Illinois Workers' Compensation Defense Law

Guide to
Illinois Law

Illinois Workers' Compensation Defense Law

Workers' Compensation Defense Law

Workers' Compensation Defense Law

Like many other states, Illinois has a workers' compensation system to compensate employees for accidental injuries occurring in the workplace. All employers subject to the Illinois Workers' Compensation Act must either carry workers' compensation insurance or demonstrate that they are self-insured and have the financial resources to cover any reasonably anticipated claims. Illinois, like many states, has struggled with its workers' compensation program, trying to contain costs and to balance the interests of injured workers, employers, and insurers. Every businessperson with employees should have a basic understanding of his or her responsibilities under Illinois' workers' compensation law. The workers' compensation system operates under rules substantially different from those used to settle other types of personal injury claims. For this reason, many lawyers specialize in handling only workers' compensation disputes.

Workers' Compensation: The Basics

Workers' compensation is a state program that requires employers to have an insurance policy covering employees for work-related injuries. When an employee is injured on the job, the employer or the insurance company pays for medical care and lost wages due to the injury, regardless of fault. No part of the premium or cost of benefits may be charged to employees.

The notion of the employer, and eventually the public, paying for employee work-related injuries originated in Germany during the latter half of the 19th century. Among the chief proponents of a German workers' compensation program was Bertha von Krupp of the famed German manufacturer, Krupp Works. Krupp had long believed that taking care of workers was in the best interest of business and in 1884 successfully persuaded Chancellor Otto von Bismark to support workers' compensation for all of Germany.

Workers' compensation came to the United States in about 1910, when New York and Massachusetts adopted programs. Illinois adopted its workers' compensation program in 1911. This program is administered by the Illinois Industrial Commission.

The advent of workers' compensation relieved injured employees from having to sue their employers to collect any sort of damages. Before workers' compensation, an employee had to prove that the employer had negligently failed to provide a safe work environment. Under workers' compensation, however, employees usually collect benefits regardless of fault. That is, even if an employee is responsible for his or her own injury, the employee is covered by workers' compensation under most circumstances, as long as the injury occurred on the job. The main restriction to the program is that in most cases, workers' compensation benefits are the only form of remedy for workplace injuries. After receiving benefits, an injured employee may not sue his or her employer for further compensation.

Who Is Covered

Employers

Illinois has a two-tiered system for providing workers' compensation coverage. Certain employers are required to have coverage under the Workers' Compensation Act. This group includes all government and school agencies, as well as those who employ domestic workers in their homes at least 40 hours per week for 13 or more weeks per year. It also includes businesses that are declared to be extrahazardous. The following businesses are declared by law to be extrahazardous:

Most manufacturing, construction and development companies
Food and beverage providers
Beauty shops
Mining industries

Certain small businesses may elect not to be covered, even if they fall generally into one of the statutory categories.

Employers who are not automatically required to carry coverage under the Workers' Compensation Act may elect to do so voluntarily, or they may elect to be self-insured. In 1988 Illinois passed legislation that encourages businesses to apply for self-insurer status. Selection of one option does not, however, preclude an employer from changing to the other status at a later date. Regardless of the option selected, every employer must post notices in the workplace that provide employees with the name, business address, and telephone number of the person, service company, or insurance company to contact for information regarding the coverage.

Employees at Work

Only employees are eligible for workers' compensation benefits. Broadly defined, an employee is anyone under oral or written appointment or contract for hire, working on a full- or part-time basis. This definition encompasses even aliens who are unlawfully employed, minors, and prisoners on work-release programs. Not included in this definition, however, are domestic servants in private homes (except those indicated above), volunteers in nongovernmental entities, professional athletes, casual laborers, real estate brokers and sales representatives who work exclusively on commission, and independent contractors or anyone who is not subject to the control and direction of the employer.

An employee's injury must arise "out of and in the course of employment" to be covered by workers' compensation. Basically, this means that the injury has to occur while the employee is involved in some activity directly related to his or her job. For example, an employee injured at the job site while performing tasks at the direction of the employer is covered. An employee who is injured on a business trip is covered as long as the employee is engaged in employment duties. Workers' compensation coverage even extends to an emergency situation in which an employee leaves work intending to save life or property. Under Illinois law, an employee is not covered during volunteer work-related or work-sponsored recreational events (such as sporting events, picnics or parties) unless the employee was assigned or ordered by his or her supervisor to participate. An employee is not covered while traveling to or from the place of employment, unless the employer asks the employee to perform a special duty on the way. Employees injured during work breaks when no work is being performed also may not be covered, depending on the circumstances.

