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Full Text of SB3709  102nd General Assembly

SB3709 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3709

 

Introduced 1/21/2022, by Sen. Linda Holmes

 

SYNOPSIS AS INTRODUCED:
 
105 ILCS 5/10-23.5  from Ch. 122, par. 10-23.5
105 ILCS 5/24-11  from Ch. 122, par. 24-11
820 ILCS 305/4  from Ch. 48, par. 138.4

    Amends the School Code. Adds a special education cooperative that dissolves or reorganizes to provisions concerning the continued employment of educational support personnel employees in a new, annexing, or receiving school district. Provides that with respect to a special education cooperative reorganization, the contractual continued service status of a teacher transfers to the new or different board. Amends the Workers' Compensation Act. Provides that it is unlawful for an employer to demote an employee because of the exercise of his or her rights or remedies under the Act. Effective immediately.


LRB102 22596 CMG 31739 b

 

 

A BILL FOR

 

SB3709LRB102 22596 CMG 31739 b

1    AN ACT concerning education.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The School Code is amended by changing Sections
510-23.5 and 24-11 as follows:
 
6    (105 ILCS 5/10-23.5)  (from Ch. 122, par. 10-23.5)
7    Sec. 10-23.5. Educational support personnel employees.
8    (a) To employ such educational support personnel employees
9as it deems advisable and to define their employment duties;
10provided that residency within any school district shall not
11be considered in determining the employment or the
12compensation of any such employee, or whether to retain,
13promote, assign or transfer such employee. If an educational
14support personnel employee is removed or dismissed or the
15hours he or she works are reduced as a result of a decision of
16the school board (i) to decrease the number of educational
17support personnel employees employed by the board or (ii) to
18discontinue some particular type of educational support
19service, written notice shall be mailed to the employee and
20also given to the employee either by certified mail, return
21receipt requested, or personal delivery with receipt, at least
2230 days before the employee is removed or dismissed or the
23hours he or she works are reduced, together with a statement of

 

 

SB3709- 2 -LRB102 22596 CMG 31739 b

1honorable dismissal and the reason therefor if applicable.
2However, if a reduction in hours is due to an unforeseen
3reduction in the student population, then the written notice
4must be mailed and given to the employee at least 5 days before
5the hours are reduced. The employee with the shorter length of
6continuing service with the district, within the respective
7category of position, shall be dismissed first unless an
8alternative method of determining the sequence of dismissal is
9established in a collective bargaining agreement or contract
10between the board and any exclusive bargaining agent and
11except that this provision shall not impair the operation of
12any affirmative action program in the district, regardless of
13whether it exists by operation of law or is conducted on a
14voluntary basis by the board. If the board has any vacancies
15for the following school term or within one calendar year from
16the beginning of the following school term, the positions
17thereby becoming available within a specific category of
18position shall be tendered to the employees so removed or
19dismissed from that category or any other category of
20position, so far as they are qualified to hold such positions.
21Each board shall, in consultation with any exclusive employee
22representative or bargaining agent, each year establish a
23list, categorized by positions, showing the length of
24continuing service of each full time educational support
25personnel employee who is qualified to hold any such
26positions, unless an alternative method of determining a

 

 

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1sequence of dismissal is established as provided for in this
2Section, in which case a list shall be made in accordance with
3the alternative method. Copies of the list shall be
4distributed to the exclusive employee representative or
5bargaining agent on or before February 1 of each year.
6    If an educational support personnel employee is removed or
7dismissed as a result of a decision of the board to decrease
8the number of educational support personnel employed by the
9board or to discontinue some particular type of educational
10support service and he or she accepts the tender of a vacancy
11within one calendar year from the beginning of the following
12school term, then that employee shall maintain any rights
13accrued during his or her previous service with the school
14district.
15    Where an educational support personnel employee is
16dismissed by the board as a result of a decrease in the number
17of employees or the discontinuance of the employee's job, the
18employee shall be paid all earned compensation on or before
19the next regular pay date following his or her last day of
20employment.
21    The provisions of this amendatory Act of 1986 relating to
22residency within any school district shall not apply to cities
23having a population exceeding 500,000 inhabitants.
24    (b) In the case of a new school district or districts
25formed in accordance with Article 11E of this Code, a school
26district or districts that annex all of the territory of one or

 

 

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1more entire other school districts in accordance with Article
27 of this Code, or a school district receiving students from a
3deactivated school facility in accordance with Section
410-22.22b of this Code, or a special education cooperative
5that dissolves or reorganizes, the employment of educational
6support personnel in the new, annexing, or receiving school
7district immediately following the reorganization shall be
8governed by this subsection (b). Lists of the educational
9support personnel employed in the individual districts for the
10school year immediately prior to the effective date of the new
11district or districts, annexation, or deactivation shall be
12combined for the districts forming the new district or
13districts, for the annexed and annexing districts, or for the
14deactivating and receiving districts, as the case may be. The
15combined list shall be categorized by positions, showing the
16length of continuing service of each full-time educational
17support personnel employee who is qualified to hold any such
18position. If there are more full-time educational support
19personnel employees on the combined list than there are
20available positions in the new, annexing, or receiving school
21district, then the employing school board shall first remove
22or dismiss those educational support personnel employees with
23the shorter length of continuing service within the respective
24category of position, following the procedures outlined in
25subsection (a) of this Section. The employment and position of
26each educational support personnel employee on the combined

 

 

SB3709- 5 -LRB102 22596 CMG 31739 b

1list not so removed or dismissed shall be transferred to the
2new, annexing, or receiving school board, and the new,
3annexing, or receiving school board is subject to this Code
4with respect to any educational support personnel employee so
5transferred as if the educational support personnel employee
6had been the new, annexing, or receiving board's employee
7during the time the educational support personnel employee was
8actually employed by the school board of the district from
9which the employment and position were transferred.
10    The changes made by Public Act 95-148 shall not apply to
11the formation of a new district or districts in accordance
12with Article 11E of this Code, the annexation of one or more
13entire districts in accordance with Article 7 of this Code, or
14the deactivation of a school facility in accordance with
15Section 10-22.22b of this Code effective on or before July 1,
162007.
17(Source: P.A. 101-46, eff. 7-12-19.)
 
18    (105 ILCS 5/24-11)  (from Ch. 122, par. 24-11)
19    Sec. 24-11. Boards of Education - Boards of School
20Inspectors - Contractual continued service.
21    (a) As used in this and the succeeding Sections of this
22Article:
23    "Teacher" means any or all school district employees
24regularly required to be licensed under laws relating to the
25licensure of teachers.

 

 

SB3709- 6 -LRB102 22596 CMG 31739 b

1    "Board" means board of directors, board of education, or
2board of school inspectors, as the case may be.
3    "School term" means that portion of the school year, July
41 to the following June 30, when school is in actual session.
5    "Program" means a program of a special education joint
6agreement.
7    "Program of a special education joint agreement" means
8instructional, consultative, supervisory, administrative,
9diagnostic, and related services that are managed by a special
10educational joint agreement designed to service 2 or more
11school districts that are members of the joint agreement.
12    "PERA implementation date" means the implementation date
13of an evaluation system for teachers as specified by Section
1424A-2.5 of this Code for all schools within a school district
15or all programs of a special education joint agreement.
16    (b) This Section and Sections 24-12 through 24-16 of this
17Article apply only to school districts having less than
18500,000 inhabitants.
19    (c) Any teacher who is first employed as a full-time
20teacher in a school district or program prior to the PERA
21implementation date and who is employed in that district or
22program for a probationary period of 4 consecutive school
23terms shall enter upon contractual continued service in the
24district or in all of the programs that the teacher is legally
25qualified to hold, unless the teacher is given written notice
26of dismissal by certified mail, return receipt requested, by

 

 

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1the employing board at least 45 days before the end of any
2school term within such period.
3    (d) For any teacher who is first employed as a full-time
4teacher in a school district or program on or after the PERA
5implementation date, the probationary period shall be one of
6the following periods, based upon the teacher's school terms
7of service and performance, before the teacher shall enter
8upon contractual continued service in the district or in all
9of the programs that the teacher is legally qualified to hold,
10unless the teacher is given written notice of dismissal by
11certified mail, return receipt requested, by the employing
12board at least 45 days before the end of any school term within
13such period:
14        (1) 4 consecutive school terms of service in which the
15    teacher receives overall annual evaluation ratings of at
16    least "Proficient" in the last school term and at least
17    "Proficient" in either the second or third school term;
18        (2) 3 consecutive school terms of service in which the
19    teacher receives 3 overall annual evaluations of
20    "Excellent"; or
21        (3) 2 consecutive school terms of service in which the
22    teacher receives 2 overall annual evaluations of
23    "Excellent" service, but only if the teacher (i)
24    previously attained contractual continued service in a
25    different school district or program in this State, (ii)
26    voluntarily departed or was honorably dismissed from that

 

 

