Carlos S. Arévalo

Wednesday, February 11th, 2015

A Shot Heard Round the World — Governor Rauner’s Executive Order 15-13

Earlier this week, Governor Bruce Rauner made national news by signing Executive Order 15-13 directing the Illinois Department of Central Management Services (“CMS”) to “cease enforcement of [union contract] Fair Share provisions” and prohibiting all state agencies from collecting fair shares under union contracts.

Fair Share provisions are provisions in union contracts that require the employer to deduct a fair share fee from state employees’ paychecks even if these employees choose not to join the union. Pursuant to the Illinois Public Labor Relations Act, employees have the right to refrain from participating in union activities. However, employees may be required, pursuant to the terms of the union contract, to pay a fee which “shall be their proportionate share of the costs of the collective bargaining process, contract administration and pursuing matters affecting wages, hours and other conditions of employment.”

The Executive Order also directs CMS and all state agencies to place all “fair share” deductions in an escrow account for as long as such deductions are required under any contracting union’s collective bargaining agreement and to maintain an accounting of such fees until a court determines whether or not fair share provisions are constitutional. Coupled with Executive Order 15-13, Governor Rauner is also filing a lawsuit in federal court seeking a declaration that fair share provisions in union contracts to which the State is a party violate the First Amendment by compelling employees to engage in political speech.

Governor Rauner cites two United States Supreme Court decisions in the text of his Executive Order, namely the cases of Abood v. Detroit Board of Education (1977) and last year’s Harris v. Quinn decision involving home-care personal assistants. In Abood, the plaintiffs, public school teachers in Detroit, filed class actions against the Detroit Board of Education and the public teacher union representative in Detroit, after the two entered into a collective bargaining agreement that contained an agency-shop clause that instituted “fair share” contributions from nonmember teachers. The complaint claimed that the union was engaged in activities that plaintiffs did not approve. The nonmember teachers sought to have the agency-shop clause declared invalid as a deprivation of their freedom of association protected by the United States Constitution. Although the agency-shop clause was found to be valid, the Supreme Court held that plaintiffs could prevent the union’s spending a part of their required service fees to express ideological views unrelated to its duties as exclusive bargaining representative.

In Harris, the Supreme Court held that “fair share” provisions requiring nonmember Medicaid-funded home-care personal assistants to pay “fair share” fees to the union violated the First Amendment. The Illinois Department of Human Services Home Services Program, a state-run Medicaid program, allowed participants to hire personal assistants. These assistants were deemed State employees under the Illinois Public Labor Relations Act. As a result, they were required to pay a “fair share” of the union dues pursuant to the union contract between the State and the union. The Court in Harris analyzed the Abood decision, characterizing it as an “anomaly” and “questionable on several grounds,” and determined that the First Amendment prohibited the collection of a fee from personal assistants who did not join the union. In the decision, the Court limited the Abood decision to “full-fledged state employees” which did not include personal assistants.

Governor Rauner, through Executive Order 15-13 and the filed lawsuit, wishes to extend the rationale in Harris to all state employees and overrule Abood based on the belief that Illinois state employee unions are “using compelled ‘fair share’ fees to fund inherently political activities to influence the outcome of core public sector issues, such as wages, pensions, and benefits.”

Whether or not Governor Rauner is ultimately successful remains to be seen. Certainly, unions in Illinois will not sit idly by and allow the Governor’s federal lawsuit to run its course; they will go on the offensive and take other steps in State courts and/or before the Public Labor Relations Board to prevent the implementation of Executive Order 15-13. While the Governor’s action is limited to the state unionized labor force impacting a reported 6,500 out of an estimated 42,000 state employees, any court decision regarding the validity of “fair share” provisions will certainly have far-reaching consequences for the nation’s public employers, unions and employees.


Carlos S. Arevalo

Author: Carlos S. Arevalo

Wednesday, January 14th, 2015

New Changes to Audit Transparency for Local Governments

The arrival of the New Year has brought about a variety of changes to Illinois laws. In particular, one of these changes brings added transparency to the audit process under the Illinois Counties and Illinois Municipal codes. Specifically, the law now requires that an auditor, within 60 days of the close of an audit, provide management letters and any audited financial statements to each member of the county board or the municipality’s corporate authorities. Additionally, this information must also be posted to the local government’s website. Finally, the auditor must also present the audit information during a public meeting, either in person, by phone, or by a web connection.

