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The Impact of the COVID-19 Pandemic on Temporary Disability Benefits

By Neelu K. Khanuja, Esq. , Founding Attorney at Khanuja Law The California Employment Development Department estimated there to be approximately 2.8 million unemployed individuals in California in June 2020. The state unemployment rate significantly increased after Governor Newsom issued Executive Order N-33-20, mandating all individuals to stay at home due to the COVID-19 pandemic unless they are essential critical infrastructure workers. Thousands of non-essential businesses statewide closed or downsized resulting in laying off or furloughing millions of workers. In consequence, there has been a substantial economic impact on the workers’ compensation industry in regards to liability to pay laid off, disabled workers temporary disability benefits. Specifically, a non-essential employer who accommodated a worker’s restrictions prior to the stay-at-home order will no longer be able to provide accommodations if the employer closes business and lays off the worker due to the COVID...
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Laid Off as a Result of the COVID-19 Pandemic?

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  A non-essential employer will no longer be able to offer modified work to an injured worker if the employer closes business and lays off the staff due to the COVID-19 pandemic. Pursuant to the reasoning in Manpower Temporary Services v. Workers’ Compensation Appeals Board (Rodriguez), the injured worker may be entitled to temporary disability indemnity if the business’s closure due to the COVID-19 pandemic is not considered “good cause” for the layoff. However, the Board in Signature Fruit Co. v. Workers' Compensation Appeals Board (Ochoa) found that “the essential purpose of temporary disability indemnity is to help replace the wages the employee would have earned, but for the injury, during his or her period(s) of temporary disability.” The employer will argue that the laid off, disabled worker is not losing wages due to the work-related injury but as a result of the pandemic, which does not entitle him or her to temporary disability benefits. Due to the current novelty of the ...
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Location: Los Angeles, CA, USA
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