7-3-2017; IL Gov't to Struggle for Decades Due to Destructive Financial Engines; Chicago "Fair Workplace" Proposed Law Not Fair to Employers and more

Synopsis: IL Gov’t Will Continue to Financially Struggle for Decades to Come.

Editor’s comment: Watching the mess that has gone on and continues in Springfield, one has to wonder if there is any chance it is ever going to calm down and fly along traditional lines of state government. In my view, the worst-run state government in the United States appears to be treading water in a hurricane, not going forward and not falling dramatically back—remember, they remain at the precipice of total economic disaster. In my view, the IL state gov’t debt situation isn’t going to get significantly better without major changes in leadership and law. The problem with getting rid of the bad leaders is hundreds of thousands of current and retired state workers vote, vote and vote for them to insure they keep getting their “fake pensions.” I truly doubt we have people in place with the brains to get things done that strongly need to be done.

The BGA or Better Government Ass’n did a recent article that indicates our State has about 480,000 retirees currently being paid about $17.3B every year with regular higher-than-COLA increases or about $500M every year at taxpayer expense. Both I and the BGA in their own way, promise you most of those pensions are “fake” in the sense the State and other IL gov’t bodies have never set aside anything close to amount needed to insure IL taxpayers aren’t called on to make up the widening shortfall. Whenever I see a T-shirt promising “A pension is a promise,” I always thing “A fake pension is a fake promise.”

I look fondly to the north and Governor Scott Walker of Wisconsin. He has worked hard to cut his State’s annual spending by $5B a year. The savings is being passed along to taxpayers. I am sure he should be able to lower state taxes and not keep increasing them to record levels as our goofy legislators are doing and will keep doing for decades. Gov. Walker has done this by consolidating state agencies and streamlining their systems. We can only wonder if there is anyone in this nutty state who can come to power and do what Governor Walker has done. I assure my readers we try to be as bi-partisan as possible. I don’t care whether a Democrat or Republican leads us from the swamp of over-spending, over-borrowing and crushing debt, I just want someone from our State to do it.

Immutable Engines Guaranteeing Financial Destruction of This State Until Removed

Last week I wrote about the worst-funded IL fake government pension I am aware of called GARS or the IL General Assembly Retirement System. A participant in GARS only has to work four years to become fully vested and entitled to constitutionally protected benefits for life. As I advised, for an investment of about $32K in total, the former legislator may receive several million dollars if they live long enough. Their retirement money will quickly come from you and me when the participant’s contribution, state match and investment income is rapidly exhausted. This financially destructive fake pension program could be ended in only four years by enacting legislation barring it for everyone but current participants.

A similar financially destructive engine is JRS or IL Judicial Retirement System. Participants pay a little more than GARS but the payout is wildly higher. If you aren’t aware, in my view, the IL judiciary is the best paid judiciary in the United State and your local traffic court judge gets paid more money than Governor Rauner, the IL Secretary of State, our Treasurer, any statewide official. Right now, judicial pay starts at over $200K a year and they retired at 85% of their highest salary with guaranteed annual compounded increases at 3%. Here is the math:

·         Judicial contribution to become fully vested equals their approximate annual pay or about $200K.

·         Return on the investment of $200K is paid at 85% or about $175K in the first year.

·         The second year of retirement, they have used up their entire 20-year pension contribution plus the state match and any investment income.

·         Third year, the judicial retiree is back on the taxpayer’s dime.

·         In their 23d year of retirement, the first year payout of $175K will have doubled to $350K a year.

·         Their pension will continue to triple, quadruple, if they live long enough.

·         I feel an IL judge could put in $200K and get $3-7 million back from you and me in fake pension payments.

If you want to be mad at me about reporting this, you are going to have to be mad because I don’t want to pay former judges who are no longer working, as judges. And I promise my math is accurate—if you want to be mad about me about the math, you are clearly blaming the wrong party. Like the GARS program above, this destructive financial engine could be ended right now but would have to continue to allow the current participants to get billions of our tax dollars over the coming years.

