that they are up to date on any changes to their respective state’s laws on various employment-related issues resulting from the COVID-19 outbreak.

Last week, we pointed you to several Legal Alerts our firm published on several COVID-19 related laws and regulations. See here another recent Legal Alert we published regarding required employer documentation for paid leaves and related tax credits.

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