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1    school district or program in the school term immediately
2    prior to the teacher's first school term of service
3    applicable to the attainment of contractual continued
4    service under this subdivision (3), and (iii) received, in
5    his or her 2 most recent overall annual or biennial
6    evaluations from the prior school district or program,
7    ratings of at least "Proficient", with both such ratings
8    occurring after the school district's or program's PERA
9    implementation date. For a teacher to attain contractual
10    continued service under this subdivision (3), the teacher
11    shall provide official copies of his or her 2 most recent
12    overall annual or biennial evaluations from the prior
13    school district or program to the new school district or
14    program within 60 days from the teacher's first day of
15    service with the new school district or program. The prior
16    school district or program must provide the teacher with
17    official copies of his or her 2 most recent overall annual
18    or biennial evaluations within 14 days after the teacher's
19    request. If a teacher has requested such official copies
20    prior to 45 days after the teacher's first day of service
21    with the new school district or program and the teacher's
22    prior school district or program fails to provide the
23    teacher with the official copies required under this
24    subdivision (3), then the time period for the teacher to
25    submit the official copies to his or her new school
26    district or program must be extended until 14 days after

 

 

SB3709- 9 -LRB102 22596 CMG 31739 b

1    receipt of such copies from the prior school district or
2    program. If the prior school district or program fails to
3    provide the teacher with the official copies required
4    under this subdivision (3) within 90 days from the
5    teacher's first day of service with the new school
6    district or program, then the new school district or
7    program shall rely upon the teacher's own copies of his or
8    her evaluations for purposes of this subdivision (3).
9    If the teacher does not receive overall annual evaluations
10of "Excellent" in the school terms necessary for eligibility
11to achieve accelerated contractual continued service in
12subdivisions (2) and (3) of this subsection (d), the teacher
13shall be eligible for contractual continued service pursuant
14to subdivision (1) of this subsection (d). If, at the
15conclusion of 4 consecutive school terms of service that count
16toward attainment of contractual continued service, the
17teacher's performance does not qualify the teacher for
18contractual continued service under subdivision (1) of this
19subsection (d), then the teacher shall not enter upon
20contractual continued service and shall be dismissed. If a
21performance evaluation is not conducted for any school term
22when such evaluation is required to be conducted under Section
2324A-5 of this Code, then the teacher's performance evaluation
24rating for such school term for purposes of determining the
25attainment of contractual continued service shall be deemed
26"Proficient", except that, during any time in which the

 

 

SB3709- 10 -LRB102 22596 CMG 31739 b

1Governor has declared a disaster due to a public health
2emergency pursuant to Section 7 of the Illinois Emergency
3Management Agency Act, this default to "Proficient" does not
4apply to any teacher who has entered into contractual
5continued service and who was deemed "Excellent" on his or her
6most recent evaluation. During any time in which the Governor
7has declared a disaster due to a public health emergency
8pursuant to Section 7 of the Illinois Emergency Management
9Agency Act and unless the school board and any exclusive
10bargaining representative have completed the performance
11rating for teachers or mutually agreed to an alternate
12performance rating, any teacher who has entered into
13contractual continued service, whose most recent evaluation
14was deemed "Excellent", and whose performance evaluation is
15not conducted when the evaluation is required to be conducted
16shall receive a teacher's performance rating deemed
17"Excellent". A school board and any exclusive bargaining
18representative may mutually agree to an alternate performance
19rating for teachers not in contractual continued service
20during any time in which the Governor has declared a disaster
21due to a public health emergency pursuant to Section 7 of the
22Illinois Emergency Management Agency Act, as long as the
23agreement is in writing.
24    (e) For the purposes of determining contractual continued
25service, a school term shall be counted only toward attainment
26of contractual continued service if the teacher actually

 

 

SB3709- 11 -LRB102 22596 CMG 31739 b

1teaches or is otherwise present and participating in the
2district's or program's educational program for 120 days or
3more, provided that the days of leave under the federal Family
4Medical Leave Act that the teacher is required to take until
5the end of the school term shall be considered days of teaching
6or participation in the district's or program's educational
7program. A school term that is not counted toward attainment
8of contractual continued service shall not be considered a
9break in service for purposes of determining whether a teacher
10has been employed for 4 consecutive school terms, provided
11that the teacher actually teaches or is otherwise present and
12participating in the district's or program's educational
13program in the following school term.
14    (f) If the employing board determines to dismiss the
15teacher in the last year of the probationary period as
16provided in subsection (c) of this Section or subdivision (1)
17or (2) of subsection (d) of this Section, but not subdivision
18(3) of subsection (d) of this Section, the written notice of
19dismissal provided by the employing board must contain
20specific reasons for dismissal. Any full-time teacher who does
21not receive written notice from the employing board at least
2245 days before the end of any school term as provided in this
23Section and whose performance does not require dismissal after
24the fourth probationary year pursuant to subsection (d) of
25this Section shall be re-employed for the following school
26term.

 

 

SB3709- 12 -LRB102 22596 CMG 31739 b

1    (g) Contractual continued service shall continue in effect
2the terms and provisions of the contract with the teacher
3during the last school term of the probationary period,
4subject to this Act and the lawful regulations of the
5employing board. This Section and succeeding Sections do not
6modify any existing power of the board except with respect to
7the procedure of the discharge of a teacher and reductions in
8salary as hereinafter provided. Contractual continued service
9status shall not restrict the power of the board to transfer a
10teacher to a position which the teacher is qualified to fill or
11to make such salary adjustments as it deems desirable, but
12unless reductions in salary are uniform or based upon some
13reasonable classification, any teacher whose salary is reduced
14shall be entitled to a notice and a hearing as hereinafter
15provided in the case of certain dismissals or removals.
16    (h) If, by reason of any change in the boundaries of school
17districts, by reason of special education cooperative
18reorganizations, or by reason of the creation of a new school
19district, the position held by any teacher having a
20contractual continued service status is transferred from one
21board to the control of a new or different board, then the
22contractual continued service status of the teacher is not
23thereby lost, and such new or different board is subject to
24this Code with respect to the teacher in the same manner as if
25the teacher were its employee and had been its employee during
26the time the teacher was actually employed by the board from

 

 

SB3709- 13 -LRB102 22596 CMG 31739 b

1whose control the position was transferred.
2    (i) The employment of any teacher in a program of a special
3education joint agreement established under Section 3-15.14,
410-22.31 or 10-22.31a shall be governed by this and succeeding
5Sections of this Article. For purposes of attaining and
6maintaining contractual continued service and computing length
7of continuing service as referred to in this Section and
8Section 24-12, employment in a special educational joint
9program shall be deemed a continuation of all previous
10licensed employment of such teacher for such joint agreement
11whether the employer of the teacher was the joint agreement,
12the regional superintendent, or one of the participating
13districts in the joint agreement.
14    (j) For any teacher employed after July 1, 1987 as a
15full-time teacher in a program of a special education joint
16agreement, whether the program is operated by the joint
17agreement or a member district on behalf of the joint
18agreement, in the event of a reduction in the number of
19programs or positions in the joint agreement in which the
20notice of dismissal is provided on or before the end of the
212010-2011 school term, the teacher in contractual continued
22service is eligible for employment in the joint agreement
23programs for which the teacher is legally qualified in order
24of greater length of continuing service in the joint
25agreement, unless an alternative method of determining the
26sequence of dismissal is established in a collective

 

 

SB3709- 14 -LRB102 22596 CMG 31739 b

1bargaining agreement. For any teacher employed after July 1,
21987 as a full-time teacher in a program of a special education
3joint agreement, whether the program is operated by the joint
4agreement or a member district on behalf of the joint
5agreement, in the event of a reduction in the number of
6programs or positions in the joint agreement in which the
7notice of dismissal is provided during the 2011-2012 school
8term or a subsequent school term, the teacher shall be
9included on the honorable dismissal lists of all joint
10agreement programs for positions for which the teacher is
11qualified and is eligible for employment in such programs in
12accordance with subsections (b) and (c) of Section 24-12 of
13this Code and the applicable honorable dismissal policies of
14the joint agreement.
15    (k) For any teacher employed after July 1, 1987 as a
16full-time teacher in a program of a special education joint
17agreement, whether the program is operated by the joint
18agreement or a member district on behalf of the joint
19agreement, in the event of the dissolution of a joint
20agreement, in which the notice to teachers of the dissolution
21is provided during the 2010-2011 school term, the teacher in
22contractual continued service who is legally qualified shall
23be assigned to any comparable position in a member district
24currently held by a teacher who has not entered upon
25contractual continued service or held by a teacher who has
26entered upon contractual continued service with a shorter

 

 