In passing this law, the Illinois Senate defined “management letters” as documents presenting “significant deficiencies and material weaknesses” in audit reports. Additionally, the posting requirement does not necessitate the disclosure of internal control weaknesses or deficiencies. Such information would be redacted so as to not “open the floodgates of material weakness in a governmental organization’s internal controls.”

Further, based on statements on the floor during the adoption of these changes, the bill’s sponsor Senator Michael Connelly (R) out of Wheaton’s 21st District, indicated that the change in legislation does not require that the auditor present the audit to the entire “county board.” Such a requirement could also be satisfied by presenting the audit to the “county finance or audit committee.”  Senator Connelly added that presenting to either will “generally” satisfy audit standards.  Because Senator Connelly’s statements were specific to counties, it is unclear whether they apply to municipalities.  However, it is reasonable to interpret that the amendment requirements would be satisfied if the audit result were presented to a municipality finance or audit committee as long as such a subsidiary body exists in a municipality corporate structure under its code.

Ultimately, the added transparency will provide further information to elected officials and the public regarding the audit process.


Carlos S. Arevalo

Author: Carlos S. Arevalo, Jacob Caudill

Monday, December 29th, 2014

Warehouse Workers Not Entitled to Pay for Time Spent Waiting and Going Through Anti-theft Screenings

On Dec. 9, 2014, the United States Supreme Court handed down a decision holding that the time spent by employees waiting to go and going through security screenings is not compensable under the Fair Labor Standards Act of 1938 (“FLSA”). Pursuant to FLSA and the subsequent Portal-to-Portal Act of 1947, workers are entitled to compensation for “work” or “work time,” but pay is not included for activities that are “preliminary or postliminary” to the work that employees are hired to perform.

The case, Integrity Staffing Solutions, Inc. v. Busk, was filed by Jesse Buck and Laurie Castro, who were hourly workers at Amazon.com warehouses in Las Vegas and Fenley, Nevada. Their duties primarily involved retrieving products from shelves and packaging these products for delivery to Amazon customers. Buck and Castro, as representatives of a putative class of workers, claimed that they were entitled to pay for the time spent waiting to go and actually going through anti-theft security checks, described as roughly 25 minutes. The trial court dismissed their claims stating that the screenings took place after the regular work shift and that under FSLA a claim for compensation could only be made if the screenings were an “integral and indispensable part of their job.” Instead, the screenings were part of the “postliminary” activities of their job. The 9th U.S. Circuit Court of Appeals in San Francisco disagreed with the trial court and found that the screenings were activities necessary to the work performed and done for the benefit of the employer.

Justice Clarence Thomas, writing for the Supreme Court in a unanimous decision, outlined decisions by the Supreme Court in the mid 1940s interpreting FSLA that defined “work” as “physical or mental exertion controlled or required by the employer” and “work week” as time that an employee was required to be at work, on duty or at a work site. According to Justice Thomas, these decisions resulted in a flood of litigation. In response Congress enacted the Portal-to-Portal Act which exempted compensation for two categories, namely walking, riding, or traveling to and from the actual place of work (“commute time”) and activities that occurred either prior to the start or subsequent to the work day.

Justice Thomas noted that this case involved the second category, particularly the question of whether or not the screening process at Amazon warehouses constitutes an activity that is preliminary or postliminary to an employee’s work. The security screenings were different from examples in earlier court decisions where activities were compensable, such as one where employees would have to spend time showering and changing clothes to get rid of the chemicals used in the manufacturing process or butchers who would spend time sharpening their knives to avoid having dull blades that would later result in a slow-down of production. These activities were, according to Justice Thomas, compensable because they were “integral and indispensable” to the work being performed. Indeed, they were based on safety and production concerns. In contrast, the security screenings at Amazon warehouses had nothing to do with the job of retrieving and packaging products for which Busk and Castro were hired.

Critics of the decision pointed to the mandatory nature of the screenings, to a deviation from the main objectives of the Portal-to-Portal Act, which was intended to exclude worker’s commutes from the time companies were required to compensate, or even to statements in the decision by Justice Thomas about the workers’ right to bring the issue of screenings to the bargaining table even though workers at Amazon are not unionized.

