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 workers’ compensation issues arising from the outbreak of COVID-19, we will have to wait and see how courts rule on the issue of temporary disability following layoff in the absence of any specific case precedent addressing it.