Undocumented Immigrants and Workers Compensation Benefits

Undocumented immigrants are an integral part of the U.S. economy. No matter how one feels about illegal immigration, the fact is that millions of undocumented immigrants are working in the United States today. According to the Pew Research Center, 7.8 million men and women who lack legal immigration status were either employed or actively seeking employment in 2016, representing 4.8 percent of the total U.S. workforce. That number is much higher in farming occupations (24 percent) and the construction industry (15 percent).

But what happens to undocumented immigrants when they are injured on the job? Because workers comp laws are enacted by the states, the answer to that question depends largely on the state where the person lives and works.

Laws Vary by State

Many states provide workers compensation benefits for undocumented immigrants who are injured on the job. In these states, legislators have reasoned that failing to protect such workers could incentivize employers to hire undocumented workers simply to decrease their workers compensation premiums. Additionally, employers who aren’t required to cover undocumented immigrants might be less likely to follow workplace safety laws, making the workplace less safe for everyone.

Specifically, Arkansas, Arizona, California, Colorado, Florida, Hawaii, New York, Texas, Tennessee and Utah have laws in place that make workers compensation available for all workers regardless of immigration status. Additionally, lawmakers in Illinois, Georgia and Minnesota have determined that those states’ workers compensation laws do not exclude undocumented workers who are injured on the job. And in Louisiana, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, and Pennsylvania, the courts have ruled that workers who do not have proof of legal immigration status are protected under state workers compensation laws.

At the same time, a few states have ruled that undocumented immigrants are not entitled to workers compensation under state law. Wyoming, for example, excludes such workers from coverage unless the employer had a reasonable expectation that the employee could legally work in the United States. Similarly, Arizona, where immigrants (documented and undocumented) comprised nearly 17 percent of the state’s labor force in 2014, the state has ruled that an undocumented worker can’t enter into an employment contract and is, therefore, not covered by the state’s workers compensation law.

Immigration Law and Workers Comp

Complicating the issue of coverage is the federal Immigration Reform and Control Act or IRCA, which makes it a crime for an employer to knowingly hire an undocumented immigrant. But since many employers hire undocumented workers unwittingly, the law states that an employer who hires a person who used a false identification to gain employment can avoid prosecution by terminating the employee. But what happens when the employer only learns that the employee was working in the U.S. illegally when the worker is injured, and a workers comp investigation uncovers that the person’s I-9 documents are stolen or forged?

Again, the answer here depends largely on where the injury took place. In most states, even terminated employees are entitled to workers compensation if the injury would otherwise be covered under the law. This even applies to workers who were terminated due to immigration fraud.

Nonetheless, state laws can be tricky. In Florida, for example, a 2003 law made it illegal for a person to file a workers compensation claim using false ID. Since then, employers increasingly have been turning injured employees into Immigration and Customs Enforcement, presumably to avoid paying workers compensation claims, according to an NPR report. Many of those workers have subsequently been deported and forced to return any benefits they had received.

And in a particularly odd twist, hundreds of undocumented workers in Florida have been charged with insurance fraud just for working under a false Social Security number, even though they were never injured and never filed a workers comp claim. Even Florida lawyer Mary Ann Stiles, who represents insurers and helped draft the 2003 law, was perplexed by this, “How is there insurance fraud if there’s no comp claim?” she said to NPR. “That would not be what anybody intended it to be.”

Unintended Consequences

State laws barring undocumented workers from workers compensation benefits can also have unintended — and negative — consequences for employers. Since workers compensation rules explicitly prohibits injured employees from suing their employers in civil court, workers who are excluded from such coverage may have the right to sue. For example, in one Wyoming case from 2010, an undocumented immigrant sued his employer after being denied workers comp. The worker had suffered permanent spinal cord damage after another worker dropped a load of steel on him, the suit alleged. The court awarded the worker $1 million in damages, which the employer had to pay.

It was after this case that the Wyoming legislature amended state law to allow illegal immigrants to receive workers compensation coverage if the employer did not know the employee was unlawfully working in the United States.

About the Carmoon Group

The Carmoon Group, Ltd. is an independent insurance broker located in Hicksville, New York. Through our large network of nationwide affiliates, we provide comprehensive business insurance to companies all across the United States. Our professional agents have the knowledge and expertise to help with all of your insurance and risk management needs. So, why not give us a call now to schedule an appointment for your insurance review? Or if you prefer, simply reach out online and we will get back to you at a convenient time.

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