7-24-2017; Clock ticking to Noon Today on Possible IL WC Reforms; Mike Lucci Joins Governor Rauner’s Team; Wassup with “Loss of Trade” in Reserving/Settling IL WC Claims? and more

Synopsis: Clock Ticking to Noon Today on Possible IL WC Reforms; WC Expert Mike Lucci Joins Governor Rauner’s Team.

Editor’s comment: Governor Rauner on Friday gave IL Senate Democrats a deadline of noon today to end a procedural maneuver and send him Senate Bill 1 for signature so he can sign an amendatory veto that would allow Illinois’ public schools to open in August 2017.

Our IL State budget that passed last month appropriates money for K-12 schools but did not include a legislative mechanism or formula to distribute school funds. Senate Bill 1 contains the mechanism, but it also includes an amendment that says the state will pick up the annual employer contribution for Chicago Public Schools’ pensions and the Chicago Public School’s unpaid pension debt.

Yes, if you haven’t been sleeping for the last six months, you might notice our IL General Assembly has already created massive state debt and is now adding even more billion-dollar debt to take over the existing and future debt of the Chicago Public Schools and their de-funded gov’t pensions. When it comes to debt, there doesn’t appear to be anyone in Springfield that doesn’t want more and more until the financial rubber-band on unlimited gov’t borrowing breaks and they can’t borrow any more, forcing punitive taxes on you and me.

Governor Rauner, who has line-item veto power, wants the CPS pension provisions removed from the bill and placed in separate legislation to ensure all IL schools open as taxpayers expect.

Business advocates say they have renewed optimism for reforms because Rauner recently replaced most of his staff with solid, knowledgeable candidates, including Mike Lucci, a Notre Dame grad and a workers’ compensation policy expert. Mr. Lucci, who was a vice president of the Illinois Policy Institute, a conservative think tank, joined Rauner’s staff as deputy chief of staff for policy and legislative affairs. Mr. Lucci advocated

·         Modest reductions in indemnity payments;

·         Better wage-replacement ratios;

·         a stronger IL WC medical fee schedule and

·         Abolition of physician dispensing of opioids.

I support the majority of his efforts. I also point out we can bring IL WC to the main stream by simply tweaking the system mildly. I also feel sure Mr. Lucci doesn’t want to win “the race to the bottom” to be hilariously cheap to leave IL widows/widowers and seriously injured workers on welfare in a few years after being killed at or disabled from work, as our cheap-o neighbors in Indiana WC do.

Per the 2016 State of Oregon WC Premium Rankings, Illinois is tied with Oklahoma for the nation’s seventh-highest premiums, at $2.23 per $100 of payroll. The Alabama WC system is smack dab in the middle at $1.85 per $100 of payroll—using simple math, we need to cut about .40 cents per $100 of payroll to win what I call the “race to the middle” of U.S. WC Premium rankings. We can do it or something close to it, if we feel growing better jobs and enticing new business to this State is important.

The Democratic majorities in the IL House and Senate passed two workers’ compensation bills during recent regular and special sessions, but I join with business and insurance spokespeople to characterize their efforts “fake reforms.” Governor Rauner has vowed to veto both bills but hasn’t yet. Under the state’s Constitution, the governor has 60 days to either sign or veto a bill, or it automatically becomes law.

House Bill 2525 calls for a drug formulary and would stop insurers from charging “excessive rates” that produce “unreasonably high” profits and to submit their rates to regulators for prior approval. That bill was delivered to Governor on June 29, so he has until Aug. 28 to sign or veto it.

HB 2622 would require the Workers’ Compensation Commission to take $10 million from its operations fund to create the comical and tiny “Illinois Employers Mutual Insurance Co.” to supposedly get started as a mono-line carrier at some future date and then immediately compete against multi-zillion-dollar global WC insurance carriers. We are sure everyone in the WC insurance industry is enjoying a wonderful belly-laugh to consider that effort as “real.” You might note that bill, if signed by the Governor would require cutting the IL WC Commission’s budget by about 1/3, generating the need for as many as 50 IWCC workers being fired. That bill was delivered to Rauner on June 23, so he has until Aug. 22 to sign or veto it.

