No Time for Complacency
After coming off last year's what many consider one of the most successful legislative sessions of a new Governor, 2020's abbreviated session was unprecedented. In 2019, Gov. Pritzker was presented over 603 measures to sign or veto. Since most of the legislation that reached his desk had been worked out between the democrat Governor and the democrat super majorities in the legislature, only a handful of bills were vetoed. In contrast, the typical last 3 months of a normal session was squeezed into 4 days of a Special Session and a total of 23 pieces of legislation were approved by the General Assembly this year. Again, from the budget to the other issues determined to be a priority by the democrat-controlled General Assembly, it is expected all will be approved in the coming weeks.
There were a number of bills that did not receive consideration that likely will be lined up for consideration during the Fall Veto Session which is scheduled for 6 days, November 17,18 & 19 and December 1,2 & 3. A few of these issues are:
- Paid Leave (SB 471, was approved without the paid leave provisions but we expect a similar bill as the one passed by the Senate in 2019)
- Covenants not to compete (SB 3430/HB 2975)
- Medical Marijuana (HB 4623/SB 3475)
- Independent contractors (HB 5077)
- Hiring of felons (HB 4837)
- Employment discrimination
- HB 3884 (race to include hairstyles)
- HB 4827 (IDHR right to intervene as a party before IHRC)
- HB 5335 (burden of proof shifted to employer)
- SB 3574 (eliminates mandatory fact finding conference)
- SB 3891 (allows a complaint to be filed anonymously)
There will be behind the scenes meetings and discussions on many issues over the summer and potential committee hearings. We will stay on top of these issues as they develop. In some instances we are working with legislative sponsors on compromise language.
Governor Signs WC/UI Measure into Law
On Friday June 5th, Gov. Pritzker signed into HB 2455 into law as
PA 101-633
. The effective date is June 5, 2020.
The workers' compensation and unemployment insurance provisions were the result of an "agreed bill" process, which brought together stakeholders from labor, business management and the Illinois legislature. Business and labor reached an agreement following substantial negotiations. Admittedly, this agreement is not "perfect".
Workers' Compensation:
As part of the final workers' compensation provisions, the most important feature to employers is the assurance of having an easy path to defend COVID claims in order to reduce potential significant cost increases for workers' compensation. This was critical given the Workers' Compensation Commission's emergency rule that was stopped by litigation as the rule provided no guidance to how an employer would be able to rebut the presumption.
The change in the law allows access to the presumption by all essential employees defined in the Governor's Executive Order who also have encounters with the public or work with 15 or more employees. It also covers police fire, paramedics, EMTs, correctional officers and health care workers.
The law also allows employers to rebut those claims using an ordinary proof standard versus "clear and convincing" or a "preponderance" of evidence. This means an employer simply has to show "some evidence" that the employee could have contracted the virus outside their employment. In addition, employers may rebut the presumption if they engaged and enforced measures following CDC or Illinois Department of Public Health guidelines.
The legislation also includes the following:
- An employer's insurance experience modification will not change due to COVID claims;
- A home or residence is not the workplace for purposes of a receiving the COVID presumption;
- The presumption ends on December 31, 2020. Labor's original proposal was open-ended;
- Employers receive a TTD offset for employees that received paid leave, wages or unemployment insurance benefits paid to the worker pursuant to the CARES Act;
- The employee has to have been exposed and contracted the virus. Simple exposure does not qualify. The Governor's original rule-and Labor's proposal--did not even require an employee to show that they had contracted the virus; and
- To access the presumption, an employee, before June 15, has to have a positive diagnosis or medical test; on or after June 16, a positive test is required. Again, the Governor's rules and labor's proposal did not require a positive diagnosis or test to get benefits.
Nothing prevents a worker to pursue a workers' compensation claim whether they have the presumption or not. The presumption is an important step in the workers' compensation process because with it the burden of proof shifts to the employer to prove that the employment was not the cause of the injury. Without the presumption, the burden of proof is the employee's to prove their employment caused the injury.
Unemployment Insurance:
Also part of HB 2455 were changes to the Unemployment Insurance Act: The agreement implements the three changes from the federal CARES Act:
- Waiver of the one-week waiting period for employment benefits until December 31, 2020;
- Increase to a maximum of 20 weeks of Extended Benefits (EB) instead of 13 weeks; and
- "non-charging" of unemployment benefit charges to an employer if COVID-19 was the cause of the lay-off (We are working with the Illinois Department of Employment Security (IDES) to develop an employer form to notify the Department when employee UI benefits are due to COVID-19 and therefore nonchargeable).
Without these change, Illinois would not have been able to receive the approximately $2 billion in federal funds to pay benefit expansions under the CARES Act. Also, at risk was over $20 million in federal funds to assist IDES in upgrading its IT systems. Finally, the waiver of benefit charges is meant to help those employers hit hardest by COVID-19 layoffs. The costs of this waiver will be shared by all employers.
Non-instructional education workers who are not eligible for UI benefits between the spring and fall school terms will be eligible for benefits this year. For reimbursable employers, the federal government will reimburse 50% of the benefits paid. The remaining 50% also will be shared by all other non-reimbursable employers. All disqualifications will continue for non-instructional workers, such as availability to work, misconduct, etc.
To bring the stakeholders back to the table next year, benefit reductions and tax increases, AKA speed bumps, will be equalized at $500m and will go into effect January 1, 2022 if they are not changed.
Finally, both labor and the employer organizations agree to cooperatively advocate for federal funding assistance to address a projected UI Trust Fund deficit of $8 to $14 billion by the end of the calendar year.
Employers who have workers that are refusing to return to work because they wish to continue to receive UI benefits should notify IDES. Additional information and how to protest those benefits can be found at: the IDES "
Refusal to Return to Work
" webpage.
IDOL Rule on Joint Employer Status
The Illinois Department of Labor (IDOL) proposed rule to establish a state standard for the factors to determine when there is a joint employer status and joint and several liability for employee benefits and rights. IDOL clearly describes what it is intending to accomplish with its proposed rule regarding joint employers.
" Recent action taken by the United States Department of Labor (U.S. DOL) could expose workers to a higher risk of wage theft and give unscrupulous employers a competitive advantage over law abiding employers. The U.S. DOL adopted a new rule on March 16, 2020. This new federal rule abandons over 60 years of precedent by adopting a restrictive four factor test to determine the existence of a joint employer relationship. Illinois has not needed its own rule interpreting joint employment, until now, because the former Fair Labor Standards Act regulation provided reasonable guidance on the issue."
The Council's Employment Law & Litigation Committee is drafting comments to be submitted by July 6th. We are concerned that the rule will send another signal that Illinois is more difficult to do business in. It is highly unlikely that any of our neighboring states will take a similar action as IDOL is proposing.
Resources Opposing Progressive Tax
The Illinois Chamber participates in a coalition of organizations opposing the constitutional amendment to change our income tax system from a flat tax to a progressive tax. Members can access resources to educate their employees, family members, friends and neighbors as to why they should vote "NO" on the constitutional change. Go to:
www.noprogressivetax.com
