Synopsis: General Assembly Whacks You and I With Massive Tax Increase; Spending, Workers’ Comp and Other Pro-Business Reforms Dropped. Are We Ready for Even Higher State Taxes Next Year and For Years to Come?
Editor’s comment: Last week, the Illinois General Assembly, led by House Speaker Michael Madigan raised our IL state income tax to 4.95% to raise about $5B in new money from you and I and IL business. Various members of the cowardly IL Republican party crossed over and voted to override Governor Rauner's budget veto. A few legislators mumbled there is still work to be done to reform Illinois workers' compensation. Our suggestion is don’t hold your breath on any future WC or other “reforms.” We are also sad to see all the pressure and stress that came with trying to make some progress and real reforms for our clients and other businesses in this State all came to nothing. We do feel businesses and jobs are going to continue to leak out to our sister states until someone in the super-majority ruling party starts to feel the pain of those growing departures.
House Speaker Madigan was able to bring together the 71 members needed to override Gov. Bruce Rauner's veto. Ten House Republican representatives crossed party lines to work with the Democrats to pass the $36 billion budget. Legislators passed a bill out of the Democrat-controlled House that included a $5 billion income tax increase to pay part of more than $15 billion in unpaid bills. I believe they are also borrowing another $6B we don’t have to insure your great-great-grandkids have to deal with their mistakes.
Gov. Rauner originally vetoed the bill a week ago on Monday, saying the bill didn't reform IL government enough, including changes to workers' compensation and a freeze on property tax, among other things.
The Illinois Senate overrode Rauner's veto within an hour. But the House failed to pass a vote until Thursday evening. The body did not meet on the Fourth of July, and failed to reach a quorum on Wednesday. As the House was readying to go into session on Thursday, the session was delayed when a woman threw an unidentified white powder into the Governor's office, sending the Capital into lockdown for two hours.
Rauner called the override vote "another step in Illinois' never-ending tragic trail of tax hikes,” during a news conference. “(Madigan's budget) is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government," Rauner said during the live televised event. "It proves how desperately we need real property tax relief and term limits." I would point out to our plucky Governor, we now also need income tax relief because of the certainty that tax is going to continue to rise.
Gov. Rauner proposed tougher standards to prove causation in workers' compensation claims and measures that would force IL WC arbitrators to use only American Medical Association guidelines in determining how much seriously injured workers could be paid for PPD. That was later dropped in favor of reducing the medical fees doctors, hospitals and pharmacies can charge for treating injured workers.
Speaker Madigan said while those reduced medical fees saved money, the only group that wasn't seeing any reductions in profits was the Illinois WC insurance industry. We have no idea how he singled out just IL WC insurers for this supposed profit-gouging in one small area of insurance business. He called for IL WC insurance company profits to be regulated. He or his staff also cooked up the confusing idea of having the State of IL form its own tiny WC mutual insurance company to somehow compete with the industry giants using Madigan’s expert government precinct captains, oops, I mean payrollers. We assure our readers all of that silliness and legislative sleight of hand has been dropped. In short, then you saw this state WC insurance company dodge, now you won’t.
Speaker Madigan claims IL legislators would continue to negotiate workers' compensation reforms. I assure my readers it is my opinion such statements are bluffing and balderdash—the 2017 IL WC reforms are over. I do feel there may be a very slight chance medical reimbursement rates may again be cut and recommend our readers in the healthcare industry keep your lobbyists working to give you reasonable reimbursements.
Susan Mendoza, the IL State comptroller, said it was still unclear whether the shiny new budget would solve our State's fiscal crisis. She indicated businesses and local governments in this State still face one of the highest workers' compensation insurance rates/costs in the country, and we still have numerous underfunded pension systems which continue to threaten to downgrade the state's credit rating.
