SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-5256-94T2
JOSE FERNANDEZ-LOPEZ,
Petitioner-Respondent,
v.
JOSE CERVINO, INC.,
Respondent-Appellant.
________________________________
Telephonically argued: February 5, 1996
Decided: February 22, 1996
Before Judges King, Humphreys and Bilder, t/a.
On appeal from the Division of Workers'
Compensation.
William F. Perry argued the cause for
appellant (Morgan, Melhuish, Monaghan,
Arvidson, Abrutyn & Lisowski, attorneys; Mr.
Perry, on the brief).
Marion v. G. Hinman argued the cause for
respondent (Marciano & Topazio, attorneys; Ms.
Hinman, on the brief).
The opinion of the court was delivered by
KING, P.J.A.D.
Petitioner Jose Fernandez-Lopez filed a workers' compensation petition on January 13, 1995 claiming that injuries from a fall on May 20, 1994 occurred during the course of his employment with Jose Cervino, Inc. (Cervino). Petitioner sought and was awarded benefits under our Workers' Compensation Act. The respondent Cervino appeals contending error in the award of benefits because petitioner was (1) an undocumented alien worker ineligible for
compensation benefits and (2) an independent contractor, not an
employee. We find no error and affirm.
Cervino operated as a general contractor in the construction business. It was a prime contractor for the construction of new residential units and the rehabilitation of existing buildings. Cervino used the services of various tradespeople in the performance of its jobs.
Petitioner is an undocumented alien from Guatamala. He had been employed as a plasterer out of a New York plasterers' union for about ten years. He was forced to leave the union in 1994 because he could not produce a "green card" permitting him to work as a noncitizen. 8 U.S.C.A. § 1324. He did odd jobs for several months until a friend referred him to Jose Cervino, the "manager, president or whatever" of Cervino. Petitioner and Jose Cervino agreed that he would do plastering work on one of the buildings which Cervino was rehabilitating. Petitioner was to do the plastering for twelve apartment units and the hallway. The term "plastering" referred to taping the seams of the drywall and ceiling and preparing them for paint, not the traditional style of spreading plaster over wire lath. On May 20, 1994 petitioner was plastering the ceiling over a stairwell area, using a ladder and some planks supplied by Cervino for make-shift scaffolding, when he fell and was hurt.
The judge found that petitioner's status as an undocumented alien did not bar him from obtaining workers' compensation benefits, stating:
The only case which has been reported is
an old case of the Division of Workers'
Compensation, [Wickham v. Monmouth Memorial
Hospital,
10 N.J. Misc. 1086 (Dept. Labor
1932)], in which the Workers' Compensation
Bureau held that a non-residential alien widow
could recover compensation for the death of
her husband. The award was based on the
philosophy that the Compensation Act is
remedial and to be liberally construed. . . .
The prevailing view in the United States
is that undocumented aliens are entitled to
the protection of Workers' Compensation
Act[s]. It is not the illegality of the
employment which would bar compensation. It
is the illegality of the work itself.
The only requirement for Workers'
Compensation is that there be a contract of
employment and that the injury arise out of
and during the course of that employment. The
philosophy which denies unemployment benefits
to undocumented aliens is totally different
from the philosophy which guides the Workers'
Compensation Act. A legal ability to work is
a requirement of the unemployment law and,
therefore, an undocumented alien who is
legally unable to work is disqualified from
those benefits.
In addition, the unemployment law is
partially funded by the Federal Unemployment
Tax and in order to receive the Federal Tax
credit, the unemployment law of each state
must comply with the Federal standards and
granting unemployment to undocumented aliens
would violate those standards.
Those considerations do not apply to Workers' Compensation. A comparable benefits act to Workers' Compensation is the No Fault Automobile Insurance Act, particularly since
the PIP carrier is required to pay benefits
arising out of a motor vehicle accident
immediately and is then entitled to a
reimbursement from the Workers' Compensation
carrier should the accident be found to be
compensable, and in the case of Montoya v.
Gateway Ins. Comp.,
168 N.J. Super. 100 (App.
Div. 1979), the court upheld the alien's
rights to recover under the No Fault
Automobile Insurance policy.
Cervino argues that under New Jersey law undocumented aliens
should not be entitled to workers' compensation benefits.