Neither bill outlined above contains provisions sought by IL Republicans — a Medicare-based fee schedule instead of a charge-based formula, and a four-year freeze on maximum weekly benefits at $775.18.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: Wassup with “Loss of Trade” in Reserving/Settling IL WC Claims?

Editor’s comment: We were asked by a reader about the concept of “loss of trade” and how to reserve/settle IL WC claims using it. We wanted to provide a couple of thoughts.

“Loss of trade” as a permanency concept in IL was first used to provide large amounts of PPD to police officers and firefighters who would receive line of duty disability pensions under the Pension Code. When a police officer or firefighter can no longer do their job due to life-changing injuries, they can’t simultaneously receive both the line of duty disability pension and a total and permanent disability award or wage loss benefits under the IL WC Act—the Pension Code bars that double recovery. I agree with that approach.

What I feel liberal hearing officers did it cook up the concept of “loss of trade” to justify large “going away presents” to seriously injured police officers or firefighters where they suffered life-changing injuries to then receive only a line of duty disability pension. I remember one claim where a now retired firefighter was seriously burned and it was felt the lifetime benefit wasn’t “enough” so the very liberal Arbitrator added 80% BAW or about $200,000 as a going away present for the seriously injured firefighter.

The problem with this concept as it relates to police and firefighters is our silly State doesn’t require them to be catastrophically injured to be entitled to a line of duty disability pension. All that is required is someone confirming then can no longer work as a police officer or firefighter. For a simple example, there is an IL firefighter who had poor hearing and was surprised to have the siren/horn on a fire truck go off. He suffered significant hearing loss and everyone agreed he would be a danger to himself, his co-workers and others to be unable to hear commands during a live fire or medical emergency. Rather than have a law that would require the fire district to find him other work where he could have hearing augmentation and actually do something for his pay, he was pensioned off. In my view, that approach directly violates the intent and coverage of the Americans with Disabilities Act but no one is going to bring a claim for it because the worker is getting so much money to not work.

So on top of being paid a line of duty disability pension, how much would you give such a worker for “loss of trade?” In my view, he hasn’t lost his trade, we are simply allowing him amazing largesse to be paid and never have to work again, unless he wants to. In fact, he can find lots of other jobs or start his own business with the money from his pension. Please note lots of firefighters and police do so—happy to provide examples on request.

Does this same “loss of trade” phenomenon apply to other IL workers?

Well, I am sure the term “loss of trade” doesn’t appear and isn’t defined in the IL WC Act. When and if you start to use it, you can give it any meaning or value you like. Let’s take a construction worker who undergoes cervical fusion surgery resulting in lifetime restrictions of no lifting over 50lbs. His employer agrees to accommodate the restrictions and he or she is successfully returned to regular work.

In my view, such a claim has a value between 15% to 30% LOU of the body. What I feel liberals around us will start arguing is the worker is “locked” to that employer as other employers won’t hire him. Please note anyone that won’t hire him with such restrictions is almost certainly violating the federal ADA. Either way, if you start increasing reserves to 40%, 50% or up to 80% BAW, what is that supposed to be formulated on? Why would loss of trade make a claim worth triple its ordinary PPD value?

In summary, my law partners tell our entire team, we have to let you know of litigation/insurance issues like this right or wrong. You have to decide what is best in setting reserves—we only make legal recommendations.

In my view, I routinely fight “loss of trade” as a negotiating concept and trial technique. Again, in my view, to have Claimant attorneys and IL WC Arbitrators start adding language to the IL WC Act that isn’t there and making awards in reliance on such concepts, they are violating the Due Process and Equal Protection provisions of the IL Constitution. As I outline above, they are also ignoring the ADA, as if you can “wish away” federal law.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: IS IT MID YEAR ALREADY??--NEW IL WC RATES ARE POSTED—UPDATED RATE SHEETS AVAILABLE SOON FOR ILLINOIS WC RATE INCREASE!!! 

