Getting “the Green” without a Green Card:
The Viability of Lost Wage Claims Brought By Illegal Aliens in New York
Jennifer A. Kelleher
Hurwitz & Fine, P.C.
1300 Liberty Building
Buffalo, New York 14202
The issue of the ability of undocumented aliens to recover lost earnings has received much attention in New York in the past several years, creating a division among the judicial departments that was ultimately settled by the Court of Appeals. The impetus of this surge of attention was the New York courts’ struggle to interpret the effect of the federal Immigration Reform and Control Act (IRCA), 8 U.S.C § 1324a et seq., and the recent Supreme Court case Hoffman Plastic Compounds, Inc. v. National Labor Relations Bd., 535 US 137 (2002) on New York tort law. IRCA, which was passed in 1986 to curtail employment of illegal aliens, makes it fraud and misuse of visas, permits, and other documents to use an identification document, knowing (or having reason to know) that the document was either false or not issued lawfully for the use of the possessor. 18 U.S.C.S. § 1546(b). The Hoffman case stands for the proposition that an undocumented alien who provides fraudulent work papers in violation of federal law can not be awarded back pay for work not performed because such recovery would run counter to the policies underlying IRCA, which criminalizes such conduct. New York courts have struggled to reconcile these principles with the well established worker protections of New York Labor Law § 240 (the Scaffold law) which seek to protect all workers in qualifying employment situations, regardless of immigration status. Balbuena v. IDR Realty LLC, 6 N.Y.3d 338, 359 (2006).
The New York courts first approached this issue on December 28, 2004, in two companion cases dealing with the right of illegal aliens to recover lost earnings. In Sanango v. 200 East 16th Street Housing Corp., 15 A.D.3d 36 (1st Dept. 2004) and Balbuena v. IDR Realty LLC, 13 A.D.3d 285 (1st Dept. 2004), the First Department found that plaintiffs were not entitled to recover lost earnings based on the wages they might have earned illegally in the United States. As a consolation prize, the court awarded plaintiffs lost earnings based on the wages they would have been able to earn in their home countries. Sanango went further by determining that state tort law was preempted by IRCA to the extent it permitted an undocumented alien to recover compensation for lost illegal wages. 15 A.D.3d 44. However, in 2005, the Second Department concluded that state tort law was not preempted by the IRCA because neither the federal statute nor Hoffman prohibited an undocumented alien from recovering lost wages in a personal injury action. Majlinger v. Cassino Contracting Corp., 25 A.D.3d 14 (2d Dept. 2005).
The Court of Appeals finally squared the circle when it decided the consolidated appeals of Balbuena and Majlinger. In Balbuena v. IDR Realty LLC, 6 N.Y.3d 338 (2006), the Court held that, in the absence of proof that plaintiffs tendered false work authorization documents to obtain employment, IRCA does not bar maintenance of a claim for lost wages by undocumented aliens. It reasoned that IRCA does not preempt New York Labor Law because the preemption language in IRCA was intended to apply only to civil fines and criminal sanctions imposed by state or local law. In contrast, the primary purpose of civil recovery in a personal injury action under the Labor Law is not to punish the tortfeasor but to compensate the worker for injuries proximately caused by negligence or the violation of statutory safety standards. 6 N.Y.3d at 357. It also distinguished Hoffman on the basis that, in Balbuena and Majlinger, there was no evidence that plaintiffs criminally provided their employers with fraudulent work papers. “In the context of Labor Law claims, a per se preclusion of recovery for lost wages would condone the employers’ conduct in contravention of IRCA’s requirements and promote unsafe work site practices, all of which encourages the employment of undocumented aliens and undermines the objectives that both IRCA and the state Labor Law were designed to accomplish.” Balbuena v. IDR Realty LLC, 6 N.Y.3d at 362.
The Second Circuit of the U.S. Court of Appeals addressed the issue shortly thereafter. In Affordable Housing Foundation, Inc. v. Silva, 469 F.3d 219 (2d Cir. 2006), the Court concluded that on the facts of the case, IRCA did not conflict with New York law and therefore undocumented workers could recover lost earnings at United States pay rates. In doing so, the Court identified five factors on which it based its decision: (1) the wrong being compensated—personal injury—was not authorized by IRCA; (2) a lost earnings award to an injured worker does not require the worker or his employer to commit an IRCA violation; (3) the IRCA violation was committed by the employer (by hiring the illegal alien), not the employee (i.e. no false documentation was submitted); (4) the illegal employment relationship and the personal injury were attributed to the wrongful conduct of persons other than the undocumented alien; and (5) the jury was instructed to consider the worker’s removeability in deciding what, if any, lost earnings to compensate.
Finally, a recent case (October 31, 2008) from the Third Department went one step further by explicitly holding that a plaintiff’s violation of IRCA (i.e., submission of a false documentation to obtain employment) does not preclude an undocumented alien from recovering lost wages. Amoah v. Mallah Management, LLC, 2008 NY Slip Op 8228 (3d Dept. 2008), is the classic story of a friendship torn apart by greed. Amoah, a citizen of Ghana, came to the U.S. with little in his pocket but big dreams and a 6-month visa that did not permit him to work. He soon found refuge in a good samaritan named Boahen-Appiah, who not only shared his roof with him, but also his driver's license and Social Security card. Armed with these fake IDs, Amoah soon found work as a parking garage attendant, but was injured on the job. When worker's comp checks began arriving to the household, Boahen-Appiah saw these checks in his name and demanded that he receive a cut of the profits. Amoah refused to share, and Boahen-Appiah took back his documents--and his roof. With no place else to turn, and most likely motivated by a little revenge, Amoah notified the worker's comp carrier of his true identity and Boahen-Appiah stopped receiving checks.
On October 30, 2008, the Third Department upheld the claimant's award for lost wages, reasoning that such a result was consistent with the purposes of IRCA, which is "to deter employers, through penalties, from hiring undocumented aliens thus indirectly discouraging illegal aliens from coming to this country anticipating employment." The significance of Amoah v. Mallah Management, LLC is that it swung open wide the door that was left only ajar by the Court of Appeals in Balbuena v. IDR Realty LLC.
In sum, the case law reveals that “an employer, general contractor, or property owner whose negligence or violation of New York’s workplace safety statutes causes injury to a worker may not avoid liability for the worker’s lost wages by virtue of the worker’s status as an undocumented alien.” Majlinger v. Cassino Contracting Corp., 25 A.D.3d at 15. Ultimately, the Courts’ rationale is a policy one: withholding lost wages from undocumented aliens can only have the effect of encouraging employers to hire them. Doing so would counteract the purpose of IRCA, which is to curtail employment of illegal aliens, not prevent them from being compensated for work already performed.
As evidenced by the fact that essentially every published case dealing with this issue arose out of a Labor Law §240 claim, the construction industry arena is fertile ground for personal injury actions involving a claim for lost earnings by undocumented aliens. The case law, which makes no distinction between past and future lost wages, demonstrates that IRCA does not bar maintenance of a claim for lost wages by undocumented aliens. Based on the current posture of case law in New York, an undocumented alien’s claim for lost earnings is viable, and evidence that a claimant obtained employment with fraudulent work documents in no longer a strong defense to an undocumented alien’s claim for lost wages.