Other sources provide even higher figures. According to theDepartment of Homeland Security, the number of undocumentedindividuals in the United States is 8-12 million, while the Centerfor Immigration Studies puts the count at 10-11 million. Almost allsources agree that there are 700,000 to 1 million illegals enteringannually, according to Richard A. Watts, an attorney in the Atlantalaw firm of Swift, Currie, McGhee & Hiers.

These numbers mean that many employers and HR professionals whodeal with workers' compensation will eventually have to handleclaims filed by undocumented workers, Watts told attendees at aJuly session of the SEAK National Workers' Compensation andOccupational Medicine Conference.

Federal Law Makes It Illegal to Employ UndocumentedWorkers

The Immigration Reform and Control Act of 1986 (IRCA) makes itillegal to "hire or recruit or refer for a fee" an unauthorizedalien. It is illegal under the act to knowingly employ anauthorized worker or to "continue to employ" a worker you laterfind to be unauthorized.

If an employee's undocumented status becomes clear once he orshe has filed for workers' compensation benefits, what then areyour obligations under IRCA as well as under state workers'compensation laws? Watts asked the conference audience.

Although, he said, federal law clearly prohibits hiring theseworkers, once they become injured on the job, several statesexplicitly allow them to recover workers' compensation benefits.Statutes in Florida, New York, Texas and Utah permit the recoveryof benefits by undocumented workers. In a number of other states,including Connecticut, Georgia, Louisiana, Nebraska, Ohio,Oklahoma, New Jersey, North Carolina and South Carolina, courtshave held that compensation benefits cannot be denied solelybecause the injured worker is undocumented.

Arguments Made to Deny Benefits

Many state workers' compensation acts define an employee as"anyone under contract for hire or apprenticeship." Illegal alienscannot legally contract. Therefore, an argument can be made, Wattssaid, that compensation benefits should be denied because illegalsare not subject to the act in that they do not meet the definitionof "employee."

This argument has been successful in courts in Arizona, Virginiaand Wyoming, Watts noted, although Virginia subsequently changedits law to explicitly include illegal aliens as employees. It hasnot been successful in several states, including Connecticut,Georgia, Louisiana, Ohio, Oklahoma and Texas.

Another argument, Watts said, is based on the fact that manystates' workers' compensation statutes deny benefits if they havebeen fraudulently obtained. Attorneys have argued, largelyunsuccessfully, that because undocumented workers have committedfraud in obtaining their jobs, they should be disqualified fromobtaining benefits.

Benefits also may be denied in many states if a worker is hurtduring the commission of a crime. Attorneys have argued that,because providing false documentation to get a job is a crime,undocumented workers should be denied benefits if they are injuredon the job they illegally obtained. But courts have not acceptedthis argument either, Watts noted.

Supreme Court Case Has Little Impact

In 2002, the U.S. Supreme Court decided in Hoffman Plastics v.NLRB (535 U.S. 137) that an undocumented worker who was terminatedfrom employment because of his union activities was not entitled toback pay, even though the employer had violated the National LaborRelations Act in discharging him. The court ruled that IRCA wouldbe violated by awarding "back pay to an illegal alien for years ofwork not performed, for wages not lawfully earned, and for a jobobtained in the first instance by a criminal act."

Federal courts subsequently applied the Hoffman decision to denyclaims for back pay brought by undocumented workers under theAmericans with Disabilities Act and Title VII, but ruled thatHoffman was not applicable to an undocumented worker's claim forunpaid overtime under the Fair Labor Standards Act (FLSA). In theFLSA context, the employee had already earned the wages, the courtreasoned, and so could not be denied based on immigrationstatus.

In the workers' compensation area, an argument based on Hoffmanhas failed in six states (California, Florida, Georgia, Maryland,Minnesota and Pennsylvania), Watts said, with the courts reasoningthat the situation is more like the one under the FLSA -- theemployee cannot be denied the benefits because he or she hadalready earned them by virtue of working for the employer prior toincurring the injury.

Immigration issues are "hot" right now, Watts concluded, andstates may consider legislation restricting undocumented workers'rights to collect workers' compensation benefits. A bill that wouldhave required an individual hurt on the job to prove that he or shewas legally employed passed the Ohio Senate in the last legislativesession but failed to pass the House, he noted.

Joanne Deschenaux, J.D., is senior legal editorfor the Society for Human Resource Management. www.shrm.org.