5-18-15; IL Speaker Madigan Jamming IL WC Reform for a "Fail;" Is the Worker an Employee or Independent Contractor by Arik Hetue, JD; Are IL Gov't Fake Pensions "Unfundable?" and more

Synopsis: Springfield Update—IL Speaker Madigan to Jam WC Reform Legislation for a “Fail.”


Editor’s comment: As you read this, IL House Speaker Michael Madigan set two different “Committees as a Whole” in the Illinois House—a “Committee as a Whole” hearing is a combined hearing for all members of the Illinois General Assembly. In both such hearings, the testimony at the first hearing was directed at knocking down the proposed IL WC reforms with a second session designed to rail and rock against caps on medical malpractice claims or tort reform. It appeared to us the Illinois Trial Lawyers Ass’n effectively got control of the inner workings of the Illinois General Assembly to dominate the hearings and present their positions on either subject. The amount of testimony from the side of Illinois business was relatively limited.


Did this strategy work? Well, this morning the news was Speaker Madigan was calling the WC reforms for a vote on Thursday, May 21, 2015. What is odd about that announcement is the IL WC reform measures haven’t been reduced to actual legislation by their sponsors. All we have seen to date are media proposals from new Governor Rauner without any real language for the legislators to actually consider or seek to modify, as they always do. We assume Governor Rauner and his team continue to troll for WC reform votes from our legislators without having to actually write anything down.


What it appears may now happen is House Speaker Madigan is going to have his staff create and propose similar WC “reform legislation” so that can be called for a vote and then knocked out by the heavily Democrat-controlled General Assembly. Obviously Speaker Madigan feels he has little to no concern about any meaningful WC reform passing. We assume the expectations of Speaker Madigan in using this unusual tactic is to quell debate and get WC reform off the State’s agenda so they can move forward to deal with other issues that have been discombobulated by our kooky legislators in years past.


As we have repeatedly advised our readers, we feel the true WC reform in this state is going to come from our hearing officers at both the Arbitration and Commission level. If they start to handle “causation” or “major contributing cause” with a common sense approach, you don’t need WC legislative reform. If they start to handle the “traveling employee” concept consistent with the language of the IL WC Act that requires an accident to “arise out of” the employment, you don’t need WC legislative reform. Arbitrators and Commissioners can currently deal with impairment ratings as they feel best, even as they consider all the other statutory factors in the IL WC Act.


In short, we hope our administrators start to apply the current English-language version of the Illinois Workers’ Compensation Act and drive our State to the middle of the fifty United States and get workers’ comp reform off the legislative agenda. When that happens, Speaker Madigan and his troops can stop their shenanigans and public relations fluff.


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Synopsis: Is the Worker an Employee or an Independent Contractor? Recent Case Law Clarifies IL’s Position on this Complex Question. Thoughts and analysis by Arik D. Hetue, J.D.


Editor’s comment:  We have seen this scenario played out many times in the past, and business is always trying to navigate a very sticky wicket of how to have just enough control over a worker such that they will be classified as an independent contractor. Over the past 10 years, the rise of former trucking companies which style themselves as logistics companies who then farm out the driving to “independent” drivers was the most recent version of this intricate dance. Please, Illinois business, be careful when trying to tango with our law.


In the case of Steel & Machinery Transportation v. IWCC, published on May 1, 2015, the IL Appellate Court, WC Division confirmed, again, the more control over a driver a company asserts, the more likely the driver will be found to be an employee of the company. As many of our readers are aware, there is no bright line rule for this classification. In Illinois, as in many of our sister states, we resort to a multi-factor analysis to determine a driver’s status. Among the various issues to be analyzed are who is providing the insurance, how the driver is paid, who controls the routes, who decides the jobs, whether logos are in place, and a variety of other factors. We have seen in the past the primary factors will generally be the nature of the work, who controls the work, and whether the driver has independent WC insurance.


In  4-1 split decision, the Workers Compensation Division of the Illinois Appellate Court ruled a truck driver was entitled to our generous IL WC benefits after his injuries from a crash necessitated the partial amputation of his leg since he was an “employee” of the company that hired him to transport a load from Indiana to Wisconsin.


The facts were essentially uncontested – Driver Radomir Cvetkovski worked as an over-the-road truck driver and he owned his own tractor-trailer. In June 2005, Respondent Steel & Machinery Transportation contracted with Mr. Cvetkovski to transport a shipment of steel from Indiana to Wisconsin. After Mr. Cvetkovski picked up the load in Indiana, he drove his vehicle to a truck stop, and then went home for the weekend as the delivery was due on Monday. On Monday morning, he left to deliver the load, but during his transit to WI, he was in a severe accident and the result was a below-the-knee amputation to his left leg.  


