11-27-2017; Employment Relationships in WC; Amazing New Book From Our Favorite Gas-Passer and more--Happy Holidays, Everyone!!!

Synopsis: Employment Relationships in Work Comp for Illinois and Your State.

Editor’s comment: I caution my readers—if you have detailed questions about any of these complex WC issues for the five states KCB&A covers, email me at ekeefe@keefe-law.com. Outside our five states, I can hook you up with a solid local WC defense attorney—just email me.

When is It Your Employee vs. Independent Contractor

In situations where elements of both an employee-employer relationship and an independent contractor relationship are present, most WC hearing boards and reviewing courts look to the following major factors in determining whether Claimant is an employee:  

· The relationship of the work performed to the overall business of both the individual performing the work and the regular work of the alleged employer;

· The party most likely to have insurance coverage for the loss;

· The right to control the manner in which the work is performed;

· The method of payment for the work performed;

· The right to discharge and the means of discharge;

· The party furnishing tools, materials and equipment.

Case law and outcomes are generally unpredictable. U.S. WC Boards/Commissions and courts ostensibly utilize formal legal standards as their published decisions are presented to the larger public—they may typically indicate the ‘right to control the work’ is a paramount standard. Illinois WC also now has the Employee Classification Act (820 ILCS 185) which outlines the above elements to assist in categorizing workers as employees or independent contractors. 

More veteran observers point to the ‘deep pocket’ theory of who has available insurance (or ‘self-insurance’) coverage when an individual suffers a serious injury and is left without any source of paying for time lost and medical bills. Remember if the injured party had his or her own workers’ compensation policy, they probably wouldn’t be bringing the claim. The party most likely to have insurance coverage faces a very strong burden of establishing the individual claiming to be an employee was an employer in their own right and had an equal responsibility to obtain insurance to cover his or her own injuries.

The above concept is critically important in ongoing work relationships, particularly where the individual claiming to be an employee worked alone and continuously performed most or all of their work for the individual or organization claiming to be the employer. 

A good example of this is a truck driver who only delivers loads for one organization, even if the driver owns his own truck and pays all of his own expenses (not including workers’ compensation coverage). Where this is occurring, we strongly urge you require such an individual to present continuing proof of workers’ compensation coverage for his own injuries. Where the injured individual is left without coverage, the IL WC Commission and courts have gone to great lengths to find that such an individual is an employee.

Another growing area of legal controversy is the mischaracterization or misclassification of workers as independent contractors when they are filling traditional employee roles. If a general contractor or building owner hires five plumbers and keeps them working at all times, it may become difficult to call each of them “independent,” particularly if they only work for the same company for weeks, months and years. 

Misclassification of workers is designed to avoid payroll taxes, unemployment benefits, workers’ comp insurance and other costs. The Illinois Department of Labor and many of our sister states are “attacking” this concept with new and punitive laws whenever and wherever they see it. In the workers’ comp arena, we do feel protections should be in place to insure injured workers are provided benefits when the unforeseen occurs.

‘Independent Contractor Agreements’

Also, you can be confident the IL WC Commission and other states’ WC systems tend to be extremely suspicious of ‘independent contractor agreements’ or other documents designed to clearly state or claim an individual is an independent contractor in advance of the injury. 

When all the facts and circumstances of the work being performed lead to the conclusion the individual performing the work is an employee, the IL WC Commission may completely reject the terms of the ‘independent contractor agreement’ as a subterfuge designed to mislead both the Commission and the injured employee.

Our favorite example of this is the trucking company that had each driver execute an ‘independent contractor agreement’ when further investigation also disclosed the driver also had to fill out a typical ‘employment application’ which was contained in the same file. Don’t be misled into thinking an ‘independent contractor agreement’ will be necessarily be legally enforceable—in many instances, the Commission or other Board will provide an even higher level of scrutiny when presented such documents. 

In a serious injury, it is likely the employee may seek out legal assistance and a veteran workers’ compensation attorney will readily bring such a claim and ignore the misleading agreement. An employer may get caught without needed WC coverage if you don’t report to your insurance carrier/TPA or otherwise reserve for such losses. 

Only to the extent an injured individual views such a document as legally enforceable and doesn’t seek benefits, it may have its intended informal effect. In our view, the risks are much too high to rely on it.

