RALEIGH — A proposal in the state Senate could take away medical benefits paid to workers here illegally who are injured on the job.
That would be a major change from what has long been the law in North Carolina and other Southeastern states. The state's workers' compensation program ensures medical care for injured employees, and it also insulates businesses from lawsuits they might bring.
Where the idea for the legislation came from was a little murky until Thursday.
The provision was added to an unrelated bill last week and cleared one committee, but it was pulled off the full Senate's calendar at the last minute on Tuesday. Opposition behind the scenes, from business and advocates for immigrants and workers' comp attorneys, could doom the proposal.
At stake in this case is the cost of health care that is ultimately borne by taxpayers - as well as the harm to individual migrant workers, who often take the most dangerous jobs and sometimes are reluctant to file claims for injuries they sustain.
"This is just one more thing that makes it cheaper to employ immigrant labor rather than American labor," said Gabe Talton, a workers' comp attorney at a Spanish-language law firm in Raleigh.
Person's legal status
The way the law is now, businesses with three or more employees have to buy workers' comp insurance or certify they have enough assets to self-insure. Having that coverage protects employers from being sued for on-the-job injuries, and it pays for medical costs including vocational rehabilitation.
Employers or employees can dispute claims at the state Industrial Commission. When claims are denied, health care providers end up absorbing the cost. Hospitals are particularly vulnerable because they are required by federal law to treat every patient, regardless of whether the person has insurance.
The question of a patient's legal status in the United States does not typically come up when health care is needed, attorneys and health care professionals say. State law says workers here illegally are entitled to insurance benefits if they are injured on the job.
Immigrants' advocates say it's common for employers to accept documentation from employees with fake Social Security numbers or other false information without checking their accuracy, because it's expedient not to know. The legislation would allow employers to successfully challenge workers' comp claims for those undocumented employees.
Under House Bill 369, businesses would have to prove that they didn't know employees were here illegally at the time they were hired because they relied on the workers' false representations. That, advocates say, would encourage businesses to turn a blind eye toward whether the workers misrepresented their status until it becomes advantageous to know otherwise.
Other employers - in particular construction, restaurants, hospitality, some small businesses - don't even bother asking for documentation, Talton said.
Law now protects all
Carol Brooke, director of the Workers' Rights Project at the N.C. Justice Center, said the proposal seems to presume that workers who might be undocumented at the time they are hired will continue to be so. In fact, she said, workers might acquire legal status later or be on a work visa that has expired.
"That the worker who may have a permanent, catastrophic injury has no access to workers' compensation benefits seems wholly unfair," Brooke said.
Brooke said the bill would lead to increased costs passed on to taxpayers, encourage employers to hire workers who are in the country illegally, prevent businesses from being held accountable for unsafe workplaces, and subject employers who do verify their workers' status to increased scrutiny.
The current law protects businesses and their employees, Brooke said.
"It's just good public policy," Brooke said. "Workers' comp is a bargain that's intended to benefit employers and employees. When you mess with that bargain, you're asking for trouble."
Hospitals are not seeing a large number of unpaid workers' compensation claims, but if some workers lose their coverage that would have a big impact, said Cody Hand, a lobbyist for the N.C. Hospital Association.
There are an estimated 325,000 immigrants living in North Carolina illegally, and this group represents 5.4 percent of the labor force, according to the Pew Hispanic Center.
Hand said injured workers showing up in emergency rooms without coverage would add to the $1 million a year the state's hospitals already provide in charity care.
Members of the hospital association also have a problem with the provision from the perspective of employers, because the hospitals have close to 200,000 workers. Premiums have to be paid for employees regardless of whether they are legal or illegal residents, Hand said.
If it turns out an injured worker isn't covered by workers' comp, then the employer risks being sued by that worker. Employees are barred for suing for workplace injuries if they are covered by workers' comp insurance.
"From an employer's standpoint, it's removing a very valuable shield for us," Hand said. "From a hospital standpoint, it means that we're on the hook to pay more."
Just where the proposal originated took some time to emerge.
Who wants the change
At a Senate judiciary committee meeting on June 26, Sen. Thom Goolsby, a Republican from Wilmington, explained four of the five sections in his bill, which would make minor changes to criminal law, including expunging records and deferred prosecution. He then turned to the state Industrial Commission to explain the workers' compensation part.
"We have one or two people from the Industrial Commission to speak on that," Goolsby told committee members. "They sent that bill to me and asked that it be considered."
Industrial Commission Administrator Walter Gray, who is a legislative liaison, then explained the provision in detail, shared information about what other states do and answered legislators' questions.
Afterward, advocates for immigrants and workers' compensation attorneys questioned the propriety of the Industrial Commission proposing such a change in law.
"It seems odd that a department that is at least partly responsible for making sure workers get the benefits they deserve would try to limit access to these benefits," said Brooke of the Justice Center.
When asked this week, the agency said it didn't initiate the legislation. The commission's general counsel, Sumit Gupta, said in a written response to The News & Observer that the commission staff worked closely with Goolsby's office to provide information that he requested, a common practice among legislators and state agencies.
"The N.C. Industrial Commission does not have the ability to propose legislation and this provision was not an issue the commission planned to pursue during this legislative session," Gupta wrote.
He added that the agency doesn't publicly comment on pending legislation, and he declined to elaborate on the provision. Gupta said Gray attended the meeting to answer questions about the provision at Goolsby's request.
On Thursday, Goolsby's staff said that Goolsby, who was out of the country, drafted the provision after hearing from an attorney friend that there was a loophole in the system that allowed workers here illegally to receive benefits after a doctor has cleared them to return to work. Commission staff provided guidance on Goolsby's drafts, a staffer said.
The issue of continuing to receive benefits after being cleared by a doctor to return to work is what Gray focused on at the committee meeting. But the complete wording of the section goes beyond disallowing those continuing benefits, and outright prohibits all workers' compensation for anyone who is "not lawfully employable."
"Currently, undocumented workers continue to receive medical and disability benefits, and in some cases vocational rehabilitation training, once they've been released by a physician to return to work," Gray said.
Sen. Josh Stein, a Democrat from Raleigh, said the wording in the provision didn't seem to close any loophole.
Stein and Sen. Buck Newton, a Republican from Wilson, disagreed on whether the provision would encourage or discourage businesses from opposing their workers' claims in order to keep the cost of their premiums down by reducing insurance payouts.
With some questions unanswered about what the provision would do, the committee approved the bill on a voice vote. The bill is on the Senate calendar for Wednesday.
Jarvis: 919-829-4576; Twitter: @CraigJ_NandO