Editor’s comment: Illinois WC Rates Jump Again So Please Be Aware Of The New Rates or Your Claims Handling Will Suffer and Penalties May Ensue.

Email Shawn at sbiery@keefe-law.com and Marissa at mpatel@keefe-law.com to Get a Free and Complimentary Email or Hard Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

We like to hope it’s a sign of a growing economy—even though rates continued to increase almost every cycle as we continue to watch the growth of IL WC rates. As we have mentioned in the past, since in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing WC rates continue to climb.

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is $775.18. However, this rate is only through June 30, 2017 and the new max PPD will be published in January 2018. When it will be published in January 2018, this rate will change retroactively from July 1, 2017 forward. If you don’t make the change, your reserves will be incorrect--if this isn’t clear, send a reply.

The current TTD weekly maximum has risen to $1,440.60. A worker has to make over $2,160.09 per week or $112,366.80 per year to hit the new IL WC maximum TTD rate.

The new IL WC minimum death benefit only increased by about $5 but we have now cracked the $700k ceiling. That amount is now 25 years of compensation or $540.23 per week x 52 weeks in a year x 25 years or $702,299.00! The new maximum IL WC death benefit is $1,440.60 times 52 weeks times 25 years or a lofty $1,872,780.00 plus burial benefits of $8K. IL WC death benefits also come with annual COLA increases which we feel can potentially makes Illinois the highest in the U.S. for WC death claims.

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. AGAIN—If you want just one or a dozen or more, simply reply to Shawn at sbiery@keefe-law.com and Marissa at mpatel@keefe-law.com  They will get a copy routed to you once we get laminated copies back from the printer—hopefully before they raise the rates again! Please confirm your mailing address if you would like laminated copies sent to your home or office!

7-17-2017; State of Illinois Gets a Budget But No Need to Celebrate; IS IT MID-YEAR ALREADY??--NEW IL WC RATES ARE POSTED by Shawn Biery; John "Jack" McAuliffe, Rest in Peace and more

Synopsis: State of Illinois Gets a Budget But No Need to Celebrate--We Continue the Inevitable Approach to the Financial Abyss of Governments Like Detroit, Puerto Rico and Greece.

Editor’s comment: Governor Bruce Rauner has tried to forestall the never-ending financial crisis caused by Speaker Madigan and other IL legislative leaders. If you aren’t sure, Moody’s indicates we have $251 Billion—yes, a Quarter of a Trillion(!) dollars in gov’t pension debt! As I advised last week, our IL State legislators can pay in about $32,000 in fake gov’t pension contributions to get millions upon millions of dollars for the rest of their lives. Former U.S. President Barack Obama and former Chicago Mayor Richard M. Daley are both eligible for this “impossible to fund” largesse. Our IL judiciary can similarly contribute about one years’ pay to their fake gov’t pension program to then get $5-10M in benefits, all from IL taxpayers. Those “doomsday engines” and others like them are pointing our State to the bottom of the financial ocean if someone doesn’t do something about spiraling fake gov’t pensions, overspending and waste.

I read a very defiant article by House Speaker Madigan castigating Governor Rauner for trying to straighten out our State’s impossible financial situation. The problem I have with Speaker Madigan’s point of view is the multi-billion-dollar financial problems occurred on his watch while he played a leading role in creating his impossible-to-stop power base that was built on skyrocketing compensation for all IL state gov’t workers, unmanageable fake gov’t pensions and duplicative/wasteful use of our tax dollars. I feel our IL State WC defense program for State workers continues to be run poorly in part due to the role of Speaker Madigan. In my view, our great-great-great-grandchildren will be paying off the mistakes of this generation of IL legislative leaders for decades to come. If Speaker Madigan wants real and lasting reform to cut spending and waste, combine/streamline state agencies and make financial sense of IL State government, go-for-it--he doesn’t need the Governor’s help; no one can stop him. To me, it is part of the tragedy of our lifetimes he won’t do it and may be dedicated to blocking any real IL gov’t reform while taxes and debt spiral.

