Indiana, like the rest of the country, has experienced enormous growth in the number of immigrants in its workforce. Many Indiana employers are concerned that, in spite of their best efforts to validate federally required documentation, some employees are working illegally. But are those “employees” entitled to worker’s compensation benefits if their illegal status is discovered after an on-the-job injury?
The Worker’s Compensation Act of Indiana mandates that employers provide medical treatment and wage replacement in the form of temporary total disability benefits to “employees” who sustain “accidental injuries, arising out of and in the course of the employment.”
Entitlement to benefits is not only predicated upon a causal connection between the injury sustained and the work performed, but also upon the actual existence of an employment relationship. The issue of whether or not an illegal alien is or has ever been an “employee” for purposes of the Worker’s Compensation Act has never been addressed by the Indiana Courts. However, given that the illegal alien was likely performing a service that benefited the employer and both parties presumably had a reasonable belief that an employment relationship existed, the Worker’s Compensation Board and the Indiana Courts could find that the illegal alien was in fact an employee.
If we assume that the employment relationship exists, is the employee entitled to all benefits under the Act? The Legislature has recognized a few exceptions to the rule that temporary total disability is owed until the employee has reached maximum medical improvement. One exception does allow the employer to terminate temporary total disability benefits if the employee is “unable or unavailable to work for reasons unrelated to the compensable injury.” [i] Unfortunately, case law provides very little guidance in evaluating exactly what the Legislature meant with this provision, and there is certainly no case law on point regarding whether employers owe temporary total disability to illegal aliens. However, an illegal alien is certainly “unable” to work under federal law.
Employers are governed by The Immigration Reform and Control Act of 1986 (hereinafter IRCA) during the initial hiring process. [ii] Under the IRCA, Congress established an “employment verification system” whereby employment is to be denied aliens who are not lawfully present or employable in the United States. The prospective employee must present documentation such as a social security card, birth certificate, driver’s license, green card, etc, and the employer must certify on a United States Department of Justice Employment Eligibility Verification Form I-9 that it has reviewed the required documents.
Under the IRCA, if an employer hires an unauthorized alien, or the alien subsequently becomes unauthorized, the employer must terminate the employment. Employers who violate IRCA are subject to civil and criminal penalties. Similarly, an unauthorized alien who presents fraudulent documentation, including “any document lawfully issued to or with respect to a person other than the possessor”, is subject to civil fines and criminal prosecution.
In Hoffman Plastic Compounds, Inc. v. National Labor Relations Board (hereinafter Hoffman Plastics)[iii], a 2002 United States Supreme Court decision, the Court determined that, in spite of the fact that Hoffman Plastics violated the National Labor Relations Act, it was not responsible for payment of back wages to an illegal alien who presented false employment verification documents. Specifically, the illegal alien had presented a false birth certificate when hired by Hoffman Plastics.
The Court reasoned that the IRCA makes it “impossible for an undocumented alien to obtain employment . . . without some party directly contravening explicit congressional policies.” The Court held that awarding back pay to an illegal alien “would unduly trench upon explicit statutory prohibitions critical to federal immigration policy [and] would encourage the successful evasion of apprehension by immigration authorities, condone prior violations of the immigration laws, and encourage future violations.”
Although not directly on point, the Supreme Court’s decision in Hoffman Plastics can certainly be analogized to the Indiana worker’s compensation setting. This exact issue has, however, been addressed in unreported decisions before The Industrial Commission of Ohio.
In the case of Marcos Hernandez[iv], the Commission vacated an award of temporary total disability in an otherwise compensable claim, finding that “claimant acknowledged that he was an illegal alien during his entire tenure with the . . . employer. Inasmuch as federal law precludes the employment of illegal aliens, claimant had no right to any income. . .” Both employee and employer would violate the IRCA if temporary total disability benefits were paid, opening the door to civil and criminal penalties. Similarly, an illegal alien’s inability to work in the United States likely renders them “unable or unavailable to work for reasons unrelated to the compensable injury” under the Indiana Act.
A fraudulent misrepresentation argument might also be made. Again, no Indiana cases are on point, but Virginia has addressed this issue. In Granados v. Windson Development. Corp., et al. [v], the Virginia court affirmed a denial of benefits, because credible evidence established that plaintiff misrepresented his ability to legally work at the time of hire, the employer reasonably relied on the misrepresentation and that, but for his hiring, plaintiff would not have been injured in the course of his employment. Plaintiff sustained an on the job injury, and the employer subsequently discovered that plaintiff had misrepresented his documentation. Plaintiff’s inability to work in the United States was not corrected. The court further reasoned that the employer complied with its obligations, and the claimant should not benefit from his fraudulent procurement of employment.
Given that the Indiana Act’s provision allowing termination of temporary disability benefits is somewhat unique, there are few, if any, decisions from other jurisdictions addressing this issue. Most other decisions turn on the issue of whether an employment relationship actually existed in the first place.
The issue of whether an employer can properly terminate temporary total disability payments to an illegal alien was recently decided by the Full Worker’s Compensation Board on appeal from a Single Hearing Member’s Award. In that case, an employee presented an invalid social security card to the employer when he was hired. That faulty documentation was discovered after the employee sustained an otherwise compensable work-related injury. The Full Board found that the employee’s “lack of a valid social security number caused him to be unable to work for reasons unrelated to his injury” and further, that the employer properly terminated temporary total disability benefits pursuant to the Worker’s Compensation Act. That decision is on appeal to the Indiana Court of Appeals, so a final answer to this question will not be had for some time.
The Worker’s Compensation Act is silent on whether medical benefits can be terminated along with temporary total disability if an employee is “unable or unavailable to work for reasons unrelated to the compensable injury”. Likewise, the United States Supreme Court did not address medical benefits in Hoffman Plastics. But, given the “humane purposes” of the Act, the Worker’s Compensation Board and the Indiana courts could find that illegal aliens are at least entitled to medical treatment for on-the-job injuries until the point of maximum medical improvement. Payment of medical benefits to illegal aliens was not at issue in the case recently decided by the Full Worker’s Compensation Board and is not on appeal to the Indiana Court of Appeals..
Due to Indiana’s unique statutory provision, illegal aliens are likely not entitled to temporary total disability benefits, because Federal law renders them “unable” to work here in Indiana. A contrary decision would put employers in the no win position of choosing between complying with Federal law or paying wage replacement temporary total disability benefits.
While awaiting a final determination on this issue, what can an employer do to ensure that it is complying with both Federal and State law? There are “social security validation” services which can double check that the employee’s number is valid. In Worker’s Compensation claims involving employees who have some language barriers, it’s also advisable to assign a nurse case manager and translator to manage the medical aspects of the claim and to maintain communication with medical providers. Although, the Indiana Worker’s Compensation Board does not have translators on staff, it can provide some resources for both the employer and employee regarding its rules and requirements. Additionally, a new Mexican Consulate office has recently opened in Indianapolis to assist immigrants.
[i] I.C. 22-3-3-7(c)(5)
[ii] 8 U.S.C. §§1324
[iii] 122 S. Ct. 1275 (2002)
[iv] The Industrial Commission of Ohio, Claim Number 96-606492
[v] 480 S.E. 2d 150 (Va. Ct. App. 1997)