Nature of Injury

Workers' compensation benefits primarily cover accidental injuries. Accidental injuries are those that happen unexpectedly, without design or plan. This includes many repetitive stress injuries such as carpal-tunnel syndrome, as well as heart attacks, strokes, or other physical problems caused by work. In addition to accidental injuries, an employee may recover if a pre-existing physical condition is made worse by his or her work.

Available Benefits

Workers' compensation entitles an employee to all reasonable and necessary medical care related to the injury, to payments for lost wages, and to rehabilitation and training. Under the Illinois Workers' Compensation Act an injured employee may be eligible for some or all of the following benefits:

Medical services, including all reasonable expenses for necessary care and treatment, which may include first aid, visits to an approved health care provider, surgery, hospital care, dental or orthodontic treatment, prescription drugs, and medical supplies ordered by an approved physician
Temporary total disability payments that provide the employee with up to two-thirds of his or her weekly wage for the time the worker is unable to work. (No compensation is payable, however, for loss of wages during the first three working days after the injury unless the employee is unable to work for 14 or more days after the date of the injury.)
Permanent total disability or disfigurement payments (up to two-thirds of the worker's salary at the time of the injury) for employees who are totally disabled, scarred, or otherwise disfigured, and unable to work again
Death benefits for burial expenses and benefits to dependents of the deceased employee in case of fatal work-related injuries

An employer usually cannot be made to pay for emotional distress, pain, suffering, or loss of companionship, affection, or sexual relations.

The Employer's Responsibilities

With the few exceptions described above, all Illinois employers must cover their employers with workers' compensation insurance. The cost of premiums for compensation insurance is determined by factors such as the number of employees a business has, how safe the record of the workplace proves to be, and how much employees are paid. Generally, the greater the payroll or the higher the risk, the higher the premium. However, an employer may be able to lower premiums by establishing programs to provide for a safer workplace and by working with injured employees to minimize lost work time.

The trade-off for an employee's relatively easy route to compensation is a limit on the amount of money that can be awarded for a work-related injury. Employers who maintain workers' compensation insurance programs to cover on-the-job injuries are immune from liability unless they act intentionally to cause injury. Coverage under the Act does not, however, limit a person from seeking compensation from a third party whose negligence may have contributed to the injury or death of the worker.

Any insurance broker or attorney should be able to help a business obtain workers' compensation insurance. An employer also may seek help by contacting the Illinois Industrial Commission.

Notice

If an employee is injured on the job, he or she must notify the employer as soon as possible, but no later than 45 days after the date of the injury, the date when the effects of the injury first become apparent, or the date when a medical expert first discovers the injury. If the injury is from exposure to radiological material or equipment, the worker must give notice within 90 days of learning or suspecting that he or she has received an excessive dose. If the injury is related to an occupational disease, the employee must notify the employer as soon as practicable after he or she becomes aware of the disease. Failure to meet the required deadline may threaten the employee's right to benefits. Notice may be verbal or written, and must include the approximate date and place of the accident, if known. In a large company, an employee gives notice by informing his or her supervisor of the injury. Notice to a fellow employee who is not a member of management is not sufficient. In cases in which the employer reasonably should have known that the injury occurred, the employer is said to have "constructive notice."

After receiving actual or constructive notice of the injury, an employer must promptly notify its insurance carrier or the administrator responsible for its workers' compensation program. If the injury or illness keeps the employee off work for more than three days, the employer must do one of the following: (1) start to pay the employee temporary total disability, (2) notify the employee in writing of the additional information needed to begin making payments, or (3) provide the employee with a written explanation of why benefits are being denied. The employer also must file an Employer's First Report of Injury or Illness Form with the Illinois Industrial Commission for all injuries resulting in loss of work of three days or more. These reports must be filed between the 15th and the 25th of each month. If a death has occurred, the employer must notify the Industrial Commission in writing within 48 hours of the death. The employer also must notify each injured employee of his or her right to rehabilitation services, of the locations of available public rehabilitation centers, and of any other services known to the employer. The Illinois Industrial Commission also provides employees with benefits information.