Special employment relationships

Undocumented Workers—“Illegal Aliens”

This is a challenging area of U.S. law. Our U.S. Supreme Court in their landmark ruling in Hoffman Plastic Compounds, Inc. v. NLRB rendered employment agreements with undocumented workers illegal. Most states ignore this ruling and I consider all of it very controversial. Please note my personal view you can’t/shouldn’t get state or federal workers’ comp benefits unless you are first part of a legally binding employment agreement. Many state courts interpreting WC laws ignore this simple concept and dole out benefits, even if the “agreement” isn’t legally binding.

The whole problem is employers shouldn’t be able to take unfair advantage of hiring an undocumented worker to have that worker become seriously injured or killed without any recourse or benefits for either the worker or their family. The other side of this same problem is many U.S. employers are presented with and hire workers who are lying or falsifying documents to get hired and then use their faked status as “employees” to make questionable, fraudulent or unsupported WC claims. There isn’t a great answer to this conundrum--I am sure this legal battle and its contradictions will continue for the foreseeable future.

Volunteers

Volunteers are not generally considered employees under most states’ WC Acts—check with KCB&A or your local defense counsel. Purely volunteer workers who are not paid and have no expectation of payment are excluded from coverage even if they suffer severe injuries. Please note, workers’ compensation benefits other than medical bills such as TTD/TPD and PPD are calculated based on the wages/salary of the worker—volunteers don’t have a wage/salary from which to calculate those weekly benefits.

Again, remember this concept may give you a legal ‘option.’ It is possible the volunteer may have a viable common law liability claim and it is conceivable workers’ compensation benefits can be paid which might serve to cut off the third party exposure.

Casual or part-time employees

Casual or part-time employees even with very low wages are covered by most state and federal Workers’ Compensation Acts and should be entitled to benefits despite part-time status. In these situations, the employees’ average weekly wage may be under or close to the minimums for TTD and PPD. It is not the minimum for amputations, death or total and permanent disability benefits—those minimums are exponentially higher. The part-time employee’s average weekly wage may actually become the amount they can be paid for TTD and PPD (see the last two sentences in Section 8(b)(2) and 8(b)(2.1)). This low rate leads to minimal exposure in claims involving part-time employees unless the individual was working more than one job and the employer was aware of dual employment.

Loaned and borrowed employees—Staffing/PEO’s 

From time to time, an employee of one company may perform job duties for another company either under a contractual relationship or in a relationship implied by the nature of the employment. In such claims, both employers are simultaneously liable for WC benefits         with one of the employers having primary liability for a loss. In these situations, the employer benefiting from the services of the employee at the time of the accident will be found to be the primarily responsible party. Secondary liability will be on the company providing the worker—unless there is an agreement to the contrary.

However, if the borrowing employer does not pay or fails to timely pay benefits, the loaning or original employer must pay. The IL WC Act is clear--liability is joint and several in such situations. Again, remember the unstated rule is to insure the injured employee has WC insurance coverage resulting in benefits for the loss. It is incumbent on risk managers and defense attorneys to make sure which entity has primary liability in defending or managing such claims. You may want to address choice of counsel as well as liability for payment of counsel in any agreement.

Lack of WC Insurance Now Ends IL WC Exclusivity

The other aspect of handling such claims is the IL WC Commission’s heightened efforts to police and patrol all Illinois employers to stop uninsured employers from operating without WC insurance and/or file for civil and criminal penalties where appropriate. Starting in 2011, the Act was amended to allow two possible legal outcomes where an employer does not have insurance for a work injury.

First, the employee can make a traditional WC claim against the employer and due to the lack of WC insurance, the employer can try to adjust the claim and pay what is due under the Act.

Second, the employee can also sue the employer in Circuit Court for the injury. When they do so, damages are effectively unlimited. Due to the lack of WC insurance, there is no more exclusivity protection. Section 4(d) of the Act now states:

Employers who are subject to and who knowingly fail to comply with this Section shall not be entitled to the benefits of this Act during the period of noncompliance, but shall be liable in an action under any other applicable law of this State. In the action, such employer shall not avail himself or herself of the defenses of assumption of risk or negligence or that the injury was due to a co-employee. In the action, proof of the injury shall constitute prima facie evidence of negligence on the part of such employer and the burden shall be on such employer to show freedom of negligence resulting in the injury.

This statutory provision basically creates “all-fault” liability on the uninsured employer.

Never Allow Executives of Independent Contractors to “Opt-Out” of WC Coverage and Contract to Work for You Without Coverage

There is a little-known provision of the IL WC Act that allows the owner or partners of a company to “opt-out” of coverage to save money and take the risk of injury upon themselves. This sets up a situation where a company that hires that executive or partner is doing so in a setting where there is no protection/insurance for a work-related injury in your workplace.

