Synopsis: Understanding What a Mess Work Comp Is In The People’s Republic of Chicago. Can It Be Reformed?
Editor’s comment: Many of my readers are asking—what the heck is going on with City of Chicago WC Claims?
The Shakman Decrees
Well, this dates back to a guy named Mike Shakman who got sick of watching patronage politics in Chicago. Politics in Chicago and in the government of surrounding Cook County had been dominated by political patronage. Most city and county employees were expected to belong to the political party of the elected official who controlled that agency. Patronage employees had to support that official and the party organization by donating to campaign funds and performing campaign work: getting signatures on nominating petitions, passing out literature, and going door-to-door to find and cultivate favorable voters. An employee who refused to do this work, or even failed to do it well, could lose his job, whereas the most effective political workers kept their jobs or were promoted in their gov’t jobs, even if they did little or nothing of their official duties. Patronage employees were also forbidden to support any candidate opposed by the political organization to which their patron belonged.
By the 1960s, patronage politics had secured one-party control of Chicago for the Democrats. Democratic candidates for office in Chicago or Cook County-wide were all selected by a "slating committee" of party insiders. All Democratic officeholders and their patronage employees were expected to support the party slate. At the apex of this "Machine" was Chicago Mayor Richard J. Daley.
Mike Shakman filed a class action suit against the Democratic Organization of Cook County, claiming political patronage employment violated the First Amendment and the equal protection clause of the Fourteenth Amendment of the United States Constitution. Shakman asserted Defendants, including a number of government employees and politicians, violated public employees' right of free speech by requiring them to support the slated candidates and by punishing them for supporting opposing candidates. He also asserted that the use of public employees to do political work instead of their official duties was an unnecessary burden on taxpayers. He sought declaratory and injunctive relief.
The case was dismissed in 1969, but reinstated in 1970, leading to a long deliberation. After the reinstatement of the case, the plaintiffs and many of the defendants entered into various consent decrees on most of the issues in the complaint. Defendants agreed to most of the complaints and resolved to make amends. Stipulations of fact were next filed to resolve the remaining issues. The Shakman decrees were a series of federal court orders regarding government employment in Chicago, which were issued in 1972, 1979, and 1983. The decrees barred the practice of political patronage, under which government jobs are given to supporters of a politician or party, and government employees may be fired for not supporting a favored candidate or party Basically, Mike Shakman ended patronage politics in the U.S. crookedest City.
Well, Chicago Still Seems Corrupt—What Happened?
In short, what happened was Ed Burke. Alderman Burke became the head of the City’s Finance Committee in the late 1980’s. When that happened, he took complete and secret control of the City’s WC “defense” program. The reason I put “defense” in quotes is the City almost never defended any workers’ comp claim other than to lose, lose and lose some more.
Please note Alderman Burke also had complete control of the City of Chicago’s Police and Fire Department Disability programs and ran them with the same secretive silliness that he ran the City’s WC program. He would almost never bring anyone back to light work, preferring to keep paying and paying and paying some more. Chicago has a “ghost” work force that costs millions each year—this could be almost immediately eliminated by simply bringing all these folks back to the thousands of desk jobs continuously available to City workers.
What happened is several thousand City workers were allowed to go on City WC benefits or Police/Fire Disability benefits for years and years, many times decades of tax-free benefits. The poster-child for this sort of silliness was Charles Siedlecki, who the Chicago Sun-Times indicated was on “disability” for decades. Starting In 1992, Mr. Siedlecki fell and hurt his shoulder while chasing a group of teens. Since then, he hasn’t worked as police officer, but went to law school, opened a law practice and continued hobbies, such as big-game hunting. During that time, he has collected more than $715,000 in disability pay through 2012, the newspaper reported. Hundreds of other City workers got such benefits. What is so irritating about Police and Fire Disability is the City of Chicago is always in need of 911 desk operators that would be perfect for any disabled police officer or firefighter—they are already trained in such protocols and can do sitting/standing work at such desks.
Why did Alderman Burke do this? Well, he clearly didn’t care about the cost to Chicago taxpayers—he wanted an army of folks beholden to him. All WC claimants for the City of Chicago don’t have to work and get hundreds of thousands in tax-free benefits for years, if not decades. To my understanding, the City of Chicago continues to cover them with full healthcare benefits and their fake gov’t pensions continue to vest. In return, if Alderman Burke wanted them to jump, they didn’t ask if, they asked “how high!” The problem is the City of Chicago is now hilariously broke and approaching bankruptcy and all mayoral candidates are pressing for new taxes. They also need some cost-cutting!!
