If your business has employees in the state of Illinois, you’ll need to make sure you adhere to Illinois’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.

Who needs Workers’ Compensation Insurance in Illinois?

Illinois requires all employers who have employees to obtain Workers’ Compensation Insurance. In Illinois, an “employee” is generally defined as someone who is in the service of an employer and is not an independent contractor.

The Illinois Workers’ Compensation and Occupational Diseases Act (IWCA) defines all of the requirements for Workers’ Comp in Illinois, and the Illinois Workers’ Compensation Commission (IWCC) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.

What employees are covered under Workers’ Compensation in Illinois?

Almost all workers are covered under Workers’ Compensation in Illinois. If you provide work or services for an employer, you will likely be eligible for Workers’ Compensation Insurance.

The following are categories of employees that are eligible for Workers’ Comp coverage:

• Full-time and part-time employees
• Apprenticeships and internships
• Contractors and subcontractors
• Undocumented workers
• Minors
• Domestic workers working at least 40 hours per week for 13 weeks per year
• Volunteer firefighters and law enforcement

The following are categories of employees that are generally excluded from Workers’ Comp coverage:

• Independent contractors
• Volunteers
• Real estate broker, broker-salesman, or salesman if paid only by commission
• Agricultural enterprises employing less than 400 working days of agricultural labor per year

What Workers’ Compensation benefits do employees receive?

Under Workers’ Compensation in Illinois, employers are required to provide the following benefits to employees who are injured in the course of employment:

Medical Benefits

• Medical expenses, including first aid, emergency aid, doctor visits, hospital care, surgery, physical therapy, prescriptions, chiropractic treatment, prosthetic devices, and prescribed medical equipment.

Temporary Total Disability Benefits

• If an injured employee is medically unable to return to work or has been cleared by a physician to return to light-duty work but the employer is unable to accomodate, he or she is eligible to receive Temporary Total Disability (TTD) benefits, which provides 66 and two-thirds percent of a worker’s average weekly wage pre-injury.
• The IWCC establishes minimum and maximum benefit amounts, which change bi-yearly. From July 15, 2020 through January 14, 2021, the minimum TTD benefit was $266.67 per week or the employee’s average weekly wage, whichever is lower. Minimum TTD benefits increase $40 per week for each dependent up to three dependents. At the fourth dependent, minimum TTD benefits are capped at $400 per week. The maximum TTD benefit was $1,572.01 per week.
• TTD benefits are available until the injured employee has recovered from the injury as much as medically possible, or he or she can return to work and earn wages again.

Temporary Partial Disability Benefits

• An injured employee may be able to return to work while recovering in a partial or limited capacity. If the employee works fewer hours or receives lower wages during this time, he or she may be eligible for Temporary Partial Disability (TPD) benefits. TPD benefits provide 66 and two-thirds percent of the difference between a worker’s pre- and post-injury average weekly wage.
• TTD benefits are available until the injured employee has recovered from the injury as much as medically possible, or the employee can return to his or her regular job.

Permanent Partial Disability Benefits

• If an injured employee recovers from an injury but has a permanent partial impairment, he or she may be eligible for Permanent Partial Disability (PPD) benefits.
• The amount that is paid out for PPD benefits depends on a number of factors, including how impaired you are and how this affects your ability to earn a living, your age at the time of injury, and your occupation.
• The IWCA classified four types of PPD benefits: Wage Differential PPD, Scheduled PPD, Unscheduled PPD, and Disfigurement PPD.
• Wage Differential PPD benefits are similar to TTD benefits, paying out 66 and two-thirds percent of the difference between a worker’s pre- and post-injury average weekly wage. These benefits are available as long as the employee continues to earn reduced wages, and they expire at the earlier of the employee’s 67th birthday or five years after the first benefit is paid.
• Scheduled PPD benefits are available to an employee who suffers an injury that involves a body part classified under the IWCA’s PPD Schedule. Benefit amounts are 60 percent of the employee’s average weekly wage pre-injury, and the number of weeks these benefits are available are determined by the body part injured and a physician’s impairment rating.
• Unscheduled PPD benefits are available to an employee who suffers an injury that involves a body part not classified under the IWCA’s PPD Schedule. Benefit amounts are 60 percent of the employee’s average weekly wage pre-injury, and the number of weeks these benefits are available are determined by a physician’s impairment rating.
• Disfigurement PPD benefits are available to an employee who suffers a permanent disfigurement of the head, face, neck, chest above the armpits, arm, hand, or leg below the knee. Benefit amounts are 60 percent of the employee’s average weekly wage pre-injury and are available for up to 162 weeks.