We consider that model very dysfunctional. If the executive of what might be a true “independent contractor” suffers a serious injury, resulting in injury or death, there is always the specter of the executive or their family coming to the company that hired them and seeking WC benefits due to the lack of insurance. When you understand a serious WC claim can cost millions of dollars, you don’t want such exposure. Even if the company allowing such an executive or partner on your premises wins the coverage battle, you have to face the costs and uncertainty of litigation.

The defense team at KCB&A can readily assist my readers on all such issues/topics. If I can help, please send a reply.

We appreciate your thoughts and comments. Please post them on our award-winning blog. Happy Holidays to all!!!  

Synopsis: Three Minutes and Your Life…Thoughts From Henry Jay Przybylo, M.D. author of the new book, Counting Backwards: A Doctor’s Notes on Anesthesia.

Editor’s comment: In Counting Backwards, Dr. Henry Jay Przybylo―a pediatric anesthesiologist with more than thirty years of experience―delivers an unforgettable account of the procedure’s daily dramas and fundamental mysteries. Dr. Jay has administered anesthesia more than 30,000 times in his career―erasing consciousness, denying memory, and immobilizing the body, and then reversing all of these effects―on newborn babies, screaming toddlers, sullen teenagers, even a gorilla. It is a fascinating read and perspective where lawyers and claims professions can get a different view on an important part of any case where anesthesia is provided.

Doctor’s comment: Give me three minutes, then you’ll give me your life. These are words that are cause for concern for any lawyer. A vacant promise, a scam, fraud? No. In the time it takes to post the latest announcement on LinkedIn or to listen to Van Morrison’s “Brown Eyed Girl,” we’ll talk, I’ll examine and then we’ll pass through automatic double doors leading to my sequestered place where I’ll induce a chemical coma, steal time, prevent memory, immobilize the body and then reverse these at will.

As an anesthesiologist, I alter heart rate, blood pressure and breathing, but I don’t cure. My care allows physicians to cut, probe and stick. Perhaps not curing isn’t entirely accurate. Without my care, procedures that are painful or require absolute stillness—clipping a brain aneurysm where any patient motion might alter the outcome—are not possible without my intervention In addition, I treat pain beyond the procedure room, both acute and chronic.

Many fear anesthesia and for good reason; it’s an act of faith. When asked how the anesthesia gas I administer day in, day out works, I have no solid scientific answer. It simply does. Forty million times every year in the U.S. alone. So as I ask a patient to have confidence in my abilities, I need to trust in my gas. I know what percent of gas is needed to keep a person safely anesthetized, and I measure continuously every imaginable vital sign and parameter, the percent of inhaled gas included. My intent is singular: that every patient emerges from my care in better condition than on entering.

The motto of anesthesiologists is vigilance. I noticed something unobserved by others in a photo from a recent published article of a wrist surgery on a woman who requested no anesthesia. The center of attention—and all the eyes in the room—were on the surgical site, her wrist. My question: Who was watching the woman? If, God forbid, something untoward happened, who in that room was charged with making life right? In the event of an allergic reaction to an injected medication, who possessed the expertise to successfully treat the woman? More than removing a patient’s senses, my charge as the anesthesiologist is to watch the patient as a whole and to correct confounding issues. High blood pressure is treated, blood sugars are followed and normalized, and so on and so on. For those requesting no anesthesia, the statistics on safety prove anesthesia is very safe and lead me to question, what’s to be gained?

Not everyone requires the mysterious, all-in-one anesthetic gas. Deconstructing anesthesia leaves its components: anxiety relief, amnesia, pain therapy (analgesia), remaining still (akinesia) and stable vital signs throughout (in my term, a-reflexia). All can be treated separately with a variety of medications and techniques. If inhaling a gas is undesired or medically unwise, pain relief and stillness can be achieved by blocking the nerves to the region of the procedure using local anesthetics, while supplemental medications treat anxiety and amnesia. Allow me the opportunity to build an anesthetic that best fits needs and leaves you in better health after my care.

Anesthesia is not a limelight specialty. I stand in the wings, and yet, I alter nearly every body function. Anesthesiology intervenes in life with a breadth, depth, and intensity that no other medical specialty possesses. Forgetting my name within minutes of discharge, I take no offense. Practicing in one of the RU—relative unknown—medical specialties such as anesthesiology, radiology and pathology means little to no face time with patients. That should not be taken to mean as the RU physicians’ work is secretive—just secluded. Most of my waking day is spent cloistered behind automatic double doors. But you can still speak with me; inquire about all options. Choices exist.

