Iowa Supreme Court Holds That Undocumented Workers Can Be Entitled to Healing Period Benefits Under the Iowa Workers’ Compensation Act

by | Dec 5, 2013

Recently, the Supreme Court of Iowa was faced with the issue of whether the Iowa Workers’ Compensation Commissioner could award an undocumented worker healing period benefits (wage replacement) pursuant to the Iowa Workers’ Compensation Act. In Staff Management v. Jimenez, 2013 WL 6037119 (Supreme Court of Iowa), an undocumented worker alleged that she incurred a work-related injury. Subsequently, the employer determined that the worker did not have proper authorization to work in the United States and accordingly terminated the claimant. The employer argued that the claimant’s termination did not arise out of a work-related injury but was related to the fact that the claimant did not have legal status to continue working.

Subsequently, the claimant filed for workers’ compensation benefits under Iowa law. At hearing, the deputy awarded running indemnity benefits from the date of the claimant’s termination until claimant reached maximum medical improvement. The employer argued that allowing the claimant to have ongoing healing period benefits from the date of her termination was improper as the claimant was precluded from working because of her legal status. Additionally, the employer argued that the Iowa statutes do not specifically include undocumented workers in its definition of employee in the Iowa Workers Compensation Act. Finally, the employer argued that federal law preempted these benefits from being awarded to the undocumented worker.

In reviewing the matter, the Supreme Court of Iowa determined that the broad statutory definition of a worker (“a person who is injured in the employment of, or works under contract of service…for an employer”) covered undocumented workers. The court noted that absent legislative action specifically precluding undocumented workers from receiving workers’ compensation benefits, the Court could not preclude such an award.

Finally, the Court noted that although federal law made it unlawful for employers to hire undocumented workers, it was not the intention of Congress to undermine or diminish labor protections in existing laws. The court reasoned that the goal of federal legislation precluding employment of undocumented workers was to inhibit employment of undocumented workers and to punish the employers who have offered those jobs to the undocumented workers. The Court reasoned that if undocumented workers were not covered by the Iowa Workers’ Compensation Act, it believed that employers would have a financial incentive to hire undocumented workers because the employers could avoid liability under the Iowa Workers’ Compensation Act.

Accordingly, the Supreme Court of Iowa determined that undocumented workers are entitled to workers’ compensation indemnity benefits. Largely, the Supreme Court of Iowa noted that this is an issue for the Iowa State legislature, and absent a clear intent from the legislature to exclude undocumented workers from receiving benefits under the Iowa Workers’ Compensation Act, the Supreme Court saw no basis to deny the same.