Illinois think tank: Use workers' comp reform, not tax breaks, to lure businesses
The Illinois Policy Institute recently proposed alternative solutions to attract more businesses to the state while also trying to alleviate higher taxes for its citizens.
Although offering tax incentives to businesses helps bring in jobs, it also hurts the very people it is trying to help. Instead, the organization suggests focusing on workers’ compensation reform as the best solution to a tough problem.
“There’s a reason new facilities aren’t being built in Illinois: In too many cases, a business investment in Illinois doesn’t make financial sense unless Illinois taxpayers are paying for a chunk of the project,” the institute said in a position paper. “This system isn’t good for businesses, or for workers and unions that are losing jobs. Until Illinois makes the broad tax and regulatory reforms needed to compete for blue-collar jobs, businesses are going to keep expanding elsewhere or asking for tax breaks to come here.”
The organization argues that focusing on reforming workers’ compensation is a better solution than business-tax incentives to keep or attract businesses.
“Rather than picking winners and losers, Illinois should compete for blue-collar jobs by reforming workers’ compensation,” the institute said. “There is a wide range of reform opportunities available.”
In an attempt to reform workers’ compensation, Governor Bruce Rauner’s “Turnaround Agenda” first explains that workers’ compensation is currently a no-fault system.
“To recover on a workers’ compensation claim, the employee bears the burden of showing he or she has sustained accidental injuries arising out of and in the course of employment,” the agenda said. “Currently, if the employment is related at all to the injury, no matter how indirectly, the employee’s injury is compensable. If a work injury aggravates a pre-existing condition even slightly, the employer is 100 percent liable for the workers’ compensation claim.”
Furthermore, the agenda proposes that the causation standard should be raised from an “any cause” standard to a “major contributing cause” standard. In other words, the accident at work must be more than 50 percent responsible for the injury, compared with all other causes.
Eugene Keefe, a workers’ compensation defense attorney and a partner at Keefe, Campbell, Biery and Associates LLC, said 50 percent responsibility can be manipulated.
“In our view, the problem with the IL WC (Illinois Workers' Compensation) Act isn’t the language (or actually the lack of any language) on causation, it is the hearing officers,” Keefe said in the firm’s weekly law-update blog. “Again, in our respectful view, if you make the language ‘major contributing cause,’ liberal hearing officers can make any problem at work into a major contributing cause. If you change the language to ‘predominant cause’ or 50 percent responsible for the injury, liberal hearing officers and our reviewing courts can still find any typical twist, lift, strain to be the predominant cause or 50 percent responsible for the injury.”
Keefe also wants to remind reformers that there are many Illinois workers’ compensation terms and concepts that are made up and sometimes modified by hearing officers and reviewing courts.
“The legal terms ‘traveling employee’ and ‘odd-lot total and permanent disability’ and ‘risk of the street’ don’t appear anywhere in the IL WC Act,” Keefe said. “The liberal reviewing courts who started these concepts and later changed/expanded or sometimes ended the concepts did so at their whim.”
Keefe said the reviewing courts need to review cases in a straightforward fashion for any legislative remedies to work.
“Our worry for Illinois businesses and local governments is we all might think legislatively changing the causation standard might work,” Keefe said. “The proposed causation-standard change only works if the hearing officers follow the simple language.”
Keefe offers a no-nonsense approach to workers’ compensation law, with some advice on how to handle hearing officers.
“In short, Governor Rauner may not have to change the language of the IL WC Act to effectively change the causation standard; he may need to change the people who are enforcing the IL WC Act to match what we think is common sense,” Keefe said. “If you aren’t ‘injured’ in an unforeseen work ‘accident,’ you shouldn’t get WC benefits.”
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