[addw2p name=”workerscomp”]What is Collectively Bargained Workers’ Compensation?

Collectively bargained workers’ compensation allows union contractors and building trade unions to bargain with one another to design and implement their own workers’ compensation system which is customized to meet their needs. The collective bargaining agreement covering workers’ compensation need not be the collective bargaining agreement governing all terms and conditions of employment. It could be a separate, stand-alone bargained agreement between labor and management solely covering workers’ compensation.

Supporters of the idea would recommend a statute in Illinois that would apply only to the construction industry, because typically the most serious and costly workers’ compensation claims arise in this industry. Additionally, construction also has the highest number of claims.

Currently, California, Maine, Massachusetts, Florida, Kentucky, Minnesota, New York and Hawaii have some type of legislation regarding collectively bargained workers’ compensation. Each state is different in how the law is administered. Furthermore, not all of the above mentioned states are using the method even though it is available to them.

What Makes Collectively Bargained Workers’ Comp. Different?

Collectively bargained workers’ compensation allows labor and management to meet their workers’ compensation needs by shaping a policy that is fair and equitable. It is administered by an agreement rather than by a state agency. Currently, Illinois workers’ compensation claims are handled by the Illinois Industrial Commission and can take years to process.

Under collectively bargained workers’ compensation, employers and union leaders are allowed greater decision making authority and the state agency becomes a “watch dog” to ensure that the statute is being followed rather than the governing body.

Why Choose Collectively Bargained Workers’ Comp.?

Currently in Illinois, the cost of workers’ compensation is very high, the time frame for sealing a claim is very long and the care given is questionable. With collectively bargained workers’ compensation the following will happen:

There will be better care for the injured worker. Providing the best care possible should be the goal of every workers’ compensation plan and with collectively bargained workers’ compensation, it can become a reality. Emphasis in this type of plan is placed on getting the injured worker well as quickly as possible and with as few health limitations as possible. Care to the injured worker would be monitored to ensure that he/she is receiving treatment in a timely manner.
There will be a cost savings for the employer. Getting the worker back on the job quickly saves the employer money because there is less chance of an expensive permanent disability. Also, employers are spared the expense of retraining another worker to do the job of the injured worker. Additionally, union contractors are at a disadvantage when it comes to paying the tab on workers’ compensation costs. Since workers’ compensation premiums are based on payroll, union contractors employing highly skilled and highly paid workers are subsidizing the workers’ compensation costs of not only the open shop sector, but the rest of the state as well. Collectively bargained workers’ compensation can be based on a cents-per-hour contribution which results in premiums for employers based on a more equitable hours worked basis.
Alternative Dispute Resolution (ADR). The use of Alternative Dispute Resolution allows parties to negotiate alternatives to costly litigation. While ADR can’t limit an employee’s right to legal remedy, it has an effective and economical tool for resolving conflicts arising from claims.

Five Methods of Implementing Collectively Bargained Workers’ Comp.

There are a variety of ways to implement workers’ compensation programs through the collective bargaining process.

Fully insured program through a licensed insurance carrier;
Self-insured program through group self-insurance;
Self-insured program through employer associations;
Fully-insured program using a Taft-Hartley trust fund; and
Self-insured program using a Taft-Hartley trust fund.

Suggested Sample Language

There are two ways we can go about getting the legislation introduced. We can be specific or general in the choice of language for the proposed statute.

“Providing that, as part of a collective bargaining agreement, an employer and a recognized or certified exclusive bargaining representative of certain employees may agree to certain terms with respect to workers’ compensation under certain circumstances; providing that an agreement is not valid until it has been filed with the Illinois Industrial Commission; providing that once an agreement is approved by the Commission it is binding to the employer and the members of the bargaining unit; imposing certain limitations; etc.


(1) Subject to the limitations stated in subsection (2), the Department and the courts shall recognize as valid and binding a provision in a collective bargaining agreement between employer and a recognized or certified exclusive bargaining reprsentative establishing any or all of the following:

(a) an alternative dispute resolution system which supplements or replaces all or part of the dispute resolution contained in the Law which may include but is not limited to mediation and binding arbitration;

(b) the use of an agreed list of providers of medical treatment, which may be the exclusive source of all medical treatment provided under this law;

(c) the use of a limited list of impartial physicians which may be the exclusive source of all medical evaluations performed under this law;

(d) a light duty, modified job or return to work program;

(e) a 24 hour health care coverage plan;

(f) a vocational rehabilitation or retraining program;

(2) Nothing in this section shall allow any agreement that diminishes an employee’s entitlement to benefits as otherwise set forth in this chapter. Any such agreement in violation of this provision shall be null and void.

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