IL Workers Compensation Costs Rise with Minimum Wage

IL Workers Compensation Costs Rise with Minimum WageAmericans have been no stranger to the issue of raising the minimum wage paid to hourly workers; just this past year the Chicago City Council approved an increase of $13 per hour by 2019, with the Illinois Senate approving a plan to raise the minimum wage across the state accordingly; good news for employees, but a potential headache for employers required to purchase Illinois Workers Compensation Coverage for their staff.

State Senator Jacqueline Collins states that “there is a moral argument to be made that anyone who works 40 hours a week should not have to live in poverty.” More recently, during a fight to increase the minimum wage throughout the country has led McDonald’s USA L.L.C.’s to announce that they will be raising employee pay to $1 above the locally mandated minimum wage for its corporate stores as of July 1st of this year.

This is all good news for Illinois, right? While employees are benefiting from these increases in the minimum wage, workers compensation experts are wary; they say that these pushed for increased pay could actually raise workers comp benefit amounts for a significant population of injured workers. While these injured workers, according to vice president of commercial lines and research for the Property Casualty Insurers Association of America in Des Plaines, IL Rita Nowak, would receive a higher indemnity benefit for work-related injuries, the cost to their employers would be far greater than those in the past.

The possible danger here is that the changes from the increased minimum wage in Illinois, along with the rise in workers compensation costs, could cause some employers to eliminate jobs all together, to keep not only their overall costs down, according to experts.

At Myers Insurance Group, we specialize in providing Workers Compensation coverage and, along with our insurance company partners, work to provide effective risk management services to help keep premiums under control, stem losses, and increase the level of safety in your working environment. For more information about all of our Illinois Business Insurance Products, please contact us today at 855.534.5707.

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