We wish him well in his hard work with our firm.

Commissioner Rink joined the Commission in 1991. He is widely regarded as a thoughtful and hard-working hearing officer. As a person who is blind, Paul rose to be one of the highest-ranking Illinois state employees with a disability, and he brought special insight to deliberations of whether an injured worker was capable of working.

Kathryn Kelley joined the Commission in 1981. Her vast knowledge about the Commission, quiet and careful attention to detail and methodical approach to legal issues were appreciated.

We agree the Commission was better for Paul Rink and Kathryn Kelley having served it. The partners and associates of Keefe, Campbell & Associates extend our best wishes to them in future pursuits.

Until a new commissioner is appointed, the Commission will make every effort to cover Commissioner Rink’s place during oral arguments and review calls with public commissioners. Currently, oral arguments will proceed as scheduled. If any schedule changes are necessary, they will be posted in advance on the Commission website.

As we reported last week, the chief counsel’s position has been posted at http://www.iwcc.il.gov/job.htm.

In Szarek v. Illinois Workers’ Compensation Commission, (No. 3-08-0530WC October 29, 2009), claimant, an apprentice carpenter, was seriously injured after falling through a floor opening on a second floor of a house he was helping to build. His employer contended marijuana use, detected via urinalysis, was the proximate cause of fall. The decision indicates the employee was winding in a chalk line when he fell. Other than urinalysis, the majority ruled there was

- No evidence … he was so intoxicated he had abandoned his employment, nor
- Was marijuana use was sole cause of fall, and
- Witness statements establish employee was performing his job duties at time of accident.

The court did rule the Commission’s award of penalties and fees was reversed as any “reasonable person” could have concluded claimant might not be entitled to workers’ compensation benefits. We are confident this won’t alleviate the onus of paying lifetime medical and lost time benefits. We also point out this is the third reported decision in the last 12 months where our reviewing courts have awarded benefits to someone who admittedly and unquestionably committed a crime.

In our view, based on the evidence outlined in the ruling, this claim would have been compensable under traditional Illinois’ legal analyses but it was handled by one of the most misguided TPA’s of Illinois TPA’s. In our view, the TPA had their defense counsels do any number of unusual things in spending literally tens of thousands of dollars to lose this claim over the nine years it was unsuccessfully litigated. If you have claims involving intoxication or impairment and want real answers on effectively defending them, send a reply.

Please note this ruling continues to implement what we feel is a contradictory and paradoxical analysis of allowing substantial seven-figure workers’ comp benefits despite an injury under the undisputed influence of drugs or alcohol. One legal device to find such an injury compensable is indicated to be the claim the impaired miscreant did not “abandon employment.” We note this same legal concept was recently proposed in new legislation.

We ask the rhetorical question of how a worker can have a work injury if they have abandoned employment? If the worker abandoned employment while stoned or drunk, they aren’t on the job any more, correct? If they aren’t on the job, they can’t ever have a work injury so how does such language add anything to this analysis? It is our academic view the paradox doesn’t add anything to the compensability of such a situation and it guarantees benefits to any intoxicated or stoned worker who remains on the job after becoming drunk or stoned.

While we feel this case would have been compensable for a number of reasons including possible OSHA violations, we feel legislation is the best way to address workplace intoxication and impairment. Please also understand an impaired worker is a health and safety risk, not just to themselves but to all workers around him or her. We also urge all Illinois and U.S. employers to learn from this lesson and implement drug and alcohol-free workplace protocols. Please let us know your thoughts and comments.

By way of background—in March 2005, Elizabeth and Frank, who were not married, had a son, Nicholas. Frank signed a voluntary acknowledgment of paternity and “accepted the obligation to provide child support” for Nicholas. On February 6, 2007, the Department issued an administrative support order pursuant to its authority under article X of the Illinois Public Aid Code (Code) (305 ILCS 5/10-1 through 10-28 (West 2006)) requiring Frank to pay child support of $428.52 per month. On August 23, 2007, the Department issued an income-withholding notice to Frank’s employer ordering it to withhold $428.52 per month for current child support, as well as $85.70 per month toward a delinquency of $6,602.34. On October 23, 2007, Elizabeth filed a petition to establish the existence of a father-child relationship and for other relief. With her petition, Elizabeth provided a copy of the voluntary acknowledgment of paternity, the administrative support order, and the income-withholding notice and alleged Frank had filed a workers’ compensation claim and was awaiting settlement. She asked the trial court to adjudicate Frank the father of Nicholas, order him to pay child support, prohibit him from dissipating any workers’ compensation settlement, and grant her 20% of any such settlement as current child support. On January 3, 2008, the trial court held a hearing on Elizabeth’s petition. Frank failed to appear.