SB3709- 15 -LRB102 22596 CMG 31739 b

1length of contractual continued service. Any teacher employed
2after July 1, 1987 as a full-time teacher in a program of a
3special education joint agreement, whether the program is
4operated by the joint agreement or a member district on behalf
5of the joint agreement, in the event of the dissolution of a
6joint agreement in which the notice to teachers of the
7dissolution is provided during the 2011-2012 school term or a
8subsequent school term, the teacher who is qualified shall be
9included on the order of honorable dismissal lists of each
10member district and shall be assigned to any comparable
11position in any such district in accordance with subsections
12(b) and (c) of Section 24-12 of this Code and the applicable
13honorable dismissal policies of each member district.
14    (l) The governing board of the joint agreement, or the
15administrative district, if so authorized by the articles of
16agreement of the joint agreement, rather than the board of
17education of a school district, may carry out employment and
18termination actions including dismissals under this Section
19and Section 24-12.
20    (m) The employment of any teacher in a special education
21program authorized by Section 14-1.01 through 14-14.01, or a
22joint educational program established under Section 10-22.31a,
23shall be under this and the succeeding Sections of this
24Article, and such employment shall be deemed a continuation of
25the previous employment of such teacher in any of the
26participating districts, regardless of the participation of

 

 

SB3709- 16 -LRB102 22596 CMG 31739 b

1other districts in the program.
2    (n) Any teacher employed as a full-time teacher in a
3special education program prior to September 23, 1987 in which
42 or more school districts participate for a probationary
5period of 2 consecutive years shall enter upon contractual
6continued service in each of the participating districts,
7subject to this and the succeeding Sections of this Article,
8and, notwithstanding Section 24-1.5 of this Code, in the event
9of the termination of the program shall be eligible for any
10vacant position in any of such districts for which such
11teacher is qualified.
12(Source: P.A. 101-643, eff. 6-18-20; 102-552, eff. 1-1-22.)
 
13    Section 10. The Workers' Compensation Act is amended by
14changing Section 4 as follows:
 
15    (820 ILCS 305/4)  (from Ch. 48, par. 138.4)
16    (Text of Section from P.A. 101-40 and 102-37)
17    Sec. 4. (a) Any employer, including but not limited to
18general contractors and their subcontractors, who shall come
19within the provisions of Section 3 of this Act, and any other
20employer who shall elect to provide and pay the compensation
21provided for in this Act shall:
22        (1) File with the Commission annually an application
23    for approval as a self-insurer which shall include a
24    current financial statement, and annually, thereafter, an

 

 

SB3709- 17 -LRB102 22596 CMG 31739 b

1    application for renewal of self-insurance, which shall
2    include a current financial statement. Said application
3    and financial statement shall be signed and sworn to by
4    the president or vice president and secretary or assistant
5    secretary of the employer if it be a corporation, or by all
6    of the partners, if it be a copartnership, or by the owner
7    if it be neither a copartnership nor a corporation. All
8    initial applications and all applications for renewal of
9    self-insurance must be submitted at least 60 days prior to
10    the requested effective date of self-insurance. An
11    employer may elect to provide and pay compensation as
12    provided for in this Act as a member of a group workers'
13    compensation pool under Article V 3/4 of the Illinois
14    Insurance Code. If an employer becomes a member of a group
15    workers' compensation pool, the employer shall not be
16    relieved of any obligations imposed by this Act.
17        If the sworn application and financial statement of
18    any such employer does not satisfy the Commission of the
19    financial ability of the employer who has filed it, the
20    Commission shall require such employer to,
21        (2) Furnish security, indemnity or a bond guaranteeing
22    the payment by the employer of the compensation provided
23    for in this Act, provided that any such employer whose
24    application and financial statement shall not have
25    satisfied the commission of his or her financial ability
26    and who shall have secured his liability in part by excess

 

 

SB3709- 18 -LRB102 22596 CMG 31739 b

1    liability insurance shall be required to furnish to the
2    Commission security, indemnity or bond guaranteeing his or
3    her payment up to the effective limits of the excess
4    coverage, or
5        (3) Insure his entire liability to pay such
6    compensation in some insurance carrier authorized,
7    licensed, or permitted to do such insurance business in
8    this State. Every policy of an insurance carrier, insuring
9    the payment of compensation under this Act shall cover all
10    the employees and the entire compensation liability of the
11    insured: Provided, however, that any employer may insure
12    his or her compensation liability with 2 or more insurance
13    carriers or may insure a part and qualify under subsection
14    1, 2, or 4 for the remainder of his or her liability to pay
15    such compensation, subject to the following two
16    provisions:
17            Firstly, the entire compensation liability of the
18        employer to employees working at or from one location
19        shall be insured in one such insurance carrier or
20        shall be self-insured, and
21            Secondly, the employer shall submit evidence
22        satisfactorily to the Commission that his or her
23        entire liability for the compensation provided for in
24        this Act will be secured. Any provisions in any
25        policy, or in any endorsement attached thereto,
26        attempting to limit or modify in any way, the

 

 

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1        liability of the insurance carriers issuing the same
2        except as otherwise provided herein shall be wholly
3        void.
4        Nothing herein contained shall apply to policies of
5    excess liability carriage secured by employers who have
6    been approved by the Commission as self-insurers, or
7        (4) Make some other provision, satisfactory to the
8    Commission, for the securing of the payment of
9    compensation provided for in this Act, and
10        (5) Upon becoming subject to this Act and thereafter
11    as often as the Commission may in writing demand, file
12    with the Commission in form prescribed by it evidence of
13    his or her compliance with the provision of this Section.
14    (a-1) Regardless of its state of domicile or its principal
15place of business, an employer shall make payments to its
16insurance carrier or group self-insurance fund, where
17applicable, based upon the premium rates of the situs where
18the work or project is located in Illinois if:
19        (A) the employer is engaged primarily in the building
20    and construction industry; and
21        (B) subdivision (a)(3) of this Section applies to the
22    employer or the employer is a member of a group
23    self-insurance plan as defined in subsection (1) of
24    Section 4a.
25    The Illinois Workers' Compensation Commission shall impose
26a penalty upon an employer for violation of this subsection

 

 

SB3709- 20 -LRB102 22596 CMG 31739 b

1(a-1) if:
2        (i) the employer is given an opportunity at a hearing
3    to present evidence of its compliance with this subsection
4    (a-1); and
5        (ii) after the hearing, the Commission finds that the
6    employer failed to make payments upon the premium rates of
7    the situs where the work or project is located in
8    Illinois.
9    The penalty shall not exceed $1,000 for each day of work
10for which the employer failed to make payments upon the
11premium rates of the situs where the work or project is located
12in Illinois, but the total penalty shall not exceed $50,000
13for each project or each contract under which the work was
14performed.
15    Any penalty under this subsection (a-1) must be imposed
16not later than one year after the expiration of the applicable
17limitation period specified in subsection (d) of Section 6 of
18this Act. Penalties imposed under this subsection (a-1) shall
19be deposited into the Illinois Workers' Compensation
20Commission Operations Fund, a special fund that is created in
21the State treasury. Subject to appropriation, moneys in the
22Fund shall be used solely for the operations of the Illinois
23Workers' Compensation Commission, the salaries and benefits of
24the Self-Insurers Advisory Board employees, the operating
25costs of the Self-Insurers Advisory Board, and by the
26Department of Insurance for the purposes authorized in

 

 

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1subsection (c) of Section 25.5 of this Act.
2    (a-2) Every Employee Leasing Company (ELC), as defined in
3Section 15 of the Employee Leasing Company Act, shall at a
4minimum provide the following information to the Commission or
5any entity designated by the Commission regarding each
6workers' compensation insurance policy issued to the ELC:
7        (1) Any client company of the ELC listed as an
8    additional named insured.
9        (2) Any informational schedule attached to the master
10    policy that identifies any individual client company's
11    name, FEIN, and job location.
12        (3) Any certificate of insurance coverage document
13    issued to a client company specifying its rights and
14    obligations under the master policy that establishes both
15    the identity and status of the client, as well as the dates
16    of inception and termination of coverage, if applicable.
17    (b) The sworn application and financial statement, or
18security, indemnity or bond, or amount of insurance, or other
19provisions, filed, furnished, carried, or made by the
20employer, as the case may be, shall be subject to the approval
21of the Commission.
22    Deposits under escrow agreements shall be cash, negotiable
23United States government bonds or negotiable general
24obligation bonds of the State of Illinois. Such cash or bonds
25shall be deposited in escrow with any State or National Bank or
26Trust Company having trust authority in the State of Illinois.

