Are Undocumented Aliens Entitled to Workers Compensation Benefits?

posted by on Thursday, November 21, 2013

In today's business world many companies hire undocumented workers, whether knowingly or unknowingly, but when one is injured on the job can the employer use that fact to decline to pay them worker's compensation benefits?  Today the Iowa Supreme Court issued its opinion in the case of Staff Management and New Hampshire Insurance Company v. Jimenez and answered the question with a resounding "No."

In this case Staff Management, a temporary employment agency, employed Ms. Jimenez and assigned her to Proctor & Gamble in Iowa City.  During the course of her work duties Ms. Jimenez suffered injuries which were diagnosed as hernias in two locations.  Ms. Jimenez worked roughly 1 month from the date of diagnosis until her surgery.  She returned to work roughly a month after surgery.  She continued to work, despite severe pain which limited her ability to perform her duties, for a month prior to her employment being terminated.  Staff Management claimed she was terminated due the recent discovery that she was undocumented, Jimenez claimed they were aware the entire time of her employment she was undocumented and that she was terminated due to her injuries.

At hearing regarding her worker's compensation claim, Ms. Jimenez was awarded a continuous award for healing period benefits from the date of the original injury, to pay all medical expenses to treat the injury, and to pay all future medical care and prescription charges.  On appeal the employer argued that Ms. Jimenez was ineligible for worker's compensation benefits due to her undocumented status.  The employer argued (1) the definition of "employee" under the Iowa Workers' Compensation Act does not specifically include undocumented workers; (2) Iowa law requires a contract of service between the employer and employee to be covered under the Iowa Workers' Compensation Act, which would be void due to illegality; and (3) even if undocumented workers were entitled to workers' compensation benefits, federal law disallows benefits to be paid.

In regards to the employer's first argument, the Iowa Supreme Court examined the statutory definition of "employee" which contains a broad definition of who are employees as well as a specific list of persons who are excluded from being employees.  The Court held that the broad definition of "employee" included undocumented workers and that the legislature did not specifically exclude undocumented workers from being employees.

The Court analyzed a similar case from Connecticut when addressing the employer's argument that any service contract is void due to the undocumented status of Ms. Jimenez.  The Iowa Supreme Court agreed with the Connecticut Supreme Court and held that to declare the contract for service between an employer and an undocumented worker void would only provide an incentive for employers to hire undocumented workers because they would be absolved from liability for injuries the worker sustained.  

Similarly, the Iowa Supreme Court agreed with the Connecticut Supreme Court's analysis of the employer's third argument.  The Court reasoned that federal law does not prohibit the payment of healing period benefits because healing period benefits are payment for lost wages while an injured employee receives medical care.  

Bottom line, the Iowa Supreme Court concluded that an employer may not hire an undocumented alien, avail themselves to that employees services, but then deny workers compensation benefits when the worker is injured on the job.