3-27-2017; CTBA Confirms IL WC Reform Not A Crisis--What Do You Think?; Tim O'Gorman, JD Reports Important Ruling on Medical Bills-Penalties and more

Synopsis: Center for Tax and Budget Accountability (CTBA) Confirms IL WC Reform Not A “Crisis.” Whether You Agree Or Not, Take a Look.

Editor’s comment: I support Governor Bruce Rauner in his efforts to bring fiscal sanity to the moderately insane State of Illinois and City of Chicago. In my view, our State/City leadership has made numerous mistakes and misjudgments. Illinois and Chicago taxpayers are paying and will continue to pay a heavy price for this tragic and continuing government dysfunction. I agree something has to be done to protect our jobs, homes, schools, places of worship and lives in this state.

That said, Governor Rauner’s “Turnaround Agenda” regularly features workers’ comp reform as his number 1 or number 2 priority. Governor Rauner almost seems to make take the concept to “crisis” levels. I have literally no idea why, as workers’ comp reform or moderate cost-cutting should be

·         Easy for him to implement and

·         Should be the 33d thing he would care about in “turning around” IL State government.

Why Should It Be Easy for an IL Governor To Implement WC Reform?

Governor Bruce Rauner, and no one else in IL gov’t, completely controls the jobs of all of IL WC Chairperson Fratianni, the nine Commissioners and our Arbitrators! As I have said repeatedly, if the Governor wants to cut WC costs, all he has to do is send a memo, call a meeting or send up smoke signals telling the above administrators and hearing officers to bring the costs down. If they don’t do it and the results aren’t measurable in, let’s say a year, find others who will. Seems like a no-brainer to me.

While he is at it, we suggest he consider cutting the IL WC Commission’s budget along with the budgets of the other 87 state agencies. If he orders the Agency heads to cut costs, for example, 10, 15 or 20%, the impact on spiraling/skyrocketing debt would be almost immediate. I vote fire the IL gov’t agency heads that don’t get the message—seem easy, Gov?

Why Should WC Reform Be the 33d Thing in “Turning Around” IL State Gov’t?

We saw this brief study on the web from CTBA or the Center for Tax and Budget Accountability. We agree with some of it. If you look at the CTBA Board of Governors, you may see there are several union officials but there are also representatives of industry and government. We aren’t completely buying into all their concepts but we think you might want to consider their thoughts and research.

This is taken from http://ctbaonline.org/reports/turnaround-fact-sheet-1-workers-compensation. If you want their footnotes, please go to the link.

Turnaround Fact Sheet #1: Workers’ Compensation

About This Series

This is the first in a series of CTBA Fact Sheets reviewing the proposals in Governor Bruce Rauner’s “Turnaround Agenda.” These initiatives have taken on great significance in Illinois, given the Governor’s decision to make enacting his Agenda a condition of passing a final General Fund budget — something the state has failed to do in the first two years of Rauner’s gubernatorial term.

As many of the policies included in the Turnaround Agenda are not traditionally part of the state budget process, the Rauner Administration has justified their inclusion in a budget deal by arguing that they will speed economic growth, thereby increasing the tax base and easing the state’s revenue shortfalls.

This series will identify whether there is evidence to indicate that the individual elements of the “Turnaround Agenda” will promote economic growth, and identify how Illinois compares to other states in these policy areas.

1. INTRODUCTION

1.1 Workers’ Compensation Background

Workers’ compensation insurance plays two critical roles. First, it helps ensure that employees who are injured on the job and either unable to work (those with “total disability”), or are limited in their ability to work (“partial disability”), are not impoverished. Second, it limits the exposure of businesses to liability as a result of injuries suffered by their workers while on the job.

Originally mandated by state laws in the early twentieth century, workers’ compensation systems generally require employers to pay premiums to either public or private insurance funds.[i] In Illinois, these insurance funds are private.[ii] When an employee is injured, they are eligible to receive benefit payments based on a schedule set by state law. These schedules are generally prorated to a standardized measurement of the extent to which the injury limits the employee’s ability to work. In exchange for paying into this system, employers are protected from lawsuits alleging negligence leading to worker injuries, significantly mitigating their risk.[iii]

1.2 Workers’ Compensation Reform in Illinois

Workers’ compensation insurance has long been criticized by business groups, which claim that its premiums unduly burden employers, and therefore reduce employment and business growth. In 2011, the Illinois General Assembly passed, and Governor Pat Quinn signed, a major reform bill aimed at reducing workers’ compensation insurance costs by cutting reimbursement rates to medical providers by 30 percent, among other measures.[iv]