Governor Rauner devoted this part of his life and work to trying to find solutions to the morass. He offered an IL State budget proposing $37.3B in spending, but included no correlating revenue or tax increase. After the failure of the General Assembly to enact a state budget by the end of this past May, the Governor called lawmakers back to Springfield for a special session in July. As part of this call for a special session, he joined with GOP Leaders announcing "The Capitol Compromise" which included an IL State income tax increase to achieve a balanced budget. In addition, the Capitol Compromise included spending caps, property tax relief, workers' compensation reform, government consolidation, education reform, term limits and gov’t pension reform. Governor Rauner tried to wedge the Compromise through, as the Democrats needed Republican support to pass any budget—instead, as you will read, the Republicans blinked.

Earlier this month the IL House took the final votes to override Governor Rauner's veto of the bills that constitute the fiscal year 2018 budget

·         SB9, the revenue portion of the budget;

·         SB6, the spending portion; and

·         SB42, the budget implementation portion.

All three bills were vetoed by the Governor and the General Assembly quickly overrode his veto. The bipartisan package spends over a billion less than what the Governor proposed in February, and $3B less than what was spent in FY 2017.  

This new State budget increases the individual income tax rate from 3.75% to 4.95% and from 5.25% to 7% for corporations. While several states have no income tax at all, our State is now just under 5% on top of the levy of the federal gov’t. For Illinois Department of Revenue guidance on income tax withholding go to:http://tax.illinois.gov/AboutIdor/PressReleases/PR-2017-07-11.pdf)  

The new budget increases funding for K-12 education over FY17 levels by approximately $700M, relying on a more equitable school funding formula that benefits low-income school districts like Chicago's.  A drafting glitch in the budget regarding school funding will require lawmakers to return to Springfield before the school year starts next month.

This State budget plan includes paying down a little more than half or $8 billion of our State's enormous backlog of overdue and unpaid bills. The State of Illinois currently has about $15 billion in unpaid bills. The devices being used to pay the late bills and fees will be with a combination of borrowing and fund “sweeps.” 

Please Note This State Budget Has No Reforms—It is Basically Higher Taxes and More Borrowing to Try to “Tread Water” While IL State Government Continues to Approach The Financial Abyss

The biggest objection to the income tax increase from Governor Rauner and legislators voting against it was the lack of any reforms to prevent a reoccurrence of the overspend-and-tax-and-borrow approach to clunky/junky/poorly run IL State Government. Consequently, it is expected Governor Rauner may again be calling our General Assembly back to Springfield later this month to see if we can develop reforms to gov’t pensions; state employees' group health insurance; procurement; a real estate property tax freeze; workers' compensation reform and term limits.

What's Next for IL Workers' Compensation Reform?

Our industry continues to ask is there an opportunity for IL workers' compensation reform and hopefully lower costs?

The challenges to getting IL WC reforms have changed. Approximately $6 billion in education spending is in limbo due to an obvious/glaring glitch in the State budget. Legislation has to be presented and pass to resolve the mistake. The question is whether the Governor will use this problem to extend his never-ending efforts for WC reform. Whether Gov. Rauner leverages the budgetary problem beyond education needs does not mean IL WC reform is forever off the table. Gov. Rauner along with Republican Leaders Sen. Bill Brady and Rep. Jim Durkin are committed to pursuing a WC reform agenda that includes improving workers' compensation. Insiders believe Gov. Rauner will call the General Assembly back to Springfield, possibly during July, to deal with the continuing need for reform. 

The challenge will be whether House Speaker Madigan and Senate President Cullerton are dug in or could they have interest in allowing a modest and meaningful workers' compensation proposal to be presented and passed. Of the two, Senate President Cullerton has been the most willing to negotiate—we salute him for doing so. Speaker Madigan has made it clear his only acceptable path for “reform” is regulating workers' compensation insurance rates. We and lots of business observer don’t consider his position a “reform” at all. I personally think of it as a fake and intentionally confusing WC “deform” effort that won’t happen even if passed. At minimum, it will infuriate the WC insurance industry that doesn’t need the interference, just to make the General Assembly feel like they did something.

