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Politics driving debate over undocumented workers and comp

Construction worker

The ever-present immigration debate continues to spill into the workers compensation industry, with undocumented workers who are injured on the job left to consider whether to pursue medical care and benefits at the risk of arrest and deportation, experts say.

Case law and state statutes vary widely regarding what benefits may be afforded to an injured undocumented worker, and these laws “reflect the politics that are at a fever pitch right now with regards to this issue,” said Gary Wickert, partner in the Hartford, Wisconsin, office of Matthiesen, Wickert & Lehrer SC, a national law firm focused on workers compensation subrogation.

Since the widely publicized collapse of the Hard Rock Hotel under construction in New Orleans in late October, injured construction worker Delmer Joel Ramirez Palma is facing deportation and has already been transferred to a detention center housed within a Harrisonburg, Louisiana, prison, according to the New Orleans Workers Center for Racial Justice, which has petitioned the government to halt his deportation.

The incident is fueling the argument of what is fair to an injured worker, why employers hire undocumented workers when it is illegal and what will stop the practice, according to experts.

While the 1986 Immigration Reform and Control Act made employing undocumented workers illegal, industries such as agriculture, hospitality and construction see undocumented workers as a large part of the workforce, said Frank Pennachio, principal at St. Petersburg, Florida-based Oceanus Partners, an insurance consulting firm.

While some believe that illegal immigrants should not be entitled to workers comp benefits, arguing that because they are undocumented no valid employment contract exists between the worker and the employer, others espouse the dangers of allowing employers to take advantage of undocumented workers’ status if they knowingly hire them because they know if an injury occurs they won’t have to pay comp benefits, said Mr. Wickert.

The majority of states cover workers compensation for undocumented workers “even if they obtained the employment with false information,” said Ryan Allen, partner in the White Plains, New York-office of Goldberg Segalla LLP.

But the specifics vary.

In Colorado, state statutes for workers compensation benefits expressly include undocumented foreign-born workers in the definition of workers entitled to collect work-related injury benefits. Delaware allows such workers to collect partial disability or diminished earning capacity dollars, which a 2014 Delaware Supreme Court decision said “ensures fairness to undocumented workers under the law,” according to research from Mr. Wickert’s firm.

On the flip side, Wyoming is the lone state that expressly states that injured workers seeking workers compensation must be “legally employed,” and its high court has held that if an employee is unauthorized to work, he or she is not an employee entitled to workers compensation benefits.

In June, the Ohio House passed a budget for the state’s monopolistic Bureau of Workers Compensation that contained language that would have required injured workers to check a box stating whether or not they were legal or illegal when filling out workers compensation forms, with the risk of forfeiting their right to benefits if they provided false information. However, the final budget was stripped down and did not include this language.

In the early 2000s, Florida passed a law that made applying for a workers compensation claim with false identification a crime. Companies there have been hiring undocumented workers and denying claims on that basis as a “cost containment strategy,” said Mr. Pennachio.

“We shouldn’t be looking at whether or not someone is documented or undocumented at the time of injury if we’re not using E-Verify to validate their legal status,” said Mr. Pennachio.

Before an injury happens, employers should take steps confirm the information provided by an employee at the start of employment, such as E-Verify or via an ISO ClaimSearch, said Josh Roberts, partner in the Irvine, California, office of Goldberg Segalla.

In situations where the employer knows the employee is illegal, Mr. Wickert said there are good arguments for why comp benefits should not be withheld.

“By denying benefits, the employer shifts the cost of the situation it knowingly created onto the taxpayer,” he said. “Workers comp laws were enacted to make sure that the cost of injuries created by an industry were placed on the industry rather than on society or on employees themselves.”

“It’s a challenging, problematic situation: arrest them instead of paying a workers comp claim,” said Mr. Pennachio, of the situation in Florida. “I’d like to see the state legislatures bring more clarity to this and figure out what’s the best way to assist undocumented injured workers, because arresting them just doesn’t seem right.”



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