For Presumed Compensability, What’s the Difference Between an Executive Order and a State Act?

Frank Ferreri

Stuart, FL (WorkersCompensation.com) – Anyone tuned in to workers’ compensation news of late has probably seen or heard something about the presumption of compensability for frontline and essential workers who contract COVID-19.

States have been pushing for various ways to bring workers’ compensation into the coronavirus era, with a patchwork of action from governors, legislatures, and regulatory bodies defining when compensability should happen. In doing so, they have also unintentionally set up an opportunity for a civics lesson on executive orders and state legislation.

Executive Orders

Gaining more notoriety at the national level thanks to presidential action, executive orders can also have powerful consequences at the state level. In short, when a governor signs an executive order, it creates legal requirements that can be enforced by state agencies and upheld in court. Not unlike presidents, governors like executive orders because they go into effect quickly and, at least at first, don’t involve the legislative and judicial branches of government.

Executive orders carry the weight of law so long as the governor acts within power a state’s constitution grants her. Whether that is so is often a question that comes up in court, with broad proclamations less likely to stand than more specifically targeted orders.

When executive orders don’t stand up in court, it’s typically because a governor has gone too far and the court determines the executive branch overreached into areas that the state constitution assigned to the legislature. Emergency situations, such as a pandemic illness, will allow governors greater leverage and more power than “run of the mill” circumstances.

Like much else in the coronavirus “new normal,” states’ stances on presumed compensability are in flux, and the law is far from settled. However, governors across “red” and “blue” states alike have issued orders requiring either the presumption of compensability or easing of standards for at least some workers to make their case for coverage.

As an example, California Gov. Gavin Newsome issued a May 6 order stating that employees with COVID-19 will be presumed to have contracted the virus on the job if: 1) the employee tested positive for or was diagnosed with COVID-19 within 14 days of going to work at the employer’s direction; 2) the work was done on or after March 19; 3) the employee wasn’t working from home; and 4) the diagnosis was from a state-licensed physician. Particularly noteworthy is that the California order applies across sectors, potentially extending to any employee who contracts the illness, not just those regarded as having a higher risk of exposure due to work.

How the order plays out when cases arise will show the willingness of the California judiciary to accept executive branch powers. The Golden State’s legislature has also weighed in, with proposed bills creating presumptions of compensability for certain frontline workers. If those go into law, it may be up to a judge to decide what effect, if any, they would have on Newsome’s order. Presumably, executive orders in other states could see similar action in court for either going too far or not far enough to cover workers who were exposed to COVID-19 on the job.

Legislative Action

While subject to judicial review when cases arise, in general, acts that state legislatures pass and governors sign into law are on stronger legal ground than executive orders. That’s because courts will typically defer to legislatures as representatives of the people unless a law violates constitutional principles in some way.

Recently, Illinois made headlines after its legislature sent H.B. 2455 to Gov. J.B. Pritzker’s desk, where it was signed and became law. It declares that police officers, EMTs, health care workers, and people employed in 23 other categories of “essential” businesses will be presumed to have contracted COVID-19 on the job whenever they test positive for the virus. The Illinois situation is instructive because the state’s workers’ compensation commission initially issued an order to create the presumption that was rejected in court.

Thus, the judicial branch in Illinois struck down an executive branch agency’s foray into what it saw as an area that should be addressed by the legislative branch in consideration of separation of powers principles.

However, the fate of H.B. 2455 isn’t a given, and a court could determine that the legislature went too far or was too vague in defining who is “essential” in the Land of Lincoln’s economy. After all, that definition comes from – wait for it – an executive order Pritzker issued in March.

Across the country, the coming months and years will determine how strong presumption laws from state legislatures are. As an illustration, the Illinois bill provides employers with three specific bases for rebutting the presumption that could end up making or breaking COVID-19 workers’ compensation cases:

  1. The employee was working from home, on leave, or some combination thereof for 14 days prior to the “injury, occupational disease, or period of incapacity” resulting from COVID-19 exposure.
  2. The employer was “engaging in and applying to the fullest extent possible” health and safety practices based on updated CDC or state health department guidance.
  3. The employee was exposed to COVID-19 by an alternate source.

Courts will strike down enacted legislation for being too vague or overly broad as such laws make it difficult to impossible for people to follow. Potential arguments against a law like the Illinois bill could hammer at how difficult it is to determine what the “fullest extent possible” means for complying with CDC guidance. With more than two dozen categories of jobs covered, what applies in one case may not stand up in another.

For both executive orders and state legislation, what employers will ultimately be responsible for under workers’ compensation law will almost certainly end up before courts and depend on the facts of the case. For employers and employees alike, it may not matter the source of the presumption but whether, “at the end of the day,” the presumption stands up. However, that will likely depend on what a court considers valid action on the part of a governor or state legislature.

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