Undocumented Workers Are Entitled to Receive Workers’ Compensation Benefits in Iowa

Last week the Iowa Supreme Court ruled in the case of Staff Management and New Hampshire Insurance Company v. Jimenez that an undocumented worker is entitled to receive work comp benefits for an Iowa job injury.

For many years undocumented workers that were hurt on the job in Iowa have been able to obtain workers’ compensation benefits. However, in the Jimenez case the employer and the insurance company challenged whether an undocumented worker should be able to receive Iowa workers’ comp benefits.

The worker in the case was Pascuala Jimenez who was 45 years old at the time of the workers’ compensation trial. Ms. Jimenez was born in Mexico and first came to the United States in 1991. She entered the United States legally with a visa that was good for ten years. After her visa expired Ms. Jimenez was no longer legally able to work in the United States and became an undocumented worker.

Ms. Jimenez worked at the Proctor & Gamble distribution center in the Iowa City area for about 16 years. During her time at Proctor & Gamble she was employed through three different temporary employment agencies, but her position and duties never changed. Ms. Jimenez was a line leader and supervisor who also performed physical labor. Ms. Jimenez had very strong English speaking ability and frequently acted as an interpreter for other employees. Her manager at Proctor & Gamble described her as a great employee.

Ms. Jimenez suffered a hernia on September 12, 2007. She underwent surgery, but had continuing problems that prevented her from returning to full-duty work and she was terminated from her position on January 22, 2008. See here and here for my blog posts of June 19, 2013 and October 18, 2013 discussing the work comp rights of injured workers who are fired from their jobs.

Ms. Jimenez filed a workers’ compensation petition and won at the work comp trial level, the Commissioner appeal level and the District Court appeal level. See here for my February 28, 2013 blog post which gives an overview of the multiple stages of the trial and appeal process in Iowa workers’ compensation cases.

The defendants continued to appeal the case all the way to the Iowa Supreme Court. The defendants raised several arguments. Their first argument was that as an undocumented worker Ms. Jimenez did not qualify as an employee under the definition set out in Iowa Code Section 85.61(11). The Iowa Supreme Court ruled that the definition of who qualifies as an employee that is entitled to workers’ compensation benefits is very broad. Additionally, the categories of persons who are either not considered employees or who are excluded from workers’ compensation coverage is specifically listed in Iowa Code Sections 85.1 and 85.61(11)(c) and does not include undocumented workers. See here and here for my blog posts of March 13, 2013 and March 20, 2013 which discuss some of the categories of people who do not qualify for work comp coverage.

The defendants’ second argument was that Ms. Jimenez did not satisfy the Iowa legal requirement of having a “contract of service” with her employer. The defendants argued that the Federal Immigration Reform and Control Act made it unlawful for employers to hire undocumented workers, and therefore Ms. Jimenez did not have a valid employment contract with her employer.

The Iowa Supreme Court rejected this argument and pointed out that the intent of Congress in passing the Immigration Reform and Control Act was not to undermine or diminish in anyway labor protections of existing law such as workers’ compensation benefits.

The Iowa Supreme Court also adopted the reasoning of the Connecticut Supreme Court that if the Court found that undocumented workers were not entitled to work comp coverage, then employers would actually have a further financial incentive to hire undocumented workers because the employers could avoid the expense of paying for workers’ compensation insurance for such undocumented workers.

The Iowa Supreme Court also cited to reasoning from the New York Supreme Court that made the point that employment contracts with undocumented workers did not have an illegal purpose such as a contract to commit murder. Rather, undocumented workers perform legal work that is lawful and legitimate and the fact that the undocumented workers are ineligible for employment does not void the contract between the employer and the worker.

The defendants’ third and final argument was that the Federal law preempted the ability of Iowa to award workers’ compensation benefits to undocumented workers. The general nature of preemption is based on the idea that the laws of the United States are the supreme law of the land and that any state law that is in conflict with a federal law is overruled or preempted. The defense argument was that the Immigration Reform and Control Act provided specific penalties against employers for hiring undocumented workers, and that the State of Iowa could not order additional penalties in the form of workers’ compensation benefits. The Iowa Supreme Court ruled that work comp benefits are not a sanction against employers, but are designed to provide compensation to injured workers, and are not preempted by Federal law.