By Bruce Buchanan, Siskind Susser

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The California Supreme Court recently found, in Salas v. Sierra Chemical Co., that an undocumented worker who filed a claim under the California Fair Employment and Housing Act (FEHA) was not barred from receiving damages for lost wages.

The employee alleged that Sierra failed to reasonably accommodate his physical disability and refused to rehire him, in retaliation for his filing of a worker’s compensation claim. During discovery, Sierra learned the employee in question was undocumented and had used someone else’s Social Security number for employment.

Sierra argued the employee was not entitled to back pay or damages because of his undocumented status, citing the U.S. Supreme Court’s decision in Hoffman Plastics Compounds, Inc. v. NLRB, 535 U.S. 137 (2002). In Hoffman, the court held the NLRB could not “award back pay to an illegal alien for years of work not performed, for wages that could not lawfully have been earned, and for a job obtained in the first instance by criminal fraud.”

The employee argued that an amendment to California’s FEHA entitled him to all remedies available under state law, except reinstatement, regardless of his immigration status. Interestingly, the California FEHA amendment was passed in response to the U.S. Supreme Court’s decision in Hoffman.

The Issue
Does the federal Immigration Reform and Control Act (IRCA) preempt the California FEHA anti-discrimination law?

In this case, the California Supreme Court found that FEHA generally is not preempted by federal law and did not directly conflict with IRCA because compliance with both federal and state law is possible. Although IRCA prohibits unauthorized use of false documents to get a job, it does not prohibit an employer from paying, or an employee from receiving, wages earned during employment wrongfully obtained by document fraud, so long as the employer remains “unaware” of the employee’s unauthorized status.

Stated another way, an employee may be entitled to lost wages for the period of time from unlawful termination until the employer discovers the fraud. In this case, the Court held that the employee was not entitled to any award for loss of employment during the post-discovery period because Sierra learned of his undocumented status during discovery and IRCA prohibits “knowingly” employing an unauthorized worker.

The California FEHA amendment did not frustrate the purpose of the IRCA statute, insofar as it made available to the employee the remedy of pre-discovery period lost wages for unlawful termination. By not allowing unauthorized workers to obtain state remedies for unlawful termination, including pre-discovery period lost wages, the California Supreme Court reasoned that it would effectively immunize employers who violate California state law by discriminating against their workers on grounds such as disability or race, retaliate against workers who seek compensation for workplace injuries, or who fail to pay the wages required under state law.

The Takeaway
This case shows that California employers cannot hide behind an employee’s undocumented status in attempting to deny back pay after violating a state employment law. It also reinforces the importance to employers of proper completion of I-9 Forms and proper use of DHS E-Verify which can help employers identify document abuse and/or fraudulent social security numbers used by undocumented workers.

A copy of the court opinion is available here.