 

 

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1    Upon the approval of the sworn application and financial
2statement, security, indemnity or bond or amount of insurance,
3filed, furnished or carried, as the case may be, the
4Commission shall send to the employer written notice of its
5approval thereof. The certificate of compliance by the
6employer with the provisions of subparagraphs (2) and (3) of
7paragraph (a) of this Section shall be delivered by the
8insurance carrier to the Illinois Workers' Compensation
9Commission within five days after the effective date of the
10policy so certified. The insurance so certified shall cover
11all compensation liability occurring during the time that the
12insurance is in effect and no further certificate need be
13filed in case such insurance is renewed, extended or otherwise
14continued by such carrier. The insurance so certified shall
15not be cancelled or in the event that such insurance is not
16renewed, extended or otherwise continued, such insurance shall
17not be terminated until at least 10 days after receipt by the
18Illinois Workers' Compensation Commission of notice of the
19cancellation or termination of said insurance; provided,
20however, that if the employer has secured insurance from
21another insurance carrier, or has otherwise secured the
22payment of compensation in accordance with this Section, and
23such insurance or other security becomes effective prior to
24the expiration of the 10 days, cancellation or termination
25may, at the option of the insurance carrier indicated in such
26notice, be effective as of the effective date of such other

 

 

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1insurance or security.
2    (c) Whenever the Commission shall find that any
3corporation, company, association, aggregation of individuals,
4reciprocal or interinsurers exchange, or other insurer
5effecting workers' compensation insurance in this State shall
6be insolvent, financially unsound, or unable to fully meet all
7payments and liabilities assumed or to be assumed for
8compensation insurance in this State, or shall practice a
9policy of delay or unfairness toward employees in the
10adjustment, settlement, or payment of benefits due such
11employees, the Commission may after reasonable notice and
12hearing order and direct that such corporation, company,
13association, aggregation of individuals, reciprocal or
14interinsurers exchange, or insurer, shall from and after a
15date fixed in such order discontinue the writing of any such
16workers' compensation insurance in this State. Subject to such
17modification of the order as the Commission may later make on
18review of the order, as herein provided, it shall thereupon be
19unlawful for any such corporation, company, association,
20aggregation of individuals, reciprocal or interinsurers
21exchange, or insurer to effect any workers' compensation
22insurance in this State. A copy of the order shall be served
23upon the Director of Insurance by registered mail. Whenever
24the Commission finds that any service or adjustment company
25used or employed by a self-insured employer or by an insurance
26carrier to process, adjust, investigate, compromise or

 

 

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1otherwise handle claims under this Act, has practiced or is
2practicing a policy of delay or unfairness toward employees in
3the adjustment, settlement or payment of benefits due such
4employees, the Commission may after reasonable notice and
5hearing order and direct that such service or adjustment
6company shall from and after a date fixed in such order be
7prohibited from processing, adjusting, investigating,
8compromising or otherwise handling claims under this Act.
9    Whenever the Commission finds that any self-insured
10employer has practiced or is practicing delay or unfairness
11toward employees in the adjustment, settlement or payment of
12benefits due such employees, the Commission may, after
13reasonable notice and hearing, order and direct that after a
14date fixed in the order such self-insured employer shall be
15disqualified to operate as a self-insurer and shall be
16required to insure his entire liability to pay compensation in
17some insurance carrier authorized, licensed and permitted to
18do such insurance business in this State, as provided in
19subparagraph 3 of paragraph (a) of this Section.
20    All orders made by the Commission under this Section shall
21be subject to review by the courts, said review to be taken in
22the same manner and within the same time as provided by Section
2319 of this Act for review of awards and decisions of the
24Commission, upon the party seeking the review filing with the
25clerk of the court to which said review is taken a bond in an
26amount to be fixed and approved by the court to which the

 

 

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1review is taken, conditioned upon the payment of all
2compensation awarded against the person taking said review
3pending a decision thereof and further conditioned upon such
4other obligations as the court may impose. Upon the review the
5Circuit Court shall have power to review all questions of fact
6as well as of law. The penalty hereinafter provided for in this
7paragraph shall not attach and shall not begin to run until the
8final determination of the order of the Commission.
9    (d) Whenever a Commissioner, with due process and after a
10hearing, determines an employer has knowingly failed to
11provide coverage as required by paragraph (a) of this Section,
12the failure shall be deemed an immediate serious danger to
13public health, safety, and welfare sufficient to justify
14service by the Commission of a work-stop order on such
15employer, requiring the cessation of all business operations
16of such employer at the place of employment or job site. If a
17business is declared to be extra hazardous, as defined in
18Section 3, a Commissioner may issue an emergency work-stop
19order on such an employer ex parte, prior to holding a hearing,
20requiring the cessation of all business operations of such
21employer at the place of employment or job site while awaiting
22the ruling of the Commission. Whenever a Commissioner issues
23an emergency work-stop order, the Commission shall issue a
24notice of emergency work-stop hearing to be posted at the
25employer's places of employment and job sites. Any law
26enforcement agency in the State shall, at the request of the

 

 

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1Commission, render any assistance necessary to carry out the
2provisions of this Section, including, but not limited to,
3preventing any employee of such employer from remaining at a
4place of employment or job site after a work-stop order has
5taken effect. Any work-stop order shall be lifted upon proof
6of insurance as required by this Act. Any orders under this
7Section are appealable under Section 19(f) to the Circuit
8Court.
9    Any individual employer, corporate officer or director of
10a corporate employer, partner of an employer partnership, or
11member of an employer limited liability company who knowingly
12fails to provide coverage as required by paragraph (a) of this
13Section is guilty of a Class 4 felony. This provision shall not
14apply to any corporate officer or director of any
15publicly-owned corporation. Each day's violation constitutes a
16separate offense. The State's Attorney of the county in which
17the violation occurred, or the Attorney General, shall bring
18such actions in the name of the People of the State of
19Illinois, or may, in addition to other remedies provided in
20this Section, bring an action for an injunction to restrain
21the violation or to enjoin the operation of any such employer.
22    Any individual employer, corporate officer or director of
23a corporate employer, partner of an employer partnership, or
24member of an employer limited liability company who
25negligently fails to provide coverage as required by paragraph
26(a) of this Section is guilty of a Class A misdemeanor. This

 

 

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1provision shall not apply to any corporate officer or director
2of any publicly-owned corporation. Each day's violation
3constitutes a separate offense. The State's Attorney of the
4county in which the violation occurred, or the Attorney
5General, shall bring such actions in the name of the People of
6the State of Illinois.
7    The criminal penalties in this subsection (d) shall not
8apply where there exists a good faith dispute as to the
9existence of an employment relationship. Evidence of good
10faith shall include, but not be limited to, compliance with
11the definition of employee as used by the Internal Revenue
12Service.
13    All investigative actions must be acted upon within 90
14days of the issuance of the complaint. Employers who are
15subject to and who knowingly fail to comply with this Section
16shall not be entitled to the benefits of this Act during the
17period of noncompliance, but shall be liable in an action
18under any other applicable law of this State. In the action,
19such employer shall not avail himself or herself of the
20defenses of assumption of risk or negligence or that the
21injury was due to a co-employee. In the action, proof of the
22injury shall constitute prima facie evidence of negligence on
23the part of such employer and the burden shall be on such
24employer to show freedom of negligence resulting in the
25injury. The employer shall not join any other defendant in any
26such civil action. Nothing in this amendatory Act of the 94th

 

 

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1General Assembly shall affect the employee's rights under
2subdivision (a)3 of Section 1 of this Act. Any employer or
3carrier who makes payments under subdivision (a)3 of Section 1
4of this Act shall have a right of reimbursement from the
5proceeds of any recovery under this Section.
6    An employee of an uninsured employer, or the employee's
7dependents in case death ensued, may, instead of proceeding
8against the employer in a civil action in court, file an
9application for adjustment of claim with the Commission in
10accordance with the provisions of this Act and the Commission
11shall hear and determine the application for adjustment of
12claim in the manner in which other claims are heard and
13determined before the Commission.
14    All proceedings under this subsection (d) shall be
15reported on an annual basis to the Workers' Compensation
16Advisory Board.
17    An investigator with the Department of Insurance may issue
18a citation to any employer that is not in compliance with its
19obligation to have workers' compensation insurance under this
20Act. The amount of the fine shall be based on the period of
21time the employer was in non-compliance, but shall be no less
22than $500, and shall not exceed $10,000. An employer that has
23been issued a citation shall pay the fine to the Department of
24Insurance and provide to the Department of Insurance proof
25that it obtained the required workers' compensation insurance
26within 10 days after the citation was issued. This Section

 

 

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1does not affect any other obligations this Act imposes on
2employers.
3    Upon a finding by the Commission, after reasonable notice
4and hearing, of the knowing and willful failure or refusal of
5an employer to comply with any of the provisions of paragraph
6(a) of this Section, the failure or refusal of an employer,
7service or adjustment company, or an insurance carrier to
8comply with any order of the Illinois Workers' Compensation
9Commission pursuant to paragraph (c) of this Section
10disqualifying him or her to operate as a self insurer and
11requiring him or her to insure his or her liability, or the
12knowing and willful failure of an employer to comply with a
13citation issued by an investigator with the Department of
14Insurance, the Commission may assess a civil penalty of up to
15$500 per day for each day of such failure or refusal after the
16effective date of this amendatory Act of 1989. The minimum
17penalty under this Section shall be the sum of $10,000. Each
18day of such failure or refusal shall constitute a separate
19offense. The Commission may assess the civil penalty
20personally and individually against the corporate officers and
21directors of a corporate employer, the partners of an employer
22partnership, and the members of an employer limited liability
23company, after a finding of a knowing and willful refusal or
24failure of each such named corporate officer, director,
25partner, or member to comply with this Section. The liability
26for the assessed penalty shall be against the named employer

