A system that is designed by law to compensate employees for work related injuries, without regard to fault is referred to Workers Compensation. The „Industrial Commission“ in Illinois is in charge of setting the rules and resolving the disputes of both the employers and the injured employees.

All employees of Illinois employers are covered immediately after hire. The law states that any injury that is caused in whole or in part by the employee’s work is covered. This includes also any pre existing condition that is aggravated by work.

Benefits offered under workers compensation plans include medical care required to cure the injury, certain disability income benefits, as well as benefit for vocational rehabilitation. There are also death benefits for surviving family members if the injuries lead to death of the workers.

All employers in the State of Illinois are required to maintain workers compensation plan (either self insured with permission or purchase a workers compensation insurance policy). Employers are also required to pay 100% of the cost of the workers compensation insurance. Benefits that are paid to injured employees are not taxable to the employees. Employers are also required to maintain records of all work related injuries. All employers should post a notice in each workplace that explains workers rights under the Workers Compensation Act and list details of employers coverage.

Employers who fail to provide workers comp coverage for their employees because of negligence are guilty of Class A misdemeanor for each day without coverage, punishable by up to 12 months in jail and a $2,500 fine. If an employer knowingly fails to provide workers comp coverage then the employer is guilty of Class 4 Felony for each day without coverage, punishable by up 36 months in prison and $25,000 fine. The State can also close down the employer’s business place if the employer knowingly fails to provide workers compensation coverage.

An injured employee must report the work related injury to the employer’s management orally or in writing as soon as possible but not more than 45 days of the injury. Reporting an injury to a co-worker is not acceptable. Employer must provide all first aid and medical care, inform workers compensation insurance carrier, begin making disability payments if disability is expected to last more than 3 days. If employer disputes the injury, a written explanation must be provided to the employee.

Fraudulent statements made by employers or employees regarding workers compensation is classified as Class 4 Felony and are punishable by up to 36 months in jail and $25,000 fine.

Premiums of workers comp are based on several factors: (1) Nature of work – cost of workers comp for roofers is significantly higher than clerical employees. (2) Wages- Payroll- it determines the amount of exposures of the insurer to potential future disability payments when there is an injury. (3) Prior workers comp claims. The more claims you have the more you pay to workers compensation- up to a limit. If insurance companies refuse to insure a particular employer because of past claims or because of the nature of the business, the employer may go to the pool (National Council on Compensation Insurance) to obtain the needed protection.

Premiums for workers compensation policy are always estimates. Because the insurance company will be covering all of your employees in the future, no premium can be exactly determined until the end of the policy term at the time when the insurance company can audit your payroll. At the end of the policy term if the actual payroll that the employer paid in the past 12 months is equal to the payroll the employer reported as projected payroll at the time of buying the policy then there will be no difference in premium. However, if the employer over-projected the payroll at the time of obtaining the policy then the company may owe the employer a refund. If the employer under-projected the payroll at the time of signing up for the policy, the employer may have to pay more premiums to the insurance company for past coverage.

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