N.Y. Appeals Court Backs Illegal Aliens’ Right to Collect Lost Wages in Civil Actions

A New York appeals court has ruled in two similar cases that illegal aliens are entitled to recover lost wages in state court personal injury actions although the amount of their recovered wages must be calculated using what they would have earned in their home country, not what they were illegally paid in the U.S.

Plaintiffs seeking to avoid paying lost wages in the cases unsuccessfully relied upon a 2002 U.S. Supreme Court ruling (Hoffman Plastic Compounds v. National Labor Relations Board) that blocked the federal NLRB from awarding lost wages to an undocumented, illegal alien. That high court decision cited the Immigration Reform and Control Act of 1986 as the basis for its ruling.

But in the two New York state cases (Babuena v. IDR Realty, LLC and Sanango v. 200 East Sixteenth Street Housing Corp.) handed down on Dec. 28, 2004, the First Department of the New York Appellate Division held that the 2002 Supreme Court case, while limiting an alien’s recovery, nevertheless permits recovery where the lost wages are based on the prevailing wage in the alien’s home country.

In Balbuena, the New York court wrote that “it is our view that plaintiff, as an admitted undocumented alien, is not entitled to recover lost earnings damages based on the wages he might have earned illegally in the United States. Rather than simply dismiss the lost earnings claim, however, we limit plaintiff’s recovery for lost earnings to the wages he would have been able to earn in his home country, since an award based on a prevailing foreign wage would not offend any federal policy.”

The court identified the underlying question in these cases as whether the purpose of the IRCA, which it said is to sanction those who employ undocumented aliens, is furthered by limiting the damages for which those very employers would otherwise be responsible upon their violation of the state’s own labor laws and thereby permitting them to reap a benefit as a result of their violation of the IRCA. “It is clear that the punishment of the undocumented worker, to the advantage of the employer who has violated the IRCA, contravenes the statute’s purpose and intent,” the decision stated.

The court dismissed the claim that the federal IRCA law trumps state laws. “There is no indication that, by passing the IRCA, Congress intended to occupy the entire field of matters affecting undocumented aliens in every respect. Significantly, it is silent on the question of Congress’s intent to preempt state labor and employment remedies.”

The court also rejected the notion that the state’s labor law conflicts with the accomplishment of the objectives of the IRCA, arguing that while awarding damages for lost earnings would benefit injured undocumented aliens, it “would not have any significant impact” upon the IRCA’s objective of “prohibiting” their employment. “(A)n undocumented alien’s eligibility for an award of damages for lost earnings in a future tort case is unlikely to influence an immigrant’s decision to try to secure work in this country. It is more likely to encourage employers to hire workers without examining their documents, contrary to the purposes of the IRCA, and to encourage employers to reduce their compliance with safety standards, contrary to state law,” the state court found.