Illinois Workers' Compensation Law: What Employers Need to Know

ILLINOIS WORKERS'
COMPENSATION
LAW
What Employers
Need to Know
Matthew R. Custardo

• The Illinois Workers’ Compensation Act
(“IWCA”) was instituted to provide a
reasonable, “no-fault” based system of
compensation for persons injured at work.
• In reality, the IWCA is a compromise
between workers and employers. Workers
give up the right to obtain full
compensation for injuries caused by the
negligence of their employers and co-
employees.
Purpose of Illinois Workers’
Compensation Act
2

• In return, the employee is to receive
compensation, regardless of fault, for
injuries sustained during their
employment.
• Employers, on the other hand, give up
the right to have liability determined on
the basis of fault and in return receive
the benefit of a system that provides
significantly smaller compensation to
injured workers.
Purpose of Illinois Workers’
Compensation Act
3

Illinois Jurisdiction
• Accident in Illinois
• Accident outside of Illinois but the
‘contract for hire’ formed in Illinois
• Employment was ‘principally localized’
in Illinois
• Other factors are location of worksite,
level of business in Illinois.
4

Is This an Employee?
• Employee vs. Independent
Contractor
– Relationship of work performed;
– Right to control manner that work is
done;
– Method of payment for work
performed;
– Right to discharge and means of
discharge;
– Party furnishing tools, materials &
equipment
5

• The IWCA provides that any employer
that undertakes to do any work that is
automatically covered under the IWCA is
liable to pay compensation not only to
its own employees but also to
employees of subcontractors that it
directly or indirectly engages to perform
work.
General Contractor Liability to
Employees of Subcontractors
6

• This liability does not apply if the
employee is covered by other workers’
compensation insurance or the
immediate employer, typically the
subcontractor, has guaranteed its liability
to pay such compensation.
General Contractor Liability to
Employees of Subcontractors
7

• The IWCA provides that in situations in
which an employee is loaned from one
employer to another, both the loaning
employer and the borrowing employer may
be jointly liable.
• The issue of whether an employee has been
borrowed by a second employer is a
question of fact to be determined by the
Illinois Workers’ Compensation Commission
(“Commission”).
Loaned/Borrowed
Employees – Joint Liability
8

Is This An Accident?
• In the course of
– On the Clock
– Going to and from Work
– Traveling Employee
• Arising out of
– Job Specific Risk vs. Risks We All Face
• Repetitive Trauma
– Carpal Tunnel Syndrome
9

“Arising Out Of”
• An injury “arises out of” the
employment if it occurs as a result of a
risk connected with or incidental to the
employment.
• The mere fact that the person was at
the location of the injury because of his
or her employment (in the course of the
employment) alone is insufficient.
10

“In the Course Of”
• While the general rule is that injuries
occurring in the course of travel to and
from the location of employment are
not compensable, if sufficient evidence
can establish a special need for the
travel at the time in question, or that
the employer has accepted such travel
to be a necessary part of the
employment, then injuries occurring
therein may be compensable.
11

Two Types of Job Specific Injuries
• Single Traumatic Event
– A specific accident that can be traced to a
definite time, place, and cause that results
in a worker’s existing physical structure
giving way under the stress of the labor.
• Repetitive Trauma
– No single accidental event was responsible
for causing the physical injury, but rather a
repeated activity over a period of hours,
days, weeks, months, or years caused the
injury.
12

Psychological/Emotional Injuries
• Unless accompanied by physical trauma,
psychological and emotional injuries
resulting from job stress are routinely
held to be non-compensable.
13

Causal Connection
• Medical Opinions and Complex Issues
– Need to Dispute the Petitioner
• Battle of the Experts
– Treating Physicians
– Dual Choice of Physicians
– Independent Medical Examination
– Sending the Treatment Records to Another
Physician
14

Aggravation of Preexisting
Condition
• The fact that a claimant may have had a
preexisting condition that made him
more susceptible to the injury in
question is irrelevant to the decision of
whether the accidental injury is
compensable.
15

Aggravation of Preexisting
Condition
• The accidental injury need only be “a
causative factor” in the resulting
disability. It need not be the sole,
principal, or even primary causative
factor as long as it was a causative
factor.
• It is sufficient if a preexisting condition is
aggravated, accelerated, or exacerbated
by an accidental injury.
16

• There are four main benefits:
– Medical
– Temporary Total Disability
– Temporary Partial Disability
– Permanent Partial Disability
Overview and Definition of Illinois
Worker Compensation Benefits
18