As I have advised my readers, the General Assembly Retirement System or GARS and the Judicial Retirement System or JRS cannot truly be “pre-funded” as they are currently set up. These retirement systems and possibly some of the other government pension systems are, in my opinion, fake, false and misleading to taxpayers and all IL citizens. In short, a “fake” gov’t pension is a fake promise. I did not see any effort to truly reform IL gov’t pensions in all the budget battles. It is my hope someone in the IL Supreme Court or other members of our judiciary start to question the ethics of their pension funding and their continued participation in such plans and take action to insure the public knows the true and staggering cost of what our government officials, including our judiciary, are and will be receiving.
On a related note, we can all be certain IL income taxes are going up and should go up again and again without any of the work comp or other pro-business reforms bravely sought be Gov. Rauner. At present, state spending is supposed to go down by about half of the 2017 tax increase. In my view, this insures this State is going to have to again start another fight over budgets and tax increases in about eleven months or by June 2018. In short, additional tax increases at the state and local level aren’t going to stop until the reasons for the increases are addressed.
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Synopsis: Chicago Fair Workweek Ordinance May Happen – More Proposed Notice Requirements for Your Chicago Work Sites. Research and writing by Lilia Picazo, J.D.
Editor’s Note: In the wake of the recent Chicago and Cook County Paid Sick Leave laws which took effect on July 1st, Chicago aldermen recently introduced the Chicago Fair Workweek Ordinance citing a need to create standards for more uniform and predictable work schedules for hourly employees in Chicago. The proposed ordinance echoes labor laws enacted in San Francisco, New York City and Seattle and would require employers to:
· Provide new and “expected” minimum work schedules at least 14 days in advance;
· Provide new employees prior to or on the first date of the employment an initial work schedule that runs through the date the next work schedule is posted for existing employees.
The proposed ordinance would also require Chicago employers to pay employees one hour of “predictability” pay if employees’ work hours are cancelled, reduced or changed (including if an employee is requested to extend their shift) with less than 14 days. If employees’ hours were reduced or cancelled with less than 24 hours’ notice, an employer would be required to pay employees up to four hours for the hours employees were expected to work, but did not.
The above notice requirements would not apply to any work schedule changes initiated by the employee.
The proposed “Fair Workweek” city ordinance would allow employees’ a right to refuse any previously unscheduled hours added by an employer with less than 14 days’ notice. A “right to rest” provision would also allow employees to decline work if scheduled within 11 hours from the end of the employees’ last shift. If an employee accept the latter shift, employers would be required to pay the employee time-and-a-half.
The ordinance would also require employers to offer existing employees additional work hours before hiring new or contract employees, including through the use of staffing agencies. Specifically, if the employer expects the duration of additional work hours to exceed two weeks, the employer would be required to give existing employees 72 hours to accept the additional work hours before hiring new employees. Only 24 hours would be required if the employer expects the additional to last two weeks or less.
Penalties for violating the proposed ordinance may result in fines of $500 to $1,000.
There are several fundamental issues we have with the proposed ordinance. For starters, the ordinance would apply to all Chicago businesses. Thus, the law mandates “pooling” the likes of the retail, service, hospitality and other industries together – none of which are the same.
Demands are different seasonally for each industry and with the rise of Amazon® and other online retail providers, brick and mortar shops are already taking a hit for slower traffic in shops. The proposed ordinance would add yet another cost to employers for any changes made to employees’ work schedules despite efforts made by the employer to reasonably schedule employees be it on-call or not for work shifts depending on foot traffic flow.
The proposed Chicago ordinance would further require restaurants and other businesses to abide by a 14-day notice of work schedule and foreseeable work hours, yet does not consider factors such as weather or sporting events which can greatly alter traffic flow. Again, the employer would take the hit and incur costs if additional employees are needed for a shift or if an employee is called off due to slower foot traffic with less than 14 days or 24 hours’ notice.
Additionally, work schedules are not necessarily generated by a computer and thought is placed into the creation of work schedules, including past sales trends and foot traffic. Without delving any further into how work schedules may be created, it is fair to say that employees are hired for different positions and are skilled in different areas of work despite working for the same employer. The right of an employee to request a shift trade, for instance, and without penalty despite less than 14 days or 24 hours’ notice to the employer could potentially affect a workday or workweek if the employees seeking a shift trade are not necessarily skilled in the same area.