As for local governments, this decision also provides guidance for determining employee overtime. If the overtime work being performed is not “integral and indispensable” to the position, the municipality (or any employer) is not required to compensate the employee. Obviously, if the municipal employee is commuting to work this time will not be compensable under the first prong of the Portal-to-Portal Act. Additionally, as long as the activities prior to work or subsequent to the work day are not “integral and indispensable” to the municipal employee’s position, the municipality will not have to compensate the employee for this time.

Ultimately, the decision is a huge win for employers and provides additional guidance to employers as to what constitutes pre-shift or post-shift activities. It directly impacts workers at Amazon and other retailer warehouses, particularly at this time of the year when overtime demands increase due to the heavy shopping season. One other outcome may be that unions, heeding Justice Thomas’ statements, will use this decision as a basis to further define “work week” in their contracts.


Carlos S. Arevalo

Author: Carlos S. Arévalo

 

 

Wednesday, October 8th, 2014

Municipality Successfully Defends PSEBA Claim

On October 3, 2014, a municipality represented by ZRFM’s Carlos Arévalo and faced with a Public Safety Employee Benefits Act (PSEBA) lawsuit, finally received word of whether or not it would be responsible to pay the plaintiff, the widow of a firefighter suffering an off-duty heart attack, for her health insurance benefits. Also at issue in the lawsuit were attorney’s fees if the plaintiff’s claims were successful.  The Circuit Court issued a ruling in favor of the municipality, denying PSEBA benefits.  The plaintiff in the case opted not to pursue an appeal of the court’s decision, resulting in the end of litigation against the municipality that dated back to late 2012.

Pursuant to PSEBA, a safety employee such as a firefighter, who suffers a catastrophic injury or is killed in the line of duty, is entitled to have the employer pay the entire health insurance plan premium for the employee, the employee’s spouse, and dependent children up to age 25. PSEBA became law in 1997.  Its scope over the last decade has been expanded primarily through litigation reaching the Supreme Court and intermediate appellate courts but not through action by the Illinois General Assembly.  The most significant Supreme Court decision involving PSEBA was issued in 2004 when it ruled that suffering a “catastrophic injury” was equivalent to an injury resulting in the employee being awarded a “line of duty disability” by a pension board.  As a result of this ruling, employees who were no longer physically fit to serve as police officers or firefighters due to duty related injuries were able to demand that their municipality pay for their health insurance premiums. Assuming that their injuries occurred within the scope of their employment and certain other parameters were met, such claims were generally successful.  While PSEBA is clearly appropriate in a scenario where the employee can no longer work as a result of his disability, local government advocates have sought amendments to PSEBA that would prevent the benefits in cases where the employee is capable of obtaining gainful employment.   These efforts have been largely unsuccessful.

More recent litigation has focused on PSEBA’s requirements that the injury would have to occur as a result of the employee’s “response to what is reasonably believed to be an emergency.” In early 2012, the Supreme Court interpreted this phrase and explained that to be eligible, PSEBA requires an injury to be sustained in response to “what was reasonably believed to be an unforeseen circumstance involving imminent danger to a person or property requiring an urgent response.”

In this case, the plaintiff sought to expand PSEBA even further. Specifically, the plaintiff argued that PSEBA should be expanded to cover injuries to firefighters that were sustained over the course of years of active fire service.  Essentially, the plaintiff sought to have the court interpret PSEBA to include cumulative occupational diseases that would potentially, but not necessarily, result in the firefighter’s death, even if he was not on duty at the time.  The firefighter at issue passed away at home as a result of a heart attack.  While acknowledging the tragic circumstances of the firefighter’s death, the municipality argued that the firefighter’s fatal heart attack occurred off-duty and that therefore he was not killed in the line of duty as such phrase is used in PSEBA.  In addition, the municipality maintained that PSEBA was not intended to address occupational diseases.

In agreeing with the municipality’s arguments, the court stated that the phrase “killed in the line of duty” as used in the PSEBA was to be given its “plain, unambiguous meaning” and that considering the lack of indication to the contrary by either the appellate courts or the legislature, PSEBA was not intended to include “cumulative occupational disease deaths” in its definition of “killed in the line of duty.” Accordingly, the court determined that the firefighter was not “killed in the line of duty,” as he was neither on duty nor killed by a specific act of duty.  As a result, the plaintiff was not entitled to PSEBA benefits.


