Safety and OSHA News

Can worker receive smaller comp payments because he’s undocumented?

In 2009, Tennessee amended its workers’ comp law to limit the benefits undocumented workers can receive. Did that provision hold up under court review? 

Carlos Martinez, an immigrant from Guatemala, began working for Steve Lawhon dba Commercial Services in March 2011. Martinez isn’t a legal resident of the U.S.

Martinez was hired at a roadside area where day laborers gathered. Lawhon didn’t require Martinez to complete an application, provide a Social Security Number or provide any other confirmation that he was a legal resident of the U.S.

On Martinez’s W-2 tax forms, Lawhon supplied the business’s tax ID number where the employee’s Social Security was supposed to be listed.

On Aug. 8, 2011, Martinez was operating a lawn mower on a hill when he slipped on wet grass and fell. The mower ran over his left arm, severely lacerating and degloving his elbow area.

Doctors performed five operations on Martinez’s left arm. The final procedure restored some function to his finger and thumb which he hadn’t been able to move. However, some nerve dysfunction remained.

His surgeon assigned a 13% medical impairment rating to Martinez’s left arm when he reached maximum medical improvement. The doctor imposed lifting restrictions ranging from 10 to 16 pounds depending on the type of lifting.

In the course of his medical treatment, it was revealed Martinez was an undocumented worker. That prohibited him from returning to work for Lawhon. Martinez was able to work intermittently. However, during some weeks, he was unable to find any work.

In May 2013, another doctor performed an independent medical evaluation of Martinez and assigned a 24% medical impairment to his left arm.

Martinez sought workers’ compensation benefits and challenged a part of the revised Tennessee law that restricted the amount he could collect. The revision limited an employee’s benefits to 1.5 times the medical impairment rating. Martinez argued that section of the Tennessee workers’ comp law was unconstitutional.

The trial court agreed with Martinez that the cap was unconstitutional. Based on the severity of his injuries and his limited education and skills, the trial court applied a 3.5 multiplier, concluding he suffered a vocational disability of 84% to his left arm.

Lawhon appealed.

Does Tennessee statute violate federal law?

The trial court had found that the limit on comp benefits violated the federal Immigration Reform and Control Act of 1986. The court said by enacting the new comp law section, the Tennessee General Assembly established what amounts to a state immigration policy which is an area controlled by the federal government.

Tennessee has other limits on comp payments. If an employee with a permanent partial disability finds meaningful work, the maximum disability award can’t be more than 1.5 times the medical impairment rating. If the employee doesn’t return to work, the award is capped at six times the impairment rating.

The lower cap is designed to encourage employers to re-employ workers who have suffered permanent partial disability.

But the failure to return to work isn’t always the employer’s fault, and the Tennessee law also takes that into consideration. When the injured employee isn’t working due to resignation, a higher unemployment rate or misconduct by the employee, the rating multiplier is capped at 1.5.

The original Tennessee comp law didn’t address situations in which an employee couldn’t return to work because of their legal work status, but the 2009 amendment added that reason to the others with the 1.5 times cap.

However, a Tennessee Supreme Court panel hearing the appeal noted:

“By reducing the liability of employers of undocumented workers to one and one-half times the medical impairment rating, the statute makes it less costly to hire these workers and potentially creates a perverse incentive for employers to hire undocumented workers over other workers, especially in high-risk jobs that often results in workers’ compensation claims.”

In fact, a Tennessee appeals court had previously determined that depriving undocumented employees from receiving workers’ comp benefits decreases the burden on companies to provide safe workplaces.

Lawhon also argued the trial court’s award of 84% permanent partial disability benefits was excessive. But the appeals panel rejected that argument, noting that Martinez was only able to find intermittent employment because of restrictions placed on him by his surgeon.

As a result of Martinez’s appeal, a special appeals panel of the Tennessee Supreme Court found the 2009 amendment to the state’s workers’ compensation law to be unconstitutional. It found the larger benefits award to Martinez should stand.

(Carlos Martinez v. Steve Lawhon, Supreme Court of Tennessee Special Workers’ Compensation Appeals Panel, No. 131145IV, 11/21/16)

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  1. Concerned Citizen says:

    Where is the incentive for illegal migrants to become citizens of the United States? If they can come here and get the same benefits as a naturalized immigrant, or as normal American born citizen, then they will to continue to flood into this country! This is not fair to the hard working migrants who come here and through the legal system become citizens! It is also not fair to all American citizens who are having to pay portions of their taxes to take care of these people! We are unable to take care of the worlds problems when it comes to employment, education, and cleaning up the corruption in their own countries preventing them from prospering there! Enough is enough!

    • This article is about Workers Compensation. It is not funded by taxes, it’s insurance paid for by the company. What’s the incentive for a company to hire citizens or legal immigrants if they can hire a person here illegally and it cost them much less in salary and now workers comp? These companies only seem to find out a persons legal status AFTER an injury that will cost them money. If you want to stop illegal immigrants from coming over, take away the jobs. You do that by taking away the incentive for a company to hire them in the first place, otherwise the problem just repeats itself ad nauseam.

  2. Joe Schmuckatelli says:

    Lawhorn should be held accountable for hiring illegals and prosecuted for doing so. Martinez should have his arm treated and then he should be deported. Any cost over and above his treatment should also be born by Lawhorn. In addition, Lawhorn should pay court costs for this action. Knowing this will universally be the case, perhaps people will stop hiring cheap illegal labor and start providing jobs to Americans who need them.


  1. […] Can worker receive smaller comp payments because he’s undocumented? State courts have been ruling that undocumented workers aren’t exempt from workers’ comp coverage. Sometimes they even point out that exempting these workers would create a situation in which it would be more profitable for companies to hire them if they weren’t included in the comp system. In this case, a court considers a state law that would put a cap on comp payments to injured undocumented workers. […]

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