Please visit www.henryjaymd.com for more information on Dr. Jay and buying a copy of his amazing new book: Counting Backwards.

11-20-2017; The Biggest Claims Mistake Adjusters Make; Can IL WC Add Small Claims Court Handling? and HAPPY THANKSGIVING, FOLKS!!!

Synopsis: The Biggest Claims Mistake Adjusters Make.

Editor’s comment: We see it over and over and over again. When it happens, we try to smile and provide simple logic and common sense. We are not sure how it started but however this concept began, we recommend putting it on the garbage pile of bad ideas that won’t work out.

What is the big mistake? Well, I want my readers to know we are constantly asked by claims handlers on WC, GL and EPLI claims to “ask the other side for a settlement demand.” We are certain the idea comes from the claims concept of “doing something” to keep things in the claim moving forward. We understand the concept of getting a claim moving but don’t make it move like this!!

Never Ask the Other Side for a Settlement Demand

To best understand, consider a common transaction that is always happening, all around us. Home sales—if you want to sell a home, you can go to any number or real estate brokers and look at what they have for sale. You can also go online to Zillow.com, Redfin.com or Trulia.com and look for yourself.

There is no real estate broker or real estate web sales site that lists homes for sale for “whatever you want to pay.” Every real estate owner, sales person and broker does their homework, carefully examines the property to be sold, compares it other properties for sale in the area and looks at “comps” or comparable sales of homes like that one. The real estate websites do literally hundreds of comps online to constantly update values in your village/town/city and give you accurate information designed to best advise you on what to ask/pay when selling your home or buying one. The equivalent of “comps” in our industry should be your reserves—reserves should be set based upon other similar claims with like-kind injuries and recoveries.

The important aspect that I am trying to teach claims handlers at every level is starting any effective negotiation requires both “bracketing” and homework! I understand your bosses sometimes overload you with too many claims and too much to do on each claim. That said, I don’t feel you can aggressively and ethically handle settlement negotiations to give up the most important aspect by letting the other side do your homework and start the bracketing for settlement. Trust me, if you ask Plaintiff attorneys to demand “whatever they want,” in my experience, they will start wildly high and you then need to spend hours and hours bringing them back to reality.

I vote start the bracket yourself. Make a reasonable and fair offer. If Claimant’s counsel doesn’t want reasonable, get the matter into a pretrial with one of IL WC Arbitrators/Commissioners presiding. Let the hearing officer know what you offered and why. We assure you they are fair, honest and wonderfully professional. If they can bring the parties together, they will make every effort to do so. Please remember the vast majority of our IL WC claims settle, year in and year out. A lot of the best settlements come via hard work by our hearing officers.

What is “Bracketing?”

Well the first party in a claims or real estate or any sales transaction that says what they are willing to pay or accept has an enormous advantage. That is why all home sales have a price already defined and listed—to let new buyers know what they may need to purchase the property and close the deal. They can look at the homework and research you provide. After taking a look, they can counter lower at the risk of losing what may be a great deal for a house. If the house doesn’t bring offers, the real estate sales person and owner may have to get together and re-evaluate the asking price.

In short, my strongest recommendation in settling any claim is to first know the file backwards and forwards. You have to do your homework and understand the strengths and weakness of the claim. Once you are confident about your research/homework, it is imperative is to always, always make the first offer and thereby start the bracketing.

What is problematic about letting the other side start the bracketing? Learn, as I did, from the venerable Bernie Goldstein! Attorney Goldstein practiced law in this state for over 60 years. I remember he knew the advantage of starting the bracketing in negotiations and if he had a file that was worth $20,000, Bernie would always ask for $118,000. When you told him that was outrageous and there was no way you could get that much from your client, he would then drop the demand to $78,000. I remember arguing with him and telling him it was still exponentially more than my client would pay and he would always answer he dropped the demand $40,000 so I would have to come up $40,000!

What I always remember from such discussions was to beat Bernie to the punch and always start the bracketing—if the claim was worth $20,000, I would contact the client and offer $10,000 at my earliest opportunity. If Bernie then countered at $78,000, I was a lot easier to hammer him down to the $20,000 range.

Always Send the Paperwork!!

As a final note, my new approach to all settlements in my IL WC, GL or EPLI practice is to create the needed settlement documents, have the client approve them and then forward to the other side as my opening offer. Many times, if the value is reasonable, the other side will grab it, sign and get approval. If they counter with a reasonable value within my authority, we can quickly modify the settlement documents and, with client approval, re-sign and resend to OC.