It doesn’t make sense for an employer making a good faith and reasonable effort to schedule individuals for particular shifts throughout the day or week based on the individuals’ skillset to incur additional costs by means of “predictability pay” to any other employee if the entire workday or workweek is affected by a shift trade within 14 days or 24 hours from the date employee schedules were originally posted.
It also doesn’t make sense for an employer to take the hit when an employee unforeseeably quits, doesn’t show up for work or calls off sick. We understand things happen, but do not agree with the idea that an employer should be forced to incur costs to account for such changes and possibly face penalties if the employer violates the proposed ordinance. Those affected most by the ordinance will likely be the smaller businesses who will have to consider other cost-effective means such as understaffing or cutting back on the number of new hires to account for the potential penalties for violating the proposed ordinance or paying employees for changing shifts with less than 14 days or 24 hours’ notice.
This article was researched and written by Lilia Picazo, J.D. Lilia can be reached for questions or concerns at email@example.com.
Synopsis: Iowa Civil Rights Act requires interactive investigation process by employers in disability accommodation decisions. Leave the employee out at your own risk! Analysis by Daniel J. Boddicker, J.D.
Editor’s Comment: A recent Court of Appeals of Iowa decision holds Iowa employers are legally obligated to work with disabled employees in regard to investigation of possible work accommodations.
In the case of John Vetter v. State of Iowa, et al, Iowa Ct. App., No. 16-0208 (May 17, 2017), the Court affirmed a several hundred thousand dollar jury verdict for John Vetter, an employee who was terminated by the Department of Natural Resources for the State of Iowa (“DNR”).
Vetter filed a petition alleging the State violated the provisions of the Iowa Civil Rights Act (ICRA) by discriminating against him with respect to the terms and conditions of his employment based on his disability or a perceived disability, and by failing to reasonably accommodate his disability. The ICRA protects employees from being discharged or otherwise discriminated against in their employment based on their disability. Vetter was required to show he was a person with a disability, he was qualified to perform his job either with or without an accommodation from his disability, and he suffered an adverse employment decision because of his disability. Vetter alleged two different adverse actions to support his claims. He claimed the DNR terminated him because of his disability and alleged the DNR failed to accommodate his disability.
Vetter suffered a back injury in 2011 and was placed on a leave of absence. In January 2012, he returned to light–duty work. The DNR accommodated his disability. In September 2012 a functional capacity exam (FCE) set forth Vetter’s limitation on activities. One year later, the Iowa workers’ compensation administrator sent Vetter’s employer a list of the permanent restrictions recommended as a result of Vetter’s FCE restrictions and asked if it could accommodate them.
The DNR hired two consultants to determine whether it could accommodate the recommended restrictions. The Court stated the determination of whether an accommodation is possible requires an interactive process that engages the employee and employer to work in concert to achieve a reasonable accommodation. In spite of its knowledge of Vetter’s disability, the DNR, and its consultants, failed to include Vetter in the process of determining which accommodations would be necessary to allow him to perform his job duties.
Instead the DNR determined the cost of accommodating Vetter’s disability was unduly burdensome and terminated him. In the letter terminating his employment, the DNR disclosed it was discharging Vetter because the cost of accommodating his restrictions would be unduly burdensome. Those permanent restrictions were issued because of Vetter’s disability. The Court held the evidence supported the jury’s finding the DNR discriminated against Vetter when it terminated him based on his disability. The Court held there to be sufficient evidence to support Vetter’s claim of disability discrimination based on the failure to accommodate his disability. Employers must include the employee in an interactive process or risk serious liability.
This article was researched and written by our licensed Iowa defense team leader, Daniel J. Boddicker, J.D. You can reach Dan at any time for questions about workers’ compensation at firstname.lastname@example.org.