Illegal Residence or Undocumented Work Status does Not Bar Indemnity Benefits

by | Apr 20, 2013

Recently, the Nebraska  Supreme Court clarified that an injured employee’s illegal residence or undocumented work status will not bar that employee from receiving a workers’ compensation award of permanent total disability. Until recently, it was unclear as to whether undocumented illegal aliens could receive disability benefits based on a work-related loss of earning capacity. However, the Nebraska Supreme Court in Moyera did confirm that illegal or undocumented workers are not entitled to vocational rehabilitation benefits under Neb.Rev.Stat. § 48-162.01.

In Moyera, the undocumented worker incurred a work-related injury in 2008. Subsequent to the injury, the employer made significant efforts to accommodate the undocumented worker’s work restrictions. The undocumented worker continued working for the employer until 2010 at which time employer discovered that the undocumented worker had been working illegally and terminated the employment. Subsequently, a vocational rehabilitation specialist reviewed the undocumented worker’s work-related permanent work restrictions and performed a loss of earning capacity assessment pursuant to Neb. Rev Stat. § 48-121. The opinion of the vocational rehabilitation specialist was that the undocumented worker was permanently and totally disabled.

The employer asserted that the undocumented worker was not entitled to benefits based on loss of earning capacity and permanent disability on the basis that the employee was an undocumented illegal immigrant. At trial, the employer acknowledged that the undocumented worker would be entitled to temporary benefits and medical benefits, but argued that permanent disability benefits are different as they are not limited to an employee’s healing period. The employer argued that permanent disability benefits should be barred as these benefits were related to an employee’s ability to obtain lawful employment in the United States, something which the undocumented worker in the case at hand was unable to do given his undocumented status.

The Nebraska Supreme Court disagreed with the employer’s interpretation of the Nebraska Workers’ Compensation Laws. First, The Nebraska Supreme Court reasoned that the Nebraska Workers’ Compensation Laws specifically defines who may receive workers’ compensation benefits and even indicated under Neb. Rev. Stat. § 48-115 (2) that “aliens” were specifically noted to be covered by the Workers Compensation Laws. The Nebraska Supreme Court reasoned that other portions of the Workers’ Compensation Laws specifically excluded other classes of employees and had the Legislature intended to exclude illegal aliens, it would have done so within the Nebraska Workers Compensation Laws.

The Nebraska Supreme Court also noted  that in awarding permanent total disability benefits, the compensation court must generally determine only two issues; (1) that the employee can no longer earn wages doing the same kind of work for which he or she is trained or accustomed to perform, and (2) that the employee lacks the necessary skills to perform other work that is within the employee’s physical limitations. The Nebraska Supreme Court reasoned that an employee’s illegal immigration status did not affect this primary determination. The Nebraska Supreme Court reasoned that even if undocumented workers cannot legally work in the United States, they could have worked elsewhere but-for the work-related injuries and resulting permanent restrictions.

The Nebraska Supreme Court noted that its decision was consistent with that of many other jurisdictions that have interpreted the issue. The Nebraska Supreme Court also noted that to exclude undocumented workers from being recipients of workers’ compensation awards could incentivize employers to hire undocumented workers knowing that they would be able to escape liability for the work-related injuries.

Finally, The Nebraska Supreme Court did note that although  an undocumented worker could be entitled to permanent total disability benefits, that did not mean that injured undocumented workers would be entitled to vocational rehabilitation benefits under Neb. Rev. Stat.§ 48-162.01. The Nebraska Supreme Court noted that under Neb. Rev. Stat. § 48-162.01, there are four priorities which must be reviewed in the analysis as to what vocational rehabilitation benefits could be received by an injured worker. The Nebraska Supreme Court noted that the first priority was the issue of whether an employee could return to the previous job with the same employer or whether the injury prevented the employee from doing so. The Nebraska Supreme Court noted that by its very nature, the undocumented status of an employee would prevent that undocumented worker from returning to the prior job with the same employer. The Nebraska Supreme Court noted that it would be the undocumented status, not the injury itself which would per se ban a return to prior employment. Accordingly, the Nebraska Supreme Court determined vocational rehabilitation benefits under Neb. Rev. Stat. § 48-162.01 would not serve their purpose as there could be no return to work as the employee was undocumented.

Finally, The Nebraska Supreme Court clarified confusion that had arisen regarding prior cases detailing vocational rehabilitation rights for illegal immigrants. The Nebraska Supreme Court noted that it was irrelevant whether an undocumented worker intended to stay in the United States or move back to their native country subsequent to vocational rehabilitation.

In summary, the Nebraska Supreme Court in Moyera essentially confirmed that aliens, regardless of their legal status, could be entitled to an assessment of loss of earning capacity under Neb. Rev. Stat. § 48-121 if they have work-related injuries resulting in permanent work restrictions. As it stands, the only likely ability to change the effect of The Nebraska Supreme Court’s ruling in Moyera, would be via legislative initiative to specify that only legal aliens are entitled to work comp benefits.

What was left unaddressed in Moyera is the issue of whether the employee’s inability to return to work because of his illegal status would also be a valid factor in the assessment of loss of earning capacity. As it stands, we believe an argument could be made that loss of earning capacity assessments for undocumented workers are inherently inflated not necessarily by the applicable permanent work restrictions, but by the worker’s illegal status; something unrelated to the work injury. If you have questions regarding the Court’s decision in Moyera or addressing benefits for undocumented injured workers, please contact Paul Barta at