If you don’t send the paperwork, it leaves the negotiations somewhat nebulous and open. I have had great results to insure my team and my clients understand the value in not just talking about settlement but actually putting the paperwork together, getting client approval and hammering out a final deal with the other side.

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

Synopsis: Can IL Workers’ Comp Add “Small Claims” Handling?

Editor’s comment: Of the approximately 40,000 new IL WC claims filed every year, there are major, moderate and minor/tiny claims. As you read this, I estimate at least 25-30% of litigated IL WC claims have a value under $10,000. This creates challenges for self-insured employers, insurance carriers and the defense industry in general as it is increasingly difficult to manage and defend such claims in a cost-effective fashion.

Many of our clients will consider over-paying small and minor claims to rapidly close rather than allow them to pend and pend. Reserves remain blocked from use by employers/insureds. As defense counsel, we are asked repeatedly to close/settle/resolve minor files to be told by our opponents

• They are looking for medical bills;
• They don’t have a complete medical chart;
• Their clients have pie-in-the-sky view of PPD values and
• Their clients are AWOL—they don’t know how to reach them.

We also see claimant lawyers set minor cases for hearing over and over again. They will then routinely seek continuances of the trial settings. In my view, this unseemly tactic is dramatically irritating to clients from other states where the clients are used to a “trial setting” meaning the claim is going to be tried, defaulted or dismissed. The IL WC system rarely does so, leaving defense clients confused and typically upset. Please also note my feeling some Claimant attorneys set cases for hearing over and over again in a fashion that seems to be extortive—they want our clients to have high defense costs to justify taking dubious claims from low nuisance value to higher nuisance values to avoid repetitive trial settings and continuances.

I also feel some Claimant attorneys want to maintain a “posse” of pending claimants/claims so they have implicit salespeople out there, looking for other folks to get injured and file minor claims with that attorney. The issue our clients have with that concept is the system then moves away from seeking fair compensation for injured workers to actually create a system that encourages questionable injuries and claims. We also point out the IL Supreme Court and the ARDC sanction other attorneys across our State for slow handling of valid claims. It appears the only place a claim can sit for years, even decades, with no one truly questioning it would be at our IWCC. Get ‘em moving, folks!

One method used in the Circuit Courts to address these sorts of issues is the “Judge Judy” handling of small and minor claims. The case is not generally assigned to any judge—they select a small claims jurist who adroitly deals with and tries/settles the smaller claims. The cases are put on a relative “fast track” and have a much more aggressive call with a focus on trying to move the little ones to a fair and speedy outcome. I am a strong proponent of the idea that “justice delayed is justice denied.” If Claimant suffers

• a minor but accepted injury
• is back to regular work, 
• lost time/bills are paid or will be paid and
• the matter is ready for disposition

Why let it sit and sit? Common sense indicates all sides of the WC matrix should get such minor cases to settlement, hearing or dismissal. We suggest Chairperson Fratianni, her Chief Legal Eagle Ron Rascia, the IL WC Advisory Board, the IL State Chamber and other business groups consider informally or formally creating a small claims handling process where either side of a litigated claim can file motions confirming acceptance, payment of interim benefits and request expedited resolution via settlement or nature and extent hearing.

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

11-13-2017; Illinois Gov't is Insane in the Brain!!—Why Won't Anyone Discuss Our Biggest Election Issue?; Kevin Boyle, JD on IN Low Injury Rates; Carolyn Klein, JD reviews New Firefighter Ruling

Synopsis: Illinois State Government is Insane in the Brain!!—What Is The Biggest Election Issue Affecting You and Me and Our Kids At Every Level And Is Being Ignored by All Candidates?

Editor’s comment: We are in the midst of an Illinois gubernatorial campaign. You and I can’t avoid watching television, print and other advertising about who should be our new IL Governor. What terrifying government financial issue in Illinois and Chicago and other local governments is directly threatening your livelihood, home values, jobs, families, schools, parks, churches/synagogues, the IWCC and just about everything any human in this State does? Why isn’t anyone talking about it?

Do we all understand the same crucial issue has made our State operate in what you and your family should understand is a ‘bankruptcy’ to the extent there are about $17 billion, yes, $17,000,000,000 in unpaid IL State bills right now? Aren’t you and I ‘bankrupt’ when we can’t and our State won’t pay almost any of our bills on time? Moody’s Investor’s Service pegged our State’s debt from this issue at $251 billion last June! It has to be around $275-300 billion or more by now because no one is paying that spiraling debt down a dime. It rises by several million dollars every hour of every day. Seems fairly important to me—how do you feel about it?