We have pointed out easy and simple reforms that are certain to save IL WC costs and hope all sides consider them—one easy way to cut PPD is to go back to the PPD values for body parts before the Blagojevich era. This is sort of like what Senate President Cullerton called a “hair-cut” that should be acceptable and a positive development.

I want my readers to know the Illinois State Chamber of Commerce is committed to achieving workers' compensation reform—they aren’t giving up the fight to get us back to the middle of the U.S. WC pack. IL WC Reform grows in importance as other costs for employers via tax changes make Illinois even less attractive to invest and grow job in. Without legislative changes that demonstrate our political leaders are interested in advancing economic opportunity as much as they are on a spend/borrow and tax agenda, Illinois will continue to lag in job growth and the revenues necessary to sustain the growth of State government. I hope my readers will join and support the Chamber—for more information go to their website at www.ilchamber.org.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: IS IT MID YEAR ALREADY??--NEW IL WC RATES ARE POSTED—UPDATED RATE SHEETS AVAILABLE SOON FOR ILLINOIS WC RATE INCREASE!!! 

Editor’s comment: Illinois WC Rates Jump Again So Please Be Aware Of The New Rates or Your Claims Handling Will Suffer and Penalties May Ensue.

Email Shawn at sbiery@keefe-law.com and Marissa at mpatel@keefe-law.com to Get a Free and Complimentary Email or Hard Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

We like to hope it’s a sign of a growing economy—even though rates continued to increase almost every cycle as we continue to watch the growth of IL WC rates. As we have mentioned in the past, since in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing WC rates continue to climb.

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is $775.18. However, this rate is only through June 30, 2017 and the new max PPD will be published in January 2018. When it will be published in January 2018, this rate will change retroactively from July 1, 2017 forward. If you don’t make the change, your reserves will be incorrect--if this isn’t clear, send a reply.

The current TTD weekly maximum has risen to $1,440.60. A worker has to make over $2,160.09 per week or $112,366.80 per year to hit the new IL WC maximum TTD rate.

The new IL WC minimum death benefit only increased by about $5 but we have now cracked the $700k ceiling. That amount is now 25 years of compensation or $540.23 per week x 52 weeks in a year x 25 years or $702,299.00! The new maximum IL WC death benefit is $1,440.60 times 52 weeks times 25 years or a lofty $1,872,780.00 plus burial benefits of $8K. IL WC death benefits also come with annual COLA increases which we feel can potentially makes Illinois the highest in the U.S. for WC death claims.

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. AGAIN—If you want just one or a dozen or more, simply reply to Shawn at sbiery@keefe-law.com and Marissa at mpatel@keefe-law.com  They will get a copy routed to you once we get laminated copies back from the printer—hopefully before they raise the rates again! Please confirm your mailing address if you would like laminated copies sent to your home or office!

Synopsis: John "Jack" McAuliffe age 95 of Winnetka rest in peace.

Editor’s comment: John McAuliffe was licensed to practice law in May 1956. He and Frank Wiedner founded Wiedner & McAuliffe, Ltd. in 1973, as a two-person firm concentrating on workers' compensation defense. The firm has grown to over 70 attorneys with four offices representing clients throughout the Midwest United States. John was an extremely skilled advocate, whose knowledge of medicine and appropriate standards of care surpassed anyone.

As an advocate or someone to break down complicated situations, he was in high demand, even outside of the firm. More important, he was a consummate gentleman, who treated everyone with dignity, kindness and respect. There was never a time that he was not available, for advice, to talk, to offer words of encouragement and support, and to help with any matter.

I always remember him for his bow ties and ardor as an advocate. He will be missed.