What Does This Have to Do With Workers’ Comp in IL State Government?

As I have told my readers for years, I have many sources that indicate there are hundreds of former IL State workers who are getting lifetime “odd-lot” total and permanent disability awards. The cost to taxpayers is well over $100M. Our WC rates for such claims are very high and there is also a COLA component paid for by you and me. This concept could all end very rapidly with an IL State law mandating our State retrain and rehire such workers at sedentary and light-duty state jobs when such jobs open up. There are hundreds of such jobs that are filled every day. While we are at it, why not mandate all police and firefighters getting line-of duty disability pensions also be put back to such work?

In short, we are almost certainly going to be raising taxes and adding new taxes to allow our leaders to “tread water” and pay some bills for now. If we don’t find and block/end these sorts of destructive financial engines, we are going to need to continue to raise taxes and add more taxes to then raise taxes again and add more taxes. The outflow of jobs and businesses to our sister states will continue and may accelerate.

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Synopsis: Chicago's 'Fair Workplace' Proposed Ordinance Needs to be Attacked by Business before Becoming Law—Please Join in the Fight!

Editor’s comment: We just saw Cook County add a stupid “soda” tax because they need money and people will fire them if they hike the County sales tax. What they do with such increases is to pass the law but sort of hide it from us until its effective date that may be months later. When we were getting ready to pay it, a judge blocked it—for now. Our vote on the “Fair Workplace” idea is to fight it before it becomes law.

Under this goofy new law, City of Chicago employers would be required to give workers at least two weeks' notice of their work schedules and pay their staffs extra for last-minute changes. Championed by the local branch of the United Food & Commercial Workers union and three alderman—Ameya Pawar, 47th Ward, Scott Waguespack, 32nd, and Toni Foulkes, 16th—the so-called Chicago Fair Workweek Ordinance mirrors recently enacted laws in New York, San Francisco and Seattle. Proponents of the ordinance cite hourly workers' desire for “predictability” in their weekly schedules, chiefly among employees in the food and retail industries. One has to wonder how such workers survived the unpredictability for the last several centuries in this industry.

Facts about the proposed ordinance:

ü  It would require Chicago employers to post schedules 14 days in advance and give employees an extra hour of pay, called "predictability" pay, if schedules are changed with less than a 14-day heads-up.

ü  f employees' hours are canceled or reduced with less than 24 hours' notice, employees could get up to four hours of pay for time they were expecting to work but did not.

ü  Additionally, a "right to rest" provision allows employees to decline to work scheduled hours occurring during the 11 hours following the end of a shift, and if they do accept such hours they must be paid time-and-a-half.

ü  The ordinance also requires employers to offer existing workers additional hours before hiring new employees.

ü  Penalties for violating the proposed ordinance, to be enforced by the Chicago Department of Business Affairs and Consumer Protection, could include fines of $500 to $1,000.

I hate when government tries to take over for private businesses, particularly in a State where our government bodies are so badly run. This proposed scheduling rule is just the latest in a series of local government mandates that add to the cost of doing business in Chicago. It follows close on increases to the Chicago minimum wage, which rose to $11 an hour this past Saturday, and new paid sick leave requirements.

If enacted, this ordinance would hamper employers’ ability to manage their business to account for seasonal fluctuations and unexpected changes in customer traffic. Employers would be on the hook to pay employees they don't need, or risk running their business short-staffed. When employees quit unexpectedly, business owners would be forced to incur extra costs in altering schedules to avoid being understaffed. The ordinance might also hurt those that it has set out to help, when employees find that they are far more limited in their ability to pick up extra shifts.

