COVID-19 Workers’ Comp Law Provides No Financial Assistance for Local Governments

April 13, 2020

The League supports financially protecting public safety and health care workers, but says the state needs to fund the measure, which could cost as much as $500 million.

Under a bill passed by the House and Senate last week, public safety and health care workers who contract COVID-19 will be covered by workers’ compensation.

The new law (Chapter 72), which was signed by Gov. Tim Walz on April 7, requires that if these workers get COVID-19, it should be presumed that they were exposed at work.

Law could devastate workers’ comp system

The League opposed the legislation, insisting that the impact of the presumption could be substantial given the unprecedented nature of the pandemic. While protecting public safety workers is paramount, a great deal of unknowns remain about how the pandemic will unfold. Using the state’s own projections, the League estimates that workers’ compensation costs for public safety employees could range from $100 million to more than $500 million.

Without financial backing from the state, the new law could have significant negative implications for the long-term financial and administrative stability of the workers’ compensation system. For public employers, the cost to compensate workers who contract COVID-19 will be passed on to property taxpayers at a time of pronounced economic instability.

Read the League’s statement on the bill

Unfortunately, legislative leaders were unable to to reach agreement on a financial plan that would have provided state or other assistance to moderate the financial impact on local units of government.

League continues to advocate for city assistance

Since the law’s passage, the League has contacted key legislators in an effort to structure a financial response package. Chief House author of the bill, Rep. Dan Wolgamott (DFL-St. Cloud) and Assistant Senate Majority Leader Eric Pratt (R-Prior Lake) are working with the League to develop legislation.

The League has also been collaborating with other local government associations and nongovernmental stakeholders on identifying funds and mechanisms to cushion the impact on local economies. This includes using a portion of the federal aid Minnesota will be receiving to reimburse organizations that are faced with a high amount of COVID-19-related workers’ compensation costs.

The League will continue to work with key legislators on a proposal to provide state assistance to address the financial implications of this new law. Please contact your legislators to make sure they are aware of city concerns and urge them to support forthcoming funding legislation.

For more background information about this bill, read a previous article.