In this episode Jonathan Rosenfeld chats with Jim Hardy an Attorney at Taxman, Pollock, Murray, & Bekkerman, LLC. Here, they discuss:

What Should an Employee do if Hurt on the Job?

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Jonathan Rosenfeld:

Hi, I am Jonathan Rosenfeld. And today on the Personal Injury podcast, I am joined by Jim Hardy, a work comp attorney in Chicago. And we are going to be talking about workers' compensation settlements, and how to value a work comp case in Illinois. Jim, thanks for joining me today. I appreciate it.

Jim Hardy:

Sure, no problem. Thank you, Jonathan. I glad to be here.

Jonathan Rosenfeld:

So Jim, we spoke in an earlier podcast about the benefits that people are entitled to in Illinois, generally under work comp. The money while you're off work, the TTD, the medical benefits while you're injured. And the third prong to work comp cases in Illinois is generally this lump sum payment. When people are talking about, "Hey, I got X amount of dollars for my work comp case," this is what they're talking about. They're talking about that lump sum payment.

Jonathan Rosenfeld:

And so today I want to talk with you and try to educate people a little bit about how this lump sum is derived, because it's not a random amount. It's a very methodical calculation. And I want you to help us get some insight into how these cases are valued under Illinois law.

Jonathan Rosenfeld:

And I guess the first thing, can you take a step back and walk us through that settlement process. I guess first off, in order to begin with I guess, when is a case, a work comp case in Illinois right to settle?

Jim Hardy:

Okay. Thanks, Jonathan. So you're entitled to a settlement for a work injury, but you should not settle your case until the doctor has released you from medical treatment. And the docs call that MMI or maximum medical improvement. So some people want to try to settle their case as soon as they're released back to work in some capacity, but that's not the best time, or that's not the appropriate time to settle a case. Because even though you're back to work, the doctor may still recommend treatment, therapy, follow-up visit doctor visits.

Jim Hardy:

And once you settle the work comp case, then you close out your medical rights. So the work comp insurance carrier, once it's settled, they don't have to pay for any more medical bills. So that's why it's essential to not pursue settlement and sign off anything until your doctor has said that you are done treating, no more follow up visits, you're good to go and they release you from treatment. So that's the appropriate time and not before that.

Jonathan Rosenfeld:

And so if you are injured on the job and your doctor's released you but you're not feeling 100%, it may be in your best interest to wait a little bit and see what happens and see what develops. See if you have any more problems.

Jim Hardy:

Sure. That's correct also. Just because the doctor has released you from treatment, that doesn't mean that you have to settle. It just means that it's an appropriate time to settle not until you're put at MMI by the doctor.

Jim Hardy:

But commonly I won't settle a case until a person feels comfortable, once their released from treatment, that they're confident that they don't need to follow up with the doctor any further. They're doing okay at work under the doctor's orders and they feel pretty good. Then it's safe to enter into a settlement because there wouldn't be any anticipated future medical anymore based on the old date of accident when they got hurt. So that's important.

Jonathan Rosenfeld:

Okay. And now I want to talk with you about how these settlements are derived. And ultimately these cases, they're about money, frankly. How much the case is valued is really dependent on the extent of your injury and how much money you were making at the time you were injured.

Jonathan Rosenfeld:

And those two things, those two factors, can you explain a little bit how those two elements get calculated and how they figure into an ultimately to a lump sum settlement and work comp?

Jim Hardy:

Sure. So the benefits in a work comp case under state law are based on what they call the average weekly wage. And the average weekly wage is calculated using the earnings that you made before the date of accident. All right. So you go back and it's just that, it's the average weekly wage or average weekly earnings. You can go back a year per the statute. If you worked prior to the date of accident less than a year, well, then the calculation just is different, but it's still the average weekly earnings prior to the date of accident.

Jim Hardy:

Then once you have that average weekly wage, then all the other benefits of more comp flow from that. So for the off work benefit, for the TTD, temporary total disability, that's the check that you get every week, every two weeks from work comp. That's calculated under state law at a specific figure, two of the average weekly wage, but then you get that two thirds tax-free. That's why that TTD check is supposed to bring you about what you may take home prior to the date of accident.

Jim Hardy:

And then the average weekly wage calculation is also used to calculate what they call the permanency rate. And the permanency rate is what you use to settle a case at the end of the day for that specific person.