Alternatively, Cervino claims that even if undocumented aliens are
generally entitled to benefits, the judge erred by refusing to
consider petitioner's alien status as relevant to the decision that
petitioner was an employee rather than an independent contractor.
We find no published opinions in this State discussing whether
undocumented aliens are entitled to workers' compensation benefits.
This question is one of first impression, perhaps because it has
previously been taken for granted that undocumented aliens were
included under the statute, which states that the term "`employee'
is synonymous with servant, and includes all natural persons. . .
who perform service for an employer for financial consideration. .
. " N.J.S.A. 34:15-36. Thus, unless undocumented aliens, like
longshoremen or "casual employees," are expressly excluded, they
self-evidently fall within the statutory definition.See footnote 1 This
reasoning has led commentators to conclude that "in every state,
but Vermont, statutes require employers to provide workers
compensation protection for both documented and undocumented
workers who are injured in the workplace." See, Michelle Mcaloon,
Comment, Working but not "Available to Work": Reconciling the
Rights of Undocumented Laborers with the Immigration Reform and
Control Act of 1986, 15 Chicano-Latino L. Rev. 92, 108 (1994); Mark
A. Miele, Note, Illegal Aliens and Workers' Compensation: The
Aftermath of Sure-Tan and IRCA,
7 Hofstra Lab. L.J., 393, 394 n.12
(1990).
The few published opinions from other state courts which have
directly addressed this issue have uniformly held that undocumented
aliens are entitled to workers' compensation. See Gene's
Harvesting v. Rodriguez,
421 So 2d 701 (Fla. Dist. Ct. App. 1982)
(noting that the state workers' compensation statute expressly
included "aliens among those `employees' entitled to benefits, and
nothing in the statute suggests that workers not lawfully
immigrated are excluded"); Commercial Standard Fire and Marine Co.
v. Galindo,
484 S.W.2d 635, 637 (Tex. Civ. App. 1972) (holding
that an employee "whose entry may be contrary to the immigration
laws is not barred, by that reason alone, from receiving workmen's
compensation benefits"); Testa v. Sorrento Restaurant,
197 N.Y.S.2d 560 (N.Y. App. Div. 1960) (holding that an Italian national was
entitled to workmen's compensation notwithstanding the fact that he
had entered the country illegally).
Cervino essentially contends that petitioner's "employment
status is predicated upon an alleged contract of employment. If
[petitioner] is an illegal alien, it is against Federal law for him
to be in the United States and work here. Therefore, it appears
that his contract of employment must be illegal." Whatever
superficial appeal this logic might have, the argument is clearly
contrary to the existing authorities. Under Cervino's logic, the
very fact of an undocumented alien's illegal presence would render
illegal any and all contracts which arise from his presence in the
country. We addressed a similar argument in Montoya v. Gateway
Ins. Co.,
168 N.J. Super. 100 (App. Div.), certif. denied,
81 N.J. 402 (1979), and found it unconvincing. Montoya dealt with an
undocumented alien who sought to enforce the personal injury
protection portions of his no-fault automobile insurance policy
under which he was the named insured. Among other theories, the
insurance company advanced the claim that an alien was not entitled
to receive the income continuation benefits he had contracted for
because his status rendered his employment illegal and prevented
him from enjoying an "occupational status," an express condition of
eligibility. Judge Morgan rejected this argument, explaining:
. . . [W]e distinguish between work which, in
and of itself, violates the law and work
which, although lawful, is engaged in by a
person under a disability to do it. The
former situation encompasses illegal work,
such as bookmaking and all other types of
criminal conduct. . . . One doing such work
is not in an occupational status. . . .
Plaintiff, however, did not do that kind of
work. His job was legal, although he was
forbidden by law to do it.
[Id. at 106.]
In response to the insurance company's argument that the alien had
no right to access to our courts and that his contract was
unenforceable, Judge Morgan stated:
Although New Jersey has not has occasion
to address the issue and the United States
Supreme Court has made no pronouncement
thereon, a well established body of law holds
that illegal aliens have rights of access to
the courts and are eligible to sue therein to
enforce contracts and redress civil wrongs
such as negligently inflicted personal
injuries. [citations omitted]. These
holdings are premised on the Fifth and
Fourteenth Amendments to the United States
Constitution, both of which use the word
"person," not "citizen," to describe the
beneficiaries to the described rights and
receive further support from congressional
recognition in
42 U.S.C.A.
§1981 in the
following language:
All persons within the jurisdiction of the
United States shall have the same right. . .
to make and enforce contracts, to sue, be
parties, give evidence, and to the full and
equal benefit of all laws and proceedings.
