After the Workers’ Compensation Commission withdrew its proposed Emergency Rule declaring that any employee in an “essential industry” contracting COVID-19 will be rebuttably presumed to have contracted COVID-19 at work, the legislature and business groups met and worked through a proposed amendment to the Workers’ Compensation Act addressing the issue.
Under the proposed amendment, which appears set to pass, first responders, frontline workers, and most “essential employees” will be rebuttably presumed to have contracted COVID-19 at work, if they have a confirmed case of COVID-19, and the presumption is not rebutted by any of the following: 1) the employee was not in the workplace for 14 days prior to the contracting COVID-19; or 2) the employer complied with all local and CDC guidance to protect its employees from COVID-19; or 3) the employee was exposed to COVID-19 by another source, such as a spouse. Notably, even if an employee is successful in making such a claim: 1) the employer’s MOD rate will not be impacted; and 2) the employer is entitled to a credit against any TTD benefits for sick leave or other benefits paid to the employee.
Moving forward, employers should comply with all local and CDC guidance, and prepare a questionnaire to be filled out by employees with confirmed COVID-19 cases, inquiring as to the employee’s COVID-19 exposure—much like an accident report. Employers can use those questionnaires when evaluating a workers compensation claim.
The question many employers have faced in recent weeks is whether or not COVID-19 could be covered by workers compensation. The answer is generally… “UNLIKELY — except those who are directly involved in dealing with the pandemic — i.e. healthcare workers.” Under workers compensation law 101, an injured or ill employee bears the burden of establishing a causal connection between the conditions under which the work is performed and the injury/illness at issue. This has been the case even for employees contracting infectious diseases such as Hepatitis-B or tuberculosis. However, there is a current movement to try and greatly expand workers compensation protections during the COVID-19 crisis.
In fact, today (April 13, 2020), the Illinois Workers’ Compensation Commission issued an Emergency Rule declaring that any COVID-19 injury or incapacitation suffered by certain workers will be “rebuttably presumed to have arisen out of and in the course of employment” and to be “causally connected” to the hazards and exposures of the worker’s employment.
While first responders and those working in health care are logically impacted given their continual exposure to the virus (and, always were protected by Illinois’ work-comp law), the Emergency Rule notably expands its coverage to all “front line workers” — meaning all workers employed in any “essential business,” as identified in Governor J.B. Pritzker’s March 20, 2020 Stay At Home Executive Order, will enjoy a rebuttal presumption that should they come down with COVID-19 it would be deemed to have been contracted in the course of and connected to their employment. The new standard removes the burden from the employee and requires the employer to present evidence disputing the cause of COVID-19. In light of its broader definition, employee-friendly Illinois has made it easier for a much broader segment of employees to successfully pursue COVID-19 related work comp claims.
By way of comparison, Indiana employees seeking coverage for COVID-19 still bear the burden of proving they contracted the illness in the course and scope of their employment. This is true even though the Indiana Worker’s Compensation Board has clearly indicated that it intends to view such claims liberally. In an April 2 notice, the Board noted that it is “well accepted” that first responders, healthcare workers and “other employees whose jobs necessarily entail close interaction with many people in a public setting” are more likely than others to contract the virus as a result of performing their work duties and “urged” employers to presume such employees are covered by the Indiana Worker’s Compensation Act if they are quarantined at the direction of the employer due to confirmed or suspected COVID-19 exposure or they are diagnosed with COVID-19 (with or without a test). However, if employers choose to dispute such claims, employees will ultimately still bear the burden of proving their case.
In Missouri, an employee bears the burden of proving that an occupational disease was contracted as a direct result of employment or that the employment subjected the worker to a hazard that is greater than that which the employee would have been subjected in non-employment life. However, in response to the COVID-19 pandemic, the Missouri Department of Labor and Industrial Relations issued its own Emergency Rule creating a presumption that first responders infected by or quarantined due to COVID-19 will be deemed to have contracted a compensable occupational disease arising out of or in the course of the performance of their employment. The Rule’s definition, however, is limited to first responders and includes law enforcement officers, firefighters and EMTs.