On January 7, 2008, the court entered an order finding Frank the father of Nicholas, ordered him to pay child support pursuant to the administrative order, ordered Frank not to dissipate any of his workers’ compensation settlement without court order, and determined Elizabeth should receive 20% of the net settlement in addition to the child-support arrearage already owed her, which amounted to $6,602.34 as of August 23, 2007. On January 28, 2008, Frank filed a motion to vacate the part of the trial court’s order requiring payment of past-due support from his settlement, arguing such payment was barred by Section 21 of the Illinois Workers’ Compensation Act, which prohibited workers’ compensation awards from “be[ing] held liable in any way for any lien, debt, penalty[,] or damages.” On April 1, 2008, the court entered an amended order requiring Frank to place his settlement funds in trust until further order of the court determining the amount to be paid Elizabeth. Thereafter, Frank received a workers’ compensation settlement of $175,000. After multiple proceedings, an order was issued indicating funds previously ordered to be held in trust in the amount of $9,216.77 shall be applied toward the child-support arrearage and interest due under the administrative support order and Frank appealed from the court’s orders.

There was no objection to the use of Frank’s workers’ compensation settlement to pay current child support. He argues, however, a request for payment of an arrearage pursuant to a child-support lien for payment of a past-due support obligation is a debt that is barred from collection from his compensation settlement. Frank argues workers’ compensation benefits are exempt from judicial process for child-support arrearages.

Section 21 of the Act provides, in pertinent part, as follows: “No payment, claim, award[,] or decision under this Act shall be assignable or subject to any lien, attachment[,] or garnishment, or be held liable in any way for any lien, debt, penalty[,] or damages.” 820 ILCS 305/21 (West 2008).

The exception to income exemptions from judgment appears in section 15(d) of the Income Withholding for Support Act (Withholding Act) (750 ILCS 28/15(d) (West 2008)), which provides as follows: “(d) ‘Income’ means any form of periodic payment to an individual, regardless of source, including *** workers’ compensation ***[.] * * * Any other [s]tate or local laws which limit or exempt income or the amount or percentage of income that can be withheld shall not apply.”

The Court noted the language of section 15(d) of the Withholding Act is clear and straightforward. Any other state or local law purporting to exempt statutorily defined income, which includes workers’ compensation benefits, does not apply to proceedings involving the collection of child support and further noted that if the legislature wanted to exempt workers’ compensation payments from collection of child-support arrearages, it could have done so when it enacted the Withholding Act in 1999. Instead, the language of section 15(d) of the Withholding Act is clear.

The Court also noted applying Frank’s workers’ compensation settlement funds to his past-due child support also serves the intent of the Act because the Illinois workers’ compensation scheme (THEIR TERM, NOT MINE) was enacted “to furnish a measure of financial protection to the workman and his dependents for injuries received by him which arose out of and in the course of his employment.” They further noted Sections 7 and 8 of the Act recognize a worker’s dependents are intended beneficiaries. Section 7 provides for compensation to go directly to a worker’s dependents in the event of a fatal injury (820 ILCS 305/7 (West 2008)), and Section 8(b) provides a worker’s compensation for nonfatal injuries is increased if he/she has a spouse and/or child (820 ILCS 305/8(b)(1), (b)(2), (b)(2.1) (West 2008)).

Because dependents are intended beneficiaries of workers’ compensation awards, the public policy furthered by the exemption in Section 21 of the Act is to protect workers and their dependents from the claims of outside creditors, not to shield workers from their own internal family obligations. As the Supreme Court explained in Logston, the purpose of income exemptions in general is to ensure creditors cannot deprive debtors of the means of supporting themselves and their dependents. Logston, 103 Ill. 2d at 279-80, 469 N.E.2d at 172-73. Illinois law and public policy allow a trial court to apply proceeds from a workers’ compensation settlement toward a child-support arrearage. Accordingly, the trial court did not err when it ordered Frank’s child-support arrearage plus interest be paid from his workers’ compensation settlement.

So the bottom line is that at some point if you get some benefit, the state and the taxpayers will expect you to take care of you obligations to your family. I highlight the fact the settlement was $175,000 and the amount of child support in arrears was less than $10,000. It is difficult to fathom why the time and effort was spent trying to avoid paying child support which was past due. Here is hoping little Nicholas learns his lessons from someone other than his proud papa. The ruling is on the web at http://www.state.il.us/court/Opinions/AppellateCourt/2009/4thDistrict/December/4090197.pdf. This article was written by Shawn R. Biery, J.D. Please feel free to email Shawn at sbiery@keefe-law.com with your thoughts and comments.

