Supreme Court Concludes That Undocumented Workers Are Entitled to Workers' Compensation Benefits
In Staff Management v. Jiminez, 839 NW2d 640 (Iowa 2013), the Iowa Supreme Court addressed an issue that they had elliptically addressed in the past - the right of undocumented workers to receive workers' compensation benefits. The court concluded that Iowa's statute did not exclude undocumented workers from coverage and also found that the Immigration Reform and Control Act of 1986 (IRCA) did not act to preempt state laws governing workers' compensation. Three amicus curiae briefs were filed in Jimenez by the Workers' Injury Law and Advocacy Group, the Iowa Association of Justice's Workers' Compensation Core Group and the National Employment Law Project. Jamie Byrne of Neifert, Byrne and Ozga wrote the amicus brief for the Core Group.
The factual situation in Jimenez involved a worker who was documented at the time she began employment, but who became undocumented during the time that she worked for the employer. She was injured at work, and found to be entitled to a running healing period of benefits. The primary issue addressed by the court was whether an undocumented worker could receive benefits under Iowa's workers' compensation law. Other issues addressed by the court included whether substantial evidence supported the running award of healing period benefits, whether the commissioner can award healing period from a date preceding the parties stipulation as to when healing period begins and whether healing period benefits could be awarded during a period when claimant was still working. The award of benefits was affirmed with the exception of the issue of whether healing period benefits were properly awarded when claimant was working. The court reversed and remanded this issue to the agency.
Claimant suffered a hernia while working for the employer on September 12, 2007 and subsequently had surgery. She returned to work without work restrictions on December 26, 2007 but was unable to do her normal job. On January 22, 2008, the employer terminated claimant, allegedly because she did not have authorization to work in the US. The employer had known of this problem since August of 2007. Following the termination, defendants did not provide further medical care and indicated that because she was no longer employed they could not provide medical assistance. There was contradictory medical evidence concerning the question of whether claimant had reached maximum medical improvement, with two doctors indicating that claimant needed another hernia surgery. Both the arbitration and appeal decisions concluded that claimant was entitled to a running healing period of benefits.
The court first dealt with a preservation of error issue and found that the employer had preserved error by raising the issue of claimant's immigration status before the agency on appeal. The court held that if the issue is presented on appeal and both parties have the opportunity to address the issue, error is preserved.
The employer raised three issues which it asserted prevented claimant from receiving benefits because of her status as an undocumented worker: 1) whether the workers' compensation act included undocumented workers in its definition of employee; 2) whether the act does not apply because a contract of service between an undocumented worker and her employer is void; and 3) whether federal law preempts the availability of healing period benefits under the workers' compensation act. The court concluded that none of these assertions prevented claimant from being entitled to benefits.
The court first noted that section 85.61(11) provides a broad definition of employee for purposes of the act (an employee "is a person who has entered into the employment of, or works under contract of service . . . for an employer"). A person who meets this definition is an employee covered by the workers' compensation act. The court held that given the language of the act, the legislature did not mean to exclude undocumented workers from coverage under the Act.
The court also rejected defendants argument that a contract of service between an employer and undocumented worker was void and that there was no contract of service. Defendants argued that such a contract was contrary to IRCA or, in the alternative, had an illegal purpose. Relying on the decision of the Connecticut Supreme Court in Dowling v. Slotnik, 712 A.2d 396, 408-409 (Conn. 1998), the court held that if undocumented workers were not covered by workers' compensation acts, "employers would have a financial incentive to hire undocumented workers because the employers could avoid liability under the Act." The court noted that the purpose of IRCA was to inhibit employment of illegal workers, not to diminish labor protections for undocumented workers. The court also rejected the argument that the contract of hire was illegal, noting that the general rule was that a contract is illegal only if the contract has the purpose of violating the law. The enforcement of the contract did not undermine the policy purposes of IRCA.
Finally, the court concluded that IRCA did not preclude the availability of healing period benefits. Again citing to Dowling, the court concluded that the express preemption provision in IRCA only prohibited civil sanctions, and that workers' compensation payments were not civil sanctions. Therefore, there was no preemption. Healing period benefits provide compensation for a work related injury, not a sanction against the employer. The court also distinguished cases which held that back pay and vocational benefits were preempted by IRCA. The court found that back pay was not involved, and that healing period benefits were distinguishable from both back pay and vocational benefits. Healing period benefits had the broad purpose of awarding compensation for the disability produced by the physical injury, and this was not preempted under IRCA.
Leaving the overarching issues, the court concluded that substantial evidence supported the commissioner's finding that claimant was entitled to a running award of healing period benefits. The court also found that the commissioner was justified in choosing a date different than the stipulated date between the parties. The court found that based on the facts, which included a pre-hearing colloquy concerning the issues and a discussion as to whether one of the issues was the start date for healing period benefits. In this situation, according to the court, the parties amended the hearing report during the colloquy and allowed for an earlier start date for healing period benefits. The court found that the agency erred in awarding healing period benefits when she was working, noting that claimant did not claim that she received less than her full wage during this period.
Justices Mansfield and Waterman concurred specially. They would hold that when an employer offers suitable work to an employee, and that employee is unable to engage in that work because of their immigration status, this amounts to "a refusal of suitable work" justifying denial of benefits. On the facts of this case, there was not enough evidence to conclude that claimant refused an offer of suitable work, but on a "proper record, not present here, I would sustain the employer's argument." The Justices would hold that when an employer offers suitable work conditioned on obtaining lawful status and the employee is unable to accept the position because of their status, this would amount to a refusal of suitable work.
