Part-Time Workers Mean Lower Wage Loss Claims

Monday, October 5, 2009 | 0

By Eugene F. Keefe

Synopsis: Wage loss claims are certain to force educated Illinois employers to start hiring on a half-time basis whenever and wherever possible.
 
Editor's comment: The numbers don't lie and in fact, we think they are sending a compelling message. We hope this staggering benefit can be reformed at some future time by our Legislature, but for now, we urge all of our readers to wake up and smell the coffee. We understand there is a cost to hiring lots of part-timers, but you have to balance that cost with spiraling workers' comp exposures. We assure you United Parcel Service and Wal-Mart are doing it for a number of defined reasons — one of them is workers' compensation costs.
 
As we advised our readers recently, Illinois wage loss differential claim exposures are sky-rocketing. The maximum weekly benefit for wage loss now caps at $932.25 per week. This means a wage loss claimant can be awarded as much as $48,477.00 per year for life. For a 35-year-old construction worker or truck driver with a 41-year life expectancy, they can work at the post-injury lower-paying job and also receive full undiscounted tax-free benefits of $1,987,557.00. They have to live the 41 years to receive all that cash, but lots of folks are now living until at least their normal life expectancies.
 
We are very confident Illinois business and industry aren't seeing such immense exposures quite yet, but they are coming to a claim or pile of new claims near you. Due to the recession, claims from the construction industry have slowed along with some slowing in the trucking industry. Also, we are presently getting rid of claims filed in years past. But the new wage loss claims are coming with a wildly high sticker price. Underwriters across the country who are looking at Illinois losses have to be pulling their hair out to see such largess.
 
For the mayors and city managers who read this Update, your sworn police officers and firefighters aren't eligible for such benefits due to the duty disability pensions they receive under the Pension Act. However, the math below directly impacts all other city, county, township and state workers.
 
Please also note in the Cassens Transport ruling, the Illinois Appellate Court made it very clear: it is technically impossible to reduce a wage loss ruling once set unless the permanent restrictions come off claimant's medical chart. The injured worker's income can later double, triple or exponentially increase above the amount they made when the award was entered — the commission and reviewing courts won't listen to such evidence and lower the award.

We consider this another way to demonstrate what a complete rip-off the 2005 Amendments to the Workers' Comp Act were — they told everyone Illinois business had up to 60 months to get such an award changed; they didn't tell everybody it would be technically impossible to ever lower an award.
 
The other defining feature of Illinois wage loss claims, assuming a compensable accidental occurrence and the "golden diagnosis" of permanent restrictions, is they are just about impossible to defend. To get an injured worker off your dime for life, you have to do one of two things.
 

1. Accommodate them and bring them back into your work force at the same or similar rate of pay.
2. Pay thousands of dollars to "vocationally rehabilitate" them into a similar paying job elsewhere.

• Carpenter/Registered Nurse/City truck driver makes $30 per hour for 40 hours a week.
• Weekly pay $1,200 per week.
• He/she falls and dislocates ankle.
• Doctors provide "golden diagnosis" of permanent restrictions: no ladders, no walking on uneven surfaces, effectively no construction work ever again.
• Injured worker returns to clerical/admin/cooking job at $10 per hour.
• Weekly pay after injury $400 per week.

• Carpenter/Registered Nurse/City truck driver makes $30 per hour for 20 hours a week, or part-time work
• Weekly pay at half time is $600 per week.
• He/she falls and dislocates ankle.
• Doctors provide "golden diagnosis" permanent restrictions, no ladders, no walking on uneven surfaces, effectively no construction work ever again.
• Returns to clerical/admin/cooking job at $10 per hour.
• Weekly pay after injury $400 per week.