Synopsis: Will City of Chicago WC Claims Start to Make Sense Under this Mayoral Administration?

Editor’s comment: For decades, City of Chicago WC claims were mis-managed by a former Alderman who is now facing federal criminal charges. He has pleaded not guilty to the charges and trial is set for the fall.

In my opinion, this Alderman used the WC system along with the police/fire disability program to recruit and help political cronies—he is not facing any charges for those actions. The saddest and most obvious example of this mis=management technique was a police cadet who was placed on disability while in the Academy and remained on the dole for decades, using his disability pay to put himself through law school and then started a law practice in the south suburbs. If you want details, send a reply.

Now that the former Alderman has been charged, he is no longer seeking office and the City’s WC program is being run much more professionally. For one thing, a national WC claims management group is now handling the claims. We hope they are bringing claims to a reasonable close and City workers aren’t allowed to get life-time or decades-long benefits from City taxpayers. In my view, they are cutting City WC claims costs to the tune of hundreds of millions of dollars because the politics have been removed from claims management.

With that in mind, I can report the Illinois Appellate Court, WC Division recently upheld a determination that an injured worker was not entitled to wage-differential benefits, penalties or fees, but said further proceedings are necessary to determine the employer’s entitlement to a credit.

Claimant Haepp worked for the City of Chicago as a carpenter. He allegedly injured his left knee at work in May 2010, and again in January 2011. Haepp filed two separate workers’ compensation claims, which were consolidated for a hearing before an arbitrator. The arbitrator found Haepp sustained compensable injuries on each of the alleged dates and awarded him temporary total disability benefits. The arbitrator also awarded attorney fees and penalties for the 2010 injury, but not for the 2011 injury.

The IL Workers' Compensation Commission panel affirmed the award for the 2010 injury and modified the award for the 2011 injury to include an award of penalties and fees. Neither party appealed from this decision.

In 2014, Haepp filed two more workers’ compensation claims; one for a hernia and one for a right shoulder injury. The two claims were consolidated and an arbitrator found both injuries were compensable. The arbitrator awarded permanent partial disability benefits, along with penalties and fees.

The IL Workers’ Compensation Commission panel made some modifications to the arbitrator’s decision, but upheld it. A circuit court judge then confirmed the Commission’s decision.

Haepp appealed, seeking additional benefits, penalties and fees. Among other things he argued that the Commission erred as a matter of law by failing to award him lifetime wage-differential benefits.

The IL Appellate Court, WC Division said the Commission’s decision to award permanent partial disability benefits instead of wage-differential benefits was not against the manifest weight of the evidence. The Court explained wage-differential benefits are available to a worker who can prove an impairment of earning capacity by showing actual earnings for a substantial period before the accident and after returning to work with or without “reasonable accommodation” required by the ADA. Section 8(d-1) of the IL WC Act provides such benefits.

Here, the Appellate Court noted, Haepp had permanent work restrictions, but he was able to continue working for the City as a union carpenter, earning the identical compensation as the all other union carpenters. The Court also said the Commission did not err in discounting the opinion of Haepp’s vocational expert since he failed to identify any jobs similar to Haepp’s chosen field of work, and completely disregarded Haepp’s prior work experience.

The decision states “In our view, the Commission's finding that Claimant failed to establish an impairment of earning capacity was a reasonable determination based on the evidence presented at the arbitration hearing.” The Court went on to find that Haepp did not establish an entitlement to additional penalties or fees, as his arguments pertaining to these issues were not clearly defined and were not supported by sufficient authority to warrant consideration.

The Court also said it was unclear from the record whether the Commission had intended to award the City a credit for medical expenses paid by Haepp’s group health insurance. The arbitrator sustained Haepp’s objection to the admission of a document that itemized the benefits and payments made by group health insurance, the Court said, and the Arbitrator found the city failed to prove entitlement to a credit. The Commission’s decision did not address the credit issue other than stating that the city "shall receive credit for medical bills paid through its group medical plan.” Under these circumstances, the Court said, the matter would have to go back to the Commission to clarify its decision on the issue of the city’s entitlement to credit.