The City of Chicago WC System Was the Paradigm of Crooked Gov’t—Can It Be Reformed?
So what happened with the end of patronage politics was the City of Chicago had a program that was spending over $100M in WC benefits for City workers. I assure you no one truly knows how much—I sent FOIA requests for the actual amounts spent to be told “We don’t know.” I asked how many City of Chicago workers were off work more than five years on TTD—the answer was “We don’t know!!!” I am sure some of the money spent on WC for the City of Chicago is buried in department budgets and other money is buried elsewhere. Good luck figuring it out.
What Alderman Burke also did was hire WC vendors, like outside claims handlers or voc rehab providers to then randomly fire the vendors. All of them were expected to donate heavily to Alderman Burke’s 18th Ward Political Organization.
To my understanding the City of Chicago has around 3,000 pending WC claims at any given time. They don’t have a single City worker listed on the City’s website as a trained WC claims adjuster. To handle 3,000 claims, the City of Chicago needs at least 15-20 veteran claims handlers. In my view, when an organization doesn’t have anyone knowledgeable or trained to handle WC claims, all you do is pay and pay and pay some more.
The same thing goes for the City’s Corporation Counsel’s office—they have one attorney who is designated to handle several thousand WC defense claims. There is no chance, none, that one defense attorney can handle that unbelievable load. There is an outside firm designated to handle “emergency” petitions. To my understanding, they were allowed to bill as much and as often as they liked because of their regular donations and fealty to Alderman Burke. We will see if the City of Chicago’s outside WC defense work goes out to be competitively bid.
Right now, all the mayoral candidates who will be running in what is expected to end up in a run-off election in March are focused on getting their arms around the City’s WC defense program. Let’s hope the hundreds of men and women currently milking Police and Fire Disability benefits are also returned to desk jobs and taken off the dole. Watch this space for news as it develops.
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Synopsis: Illinois WC Rates Jump Again—even with 313 residents leaving the state on average PER DAY, there was a jump in the Statewide AWW and Your existing PPD Reserves May Need To Be UPDATED RETROACTIVELY(!).
To any of our readers and/or fans, Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!
Editor’s comment: There continues to be an upward spiral of IL WC rates. Please don’t shoot the messenger for telling you how to get them right.
As mentioned before, twice every year, starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, your IL WC rates keep climbing.
We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $826.79 (up from $790.64—a $36 increase when the last increase was only $15!!!).
When it was published, this PPD Max rate changed retroactively from July 1, 2018 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong.
If you have a claim with a date of loss after July 2017 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies.
The current TTD weekly maximum has risen to $1,506.81.
An IL worker has to make over $2,260.22 per week or $117,531.18 per year to hit the new IL WC maximum TTD rate.
The new IL WC minimum death or T&P rate also went up.
The IL WC minimum death benefit is 25 years of compensation or $565.06 per week x 52 weeks in a year x 25 years equaling a staggering $734,578.00! Yes, if Claimant makes $100 a week in a part-time job and dies in a work-related accident, the benefit is over $734K.
The new maximum IL WC death benefit is $1,506.81 times 52 weeks times 25 years or a lofty $1,958,853.00 plus burial benefits of $8K.
On top of this massive benefit, Illinois employers/governments have to contribute to a fund to pay COLA increases under the Rate Adjustment Fund that may double that already-high benefit, depending on the CPI.
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.
If you want it, simply email Marissa at firstname.lastname@example.org and include your mailing address if you would like to be mailed a laminated copy & you can also copy Shawn at email@example.com with any questions, and his great team will get a copy routed to you before rates rise again.
Shawn remains your go-to defense source on any issue relating to IL WC rates!
Synopsis: Get your handy and updated 2019 Indiana Rate Chart Here. Research and reporting by Kevin Boyle, J.D., KCB&A’s Indiana WC defense team leader and Gene Keefe, J.D.
Editor’s comment: A new year, and our new 2019 Indiana WC Rate Chart is available. You can find it on our website, or if you’d like a laminated hard copy, please email Kevin and he’ll mail you as many as you and your staff need. Happy New Year!
Kevin Boyle, Esq., Keefe, Campbell, Biery & Assocs., LLC
885 South College Mall Rd. #222
Bloomington, IN 47401