In Illinois, Michigan, Minnesota, North Dakota, and Ohio, the workers' compensation provisions include aliens, but make no reference to their legal or illegal status.

In Alabama, Arizona, Colorado, Montana, North Carolina, South Carolina, and Virginia, lawmakers have extended coverage to "aliens and minors" who are "legally authorized" to work. However, the authors noted that then "begs the question of whether the 'legally authorized' modifier extends to aliens or only to minors. The courts that have addressed this question generally conclude that it does not -- and that all aliens (legal and illegal) are covered."

The remaining 30 states don't address the illegal alien - workers' compensation benefits issue at all.

The laws, however, are in a constant state of flux, either through legislative action or judicial appeals.

For example, in mid-November, Utah State Rep. Michael Morley (R-Spanish Fork) proposed a bill that would close a loophole in the workers' compensation system that allows former employees to collect benefits when they are fit to work, but unable to do so because of incarceration. The bill addresses wage compensation benefits only; medical and/or disability benefits would not be affected.

The law had the arguably laudable intent of not forcing employers to pay workers' compensation benefits to people in prison. However, before giving the bill a favorable recommendation, the Utah House Business and Labor standing committee sought clarification on how a worker's status as an undocumented alien would play into the proposal.

Dennis Lloyd, general counsel for the Utah Worker's Compensation Fund, distinguished between medical and wage benefit payouts. "Individuals who are incarcerated, or of illegal status, could receive full benefits, due to medical incapacity, but ... someone who is able to work, but incarcerated, would not be eligible," Lloyd said.

Rep. Morley told the committee that a worker who was fit to return to work after a temporary medical leave, but unable to do so due to immigration status, would also not be eligible for wage benefits.

Richard Burke from the Utah Association for Justice declared that the bill actually creates financial incentives for employers to hire illegal immigrants. "There are some unintended consequences ... the bill discriminates against legal status ... and creates incentives to hire illegal labor [because the employer will not have to pay some benefits]," Burke said.

Lawyers in California have already latched onto that idea. Suits have been filed against companies that hire undocumented aliens, using a provision of California law under which a company that knowingly hires illegal immigrants can be sued by a competitor who has suffered economic damages as a result of those hirings.

Even when lawmakers expressly approve workers' compensation benefits to undocumented workers, some opponents have found favor in courts that reject that benefit on causation grounds.

The Kansas Supreme Court, while acknowledging that an illegal alien claimant was "legally entitled to ... benefits" under the Kansas workers' compensation statute, concluded that her benefits could be suspended on the basis of the "fraudulent and abusive" act she committed when she misrepresented her identity. The Michigan Court of Appeals reached a similar conclusion in one of its cases. Pennsylvania courts also have refused workers' compensation benefits to undocumented workers on causation grounds.

In the last year, the Maryland Court of Appeals approved benefits for an undocumented worker injured while performing work he was not legally permitted to perform. In its findings, the Maryland court noted that only one state court decision (by the Wyoming Supreme Court) has construed its workers' compensation law to exclude undocumented workers.

These rulings and debates are taking place throughout the country with increasing frequency as employers and lawmakers grapple with the issue.

Efforts to bring about a consensus and to attack the problem at its source also are appearing on the federal level. In late February, The New Employee Verification Act was introduced by Representative Sam Johnson (R-Texas). The legislation, which would create the nation's first mandatory employment verification system for all U.S. employers, is backed by a coalition of business leaders and human resource professionals.

According to its supporters, The New Employee Verification Act would enable employers to confirm quickly and accurately the legal status of prospective employees by checking identification data through their state's "new hire" reporting program, a system that is already widely used for child support enforcement.

For Americans, work authorization would be confirmed only through the Social Security Administration. For non-citizens, work authorization would be confirmed through the Department of Homeland Security that has the databases on visa and immigration status.

Johnson says the new verification system would be superior to the federal government's existing program because it would rely on a more accurate, up-to-date database, and it would be entirely electronic, thereby eliminating susceptibility to fraud and identity theft.

He also claims that the legislation would help safeguard workers' identities. A voluntary system would be created using the latest technology to authenticate and protect a worker's identity. Private sector companies, certified by the federal government, would verify work authorization and authenticate the identity of employees by utilizing existing background-check and document screening tools. The identity would then be secured through a biometric identifier, such as a fingerprint or eye scan.

The bill also seeks to strengthen enforcement through enhanced penalties on employers and by referring mismatches found in Social Security numbers to the Department of Homeland Security for further investigation.