7-10-17; Hello, Giant IL Tax Increase; Sayonara to WC and Other Reforms; Lilia Picazo on Chicago "Fair Workweek" That May Not Be So Fair to Business; Dan Boddicker on New Iowa EPLI Precedent and more

Synopsis: General Assembly Whacks You and I With Massive Tax Increase; Spending, Workers’ Comp and Other Pro-Business Reforms Dropped. Are We Ready for Even Higher State Taxes Next Year and For Years to Come?

Editor’s comment: Last week, the Illinois General Assembly, led by House Speaker Michael Madigan raised our IL state income tax to 4.95% to raise about $5B in new money from you and I and IL business. Various members of the cowardly IL Republican party crossed over and voted to override Governor Rauner's budget veto. A few legislators mumbled there is still work to be done to reform Illinois workers' compensation. Our suggestion is don’t hold your breath on any future WC or other “reforms.” We are also sad to see all the pressure and stress that came with trying to make some progress and real reforms for our clients and other businesses in this State all came to nothing. We do feel businesses and jobs are going to continue to leak out to our sister states until someone in the super-majority ruling party starts to feel the pain of those growing departures.

House Speaker Madigan was able to bring together the 71 members needed to override Gov. Bruce Rauner's veto. Ten House Republican representatives crossed party lines to work with the Democrats to pass the $36 billion budget. Legislators passed a bill out of the Democrat-controlled House that included a $5 billion income tax increase to pay part of more than $15 billion in unpaid bills. I believe they are also borrowing another $6B we don’t have to insure your great-great-grandkids have to deal with their mistakes.

Gov. Rauner originally vetoed the bill a week ago on Monday, saying the bill didn't reform IL government enough, including changes to workers' compensation and a freeze on property tax, among other things.

The Illinois Senate overrode Rauner's veto within an hour. But the House failed to pass a vote until Thursday evening. The body did not meet on the Fourth of July, and failed to reach a quorum on Wednesday. As the House was readying to go into session on Thursday, the session was delayed when a woman threw an unidentified white powder into the Governor's office, sending the Capital into lockdown for two hours.

Rauner called the override vote "another step in Illinois' never-ending tragic trail of tax hikes,” during a news conference. “(Madigan's budget) is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government," Rauner said during the live televised event. "It proves how desperately we need real property tax relief and term limits." I would point out to our plucky Governor, we now also need income tax relief because of the certainty that tax is going to continue to rise.

Gov. Rauner proposed tougher standards to prove causation in workers' compensation claims and measures that would force IL WC arbitrators to use only American Medical Association guidelines in determining how much seriously injured workers could be paid for PPD. That was later dropped in favor of reducing the medical fees doctors, hospitals and pharmacies can charge for treating injured workers.

Speaker Madigan said while those reduced medical fees saved money, the only group that wasn't seeing any reductions in profits was the Illinois WC insurance industry. We have no idea how he singled out just IL WC insurers for this supposed profit-gouging in one small area of insurance business. He called for IL WC insurance company profits to be regulated. He or his staff also cooked up the confusing idea of having the State of IL form its own tiny WC mutual insurance company to somehow compete with the industry giants using Madigan’s expert government precinct captains, oops, I mean payrollers. We assure our readers all of that silliness and legislative sleight of hand has been dropped. In short, then you saw this state WC insurance company dodge, now you won’t.

Speaker Madigan claims IL legislators would continue to negotiate workers' compensation reforms. I assure my readers it is my opinion such statements are bluffing and balderdash—the 2017 IL WC reforms are over. I do feel there may be a very slight chance medical reimbursement rates may again be cut and recommend our readers in the healthcare industry keep your lobbyists working to give you reasonable reimbursements.

Susan Mendoza, the IL State comptroller, said it was still unclear whether the shiny new budget would solve our State's fiscal crisis. She indicated businesses and local governments in this State still face one of the highest workers' compensation insurance rates/costs in the country, and we still have numerous underfunded pension systems which continue to threaten to downgrade the state's credit rating.