Well, inquiring minds need to know. Turns out the statewide average weekly wage (or SAWW) went down!! For the first time since the SAWW was implemented to make WC rates spiral up, one would have thought Illinois business would get rate relief in the workers’ comp arena. We learned from George Picha of Picha and Salisbury and KC&A’s own WC rate guru, Shawn R. Biery, the Commission did not change the existing maximum PPD rates since the SAWW actually decreased and also for the reason the Act does not contain a specific provision authorizing a corresponding decrease in the maximum rates.

The Commission’s own website says:

Every six months, the Illinois Department of Employment Security publishes the statewide average weekly wage (SAWW). The SAWW sets the maximum and minimum weekly benefit levels for workers’ compensation. To calculate the SAWW, total wages are divided by the total number of employees in the past six months. Some employees worked every day, and some worked only a few days, but all are counted together. (Federal workers and self-employed workers are excluded.)

Although every attempt is made to calculate the workers’ compensation rates in an accurate and reliable manner, only the Illinois statute governs. Where there is a disagreement between the statute and the IWCC’s calculations, the statute is correct.

*As provided in Section 8(b)4, there is no increase in the benefit rates for 1/15/10 – 7/14/10 because the SAWW decreased.

In a website we have saluted for years, we remain stunned to see they didn’t post their decision as web news or something of note.

We then understood there may be no need for a specific statutory provision authorizing the Commission to reduce the maximum rates since Section 8(b)4 mandates the maximum TTD rate “shall be increased to 133-1/3% of the State’s average weekly wage in covered industries under the Unemployment Insurance Act.” Section 8(b)4.1 further states: “Any provision herein to the contrary notwithstanding, the weekly compensation rate for compensation payments under subparagraph 18 of paragraph (e) of this Section and under paragraph (f) of this Section and under paragraph (a) of Section 7 and for amputation of a member or enucleation of an eye under paragraph (e) of this Section, shall in no event be less than 50% of the State’s average weekly wage in covered industries under the Unemployment Insurance Act.”

If you do the math, by leaving the current maximum TTD rate at $1,243.00, that number would actually represent 134-3/4% of the current $922.45 SAWW and not 133-1/3% as the statute patently outlines. The current published minimum rate for death, PTD, amputation and enucleation cases would actually be 50.53% of the current SAWW and not 50%. We feel where the current maximum TTD rate applies our readers may want to consider paying $1,229.93 per week, and in Section 8(b)4.1 cases, $461.23 per week. Please note this recommendation may result in litigation to debate this statutory issue.

We have not researched the issue of computing the accurate maximum PPD rate, if the rate retroactive to 7/1/09 is based upon the $922.45 SAWW, there should be a proportionate decrease for the same reason. There is no question the maximum TTD and minimum rates for Section 8(b)4.1 cases are specifically tied to a stated percentage of the SAWW, a specific provision in the Act authorizing a decrease in the rate when the SAWW decreases is unnecessary and, in our view, should be presumed to be the law.

We need your thoughts on all of this. In order to push for a change favorable to Illinois business, we need to take this matter to the courts on what is called a writ of mandamus. A writ of mandamus can be used to have a court compel an administrative agency, such as the IWCC to act and follow the provisions of the law. In Illinois, one may petition the circuit courts for a writ of mandamus “to command a public official to perform some ministerial nondiscretionary duty in which the party seeking such relief has established a clear right to have it performed and a corresponding duty on the part of the official to act.” The authority of the respondent to comply with the writ must also be clear. Finally, Petitioner must show that a demand was made on the official concerned but he or she refused to comply. This is to make sure the officer in question has the option of performance before the court exacts compliance. Please remember the Illinois courts may follow the law and they may make it up as we go along.

So we are asking all of our readers, should we take this to the courts? Well, if we don’t, Illinois business is certain to continue to overpay benefits. And if the economy stays flat and the SAWW goes down even further, the gap will increase. We invite your thoughts and comments. We have made inquiries and the Illinois State Chamber may consider supporting these efforts if this is important to Illinois business.

The fee award against the EEOC by a federal judge is unusual and may be among the largest imposed by a federal court. They are appealing. The agency alleged CRST’s lead drivers or team drivers subjected approximately 270 female drivers to sexual harassment and a sexually hostile work environment and the company had failed to correct and protect them.

