Illinois Appellate Court Awards TTD Benefits Post-Termination and Includes Bonus in AWW Calculation

By Christopher D. Galanos

Fourth District Finds Light Duty Work Does Not Necessarily Preclude or Diminish Eligibility for TTD Benefits

In Shafer v. The Illinois Worker’s Compensation Commission, the Fourth District addressed a number of topics including the Commission’s jurisdiction on review when a party seeking review fails to comply with statutory procedure. Specifically, the employer sought review of the arbitrator’s decision, but inadvertently placed the wrong case number on the Petition for Review filed with the Commission. Prior to oral argument on the Petition, the Commission sua sponteraised the issue of whether or not it had jurisdiction over the review given the employer’s mistake. Ultimately, the Commission decided that it did have jurisdiction.

In upholding the Commission the Fourth District noted that while it is true that no presumption of jurisdiction extends to the Commission and strict compliance with the Illinois Worker’s Compensation Act and its regulations is necessary in order to perfect an appeal, there was simply no regulation that required that the proper case number be included on the Petition. All that is required is that the Petition be filed within 30 days and that it contain “a statement of the petitioning party’s specific exceptions to the decision of the arbitrator.” There are no other requirements as to the contents of a Petition.

Also at issue in Shafer was the Commission’s award of TTD benefits. The Petitioner had been terminated on December 5, 2007 and later filed a claim. The arbitrator awarded TTD benefits from December 18, 2007 through January 10, 2008. The Commission modified the award of TTD benefits finding that the employee was not entitled to TTD benefits between December 18, 2007 and January 10, 2008 because she had a light duty release and had applied for unemployment benefits. In reversing the Commission’s decision, the Fourth District cited the general rule that a claimant is temporarily totally disabled from the time the injury incapacitates him from work until such time as he is as far recovered or restored as a permanent character of injury will permit. Just because an employee has the ability to do light duty work does not necessarily preclude a finding of temporary total disability. Similarly, the mere fact that the employee applies for, or receives, unemployment benefits does not preclude or diminish her eligibility to receive TTD benefits.

The lessons to be taken from Shafer are 1) although the employer was allowed to proceed despite the typographical error, the court did note that strict compliance with the Act is required. Accordingly, employers and defense attorneys should be extraordinarily careful when filing for review, both before the Commission and the Circuit Courts, as small errors could result in the loss of the ability to review substantive decisions, and 2) the case serves as a reminder that when an employee is terminated, for any reason, prior to reaching MMI, the fact that he or she had a light duty release is not sufficient to deny payments of temporary total disability benefits.

First District Finds That Production Bonus is Included in AWW Calculation

In Arcelor Mittle Steel v. Illinois Worker’s Compensation Commission, the First District reviewed how overtime and bonuses are calculated to reach an employer’s average weekly wage for workers compensation purposes. The Petitioner, Robert Common, was found to have an average weekly wage of $1,403.32. In calculating this average weekly wage, the Commission included the 40 hours per week that Common was scheduled to work, along with any mandatory overtime. Additionally, the collective bargaining agreement in place between the employer and the pertinent union included provisions regarding an “incentive plan.” The incentive plan consisted of two components, a production component and a safety component. It was undisputed that this bonus was not tied to the company stock price, was not seasonal, and was not given due to the generosity of management. The bonus was paid to a team of employees if certain production levels were met. Additionally, if no time was lost due to work related accidents a safety bonus was paid. The bonus was paid bi-weekly and was included as taxable income on the W2 form. As long as the conditions for receiving the bonus were met, the employer had no discretion in deciding whether or not to pay the bonus.

In affirming the Commission’s decision the First District noted that there is a distinction between incentive based pay which an employee receives in consideration for specific work performed as a matter of contractual right, and a bonus which an employee receives for no consideration, or a consideration of overall performance at the sole discretion of the employer. The court found that Common received the production bonuses in consideration for work performed pursuant to the collecting bargaining agreement, and not as an extra benefit provided by the employer gratuitously.

While determining whether a bonus or other type of compensation should be included in the AWW calculation is a fact specific inquiry that must be decided on a case by case basis, it would be prudent for employers and defense attorneys to be aware that simply because something is termed a “bonus” does not mean that it is automatically excluded from a petitioner’s average weekly wage.

Originally published in the Winter 2011 edition of Quinn Quarterly.

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