 

 

SB3709- 30 -LRB102 22596 CMG 31739 b

1first, and if the named employer fails or refuses to pay the
2penalty to the Commission within 30 days after the final order
3of the Commission, then the named corporate officers,
4directors, partners, or members who have been found to have
5knowingly and willfully refused or failed to comply with this
6Section shall be liable for the unpaid penalty or any unpaid
7portion of the penalty. Upon investigation by the Department
8of Insurance, the Attorney General shall have the authority to
9prosecute all proceedings to enforce the civil and
10administrative provisions of this Section before the
11Commission. The Commission and the Department of Insurance
12shall promulgate procedural rules for enforcing this Section
13relating to their respective duties prescribed herein.
14    If an employer is found to be in non-compliance with any
15provisions of paragraph (a) of this Section more than once,
16all minimum penalties will double. Therefore, upon the failure
17or refusal of an employer, service or adjustment company, or
18insurance carrier to comply with any order of the Commission
19pursuant to paragraph (c) of this Section disqualifying him or
20her to operate as a self-insurer and requiring him or her to
21insure his or her liability, or the knowing and willful
22failure of an employer to comply with a citation issued by an
23investigator with the Department of Insurance, the Commission
24may assess a civil penalty of up to $1,000 per day for each day
25of such failure or refusal after the effective date of this
26amendatory Act of the 101st General Assembly. The minimum

 

 

SB3709- 31 -LRB102 22596 CMG 31739 b

1penalty under this Section shall be the sum of $20,000. In
2addition, employers with 2 or more violations of any
3provisions of paragraph (a) of this Section may not
4self-insure for one year or until all penalties are paid.
5    Upon the failure or refusal of any employer, service or
6adjustment company or insurance carrier to comply with the
7provisions of this Section and with the orders of the
8Commission under this Section, or the order of the court on
9review after final adjudication, the Commission may bring a
10civil action to recover the amount of the penalty in Cook
11County or in Sangamon County in which litigation the
12Commission shall be represented by the Attorney General. The
13Commission shall send notice of its finding of non-compliance
14and assessment of the civil penalty to the Attorney General.
15It shall be the duty of the Attorney General within 30 days
16after receipt of the notice, to institute prosecutions and
17promptly prosecute all reported violations of this Section.
18    Any individual employer, corporate officer or director of
19a corporate employer, partner of an employer partnership, or
20member of an employer limited liability company who, with the
21intent to avoid payment of compensation under this Act to an
22injured employee or the employee's dependents, knowingly
23transfers, sells, encumbers, assigns, or in any manner
24disposes of, conceals, secretes, or destroys any property
25belonging to the employer, officer, director, partner, or
26member is guilty of a Class 4 felony.

 

 

SB3709- 32 -LRB102 22596 CMG 31739 b

1    Penalties and fines collected pursuant to this paragraph
2(d) shall be deposited upon receipt into a special fund which
3shall be designated the Injured Workers' Benefit Fund, of
4which the State Treasurer is ex-officio custodian, such
5special fund to be held and disbursed in accordance with this
6paragraph (d) for the purposes hereinafter stated in this
7paragraph (d), upon the final order of the Commission. The
8Injured Workers' Benefit Fund shall be deposited the same as
9are State funds and any interest accruing thereon shall be
10added thereto every 6 months. The Injured Workers' Benefit
11Fund is subject to audit the same as State funds and accounts
12and is protected by the general bond given by the State
13Treasurer. The Injured Workers' Benefit Fund is considered
14always appropriated for the purposes of disbursements as
15provided in this paragraph, and shall be paid out and
16disbursed as herein provided and shall not at any time be
17appropriated or diverted to any other use or purpose. Moneys
18in the Injured Workers' Benefit Fund shall be used only for
19payment of workers' compensation benefits for injured
20employees when the employer has failed to provide coverage as
21determined under this paragraph (d) and has failed to pay the
22benefits due to the injured employee. The Commission shall
23have the right to obtain reimbursement from the employer for
24compensation obligations paid by the Injured Workers' Benefit
25Fund. Any such amounts obtained shall be deposited by the
26Commission into the Injured Workers' Benefit Fund. If an

 

 

SB3709- 33 -LRB102 22596 CMG 31739 b

1injured employee or his or her personal representative
2receives payment from the Injured Workers' Benefit Fund, the
3State of Illinois has the same rights under paragraph (b) of
4Section 5 that the employer who failed to pay the benefits due
5to the injured employee would have had if the employer had paid
6those benefits, and any moneys recovered by the State as a
7result of the State's exercise of its rights under paragraph
8(b) of Section 5 shall be deposited into the Injured Workers'
9Benefit Fund. The custodian of the Injured Workers' Benefit
10Fund shall be joined with the employer as a party respondent in
11the application for adjustment of claim. After July 1, 2006,
12the Commission shall make disbursements from the Fund once
13each year to each eligible claimant. An eligible claimant is
14an injured worker who has within the previous fiscal year
15obtained a final award for benefits from the Commission
16against the employer and the Injured Workers' Benefit Fund and
17has notified the Commission within 90 days of receipt of such
18award. Within a reasonable time after the end of each fiscal
19year, the Commission shall make a disbursement to each
20eligible claimant. At the time of disbursement, if there are
21insufficient moneys in the Fund to pay all claims, each
22eligible claimant shall receive a pro-rata share, as
23determined by the Commission, of the available moneys in the
24Fund for that year. Payment from the Injured Workers' Benefit
25Fund to an eligible claimant pursuant to this provision shall
26discharge the obligations of the Injured Workers' Benefit Fund

 

 

SB3709- 34 -LRB102 22596 CMG 31739 b

1regarding the award entered by the Commission.
2    (e) This Act shall not affect or disturb the continuance
3of any existing insurance, mutual aid, benefit, or relief
4association or department, whether maintained in whole or in
5part by the employer or whether maintained by the employees,
6the payment of benefits of such association or department
7being guaranteed by the employer or by some person, firm or
8corporation for him or her: Provided, the employer contributes
9to such association or department an amount not less than the
10full compensation herein provided, exclusive of the cost of
11the maintenance of such association or department and without
12any expense to the employee. This Act shall not prevent the
13organization and maintaining under the insurance laws of this
14State of any benefit or insurance company for the purpose of
15insuring against the compensation provided for in this Act,
16the expense of which is maintained by the employer. This Act
17shall not prevent the organization or maintaining under the
18insurance laws of this State of any voluntary mutual aid,
19benefit or relief association among employees for the payment
20of additional accident or sick benefits.
21    (f) No existing insurance, mutual aid, benefit or relief
22association or department shall, by reason of anything herein
23contained, be authorized to discontinue its operation without
24first discharging its obligations to any and all persons
25carrying insurance in the same or entitled to relief or
26benefits therein.

 

 

SB3709- 35 -LRB102 22596 CMG 31739 b

1    (g) Any contract, oral, written or implied, of employment
2providing for relief benefit, or insurance or any other device
3whereby the employee is required to pay any premium or
4premiums for insurance against the compensation provided for
5in this Act shall be null and void. Any employer withholding
6from the wages of any employee any amount for the purpose of
7paying any such premium shall be guilty of a Class B
8misdemeanor.
9    In the event the employer does not pay the compensation
10for which he or she is liable, then an insurance company,
11association or insurer which may have insured such employer
12against such liability shall become primarily liable to pay to
13the employee, his or her personal representative or
14beneficiary the compensation required by the provisions of
15this Act to be paid by such employer. The insurance carrier may
16be made a party to the proceedings in which the employer is a
17party and an award may be entered jointly against the employer
18and the insurance carrier.
19    (h) It shall be unlawful for any employer, insurance
20company, or service or adjustment company to interfere with,
21demote, restrain, or coerce an employee in any manner
22whatsoever in the exercise of the rights or remedies granted
23to him or her by this Act or to discriminate, attempt to
24discriminate, or threaten to discriminate against an employee
25in any way because of his or her exercise of the rights or
26remedies granted to him or her by this Act.