In a series of rulings, Chief Judge Linda Reade of the Northern District of Iowa dismissed the agency’s claims. She previously granted summary judgment on the claim CRST tolerated a “pattern and practice” of sexual harassment against female drivers. The EEOC presented the court with what was felt to be solely anecdotal evidence to show some members of CRST’s management may have occasionally violated CRST’s anti-sexual harassment policy by failing to respond appropriately to sexual harassment in the workplace.

The EEOC did not present the failings of CRST’s managers in any meaningful way to show CRST had a defined pattern or practice of tolerating sexual harassment in its workplace. This summary judgment ruling effectively left 200 or so EEOC claims with nothing in common.

Please don’t hesitate to reply with your thoughts and comments.

Like secrecy in hiring, we hate the secret “agreed bill” process and it appears to be rearing its ugly head yet again. We will never forget the public relations fiasco that led to passage of the 2005 Amendments to the Workers’ Comp Act that might have sounded great but have delivered very little effective savings to Illinois business. We are now advised by several reliable sources; the Governor convened a meeting recently of some employers and organized labor to discuss the agreed bill process involving potential changes to workers compensation law. This meeting led to a discussion of the process in general and several bills may be cooking out there.

Several measures potentially helpful to Illinois employers have been introduced. We add our thoughts at the end of each description in bold.

Workers’ Compensation Alcohol/Drugs HB 5721 (Zalewski-D-Chicago) provides no compensation is payable if an injury was caused “primarily” by the intoxication of the injured worker, to include the influence of alcohol or certain drugs not prescribed by a physician or the combined influence of alcohol and drugs that affected the worker to the extent that the intoxication constituted a departure from employment. We point out if there are no mandatory guidelines the Commission has to follow in enforcement; this bill isn’t worth the paper it is written on. We hate the legal concept of requiring denial of benefits for injury while intoxicated to necessitate a showing of “departure from employment” and consider the whole concept unenforceable and nonsensical.

Workers’ Compensation Workplace Prevailing Cause HB 6159 (Reis-R-Willow Hill) defines injury as an injury that has arisen out of and in the course of employment; provides that an injury by accident is compensable only if the accident was the prevailing factor in causing both the resulting medical condition and disability. Again, we point out that if this bill isn’t coupled with a provision similar to Missouri’s which requires strict adherence to the legislative intent, this bill is similarly not worth the paper it is written on because everyone will simply swim around it, like an ice cube in a hot swimming pool.

Workers’ Compensation Collective Bargaining SB 3829 (Link-D-Lake Bluff) provides an employer or group of employers and the representative of its employees may agree to establish binding obligations and procedures relating to workers’ compensation; provides the agreement must be limited to, but need not include an alternative dispute resolution system to supplement, modify, or replace the procedural or dispute resolution provisions of the Act. We point out this sort of legislation indicates the Commission should be reformed or not; why create a binding arbitration system and another binding arbitration system? If an employer “opts out” of the current system, do they get to keep the money they are required by law to pay for a system they won’t use?

Workers’ Compensation Objective Medical Standards SB 3830 (Brady-R-Bloomington) provides permanent partial or total disability shall be certified by a physician and demonstrated by use of medically defined objective measurements, that subjective complaints shall not be considered unless supported by and clearly related to objective measurements, and a specified publication shall be applied in determining the level of disability; provides that temporary total disability payments shall not exceed 104 weeks. In our view, this legislative concept is borrowed from other states and would be a very solid, sober and sweeping change to Illinois workers’ compensation law. Therefore, in our view, organized labor will fight it like crazy. Please note this is being sponsored by the leading Republican candidate for Governor! We feel it may have a strong chance of enactment if the political winds change as many feel they may during this coming election year.

Workers’ Compensation Fraud SB 3832 (Brady) provides the Workers’ Compensation Commission may recall a decision or settlement when fraud has been determined to be committed related to a case; provides the Commission shall implement a rule to establish a process for recalling a decision or settlement that is subject to recall due to fraud; provides the fraud and insurance non-compliance unit of the Department of Insurance shall employ one or more attorneys as special prosecutors. Again, this is a sweeping change proposed by the leading Republican candidate for Governor.

Workers’ Compensation Coverage HB 6266 (Rose-R-Mahomet) provides a subcontractor under contract to a general contractor may elect to be covered under any policy of workers’ compensation insurance insuring the contractor upon written agreement of the contractor, by filing written notice of the election on a form prescribed by the Workers’ Compensation Commission. This is a simple and solid idea.

If we put you in charge, what would you change about Illinois work comp law? Please reply with your thoughts and comments.

As we have said numerous times in the past, secrecy in this process is clearly counterproductive to the interests of what many Illinoisans call “democracy” or open government. We are not amazed but a little confused our current “reform” Governor would want the secrecy and insider dealings of the past to continue. We feel he is working to slowly crack open state government under the Freedom of Information Act and has made strides.