• Illinois allows for 100% of all related and
necessary medical treatment rendered
by the first doctor chosen solely by the
employee (along with any doctor that
physician refers the employee to see)
and for treatment by the second doctor
solely by the employee (along with any
doctor that physician refers the
employee to see).
Medical Benefits
19

• An employee who loses time from work
as a result of a compensable injury is
entitled to temporary total disability
(TTD) benefits while unable to work.
• These benefits are payable at the rate of
66.66 percent of the employee’s average
weekly wage.
Temporary Total Disability (TTD)
20

Vocational Rehabilitation
• Because of an injury, the employee may not
be capable of returning to his or her pre-
injury occupation. In that case, the
employee is entitled to retraining at the
employer’s expense.
• Employee seeking vocational rehabilitation
must show a diligent but unsuccessful
effort to obtain a reasonable form of
employment, even if such employment
would pay a lower wage than that of the
previous occupation. 21

Vocational Rehabilitation
• Once the claimant returns to work
(after their TTD ends), they may be
restricted to certain types of work:
– Can’t lift over 20 LBS
– Designated Pencil Sharpener
22

Temporary Partial Disability (TPD)
• If an employee returns to any work
following injury-part-time or full-time
light duty work at a lower rate of pay on
a temporary basis, Illinois law does not
require that an employer make up the
difference or continue to pay temporary
total disability until the employee
returns to full duty.
23

• When the employee is working light
duty on a part-time basis or full-time
basis and earns less than would be
earning if employed in full capacity of
the job, then the employee shall be
entitled to temporary partial disability
benefits.
24

• TPD shall be equal to 2/3 of the
difference between the average amount
that the employee would be able to
earn in the full performance of his
duties in the occupation in which he was
engaged at the time of accident and the
gross amount which he is earning in the
modified job provided to the employee
by the employer. 820 ILCS 305/8(a).
25

Permanent Total Disability (PTD)
• An employee who is left wholly and
permanently incapable of work because
of an injury is considered to have a
permanent total disability (PTD) and is
entitled to compensation on that basis.
Compensation for PTD equals 66.66
percent of the average weekly wage,
payable for the life of the petitioner or
until the disability ceases.
26

Permanent Total Disability (PTD)
is Awarded in 6 Ways
• Serious & Permanent Disfigurement
• Specific Loss
• Nonspecific Loss
• Wage Differential Benefits
• Total and Permanent Disability
• Death
27

Independent Medical Exam
• The IWCA states that if requested by the
employer, an employee is required to submit to
an examination by a medical practitioner
selected by the employer.
• This is referred to as an “independent medical
examination” (IME).
• Refusal to submit to a properly scheduled
examination may result in suspension of the
employee’s right to receive compensation
payments until the examination is completed.
28

Independent Medical Exam
• Frequently, the employer’s IME medical
opinion will be that the employee needs no
further treatment or does not need the
treatment being recommended by the
employee’s doctor.
• This permits the employer to refuse to
authorize any additional medical treatment.
The employer may also refuse to pay additional
TTD compensation benefits if the IME doctor’s
report opines that the employee return to
work.
29

Maintenance
• Benefit that may be awarded in specific
circumstances-it is generally difficult to
define but in most typically appears to
be temporary disability or other
expenses paid during vocational
rehabilitation or retraining.
30

Maintenance
• When scheduling an IME, the employee
is entitled to mileage, meals and time
lost from work in advance of traveling to
the appointment.
• An Illinois employee can seek civil
damages for retaliatory
discharge/termination or failure to
recall as a result of seeking worker
compensation benefits.
31

Penalties
• In Illinois, penalties are 50% of the
amount payable for TTD or permanent
partial disability which are not paid for
frivolous reasons or withheld solely for
delay.
• Penalties can be awarded for not paying
penalties resulting in an additional 50%
of the 50% already awarded.
32

Penalties
• There is an additional penalty of $10 a day
(with a cap of $25,000.00) which can be
awarded for not paying temporary total
disability for frivolous reasons or solely for
delay.
• Attorney’s fees in Illinois (typically 20% of
the disputed benefits) can be made payable
by the Respondent at the discretion of the
Commission when benefits are withheld
frivolously or solely for delay.
33

Forms Needed by Employers
• Illinois has two forms that it provides to
employers and their insurance carries or
third party administrators (TPA’s) to
report accidental occurrences. They are:
– Form 45-Intial report of injury
– Form 85-or supplementary or final
report of injury
35