As part of his Turnaround Agenda, Governor Rauner has proposed further reducing the fees paid to medical providers, as well as limiting the benefits paid to workers. This would be accomplished by requiring that work activities be the “major contributing cause” of an injury. That is a much higher standard than current law, which simply requires that work activities be a cause of the injury suffered. In addition, Governor Rauner would narrow the types of work-related travel that are eligible for coverage under workers’ compensation.[v]

In justifying his workers’ compensation initiatives, Governor Rauner has identified increased economic growth as the intended outcome, maintaining that: “We need to make Illinois a growth state again. That means structural reforms to major cost drivers for businesses.”[vi]

However, there is very little independent research linking lower workers’ compensation costs to higher rates of employment or economic growth. In addition, the strategy of reducing the cost of workers’ compensation to employers by cutting worker benefits is dubious, as recent national trends show employer costs rising even as worker benefits fall.

2. Workers’ Compensation Costs in Illinois Versus Other States

2.1 Employer Costs

There are two primary ways to evaluate the costs of workers’ compensation: the direct costs to employers, and the benefits paid to covered workers. Since the goal of Governor Rauner’s proposals is to reduce employer costs, those will be analyzed first.

According to data collected by the National Academy of Social Insurance, worker compensation costs for employers in Illinois are slightly less than the national average. (For more on the choice of data in this Fact Sheet, see the Methodological Note.) In 2014, Illinois employers paid $1.31 in workers’ compensation costs per $100 of covered payroll, just under the national average of $1.32, as shown in Figure 1. However, employer costs in Illinois are higher than some other Midwestern states, which have workers’ compensation costs that are significantly below the national average, including Indiana ($0.85) and Michigan ($0.94). Wisconsin ($1.67) is a notable exception, with employer costs that are higher than Illinois’. Other large industrial states also tend to have higher employer costs than Illinois, such as New York ($1.44), Pennsylvania ($1.49), and California ($2.00).

2.1 Employee Benefits

As with employer costs, Illinois’ employee benefits are also just below the national average.

In 2014, Illinois workers’ compensation insurance paid $0.90 in benefits per $100 of covered payroll. The national average was $0.91. Meanwhile, the state’s Midwestern neighbors Michigan ($0.55) and Indiana ($0.49) had much lower benefits — among the lowest in the country — while Wisconsin ($1.00) had slightly higher benefits, as shown in Figure 2. Other large industrial states, such as New York ($0.97), Pennsylvania ($1.08), and California ($1.32), also have higher worker benefits than Illinois.

2.2 The Divergence of Employer Costs and Employee Benefits

This distinction between employer costs and worker benefits is important, as the reforms proposed by the Rauner Administration aim to shrink costs to employers by further reducing benefits to workers. However, as Figure 3 shows, worker benefits per $100 of covered payroll have fallen precipitously in Illinois between 2010 and 2014, dropping over 20 percent from $1.13 to $0.90. But at the same time, employer costs have fallen just 4.4 percent, from $1.37 to $1.31 per $100 of covered payroll. In other words, for each one percent decline in worker benefits, employer costs have fallen just 0.2 percent.

Even more strikingly, while workers’ compensation costs for employers in Illinois have been declining, employer costs nationally have actually increased by 8.2 percent. Moreover, that national spike in workers’ compensation employer costs occurred despite the fact that worker benefits fell by 10 percent over the same period. In other words, substantial reductions in worker benefits have been associated with very weak declines in employer costs in Illinois, and increases in employer costs nationwide.

Therefore, the assumption that reducing benefits for injured workers will result in concomitant reductions in workers’ compensation premiums for employers is simply not supported by the real world evidence. This is troubling, given that the Rauner Administration’s proposed reforms make precisely this assumption, and rely on lowering worker benefits as a path to reducing employer costs.

3. Research Shows Little Connection Between Workers’ Compensation and Economic Growth or Employment

Workers’ compensation reform, though not a budgetary issue in the sense that it is not directly related to state expenditures or revenues, has nevertheless been included as part of the “Turnaround Agenda” that the Rauner Administration says must be part of any agreement to end Illinois’ budget crisis. The Administration argues that workers’ compensation is crucial to any budget solution because it will spur economic and employment growth, increasing the size of the state’s tax base.

This argument, however, does not appear to be supported by independent analysis of the link between workers’ compensation costs and economic growth. In fact, there has been surprisingly little research on the question.[vii] But what has been done mostly suggests that there is no significant link.

In a 2005 paper, the Federal Reserve Bank of Kansas City found that “workers’ compensation costs are not a likely cause of jobs woes in most states.”[viii] The paper found that a 10 percent increase in workers’ compensation benefits reduced employment by just 0.11 percent, and wages by 0.10 percent. By contrast, gas prices had a five times greater effect on wages. A 10 percent increase in employer costs reduced employment by even less — 0.07 percent, with an even smaller effect on wages. The author concluded: “Recent claims by policy makers, businesses, and chambers of commerce that workers’ compensation costs are driving away jobs probably is unwarranted.”