[Id. at 104.]
Thus, Montoya supports the proposition that an undocumented alien's
employment contract is valid, so long as the work he contracts to
do is legal.
In Montoya, we also examined the public policy of discouraging
illegal immigration and concluded that it
will not be subverted by according such aliens
access to our courts. It cannot be supposed
that anyone illegally enters this country for
the purpose of initiating litigation. Indeed,
forbidding aliens access to the courts may
have precisely the reverse effect. Potential
employers may well be encouraged to employ
such aliens if they become aware of the
alien's inability to lodge claims against them
for wages or on account of injuries sustained.
Insurance companies may well be encouraged to
insure them in anticipation of being able to
renege with impunity after a covered loss has
occurred.
[Ibid.]
Similarly, the public policy against illegal immigration may
actually be subverted by refusing to grant undocumented aliens
workers' compensation benefits. Employers might be anxious to hire
illegal aliens rather than citizens or legal residents because they
will not be forced to insure against or absorb the costs of
industrial accidents.
Cervino also relies on Brambila v. Board of Review,
241 N.J.
Super. 216 (App. Div. 1990), rev'd on other grounds,
124 N.J. 425
(1991),See footnote 2 which held that undocumented aliens were not entitled to
unemployment benefits. Brambila, however, is quite different. In
that case, the applicable New Jersey statute, N.J.S.A. 43:21-4(i)(1), provided:
Benefits shall not be paid on the basis of
services performed by an alien unless such
alien is an individual who was lawfully
admitted for permanent residence at the time
the services were performed and was lawfully
present for the purpose of performing the
services or otherwise was permanently residing
in the United States under color of law at the
time the services were performed. . .
The New Jersey's Workers' Compensation Act currently contains no
such exclusion.
Senate Bill # 212, currently pending action in that body,
would exclude:
(2) employees who are aliens unless they
were lawfully admitted for permanent residence
at the time the employment was performed, were
lawfully present for the purpose of performing
the employment, or otherwise were permanently
residing in the United States under color of
law at the time the employment was performed
(including aliens who were lawfully present in
the United States as a result of the
application of the provisions of section
203(a)(7) or section 212 (d)(5) of the
Immigration and Nationality Act (
8 U.S.C. §1153(a)(7) or
9 U.S.C. §1128 (d)(5),
respectively);
Unless and until the Legislature expressly excludes
undocumented aliens from workers' compensation benefits, the
compassionate public policy which animates this social legislation
favors inclusion of workers who would be otherwise covered. 1A
Larson's Worker Compensation Law § 35.20 n. 55.2 (1990 & Supp.)
Cervino alternatively argues that, even if undocumented aliens
fit under the general definition of an employee, courts should
still consider an individual's undocumented status when determining
whether or not an employee-employer relationship exists. Cervino
asserts that undocumented aliens will always be found to be
"totally, economically dependent" and thus will always be held
employees, because the nature of their status severely curtails the
avenues through which they can pursue economic gain.
Cervino is correct to an extent; it would be improper for a
judge to look at the specific economic hardships caused by a
petitioner's undocumented status and from that conclude that the
individual was "totally, economically dependent" for eligibility
purposes. An analogous situation confronted the Court of Appeals
for the District of Columbia in Rivera v. United Masonry, Inc.,
948 F.2d 774 (D.D.C. 1991). There, the court found that when the lack
of "suitable alternate employment" was a prerequisite to certain
workers' compensation benefits, judges should consider whether
someone of like age, education, work experience and physical
disability could find employment. Judges should not, however, take
an employee's status as an undocumented alien into account. The
court reasoned that the workers' compensation act was meant to
compensate those who were rendered unable to find alternate work
"because of injury," not because legal employment was unavailable.
Id. at 775. To hold otherwise would mean that "many partially
injured undocumented aliens who can work would receive total
disability benefits .... benefits that would not be available to
injured, legal workers in the same position. . ." Id. at 776.
