Workers’ Compensation and Employers’ Liability
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Transcript of Workers’ Compensation and Employers’ Liability
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Workers’ Compensation and Employers’ Liability
Who is an Employer?
Employer Liability Under Common Law
State WC Laws
Common Features
Types of Injuries
Illinois WC Benefits
Federal Compensation Laws
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Who is an employer?
Characteristics of employers
Engages the services of individual
Fixes hours
Provides tools
Defines methods and means
Employer versus independent contractor
Proprietors and partners are not employees
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Employer Liability Under Common LawEmployer’s Duty of Care
Provide a safe place to work
Provide an adequate number of competent fellow employees
Provide safe tools and equipment
Warn the employee of inherent dangers
Make and enforce rules for the safety of all employees
Common-Law Defenses
Assumption of risk
Contributory negligence
Negligence of fellow employee
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State Workers’ Compensation LawsOriginally held unconstitutional
Maryland 1902 - unconstitutional
Federal law 1908 - provided new benefits
New York 1910 - unconstitutional
Wisconsin 1911 - upheld
New York 1913 - upheld
Principles of WC Laws
Prompt payment of determinable benefits
Elimination of delays and reduced costs
Guarantee of benefit payments through insurance
Promotion of safety
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Common Features of Compensation LawsChoice of Law
Employee chooses which benefits to receive if more than one state law applies:
State where injury occurred
Location of usual employment
Where employee was hired
Persons and Employments Covered
Covers employees and not independent contractors
Exception - must cover employees of uninsured independent contractors
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Common Features of Compensation Laws
Description of Injuries and Diseases Covered
Injury must be caused by accident arising out of and in the course of employment
Disease must be covered by the statute as one that normally results from the nature of the employment and exposure to the disease must arise from employment
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Common Features of Compensation Laws
Benefits Provided
Indemnity payments for time lost from work
60-75% of wages
Tax free
Maximum set by state
Payment for medical services
Unlimited
No deductibles or coinsurance
Rehabilitation services
Death benefits
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Common Features of Compensation LawsMethods of Financing Benefits
Private insurance
Insurance through assigned risk plans
Insurance through state funds
Qualified “self-insurance” plans
Excess insurance
Procedure for Obtaining Benefits
Notification requirements
Administration
Courts
Special commission
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Third-Party ClaimsApplies when employee eligible for WC benefits was injured by the tort of a third partyEmployee has three choices:
1 Sue the third party
Can file for WC benefits if unsuccessful
2 Accept WC benefit
Employer is subrogated to rights of employee against third party to extent of WC benefits
3 Accept WC benefit and sue third party
Employer has lien on proceeds of recovery to extent of WC benefits
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Types of Injuries Covered by Workers’ Compensation
• Fatal Injury
• Permanent Total Disability
• Permanent Partial Disability
• Temporary Total Disability
• Medical Only
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Illinois WC BenefitsState Average Weekly Wage (SAWW) = $747.48
Average Weekly Wage (AWW) =
(Earnings over last year- Overtime)/52
Cost of Living Adjustment (COLA)
Survivors’ Benefits
Burial Benefit: $4,200
66 2/3% of AWW w/ COLA
Min Weekly Benefit: Lesser of $373.74 or AWW
Max Weekly Benefit: $996.64
Max Lifetime: Greater of $250,000 or 20yrs
Remarriage “Award”: 2yrs Lump Sum w/o children
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Illinois WC Benefits (continued)Permanent Total Disability
66 2/3% of AWW w/ COLA
Min Weekly Benefit: Lesser of $373.74 or AWW
Max Weekly Benefit: $996.64
Max Lifetime: Unlimited
Temporary Total Disability
66 2/3% of AWW
3 Workday waiting period/14 day retroactive period
Min Weekly Benefit: Lesser of $113.40* or AWW
Max Weekly Benefit: $996.64
*Assumes Married, 2 children
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Illinois WC Benefits (continued)Permanent Partial Disability
60% of AWW Min Weekly Benefit: Lesser of $88.90* or AWWMax Weekly Benefit: $541.23 or $996.64**Duration:
Non-Schedule: % of disability * 500 wksSchedule: Thumb 70 wks
Hand 190 wks Foot 155 wks Leg 200 wks Hearing Both Ears 200 wks
*Assumes Married, 2 children**$996.64 paid if amputation or enucleation occurs
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Illinois WC Benefits: Example
An employee is injured at work while performing his job duties. His medical bills are $400. His average weekly wage is $1,540. He is totally disabled for 13 calendar days (9 workdays).
Assuming the injury is covered by the workers’ compensation law, how much will paid in benefits?
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Illinois WC Benefits: ExampleInjury is a Temporary Total Disability
66 2/3% of his AWW = $1,026.67
Max benefit for TTD = $996.64
He will receive benefits for 6 workdays (9 workdays minus 3 day waiting period.
1.2 weeks * $996.64/week = $1,195.68
$400 for medical expenses
TOTAL: $1,595.68
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Federal Compensation LawsFederal Employers’ Liability Act (1908)
Applies to employees of interstate railroads
Eliminates traditional employer defenses in suits by employees
Longshore and Harbor Workers’ Compensation Act
Provides more generous WC benefits to maritime workers (loading, repairing, building vessels)
Jones Act (1920)
Extends FELA to crew members
Migrant and Seasonal Agricultural Worker Protection Act