• Employer required to have a supervisor
become aware of the employees loss
within 4 days of injury.
• Form 45 is required to be filed at the
Industrial Commission by the employer,
but the document is filed in a room &
will not generally take any action on
information outlined on the form.
36

• If the decision is to pay benefits, no one
has to be advised of the decision other
than the employee.
• If the decision is to deny benefits, there
is a rule which requires written
notification of the for denial.
• It is entirely possible to accept a claim,
pay medical, temporary disability &
close the file w/o notifying the Industrial
Commission (other than filing the Form
45).
37

Filing a Formal Claim
• After an accident happens, all claims
must be filed regardless of whether a
settlement is reached prior to the filing
of a formal claim in order to achieve
Commission approval.
38

Limitations to Filing
• The IWCA states that workers’
compensation claims must be filed
within three years after the date of the
accidental injury or death or within two
years after the date of the last payment
of compensation, whichever is later.
39

• The employer and insurance carrier are
under no obligation to inform the
employee about the statute of
limitations. Further, the mere existence
of a pending settlement offer is not
sufficient to prevent the employer from
asserting the statute of limitations as a
defense.
40

• In order for an employer to be estopped
from asserting the statute of limitations,
there must be some affirmative conduct
that lulls the employee into a false sense
of security and that results in the
employee delaying or failing to assert
the right to compensation benefits by
filing a claim.
41

• A claim is filed with the Commission by sending
Form IC01, Application for Adjustment of
Claim, as well as Form IC10, Attorney
Representation Agreement, and Form IC15,
Proof of Service, to the Commission and the
employer.
• After a claim is filed with the Commission, the
Commission assigns the claim to a hearing
location and places the claim on the
arbitrator’s docket or “call” for that location.
42

• The Commission mails a “NOTICE: CASE
FILED” to the petitioner’s counsel and
the respondent. Occasionally, this notice
is also mailed directly to the petitioner.
• The “NOTICE: CASE FILED” also contains
a notice to the respondent that the
petitioner has filed the claim and that it
should forward the notice to its
insurance carrier or attorney.
43

• Filing of the form is carefully catalogued,
indexed, and tracked by the
Commission.
• The claim is randomly assigned an
arbitrator & will pend for up to 3 years
before either side has to take some
significant action to resolve it.
• The claim will appear on a status call
every 90 days unless an emergency
petition is filed by the employee to
accelerate the matter to hearing.
44

Settlement vs. Trial
• First, upon settlement, the petitioner almost
always gives up the right to have future
medical expenses for any ongoing or
progressive worsening of the injury paid by the
respondent.
• Second, the petitioner gives up the right to
reconsideration of the award on disability
should that condition change within 30
months.
• Third, settlements are paid in a single lump
sum, whereas awards from the arbitrator or
Illinois Workers’ Compensation Commission are
paid weekly, as weekly benefits accrue.
45

Arbitration
• After the evidence has been marshaled, and
assuming that the employee and employer are
not then able to arrive at a reasonable
settlement, the petitioner must request a
hearing before the arbitrator.
• Fifteen (15) days’ notice must be given for the
hearing.
• Approximately 90% of all IL workers’
compensation claims are settled at or during
arbitration.
46

Arbitration
• The attorneys must then decide what
evidence needs to be submitted to the
arbitrator and how to best to present that
evidence. Counsel may subpoena
witnesses, if necessary, using Form IC16,
Subpoena.
• Additionally, counsel should determine
whether there will be an agreement to try
the claim on the basis of medical reports
or whether medical depositions should be
taken.
47

Arbitration
• The arbitration proceeding usually begins
with the arbitrator announcing on the record
that certain issues have been stipulated and
that no further proof need be submitted on
those issues.
• The arbitrator will then ask each side
whether there are any objections to the
admission of the other’s exhibits, which are
typically medical records, earnings records,
and other documents relevant to any
disputed issues being offered into evidence.
48

Arbitration
• Although medical bills are admissible
into evidence if certified by the medical
provider, under 820 ILCS 305/16, that
section does not expressly provide for a
presumption that certified bills are
reasonable and necessary.
• In practice, respondents routinely object
to medical bills due to causation but
rarely due to reasonableness.
49