Courts should not find that an individual is economically
dependent because of his immigration status; an undocumented alien
should never be found "economically dependent" when a U.S. citizen
in the same circumstances would not be. That, however, is not what
happened in this case. The judge here based his finding of
economic dependency on the fact that petitioner devoted his entire
work effort to plastering for Cervino. The judge also considered
other factors, such as who finished the plastering work after the
accident. This indicated an employee-employer relationship which
was completely unrelated to petitioner's immigration and alien
status.
Cervino is also incorrect in his assertion that the reality of
an undocumented alien's situation would be certain to lead to a
finding of economic dependency. One can easily imagine an
undocumented alien arranging, for example, to tend on an ongoing
basis to the lawns and gardens of twenty homeowners. This person
would surely be an independent contractor, even though his
inability to secure legal employment prevented him from entering
the economic mainstream. Likewise, if petitioner had worked for
two or three different contractors or had lined up future
plastering jobs for others, the judge in this case might well have
found that he was an independent contractor, in spite of his
undocumented status. In this case before us, we reject the
undocumented alien defense in any guise.
The judge determined that, under the "relative nature of the work test," petitioner and Cervino had an employee-employer relationship. The scope of our review is limited to
a determination of whether the findings of the
judge of compensation could reasonably have
been reached on sufficient credible evidence
present in the whole record, after giving due
weight to his expertise in the field and his
opportunity of hearing and seeing the
witnesses.
[DeAngelo v. Alsan Masons, Inc.,
122 N.J.
Super. 88 (App. Div.), aff'd o.b.,
62 N.J. 581
(1973); See also Close v. Kordulak Bros,
44 N.J. 589, 599 (1965).]
When determining whether an individual should be considered an
employee, the judge must consider all of the circumstances bearing
on the relationship of the parties. Smith v. E.T.L. Enterprises,
155 N.J. Super. 343 (App. Div. 1978). The judge should not define
"employee" mechanically or restrictively, Marcus v. Eastern
Agricultural Ass'n,
58 N.J. Super. 584, 602 (App. Div. 1959), but
should construe the term liberally "in order to bring as many cases
as possible within the coverage of the [workers' compensation]
act." Smith, supra, 155 N.J. Super. at 349.
Our courts apply two tests when determining whether an
individual is an employee or an independent contractor .... the
"control test" and "the relative nature of the work test." Pollack
v. Pino's Formal Wear,
253 N.J. Super. 397, 407 (App. Div. 1992).
"[B]oth tests are basically designed to draw a distinction between
those occupations which are properly classified as separate
enterprises and those which are in fact an integral part of the
employer's regular business." Smith, supra, 155 N.J. Super. at
350.
In this case, the judge based his decision on the relative
nature of the work test; he considered the control test
unilluminating on the facts before him. Under the relative nature
of the work test, an employee-employer relationship exists where
the worker shows "substantial economic dependence" upon the
"employer" and demonstrates a "functional integration" of their
respective operations. Smith, supra, 155 N.J. Super. at 353
(quoting Caicco v. Toto Bros., Inc.,
62 N.J. 305, 310 (1973).
Here, the judge found that Cervino was in the business of
rehabilitating buildings and that plastering work was an integral
part of that business. This satisfied the "functional integration"
prong of the relative nature of the work test. The judge also
found that petitioner's "entire work effort was devoted to the
performance of the work for the respondent." Petitioner worked
long hours; he did not work for anyone else at any time during his
employment with Cervino; he was economically dependent on Cervino.
Although the judge stated that the parties "negotiated" the
price for the plastering job, the judge found that the sum was
essentially set by Jose Cervino, was lower than petitioner
requested and was considerably lower than the cost of unionized
labor. The judge observed that petitioner believed that Jose
Cervino, if happy with his work, would use him for plastering work
on other buildings.
The judge found that "in the overall evaluation of the
testimony, I find petitioner to be credible." The judge accepted
his testimony that, following the accident, the plastering job was
completed by Carlos Perez, Cervino's sole regular, salaried
employee, not by a contractor. This was an additional factor which
indicated an employee-employer relationship because "[i]f
petitioner was an independent contractor and if [Cervino] had a
contract with him, it would have been [petitioner's]
responsibility" to see to it that the plastering work was
completed. Jose Cervino claimed that he had hired another
contractor to complete the work but he could not remember his name
nor how much he had paid.
