NV High Court Reiterates That Undocumented Workers May Recover Indemnity Benefits

The Supreme Court of Nevada reiterated that the state’s workers’ compensation statutes clearly and unambiguously protected every person in the service of an employer, whether lawfully or unlawfully employed, including undocumented aliens [Associated Risk Mgmt., Inc. v. Ibanez, 2020 Nev. LEXIS 81 (Dec. 31, 2020)]. Accordingly, the high court affirmed the judgment of the state district court that denied judicial review to an appeals officer’s decision awarding PTD benefits to an undocumented worker.

Background

Ibanez, an undocumented worker, sustained severe injuries in a 2014 construction site accident. He was treated for his injuries over the next several years, which included multiple surgeries. Even after these surgeries, he continued to suffer both physical pain and mental trauma related to the accident. Ibanez’s injuries proved debilitating, and so he applied for PTD status in June 2018. The third-party insurance administrator (“ARM”) denied this request, finding Ibanez’s disability was only temporary and that he would be able to return to light duty. Further, it determined that Ibanez would be employable if he were eligible to work in the United States.

Odd-Lot Status

Ibanez sought review of ARM’s determinations pursuant to NRS 616C.320. The hearing officer initially affirmed ARM’s denial of benefits, but the appeals officer reversed, granting Ibanez PTD status pursuant to the “odd-lot doctrine.” Under this broadly-adopted doctrine, a worker may be determined to suffer a permanent total disability even though he or she is not altogether incapacitated for work, if he or she is so handicapped that they will not be employed regularly in any well-known branch of the labor market [see Larson’s Workers’ Compensation Law, § 83.01, et seq.]. The appeals officer found that Ibanez’s lack of a valid work visa was “not relevant” to the determination of PTD status.

IRCA Does Not Preempt Award of Monetary Benefits to Undocumented Alien

Initially, the Court indicated the federal Immigration Reform and Control Act (IRCA) did not preempt an award of workers’ compensation benefits. It noted further that Nevada’s industrial insurance system covered “every person in the service of an employer … whether lawfully or unlawfully employed,” including “[a]liens” [see NRS 616A.105(1)].

The Tarango Decision

Referring to its earlier decision in Tarango v. State Indus. Ins. Sys., 117 Nev. 444, 25 P.3d 175 (2001), the Court said the issue in Tarango was not whether an undocumented alien could receive workers’ compensation under Nevada laws, but whether an injured undocumented worker’s access extended to the full depths of the workers’ compensation scheme. The Court observed, for example, that under the state’s workers’ compensation statute, an insurer was directed to prioritize returning an injured worker to similar employment if possible and to vocational training if not [see NRS 616C.530]. At the same time, federal law positively prohibited any employer from knowingly employing an undocumented alien.

In Tarango, the Court had noted that even if the provision of vocational training was not technically preempted, such training would be contrary to the legislative intent, in light of our conclusion that a return to employment was preempted. But the Court stressed that it’s Tarango decision did not bar compensatory benefits which award monetary relief. Far from holding those benefits preempted, the Court expressly affirmed an award of such benefits.

The Court continued that IRCA makes it unlawful to knowingly employ an undocumented alien; IRCA says nothing about paying an undocumented alien benefits that compensate for an injury. There was no conflict with federal law when an insurer paid compensatory benefits, indicated the Court. Furthermore, those benefits were not only available because of the worker’s undocumented status; they are available to any worker, lawfully or unlawfully employed, who is injured by accident arising out of and in the course of employment [see NRS 616C.440(1)]. Accordingly, the Court held that undocumented aliens were not precluded from receiving disability benefits under Nevada’s workers’ compensation laws.