In Wisconsin, for COVID-19 to be covered by worker’s compensation, it must be established that contracting the disease was work-related. In other words, there must be evidence to prove that contracting COVID-19 arose out of the worker’s employment while performing services incidental to employment. Thus, to date no policy changes have been implemented. However, legislation is pending that would presume that any injury to a “first responder” during this public health emergency is caused by the individual’s employment.
Of course, as with all COVID-19 matters, readers must continue to monitor local and state developments carefully. We expect more states to broaden worker protections in the coming days and weeks.
The EEOC’s Strategic Enforcement Plan (SEP) for Fiscal Years 2017-2021 identified “Equal Pay” as a priority area that demands focused attention. The EEOC’s recent press releases show it is actively fulfilling this strategic mission.
Gender equality scale
In the third scenario, the EEOC obtained a judgment against a pizza restaurant for violating the Equal Pay Act. Two high school friends-one male and one female-applied to be “pizza artists” and both were hired. However, the female applicant received $0.25 less an hour in starting pay. When she realized this discrepancy, she contacted the restaurant to complain. In response, the restaurant withdrew the offers of employment to both individuals. The EEOC’s attorney referenced the vast amount of recent news related to sexual harassment and stated unequal pay is simply another form of sex discrimination in the workplace. Further, the EEOC stressed that it will continue to thoroughly investigate and enforce equal pay requirements.
The overwhelming media coverage of sexual harassment and unequal treatment in the workplace reinforces that employers must make equal treatment a top priority. Periodic review of policies and practices, with attention to pay policies, remains critical to limit employer exposure to lawsuits alleging unequal pay or treatment.
An employer who allows its employees the “flexibility” to self-schedule time off the clock must make sure that it is paying its employees for all time worked. And beware, under the Fair Labor Standards Act (FLSA), “hours worked” is not limited to only that time an employee spends performing his or her job duties. Short breaks of twenty minutes or less are also counted as hours worked and must be paid.
The Third Circuit Court of Appeals recently held as a bright-line rule: Where breaks of twenty minutes or less are in question, the time must be paid. The court adopted the U.S. Department of Labor policy rationale that “breaks of twenty minutes or less are insufficient to allow for anything other than the kind of activity (or inactivity) that, by definition, primarily benefits the employer.” There will not be a factual analysis, or a case-by-case determination. Simply stated, if an employee is at the worksite, and is taking time away from their work-related duties for twenty minutes or less, they must be compensated for that time.
In the case decided by the Third Circuit, the employer did not deny that it permitted its call-center employees to log off their computers and use their time free from any work related duties, but it refused to call those time periods “breaks.” Rather, the employer considered it part of a “flexible time” policy, in which employees could take an unlimited amount of unpaid time away from work at any time, for any duration, and for any reason.
The court rejected the employer’s attempt to characterize time in a way that deprived employees of rights they were entitled to under the FLSA and considered the time an employee spent logged off the computer as a “break.” The employer violated the FLSA by not compensating employees for breaks that lasted twenty minutes or less.
Bottom Line: This is a reminder to employers that all policies and procedures should be vetted by experienced labor and employment counsel. In addition, all time worked including break periods should be accurately recorded, not only to comply with the record-keeping requirements of FLSA, but to document any abuse.
Employers should also keep in mind that some states may have their own break requirements that employers in those states must follow. Therefore, it is imperative that employers review their break policies and check applicable laws to ensure compliance with both federal and state law.
Although federal wage and hour laws do not generally mandate employee breaks, and state laws may vary, a strict policy that forces employees to choose between getting paid and basic necessities such as using the restroom runs contrary to “humanitarian and remedial” purpose of the act and will violate the law. These kinds of short breaks must be compensated. The FLSA and corresponding state wage and hour laws are designed to protect employees, and will be liberally construed.
Addressing an employment issue of interest in an increasingly digital world, the Seventh Circuit Court of Appeals (which has jurisdiction over lower federal courts in Illinois, Indiana, and Wisconsin) recently upheld a prior ruling that the City of Chicago was not liable for paying wages for certain employees’ off-duty work time.