Mr. Cvetkovski filed a claim for IL WC benefits, but Steel & Machinery disputed the claim, arguing it should be denied as Mr. Cvetkovski was an “independent contractor.” Please note his “independence” did not include the purchase of a policy of WC insurance to cover himself in case of a work-related loss or injury. An Arbitrator, the Commission, and the Circuit Court all agreed Mr. Cvetkovski satisfied the requirements to be considered an employee and awarded benefits.


Among the facts related to this finding, the most important tended to be in the area of control – while Claimant owned the truck he was driving, according to the Agreement between the parties, the truck and equipment used were for Steel & Machinery’s “exclusive possession, control and use for the duration of [the] Agreement.” Also – while Claimant was on driving routes, the testimony indicated he drove solely for Respondent during his years working with them, and he suffered negative consequences if he ever turned down a delivery. While he could technically work for other parties, the Agreement subjected this activity to a wide range of subjective hoops he would have to jump through and approval would be required before he could do so. While driving, he would be contacted every couple of hours by a Respondent dispatcher, who would direct routes and deliveries.


Going the other way, there were facts that lead to an inference Claimant was an independent contractor – specifically, his ownership of the truck, payment of upkeep for the truck, his per job payments with no tax withholdings, and the fact the company did not require him to submit to a dress code or appearance code.


In any case, this determination was a finding of fact – and as such, following the Commission decision, it could only be overturned under the business-dreaded “manifest weight of the evidence” standard. In light of the fact there were reasonable facts on both sides of the employee/independent contractor question, either decision by the Commission would have been sustained under the manifest weight standard. As any defense veteran knows, this is an extraordinary burden to meet.


Presiding Justice William Holdridge issued a very interesting dissent where he noted "under our court’s current interpretation of the law, it has become virtually impossible for a trucking company and an independent driver/lessor to structure their relationship in a way that reliably precludes a finding of an employment relationship, even if that is the clear and expressed intent of both parties." Justice Holdridge felt a more reasonable approach would be to adopt a position allowing a trucking company's compliance with regulations that require it to exercise control over a driver to not equate to evidence of the company’s control over the driver for the purposes of determining the driver’s contractor status. What this means for us in IL business is the more control, the more likely it is an employee status. Even if the control asserted is required under federal law. Please be very careful in how you handle such relationships.


Editor’s note: If this employer “forced” or otherwise required this claimant to have his own WC coverage and provide a certificate of insurance to them, there is a much stronger chance this driver would have been viewed as “independent.” It is our view, as the driver had no WC coverage, the reviewing court put the WC coverage on the company that had it. We tell all our clients and readers—never, ever hire a sole proprietor to work for you and allow them to “opt-out” of WC coverage. It can be financially disastrous to do so—if you aren’t sure, send a reply and we will explain further. Please note, this claim involved an partial leg amputation. The cost of such a claim could be $300K or over seven-figures, if the guy can never drive or work again. You may also note the claim has been pending for around 10 years—litigation costs are probably high.


An Illinois worker who is injured for an employer that doesn’t have any WC coverage for them can:


  • Sue in Circuit Court for the injuries;
  • Sue at the IL Work Comp Commission too;
  • Any benefits received from either venue don’t offset;
  • The employee can “pierce the corporate veil” and seek to go after the employer’s personal assets;
  • It is a felony to operate in IL without WC coverage.


This article was researched and written by Arik D. Hetue, J.D. who can be reached at ahetue@keefe-law.com. If you would like to review a copy of this decision, please feel free to email him with any comments or concerns, or you can post them to our award winning blog!


Synopsis: Another Quick Thought on IL Fake Government Pensions—It is Hard to Pre-Fund Them When The Multi-Million Dollar Benefits Are The Equivalent Of Winning the Lottery!


Editor’s comment: A reader sent us a quick note about articles being published across our state by Robert Rich who is the retired director of the Institute of Gov’t and Public Affairs at the U. of I.  If you want links, send a reply. His articles follow a tired theme—why doesn’t IL government simply “pre-fund” what is or will be due on the state government fake pensions? Trust us, that sounds simple but isn’t nearly that easy when you consider how lucrative the fake pensions are when the workers get to the money.


We assure you some of the fake pensions are simply “unfundable” if you understand the math. Pensions are supposed to be pre-funded with three sources—personal contributions, “matching” state contributions and investment income. When they are not pre-funded, the “pension clause” requires taxpayers to make up the balance after the sometimes retired worker leaves gov’t employ. So consider pre-funding one legislative fake pension. Just one. Please note the late Judy Baar Topinka was a legislator for six years. As a legislator, she made $60K a year and put in 10% of her salary to become vested in only four years of service. Her total personal contribution to the fake pension plan in six years was six years times $6K a year or $36K. When she passed, she was seventy years old. Her annual pension for six years of work was $150K or 2-1/2 times her highest legislative salary.