As I have advised my readers, the General Assembly Retirement System or GARS and the Judicial Retirement System or JRS cannot truly be “pre-funded” as they are currently set up. These retirement systems and possibly some of the other government pension systems are, in my opinion, fake, false and misleading to taxpayers and all IL citizens. In short, a “fake” gov’t pension is a fake promise. I did not see any effort to truly reform IL gov’t pensions in all the budget battles. It is my hope someone in the IL Supreme Court or other members of our judiciary start to question the ethics of their pension funding and their continued participation in such plans and take action to insure the public knows the true and staggering cost of what our government officials, including our judiciary, are and will be receiving.

On a related note, we can all be certain IL income taxes are going up and should go up again and again without any of the work comp or other pro-business reforms bravely sought be Gov. Rauner. At present, state spending is supposed to go down by about half of the 2017 tax increase. In my view, this insures this State is going to have to again start another fight over budgets and tax increases in about eleven months or by June 2018. In short, additional tax increases at the state and local level aren’t going to stop until the reasons for the increases are addressed.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: Chicago Fair Workweek Ordinance May Happen – More Proposed Notice Requirements for Your Chicago Work Sites. Research and writing by Lilia Picazo, J.D.

Editor’s Note: In the wake of the recent Chicago and Cook County Paid Sick Leave laws which took effect on July 1st, Chicago aldermen recently introduced the Chicago Fair Workweek Ordinance citing a need to create standards for more uniform and predictable work schedules for hourly employees in Chicago. The proposed ordinance echoes labor laws enacted in San Francisco, New York City and Seattle and would require employers to:

·        Provide new and “expected” minimum work schedules at least 14 days in advance;

·        Provide new employees prior to or on the first date of the employment an initial work schedule that runs through the date the next work schedule is posted for existing employees. 

The proposed ordinance would also require Chicago employers to pay employees one hour of “predictability” pay if employees’ work hours are cancelled, reduced or changed (including if an employee is requested to extend their shift) with less than 14 days. If employees’ hours were reduced or cancelled with less than 24 hours’ notice, an employer would be required to pay employees up to four hours for the hours employees were expected to work, but did not. 

The above notice requirements would not apply to any work schedule changes initiated by the employee.

The proposed “Fair Workweek” city ordinance would allow employees’ a right to refuse any previously unscheduled hours added by an employer with less than 14 days’ notice. A “right to rest” provision would also allow employees to decline work if scheduled within 11 hours from the end of the employees’ last shift. If an employee accept the latter shift, employers would be required to pay the employee time-and-a-half.

The ordinance would also require employers to offer existing employees additional work hours before hiring new or contract employees, including through the use of staffing agencies. Specifically, if the employer expects the duration of additional work hours to exceed two weeks, the employer would be required to give existing employees 72 hours to accept the additional work hours before hiring new employees. Only 24 hours would be required if the employer expects the additional to last two weeks or less.

Penalties for violating the proposed ordinance may result in fines of $500 to $1,000.

There are several fundamental issues we have with the proposed ordinance. For starters, the ordinance would apply to all Chicago businesses. Thus, the law mandates “pooling” the likes of the retail, service, hospitality and other industries together – none of which are the same.

Demands are different seasonally for each industry and with the rise of Amazon® and other online retail providers, brick and mortar shops are already taking a hit for slower traffic in shops. The proposed ordinance would add yet another cost to employers for any changes made to employees’ work schedules despite efforts made by the employer to reasonably schedule employees be it on-call or not for work shifts depending on foot traffic flow. 

The proposed Chicago ordinance would further require restaurants and other businesses to abide by a 14-day notice of work schedule and foreseeable work hours, yet does not consider factors such as weather or sporting events which can greatly alter traffic flow. Again, the employer would take the hit and incur costs if additional employees are needed for a shift or if an employee is called off due to slower foot traffic with less than 14 days or 24 hours’ notice.

Additionally, work schedules are not necessarily generated by a computer and thought is placed into the creation of work schedules, including past sales trends and foot traffic. Without delving any further into how work schedules may be created, it is fair to say that employees are hired for different positions and are skilled in different areas of work despite working for the same employer. The right of an employee to request a shift trade, for instance, and without penalty despite less than 14 days or 24 hours’ notice to the employer could potentially affect a workday or workweek if the employees seeking a shift trade are not necessarily skilled in the same area. 

