A limit on workers compensation benefits for undocumented workers is unconstitutional because it prevents them from being eligible for the same comp benefits afforded to legally employed workers in the state, the Tennessee Supreme Court says.

Carlos Martinez emigrated to the United States from Guatemala in 2003 or 2004. In March 2011, he began working for Steve Lawhon, doing business as Commercial Services, a building and ground maintenance company, according to court records.

Mr. Martinez was hired at a roadside area where day laborers were known to gather. Mr. Lawhon failed to request documentation or attempt to verify that Mr. Martinez was eligible to work in the United States, court records show. On Mr. Martinez’s W-2 tax forms, Mr. Lawhon supplied the tax identification number for his own business instead.

In August 2011, Mr. Martinez was operating a lawn mower while working on a hillside. He slipped on wet grass and fell, losing control of the mower. The mower ran over his left arm, severely lacerating and degloving his elbow area.

Mr. Martinez underwent five surgeries, and in January 2013, his surgeon placed work and activity restrictions on Mr. Martinez. Those included restricting Mr. Martinez to a limit of 16 pounds for floor to waist lifting, 11 pounds for waist to shoulder lifting and 10 pounds for shoulder to overhead lifting.

Additionally, Dr. Lee assigned a 13% medical impairment rating to Mr. Martinez’s left arm in March 2013. In May of that year, Mr. Martinez underwent an independent medical evaluation that showed a 24% medical impairment rating for his left arm.

Mr. Martinez was unable to return to work for Mr. Lawhon because of the physical restrictions assigned by Dr. Lee and because federal law prohibits employers from rehiring undocumented workers once their work status has been revealed, court records show.

Tennessee law says that undocumented workers may receive maximum permanent partial disability benefits of 1.5 times their medical impairment rating, provided that the worker's employer did not knowingly hire the person when they were ineligible or not authorized to work in the United States.

Mr. Lawhon argued that PPD benefits for Mr. Martinez should be limited based on that law, while Mr. Martinez argued in court filings that the cap was unconstitutional.

However, a Chancery Court in Davidson County, Tennessee, ruled that Mr. Lawhon should pay Mr. Martinez workers comp benefits worth 3.5 times Mr. Martinez's 24% medical impairment rating. The court found that the state cap on comp benefits for undocumented workers amounted to a "state immigration policy," thereby attempting to legislate an area over which the federal government has sole power. Mr. Lawhon and the Tennessee Attorney General's Office appealed.

Mr. Martinez's benefit award was upheld Nov. 21 by the Tennessee Supreme Court Special Workers' Compensation Appeals Panel. The high court said that Tennessee law limits PPD benefits to 1.5 times a worker’s impairment rating when an injured worker has a meaningful return to work. But a worker's award can be increased to six times his or her medical impairment rating when a worker doesn't have a meaningful return to work because of circumstances beyond their control.

The state Supreme Court noted that undocumented workers are included in the definition of "employees" under the state worker's comp act, and that undocumented workers should not be excluded from benefit levels afforded to other workers under the state law.

Additionally, the court found that limiting PPD benefits for undocumented workers could provide an incentive for employers to hire undocumented employees.

The benefit cap “may also have the unintended consequence of encouraging unscrupulous employers to knowingly hire undocumented employees to gain a windfall, as workers’ compensation liability for such employees would be capped at one and one-half times the medical impairment rating, even if the workers had no meaningful return to work," the ruling reads.