In the case of Allen v. City of Chicago, employees who alleged they were not compensated for off-duty work performed on their mobile devices were not entitled to recovery for that unscheduled, overtime work. Agreeing with the trial court’s decision that the City was not aware of the overtime work, and that the employees were not prevented or discouraged from reporting off-duty work time and seeking pay, the court ruled that the City should not be held liable.
In the decision, the court stated that the City would have been liable for unpaid wages it knew or should have known about the work at issue through the exercise of “reasonable diligence.” Under the Fair Labor Standards Act, an employer must pay for all work it knew or should have known was being performed. Moreover, an employer is considered to have knowledge of the work if it should have known about it through the exercise of reasonable diligence. The court’s decision further illustrates and offers guidance on how employers can exercise such reasonable diligence:
For instance, it is important that employers institute a method by which any time worked outside of the normal business day can be reported in order to be compensated. In this case, the court found that the City of Chicago exercised diligence by allowing employees to submit “time due slips” on which they listed their off-duty hours worked along with a brief, albeit vague, description of the work performed.
Employers should also establish a reasonable policy and process for employees to report uncompensated work time after noticing a shortfall in pay. Such a process might involve an employee handbook provision that instructs employees to carefully review their paychecks, every pay period, to ensure that the paycheck accurately reflects all time actually worked. The handbook should also instruct employees to contact human resources or another appropriate member of management if a paycheck is short.
Lastly, in order to avoid landing on the wrong side of a legal decision, employers must take employee complaints under such a policy seriously by thoroughly investigating and adjusting compensation due when it is determined that there is a shortfall in the employee’s pay.
Bottom Line: Bearing all of this in mind, especially in the modern workplace, employers that have hourly employees who check e-mail, make calls, or conduct any other work outside of normal business hours on their cell phones, must heed the Seventh Circuit’s guidance by implementing and enforcing strong and clear policies that meet the “reasonable diligence” standard to ensure that employees are properly compensated for all hours worked.
The Illinois Appellate Court’s latest decision could make defending cases where an injured worker has permanent restrictions more challenging and costly. It increases the importance of co-opting with a trusted workers’ compensation and employment attorney earlier in the overall process.
However, the same decision exemplifies why disputing certain cases can still yield good results if done properly. Over the years and at an increasing rate, we hear insured’s and claims professionals wondering aloud if there is a point to litigating or denying and compromising questionable workers’ compensation cases. This case provides hope.
In Lenhart v The Illinois Workers Compensation Commission (USF Holland), 2015 I App (3d) 130743 WC, the third district sent a case back to the commission for a determination on wage differential, even though the claimant did not make an election to come within that provision of the WCA at the time of arbitration, instead asking for permanent and total disability. A company typically faces different litigation strategy (and exposure) decisions when a claimant seeks a wage differential award. Vocational rehabilitation and job placement to mitigate a potentially long-lasting and expensive wage loss award come into play. Before Lenhart, defense counsel could arguably rely upon the claimant’s need to “elect” to come within the wage differential scenario. Essentially, this decision eliminates the informal “safe harbor” in which defense could focus on permanent total disability issues (for example: odd-lot, job search, employability) and not automatically have to seriously consider the costly prospect of vocational rehabilitation and job placement (while paying maintenance). Before Lenhart, the court previously held that if a claimant fails to present evidence regarding his entitlement to a wage differential award, then he implicitly waives his right to such an award.
While this presents new challenges, the same decision illustrates that there is still a positive cost-benefit to disputing a claim when you have obtained evidence that the claimant is exaggerating the subjective complaints to the treating physician. The claimant had convinced his treating medical providers that he was extremely disabled and sought permanent total disability at the IWCC. Surveillance showed otherwise and the commission found that much of the medical opinion testimony that the claimant relied on to meet his burden was based on his own subjective reporting of his capabilities to his medical providers. The commission found the opinion testimony of a physician to be “unreliable,” and found it significant that after the claimant’s treating psychiatrist viewed some of the surveillance video, he opined that the claimant appeared to be more mobile in the video than he was in his office. This doctor also noted that the claimant engaged in social interaction more than he reported being able to do.
