Risk & Business Magazine JGS Insurance Spring 2020 | Page 26

WORKERS' COMPENSATION WORKERS’ COMPENSATION AND UNDOCUMENTED WORKERS T he Pew Research Center estimates that 7.5 million workers in the United States are undocumented. Most are concentrated in the agriculture, construction, and hospitality industries with about 10 percent, of restaurant workers being undocumented. To be clear, an undocumented worker can be a person who entered the United States illegally or a person who entered the United States legally but who lost their legal status usually by overstaying their visa. Recent studies show about 62 percent of newly illegal immigrants, many who come to seek work, overstayed their visa and 38 percent had crossed a border illegally. So why do workers that are illegally in this country receive workers’ compensation? Well, when a person is at work, they are at risk to work-related hazards. This is precisely why workers’ compensation is in place—to indemnify employees. But, how can you say a person is an employee if they are undocumented? If that person comes in regularly to perform duties that benefit the company, they can be labeled as an employee and are entitled to workers’ compensation. The rationale is that it is unfair for an employee who is working on the job to suddenly have an accident and not receive compensation for the injury they have suffered. Often, employers will try to terminate their employment. In all states, with the exception of Wyoming, BY: ERIC P. WOKAS, CSP ARM RISK CONTROL CONSULTANT JGS INSURANCE 26 an employer cannot use the fact that a person is undocumented to bar them from workers’ compensation. IF THAT WERE THE CASE, THE INJURED WORKER’S IMMIGRATION STATUS WOULD BECOME THE ACTUAL CAUSE OF THE LOSS IN EARNING POWER, AS OPPOSED TO THE WORK-RELATED INJURY. Likewise, health, safety, and wage laws protect all employees regardless of their immigration status. Therefore, undocumented workers have rights to information regarding their health and safety rights. They also have the right to refuse unsafe work if they reasonably believe it would create a hazard to them or their coworkers. Since 1986, federal laws have required employers to complete an Employment Eligibility Verification Form (I-9) to verify all workers’ identities, as well as their authorization to work in the United States. Some employers also use a free supplemental program, called the E-Verify program, that feeds workers’ I-9 information into a variety of federal databases to confirm that new hires are authorized to work in the United States. Congress created it as a way to deny jobs to illegal immigrants and deter them from coming to the United States. Currently only 8 states, Pennsylvania being one of them, require E-Verify on almost all businesses. Some other states require E-Verify for public employees only. New Jersey and 28 other states have no E-Verify requirement. Some workers get around I-9 requirements by working “under the table.” In that case, the employer won’t report them for tax purposes. They can also buy fake green cards and fake Social Security cards in their own names from illicit vendors or steal or borrow work documents belonging to a US citizen or legal permanent resident. Employers skirt culpability by accepting fake documents that they are not legally required to verify. Other methods may include misclassifying workers as independent contractors or subcontracting to separate businesses that do the actual hiring—all the while claiming they did what the law requires to verify their workers’ employment authorization. Under federal and state laws, employers can be fined for hiring illegal immigrants. Depending on the severity of the violation, employers can pay fines as high as $10,000 for every undocumented worker. Hence, this may backfire on the employer. The underground labor market is one in which illegal hiring is widespread. It even includes some of the biggest names in American business. Yet the risk of running afoul of immigration authorities is low. This “don’t ask, don’t tell” system has allowed employers to benefit from cheap immigrant labor. However, employers should not fool themselves. In almost all cases, undocumented workers are entitled to the same benefits as your documented employees. The risk of not providing benefits can cost a company a lot more in fines and reputation. + Eric Wokas has over 25 years of experience as a risk management consultant working for various major property/casualty insurance carriers including Continental, Zurich and Gerling as well as Aon an international insurance brokerage firm. At JGS Insurance Eric continues to assist clients in development and implementation of practical solutions in reducing risk.