Another study by researchers at Marshall University’s Lewis College of Business found that in nearly half of all states, there was no correlation between workers’ compensation benefits and economic development. Furthermore, even in those states that showed a statistically detectable correlation, the authors concluded that “the impact is so small that it is economically insignificant.”[ix]

Moreover, according to the Workers’ Compensation Research Institute, an independent research organization based in Cambridge, MA: “Our researchers note that workers’ compensation is a very small percentage of total compensation, so the impact of changes in workers’ compensation on a state’s fiscal health is presumably negligible.”[x]

It is necessary to go back to the early 1990s to find a study that suggests that higher workers’ compensation costs have economically significant effects on employment.[xi] And that study was undertaken at a time when workers’ compensation costs nationwide were significantly higher than today, and so presumably a more important cost factor for businesses. Indeed, between 1994 and 2014, workers’ compensation costs fell by 57 percent.[xii] Since that significant national decline in workers’ compensation costs, research has found no meaningful correlation between workers’ compensation costs and economic growth.

4. Conclusion

Governor Bruce Rauner’s “Turnaround Agenda” has made workers’ compensation reform a major priority for any Illinois budget deal. Although workers’ compensation does not directly affect state expenditures or revenues, the Rauner Administration has argued that reducing workers’ compensation costs for employers is key to improving the state’s economic growth and building the tax base. The Governor proposes to reduce employer costs principally through cutting benefits for injured workers.

CTBA’s review of the evidence suggests that this plan is flawed in a number of ways. First, recent trends show that the connection between worker benefits and employer costs is weaker than is often assumed. Between 2010 and 2014, worker benefits in Illinois fell by over 20 percent, but employer costs fell just 4.4 percent. At the same time, employer costs actually increased nationwide, despite the fact that worker benefits declined. There is no evidence that further reductions to worker benefits will yield significant savings to employers.

Furthermore, most independent studies have found that there is no economically significant relationship between workers’ compensation costs and either economic growth or employment. This seriously calls into question the appropriateness of making workers’ compensation reform a critical part of a budget deal.

Methodological note

Reports on workers’ compensation costs by state commonly cite either the National Academy of Social Insurance (NASI) or the Oregon Department of Consumer and Business Services (Oregon DCBS). NASI and Oregon DCBS use different methodologies that lead to sometimes widely differing results. Specifically, Oregon DCBS creates an index of workers’ compensation employer costs based on a sample of 50 industries common to Oregon, and then applies weights based on the industry mix of Oregon’s state economy.

Because workers’ compensation costs vary substantially by industry, these weights and sampling are significant. For example, Illinois’ workers’ compensation cost ranking is quite high in industries related to logging (it has the highest costs of any state in the Saw Mill sector, for example), but is much lower in some other areas (34th highest costs in Clerical Office Employees, and 36th in Home/Public Healthcare, according to Oregon DCBS). A weighting system that reduces the significance of Clerical Office Employees and increases the significance of Saw Mill workers will make Illinois’ workers’ compensation costs appear to be higher.

The Oregon DCBS itself warns that “Because not all premium classes were included in the study, the actual average premium rate for a state will differ from the weighted premium rate index, which is based on the characteristics of Oregon’s economy. If different classes had been selected, or payroll from a state other than Oregon had been used to weight the rates by class, the results would be somewhat different.” (Emphasis added.)

The NASI data, on the other hand, report true average costs and benefits based on the existing industry mix in each state. For that reason, CTBA has chosen to use NASI data in this report.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: If An IL Claimant Wants Penalties/Fees on Medical Bills, They Have to be Tendered! IL WC Appellate Court Overturns 19L Penalties Awarded by the Commission.

Editor’s comment: In Brittany Theis v. IWCC, No. 1-16-1237WC, issued March 17, 2017 was originally tried before the Arbitrator in April 2014. Shortly thereafter, an award was issued for permanency, temporary total disability and medical bills. Neither party appealed and after the award became final. Thereafter, Petitioner’s counsel filed a petition for 19K and 19L penalties and Section 16 fees before the Commission for non-payment of the award. These penalties/fees could have dramatically increased the award by approximately 70% of the amounts owed!