What Does This Mean?
Assess the wage differential early, particularly when making employment separation decisions and coordinate your workers’ compensation defense with the firm’s labor and employment counsel.
Avoid surprises leaving you ill-prepared to defend on a last minute shift to wage differential claim/exposure by assessing it before the day of trial. It’s possible to obtain a needed trial continuance if you have prior written confirmation from the claimant attorney that wage differential is not at issue.
Get good surveillance, provide it to the treating physician and remember that such contact typically requires permission from the claimant or attorney to avoid the risk of barred/excluded evidence/opinions. Continue to seek out anecdotal information about an injured worker’s home activities from co-workers, etc… that might reveal any exaggeration of subjective complaints.
Anticipate job performance issues, obtain legal advice from workers’ compensation and employment counsel, aggressively confront exposure with either voluntary job separation or providing restricted duty, early vocational placement activity.
After confirming exposure early on with job separation, consider avoiding costs of long term temporary /maintenance benefits and vocational expert costs with settlement or trial.
Remember, it is a constant battle requiring a pre-emptive approach combining workers’ compensation and employment law focuses, but it’s possible to achieve the most cost-efficient and risk-limiting results through proper steps.
Throughout 2014, we have provided updates on a variety of new laws. Below are several Illinois laws that employers should be aware are effective January 1, 2015, as well as an update on Illinois’ medical marijuana law:
Ban the Box – Effective January 1st, Illinois employers with 15 or more employees or employment agencies working for them are forbidden from inquiring about a job applicant’s criminal record/history prior to the applicant being selected for an interview or, if there is no interview, prior to a conditional offer of employment.
Pregnancy Discrimination and Accommodation – Effective January 1st, the Illinois Human Rights Act will prohibit employers with one or more employees from discriminating based on pregnancy and require reasonable accommodations for any pregnancy related condition (not just medical conditions). Employers must also provide notice to employees in their handbooks and by posting the approved Illinois Department of Human Rights Notice, which can be found here.
Payroll Cards – Effective January 1st, Illinois employers will be able to pay employees through payroll debit cards but must follow strict requirements regarding implementing and use, including offering other payment methods, written disclosures, voluntarily consent and limits on fees including that there must be methods to make withdraws at no cost to the employee.
Medical Marijuana – On September 1, 2014, Illinois started the process to license registered users, dispensaries and cultivators. Over 11,000individuals have applied to become registered users and more than 600 registered user licenseshave been approved. Licenses for cultivators and dispensariesare anticipatedto be approved within the next month or two.
Unemployment Implications – Employees may receive unemployment benefits, even if terminated for admitted use of marijuana while off-duty. Eastham v. Housing Authority of Jefferson County, 2014 IL App (5th) 130209. In Eastham, the Appellate Court held that an employee’s off-duty marijuana use was not “in the course of employment” and did not violate the employer’s drug policy or constitute “misconduct” under the Unemployment Insurance Act. Id. Similarly, a Michigan Court has held that absent evidence that an employee was intoxicated at work or their job performance was impaired by medical marijuana use, there was no gross misconduct and the employee was entitled to unemployment benefits. Braska v. Challenge Mfg. Co., No. 313932, 2014 WL 5393501 (Mich. Ct. App. Oct. 23, 2014).
Workers’ Compensation Implications – While still unknown in Illinois, a New Mexico Court held that New Mexico’s workers’ compensation law requires employers and insurers to pay for “reasonable and necessary medical care” for any work related injury and since medical marijuana is legal in New Mexico and was prescribed by a doctor for the work injury, the insured was required to pay for it. Vialpando v. Ben’s Automotive Services and Redwood Fire Casualty, 2014-NMCA-32,920 (N.M. Court of Appeals, May 19, 2014).