Cervino unconvincingly argues that the judge's conclusion that
petitioner was an employee "flies in the face of the testimony and
evidence contained in the record." Cervino argues that petitioner
"purported to be an independent businessman by offering his own
business card." The parties agree that petitioner gave Jose
Cervino a printed card at their first meeting which was inscribed
"Jose and Rafael Plastermen, Professional Plaster Works."
Petitioner testified that, after he lost his job through the union,
he took the names of his two children, Jose and Raphael, and had
the cards printed so that his children would think that he might
still get plastering work. Aside from an occasional repair job for
a friend, petitioner did no plastering work between the loss of his
union job and the start of his job with Cervino. The judge
accepted petitioner's explanation that the card "was printed up in
order to give [petitioner] some degree of self respect with his
children after he was terminated from the union." The judge
concluded that the business card, though a factor to consider, was
not very important in his employee-employer determination.
Cervino also argues that the judge did not give enough weight
to the fact that petitioner "was able to negotiate his own price
for the job" with Jose Cervino. While Jose Cervino testified
petitioner gave him a "bid" and he paid that price, petitioner
testified that Cervino set the price and he accepted it because he
needed the work but that the price was less than the job was worth.
As a union worker, petitioner made $23 per hour, $46 per hour for
overtime. Jose Cervino agreed that the price was considerably
"lower than what the same job would require with union labor."
The parties disagreed about the exact price and method of
payment. Petitioner testified that he was to be paid $3,900 for
the total job and that, as well as he remembered, he received three
weekly payments, the first for $500, the second for $800, and the
third for $800 (a total of $2,100). According to petitioner, Jose
Cervino paid him by check, which petitioner would endorse and give
to Jose Cervino in exchange for cash.
Jose Cervino said that the total price for the job was $4,000.
As Jose Cervino recalled the events, he paid petitioner about $500
to start and $1,800 a week or two later, a total of $2,300.
Although Jose Cervino himself sometimes cashed the checks he issued
for construction services, he believed that petitioner cashed the
$1,800 check at the bank. The judge found that $4,000 was the
total agreed-upon price but believed petitioner regarding other
specifics and considered the low overall price for the job evidence
of economic dependence rather than free negotiation.
We find no reason to disturb the finding that petitioner was
Cervino's employee. The judge found petitioner credible. In
addition to the facts which the judge specifically mentioned in his
decision, there was evidence at trial that Jose Cervino, (1) bought
and supplied all plastering supplies and equipment, including
ladders and scaffolding, with the exception of personal tools which
already belonged to petitioner, trowels and stilts, (2)
occasionally yelled at petitioner and reprimanded him about the
work, (3) sent petitioner on errands, and (4) reviewed petitioner's
work almost daily.
When petitioner was hurt, he would not permit anyone to call
an ambulance because he was afraid he would get into trouble with
Jose Cervino. He stayed put until Jose Cervino arrived on the
scene several hours later. Moreover, there was no written contract
between the parties and petitioner did not supply Cervino with an
insurance certificate.
While the record may be susceptible of varying inferences, we
find that there was sufficient evidence to support the judge's
conclusion that an employment relationship existed.
Affirmed.
Footnote: 1N.J.S.A. 34:15-36 states in pertinent part:
"Employer" is declared to be synonymous with master, and includes natural persons, partnerships, and corporations; "employee" is synonymous with servant, and includes all
natural persons, including officers of corporations, who perform service for an employer for financial consideration, exclusive of (1) employees eligible under the federal "Longshore and Harbor Workers' Compensation Act," 44 Stat 1424, ( 33 U.S.C. §901 et seq.), for benefits payable with respect to accidental death or injury, or occupational disease or infection; and (2) casual employments, which shall be defined, if in connection with the employer's business, as employment the occasion for which arises by chance or is purely accidental; or if not in connection with any business of the employer, as employment not regular, periodic or recurring; provided, however, that forest fire wardens and forest firefighters employed by the State of New Jersey shall, in no event, be deemed casual employees. Footnote: 2The Supreme Court reversed on the issue of whether aliens who were eligible for work authorization but unable to document that eligibility were "lawfully present" under the statute. In this case, the record does not disclose whether petitioner was eligible for work authorization or not.