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Illegal Employment.

If an individual lies on an employment application, the contract of employment may still be valid for purposes of considering payment of a workers' compensation claim.

Another factor in determining whether an employee is entitled to workers' comp benefits relates to the issue of whether the contract is one to perform an illegal act, such as bartenders hired during prohibition, or whether the person works for an illegal enterprise such as prostitution, drug trafficking, or gambling operations in violation of the law.

Illegal aliens living in the United States provide a fertile ground for litigation. The majority of jurisdictions allow illegal aliens to file for workers' compensation benefits. A recent Pennsylvania case illustrates the manner in which the judges deal with illegal alien claims. An illegal alien who did not have the proper documentation to work for Reinforced Earth Co. sustained injury to his head, neck, shoulders and upper back when he was struck by a steel beam while employed as a maintenance worker. His injury prevented him from performing his pre-injury position. The claimant filed for and was awarded workers' compensation disability benefits. The employer claimed that an illegal alien was not entitled to workers' compensation benefits.

The employer appealed a lower court decision and argued on appeal that the Immigration Reform and Control Act of 1986 (IRCA), under which illegal immigrants are prohibited from being employed in the United States, preempts the state's workers' compensation act and requires Pennsylvania courts to find the claimant was not an employee under the workers' compensation law. The court said the IRCA was enacted to prohibit employers from hiring illegal aliens and that it placed on employers the burden of obtaining documentation that an applicant can legally seek employment.

The IRCA does not address the issue of benefits for aliens employed in violation of the law. The court ruled that the IRCA does not preclude an illegal alien from being considered an employee for purposes of the workers' comp law, and the court affirmed the award of benefits.

Finally, one of the most frequently encountered disputes regarding illegal employment deals with minors. Modern American jurisprudence has sought to protect minor-age employees from abuse and dangers in the workplace. Children have been permitted to engage in employment because it is recognized that there are positive developmental and educational aspects to working.

For workers' compensation purposes, the remedy available to an injured minor is dependent on the legality of the employment. It is therefore necessary in these cases to examine the appropriate state or federal law governing the minor's employment. In New York, a minor's employment may be governed by his or her age, by the hazards of the employment, or by other employment conditions.

Workers' compensation has been determined by some courts to be the exclusive remedy available to an injured employee who is a minor. This has been held to be the case even when there has been a violation of another law that provides its own remedy for violation.

In most states, there are penalties provided in workers' compensation laws for the employment of minors in violation of child labor laws. The New York statute provides for an award of double compensation benefits where a minor has been employed in such violation. A number of other states also pay increased benefits to injured illegally employed minors. Under the New York statute, the single award may be paid by an insurance carrier, but the double award portion cannot be insured and must be paid by the employer.

The standard workers' compensation and employers' liability policy specifically excludes coverage for employers' liability insurance for "bodily injury to an employee while employed in violation of law with your (the employer's) actual knowledge or the actual knowledge of any of your executive officers." Accordingly, there may be worker-related employer liability suits without insurance coverage.

Donald T DeCarlo is a partner the law firm of Lord, Bissell & Brook in New York.
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Publication:Risk & Insurance
Date:Apr 1, 2001
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