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Employers Caught in the Middle on Immigration

Employers Caught in the Middle on Immigration

The last decade has seen a vast increase in workplace litigation revolving around a worker’s immigration status. In 2002, the U.S. Supreme Court decided Hoffman Plastic Compounds Inc. vs. NLRB (2002) 535 U.S. 137. This case involved an undocumented worker who was fired by his employer for involvement in union-organized activities. The worker brought suit and the National Labor Relations Board (NLRB) ordered the employer discontinue further violations and also ordered back-pay. The Supreme Court of the United States reversed, finding that the undocumented worker was not entitled to back-pay because it ran counter to the policies underlying Immigration Reform and Control Act of 1986 (IRCA), which discouraged illegal immigration. IRCA is the overlying Federal Act that places the burden on employers to verify a worker’s status and keep certain records, or be subject to civil and possibly criminal penalties for knowingly hiring and undocumented worker.
After this decision, there was much confusion as to whether undocumented workers were entitled to workplace and labor law rights. In 2003, the California Legislature reacted and codified section 1171.5 of the California Labor Code to limit the potential effects of Hoffman on state labor and civil rights laws. This section provides that immigration status is irrelevant to workers’ compensation, with one exception, and prohibits using a worker’s immigration status as a basis for denying benefits.
The exception provided that immigration status in a workers’ compensation claim may be looked at when necessary to comply with federal immigration laws. In Farmer Bros. Coffee v. WCAB (Ruiz) (2005) 70 CCC 1399 the Second District of the California Court of Appeal determined IRCA did not preempt sections 1171.5 and 3351 of the California Labor Code.
Recently, the operation of IRCA’s effect on State legislation resurfaced in the unpublished opinion in Vicente Salas v. Sierra Chemical Co. (2014). This case was decided by the California Supreme Court, but Sierra has appealed to the United States Supreme Court. In Salas a former employee sued Sierra under the California Fair Employment and Housing Act (FEHA), alleging Sierra failed to reasonably accommodate his physical disability and refused to rehire him in retaliation for his filing a workers’ compensation claim. During discovery, it was determined that the employee had used a Social Security number that belonged to another man.
The California Supreme Court ultimately held that “FEHA is generally not preempted by federal immigration law, but that federal preemption does bar an award of lost pay damages under the FEHA for any period or time after an employer’s discovery of the employee’s ineligibility under federal law to work in the United States.” Justice Baxter wrote a dissenting opinion in regards to the court’s decision regarding preemption. Justice Baxter wrote: “In my view, a state law rule that allows any recovery of a post-termination lost wages by an employment-ineligible alien who sought or procured the job by submitting fraudulent eligibility documents, in direct violation of federal law, is foreclosed by the United States Supreme Court’s definitive interpretation of federal immigration policy as set forth in [IRCA].”
Thus, undocumented workers are not entitled to back-pay. However, under the same precedent, a worker’s immigration status is irrelevant to his claim for workers’ compensation benefits. Therefore, benefits like medical treatment, temporary disability and permanent disability are available.
But what about benefits that are more intertwined with the worker’s immigration status, such as Supplemental Job Displacement Benefits (SJDB)? What rights does an employer have when asserting a 15% “bump down” pursuant to section 4658? Do these issues render a workers’ immigration status relevant being that they are premised on a good-faith return to work offer?
According to Del Taco et al. v. WCAB (Gutierrez) (2000) 79 Cal. App. 4th 1437, an undocumented worker is not entitled to vocational rehabilitation benefits. In Del Taco, the employee was injured on the job and Del Taco paid temporary disability until a physician released him and the employee returned to modified work. A week later Del Taco learned the employee was illegally in the United States and fired him. Del Taco asserted that the employee was not entitled to temporary disability or vocational rehabilitation services and that it would suffer potential penalties only because a worker cannot legally work—not because of his medical status.
The Second Appellate District Court of Appeal of California found that the employee was entitled to temporary disability, however, to award vocational rehabilitation benefits would deprive Del Taco of equal protection of the laws under the United States Constitution. In reasoning, the court stated: “it is not the worker’s disability that precludes him from working…[i]t is his immigration status…Del Taco should not be penalized for obeying the law and a worker should not be rewarded for disobeying the law.” The court found that providing an “illegal worker” with more extensive and costly services than would be provided to a similarly situated “legal worker” deprives Del Taco of equal protection of the laws.
Thus, it seems an undocumented worker is not entitled to back-pay; however she is entitled to other benefits of workers’ compensation like temporary disability, permanent disability and medical treatment. Under Del Taco, employers cannot be required to offer SJDB’s after discovering an employee is not qualified to legally work, as it interferes with the employer’s constitutional rights.
If there is a common theme, it is the courts each acknowledge the power of the states to enact laws that reflect the state’s own policies on labor and employment, while adhering to federal immigration laws, usually by finding a middle ground: finding somewhere between the constitutional right of a sovereign state to allow an undocumented worker some of the same protections as eligible workers, but precluding the ineligible worker from other benefits that creep too close to violations under federal immigration law.
For example, in Farmer Bros. Coffee the Court made clear that IRCA and California’s legislation regarding undocumented workers could operate harmoniously. In Salas, the court found IRCA and FEHA could operate together.
Interestingly, the recent signing of AB 1660 (signed September 29, 2014) provides an additional opportunity for the courts to craft a harmonious coexistence between state and federal law, or not. This bill prohibits California employers from discriminating against a worker who has a driver’s license but cannot show other documentation of citizenship. You may recall that earlier, the California legislature enacted AB 60, which basically requires the DMV to issue a license to an undocumented person if they are otherwise qualified to drive.
AB1660 adds protections under FEHA that create new obstacles for employers trying to abide by federal law. Employers are required by federal law to examine certain documentation in hiring an employee, like a driver’s license and some other documents, like a social security card. But this California law now welcomes discrimination claims against an employer when they refuse to hire a worker who cannot provide the additional documentation required by federal law. This is yet one more layer added to this puzzle for the courts to address.
AB1660 invites state discrimination claims against employers who comply with federal immigration law: It begs for intervention from the courts. Whether state and federal law can continue to operate harmoniously remains to be seen.


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