With the Jimenez decision, Iowa joins the majority of courts which conclude that immigration status is not a bar to the provision of workers' compensation benefits. This would appear to certainly be true of permanency benefits. With respect to healing period benefits, the concurrence will likely lead to new challenges, as employers offer work to undocumented workers after an injury and condition that work on obtaining lawful status. Undoubtedly, that next chapter will be written in the near future.
The factual situation in Jimenez involved a worker who was documented at the time she began employment, but who became undocumented during the time that she worked for the employer. She was injured at work, and found to be entitled to a running healing period of benefits. The primary issue addressed by the court was whether an undocumented worker could receive benefits under Iowa's workers' compensation law. Other issues addressed by the court included whether substantial evidence supported the running award of healing period benefits, whether the commissioner can award healing period from a date preceding the parties stipulation as to when healing period begins and whether healing period benefits could be awarded during a period when claimant was still working. The award of benefits was affirmed with the exception of the issue of whether healing period benefits were properly awarded when claimant was working. The court reversed and remanded this issue to the agency.
Claimant suffered a hernia while working for the employer on September 12, 2007 and subsequently had surgery. She returned to work without work restrictions on December 26, 2007 but was unable to do her normal job. On January 22, 2008, the employer terminated claimant, allegedly because she did not have authorization to work in the US. The employer had known of this problem since August of 2007. Following the termination, defendants did not provide further medical care and indicated that because she was no longer employed they could not provide medical assistance. There was contradictory medical evidence concerning the question of whether claimant had reached maximum medical improvement, with two doctors indicating that claimant needed another hernia surgery. Both the arbitration and appeal decisions concluded that claimant was entitled to a running healing period of benefits.
The court first dealt with a preservation of error issue and found that the employer had preserved error by raising the issue of claimant's immigration status before the agency on appeal. The court held that if the issue is presented on appeal and both parties have the opportunity to address the issue, error is preserved.
The employer raised three issues which it asserted prevented claimant from receiving benefits because of her status as an undocumented worker: 1) whether the workers' compensation act included undocumented workers in its definition of employee; 2) whether the act does not apply because a contract of service between an undocumented worker and her employer is void; and 3) whether federal law preempts the availability of healing period benefits under the workers' compensation act. The court concluded that none of these assertions prevented claimant from being entitled to benefits.
The court first noted that section 85.61(11) provides a broad definition of employee for purposes of the act (an employee "is a person who has entered into the employment of, or works under contract of service . . . for an employer"). A person who meets this definition is an employee covered by the workers' compensation act. The court held that given the language of the act, the legislature did not mean to exclude undocumented workers from coverage under the Act.
The court also rejected defendants argument that a contract of service between an employer and undocumented worker was void and that there was no contract of service. Defendants argued that such a contract was contrary to IRCA or, in the alternative, had an illegal purpose. Relying on the decision of the Connecticut Supreme Court in Dowling v. Slotnik, 712 A.2d 396, 408-409 (Conn. 1998), the court held that if undocumented workers were not covered by workers' compensation acts, "employers would have a financial incentive to hire undocumented workers because the employers could avoid liability under the Act." The court noted that the purpose of IRCA was to inhibit employment of illegal workers, not to diminish labor protections for undocumented workers. The court also rejected the argument that the contract of hire was illegal, noting that the general rule was that a contract is illegal only if the contract has the purpose of violating the law. The enforcement of the contract did not undermine the policy purposes of IRCA.
Finally, the court concluded that IRCA did not preclude the availability of healing period benefits. Again citing to Dowling, the court concluded that the express preemption provision in IRCA only prohibited civil sanctions, and that workers' compensation payments were not civil sanctions. Therefore, there was no preemption. Healing period benefits provide compensation for a work related injury, not a sanction against the employer. The court also distinguished cases which held that back pay and vocational benefits were preempted by IRCA. The court found that back pay was not involved, and that healing period benefits were distinguishable from both back pay and vocational benefits. Healing period benefits had the broad purpose of awarding compensation for the disability produced by the physical injury, and this was not preempted under IRCA.
Leaving the overarching issues, the court concluded that substantial evidence supported the commissioner's finding that claimant was entitled to a running award of healing period benefits. The court also found that the commissioner was justified in choosing a date different than the stipulated date between the parties. The court found that based on the facts, which included a pre-hearing colloquy concerning the issues and a discussion as to whether one of the issues was the start date for healing period benefits. In this situation, according to the court, the parties amended the hearing report during the colloquy and allowed for an earlier start date for healing period benefits. The court found that the agency erred in awarding healing period benefits when she was working, noting that claimant did not claim that she received less than her full wage during this period.
Justices Mansfield and Waterman concurred specially. They would hold that when an employer offers suitable work to an employee, and that employee is unable to engage in that work because of their immigration status, this amounts to "a refusal of suitable work" justifying denial of benefits. On the facts of this case, there was not enough evidence to conclude that claimant refused an offer of suitable work, but on a "proper record, not present here, I would sustain the employer's argument." The Justices would hold that when an employer offers suitable work conditioned on obtaining lawful status and the employee is unable to accept the position because of their status, this would amount to a refusal of suitable work.
With the Jimenez decision, Iowa joins the majority of courts which conclude that immigration status is not a bar to the provision of workers' compensation benefits. This would appear to certainly be true of permanency benefits. With respect to healing period benefits, the concurrence will likely lead to new challenges, as employers offer work to undocumented workers after an injury and condition that work on obtaining lawful status. Undoubtedly, that next chapter will be written in the near future.
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