The rising minimum wage in Cook County will have a drastic impact on workers’ compensation claims, Eugene Keefe, of law firm Keefe, Campbell, Biery and Associates, wrote in a blog post on the firm's website.
In the post, Keefe, founding partner of the Chicago-based workers' compensation defense firm, commented on how the new math Cook County will use to calculate annual rises in the minimum wage will impact benefits for workers claiming compensation benefits.
Keefe explained how according to the Workers’ Compensation Act for accidents occurring after September 2011, if a worker is injured, he or she can receive permanent benefits if the “petitioner has returned to work within their capabilities at a similar rate of pay.” Or, the injured worker could elect to receive wage loss differential benefits based on a modified job that pays a two-thirds difference from what they had been earning at the time of an injury. Essentially, an employee cannot return to his/her prior occupation but can get new employment paying two-thirds of what he or she was earning.
“Wage loss differential benefits are routinely confused with temporary partial disability benefits which are available in some states,” Keefe wrote. “Illinois has no provision for a petitioner in a modified duty job who temporarily receives lower wages but expects to return to a higher paying job in the near future.”
Keefe calls that the new math that the county will use for determining increases in minimum wage each year and believes that it will make calculating workers’ compensation claims more challenging.
“You can’t ignore the ever-rising Cook County minimum wage ramp when calculating wage loss differential claims in Illinois,” Keefe contends.
On July 1, the Cook County minimum wage rose to $10 per hour and will rise to $11 on July 1, 2018; $12 in July 2019; and to $13 per hour in 2020
Keefe argues that subsequent annual increases will be at the rate of inflation but not to exceed 2.5 percent.
Keefe points out that that if the Cook County minimum wage reaches the 2.5 percent limit each year, by 2027 the county’s minimum wage will be $16.64 per hour, and in 25 years it will be $24.20 an hour.
“I am not aware the annual increases will ever actually end,” Keefe notes.
As a result, as minimum wage would go up, the Illinois workers’ compensation wage differential would go down, according to Keefe.
“If claimant was making $30 per hour and is now making minimum wage of $10 per hour, they would receive two-third of the difference or $533.33 a week as their supplemental benefit in the first year” Keefe explains. “The next year, the benefit would be based on the new minimum wage of $11 an hour and the math would provide $506.67 a week. The third year, the math would reduce the benefit to $480.”
Keefe writes that he is “unsure what our arbitrators and commissioners should do in writing a decision for a worker who does or can find a ‘minimum wage’ job that is certain to go up on an annual basis for the rest of their career.”
Keefe says that the closer a claimant lives to Cook County, the stronger the chance an employer could show that a worker could get a much higher minimum wage “replacement” job than in Galesburg or Bloomington.
“The long and the short of the problem is no one expected the new minimum wage ‘ramp’ that would ensure moderate wage jobs for some workers would rise on an annual basis,” Keefe writes. “We are all going to have to deal with the new math.”
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