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Legislative Updates

In early July, various members of the California Legislature tested positive for COVID-19 and legislative leaders announced both houses would be out until further notice. Leaders later announced they would follow a two-week quarantine and possibly, try to return to business in late July. With upcoming deadlines and the uncertain future, significant legislation for this year continues to be on hold. This is the second year of a two-year session and most non-COVID legislation has been postponed as COVID and other emergency matters take top priority.

URCA continues to monitor a number of important policy and regulatory issues that could have a significant impact on our industry.

Below is an update on the adoption of the California budget, URCA letters of opposition to Executive Orders and proposed legislation, and the US Department of Labor’s ruling on Industry Recognized Apprenticeship programs.

California Budget 2020:
Governor Gavin Newsom signed the 2020 Budget Act – a $202.1 billion spending plan that strengthens emergency response, protects public health and safety, and promotes economic recovery while closing a $54.3 billion budget shortfall caused by the COVID-19 recession. The Budget makes critical investments to save lives and promote economic recovery by continuing critical purchases of personal protective equipment and other safeguards necessary to safely reopen the economy during the COVID-19 pandemic. It protects public education and supports Californians facing the greatest hardships – since the pandemic is having a disproportionate impact on lower-wage workers, communities of color, and is further exacerbating income inequality. Finally, the Budget supports job creation, economic recovery and opportunity by recognizing and supporting the critical role small businesses play in job creation in the state.

The COVID-19 pandemic has impacted every sector of the state’s economy and has caused record high unemployment – almost 1 in 5 Californians who were employed in February were out of work in May – and further action from the federal government is needed given the magnitude of the crisis. The Governor continues his efforts to secure $1 trillion in flexible federal aid to state and local governments across the country. This additional support is critical to mitigate the worst effects of the public health crisis, encourage recovery, and support Californians in need.

Governors Executive Order N-62-20: (OPPOSED) creates a rebuttable presumption that an employee’s COVID-19-related illness arose out of the course of employment for workers’ compensation purposes if the employee tests positive or is diagnosed “within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction.” The presumption does not apply if the employee worked from home. To qualify, the employee must either (1) test positive for COVID-19 within 14 days after performing work; or (2) be diagnosed with COVID-19 by a licensed physician within 14 days after performing work and have that diagnosis confirmed by further testing within 30 days of the diagnosis. Additionally, the date of injury must occur between March 19, 2020, and July 5, 2020. For current employees, the practical reality of this Executive Order is that any test-confirmed COVID-19 illness will be presumptively compensable by workers’ compensation.

The Executive Order provides that the presumption “is disputable and may be controverted by other evidence.” However, if a claim is not rejected within 30 days of filing, the presumption can only be rebutted by evidence discovered subsequent to the 30-day period.
Employees claiming COVID-19-related illness are eligible for all workers’ compensation benefits, including “full hospital, surgical, medical treatment, disability indemnity, and death benefits.” There is no waiting period for temporary disability benefits, but an employee entitled to COVID-19 paid sick leave must exhaust that paid leave first.

URCA opposed this N-62-20 as burdensome and redundant, especially with all of the current and coming relief from federal and state remedies.
AB 196 (Gonzales-Fletcher) (OPPOSE) Establishes Costly “Conclusive Presumption” of Injury. Significantly increases workers’ compensation costs for employers by “conclusively” presuming (non-rebuttable) that contraction of COVID-19 by all “essential workers” is a workplace injury. Establishes an extremely concerning precedent for expanding presumptions into the private sector for COVID-19 issues, which the Workers’ Compensation Insurance Rating Bureau (WCIRB) recently estimated will add billions in costs to California’s workers’ compensation system.

This bill would define “injury,” for certain employees who are employed in an occupation or industry deemed essential in the Governor’s Executive Order of March 19, 2020 (Executive Order N-33-20), except as specified, or who are subsequently deemed essential, to include coronavirus disease 2019 (COVID-19) that develops or manifests itself during a period of employment of those persons in the essential occupation or industry. The bill would apply to injuries occurring on or after March 1, 2020, would create a conclusive presumption, as specified, that the injury arose out of and in the course of the employment, and would extend that presumption following termination of service for a period of 90 days, commencing with the last date actually worked.

URCA opposed to this proposed legislation as overly burdensome and redundant, as many protective measures have been implemented to address infection.

AB 398, (Chu) (OPPOSE) COVID-19 Local Government and School Recovery and Relief Act. AB 398 would institute a tax of $275 per employee for “an entity, including, but not limited to, a limited liability company, corporation, or limited liability partnership, that has more than 500 employees that perform any part of their duties within the state.”

URCA is opposed because AB 398 would degrade California’s economic competitiveness against other states who notoriously compete to attract California’s companies by providing tax benefits and other incentives to support businesses. This bill would take the exact opposite approach and unnecessarily raise the cost associated with job growth.

A “head tax” would increase the labor costs for businesses by making each employee more expensive. The increased labor costs from a “head tax” would put downward pressure on employee wages and workforce expansions, while simultaneously placing upward pressure to raise prices or even relocate the business outside of California. Un- precedented furloughs and layoffs are already happening in California due to COVID- 19. An employee “head tax” will exacerbate the unemployment in California by raising costs on businesses since it makes each employee more costly.

This proposed legislation unnecessarily and significantly drives up costs for California employers at a time when employers are already struggling. URCA strongly opposes AB 398 because it hurts employers at a crucial time and is not sound public policy.

US Department of Labor Final Rule Re: Industry Recognized Apprenticeship Programs (IRAPS): The USDOL completely excluded the construction industry from its final rule on IRAPs. This means DOL will not recognize any IRAPs that are intended to train apprentices in construction-related activities. The Department correctly concluded that the construction industry is already well-served by the current privately funded registered apprenticeship system administered jointly by union labor and management. Today's rule ensures that the 'gold standard' for apprenticeship training will remain in place for future generations of craftworkers and provide them with the safest, most extensive training available anywhere in the world."


URCA thanks the following members for providing photos for this website:
Alcal Arcade Contracting, Best Contracting, Eberhard Company, Letner Roof Company and Troyer Contracting.

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