Petitioner’s allegation claimed medical bills which were awarded at trial had not been paid for several months following the decision becoming final. Petitioner, until October 2014 about six months after the award became final, repeatedly refused to “tender” medical bills to opposing counsel as required by the IL WC Act and simply submitted them for the record at earlier hearing. Petitioner counsel’s unusual argument was it was incumbent upon Respondent counsel to order a copy of the arbitration transcript or subpoena Petitioner’s providers to obtain full copies of all medical bills including needed documentation.

It was admitted during oral arguments that Petitioner’s attorney had not provided copies of Petitioner’s exhibits to Respondent, prior to, during or subsequent to the trial commencing. No reason for failure to tender copies of the bills was outlined in the record.

Respondent presented arguments and evidence submitted for the record specifically addressing this argument. Respondent argued it was Petitioner herself who created any delay in payment by failing to “tender” medical bills to Respondent or its counsel. This conclusion is one that utilizes common sense; how can a Respondent subpoena medical bills when they may not even know which medical providers Petitioner may have been seen by? Furthermore, the IL WC Act and prevailing case law is extremely clear as to the burden of proof resting upon Claimant. Requiring Respondents/insurance carriers to seek out medical bills unilaterally would impermissibly shift the burden of proof.

The Commission panel agreed and specifically found Petitioner herself was the cause of the delay in tender and payment of the medical bills. They confirmed the IL WC Act specifically requires a Petitioner “tender” medical bills prior to the accrual of any liability for Section 19K and 16 penalties/fees and by refusing to send these medical bills to Respondent, Respondent’s insurance carrier or Respondent’s counsel, Petitioner could not “hide the ball” and collect 19K penalties or Section 16 fees as a result of her inactivity.

Despite coming to this very specific conclusion, the Commission confusingly awarded 19L “late fee” penalties from the date of the award through the date the bills were eventually paid per the IL WC Medical Fee schedule. This period of time included several months where Respondent did not even know bills were still outstanding as they had not been presented with copies of any allegedly unpaid bills.

Respondent appealed to the Circuit Court and argued the Commission’s decision was inherently contradictory. The Commission appeared to have come to a very specific conclusion that a Petitioner should not be able to hide medical records from a Respondent and expect to collect penalties. Then the Commission panel contradictorily awarded 19L penalties.

The Circuit Court agreed with Respondent’s common sense arguments and vacated the award for penalties finding the Commission’s decision was against the manifest weight of the evidence and based upon the Commission’s own findings and conclusions, 19L penalties would be inappropriate.

The IL Appellate Court, WC Division agreed in their ruling in Theis v. IWCC. Petitioner cross-appealed the decision of the Circuit Court and again attempted to argue that Respondents should be expected to prove a negative. According to Petitioner, a Respondent should be held responsible for obtaining medical bills, possibly without knowledge of all medical bills existing and relying solely on a providers’ custodian of records that bills may be complete and provide needed documentation to allow processing.

This argument begs a number of questions. If a Respondent is expected to subpoena medical bills, when would the clock begin to run on penalties? At the time the subpoena is issued? What if a provider is non-compliant? Should the deadline start at trial? At the time a transcript is order or received? The purpose of this ruling may be to simplify future proceedings and provide concrete answers. This Court came to the abundantly correct conclusion in answering these questions as “none of the above.” The penalty clock should only begin to run after medical bills are “tendered” to a Respondent, as the Commission had stated originally. The IL WC Appellate Court affirmed the finding of the Circuit Court and vacated all penalties awarded as the Respondent had an adequate justification for the delay of bill payment, namely that Petitioner created the delay.

We appreciate your thoughts and comments. Please post them on our award-winning blog. This article was researched and written by Timothy O’Gorman, J.D. You can reach Tim with questions, concerns or to assign new claims at togorman@keefe-law.com.

3-20-2017; As IL/Chicago March to Financial Armageddon, Can I Suggest One IL WC Reform?; Consider Ascent Risk Mgmt for Modified Duty Off-Site Placement; OSHA Budget Changes and more

Synopsis: As Illinois and Chicago Continue Their March to Financial Armageddon, Can I Suggest One Simple WC Reform?

Editor’s comment: The financial headlines for our Illinois/Chicago governments are imposing. In the last ten days, we were advised our

ü  State’s unpaid bills are now more than $13 billion dollars. That is $13,000,000,000 in the red!!! The unpaid amount is spiraling up at least $11 million every day. While a State can’t be “bankrupt,” to me, not paying your bills is the same thing.

ü  The State has over $130 billion in gov’t pension debt that continues to spiral up as part of the immutable math of 85% fake gov’t pensions with 3% compounded annual increases;

ü  Illinois’ State University system has a budget of $4 billion and ½ of their entire annual budget amount is spent solely on their unfunded and unfundable gov’t pensions.

ü  The City of Chicago is going to pay over $1 billion dollars in interest on the money they have borrowed to run their crazy and precarious government.

