Ill. Court Rejects Employer's Request for Credits, Including what it Paid Employee Not to Work

Springfield, IL (WorkersCompensation.com) -- When a worker receives workers' compensation benefits along with benefits due through contractual arrangements or other considerations, can the employer claim a credit?

That issue was up for consideration in Joliet v. Illinois Workers’ Compensation Commission, No. 3-22-0175 WC (Ill. Ct. App. 01/10/23), in which the court held that benefits an employee would have been paid anyway -- including the salary she recieved despite not going to work -- weren't up for her employer to claim a credit on.

A worker filed two claims related to two at-work injuries. The first occurred when the worker was in a motor vehicle accident, and the second took place when she lost her footing on uneven ground and felt a “crack and pop” in her neck. 

Following the first injury, the employer began paying the worker temporary total disability payments of $2,327.54. Pursuant to a “make-whole” provision in the collective bargaining agreement, the employer was also obligated to pay the worker the difference between what she received for TDD and her actual salary, which amounted to $1,412.93.  

The worker underwent an independent medical examination, and the doctor conducting it opined that she was at maximum medical improvement and capable of full-duty work. Relying on her own doctor’s opinion, the worker remained off work, but the employer began paying her full salary of $3,729.36. She returned to work seven months later, receiving her salary while performing light-duty work. 

Later, the worker experienced her second work-related injury when slipped and felt the “crack and pop.” She was taken off work for this injury and paid pursuant to her expenditure of sick, vacation, and compensatory leave. 

The employer argued that it was entitled to a credit for: 

1. The “make-whole” payments it made during the first six months of the worker’s disability 
2. The “make-whole” payments it made when it was no longer required to under the CBA 
3. The overpayment of wages during the period the worker did not work 
4. The benefits the worker received following her second injury 

Regarding these claims, an arbitrator: 

• Denied the employer’s request for a credit due to the payment of medical bills 
• Awarded the employer a credit for payment of TTD 
• Found the employer was entitled to a credit of $14,120.30 for the “make-whole” payments 
• Found that the employer was not entitled to a credit for the worker’s pay, as it represented her “actual regular gross pay” 
• Determined that payments made pursuant to the worker’s use of sick leave, vacation, and compensatory time did not entitle the employer to a credit because these benefits could be used irrespective of her work injury 

The state’s workers’ compensation commission adopted the arbitrator’s decision except for the credit for “make-whole” payments. The commission determined that the employer could not recover $14,120.30 for the “make-whole” benefits it paid during the initial period of TTD. 

The employer appealed.  

Under Illinois law, if an injured employee receives benefits that should not have been payable if rights under workers’ compensation law exist, then the employer can claim a credit. That provision does not apply to payments made that would have been payable irrespective of a workplace injury. 

The court broke down the employer’s claims down as follows: 

Jan. 28, 2015, to July 28, 2015 

What the employer said: The employer claimed an entitlement to a credit of $14,210.30 

How the court ruled: The sum the employer made was paid to the worker under the “make-whole” provision in the CBA under which the parties operated. As such, “there was no overpayment of TTD, nor was there an early payment made toward satisfying a future obligation.” 

July 29, 2015, to Jan. 12, 2016 

What the employer said: The employer claimed a credit for “make-whole” payments. 

How the court ruled: There was a basis in the record for the commission’s decision that “the information on the payment vouchers [was] unreliable.” To wit, the worker’s pay vouchers showed actual time worked during this period despite the fact that she had not yet returned to light duty. “We cannot say that the Commission’s decision on this point it contrary to the manifest weight of the evidence,” the court wrote. 

Jan. 13, 2016, to Aug. 11, 2016 

What the employer said: The commission wrongly denied the employer a credit for payments the employer made to the worker after it terminated her TTD. 

How the court ruled: These payments were made by virtue of the expenditure of the worker’s accrued leave benefits. As evidence that the employer envisioned this, the court pointed out that a human resources official named “Andrea” told the worker that her continued payments would be based on her expenditure of accrued leave. 

Why wasn’t this statement hearsay? Under Illinois Rule of Evidence 801(d)(2)(D), a statement is not hearsay if it is offered against a party and is a statement by the party’s agent or servant concerning a matter within the scope of the agency or employment and made during the existence of the relationship. 

Feb. 17, 2017, to Dec. 7, 2017 

What the employer said: Although the worker received payments during this period by expending accrued leave, another case, Elgin Board of Education School District U-46, No. 1-09-3446WD (Ill. App. Ct. 04/25/11), allowed a credit under similar circumstances. 

How the court ruled: Depsite the other case, the language of the statute made clear that credits do not apply to payments made that would have been payable irrespective of an accidental injury at work. “There is no dispute that [the worker] was paid through the expenditure of her accrued leave time and … there is no indication that she could not have used this leave time absent an occupational injury.”  

Thus, the court upheld the commission’s decision. 

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