As federal enforcement and immigration issues continue to draw attention, employers and claims administrators should understand that federal immigration law generally does not preempt state worker’s compensation laws. Employers and claims professionals, however, may still be confronted with legal questions and concerns when an injured worker reporting a worker’s compensation claim is not legally qualified to work within the United States. In many states, undocumented workers injured on the job may still qualify for statutory compensation and benefits because most state worker's compensation laws do not condition eligibility on immigration status.

The Debate Over Worker's Compensation Benefits for Undocumented Workers

Those opposed to allowing undocumented worker’s compensation benefits argue that undocumented workers are ineligible because of an invalid work authorization status or an unenforceable employment contract. Some also assert that detention or an inability to legally work justifies denying or suspending benefits because the worker is unavailable for work for reasons other than the work injury.

Others argue that worker’s compensation laws are designed to place the financial responsibility for workplace injuries on employers and the industries that benefit from the employee’s labor. Denying benefits would shift those costs to injured workers or the public, and it would give the employer the benefit of labor without the risk of statutory responsibility.

How State Worker's Compensation Laws Determine Worker's Compensation Eligibility

Worker’s compensation rights are governed by state law. The initial inquiry in determining worker's compensation eligibility is whether the injured individual qualifies as an employee under the state definition. In most states, the statute defines an employee without regard to immigration status. Currently, most statutory definitions are silent as to immigration status. For example, Indiana’s worker’s compensation statute defines an employee as “every person, including a minor, in the service of another, under a contract of hire …” Other states may include ‘alien’ in the employee definition without further defining or addressing legal status.

What Happens When an Undocumented Worker Is Injured on the Job?

Relatively few reported cases address undocumented employee’s worker’s compensation claims. Claims may not be pursued due to the risks of exposure to the employee or immigration enforcement or scrutiny to the employer. Among the claims that are pursued and decided by an administrative law judge, few decisions are appealed to the courts. As a result, there are limited legal opinions with varying outcomes. Some courts have awarded full compensation and benefits, others have denied benefits based on the employee providing false employment documentation or other violation, and some have allowed medical benefits only while limiting wage-loss benefits.

When asked to interpret state law, courts generally defer to the legislature to make changes. As immigration issues continue to evolve, lawmakers may propose new legislation which would impact eligibility requirements for state benefits and penalize undocumented workers. One example is the Indiana Fairness Act, which does not address eligibility for worker’s compensation, but penalizes the employer for engaging undocumented workers.

What Employers Need to Know About Worker's Compensation Claims Involving Undocumented Workers

Regardless of personal views on the issues, worker’s compensation claims involving undocumented workers must be evaluated under the applicable state law governing the workforce. Employers and claims professionals should understand the requirements in each state where they operate and seek legal guidance when necessary.

Questions about worker's compensation claims involving undocumented workers? Ice Miller's Worker's Compensation attorneys help employers, insurers and claims professionals navigate complex worker's compensation eligibility issues and evolving state law requirements. Contact our team for guidance.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.