California Employer Sues State Over Wage Claims for Illegal Workers

The owner of a downtown Los Angeles sushi restaurant facing wage payment claims by two alleged undocumented workers has launched a novel counterattack by filing a class-action lawsuit against the California labor commissioner for defying federal immigration law.

Masayoshi Kaji of Sushi Sharin argues that the commissioner’s policy of providing undocumented workers with an administrative forum in which to litigate wage claims and awarding them wages violates the Immigration Reform and Control Act. His attorney believes the case is one of first impression.

“The immigration policy of the United States is that people who are here illegally can’t work and should not be awarded wages,” says Ernest J. Franceschi of Los Angeles.

In April, the commissioner awarded Kaji’s two former employees—brothers Tranquilino Cruz Garcia and Rutilino Cruz Garcia—more than $35,000 in back wages plus penalties. The award covers unpaid overtime, missed rest periods and missed meal periods between February 2005 and December 2007.

The class action, filed in May, seeks an injunction against the commissioner on behalf of Kaji and “all California employers who are presently subject to or in the future may be subject to an administrative action before the California labor commissioner in which an award of wages is sought by a person not illegally authorized to work in the United States.”

Franceschi cites the precedent of Hoffman Plastics Compounds v. National Labor Relations Board, in which the U.S. Supreme Court overturned an award of back pay to an undocumented alien who sued an employer for violations of the National Labor Relations Act. “[A]warding back pay to illegal aliens runs counter to policies underlying IRCA, policies the board has no authority to enforce or administer,” it concluded.

Kaji also has requested a court order requiring the Cruz Garcias to reimburse him for all wages they received from him.

“I don’t really see any distinction” between Hoffman Plastics and Kaji’s case, Franceschi says.

But California Labor Code Section 1171.5 provides that “All protections, rights, and remedies available under state law … are available to all individuals regardless of immigration status who have applied for employment, or who are or who have been employed, in this state.”

According to Gladys Limon, an attorney with the Mexican American Legal Defense and Educational Fund who is representing the Cruz Garcias, Hoffman Plastics was a narrow ruling that has not been extended to state labor laws.

“One of the objectives of IRCA is to deter employers from hiring illegal workers,” she argues. “Enforcing wage and hour laws against employers who are exploiting illegal workers [achieves] the purposes of IRCA.”

Federal courts, moreover, have distinguished Hoffman, which applied to back pay for work that had not been performed, from cases involving awards for work actually performed.

“Nothing in Hoffman suggests that IRCA mandates that undocumented workers forfeit payments for work that they have already performed or that, by hiring undocumented workers, employers may evade their legal obligation to make wage payments for work that has actually been performed,” the New York state Attorney General’s Office has said in an advisory opinion.

In Franceschi’s view, that distinction is “without substance” when the worker’s act of working is illegal. “The Cruz Garcias were not allowed to be here, they were not allowed to work here,” he says. Therefore, the labor commissioner “has no jurisdiction … to give them wages, no matter how they are classified.”

—Matthew J. Heller