 

 

SB3709- 36 -LRB102 22596 CMG 31739 b

1    It shall be unlawful for any employer, individually or
2through any insurance company or service or adjustment
3company, to demote, to discharge or to threaten to discharge,
4or to refuse to rehire or recall to active service in a
5suitable capacity an employee because of the exercise of his
6or her rights or remedies granted to him or her by this Act.
7    (i) If an employer elects to obtain a life insurance
8policy on his employees, he may also elect to apply such
9benefits in satisfaction of all or a portion of the death
10benefits payable under this Act, in which case, the employer's
11compensation premium shall be reduced accordingly.
12    (j) Within 45 days of receipt of an initial application or
13application to renew self-insurance privileges the
14Self-Insurers Advisory Board shall review and submit for
15approval by the Chairman of the Commission recommendations of
16disposition of all initial applications to self-insure and all
17applications to renew self-insurance privileges filed by
18private self-insurers pursuant to the provisions of this
19Section and Section 4a-9 of this Act. Each private
20self-insurer shall submit with its initial and renewal
21applications the application fee required by Section 4a-4 of
22this Act.
23    The Chairman of the Commission shall promptly act upon all
24initial applications and applications for renewal in full
25accordance with the recommendations of the Board or, should
26the Chairman disagree with any recommendation of disposition

 

 

SB3709- 37 -LRB102 22596 CMG 31739 b

1of the Self-Insurer's Advisory Board, he shall within 30 days
2of receipt of such recommendation provide to the Board in
3writing the reasons supporting his decision. The Chairman
4shall also promptly notify the employer of his decision within
515 days of receipt of the recommendation of the Board.
6    If an employer is denied a renewal of self-insurance
7privileges pursuant to application it shall retain said
8privilege for 120 days after receipt of a notice of
9cancellation of the privilege from the Chairman of the
10Commission.
11    All orders made by the Chairman under this Section shall
12be subject to review by the courts, such review to be taken in
13the same manner and within the same time as provided by
14subsection (f) of Section 19 of this Act for review of awards
15and decisions of the Commission, upon the party seeking the
16review filing with the clerk of the court to which such review
17is taken a bond in an amount to be fixed and approved by the
18court to which the review is taken, conditioned upon the
19payment of all compensation awarded against the person taking
20such review pending a decision thereof and further conditioned
21upon such other obligations as the court may impose. Upon the
22review the Circuit Court shall have power to review all
23questions of fact as well as of law.
24(Source: P.A. 101-40, eff. 1-1-20; 102-37, eff. 7-1-21.)
 
25    (Text of Section from P.A. 101-384 and 102-37)

 

 

SB3709- 38 -LRB102 22596 CMG 31739 b

1    Sec. 4. (a) Any employer, including but not limited to
2general contractors and their subcontractors, who shall come
3within the provisions of Section 3 of this Act, and any other
4employer who shall elect to provide and pay the compensation
5provided for in this Act shall:
6        (1) File with the Commission annually an application
7    for approval as a self-insurer which shall include a
8    current financial statement, and annually, thereafter, an
9    application for renewal of self-insurance, which shall
10    include a current financial statement. Said application
11    and financial statement shall be signed and sworn to by
12    the president or vice president and secretary or assistant
13    secretary of the employer if it be a corporation, or by all
14    of the partners, if it be a copartnership, or by the owner
15    if it be neither a copartnership nor a corporation. All
16    initial applications and all applications for renewal of
17    self-insurance must be submitted at least 60 days prior to
18    the requested effective date of self-insurance. An
19    employer may elect to provide and pay compensation as
20    provided for in this Act as a member of a group workers'
21    compensation pool under Article V 3/4 of the Illinois
22    Insurance Code. If an employer becomes a member of a group
23    workers' compensation pool, the employer shall not be
24    relieved of any obligations imposed by this Act.
25        If the sworn application and financial statement of
26    any such employer does not satisfy the Commission of the

 

 

SB3709- 39 -LRB102 22596 CMG 31739 b

1    financial ability of the employer who has filed it, the
2    Commission shall require such employer to,
3        (2) Furnish security, indemnity or a bond guaranteeing
4    the payment by the employer of the compensation provided
5    for in this Act, provided that any such employer whose
6    application and financial statement shall not have
7    satisfied the commission of his or her financial ability
8    and who shall have secured his liability in part by excess
9    liability insurance shall be required to furnish to the
10    Commission security, indemnity or bond guaranteeing his or
11    her payment up to the effective limits of the excess
12    coverage, or
13        (3) Insure his entire liability to pay such
14    compensation in some insurance carrier authorized,
15    licensed, or permitted to do such insurance business in
16    this State. Every policy of an insurance carrier, insuring
17    the payment of compensation under this Act shall cover all
18    the employees and the entire compensation liability of the
19    insured: Provided, however, that any employer may insure
20    his or her compensation liability with 2 or more insurance
21    carriers or may insure a part and qualify under subsection
22    1, 2, or 4 for the remainder of his or her liability to pay
23    such compensation, subject to the following two
24    provisions:
25            Firstly, the entire compensation liability of the
26        employer to employees working at or from one location

 

 

SB3709- 40 -LRB102 22596 CMG 31739 b

1        shall be insured in one such insurance carrier or
2        shall be self-insured, and
3            Secondly, the employer shall submit evidence
4        satisfactorily to the Commission that his or her
5        entire liability for the compensation provided for in
6        this Act will be secured. Any provisions in any
7        policy, or in any endorsement attached thereto,
8        attempting to limit or modify in any way, the
9        liability of the insurance carriers issuing the same
10        except as otherwise provided herein shall be wholly
11        void.
12        Nothing herein contained shall apply to policies of
13    excess liability carriage secured by employers who have
14    been approved by the Commission as self-insurers, or
15        (4) Make some other provision, satisfactory to the
16    Commission, for the securing of the payment of
17    compensation provided for in this Act, and
18        (5) Upon becoming subject to this Act and thereafter
19    as often as the Commission may in writing demand, file
20    with the Commission in form prescribed by it evidence of
21    his or her compliance with the provision of this Section.
22    (a-1) Regardless of its state of domicile or its principal
23place of business, an employer shall make payments to its
24insurance carrier or group self-insurance fund, where
25applicable, based upon the premium rates of the situs where
26the work or project is located in Illinois if:

 

 

SB3709- 41 -LRB102 22596 CMG 31739 b

1        (A) the employer is engaged primarily in the building
2    and construction industry; and
3        (B) subdivision (a)(3) of this Section applies to the
4    employer or the employer is a member of a group
5    self-insurance plan as defined in subsection (1) of
6    Section 4a.
7    The Illinois Workers' Compensation Commission shall impose
8a penalty upon an employer for violation of this subsection
9(a-1) if:
10        (i) the employer is given an opportunity at a hearing
11    to present evidence of its compliance with this subsection
12    (a-1); and
13        (ii) after the hearing, the Commission finds that the
14    employer failed to make payments upon the premium rates of
15    the situs where the work or project is located in
16    Illinois.
17    The penalty shall not exceed $1,000 for each day of work
18for which the employer failed to make payments upon the
19premium rates of the situs where the work or project is located
20in Illinois, but the total penalty shall not exceed $50,000
21for each project or each contract under which the work was
22performed.
23    Any penalty under this subsection (a-1) must be imposed
24not later than one year after the expiration of the applicable
25limitation period specified in subsection (d) of Section 6 of
26this Act. Penalties imposed under this subsection (a-1) shall

 

 

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1be deposited into the Illinois Workers' Compensation
2Commission Operations Fund, a special fund that is created in
3the State treasury. Subject to appropriation, moneys in the
4Fund shall be used solely for the operations of the Illinois
5Workers' Compensation Commission and by the Department of
6Insurance for the purposes authorized in subsection (c) of
7Section 25.5 of this Act.
8    (a-2) Every Employee Leasing Company (ELC), as defined in
9Section 15 of the Employee Leasing Company Act, shall at a
10minimum provide the following information to the Commission or
11any entity designated by the Commission regarding each
12workers' compensation insurance policy issued to the ELC:
13        (1) Any client company of the ELC listed as an
14    additional named insured.
15        (2) Any informational schedule attached to the master
16    policy that identifies any individual client company's
17    name, FEIN, and job location.
18        (3) Any certificate of insurance coverage document
19    issued to a client company specifying its rights and
20    obligations under the master policy that establishes both
21    the identity and status of the client, as well as the dates
22    of inception and termination of coverage, if applicable.
23    (b) The sworn application and financial statement, or
24security, indemnity or bond, or amount of insurance, or other
25provisions, filed, furnished, carried, or made by the
26employer, as the case may be, shall be subject to the approval

 

 

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1of the Commission.
2    Deposits under escrow agreements shall be cash, negotiable
3United States government bonds or negotiable general
4obligation bonds of the State of Illinois. Such cash or bonds
5shall be deposited in escrow with any State or National Bank or
6Trust Company having trust authority in the State of Illinois.
7    Upon the approval of the sworn application and financial
8statement, security, indemnity or bond or amount of insurance,
9filed, furnished or carried, as the case may be, the
10Commission shall send to the employer written notice of its
11approval thereof. The certificate of compliance by the
12employer with the provisions of subparagraphs (2) and (3) of
13paragraph (a) of this Section shall be delivered by the
14insurance carrier to the Illinois Workers' Compensation
15Commission within five days after the effective date of the
16policy so certified. The insurance so certified shall cover
17all compensation liability occurring during the time that the
18insurance is in effect and no further certificate need be
19filed in case such insurance is renewed, extended or otherwise
20continued by such carrier. The insurance so certified shall
21not be cancelled or in the event that such insurance is not
22renewed, extended or otherwise continued, such insurance shall
23not be terminated until at least 10 days after receipt by the
24Illinois Workers' Compensation Commission of notice of the
25cancellation or termination of said insurance; provided,
26however, that if the employer has secured insurance from