Carlos S. Arevalo

Author: Carlos S. Arévalo

Wednesday, May 14th, 2014

Internship Programs: Paid or Unpaid?

The summer is soon approaching and soon, if not already, college and high school students will hit the pavement and come knocking for interviews and jobs while they are off school.  Their goal:  to make some money or, at a minimum, to pad their resumes.

While internships are a good source of cheap or free labor, local governments have to proceed carefully when making these hiring decisions.  Assuming that a local government’s budget does provide for summer help, and that some funds can be earmarked for internships that pay minimum wage, there should be no issue with the selection and retention of summer employees.  In the case of unpaid internships, there are some issues to consider.

The Department of Labor Wage and Hour Division (WHD) oversees whether or not employers are in compliance with Federal Labor Standards Act (FLSA) requirements for unpaid interns.  The WHD has developed six criteria which include the following:

  • Is the internship similar to training that would be offered in an educational environment?
  • Is the internship experience for the benefit of the intern?
  • Is the intern displacing a regular employee?
  • Does training provided by the employer to the intern impede employer’s operations?
  • Is it clear that the intern is not expecting a permanent position at the conclusion of the internship?
  • Do the employer and intern understand there is no compensation?

Fortunately for local governments, the FLSA makes a special exception for individuals who volunteer to perform services.  Accordingly, unpaid internships in the public sector where the intern volunteers without expectation of compensation are generally permissible.  However, there are limits.

When the work performed is for the benefit of a “commercial operation” or “enterprise” operated by the local government or charitable organization, a legitimate question arises as to whether the exception applies.  This approach arises out of a Supreme Court case where a not-for-profit organization, the Alamo Foundation in California, derived a large part of its income from the operation of a business staffed by “associates.” The associates were individuals who were not paid compensation and rather received food, clothing, shelter and other benefits and the foundation disputed that they were employees. The organization business was found to be an “enterprise” because the work being performed served a common business purpose, served the general public and competed with other commercial enterprises in the area.  As a result, the volunteers were deemed employees.

By way of illustration in the local government context, if a municipality parks department or a park district brings in students who are engaged in a course of study leading to a profession in the health and fitness field to be lifeguards or physical trainers, the activity is more likely to be deemed an “enterprise” and such individuals should be paid.  A public pool or fitness center would likely be considered an enterprise because it is (1) operated as a business, (2) does serve the general public, and (3) does compete with private sector providers such as Lifetime Fitness (and Centegra Healthbridge in McHenry County).

On the other hand, if a township brought an intern to assist the food pantry coordinator with its service operation, and the intern’s purpose would be to sharpen her organization and managerial skills, the non-business, charitable purpose of the food pantry will most certainly override the concept of a commercial purpose or enterprise and the intern may properly be deemed a volunteer or unpaid intern.

Another area inviting scrutiny despite the exception is where there is a displacement of employees as a result of bringing in unpaid interns or volunteers.  The WHD will maintain that if work force numbers are reduced or could be increased depending on seasonal needs, replacing or supplementing workers with unpaid interns will result in these interns being deemed employees and having to be paid a wage.  Clearly, if the work force at issue is part of a union, the employing entity will need to worry about a grievance and associated remedies to union members for lost opportunities and overtime.

Specifically, the WHD has opined in the past that students at a community college who are enrolled in a fire protection technology course of study and who intern with a local fire department, but who do not displace regular employees and are not promised a job at the end of the internship were deemed trainees and not employees.  As a result, they could be unpaid interns.

As a final point, it should be taken into account that whether an individual is properly classified as an “unpaid intern” or volunteer depends on the totality of the circumstances surrounding the relationship between the person providing services and the entity receiving those services.  It has never been Congress’ intent to discourage volunteerism or to prevent willing individuals from pursuing and attaining skills and training in their chosen careers by spending time serving as unpaid interns.

Bottom line, while an exception is recognized for those performing service for local governments without compensation, the administration must be thoughtful in the creation and implementation of volunteer or unpaid internship opportunities.