ü  The City is increasing any tax they can hike and trying to impose new taxes on anything that isn’t moving rapidly.

ü  As bad as the City of Chicago’s financial plight might be, the Chicago Public Schools may be even worse—they need $500 million by June 30 and they don’t have it. We are unsure whether anyone will underwrite another one of their crazy almost-junk-bond-offerings.

What caused this morass of debt and financial danger? I call it a “benefit-ocracy”—our leaders spend billions on government workers to get their help and support to be re-elected and re-elected again. We can’t get rid of IL House Speaker Madigan because all of the supporters in his District have something like three government jobs and four unfunded government fake pensions. When you are raking that much in from taxpayers, why wouldn’t you remain loyal to your benefactor?

So What Does This Have to Do With IL Workers’ Comp?

Well, our workers’ comp system has a crazy concept that needs to be dumped, oops, we mean reformed one of these days. It is called an “odd-lot” total and permanent disability award. There is no “even-lot” that I am aware of. I often call it a “lazy-lot” total and permanent disability because it encourages and rewards whining and sloth. The words “odd-lot” don’t appear in the IL WC Act--these court-created benefits might be one of the most pricy things in all of this state’s expensive workers’ comp system. I assure you getting such an award is tantamount to what you might receive for winning the lottery. Here is one example of how it works.

Take a IL state prison guard, oops, we mean corrections officers. Let’s make our example guard Sandy Smith, 25 years old. Let’s assume Sandy is unfortunately attacked by inmates and before extricating herself, she suffers a shoulder injury that turns into an operated shoulder with moderate restrictions. Let’s assume Sandy Smith undergoes one of the dumbest tests in IL WC an FCE or functional capacity evaluation. As part of the testing, Officer Smith is now limited to lifting no more than 20lbs. That limitation means she can no longer work as an active correctional officer.

One would think our nutty state government system would bring her back to work in an administrative capacity, right? Well, that almost never happens in this state. Well, wouldn’t plan B mean that would put her into any other sedentary state job for with former Officer Smith might be suited? Heck no, we don’t do that. We kick her out into the private workforce and tell her to locate work on her own. She does a miserable job finding work and never locates anything.

What happens then? Well, we call such folks “odd-lot” total and permanent disability. If former Officer Smith was making $70,000 a year when injured, her total and permanent disability rate would be a tidy $897.43 a week or $46,666.26 on a tax-free basis every year to start. But don’t stop there—she is also entitled to RAF or Rate Adjustment Fund benefits paid for out of a fund wholly supported by Illinois business. That fund will give her COLA increases every year for literally the rest of her life.

Remember, the main rule in Illinois is, in a benefit-ocracy, retired people eventually make double, triple, quadruple or more what they made while working. Former Officer Smith can expect to be making over $90,000 a year during the 23d year of “retirement” as an odd-lot total and permanent disability claimant. She will be 48 years of age at the time. In 23 more years, simple math indicates she will again double her income to about $180,000. She will be 71 years old. And 23 years later, when she is 94, her annual income from taxpayers will be over $300,000!! If you aren’t sure, the combined payout on such a claim, involving one surgery to one shoulder could be $5-10 million dollars or more in lifetime benefits.

Now try to imagine numerous IL State workers who are getting these benefits with regular annual increases. We could stop any and all of them if the State would simply bring them back to sedentary or light work when it became available. We could also stop this silliness to reform the IL WC Act and dump the whole concept.

So How Does This Affect the Private Sector?

In Personnel Staffing Group d/b/a Most Valuable Staffing v. IWCC, Claimant was a staffing worker whose back went out on him. He got one surgery to one level of his spine at one of our top hospitals in Chicago’s west suburbs. Claimant uneventfully recovered from surgery and was provided an office or desk job at the employer’s office.

Claimant testified in order to get to the employer's office for work, he had to take the bus. He asserted it took him 20 to 30 minutes to get to the bus stop because he claimed it was “very troublesome” for him to walk and he was required to stop frequently. The bus ride itself to the office took about 40 minutes. Petitioner claimed riding the bus also caused him discomfort because he had to get up frequently and the shaking of the bus when it hit potholes caused him further pain. Once the bus left him off at this stop, Claimant testified it then took him 20 to 30 minutes to get from the bus stop to the office.

Claimant worked at the employer's office for three months and then stopped because he claimed he wasn't able to do it anymore. At least one of the doctors in the treatment group that provided care to Claimant strongly contradicted his tales of woe and confirmed this medical chart showed a single surgery to a single level of his spine. This surgeon asserted there was literally no scientific basis this man can’t and isn’t working right now.