Permanent Total Disability Benefits

• If an injured employee is unable to resume any form of work due to a permanent disability or has suffered complete loss of use of both hands, arms, feet, legs, eyes, or any two such body parts, he or she may be eligible for Permanent Total Disability (PTD) benefits.
• PTD benefits provide 66 and two thirds percent of the employee’s average weekly wage pre-injury.
• The IWCC establishes minimum and maximum benefit amounts, which change bi-yearly. From July 15, 2020 through January 14, 2021, the minimum PTD benefit was $589.51 per week, and the maximum TTD benefit was $1,572.01 per week.
• These benefits are available as long as the employee has a permanent disability and may expire or be reduced if the employee returns to work.

Vocational Rehabilitation Benefits

• If an employee recovers but is unable to perform his or her work fully, he or she may be eligible for rehabilitation services to help the employee return to work. These benefits can include such services as job search counseling and vocational training.

Death Benefits

• Employers are required to pay up to $8,000 to cover funeral expenses.
• A worker’s surviving dependents may be eligible to receive 66 and two-thirds percent of the deceased employee’s average weekly wage.
• The IWCC establishes minimum and maximum benefit amounts, which change bi-yearly. From July 15, 2020 through January 14, 2021, the minimum death benefit was $589.51 per week, and the maximum was $1,572.01 per week.
• Death benefits are paid for 25 years or $500,000, whichever is greater.

What are the penalties for breaking Illinois Workers’ Compensation laws?

Failure to adhere to the Workers’ Compensation laws set out by the IWCA can result in significant fines and even imprisonment. In order to avoid any costly penalties, it’s important to consult the IWCA or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:

General Violations

• Failure to comply with any part of the IWCA is punishable by a fine of up to $1,000.

Failure to Purchase Coverage

• Failure to secure adequate Workers’ Compensation Insurance may result in civil fines of up to $500 per day, and the IWCC may issue a work-stop order to shut down the employer’s operations.
• Employers that negligently fail to secure coverage may be criminally charged with a class A misdemeanor, punishable by a fine of up to $2,500 or up to one year of imprisonment, or both.
• Employers that willfully or knowingly fail to secure coverage may be criminally charged with a class 4 felony, punishable by a fine of up to $25,000 per offense or one to three years of imprisonment, or both.
• If an offending employer does not comply within 10 days of a citation, the IWCC may assess additional fines of between $500 and $2,000 and can hold the directors and officers of a company personally liable for any fines that remain unpaid after 30 days.

Failure to Provide Medical Benefits

• Failure to provide timely and adequate medical compensation will result in the employee receiving up to an additional 50 percent of the benefits he or she should have been paid.

Intentional Misrepresentation

• If an employer purposefully gives false information in order to obtain or deny any benefits or payments under the IWCA, they may be charged with civil penalties, criminal charges, and ordered to pay restitution.
• Penalties increase with the value of the benefits or insurance coverage obtained or attempted to be obtained through fraud. These penalties start with a class A misdemeanor, a fine of up to $2,500, and up to a year of imprisonment for fraudulent compensation of $300 or less, and go up to a class 1 felony, 4-15 years of imprisonment, and a fine of up to $25,000 for fraudulent compensation of $100,000 or more.

How much does Workers’ Compensation Insurance cost in Illinois?

According to the National Academy of Social Insurance Workers’ Compensation Report (October 2019), the average employer cost for Workers’ Compensation in Illinois was $1.07 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.

How does the Workers’ Compensation claims process work in Illinois?

The claims process in Illinois begins with the employee. If an employee suffers a work-related injury or illness, he or she must immediately report the condition to the employer, either orally or by written notice within 45 days of the accident. For occupational diseases, the employee should notify the employer as soon as he or she is aware of the condition.

After being notified, an employer must provide the necessary medical services or first aid and inform the insurance carrier. If the injured employee cannot work for more than three days, the employer must begin TTD benefit payments, provide written request to the employee of additional information needed prior to TTD benefits being paid, or provide written explanation to the employee of a claim denial.

Employers must also submit a report to the IWCC within one month for any work-related injuries or illnesses that result in an employee being unable to work for more than three days. For work-related deaths, employers must submit a report to the IWCC within two working days. No reports to the IWCC are necessary for injuries or illnesses that require less than three days of a worker’s absence.

Illinois Workers’ Compensation Insurance Resources

For more information on Illinois Workers’ Compensation laws and requirements, please visit the following resources:

• Illinois Workers’ Compensation Commission (IWCC)
• Illinois Workers’ Compensation and Occupational Diseases Act (IWCA)