Arévalo Appointed Secretary of ISBA’s Labor & Employment Law Section Council

Carlos Arévalo, featured in this edition of the Local Government Law Bulletin, has been appointed as Secretary of the Labor & Employment Law Section Council of the Illinois State Bar Association.  The Section’s mission is to keep its members and the public informed of important developments in labor and employment law, to review and comment on proposed legislation, to foster informal contacts between attorneys representing management and labor interests and to foster improvement in the administration of federal and state labor legislation.

Carlos has been an active member of the Labor & Employment Section Council since 2010 after completing his term as Chair of the Local Government Law Section Council.


 

Carlos S. Arevalo

Author: Carlos S. Arévalo

Thursday, April 3rd, 2014

College Campuses: A Potentially Target-Rich Environment for Organized Labor

Now that the Final Four is set and many a bracket has been busted, it seems appropriate that ZRFM’s Local Government Law Bulletin would offer a brief commentary on a recent development impacting college sports (even if it has little to do with local government!): College football players can now vote to unionize.   Of course, in light of setbacks to organized labor in the last few years, it is no surprise that organized labor is setting its sights on untapped markets.

In January 2013, Steve Greenhouse of the New York Times reported that the national share of workers in unions fell to 11.3 percent, a 97-year low.  His report cited numbers compiled by the Bureau of Labor Statistics that found the union members fell by 400,000 in 2012 even though employment had risen by 2.4 million.  Factors for this decline included new laws in Wisconsin, Michigan and Indiana (what about Illinois?) that lessened the power of unions as well as the continued expansion of manufacturers in nonunion states.  An added component for this decline was the growth of sectors where unions do not play a significant role such as retail and restaurants.

Just this past February, the nation witnessed the defeat of the United Auto Workers union at a Volkswagen Tennessee plant where employees voted against the union’s organizing efforts, even though it had the support of management.  According to Neal E. Boudette of the Wall Street Journal, this loss “raised questions about the future of a union that has for years suffered from declining membership and influence.”  Admittedly, the United Auto Workers’ loss occurred in the South, an area where anti-union sentiments run strong.

But now, the United Steelworkers union (“USW”) recently scored a victory, albeit indirectly, by supporting the College Athletes Players Association (“CAPA”) and its petition on behalf of Northwestern University football players.  According to CAPA’s website, its objective is to secure the rights of players to collectively bargain and obtain guaranteed coverage for sports-related medical expenses for current and former players, minimize the risk of traumatic brain injury and establish return to play protocols, improve graduation rates and implement due-process rights with respect to discipline.  Peter Sung Ohr, the Regional Director for Region 13 of the National Labor Relations Board, issued a Decision and Direction of Election on the football players’ petition.  In his decision, Ohr found that scholarship football players at Northwestern are “employees” within the meaning of the National Labor Relations Act and eligible for union representation and can be considered an “appropriate bargaining unit.”  The decision was hailed by USW’s President Leo W. Gerard as “a tremendous victory, not just for athletes at Northwestern, but ultimately for all college athletes, many of whom generate tens of millions of dollars each year for their institutions, yet still are in constant danger of being out on the streets with one accident or injury.”  Gerard vowed to continue USW’s support of CAPA and its “struggle.”

As with all labor issues, it came down to money and control.  Ohr’s decision highlighted revenues of approximately $235 million for Northwestern over a nine-year period.  The players are granted scholarships to attend Northwestern, room and board, at a value of up to $76,000.  The decision also cited the manner in which Northwestern exercises control over the football players.  The players’ schedule, heavily regulated, includes 50 to 60 hours of football-related activities.  Players are restricted in their choice of housing, whether they drive their own vehicles, any outside employment opportunities and traveling options.  They are also restricted in their use of social media.  Because of their football-related obligations, they are often unable to take desired courses of study due to scheduling conflicts.  Essentially, Ohr found that players are not students, their football activities have nothing to do with their studies, there is no connection between their athletic endeavors and academics, and their scholarships were strictly for football, not academics.

