Among the possible reasons underlying this trend toward providing coverage for undocumented workers are: 1) statutory construction supports compensability; 2) an employment contract exists, despite the worker's immigration violation; 3) other states have permitted compensability; and 4) public policy considerations that if illegal aliens are not protected by workers' compensation laws, employers would use them for unsafe practices with no worry of retribution or accountability.

Immigration Policy and Workers' Compensation

Congress recognized that the primary factor drawing the majority of illegal aliens into the United States was the opportunity for stable employment and relatively high wages. In an attempt to stem this trend, Congress enacted the Federal Immigration Reform and Control Act of 1986 (IRCA) with the broad, simple purpose of prohibiting the employment of illegal aliens in the United States. IRCA is targeted toward aliens who are either unlawfully in the United States, or are not lawfully authorized to work in the United States. The heart of the act is a system that requires employers to verify the identity and status of each prospective employee by examining documents provided by the worker. The person cannot be hired if he is unable to furnish the required documentation. If the prospective worker provides the necessary documents, the employer must then examine them to determine if they are genuine. If a document, on its face, does not appear to the employer to be legitimate, the employer must not accept it, and accordingly, must not hire that person.

However, IRCA did not stop the employment of undocumented workers in the United States, nor did it stop undocumented workers from filing claims in court arising out of their employment. In terms of workers' compensation claims, courts have routinely found that injured workers in the country illegally were eligible for workers' compensation benefits.

In 2002, the U.S. Supreme Court confronted the issue of whether the award of back pay to an undocumented worker who was not authorized to be in the United States was in conflict with IRCA in Hoffman Plastic Compounds, Inc. v. National Labor Relations Board. The case involved an illegal alien, Jose Castro, who was terminated by the employer for his involvement in union-organizing activities. Castro was part of a group that sued the employer, arguing that the employer violated the National Labor Relations Act by denying their right to self-organization. The National Labor Relations Board sided with the employees and ordered the employer, among other things, to offer reinstatement and back pay to the affected employees. Thereafter, it was discovered that Castro was not authorized to work in the United States and knowingly used fraudulent documents to obtain employment. The employer subsequently argued that Castro's status in the United States precluded him from receiving back pay as ordered. The Supreme Court agreed, ruling that an award of back pay in this instance violated the principles underlying IRCA.

With this decision, the Court established that an illegal alien was not entitled to wage-based damages for unperformed work. As a result, it was recognized that a claim of entitlement to lost wages brought by an illegal immigrant was a matter dealt with through IRCA. Nonetheless, since that decision, courts have faced the dilemma of reconciling safety and employment laws with federal immigration policy.

State Laws v. Federal Law

One important aspect of law that Hoffman does not address is whether IRCA preempts state laws governing workers' compensation claims. Under the Supremacy Clause of the U.S. Constitution, a court must disregard state law if it conflicts with a federal statute such as IRCA. The 2002 decision in Hoffman reinforced the idea of federal preemption for claims by undocumented workers seeking damages arising out of their employment. As a result, a flurry of suits were filed by employers seeking to apply Hoffman to state workers' compensation claims.

As before, however, the cases decided since Hoffman generally have found that IRCA does not affect an undocumented worker's ability to collect workers' compensation benefits because it does not preempt state law. Most courts deciding issues of undocumented worker eligibility conclude that the decision and IRCA do not preempt state workers' compensation laws that otherwise allow an illegal alien to recover benefits for an on-the-job injury.

Beyond attempts to make claims using IRCA and Hoffman, employers have also advanced the argument that it is against public policy to reward undocumented workers by awarding them workers' compensation benefits. At least two courts have rejected this position, noting that denial of benefits to injured illegal aliens would actually reward the employer who knowingly hired that worker.

When an undocumented worker is injured, the employer is placed in a difficult position. Chances are strong that the injury is compensable. It is also likely that the injury is serious in nature. If an undocumented person is willing to go through the tremendous trouble, expense, and risk of entering the country illegally to obtain work and make money, then it is not likely that person will be easily sidelined by an injury unless it is serious and significantly affects the ability to work. Also, filing a claim for workers' compensation draws attention to the worker that may require unwelcome inquiry into his background, which heightens the risk of exposing that person's status.

Additionally, the law does not generally afford the employer a break if an employee is found to be in the United States illegally. First, the employer is subject to possible civil or criminal penalties under IRCA. Second, if the employee is injured on the job, the employer will be liable for workers' compensation benefits, regardless of the fact that the worker, technically, has no right to employment in the first place.

From the start, it is important for employers to understand that the law treats them harshly when it comes to hiring undocumented workers. To deter undocumented workers, employers should adopt a strict no-tolerance policy for illegal immigrants and notify all seeking employment of this stand. Employers should make the effort to train their personnel to recognize fake or suspicious documentation. Employers should not ignore any questions that arise regarding a worker's legal status in the United States. All issues or doubts should be resolved promptly. Furthermore, employers should make a periodic check of their employees' documentation and should try to keep up with any changes in immigration law or regulations. Although these recommendations may make the hiring and maintenance of employees more burdensome for some employers, any extra inconvenience seems menial compared to the consequences if a worker is exposed as undocumented and/or suffers an on-the-job injury.

It is clear that there is a general trend toward allowing illegal aliens to be eligible to receive workers' compensation benefits following an on-the-job injury. The type of benefits recoverable, however, can differ, due primarily to the unique nature of each state's workers' compensation statute. It remains to be seen whether federal preemption will be a valid legal defense for a workers' compensation claim. To date, the U.S. Supreme Court has not taken up the issue of whether an undocumented worker is eligible for workers' compensation benefits and the federal government has not created any further legislation on this issue beyond IRCA. There is little doubt, however, that with the ever-increasing participation of undocumented workers in the work force, more opportunities for appellate review of these issues will be presented in the near future.

David Wilson is the founder of Wilson & Berryhill, P.C. in Birmingham, Ala. The firm is primarily devoted to trial and appellate practice in the insurance and corporate defense litigation area. Wilson will speak on this topic during the 64th Annual Workers' Compensation Educational Conference and 21st Annual Safety and Health Conference August 16-19 at the Orlando World Center Marriott. He may be contacted at [email protected]. Robert A. "Drew" Feeley is an associate with the firm.