I salute the august members of the IL Appellate Court for a solid and well-written decision. I also salute current Mayor Lightfoot for her professionalism in dealing with the City’s WC claims.

To read the court’s decision in Haepp v. IWCC, No. 1-21-0634WC, 12/09/2022, published, click here. I appreciate your thoughts and comments, please post them on our award-winning blog.

Synopsis: Illinois Passes A New Bill, Starting Next New Year’s Day, Guaranteeing Up to 1 Week of Paid Leave for All Workers. Please note it isn’t necessarily “sick leave.”

Editor’s comment: As I have advised my readers, Illinois is a one-party State and will be for a generation. In my view, it is going to be almost impossible to block social legislation like this, regardless of the costs or impact on Illinois business.

On January 10, 2023, the Illinois legislature passed the Paid Leave for All Workers (PLFAW) Act, making Illinois just the third state in the U.S. to require private employers to provide earned paid leave to employees to be used for any reason. Our Governor signed it.

The PLFAW Act will take effect on next year on January 1, 2024, and, once enacted, will provide nearly all Illinois workers with a minimum of 40 hours of paid leave, or a pro rata number of hours, during a designated twelve-month period. Employers can choose to frontload the leave on the first day of employment or the first day of a designated twelve-month period, or use an accrual method. Under the new Act, leave accrues at the rate of one hour of paid leave for every forty hours worked. The law will deem exempt employees to have worked 40 hours in each workweek for purposes of PLFAW Act accrual, unless their regular workweeks are less than 40 hours. Once enacted, the law will permit employees to use the PLFAW Act leave after 90 days on the job, unless an employer allows them to utilize leave earlier. Employees may determine how much leave to use, but employers may set a reasonable minimum of increment of no less than two hours per day.

The law will not require employees to give a reason for taking leave, and employers will not be permitted to require any documentation or certification of the need to take leave. Employers may require up to seven calendar days’ notice of foreseeable leave if they have a written policy provided to employees outlining notice requirements and procedures. If the leave is not foreseeable, employees must provide notice as soon as practicable.

Rate of Pay While on Paid Leave

Leave under the law will be paid at the employee’s hourly rate of pay for the hours of paid leave he or she takes. An employee who is paid gratuities and commissions must be paid at least the full minimum wage for the jurisdiction, or their hourly rate, whichever is greater.

Carry-over if Leave is Unused

Unused accrued PLFAW Act leave will carry over annually, but the employer will not be required to provide more than 40 hours of paid leave for an employee in the designated twelve-month period. Employers that choose to frontload the 40 hours will not be required to carry over unused paid leave to the next twelve-month period.

Termination of Employment

While the Illinois Wage Payment and Collection Act requires employers to pay out earned vacation time at the end of the employment relationship, the PLFAW Act expressly states IL employers will not need to pay unused paid leave under the PLFAW Act at the end of the benefit year or any other time, provided the employer has not credited PLFAW Act leave to an employee’s paid time off bank or employee vacation account. The new law will require employers to restore the PLFAW Act leave of employees who leave their employers but return to the same employer within twelve months.

Records

The law will require employers to create records documenting hours worked, leave accrued and taken, and remaining paid leave balances. Such records must be maintained for at least three years, and employers must allow the Illinois Department of Labor (IDOL) access to the records. Employers that provide PLFAW Act leave on an accrual basis must provide notice of the amount of leave accrued or used by an employee upon request. Failure to comply with the recordkeeping requirements subjects employers to a penalty of $2,500 per offense.

Posting Requirement

The law will require employers to post, where other notices are customarily posted, a notice (that IDOL will prepare) summarizing the requirements of the act and giving information on filing a charge. Employers that have workforces comprised of a significant portion of workers who do not read English will be required to request a notice in the appropriate language from IDOL. Violations of the posting requirements would subject employers to a penalty of $500 for the first violation and $1,000 for each subsequent violation.

