New York Labor and Employment Law Report
Appellate Court Holds That Employers Who Hire Undocumented Aliens Are Still Entitled to the Protections of the Workers' Compensation Law
October 15, 2012
On September 26, 2012, the Second Department Appellate Division held that an employer who hires undocumented aliens in violation of the Immigration Reform and Control Act of 1986 ("IRCA") is still shielded by the Workers' Compensation Law if those employees are injured on the job.
IRCA was adopted by Congress in an attempt to curtail illegal immigration. Toward that end, it imposed a duty upon employers to verify a prospective employee's identity and work eligibility by examining the individual's documentation prior to hiring. Absent the requisite documentation, employment cannot be offered. Employers who violate IRCA are subject to civil and criminal penalties.
The Workers' Compensation Law insulates employers from personal injury claims brought by their employees, and also precludes third party claims against the employer for contribution and indemnification except in instances of “grave injury” or where the employer contracted to provide such indemnification.
How do these federal and state provisions relate? In a matter of first impression, the Second Department Appellate Division was asked to decide whether the protection afforded employers under the Workers' Compensation Law was still available in the event that the employer violated IRCA. Yes, it was, according to the decision in New York Hospital Medical Center of Queens v. Microtech Construction Corp.
In arriving at that conclusion, the Court made several observations. First, it noted that in adopting IRCA, Congress expressly preempted all state and local laws that imposed civil or criminal sanctions upon employers for similar offenses. It also observed that the statute was silent as to any further preemptive effect. Indeed, to the contrary, IRCA’s legislative history demonstrated a lack of intent to diminish existing labor protections. Consistent with that conclusion, the Court determined that there could be no express preemption of the Workers' Compensation Law, as none of its relevant provisions seek to impose civil or criminal sanctions for employing undocumented aliens.
While the Court acknowledged that stripping away the protections of the Workers' Compensation Law from an IRCA-violating employer may support the federal statute’s ultimate goals, it held nevertheless that retaining such protections despite an IRCA violation did not present such an obstacle to attaining Congress’ objectives that the Workers' Compensation Law could be considered preempted. Thus, the Court ruled that an IRCA violation did not serve to diminish or remove the protections afforded an employer under the Workers' Compensation Law.
