Workers’ Comp Laws Regarding Illegal Immigrants See Little Change

With immigration grabbing headlines, some state legislators may decide to once again push bills to disqualify illegal immigrant workers injured on the job from receiving workers’ compensation benefits.

“Is it plausible that elected officials who feel strongly about the immigration issue might use the current instability to make a political point?” asked Bruce Wood, workers’ comp director for the American Insurance Association (AIA). “You can connect the dots. But from me sitting here today it would be speculation to say that is going to happen.”

The immigration issue surged to the forefront recently with news stories of tens of thousands of Central American children flooding the U.S. border in recent months, an angry reaction by residents in one California town who blocked Homeland Security buses carrying illegal immigrants, and a political stalemate in Washington D.C. over immigration law reforms sought by business groups.

“There was definitely that wave [of legislation] four or five years ago and it has been pretty quiet on that front the last two or three [legislative] session cycles, but given the current news and political climate we are potentially expecting to see bills in 2015.” — Trey Gillespie, senior workers’ comp director for the Property Casualty Insurers Association of America

But with a history of businesses opposition to legislation denying workers’ comp benefits to illegal immigrant workers, any new bills could meet the same fate as those introduced in 2011 in Georgia, Montana, New Hampshire, and South Carolina.

Those legislative efforts failed to pass into law amid insurer opposition and concerns they would harm employers, including by allowing claimants to seek redress in civil courts rather than through workers’ comp systems where employer liability is limited.

“There was definitely that wave [of legislation] four or five years ago,” said Trey Gillespie, senior workers’ comp director for the Property Casualty Insurers Association of America (PCIAA), “and it has been pretty quiet on that front the last two or three [legislative] session cycles, but given the current news and political climate we are potentially expecting to see bills in 2015.”

That lull doesn’t apply to all state legislation regarding immigration-related issues, which rebounded in 2013 after falling off the prior year, according to the National Conference of State Legislators.

Lawmakers in 45 states and the District of Columbia enacted 437 immigration-related laws and resolutions during 2013, affecting issues such as education, drivers’ licenses, and budget appropriations, according to NCSI. That compared to 267 in 2012, and included resolutions praising immigrant contributions.

AIA’s Wood recalled a 1999 Virginia’s Supreme Court finding that illegal immigrants in that state could not receive workers’ comp benefits when injured.

“The employer community took a victory lap after that and then AIA and others reminded them that this opened them up to tort exposure because there was nothing precluding an undocumented worker from filing a tort suit,” Wood said.

That new exposure pushed Virginia employers to support the successful adoption of a law requiring workers’ comp benefits, with the exception of vocational rehabilitation benefits, to be paid to undocumented workers.

Overall, despite legislative attempts over the years to prevent providing workers’ comp benefits to illegal immigrants, state laws on the matter have remained unchanged, Wood said.

“Notwithstanding all of the bills introduced there haven’t been a whole lot that actually got through and were signed into law,” he said.

But that has not stopped attempts, even recently.

In North Carolina, Sen. Thom Goolsby (R-Wilmington) amended House Bill 369 in late June to disallow workers’ comp benefits being paid to workers “not lawfully employable in the United States and [those who] knowingly made a false representation to the employer as to his or her legal work status.”

But on July 8, the bill was removed from the state Senate’s calendar and referred to a Senate Rules and Operations Committee, meaning it had stalled.

Insurers oppose such legislation because in addition to stripping employers of worker’s comp exclusive remedy protections, there is a public policy concern. Such laws could incentivize certain employers to hire illegal workers and ignore safety practices because they would not be obligated to purchase workers’ comp insurance.

Those employers would gain an unfair advantage over other employers paying workers’ comp premiums.

“There is a concern,” said PCIAA’s Gillespie, “as to whether you are rewarding employers for knowingly hiring illegal aliens at the expense of employers who do their best to follow immigration and employment laws and pay benefits to their injured workers, as opposed to other employers who may get a benefit from hiring illegal aliens because they wouldn’t have to pay workers’ compensation claims arising out of injuries.”