Payment of Benefits

The employer or insurance carrier is obligated to provide necessary medical treatment. Treatment that is "medically necessary" is any medical treatment that assists the employee in recovering or helps to improve the employee's condition. Usually, this treatment ranges from diagnostic procedures to physical therapy, and may include psychiatric counseling, chiropractic care, plastic surgery, medicine, prostheses and other medical supplies, travel expenses (for travel to obtain medical treatment), and attendant or custodial care.

An employee may select his or her own treating doctor or hospital, and should notify the employer of this selection. The employer is responsible for the costs of all first aid and emergency services, two treating physicians, surgeons or hospitals of the employee's choice, and additional care provided through referrals. After this initial treatment phase, the employee must obtain approval from the employer before seeking treatment from additional physicians or at other hospitals. If the employee is treated by nonapproved providers, the employer is not required to pay.

The employer may require a person receiving benefits under the Workers' Compensation Act to submit to a medical examination by a physician selected and paid by the employer. This exam may be required to determine the nature, extent, and possible duration of the injury and the disability compensation amounts. The employee also may be required to submit to examination by medical experts selected and paid by the employer. Refusal to submit to required examinations, or attempts to unnecessarily obstruct the exams, may result in the temporary suspension of benefit payments. Suspended payments cannot later be recovered.

Refusing to Pay Benefits

Under some circumstances, employers may refuse to pay workers' compensation benefits. An employer may refuse to pay a workers' compensation claim because he or she believes the injury was not work-related or the benefits demanded exceed those justified for the injury. Benefits also may be jeopardized if an employee fails to follow safety rules and consequently suffers injury.

When a dispute arises, two options exist to settle it. One option is to file a claim with the Illinois Industrial Commission. The Industrial Commission will appoint an arbitrator, who will conduct a hearing and issue a decision. Either party may appeal the decision to the Industrial Commission, which will review the case and may hear arguments. For employees of the State of Illinois, the decisions of the Industrial Commission are final. In all other cases, parties may appeal Industrial Commission decisions to the Illinois Circuit Court. Further appeals may be taken to the Industrial Division of the Illinois Appellate Court and, in some cases, to the Illinois Supreme Court.

The second option for resolving disputes is through voluntary arbitration. This option is available when the only disputed issues involve temporary total disability, permanent partial disability, or medical expenses. Parties who submit their case to an arbitrator waive their right to review by the Industrial Commission. The arbitrator's decision is final as to the factual issues in dispute, but questions of law may be appealed to the Illinois Circuit Court.

Other Employer Responsibilities

Employers are prohibited from harassing, discharging, or threatening any employee for asserting a valid claim for workers' compensation benefits. It is illegal for an employer to refuse to hire or rehire an individual because he or she exercised his or her rights under the Workers' Compensation Act. It is also unlawful for an employer to refuse to hire or rehire an employee who has a disabling condition from a prior injury. However, employers are protected from some workers' compensation liability if an employee is hired with a pre-existing condition. If an employee suffers an injury that is made worse because of a condition existing prior to the time of hiring, the employer is protected from some liability under the Illinois Second Injury Law. The purpose of this law is to encourage employers to hire people who may have disabilities from a previous injury.

Resources

The Illinois Industrial Commission oversees administration of worker's compensation for the state. The Commission is located in the James R. Thompson Center, 100 Randolph Street West, Chicago, IL, 60601, (312) 814-6611. The Commission publishes a free Handbook on Workers' Compensation and Occupational Diseases. The Commission also has established the Worker's Compensation Advisory Board to aid the Commission in formulating policies, discussing problems, setting priorities of expenditures, and establishing short- and long-term administrative goals. The Advisory Board is chaired by the Chair of the Commission, and its members are appointed by the Governor as representatives of employers or employees, or neutral representatives. Illinois also established the Commissions Review Board to review complaints about Commissioners and Arbitrators. Information about these two Boards is available from the Illinois Industrial Commission.

The Illinois State Economic Development Agency's Department of Commerce and Community Affairs also publishes information guides for businesses. Contact the Department at 620 Adams Street East, Springfield, IL 60703, (217) 782-7500.

Other Resources

Employers seeking self-insurance coverage may obtain assistance from the Assigned Risk Pool. For information on Assigned Risk coverage, call the National Council on Compensation Insurance (NCCI) Customer Service Line at (800) 622-4206.