It's important to remember that many of the city's restaurant franchise owners, perhaps a group most likely to bear the brunt of any new "fair workweek"—are small businesses. The restaurant industry survives on razor-thin profit margins and is struggling with the increasing costs of doing business within Chicago. What rhymes with automate? If the ordinance is passed, employers in every affected industry will cut back on part-time hires, schedule fewer employees per shift, and offer less scheduling flexibility to employees. That's exactly what a market research firm finds happened in San Francisco, which implemented its ordinance in late 2014.

Our vote for our readers with operations in Chicago—contact your alderman or Chicago Mayor Emanuel and convey how happy you are with such shenanigans.


Synopsis: Who says you cannot deny TTD when an injured employee is terminated before MMI?  A brave new world or return to sanity?  Analysis and Reporting by Shawn R. Biery, J.D., MSCC.


Editor’s comment: In the recent future post Interstate Scaffolding, we have seen multitudes of cases in which TTD is being paid even after termination for cause based upon the holding which indicated generally that the Appellate Court would not consider the actual details of the cause. In most cases, this was difficult to avoid however we consistently advised clients that certain cases should be considered for litigation back to the Appellate Court to clarify the ruling in particularly egregious cases where payment of TTD really did appear to be unwarranted. Now, we get some case law to support our consistent recommendations to our clients and interested observers.


In Holocker v. IWCC (Komatsu America Corp.), No. 3-16-0363WC, 06/16/2017, the Illinois Appellate Court ruled that a worker who was fired before attaining maximum medical improvement for his industrial injuries was not entitled to temporary total disability benefits after he lost his job.


By way of background, Scott Holocker worked for the Komatsu America on crane duty when a chain broke loose from a crane he was operating September 2012, striking him in the face and chest. The blow knocked out four teeth and caused facial fractures.

Holocker missed one month of work, returning to light duty in October 2012 and full duty in December 2012. However, upon his return, Holocker requested he not be given any crane duties. He was obliged, and assigned to a position as a forklift driver in a building without cranes. Later in May 2013, Holocker was reassigned to a position in the building where his accident had occurred and he reported a panic attack in July 2013 when he attempted to operate the crane which had caused his injuries.


Holocker then asked to be reassigned to a new position, and his employer offered him a janitorial assignment which he refused. In October 2013, Komatsu fired Holocker after he missed three consecutive days of work without calling in sick. While he did undergo dental surgery the next month, his doctor excused him from work between Nov. 13 and Nov. 20 only based upon our reading of the facts.


Holocker proceeded on his WC thereafter and the arbitrator found Holocker was entitled to temporary total disability benefits from the date of his termination through the date of the arbitration but declined to any award of attorney fees or penalties. Both parties appealed, and the Illinois Workers’ Compensation Commission overturned the TTD award however the Circuit court later reinstated the arbitrator’s award.


The Illinois Appellate Court in their decision held the commission’s decision to deny TTD benefits after Holocker’s termination was not against the manifest weight of the evidence even though he had not yet reached maximum medical improvement at the time of his termination and in doing so, the court noted Holocker had been released to full-duty work and was back to work at his old job. It was also noted there was evidence Holocker remained employable, even with his work-related physical and psychological conditions. To quote the court, “Accordingly, there was ample evidence to support the commission finding that, at the time of his termination, the claimant's work-related injuries had stabilized to the extent that he was able to re-enter the workforce, and his injuries had no impact on his employment….”


While we are thrilled to see a common sense decision be made even though it is employer oriented, we also believe it could have been as easily noted that work was available and refused and find it to be an even stronger decision of the Appellate court which we hope is a signal that fair play is back with regard to legitimate issues surrounding disputes on return to work. In cases where an individual is committing theft, threatening co-workers or simply refusing to comply with offered accommodated work offers, we suggest there is new hope that you do not need to simply lay back and accept the non-compliance.


This article was researched and written by Shawn R. Biery. If you have questions about your return to work program or any cases with non-compliance regarding return to work or accommodations, please contact Shawn via email at sbiery@keefe-law.com  or via phone at 312-756-3701.