Definition of Employer and Employee under the Illinois Workers Compensation Act.

Almost every employee in Illinois that is hired, or whose employment is localized in the State of Illinois is going to be covered by the Act for work-related injuries from the moment they begin their employment. However, there are situations where an employee may not be an employee covered under the Act. In this regard, it is important to understand how the Act defines “employer,” “employee,” as well as §1(a)(3) of the Act (regarding certain types of employment) to more accurately understand why any particular employee is covered by the Act or why an employee might not be covered by the Act.

Under 820 ILCS 305/1(a) , employer means:

  1. The State and each county, city, town, township, incorporated village, school district, body politic, or municipal corporation therein.
  2. Every person, firm, public or private corporation, including hospitals, public service, eleemosynary, religious or charitable corporations or associations who has any person in service or under any contract for hire, express or implied, oral or written, and who is engaged in any of the enterprises or businesses enumerated in Section 3 of this Act, or who at or prior to the time of the accident to the employee for which compensation under this Act may be claimed, has in the manner provided in this Act elected to become subject to the provisions of this Act, and who has not, prior to such accident, effected a withdrawal of such election in the manner provided in this Act.

820 ILCS 305/1(a)(3), among other provisions, provides that anyone engaged in any business or enterprise involving the erection, maintaining, removing, remodeling, altering or demolishing of any structure or in construction, excavating or electrical work must pay compensation both to its own immediate employees and, if it directly or indirectly engages any contractor or subcontractor to do any of the work, to the employees of the contractor or subcontractor if, in fact, that contractor or subcontractor is uninsured. If the employer pays the compensation, it may recover from the contractor or subcontractor the amount that it has been held to pay.

This Section has been given a broad understanding such that even someone who is simply using a building for storage has been held to be in the business of maintaining a building. See Fefferman v. Industrial Comm’n, 375 N.E.2d 1277 (1978). However, it is important to note that the liability discussed in 820 ILCS 305/1(a)(3), is not applicable where the accident does not occur on, in, or about the immediate premises on which a principal has contracted that the work be done. 820 ILCS 305/1(a)(3). Additionally, the payment of compensation to an employee of an uninsured contractor or subcontractor does not necessarily create an employment relationship between the employer paying the compensation and the employee receiving the compensation. Laffoon v. Bell, 359 N.E.2d 125 (1977)

Under 820 ILCS 305/1(b), employee means:

  1. Every person in the service of the State, including members of the General Assembly, members of the Commerce Commission, members of the Illinois Workers’ Compensation Commission, and all persons in the service of the University of Illinois, county, including deputy sheriffs and assistant state’s attorneys, city, town, township, incorporated village or school district, body politic, or municipal corporation therein, whether by election, under appointment or contract of hire, express or implied, oral or written, including all members of the Illinois National Guard while on active duty in the service of the State, and all probation personnel of the Juvenile Court appointed pursuant to Article VI of the Juvenile Court Act of 1987, and including any official of the State, any county, city, town, township, incorporated village, school district, body politic or municipal corporation therein except any duly appointed member of a police department in any city whose population exceeds 500,000 according to the last Federal or State census, and except any member of a fire insurance patrol maintained by a board of underwriters in this State. A duly appointed member of a fire department in any city, the population of which exceeds 500,000 according to the last federal or State census, is an employee under this Act only with respect to claims brought under paragraph (c) of Section 8. One employed by a contractor who has contracted with the State, or a county, city, town, township, incorporated village, school district, body politic or municipal corporation therein, through its representatives, is not considered as an employee of the State, county, city, town, township, incorporated village, school district, body politic or municipal corporation which made the contract.
  2. Every person in the service of another under any contract of hire, express or implied, oral or written, including persons whose employment is outside of the State of Illinois where the contract of hire is made within the State of Illinois, persons whose employment results in fatal or non-fatal injuries within the State of Illinois where the contract of hire is made outside of the State of Illinois, and persons whose employment is principally localized within the State of Illinois, regardless of the place of the accident or the place where the contract of hire was made, and including aliens, and minors who, for the purpose of this Act are considered the same and have the same power to contract, receive payments and give quittances therefor, as adult employees.
  3. Every sole proprietor and every partner of a business may elect to be covered by this Act. An employee or his dependents under this Act who shall have a cause of action by reason of any injury, disablement or death arising out of and in the course of his employment may elect to pursue his remedy in the State where injured or disabled, or in the State where the contract of hire is made, or in the State where the employment is principally localized.

However, any employer may elect to provide and pay compensation to any employee other than those engaged in the usual course of the trade, business, profession or occupation of the employer by complying with Sections 2 and 4 of this Act. Employees are not included within the provisions of this Act when excluded by the laws of the United States relating to liability of employers to their employees for personal injuries where such laws are held to be exclusive.

The term “employee” does not include persons performing services as real estate broker, broker-salesman, or salesman when such persons are paid by commission only.

Of course, this definition has many interpretations and a review of case law is necessary to fully understand who is, and who is not an employee. In general though, whether an individual qualifies as an employee under the Act is a question of fact and the Commission has a very wide discretion in making this determination. Associates Corp. v. Industrial Comm’n, 522 N.E.2d 102 (3d Dist. 1988). See also Chicago Housing Auth. v. IC, 608 N.E.2d 385 (1992). See also Jackson v. Back of Yards, 608 N.E.2d 124 (1st Dist. 1992).

If you, or a loved one, has been injured at work, then you need information about your rights. At Shunneson Law Office, I am devoted to demanding an insurance company cover your injuries following accidents. Call (847) 693-9120 for more information or contact us to schedule a consultation. Located in Lake County, Illinois, with meeting locations throughout Chicago, we have the ability to meet with you at any convenient Chicagoland location from 9:00 a.m. to 5:00 p.m., Monday – Friday. However, evening and weekend appointments are available upon request by calling 847.693.9120.

-Drake Shunneson (copyright 2012)

NOTICE: The materials provided are for informational purposes only and should not be viewed as legal advice. It may also be viewed as advertising material. You should contact us directly, or your attorney, to obtain advice to any issue or problems. This article, by itself, does not create an attorney-client relationship and the opinions are those of the individual author and do not reflect the opinions of the Law Office or any other individual, attorney, entity or individual. Photos courtesy of FreeDigitalPhotos.net While the author has utilized his experience and knowledge of workers compensation law in writing this article, as well as many articles, books, statutes, regulatory rules, treatises, and internet sources, some of the ideas and material for this article were obtained from the Illinois Institute for Continuing Legal Education’s Illinois Workers’ Compensation Practice Guide (2011), which deserves special recognition.