Back and forth and forth and back, our IL Appellate Court recently affirmed an “odd-lot” total and permanent disability for this whining claimant. His benefits were about $25,000 a year on a tax-free basis and in the next twenty-three years, those benefits will double and later quadruple. If you ask me, we have to take a long, hard look at claims like this and stop listening to subjective complaints and look solely at objective evidence of disability.

In my view, the IL WC Appellate Court ruling, that was “non-published” or somewhat hidden by the panel, reads like a brief for Claimant. The five justices join in the unanimous opinion confirming Claimant doesn’t have to walk to the bus and ride on it if that somehow makes him sore. Who cares if it costs an Illinois business millions of dollars?

It is also my view, if Claimant wasn’t receiving our largesse, he can and would be working right now. Instead the cost to his employers and the businesses that pay into the RAF may be well into the millions. “Odd-lot” total and permanent disability claims are like Illinois and Chicago’s goofy government pensions—they start relatively small and become very expensive to finance and pay.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: How to Avoid “Odd-Lot” Total and Permanent Disability Claims with Ascent Risk Management.

Editor’s comment: We learned of the team at Ascent Risk Management from a client who recommended their MDOS or Modified Duty Off-Site program.

Ascent Risk Management focuses on the big picture of reducing workplace risk through a holistic approach. Just managing claims is the bare minimum for employers who want to create a better world for their employees.

Ascent Return-To-Work Plus

The Ascent Return-to-Work Plus (Modified Duty Off-Site) program provides options to employers who are unable to accommodate temporary light duty restrictions for their employees. Ascent partners with nonprofit organizations who have agreed to accept injured employees during their recovery process. This promotes healing and allows the employer to give back to the community.

Official Disability Guidelines

Ascent utilizes the nationally recognized Official Disability Guidelines (ODG) to benchmark and identify unnecessary disability. We work as part of your team to deliver positive RTW outcomes.

Solid and Rapid Job Placements for Injured/Disabled Workers

Ascent does placements with Nationally Recognized Organizations. They are 99% successful with placements. Statistically, they can do timely placements--35% in 24 Hour; 40% in Two Business Days

47: Average Number of Days Employees Are Placed at a Nonprofit Organization.

Savings Opportunities—rapid job placements of this nature reduce indemnity costs/reserves; reduce medical costs because someone who is working isn’t going to a doctor to justify being off work. Their assistance also lowers OSHA recordable lost days.

Ascent also has the capability to provide electronic timesheets.

For more information, go to http://ascentriskmanagement.com/

Synopsis: Proposed Federal Budget May Allay Fears About OSHA’s Rules and Punitive Enforcement Under the Prior Administration.

Editor’s comment: We have been repeatedly asked about the many rules and expensive citations that came from OSHA under the former administration and whether our clients and readers have to adjust to the rules that remain in place. The news from Washington D.C. appears to indicate your company or local government isn’t going to be hit with lots of OSHA citations under the current administration, as there may not be anyone around to issue them after the budget cuts take place.

A proposed "budget blueprint" released by the current administration will eliminate funding for 19 federal agencies.

The budget cuts, which would offset a proposed $54 billion increase in defense spending, would hit nearly every federal department. The Department of Labor, which includes the Occupational Safety and Health Administration, would face a $2.5 billion, or 21%, budget cut. The budget for the Department of Health and Human Services would be slashed by $15 billion, or 18%.

The OSHA defense team at KCB&A is involved in workplace safety and we have been keeping a close eye on changes at OSHA, where the focus under the new administration is expected to shift from enforcement to compliance assistance, and the agency has already shown signs of doing implementing that model.

Within the Department of Labor, OSHA training grants are targeted for elimination, which would save about $11 million. Instead, the OSHA budget would focus the agency “on its central work of keeping workers safe on the job,” the document states. Although not specifically identified in the budget blueprint, the OSHA training grants are likely the Susan Harwood grants, which used to award $10 million to $11 million per year.

In other sections of the proposed federal budget, certain programs at HHS would receive a funding boost, although funding for the department overall would be cut. The proposed budget would add $500 million for opioid abuse prevention and treatment services within HHS. The Health Care Fraud and Abuse Control program within the Centers for Medicare and Medicaid services would receive an additional $70 million. The budget document says that the former program's return on investment has been $5 for every $1 spent.

The current administration also issued a regulatory freeze, calling for a retraction of any regulations that had been sent to, but not yet published, in the Federal Register. Other regulations will have effective dates postponed so that they can undergo additional review.

There is also an executive order for agency heads to develop reorganization plans within 180 days, which could lead to the elimination of what the order calls unnecessary agencies, components of agencies and agency programs.