Jim Hardy:

So in a work comp case, the average weekly wage is important, and there are different ways to calculate it as well. The insurance company would be more than happy to calculate that average weekly wage for you, because they're going to calculate it to their advantage, which means to keep it as low as possible. Because then everything else, all the benefits that flow from that will be lower. That's why it's important to get an attorney involved to make sure that the average weekly wage is calculated correctly.

Jim Hardy:

So how we do that as we secure a wage statement from the employer, or look at the pay stubs if the injured worker has all of them for that specific period, and do our own calculation, that there are certain ... There's a lot of case law over the years in court about fighting about how that average weekly wage is calculated, and the adjuster isn't going to calculate it in your favor, that's for sure. So very, very important to calculate that average weekly wage correctly.

Jonathan Rosenfeld:

So do you calculate the average weekly wage, you figure that out. And then there's a document, there's a schedule in Illinois as well as in other states, basically categorizing each part of the body. And it basically sets forth the amount of money or weeks in terms of compensation that you can recover based on the type of injury that you sustained.

Jonathan Rosenfeld:

Can you talk a little bit about that scheduled types of injury in Illinois? What that is and how that comes into play with a settlement?

Jim Hardy:

Sure. So the Work Comp Act lays out a series of body parts, and it goes from at the highest rate for the, they call it the person as a whole, which is the core of the body. Usually the spine or head injuries or shoulder comes from the person as a whole.

Jim Hardy:

And then from there, it goes to loss of use of an arm, and then a hand, and then actually the thumb. And then each of the fingers, it goes down to the little finger, pinky finger. And then it also breaks it down into legs, ankles, foot, and toes as well. So it's very specific and there are also different schedules for loss of hearing, for instance, loss of vision and so forth for eye juries.

Jim Hardy:

But so, and what the state law does is, people think that there's a set rate that you get for a work injury. It's only a set rate if you have 100% loss of use of that body part. So if you have a thumb amputated that would be all the way down to the base, then that would be 100% loss of use of the thumb. And you would get a benefit check for the 100% loss. There's no argument, it's medically determined that there's an amputation there. Bone loss all the way down, you lost your thumb.

Jim Hardy:

So anything short of an amputation though is lower than 100% of course, and that's what you get a settlement for. Say you injure your thumb and fracture it. It's not amputated, you fractured it or you have an injury where they have to go in and do surgery on the nerve and the thumb due to a deep laceration. That's loss of use of the thumb less than 100%.

Jim Hardy:

And that's what attorneys and insurance adjusters argue about for a settlement. It's the percentage loss of use of that body part, in this case the thumb. And the attorney is trying to get the percentage up as high as possible, because the higher the loss of use to the body part, the higher the dollar figure of your settlement. But it's not fixed because you got that variable of the percentage that we can argue.

Jim Hardy:

But it's also ... There's another variable there, and that's the average weekly wage that we were talking about. And that's why it's important to get that up as high as possible, because the higher the average weekly wage, the more you get for that whatever percentage loss of use is of that body part. So a person making 10 bucks an hour can have the same exact injury in a settlement for 20% loss of use of the thumb, for instance. That guy making 10 bucks an hour is going to get half the settlement in dollars and cents of a guy making 20 bucks an hour.

Jim Hardy:

So that's why it's important to get that average weekly wage up as high as possible so your settlement is higher. But that in a nutshell is how the settlement process works with a specific body part, loss of use of a certain body part.

Jonathan Rosenfeld:

Interesting. So I guess for any employee who's injured on the job and they're looking at the schedule on the Illinois Industrial Commission website, and they're like, "Agh, this is easy. I got a iPhone, I could punch these numbers in and figure this out." There's a lot more to it than just punching numbers. These are typically disputed cases too, correct?

Jim Hardy:

Right, that's correct. And you're going to have disputes over the calculation of the average weekly wage. You're going to have disputes over what ... Again, short of a full amputation, which fortunately is rare, you have an argument and disputes over what that percentage should be, and that's where the fight is.

Jim Hardy:

And that's why it's important to get an attorney to be on your side, to fight for you because the insurance company has no obligation to fight on your side, they're trying to save themselves money. So the more money they keep in their pocket, the less money goes into the injured worker's pocket.

Jonathan Rosenfeld:

Obviously this is great information for anyone who's injured and really anyone who's got a family member who may have a work-related injury. Jim, I want to thank you today for joining me. And if anyone has any questions about work comp settlements, we'll have your contact information in the show notes. But thank you, it's great information.

Jim Hardy:

Right, Jonathan. Thank you again. It was a pleasure to be with you today.