For the moment, the decision’s impact is narrow.  It applies to private universities and their revenue generating scholarship athletes.  Public institutions, on the other hand, are governed by state law.  Nationwide, 24 states are “right-to-work” jurisdictions making the path to unionizing extremely difficult, especially in the South.   Ultimately, many questions will need to be answered including how non-revenue producing sports will be treated, particularly the women’s teams in light of the Title IX gender equality requirements.  There are also tax ramifications of scholarships being deemed “income” and the impact that it will have on athletes.  As employees, athletes will be able to pursue benefits afforded pursuant to workers’ compensation laws, especially those athletes whose “careers” are cut short by injury.  And then, there will be an impact on college recruitment efforts—what university has the best union contract and related benefits!   States will certainly monitor the progress of the Northwestern football players’ petition and will likely craft legislation applicable to their public universities.  Current and future college athletes will wait and see how this unfolds.  And, of course, organized labor will continue to support the college athletes’ “struggle” and its efforts to tap into this vast source of dues and membership.

Most importantly, the viability of the term “student athlete” will be called into question and the world of college sports as we know it will cease to exist.  Just imagine: What if March Madness were suspended as a result of a players’ strike?  No matter—Opening Day would still be around the corner.  But, for Cubs fans, there is always next year…


Carlos S. Arevalo

Author: Carlos S. Arévalo

 

Friday, January 24th, 2014

Department of Revenue’s New Sales Tax Allocation Emergency and Proposed Rules Following Hartney Decision

On Jan. 22, 2014, the Illinois Department of Revenue filed emergency rules to comply with the Illinois Supreme Court’s recent decision in Hartney Fuel Oil Co. v. Hamer that we addressed in a previous article.  According to this decision, a seller incurs retailers’ occupation taxes in the local jurisdiction where its predominant selling activities occur, even if it also engages in very limited activities in other taxing jurisdictions.

At the time of the decision, the Department of Revenue stated that the Hartney decision would not have any impact on the overwhelming majority of Illinois retailers because most retailers are engaged in traditional over-the-counter sales, and these retailers consistently have collected and paid local sales tax for the jurisdiction where such sales take place.  The Department also noted that a number of retailers with selling activities in multiple jurisdictions had a long-standing practice of collecting and paying local retailers’ occupation taxes only in the lower tax rate jurisdictions where they arranged for final acceptance of purchase orders, even if their predominant selling activities occurred in other taxing jurisdictions. This is the practice that was rejected by the Supreme Court in its decision.

The emergency rules are intended to provide Illinois businesses the necessary guidance about how they should allocate the local sales taxes they collect from customers.  Specifically, the regulations establish a set of factors to determine the proper taxing jurisdiction for a business that operates in multiple jurisdictions.  To do so, the regulations identify four primary selling activities, namely the place of the offer to sell, the place of the acceptance of such offer, the goods and inventory location and where the sales personnel are found.  In the event that these four “selling activities” do not identify the predominant location of the business for taxing purposes, the regulations then point to five additional factors.  These include the location of the seller’s administrative functions, where solicitations take place, where contracts are received, where the transfer of title of the goods at issue occurs and where the goods are delivered.  If consideration of these factors still fails to identify the proper tax jurisdiction, then the regulations allow the Department to make a determination of the appropriate tax jurisdiction based on he locality where the seller receives the bulk of government services and consistent with an analysis of the statutory purposes and judicial interpretations of State’s sales tax provisions.

The emergency rules will be in effect for 150 days unless the Joint Committee on Administrative Rules votes to suspend them.

The Department of Revenue also filed virtually identical proposed rules that will permanently replace the emergency rules following the Joint Committee on Administrative Rules review process.  Under the rule-making process and for a period of 45 days following the filing of proposed rules, interested groups (including local governments) and the general public are allowed to submit comments or request a public hearing.  A second 45-day period follows in which the Department and JCAR can agree to modify or amend the proposed rules.  Ultimately, the proposed regulations, as potentially modified or amended, become permanent at the conclusion of the rule-making process.

In public hearings held by the Department of Revenue in December 2013, impacted municipalities urged the governor and the Department to promulgate rules that would adhere to the original intent of the law characterized as raising revenue from retailers who benefit from the services that units of local government provide.  Others asked the Department to move forward with the rule making process to ensure fairness and clear direction to retailers and to allow for sales tax agreements between retailers and local governments.  We would encourage our clients to take full advantage of the comment period and submit their input.