We will continue to closely watch what happens at OSHA and report as news develops. We appreciate your thoughts and comments. Please post them on our award-winning blog.

3-13-2107; Can IL WC Drop Court Review of Claims; OSHA Rules--Will They Change Under New Administration; Anti-Staffing Legislation in Springfield and more

Synopsis: One Baffling IL WC Appellate Ruling After Another--Could Both Sides in IL WC Agree to Drop Court Review?

Editor’s comment: With respect to the five members of the IL Appellate Court, WC Division and the Circuit Court judges who hear WC appeals, I want to confirm my new position our State would be better served to have our work comp claims adjudicated only by the IL WC Commission—Arbitrators at the first hearing level and one of the three Commission panels thereafter. When that is done, game over.

If you or the lawyers who read this KCB&A Update consider this an unusual stance, please note the two levels of hearing is precisely what is accorded to state workers—right now, they are not allowed to appeal to the courts. Somehow they deal with what they get from just two levels of hearing. I vote expand that streamlined model to all WC claims in this nutty state.

I am confident our State might save literally millions to do so. I am also sure the Arbitrators and Commissioners could do a solid job of making reasonable work comp decisions and we wouldn’t have to concern ourselves with the almost endless time it takes to get a final decision in a jurisprudence system that allows five, count ‘em, five different WC hearing levels.

As an example, in a recent ruling in Crittenden v. Illinois Workers' Compensation Comm'n, 2017 IL App (1st) 160002WC (issued February 24, 2017) our Appellate Court, WC Division ruled on a claim arising in 2008, nine years ago. The outcome of their unanimous decision was to send the whole thing back all the way to the Commission with instructions to restart everything, consider new evidence and create a whole new ruling. What? Why? Will this claim end by 2028?

The IL WC Appellate Court ruled our IL Workers' Compensation Commission erred in its method of determining average amount which Claimant Crittenden is able to earn in some suitable employment or business after work-related accident. The Court decision may indicate to me the City of Chicago didn’t truly defend itself in citing jobs this worker could perform and wages he would be earning if he was working.

The other side called an expert whose report was offered into evidence without objection from the City’s Corporate Counsel. As I have advised my readers for years, under the auspices of the politically powerful Alderman who runs the City of Chicago’s workers’ comp program, the City does a miserable job of “defending” itself from such claims. I feel his goal is to insure all city workers get amazing and unfundable pensions or other post-employment benefits, like police/fire disability and workers’ comp benefits. In this situation, Claimant would be entitled to about $250,000 for “wage loss differential” benefits even though the record doesn’t indicate he has an actual job from which to evaluate wage loss. We always ask our students how one can measure wage loss benefits for someone that doesn’t have a wage.

The Court ruling confusingly indicates if Claimant is not working at time of “wage loss” calculation, our IL WC Commission must identify, based on evidence in the record, an occupation that claimant is able and qualified to perform, and apply average wage for that occupation to wage differential calculation. Claimant is now required to introduce evidence sufficient for Commission to identify a specific occupation that Claimant is able and qualified to perform and the average wage for that occupation.

What is unusual about the paragraph above is Claimant presented the evidence “required.” The Arbitrator found the vocational experts agreed that cashier and customer service jobs should be targeted for Claimant and Claimant earned $11.00 per hour when he left his part-time job at Target. Additionally, the Arbitrator noted Claimant’s expert gave a range of projected earnings of $8.25 to $13.78 per hour. The arbitrator then stated "[t]he arbitrator selects $11.00 per hour as a reasonable wage. On appeal, the IWCC looked at the same evidence and ruled $13.78 per hour was a reasonable wage.

So case closed right?—not so fast, not so fast!!! The Appellate Court reversed and remanded for an all new hearing. By now, the prior job at the City for Claimant has gone up in pay and any cashier and customer service jobs also have increased in pay. In short, I have no idea what the Appellate Court means in the paragraph above or why they are again seeking new facts and evidence. It would appear to me the goal is to stick the City with an even higher wage loss differential award than about $30,000 a year for life.

If you understand this decision, please send me your explanation—I have been reading, writing and teaching workers’ comp in this state for almost four decades and I truly don’t understand the intent, meaning and purpose of this baffling appellate ruling.

Only in Chicago and the State of Illinois does it appear that our courts want to stick it to taxpayers as hard as we do in this state. If you aren’t sure, the City is bordering on actual bankruptcy while the State of Illinois is, for the lack of another term, already ‘bankrupt’ to the extent they aren’t paying their bills to the tune of over $12 billion, yes, billion. The credit rating for both governments is about a scintilla above a smoldering junk heap.

In short, I vote we stop clowning around with years of uncertainty in IL WC claims—cut out the reviewing courts for all claims and let the IWCC come to the point much quicker and faster.

