LOS ANGELES—The federal Immigration Reform and Control Act of 1986 does not pre-empt California laws holding employers liable for injured employees regardless of such workers' immigration status, a state appeals court ruled Monday.

California's 2nd District Court of Appeal, ruling in Farmers Brothers Coffee vs. Workers' Compensation Appeals Board, also found that an illegal immigrant's use of a fraudulent Social Security card and number to obtain employment and file a workers compensation claim did not violate a state anti-fraud insurance code. The employee in the case did not violate the code because he had not been convicted of fraud; such a conviction is necessary to render a worker ineligible for compensation.

The Los Angeles-based court also found that Congress did not intend to pre-empt state labor laws when it passed IRCA, which provides penalties for employers that hire illegal immigrants.

The appeals court's ruling upholds findings by a workers comp judge and the state Workers' Compensation Appeals Board.