Retaliation

The PLFAW Act, once enacted, will prohibit employers from taking adverse action against employees for:

Exercising their rights under the PLFAW Act;
Opposing practices the employee believes to be in violation of the PLFAW Act; or
Supporting others’ exercise of rights under the PLFAW Act.
In addition, the law prohibits employers from considering the use of leave under the PLFAW Act in making discipline, promotion, or evaluation decisions.

Remedies

The Il Department of Labor will be responsible for administering and enforcing the PLFAW Act. Employees may file complaints with the IDOL within three years of the alleged violation. Employers found to violate the PLFAW Act are subject to actual damages, compensatory damages, attorneys’ fees/costs, and civil penalties, as well as being subject to equitable relief. The IDOL can conduct investigations and refer matters to hearing. The state attorney general may enforce the collection of awards.

Exclusions

The New Act does not affect the validity or change the terms of bona fide collective bargaining agreements in effect on January 1, 2024. After January 1, 2024, the requirements may be waived by a collective bargaining agreement only if the agreement includes a clear and unambiguous waiver. The law does not apply to:

school districts or park districts;
students employed on a part-time, temporary basis by the college or university they attend;
short-term employees of higher education institutions who are employed for less than two consecutive calendar quarters during a calendar year without a reasonable expectation that they will be rehired in a subsequent calendar year;
employees working in the construction industry covered by a bona fide collective bargaining agreement;
employees covered by a bona fide collective bargaining agreement with an employer that provides national or international services of delivery, pickup, and transportation of parcels, documents, and freight; or
employers covered by municipal or county ordinances in effect on January 1, 2024, that provide for paid leave or paid sick leave. After January 1, 2024, any municipal or county ordinance enacted or amended must comply with the Act or give greater protections to employees.

Next Steps for IL Employers

While employers have about a year to prepare for the PLFAW Act to take effect, employers may want to consider thinking through processes and policies now. While employers that already have paid leave policies that provide at least forty hours of leave per year are not required to modify their policies as long as the leave can be taken for any reason, employers may want to consider creating a policy specifically addressing the PLFAW Act and may want to change existing accrual policies.

I appreciate your thoughts and comments, please post them on our award-winning blog.

Synopsis: IRS announces new mileage rates for your WC claims.

Editor’s comment: Please note this mileage rate is used for IL WC IME’s making it important to IL WC claims handlers. I don’t agree with that focus, as IRS publishes a “medical” rate but it isn’t worth fighting over it.

The IRS announced the 2023 business standard mileage rate is increasing to 65.5 cents, up 3 cents from the 2022 midyear adjustment of 62.5 cents. The agency made the rare midyear change in June—in addition to a regular annual adjustment announced last December that put the rate at 58.5 cents per mile for the first six months of 2022—as a way to combat inflation and high gas prices that have been taking a toll on employees.

The 2023 mileage rate took effect Jan. 1. In addition to the 65.5 cents per mile driven for business use, the IRS also announced the standard mileage rate for 2023 will be:

22 cents per mile driven for medical or moving purposes for qualified active-duty members of the armed forces, consistent with the increased midyear rate set for the second half of 2022.
14 cents per mile driven in service of charitable organizations; the rate is set by statute and remains unchanged from 2022.

These rates apply to electric and hybrid-electric automobiles, as well as gasoline- and diesel-powered vehicles, the IRS announced.

KCBA Blog

1-13-2023; Will City of Chicago WC Claims Start to Make Sense Under this Mayoral Administration?; PFLAW Coming to the IL Workplace; New IRS Mileage Rates and more

Synopsis: Illinois Passes A New Bill, Starting Next New Year’s Day, Guaranteeing Up to 1 Week of Paid Leave for All Workers. Please note it isn’t necessarily “sick leave.”