Please note the same issue is threatening to bankrupt and crush the economy of Chicago. The same issue is impacting lots of other municipalities across Cook County where County Treasurer Maria Pappas reports small, medium and big municipalities under her watch now have $139 billion or $139,000,000,000 in unsecured and soon to be crushing debt that has risen 30% in the last six years. At that rate, in seven years or less, it will be over $200B and rising…!

I have reviewed the campaign websites of J.B. Pritzker and Chris Kennedy who are both running on the Democrat side for governor—Chris Kennedy mentions this stealth issue on his website with no true recommendations for reform. J.B. Pritzker’s website doesn’t even mention it. Governor Bruce Rauner’s website doesn’t mention this one a teensy bit. Yikes. I am sure Governor Rauner is appalled by all of it and working quietly to change it; I just consider it odd that he isn’t mentioning it.

The Top-Secret “Stealth” Election Issue Is Fake IL Government Pensions!

A great example of how nutty these fake gov’t pensions are was reported by the Chicago Tribune last week when they chronicled the massively high retirement package of former U. of Illinois Athletic Director Ron Guenther. We are not blaming Mr. Guenther for this whole morass but please learn from it. The Tribune article indicates Mr. Guenther’s career contributions to his retirement program totaled about $615,000 including interest. Sounds like a lot of money, right? Well, as you read this, Mr. Guenther is receiving about $40,000 every month or about $473,094 a year for this current year. Please remember he is getting that money NOT to work.

Please also remember insane-in-the-brain Illinois government has to pay annual fake gov’t pension increases of 3% compounded on an annual basis. As Mr. Guenther is only 72 years young, he will be getting over $500,000 a year in 2019. In nine years, he will be getting more each year than his entire career fake pension contributions or more than $50,000 a month and $617,000 a year. If he lives 20 years to 82 and lots of folks are living that long, he will be getting $854,000 a year. In 26 years, you and me and our kids and grandkids will be paying Ron Guenther more than $1M a year not to work. These increases and payments are guaranteed by the IL Constitution.

Please also note his total expected retirement income can and will be well into the tens of millions of dollars. When I hear complaints the State didn’t properly “fund” that pension, I ask anyone of my readers to tell me how much our State gov’t would have to put into his pension to fund $10M to $30M that he will probably receive in retirement. The amount would be staggering—in essence and in my humble view, such a fake gov’t pension (and hundreds like it) are “unfundable.”

Please also note former AD Guenther doesn’t have to pay a dime in IL State income tax on the money, despite the fact he will receive millions over his contributions. Every dime will be tax dollars coming from you and me and your kids and grandkids—he is already way past any fake pension contribution he made or we matched while he was working. As I indicate above, there are supposedly at least 700,000 former Illinois government workers now on fake gov’t pensions and the debt just keeps rising and rising. As you read this, I assure you both judges/justices in the Judicial Retirement System and General Assembly members in the GARS fake pension system are hilariously under-funded/unfundable. The IL State and local gov’t retirement benefits are so high as to be wholly shocking. They are financial engines that foretell financial doom for our gov’t, like the City of Detroit, the country of Greece and Puerto Rico.

This whole unspoken gov’t concept is going to “break” or explode into failure/Armageddon when Wall Street cuts off borrowing or won’t underwrite bond issues to all these nutty IL government entities who are rated slightly above junk status right now. Gosh only knows what that will do to jobs, home prices/sales, schools and everything else. How can our elected officials ignore it and sweep it under the nearest rug?

Why Isn’t Anyone in the Election Talking About This Financial Insanity?

In a word(s)—IL government unions. Huh? Well, as I have advised government unions don’t appear to care about bankrupting our State or the City of Chicago and various municipalities chronicled by Cook County Treasurer Maria Pappas. In fact it appears to me they want to keep it all hush-hush so no one is discussing it on the election trail or any website. If that is incorrect, please, please tell me their financial approach to openly reforming all of it and I will publish with my deepest apologies.

In my view, any candidate for Governor who talks about it is going to be cannon-balled and the government unions are going to fight like the dickens and send hundreds of emails to their members to attack/block/defeat that noble candidate. They won’t go head on but they will spin their PR spins to try to block such fake gov’t pension discussions and tell their members to vote and organize friends and relatives to vote “against” anyone who won’t support this financial insanity.

Thoughts For How To Stop This Craziness.

Ask your favorite candidate for IL Governor and keep asking:

·         Do you support ending fake unfunded/unfundable gov’t pensions?

