Employment Law Information

Workers compensation is a system that is designed by law to pay certain benefits for injuries and diseases that are work related without regard to fault. A governmental agency known as “the Illinois Industrial Commission” is in charge setting rules and resolving disputes of both injured workers and employers.

All employees of Illinois employers are covered immediately after hire. The law states that any injury that is caused in whole or in part by the employee’s work is covered. This includes also any pre existing condition that is aggravated by work.

Benefits provided under workers comp include medical care required to cure the injury plus certain disability income benefits, as well as vocational rehabilitation benefits. There is also death benefit for surviving family members if the injuries lead to death of the worker.

All employers in the State of Illinois are required to maintain workers compensation plan (either self insured with permission or purchase a workers compensation insurance policy). Employers are also required to pay 100% of the cost of the workers compensation insurance. Benefits that are paid to injured employees are not taxable to the employees. Employers are also required to maintain records of all work related injuries. All employers should post a notice in each workplace that explains workers rights under the Workers Compensation Act and list details of employers coverage.

Employers who fail to provide workers comp coverage for their employees because of negligence are guilty of Class A misdemeanor for each day without coverage, punishable by up to 12 months in jail and a $2,500 fine. If an employer knowingly fails to provide workers comp coverage then the employer is guilty of Class 4 Felony for each day without coverage, punishable by up 36 months in prison and $25,000 fine. The State can also close down the employer’s business place if the employer knowingly fails to provide workers compensation coverage.

An injured employee must report the work related injury to the employer’s management orally or in writing as soon as possible but not more than 45 days of the injury. Reporting an injury to a co-worker is not acceptable. Employer must provide all first aid and medical care, inform workers compensation insurance carrier, begin making disability payments if disability is expected to last more than 3 days. If employer disputes the injury, a written explanation must be provided to the employee.

Fraudulent statements made by employers or employees regarding workers compensation is classified as Class 4 Felony and are punishable by up to 36 months in jail and $25,000 fine.

Premium of workers comp coverage is based on several considerations: (1) Payroll or wages of employees- it determines the amount of exposures of the insurer to potential future disability payments when there is an injury. (2) Nature of work – cost of workers comp for construction workers is significantly higher than office employees. (2) Wages- Payroll- it determines the amount of exposures of the insurer to potential future disability payments when there is an injury. (3)Historical Claims. Previous claims means potentially higher premiums or even rejection by certain private insurers- up to a limit. If insurance companies refuse to insure a particular employer because of past claims or because of the nature of the business, the employer may have to go to the workers comp pool (National Council on Compensation Insurance) to secure the needed coverage.

Premiums for workers compensation policy are always estimates. Because the insurance company will be covering all of your employees in the future, no premium can be exactly determined until the end of the policy term at the time when the insurance company can audit your payroll. At the end of the policy term if the actual payroll that the employer paid in the past 12 months is equal to the payroll the employer reported as projected payroll at the time of buying the policy then there will be no difference in premium. However, if the employer over-projected the payroll at the time of obtaining the policy then the company may owe the employer a refund. If the employer under-projected the payroll at the time of signing up for the policy, the employer may have to pay more premiums to the insurance company for past coverage.

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