 

 

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1another insurance carrier, or has otherwise secured the
2payment of compensation in accordance with this Section, and
3such insurance or other security becomes effective prior to
4the expiration of the 10 days, cancellation or termination
5may, at the option of the insurance carrier indicated in such
6notice, be effective as of the effective date of such other
7insurance or security.
8    (c) Whenever the Commission shall find that any
9corporation, company, association, aggregation of individuals,
10reciprocal or interinsurers exchange, or other insurer
11effecting workers' compensation insurance in this State shall
12be insolvent, financially unsound, or unable to fully meet all
13payments and liabilities assumed or to be assumed for
14compensation insurance in this State, or shall practice a
15policy of delay or unfairness toward employees in the
16adjustment, settlement, or payment of benefits due such
17employees, the Commission may after reasonable notice and
18hearing order and direct that such corporation, company,
19association, aggregation of individuals, reciprocal or
20interinsurers exchange, or insurer, shall from and after a
21date fixed in such order discontinue the writing of any such
22workers' compensation insurance in this State. Subject to such
23modification of the order as the Commission may later make on
24review of the order, as herein provided, it shall thereupon be
25unlawful for any such corporation, company, association,
26aggregation of individuals, reciprocal or interinsurers

 

 

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1exchange, or insurer to effect any workers' compensation
2insurance in this State. A copy of the order shall be served
3upon the Director of Insurance by registered mail. Whenever
4the Commission finds that any service or adjustment company
5used or employed by a self-insured employer or by an insurance
6carrier to process, adjust, investigate, compromise or
7otherwise handle claims under this Act, has practiced or is
8practicing a policy of delay or unfairness toward employees in
9the adjustment, settlement or payment of benefits due such
10employees, the Commission may after reasonable notice and
11hearing order and direct that such service or adjustment
12company shall from and after a date fixed in such order be
13prohibited from processing, adjusting, investigating,
14compromising or otherwise handling claims under this Act.
15    Whenever the Commission finds that any self-insured
16employer has practiced or is practicing delay or unfairness
17toward employees in the adjustment, settlement or payment of
18benefits due such employees, the Commission may, after
19reasonable notice and hearing, order and direct that after a
20date fixed in the order such self-insured employer shall be
21disqualified to operate as a self-insurer and shall be
22required to insure his entire liability to pay compensation in
23some insurance carrier authorized, licensed and permitted to
24do such insurance business in this State, as provided in
25subparagraph 3 of paragraph (a) of this Section.
26    All orders made by the Commission under this Section shall

 

 

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1be subject to review by the courts, said review to be taken in
2the same manner and within the same time as provided by Section
319 of this Act for review of awards and decisions of the
4Commission, upon the party seeking the review filing with the
5clerk of the court to which said review is taken a bond in an
6amount to be fixed and approved by the court to which the
7review is taken, conditioned upon the payment of all
8compensation awarded against the person taking said review
9pending a decision thereof and further conditioned upon such
10other obligations as the court may impose. Upon the review the
11Circuit Court shall have power to review all questions of fact
12as well as of law. The penalty hereinafter provided for in this
13paragraph shall not attach and shall not begin to run until the
14final determination of the order of the Commission.
15    (d) Whenever a panel of 3 Commissioners comprised of one
16member of the employing class, one representative of a labor
17organization recognized under the National Labor Relations Act
18or an attorney who has represented labor organizations or has
19represented employees in workers' compensation cases, and one
20member not identified with either the employing class or a
21labor organization, with due process and after a hearing,
22determines an employer has knowingly failed to provide
23coverage as required by paragraph (a) of this Section, the
24failure shall be deemed an immediate serious danger to public
25health, safety, and welfare sufficient to justify service by
26the Commission of a work-stop order on such employer,

 

 

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1requiring the cessation of all business operations of such
2employer at the place of employment or job site. Any law
3enforcement agency in the State shall, at the request of the
4Commission, render any assistance necessary to carry out the
5provisions of this Section, including, but not limited to,
6preventing any employee of such employer from remaining at a
7place of employment or job site after a work-stop order has
8taken effect. Any work-stop order shall be lifted upon proof
9of insurance as required by this Act. Any orders under this
10Section are appealable under Section 19(f) to the Circuit
11Court.
12    Any individual employer, corporate officer or director of
13a corporate employer, partner of an employer partnership, or
14member of an employer limited liability company who knowingly
15fails to provide coverage as required by paragraph (a) of this
16Section is guilty of a Class 4 felony. This provision shall not
17apply to any corporate officer or director of any
18publicly-owned corporation. Each day's violation constitutes a
19separate offense. The State's Attorney of the county in which
20the violation occurred, or the Attorney General, shall bring
21such actions in the name of the People of the State of
22Illinois, or may, in addition to other remedies provided in
23this Section, bring an action for an injunction to restrain
24the violation or to enjoin the operation of any such employer.
25    Any individual employer, corporate officer or director of
26a corporate employer, partner of an employer partnership, or

 

 

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1member of an employer limited liability company who
2negligently fails to provide coverage as required by paragraph
3(a) of this Section is guilty of a Class A misdemeanor. This
4provision shall not apply to any corporate officer or director
5of any publicly-owned corporation. Each day's violation
6constitutes a separate offense. The State's Attorney of the
7county in which the violation occurred, or the Attorney
8General, shall bring such actions in the name of the People of
9the State of Illinois.
10    The criminal penalties in this subsection (d) shall not
11apply where there exists a good faith dispute as to the
12existence of an employment relationship. Evidence of good
13faith shall include, but not be limited to, compliance with
14the definition of employee as used by the Internal Revenue
15Service.
16    Employers who are subject to and who knowingly fail to
17comply with this Section shall not be entitled to the benefits
18of this Act during the period of noncompliance, but shall be
19liable in an action under any other applicable law of this
20State. In the action, such employer shall not avail himself or
21herself of the defenses of assumption of risk or negligence or
22that the injury was due to a co-employee. In the action, proof
23of the injury shall constitute prima facie evidence of
24negligence on the part of such employer and the burden shall be
25on such employer to show freedom of negligence resulting in
26the injury. The employer shall not join any other defendant in

 

 

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1any such civil action. Nothing in this amendatory Act of the
294th General Assembly shall affect the employee's rights under
3subdivision (a)3 of Section 1 of this Act. Any employer or
4carrier who makes payments under subdivision (a)3 of Section 1
5of this Act shall have a right of reimbursement from the
6proceeds of any recovery under this Section.
7    An employee of an uninsured employer, or the employee's
8dependents in case death ensued, may, instead of proceeding
9against the employer in a civil action in court, file an
10application for adjustment of claim with the Commission in
11accordance with the provisions of this Act and the Commission
12shall hear and determine the application for adjustment of
13claim in the manner in which other claims are heard and
14determined before the Commission.
15    All proceedings under this subsection (d) shall be
16reported on an annual basis to the Workers' Compensation
17Advisory Board.
18    An investigator with the Department of Insurance may issue
19a citation to any employer that is not in compliance with its
20obligation to have workers' compensation insurance under this
21Act. The amount of the fine shall be based on the period of
22time the employer was in non-compliance, but shall be no less
23than $500, and shall not exceed $2,500. An employer that has
24been issued a citation shall pay the fine to the Department of
25Insurance and provide to the Department of Insurance proof
26that it obtained the required workers' compensation insurance

 

 

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1within 10 days after the citation was issued. This Section
2does not affect any other obligations this Act imposes on
3employers.
4    Upon a finding by the Commission, after reasonable notice
5and hearing, of the knowing and wilful failure or refusal of an
6employer to comply with any of the provisions of paragraph (a)
7of this Section, the failure or refusal of an employer,
8service or adjustment company, or an insurance carrier to
9comply with any order of the Illinois Workers' Compensation
10Commission pursuant to paragraph (c) of this Section
11disqualifying him or her to operate as a self insurer and
12requiring him or her to insure his or her liability, or the
13knowing and willful failure of an employer to comply with a
14citation issued by an investigator with the Department of
15Insurance, the Commission may assess a civil penalty of up to
16$500 per day for each day of such failure or refusal after the
17effective date of this amendatory Act of 1989. The minimum
18penalty under this Section shall be the sum of $10,000. Each
19day of such failure or refusal shall constitute a separate
20offense. The Commission may assess the civil penalty
21personally and individually against the corporate officers and
22directors of a corporate employer, the partners of an employer
23partnership, and the members of an employer limited liability
24company, after a finding of a knowing and willful refusal or
25failure of each such named corporate officer, director,
26partner, or member to comply with this Section. The liability

 

 

