The Worker’s Compensation System is a sort of compromise between employers, employees, and the government. Its goals are to provide employees with a stable and consistent pool of funds from which they can get money if they are injured on the job. It has done well in this regard. Unlike the common tort system, where payouts are often unpredictable, almost everyone who is injured on the job while in the state of Illinois, hired in the state of Illinois, or are working for a company based in Illinois can get their health and employment loss related costs covered. In this respect, Worker’s Compensation, or Workman’s Comp. as it is often referred to, is a great benefit to employees.


But like all compromises, there must be a payoff for the other side as well, in this case employers. In return for agreeing to not fight most on the job injury claims, employers get the benefit of limiting the payouts for injured workers to health expenses and economic losses such as not being able to work as a result of the injury. Ostensibly, the compromise cuts out any emotional damage payments as well as most punitive damages. These two damages often varied quite wildly, depending in large part upon how sympathetic the injured person appeared to the jury at trial, and were less dependent upon the actual costs or negligent harms that were committed. So, as you can imagine, these damages were hard to predict for an employer going into the trial. Additionally, and maybe most importantly, employers got to opt out of the trial system, and now all on the job injury claims are handled through arbitration. Arbitration is less formal way of deciding a case in which the parties just sit down in front of a person, often a former judge, who decides the case more quickly and thus more cost-efficiently. This means that employers now get relatively predictable and, on average, smaller payouts for injuries on the job, so they can factor these costs into their annual budget.


In Chicago, the way in which the system typically plays, is that an injured employee first files a claim. If there is no problem from the employer’s point of view, the money is simply paid out quickly and easily. But, if there is a dispute with their employer about their right to receive benefits under Workers Comp. then the case goes to arbitration. Next, the parties will typically both bring an attorney to their arbitration hearing, the location of which is determined by a number of fact specific factors. There the arbitrator will listen to each side and make a determination on the case. If the employee wins, he gets his or her costs covered, and if the employer wins, then there is no payout.