And by the way, we extend the criticisms of secrecy in this process to Illinois Republican and Democrat leaders alike. In many states, open positions like the medium-paying Commission posts are published on the web and open interviews are conducted of qualified candidates from all over the state and country. In contrast, the Illinois workers’ comp appointment process continues to seem like someone’s-cousin’s-brother’s-uncle got the nod. In the past, Republicans leaders have agreed to the same secrecy the Dems cherish. To anyone who likes all the secrecy on either side, please tell us how it has served the interests of Illinois business?

We also point out our understanding the job of staffing the Collinsville office of the IWCC after the retirement of the nice lady who used to work there took place very quietly and without that job being posted on the IWCC website.

So what happened this week? Well if you navigate to the Commission’s website at http://www.state.il.us/agency/iic/job.htm; you will learn they have posted a management position of Chief Legal Counsel on the web! As we indicate above, we hope this means someone may actually be opening up the hiring process a bit. We salute anyone and everyone responsible for this change. In the future, we hope what are supposed to actually be civil service jobs like Arbitrator might actually be posted on the IWCC website where the public would expect them to be posted and not on the relatively hidden and almost-impossible-to-navigate Central Management Services website. We will simply have to wait and see what happens.

Again, please don’t hesitate to reply with your thoughts and comments.

In R & D Thiel v. Illinois Workers’ Compensation Commission, (No. 1-08-3666WC February 9, 2010); the Appellate Court, Workers’ Compensation Division ruled the Commission’s decision was not contrary to the manifest weight of evidence as to necessity and reasonableness of medical expenses and causal relationship, although their ruling was contrary to the Arbitrator’s findings, including credibility. The Court noted the Commission explained its reasons.

Claimant testified without rebuttal to a fall off a ladder. He saw a chiropractor the next day. He did not report any problems with his right leg for over two weeks. He went on to treat over 100 times with the chiropractor, primarily for his back. He later wanted and fought to get approval for surgery to his leg.

The Arbitrator concluded claimant suffered only a soft-tissue injury to the low back related to a fall at work. The Arbitrator further ruled Plaintiff failed to prove permanent injury and denied future medical treatment to his knee. In contrast, the Commission reversed and found Plaintiff proved a work-related disk protrusion with annular tear and fracture with possible meniscal tear of knee caused by the admitted work-related fall.

The Appellate Court followed the Commission’s ruling and re-affirmed the legal concept which holds the Commission’s ruling is not affected by the prior determination of the Arbitrator—the Commission rules on the facts and law in a de novo setting. Our only hope is the Appellate Court consistently adheres to this simple rule for both sides of the workers’ comp matrix.

Please do not hesitate to reply with your thoughts and comments or post them on our award-winning blog. If you want the link to the ruling, let us know.

The National Research Program audits will generate the IRS’s first statistical analysis of employment tax compliance since 1984. The audits will stretch across all industries and company sizes. We recommend you insure your employment and tax records are ready for an IRS audit. Federal officials believe the recession encouraged more employers to classify members of their workforce as independent contractors. Classifying workers as independent contractors might save money for some employers who won’t pay for contractors’ healthcare and pension benefits or for the employers’ half of the Social Security and Medicare taxes on workers’ wages.

The line in the sand is how much control the employer has over the worker’s schedule, materials, behavior, risk level and everything else. A recent U.S. Government Accountability Office (GAO) report says employee misclassification “could be a significant problem with adverse consequences” because it reduces tax revenues flowing to the government.

FedEx was the poster child for the contractor battle. The IRS originally hit the company with a $319 million tax assessment for improperly classifying 12,000 of its drivers as independent contractors. But earlier this month, the IRS backed off the assessment and allowed the workers to be classified as employees. Still, several states aren’t giving up the fight and may sue FedEx over those classifications.

The GAO report says the number of misclassified workers uncovered by state audits had increased from approximately 106,000 workers in 2001 to more than 150,000 workers in 2007. The 6,000 NRP audits will include face-to-face interviews, plus a line-by-line review of the company’s employment tax returns (IRS Form 941) and related forms and documents. Audits will mainly focus on tax returns for the calendar years 2007 and 2008.

The IRS has stated these audits will focus on five primary employment tax issues:

1. Worker classification

2. Fringe benefits

3. Reimbursed expenses

4. Officer compensation and

5. Non-filers.

Forewarned may be forearmed so don’t be surprised when and if the random audit hits your doors. Please do not hesitate to reply with your thoughts and comments.