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1for the assessed penalty shall be against the named employer
2first, and if the named employer fails or refuses to pay the
3penalty to the Commission within 30 days after the final order
4of the Commission, then the named corporate officers,
5directors, partners, or members who have been found to have
6knowingly and willfully refused or failed to comply with this
7Section shall be liable for the unpaid penalty or any unpaid
8portion of the penalty. Upon investigation by the Department
9of Insurance, the Attorney General shall have the authority to
10prosecute all proceedings to enforce the civil and
11administrative provisions of this Section before the
12Commission. The Commission and the Department of Insurance
13shall promulgate procedural rules for enforcing this Section
14relating to their respective duties prescribed herein.
15    Upon the failure or refusal of any employer, service or
16adjustment company or insurance carrier to comply with the
17provisions of this Section and with the orders of the
18Commission under this Section, or the order of the court on
19review after final adjudication, the Commission may bring a
20civil action to recover the amount of the penalty in Cook
21County or in Sangamon County in which litigation the
22Commission shall be represented by the Attorney General. The
23Commission shall send notice of its finding of non-compliance
24and assessment of the civil penalty to the Attorney General.
25It shall be the duty of the Attorney General within 30 days
26after receipt of the notice, to institute prosecutions and

 

 

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1promptly prosecute all reported violations of this Section.
2    Any individual employer, corporate officer or director of
3a corporate employer, partner of an employer partnership, or
4member of an employer limited liability company who, with the
5intent to avoid payment of compensation under this Act to an
6injured employee or the employee's dependents, knowingly
7transfers, sells, encumbers, assigns, or in any manner
8disposes of, conceals, secretes, or destroys any property
9belonging to the employer, officer, director, partner, or
10member is guilty of a Class 4 felony.
11    Penalties and fines collected pursuant to this paragraph
12(d) shall be deposited upon receipt into a special fund which
13shall be designated the Injured Workers' Benefit Fund, of
14which the State Treasurer is ex-officio custodian, such
15special fund to be held and disbursed in accordance with this
16paragraph (d) for the purposes hereinafter stated in this
17paragraph (d), upon the final order of the Commission. The
18Injured Workers' Benefit Fund shall be deposited the same as
19are State funds and any interest accruing thereon shall be
20added thereto every 6 months. The Injured Workers' Benefit
21Fund is subject to audit the same as State funds and accounts
22and is protected by the general bond given by the State
23Treasurer. The Injured Workers' Benefit Fund is considered
24always appropriated for the purposes of disbursements as
25provided in this paragraph, and shall be paid out and
26disbursed as herein provided and shall not at any time be

 

 

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1appropriated or diverted to any other use or purpose. Moneys
2in the Injured Workers' Benefit Fund shall be used only for
3payment of workers' compensation benefits for injured
4employees when the employer has failed to provide coverage as
5determined under this paragraph (d) and has failed to pay the
6benefits due to the injured employee. The Commission shall
7have the right to obtain reimbursement from the employer for
8compensation obligations paid by the Injured Workers' Benefit
9Fund. Any such amounts obtained shall be deposited by the
10Commission into the Injured Workers' Benefit Fund. If an
11injured employee or his or her personal representative
12receives payment from the Injured Workers' Benefit Fund, the
13State of Illinois has the same rights under paragraph (b) of
14Section 5 that the employer who failed to pay the benefits due
15to the injured employee would have had if the employer had paid
16those benefits, and any moneys recovered by the State as a
17result of the State's exercise of its rights under paragraph
18(b) of Section 5 shall be deposited into the Injured Workers'
19Benefit Fund. The custodian of the Injured Workers' Benefit
20Fund shall be joined with the employer as a party respondent in
21the application for adjustment of claim. After July 1, 2006,
22the Commission shall make disbursements from the Fund once
23each year to each eligible claimant. An eligible claimant is
24an injured worker who has within the previous fiscal year
25obtained a final award for benefits from the Commission
26against the employer and the Injured Workers' Benefit Fund and

 

 

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1has notified the Commission within 90 days of receipt of such
2award. Within a reasonable time after the end of each fiscal
3year, the Commission shall make a disbursement to each
4eligible claimant. At the time of disbursement, if there are
5insufficient moneys in the Fund to pay all claims, each
6eligible claimant shall receive a pro-rata share, as
7determined by the Commission, of the available moneys in the
8Fund for that year. Payment from the Injured Workers' Benefit
9Fund to an eligible claimant pursuant to this provision shall
10discharge the obligations of the Injured Workers' Benefit Fund
11regarding the award entered by the Commission.
12    (e) This Act shall not affect or disturb the continuance
13of any existing insurance, mutual aid, benefit, or relief
14association or department, whether maintained in whole or in
15part by the employer or whether maintained by the employees,
16the payment of benefits of such association or department
17being guaranteed by the employer or by some person, firm or
18corporation for him or her: Provided, the employer contributes
19to such association or department an amount not less than the
20full compensation herein provided, exclusive of the cost of
21the maintenance of such association or department and without
22any expense to the employee. This Act shall not prevent the
23organization and maintaining under the insurance laws of this
24State of any benefit or insurance company for the purpose of
25insuring against the compensation provided for in this Act,
26the expense of which is maintained by the employer. This Act

 

 

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1shall not prevent the organization or maintaining under the
2insurance laws of this State of any voluntary mutual aid,
3benefit or relief association among employees for the payment
4of additional accident or sick benefits.
5    (f) No existing insurance, mutual aid, benefit or relief
6association or department shall, by reason of anything herein
7contained, be authorized to discontinue its operation without
8first discharging its obligations to any and all persons
9carrying insurance in the same or entitled to relief or
10benefits therein.
11    (g) Any contract, oral, written or implied, of employment
12providing for relief benefit, or insurance or any other device
13whereby the employee is required to pay any premium or
14premiums for insurance against the compensation provided for
15in this Act shall be null and void. Any employer withholding
16from the wages of any employee any amount for the purpose of
17paying any such premium shall be guilty of a Class B
18misdemeanor.
19    In the event the employer does not pay the compensation
20for which he or she is liable, then an insurance company,
21association or insurer which may have insured such employer
22against such liability shall become primarily liable to pay to
23the employee, his or her personal representative or
24beneficiary the compensation required by the provisions of
25this Act to be paid by such employer. The insurance carrier may
26be made a party to the proceedings in which the employer is a

 

 

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1party and an award may be entered jointly against the employer
2and the insurance carrier.
3    (h) It shall be unlawful for any employer, insurance
4company, or service or adjustment company to interfere with,
5demote, restrain, or coerce an employee in any manner
6whatsoever in the exercise of the rights or remedies granted
7to him or her by this Act or to discriminate, attempt to
8discriminate, or threaten to discriminate against an employee
9in any way because of his or her exercise of the rights or
10remedies granted to him or her by this Act.
11    It shall be unlawful for any employer, individually or
12through any insurance company or service or adjustment
13company, to demote, to discharge or to threaten to discharge,
14or to refuse to rehire or recall to active service in a
15suitable capacity an employee because of the exercise of his
16or her rights or remedies granted to him or her by this Act.
17    (i) If an employer elects to obtain a life insurance
18policy on his employees, he may also elect to apply such
19benefits in satisfaction of all or a portion of the death
20benefits payable under this Act, in which case, the employer's
21compensation premium shall be reduced accordingly.
22    (j) Within 45 days of receipt of an initial application or
23application to renew self-insurance privileges the
24Self-Insurers Advisory Board shall review and submit for
25approval by the Chairman of the Commission recommendations of
26disposition of all initial applications to self-insure and all

 

 

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1applications to renew self-insurance privileges filed by
2private self-insurers pursuant to the provisions of this
3Section and Section 4a-9 of this Act. Each private
4self-insurer shall submit with its initial and renewal
5applications the application fee required by Section 4a-4 of
6this Act.
7    The Chairman of the Commission shall promptly act upon all
8initial applications and applications for renewal in full
9accordance with the recommendations of the Board or, should
10the Chairman disagree with any recommendation of disposition
11of the Self-Insurer's Advisory Board, he shall within 30 days
12of receipt of such recommendation provide to the Board in
13writing the reasons supporting his decision. The Chairman
14shall also promptly notify the employer of his decision within
1515 days of receipt of the recommendation of the Board.
16    If an employer is denied a renewal of self-insurance
17privileges pursuant to application it shall retain said
18privilege for 120 days after receipt of a notice of
19cancellation of the privilege from the Chairman of the
20Commission.
21    All orders made by the Chairman under this Section shall
22be subject to review by the courts, such review to be taken in
23the same manner and within the same time as provided by
24subsection (f) of Section 19 of this Act for review of awards
25and decisions of the Commission, upon the party seeking the
26review filing with the clerk of the court to which such review

 

 

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1is taken a bond in an amount to be fixed and approved by the
2court to which the review is taken, conditioned upon the
3payment of all compensation awarded against the person taking
4such review pending a decision thereof and further conditioned
5upon such other obligations as the court may impose. Upon the
6review the Circuit Court shall have power to review all
7questions of fact as well as of law.
8(Source: P.A. 101-384, eff. 1-1-20; 102-37, eff. 7-1-21.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.