·         If we realized our mistaken and immediately stopped this madness for all new and incoming gov’t workers and paid off the lucky folks who are vested in them, when would our State and local governments and taxpayers be free at last?

·         Why can’t we provide 401K’s to new gov’t workers and save zillions?

·         If we are going to keep over-compensating State and local workers at work and in retirement, how do we start cutting/laying off some of these grossly overpaid and “over-retired” gov’t workers and use private and competitive companies for State work?

How About the 28th Amendment to the U.S. Constitution?

Governor Rauner is bravely trying to get federal help to rein in our impossible-to-fund gov’t pensions. One thought is to change/amend the U.S. Constitution to protect all U.S. taxpayers from this massive fake gov’t pension rip-off. Someone please write an amendment that guarantees present and future gov’t workers across our nation can only retire on

1.    Their fake gov’t pension contributions

2.    Matching gov’t contributions while they were working and

3.    Any interest earned on both at any time.

4.    When that is gone, you can’t come to taxpayers for another penny because it isn’t a ‘pension,’ it is sort of like stealing because you aren’t doing anything to invest in it or earn it.

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

Synopsis: Indiana Reports Lowest Workplace Injuries and Illnesses in State History. Research and analysis from our top IN WC/GL Team Leader, Kevin Boyle, J.D.

Editor’s comment: The Indiana Department of Labor (IDOL) released the annual nonfatal workplace injury and illness report for 2016 and its good news. Indiana's nonfatal occupational injury and illness rate is the lowest in state history with an estimated 3.5 injuries or illnesses per 100 full-time workers. This represents an eight percent decrease from 2015's previous historically low rate of 3.8, and the fifth consecutive year the injury and illness rate has been at or below 4.0.

“We are proud of our Hoosier workforce and their dedication to maintaining safe and healthy workplaces,” said Rick Ruble, commissioner of the Indiana Department of Labor. “Indiana's employers and employees continue to make workplace safety a top priority. Partnerships with organized labor, trade associations and safety councils, as well as Indiana's IOSHA enforcement and INSafe programs, help ensure that workplace safety is more than a buzzword. It's a culture.”

Here are some other important findings in the new 2016 report:

• The overall state nonfatal injury and illness rate for 2016 is 3.5 injuries or illnesses per 100 full-time workers, the lowest rate since the federal Bureau of Labor Statistics' Survey of Occupational Injuries and Illnesses (SOII) report was introduced in its current form in 1992. The 2016 rate represents a one-year decline of eight percent from the previous historic low rate of 3.8 in 2015.
• 15 of 19 major Indiana industry classifications experienced a decrease in nonfatal worker injury and illness rates. 
• The finance and insurance industry experienced the greatest one-year decline in nonfatal worker injuries and illnesses, 60 percent. 
• The Indiana construction industry remained steady with the 2015 rate of 2.8 per 100 fulltime workers. ? The Hoosier manufacturing industry saw a 13 percent decrease in injuries and illnesses from the 2015 rate of 4.7 to 4.1 in 2016. 
• The Hoosier agriculture industry nonfatal worker injury and illness rate saw a one-year 39 percent decrease from 7.1 in 2015 to 4.3 in 2016.

This article was researched and written by Kevin Boyle, J.D. He can be reached for any question about legal defense in WC, GL and EPLI for IN clients at kboyle@keefe-law.com.

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Synopsis: When Illinois Courts Review Firefighter Pension Claims, They Usually Pick the Highest Possible Value. Research and analysis by Carolyn Ettelson Klein, J.D.

Editor’s comment: The IL Appellate Court recently affirmed the trial court’s judgment to reverse the amended decision of the Firefighters’ Pension Fund of the City of Moline (Board) and reinstated the Board’s original decision to grant a firefighter (Plaintiff) his line-of-duty disability pension calculated at the salary he was receiving on the last date he was on the payroll, an amount much higher than the salary attached to his rank if the court had interpreted “removed from the payroll”  as the date at which Plaintiff began receiving TTD benefits payments. The Court reasoned the IL Pension Code, the interpretation of which is pivotal to this case, must be liberally construed in favor of Applicant. The Court determined Plaintiff’s last day on the city payroll is the day he signed WC settlement contracts and stopped receiving TTD payments, thereby entitling him to a pension based upon 65% of the “rank-attached” salary he would have been receiving at that time.