Carlos S. Arevalo

Author: Carlos S. Arévalo

Thursday, November 14th, 2013

PSEBA Recipient Reporting Forms

On August 27, 2013, Governor Quinn signed into law Senate Bill 1245 (codified as 820 ILCS 320/17).  The bill amended the Public Safety Employee Benefits Act (“PSEBA”), effective immediately, and instituted an employer’s periodic reporting obligation with the State Commission on Government Forecasting and Accountability (“COGFA”).  Senate Bill 1245 was initially introduced in an effort to define “catastrophic injury” as an injury that prevented an individual from performing gainful employment.  However, the bill’s sponsors did not have sufficient support behind it and, as a result, the bill was amended to require the collection of data regarding the costs of PSEBA across Illinois.  By now, employers should have received forms from COGFA, which seek information regarding the number of PSEBA applications received in the last two years (the reporting period) and since PSEBA’s inception. The reports are due to COGFA 120 days after receipt of the form.

COGFA’s report forms found in www.cgfa.ilga.gov/Resource.aspx?id=1665 contain detailed instructions and are fairly easy to complete.  The employer form requests information regarding the number of PSEBA claims, the number of awarded claims (assuming claims qualify under PSEBA requirements), and the aggregate costs of providing PSEBA benefits, specifying the premiums paid per recipient.  The forms also seek historical information as to the number of PSEBA claims filed and/or awarded since the inception of PSEBA in 1997 and the related costs as well as a specific breakdown of the monthly costs and the type of health plans afforded to PSEBA recipients.  Employers are also required to provide applicable forms to each PSEBA recipient.  The PSEBA Recipient forms, also found in the website link provided above, are just as simple to complete.  Recipients’ responses are due to employers within 60 days.  Employers can provide an additional 30 days in the event of non-compliance, and give notice that failure to so comply will result in the recipient’s obligation to reimburse employer for health care premiums for the period the form is due and not filed.  The information gathered by employers and submitted to COGFA is exempt from disclosure pursuant to the requirements of the Freedom of Information Act, thus any privacy concerns on the part of PSEBA recipients should not be a factor in their compliance.

We encourage employers subject to PSEBA to timely submit the requested information.  To date, the extent of costs associated with PSEBA across the state is unknown.  Each employer can attest to PSEBA’s impact and significant strain on its budget.  While in some situations the employee awarded the benefits is truly unable to engage in gainful employment as a result of his line of duty injuries, there are those instances where PSEBA recipients can still work, do work, and are capable of obtaining health care benefits through their new employers.  Data obtained pursuant to this amendment may lend support to proponents of the redefinition of “catastrophic injury.”  At a minimum, data ought to provide a complete picture of what are likely astronomical costs, thereby potentially curbing further efforts to expand PSEBA.


Carlos S. Arevalo

Author: Carlos S. Arévalo

Wednesday, September 25th, 2013

ZRFM’s Illinois State Bar Association Articles Now Available

More than 20 articles published in Illinois State Bar Association newsletters and authored by Zukowski, Rogers, Flood & McArdle lawyers can be viewed now on zrfmlaw.com. ZRFM is the largest law firm in McHenry County, Illinois.

The articles address topics involving labor and employment, local government, administrative law, and antitrust and unfair competition. Individual newsletter articles can be located by linking from the titles listed in the publications section of each attorney’s Web site biography. They also appear below chronologically:

Tuesday, January 29th, 2013

Awards & Recognitions

Local Government Award:

  • The City of Harvard received the 2012 Governor’s Hometown Award for its support and service to the Harvard Community Center and Food Pantry. Congratulations to the City of Harvard for this prestigious recognition.

ZRFM Attorney Updates:

  • Rich Flood was named one of the Top Ten Suburban Real Estate Related Lawyers by the Leading Lawyers Network. Rich was also named a Super Lawyer by his peers for the ninth consecutive year, which is as long as the designation has existed.
  • Carlos S. Arévalo recently joined the board of directors at Mercy Harvard Hospital.
  • Ryan Farrell became a director of the Centegra Health Systems Foundation Board in December 2012.
  • The McHenry County Historical Society welcomed Greg Barry to its board of directors in 2012.
  • Timothy (T.J.) Clifton was named chair of the Community Leadership Board of Big Brothers Big Sisters of McHenry County.
  • The Community Action Agency recently added Bill Westfall to its board of directors.