If Judy lived to 90 years of age, and lots of folks are living to ninety, she would have received $150K a year with annual 3% compounded increases over twenty more years. Her annual fake pension payout would have doubled to over $300K. In short, she would have received another $4-5M in that time. Try to get your head around Judy making a $36K contribution while working for us and then be entitled to literally millions and millions after working for us. As Mr. Rich’s articles validly point out, most of the “unfunded money” is “back-funded” and therefore comes from current tax dollars. The eventual payout to all Illinois legislators is the equivalent to winning the Lottery when you consider they can easily get millions for a four-year contribution less than $50,000.


To pre-fund or set aside what is needed to justify that much pension money for Judy Baar Topinka, the State of IL would have had to put about $500,000 a year or more into Judy’s pension fund every year she was working as a legislator. That is a LOT of pre-funding. There are 113 Illinois legislators and they change with great regularity. We assure you President Obama was in our General Assembly and is eligible for the same fake pension right now and can also receive millions over the rest of his life for his limited IL pension contributions.


We assure you this math is accurate. We are not annuitants, like Mr. Rich but we are sure for our State to pay out $4-5M in fake pension benefits over 20 years, you need to start with something like $3M or more. The current annual amounts being back-funded and annually paid to former Illinois legislators is over a quarter of a billion dollars a year and continuing to rise. In our view, our fake legislative pension program is designed to be “unfundable” and seems similar to legislators stealing our tax dollars to almost secretly get that much from us long after they have stopped working in the legislature. The judicial fake pension set-up is similarly shockingly unfundable and pays millions to each jurist after they have left the bench. As another egregious fake pension, City of Chicago school teachers only contribute 2% of their annual income to their pensions—in 20 years to become vested, they haven’t put one full year of salary into the “kitty.” That pension system is relatively “unfundable” costing Chicago taxpayers billions. Hard-working taxpayers hated welfare programs because folks got lots of your money for doing nothing. Why doesn’t that same ethic apply to fake government pensions?


Either way, while they are working for us, we don’t want to pay any legislator their annual salary and set aside literally millions in their four years of service to pre-fund these gigantic lifetime pensions. Illinois legislators aren’t full time employees—the legislature is in session about 50 days each year! Lots of them don’t have 100% attendance and show up when something important happens.


We vote Illinoisans consider Con-Con--an emergency constitutional convention and rewrite the whole thing. In making that recommendation, we would end the legislative fake pension program completely—there is no reason a part-time worker earns a generous lifetime pension with guaranteed annual increases after only four years of part-time service. And as a final note, we agree with Mr. Rich to the extent that we feel our IL Constitution should have a “taxpayer-protection” clause requiring any and all money used for a government pension should have to come from either the pensioners’ contributions or whatever the Government paid to match their money while they were employed by taxpayers.


Rant over—we appreciate your thoughts and comments. Please post them on our award-winning blog.



Synopsis: Can the IL WC Community Help Dominic Secure His Forever Friend!

Editor’s comment: Please consider making a donation to Dominic’s GoFundMe account to aide in efforts to obtain a service dog. Dominic is an amazing 7-year-old non-verbal autistic boy who was recently diagnosed with seizures in January of 2015. It became very clear he needed to do more on a more personal level to help Dominic with his confidence and self-esteem. Research on service dogs followed and the family learned this was the right choice. This young man struggles on a daily basis to dress himself, bathe himself and almost daily suffers from self-injurious behavior because of his inability to be able to communicate. The family reached out to an organization called Argos Unlimited K9 who work with service dogs and they immediately told the family they would be able to help Dominic! Some of the things they will be able to assist Dominic with are

·         To help prevent him from wandering or running away by wearing a tether or barking to alert us of his whereabouts that are not safe.

·         To help with self-soothing during melt-downs. The tactile stimulation, whether by petting, hugging, or having the dog actually lie on the child, can help the child learn the skills of calming themselves.

·         Socialization including serving as a "social bridge", so as children and adults come over and ask about the dog, the child with autism is prompted to answer. The parent should not answer questions, but should refer all inquiries to the child. Thus with the dog, rather than having just the parent or teacher try to bring the child out of their own world, the entire community is talking to the child.)

·         4)The dog will wear Dominic’s communication device so that he will not have to travel to find it and he can communicate more easily.

·         5)Dominic has also show a great interest in water and the number 1 killer amongst children in children of the autistic community is accidental drowning. The service dog will be trained not only in water rescue but also to alert the family by barking if Dominic goes into the nearby lake in his subdivision or also gets into our bathtub without the family’s knowledge.

This is where you come in……the cost of a service dog is $12,000.00. Since starting their GoFundMe account the family has been blessed with donations from other family members, colleagues and friends and would like to keep the momentum going for Dominic. They would like to share with you a picture of their beloved Dominic and the service dog Jax who is in training now to hopefully come to the family within the next 18 months to help Dominic in his daily living. She will attend school with Dominic and be a lifelong companion to not only Dominic but the family. They want to thank you all should you consider making a donation!

The attorneys at KCB&A have already donated and may donate even more. Consider $10, $25, $50 or $100—give what you feel best. To contribute to this great cause or for more info, go to http://www.gofundme.com/lk29y8