Editor’s comment: Sottos v. The Firefighters’ Pension Fund of the City of Moline is a decision rendered by the IL Appellate Court primarily under section 4-110 of the Illinois Pension Code (Pension Code) determining Plaintiff’s last day on the city payroll was the day he signed workers’ compensation settlement contracts, thus entitling him to accumulated vacation time and compensatory time calculated at the higher salary level of $75,674.93 attached to his rank on March 7 , 2014 rather than the lesser salary of $73,829.32 attached to his rank on March 8, 2013. Defendant asserted the first TTD payment, is the last day Plaintiff was on the firefighter’s payroll.

The Board initially determined Plaintiff’s last day on the payroll was March 7, 2014 and calculated Plaintiff’s line of duty pension based upon the salary attached to his rank on that day and he would receive a monthly disability pension benefit of $4,099.06, 65% of the monthly salary attached to the Plaintiff’s rank. Plaintiff received a lump sum payment consisting of unused vacation time and compensatory time (without pension withholding). Of their own volition, the Board subsequently motioned to reconsider its own ruling on Plaintiff’s application for line-of-duty disability pension benefits.

The Board held a hearing in September 2014 to reconsider its previous ruling. The City’s HR manager (Fleming) testified Plaintiff’s annual salary attached to his rank was $72,204 prior to February 27, 2013, after which his salary increased to $73,829.32 due to an anniversary increase. Fleming testified in accordance with the Public Employee Disability Act (Disability Act) (5 ILCS 345/0.01 et seq. (West 2012), Plaintiff received full pay with pension contributions withheld throughout March 8, 2013 at which time the city began paying workers’ compensation TTD benefits to Plaintiff, benefits based upon Plaintiff’s 2013 salary.

In May of 2013, the City stopped withholding pension fund contributions from Plaintiff’s payments. The city instituted a general wage increase for firefighters in January of 2014. Fleming contended Plaintiff would have received said wage increase had he been eligible for the same. Meaning, Plaintiff was not on payroll at the time of the increase and ultimately could not have Pension Disability Benefits calculated based upon an increased wage he was not eligible to receive as Plaintiff’s last day on the payroll was in February 2013. Fleming asserted the City erroneously paid Plaintiff a lump sum based upon the new higher salary of $75,674.93 and the monthly disability pension benefits should thus be reduced to $3,999.09 and a refund to Plaintiff for excess pension contributions withheld after March 8, 2013.

The Board entered an amendment to its initial ruling, and did so without stating why. In 2014, Plaintiff filed a complaint for administrative review of the Board’s decision. The trial court reversed the Board’s amended decision, reinstated the original decision which was to pay Plaintiff his monthly line-of-duty disability pension benefit based on the salary attached to his rank in March 2014. The Board appealed, and lost.

The liberal interpretation of the payroll clause in favor of Plaintiff required the Court rule the correct date Plaintiff was removed from the City’s payroll was in March 2014, thereby entitling Plaintiff to his lump sum payment based upon his higher “rank-attached” $75,674.93 salary which would entitle him to $4,099.06 (65% of that salary) on a monthly basis.

The Appellate Court’s ruling was consistent with an Illinois Department of Insurance (IDOI) advisory opinion from 2016 wherein, for the purpose of Section 4-110 of the Pension Code, workers’ compensation benefit payments by a municipal employer constitute being “on” the municipality’s payroll.  In Roselle, a disabled employee was still considered on the municipality’s payroll throughout the time the city paid workers’ compensation TTD benefits.

The Appellate Court assigned the IDOI opinion what they felt was appropriate weight and thereby reversed the Board’s amended decision, reinstated their initial decision and affirmed the trial court’s judgment.

It should be noted that in calculating disability pension benefits based upon the “rank-attached” salary at the time an employee is removed from payroll may result in an exponential increase to malingering Petitioners. As defense attorneys, we should be cognizant of the motivation this creates for city employees not to settle their claims and extend them to get more money. We should consider the possible perspective of the Petitioner–a salary raise is next week, next month (possibly soon), so if they can hold off settlement and remain on TTD a little longer, disability pension benefits will be based upon 65% of a higher salary-

The Appellate Court has decided IL workers’ compensation TTD benefit payments constitute “salary” for the purpose of the Pension Code. The benefits hinge upon the salary an employee was earning at the time he or she became disabled. Therefore, employees receiving these benefits are effectively entitled to monthly pension payments based upon calculations for a raise not “earned” during service.

This article was researched and written by our latest and greatest addition to the Keefe, Campbell, Biery and Assoc. defense team, Carolyn Ettelson Klein. She can be reached for questions and concerns at CKlein@keefe-law.com.