Arbitration
• Counsel for the petitioner calls each witness
necessary to prove the elements of the claim,
and the respondent’s counsel has the
opportunity to cross-examine each witness.
• The respondent then presents its case in
exactly the same fashion. Thereafter, each side
is permitted to present rebuttal testimony, if
needed. Usually, a trial takes less than an hour,
but two- and three-hour trials are not
uncommon in heavily disputed or complex
claims.
50

Arbitration
• After consideration of the evidence on
arbitration and the proposed decisions
submitted by counsel, the arbitrator
renders a decision. There is no time limit
imposed on the arbitrator, but the
average time is 50 to 70 days. Counsel
receives a copy of the arbitrator’s
decision by certified mail.
51

Arbitration
• It is important to note the date on which
the decision is received, as the 30-day time
limit within which to file a petition for
review of the decision begins on that date.
820 ILCS 305/19(b). The time limit for filing
a review is 15 days in §19(b-1) cases.
• If either or both sides feel that the
arbitrator’s decision is in error, they have
the right to a review of the arbitrator’s
decision.
52

Schedule For Total Number Of Weeks Of Compensation For
100 Percent Loss Of Use Of Various Body Parts
Body as a whole 500 weeks
Thumb 76 weeks
Index finger 43 weeks
Middle finger 38 weeks
Ring finger 27 weeks
Little finger 22 weeks
Great toe 38 weeks
Other toes 13 weeks
Hand 205 weeks (except if the injury
involves carpal tunnel syndrome
due to repetitive trauma and
occurs on or after June 28, 2011, in
which case it is 190 weeks)
53

Schedule For Total Number Of Weeks Of Compensation For
100 Percent Loss Of Use Of Various Body Parts
Arm 253 weeks
Foot 167 weeks
Leg 215 weeks
Eye 162 weeks (173 if removed)
Hearing 54 weeks for one; 215 weeks for
both
Testicle 54 weeks for one; 162 weeks for
both
Fractured skull — minimum 6 weeks
Fractured facial bones — minimum Not less than 2 weeks for each
Kidney, spleen, or lung — minimumNot less than 10 weeks for each
Fractured vertebrae — minimum 6 weeks for each vertebra;
fractured transverse process is not
less than 3 weeks
54

Review of Arbitration
• Any petition for review of the Arbitrator’s decision
will go to the Commission.
• The Commission serves as an appellate tribunal in
reviewing decisions of the arbitrator, although the
Commission is not bound in any respect by the
arbitrator’s findings of fact or rulings of law. The
decision of the Commission is conclusive and will
not be overturned by the circuit court or appellate
court unless it is contrary to the manifest weight
of the evidence on factual matters or contrary to
the law.
55

Review of Arbitration
• On the petition, the reviewing party indicates
the exceptions taken to the arbitrator’s
decision and whether oral argument is
requested. Regardless of the exceptions taken
by the parties, the Commission may consider
additional issues if it so desires. Further, as a
practical matter, a party wishing to reverse or
modify the decision of an arbitrator should ask
for oral argument before the Commission.
56

Review by Circuit Court
• Except in cases against the State of Illinois, in
which the decision of the Commission is final,
cases can be reviewed in the circuit court of
the county where any of the parties defendant
may be found or in the county where the
accident occurred.
• Such review must be commenced within 20
days of the receipt of notice of the decision of
the Commission, with summons issued by the
clerk of the court.
57

Review by Circuit Court
• The circuit court may confirm or set aside the
decision of the Commission. If the decision is
set aside, the court may either enter such
decision as is justified by law and supported by
the transcript or remand the case to the
Commission for further proceedings, stating
the issues requiring further hearing and giving
such other instructions as may be proper.
58

Review by Appellate and
Supreme Courts
• Appeals from the circuit court shall be taken to
the Workers’ Compensation Commission
Division of the Illinois Appellate Court.
• No petition for leave to appeal from the
appellate court to the Supreme Court can be
filed unless at least one judge of the appellate
court files a statement that the case involves a
substantial question that warrants
consideration by the Supreme Court.
• These appeals are rarely allowed.
59

Conclusion
• Discussion of the topics in this
presentation has, by necessity, been
limited to the major issues related to
workers’ compensation claims. The
author has attempted to give practical
advice in order to acquaint the
employer with basic workers’
compensation practice.
60

Conclusion
• This presentation is for informational
use only. Each workers’ compensation
claim is a unique event with different
legal applications.
• Further, no attorney/client relationship
was created by viewing this presentation
online.
61

62
Matthew R. Custardo
matthew.custardo@gmail.com
224-856-9190

Illinois Workers' Compensation Law: What Employers Need to Know

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