In 2015, employers should also be aware of the following national topics due to the increased changes in laws affecting these topics:
Minimum Wage – Many states and local governments, including the City of Chicago have implemented laws that will impact minimum wage in 2015.
States with minimum wage changes effective January 1, 2015 include: Alaska ($7.75 to $8.75 per hour), Arizona ($7.90 to $8.05 per hour), Arkansas ($6.25 to $7.50 per hour), Colorado ($8.00 to $8.23 per hour), Connecticut ($8.70 to $9.15 per hour), Delaware ($7.75 to $8.25 per hour), Florida ($7.93 to $8.05 per hour), Hawaii ($7.25 to $7.75 per hour), Maryland ($7.25 to $8.00 per hour), Massachusetts ($8.00 to $9.00 per hour), Missouri ($7.50 to $7.65 per hour), Montana ($7.90 to $8.05 per hour), Nebraska ($7.25 to $8.00 per hour), New Jersey ($8.25 to $8.38 per hour), New York ($8.00 to $8.75 per hour), Ohio ($7.95 to $8.10 per hour for workers older than 16 years old who work for employers grossing at least $297,000), Oregon ($9.10 to $9.25 per hour), Rhode Island ($8.00 to $9.00 per hour), South Dakota ($7.25 to $8.50 per hour), Vermont ($8.73 to $9.15 per hour), Washington ($9.32 to $9.47 per hour) and West Virginia ($7.25 to $8.00 per hour). (NOTE: this does not reflect changes for tipped employees, which varies by each state as well).
Paid Sick Leave – California, Washington D.C., Connecticut, Massachusetts, Seattle, WA, Portland, OR, New York City, Newark and Jersey City, NJ, Eugene, OR, and Oakland, CA are state and local governments that have instituted paid sick leave laws. Employers that operate in areas that have a paid sick leave law should make sure that their vacation and sick leave policies are compliant.
U.S. Department of Labor 2015 Targets and Changes to the FLSA – Three issues identified by the DOL as targets in 2015 are: (1) violations of federal and state minimum wage and overtime laws; (2) misclassification of workers as independent contractors instead of employees; and (3) issuance of a new proposed rule on the FLSA overtime exemption for “white collar” employees, which is anticipated as soon as February 2015.
A judge from the Northern District of Illinois recently ruled that an employer’s policy requiring employees to notify management before seeking medical treatment violates the Illinois Workers’ Compensation Act (IWCA). The employee filed suit alleging he was fired in retaliation for exercising his rights under the IWCA. The employer explained that the employee was terminated for failing to adhere to an important workplace policy that was in place for the safety of its employees.
The employer’s policy required employees to immediately report workplace injuries and notify management before seeking professional medical treatment. The employee reported his workplace injury, but he failed to notify management before seeking medical treatment. The court acknowledged that an employer can lawfully require employees to report workplace injuries, but employees have a right under the IWCA to seek medical treatment and the employer cannot interfere with rights under the IWCA “in any manner whatsoever.” The court agreed that the “interference” related to the employer’s “advance notice” policy was probably minor in nature, but stressed that the act does not permit any type of interference.
Employers have a legitimate and lawful basis for requiring employees to report workplace injuries, but this recent Illinois case is a reminder that an employer’s policies must not discourage or interfere with an employee’s right to exercise protections under the IWCA.
We often hear the above statement when providing advice on workers’ compensation and employment law to clients and prospective clients. The focus then always involves exposure for workers’ compensation retaliatory discharge lawsuits. The litigation costs and risks of paying the former employee for wrongful discharge warrant obtaining legal advice. Plaintiff attorneys confirm to me that the burden of proving such a case is still a challenge to them.
Notably, an Illinois appellate court has just reduced the incentive to such litigation for plaintiffs in Dale v South Central Illinois Mass Transit District. The court refused to allow recovery for lost wages following alleged retaliatory discharge when the employee recovered some of the disputed lost wages in a workers’ compensation settlement. The employee argued that the employer fired him because he could not work. He could not work because of the disputed workers’ compensation injury and the employer’s denial of treatment, which arguably would have facilitated a return to work. The court rejected that argument thus providing some precedent for an employer to dispute a workers’ compensation claim and deny benefits without concern about the lost wages stemming from the denial, serving as a basis for a retaliatory discharge judgment.