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Synopsis: OSHA’s New Reporting and Anti-Retaliation Rule Now in Effect—Will the Current Administration Leave It All in Place??

Editor’s comment: OSHA recently implemented its new "reporting and anti-retaliation rule", which went into effect January 1, 2017. When our current President took over, I predicted some of this stuff would change. His appointment for the first candidate to head the U.S. Department of Labor voluntarily withdrew from consideration and the second candidate--Alexander Acosta—is facing Senate consideration this Wednesday.

From the foxhole in which we are deployed, new leadership for OSHA under Mr. Acosta may cause changes to what you are reading right now. Until we have a better idea of how OSHA will work under him, we will have to continue to adjust. Please watch this space for news on any changes to the OSHA rules outlined herein.

Under the new rule, major U.S. employers must now submit injury and illness information electronically. Most employers were already required to keep records of work related illnesses and injuries and to report fatalities and other certain serious injuries. However, under the new rule, companies that employ 250 or more employees must electronically submit the

Ø  OSHA Form 300 (Log of Work Related Injuries and Illnesses);

Ø  OSHA Form 301 (Injury and Illness Incident Report); and

Ø  OSHA Form 300A (Summary of Work Related Injuries and Illnesses) on a quarterly basis.

Companies in the construction, manufacturing, utilities, and agriculture industries, which have historically high rates of occupational injuries and illnesses, must submit OSHA Form 300A annually when they employ between 20 and 249 employees. Additionally, OSHA may provide written notification to smaller employers requiring them to submit information on a routine basis electronically.

The anti-retaliation rule allows OSHA to cite employers for taking adverse action against employees for reporting a work related injury or illness, even if the employee does not file a retaliation complaint. It also allows OSHA to cite employers who have systems in place that have been used to create safer workplaces, but OSHA now says may discourage injury reporting.

In this controversial rule, OSHA specifically address concerns regarding safety incentive programs and post-accident drug and alcohol testing.

OSHA asserts U.S. employers may perform post-accident drug and alcohol testing only where

(1)  there is a reasonable possibility the employee’s drug and alcohol use contributed to the incident and

(2)  the drug and alcohol test can accurately identify impairment was caused by the drug use.

On the other hand, OSHA states it is unreasonable to drug test an employee when it is clear drug or alcohol use would not have made it more likely that the injury would occur, such as insect bites and repetitive strains occurring over a long period of time) OSHA’s reasoning was allowing employers to “blanket” drug and alcohol test after every accident/injury would somehow discourage employees from reporting injuries and work-related exposures. Safety incentive programs such as cash bonuses for departments or employees that remain accident free were also prohibited. OSHA claims employees who were injured or ill might be reluctant to report a problem because they would be afraid their co-workers would retaliate against them for not getting the safety incentive bonus.

OSHA can fine employers up to $12,471.00 for a single serious violation and up to $124,709.00 for willful or repeated violations. Therefore, all employers need to review their injury-illness reporting requirements, post-accident drug and alcohol testing protocols and safety incentive programs.

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Synopsis: Important News from the American Staffing Association--Oppose Illinois HB 690—Contact Your Legislators TODAY!!

Editor’s comment: KCB&A represents a number of great staffing companies. We want all of them and our readers to know of this new anti-business legislation.

This shocking new proposed IL law would impose notice requirements, wacky wage mandates, and problems for all IL Staffing Firms.

The Illinois General Assembly is considering amending our State’s Day and Temporary Labor Services Act, which applies to temporary workers other than clerical and professional employees, in a manner that would have a devastating effect on the state’s staffing industry.

Among other things, HB 690 would

      Require a staffing firm to provide a temporary worker with 48 hours advance written notice of schedule changes to multi-day assignments

      Require a staffing firm to ascertain and keep records on the ethnicity of each applicant

      Require a staffing firm to provide applicants with signed written notices of the date, time, and location that they applied for employment

      Require a staffing firm to provide workers with return transportation if such firm provides transportation to the work site

      Require staffing firms to inform temporary workers of conversion fees to clients

      Prohibit a staffing firm from charging temporary workers for drug tests, criminal background checks, and consumer reports

      Require temporary workers to receive the same average rate of pay and benefits as clients’ employees doing substantially similar work

      Impose a rebuttable presumption of retaliation upon any firm that terminates or disciplines a temporary worker within three months of any exercise of the worker’s rights

These operational and other burdens would greatly harm staffing firms’ operations and destroy jobs.

Because the Illinois House Labor and Commerce Committee is holding a hearing on the bill this Wednesday March 15, it is imperative that you contact your legislators immediately.