It doesn’t make sense for an employer making a good faith and reasonable effort to schedule individuals for particular shifts throughout the day or week based on the individuals’ skillset to incur additional costs by means of “predictability pay” to any other employee if the entire workday or workweek is affected by a shift trade within 14 days or 24 hours from the date employee schedules were originally posted.

It also doesn’t make sense for an employer to take the hit when an employee unforeseeably quits, doesn’t show up for work or calls off sick. We understand things happen, but do not agree with the idea that an employer should be forced to incur costs to account for such changes and possibly face penalties if the employer violates the proposed ordinance. Those affected most by the ordinance will likely be the smaller businesses who will have to consider other cost-effective means such as understaffing or cutting back on the number of new hires to account for the potential penalties for violating the proposed ordinance or paying employees for changing shifts with less than 14 days or 24 hours’ notice. 

This article was researched and written by Lilia Picazo, J.D. Lilia can be reached for questions or concerns at lpicazo@keefe-law.com. 

Synopsis: Iowa Civil Rights Act requires interactive investigation process by employers in disability accommodation decisions. Leave the employee out at your own risk!  Analysis by Daniel J. Boddicker, J.D.

Editor’s Comment: A recent Court of Appeals of Iowa decision holds Iowa employers are legally obligated to work with disabled employees in regard to investigation of possible work accommodations.

In the case of John Vetter v. State of Iowa, et al, Iowa Ct. App., No. 16-0208 (May 17, 2017), the Court affirmed a several hundred thousand dollar jury verdict for John Vetter, an employee who was terminated by the Department of Natural Resources for the State of Iowa (“DNR”).

Vetter filed a petition alleging the State violated the provisions of the Iowa Civil Rights Act (ICRA) by discriminating against him with respect to the terms and conditions of his employment based on his disability or a perceived disability, and by failing to reasonably accommodate his disability. The ICRA protects employees from being discharged or otherwise discriminated against in their employment based on their disability. Vetter was required to show he was a person with a disability, he was qualified to perform his job either with or without an accommodation from his disability, and he suffered an adverse employment decision because of his disability. Vetter alleged two different adverse actions to support his claims. He claimed the DNR terminated him because of his disability and alleged the DNR failed to accommodate his disability.

Vetter suffered a back injury in 2011 and was placed on a leave of absence. In January 2012, he returned to light–duty work. The DNR accommodated his disability. In September 2012 a functional capacity exam (FCE) set forth Vetter’s limitation on activities. One year later, the Iowa workers’ compensation administrator sent Vetter’s employer a list of the permanent restrictions recommended as a result of Vetter’s FCE restrictions and asked if it could accommodate them.

The DNR hired two consultants to determine whether it could accommodate the recommended restrictions. The Court stated the determination of whether an accommodation is possible requires an interactive process that engages the employee and employer to work in concert to achieve a reasonable accommodation. In spite of its knowledge of Vetter’s disability, the DNR, and its consultants, failed to include Vetter in the process of determining which accommodations would be necessary to allow him to perform his job duties.

Instead the DNR determined the cost of accommodating Vetter’s disability was unduly burdensome and terminated him. In the letter terminating his employment, the DNR disclosed it was discharging Vetter because the cost of accommodating his restrictions would be unduly burdensome. Those permanent restrictions were issued because of Vetter’s disability. The Court held the evidence supported the jury’s finding the DNR discriminated against Vetter when it terminated him based on his disability. The Court held there to be sufficient evidence to support Vetter’s claim of disability discrimination based on the failure to accommodate his disability. Employers must include the employee in an interactive process or risk serious liability.

This article was researched and written by our licensed Iowa defense team leader, Daniel J. Boddicker, J.D. You can reach Dan at any time for questions about workers’ compensation at dboddicker@keefe-law.com.