Generally, to prove retaliatory discharge for filing a workers’ compensation claim, the plaintiff must show that he or she was an employee before the injury, that he or she exercised rights granted by the state’s workers’ compensation law , and that he or she was discharged which was causally related to his or her asserting a claim under the law.
The most litigated aspect in these cases is the causation element which requires the plaintiff to affirmatively show that the discharge was primarily in retaliation for his exercise of a protected (workers’ compensation) right. The evidence of the employer’s motive is varied but there are valid reasons (“non-pretextual”) courts recognize for discharging the employee. These include absenteeism, physical inability to perform the job, legitimate RIFs, and poor job performance. Typically all of these valid reasons for discharge are documented to varying degrees and affect the strength of a legal defense if a claim arises, so legal advice is necessarily fact-specific. Obviously, when the employer has documented issues prior to an injury or illness being reported or claimed by the employee, the stronger the defense in a retaliation case.
What’s the business advice here?
Each situation has its own set of facts warranting careful legal advice while not giving up on the ability to run your business affairs. Employers need to protect themselves and the best defense is to ensure management appropriately, consistently and in real time confronts employee issues. Too often employers say “I wish I had documented the employee’s poor performance before the injury.” Also, employers must consider that if they terminate an employee who has reported a work-related injury or illness, the exposure for compensation can increase substantially.
With the current state of workers’ compensation retaliatory discharge law, it is still possible to make solid business decisions that could result in terminating an employee who may have an open workers’ compensation claim or who has reported an injury, but it’s highly advisable to get legal help in navigating the potential landmines in doing so.
In a recent workers’ compensation case, the personal and neutral risk defenses have been seriously eroded via an appellate court created exception based on the number of times an employee is exposed to a neutral risk (no greater risk than the general public/no defect) with employer knowledge of the personal condition.
In the case of Village of Villa Park, a community service officer suffered from a right knee condition related to a prior non-work injury (fall on ice at his vacation home). Due to the injury suffered in that accident, the petitioner was scheduled for surgery, at the time of the work incident. He continued to work his regular duties which were clerical in nature and conducted on the main floor of the building. These occasioned him to use a normal stairway open to the general public to the lower level of the building, which contained locker rooms, a briefing room, a lunch area and a shooting range.
Before his shift, he would descend the stairway to the locker room to change into his uniform. He would go to lunch, acquire rain gear or other equipment from the lower level during the day. At a minimum, he would traverse the stairs six times per day. The stairs were without defect and consisted of ten steps to a landing and an additional ten steps to ground level. At the time of the accident, he was returning to the lower level locker room, when his knee gave out after three steps, causing him to fall seven stairs to the landing below. He injured his back and right knee. A denial of the right knee injury was not presented to the appellate court.
The appellate court noted the two types of risks involved in this case: risk personal to the employee and neutral risk. The weak knee is a personal risk. The stairs are a neutral or common risk. The court found six times per day use was sufficient to expose the employee to a “common risk” more frequently than that to which the general public was exposed. The risk was increased on a quantitative basis because he was “continually forced to use the staircase” by his employer for his personal comfort and for work-related activities. The court also noted that the employer knew of the prior knee injury but placed him in a position of an increased risk based on a quantitative analysis. The risk was no longer neutral because of the frequency (repetitiveness) with which the claimant was required to traverse the stairs with his known weak knee.
This appears to create a new exception to the general rule of non-compensability for personal risk in an area of neutral risk where the employer has knowledge of the claimant’s pre-existing condition or weakness. Of course, this not only expands the compensability of fall down cases, but brings into question where (how many times per day) is the quantitative line drawn and what action should be taken when the employer has “knowledge” of the pre-existing condition or weakness. Apparently, judicial activism on the part of the appellate courts to expand compensability is alive and well.