Does the U.S. Supreme Court's Hoffman Plastic decision stop the New York Department of Labor from collecting unpaid wages for undocumented workers?

Plain-English summary

The Department of Labor's counsel asked the AG whether Hoffman Plastic Compounds, Inc. v. NLRB, decided by the U.S. Supreme Court in 2002, kept the Department from enforcing New York's wage payment laws on behalf of undocumented workers. The Department had been treating undocumented workers as covered by Labor Law Articles 6, 19, and 19-A, but Hoffman had unsettled federal NLRB practice. The AG concluded that Hoffman did not block New York's enforcement.

What Hoffman actually held. In Hoffman, Castro had been fired by his employer for union-organizing activity. The NLRB found a violation of the National Labor Relations Act and awarded backpay. At the damages hearing, Castro testified that the birth certificate he'd presented to verify work authorization was not his. The Supreme Court, 5-4, held that the NLRB could not award backpay "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 a criminal fraud." The key word was "not performed." Under the Immigration Reform and Control Act (IRCA), it would have been illegal both for Castro to seek employment and for an employer to hire him. Backpay for time he could not lawfully have worked would have undermined IRCA.

Why Hoffman doesn't reach wage claims for work already performed. Hoffman addressed remedies for work that didn't happen because of an unlawful termination. New York's wage payment laws address compensation for work that did happen but wasn't paid. The conceptual difference is significant. Labor Law Articles 6, 19, and 19-A require employers to pay for work performed; they don't depend on the worker's lawful entitlement to be in the labor market in the future. Every federal court to consider the question has drawn this line: Flores v. Amigon (E.D.N.Y.), Flores v. Albertsons (C.D. Cal.), Singh v. Jutla (N.D. Cal.), Cortez v. Medina's Landscaping (N.D. Ill.), and Liu v. Donna Karan (S.D.N.Y.). Each treated Hoffman as confined to backpay-for-time-not-worked. Federal agencies reached the same conclusion: the DOL Wage and Hour Division's Fact Sheet #48 and the NLRB General Counsel's GC 02-06.

Pre-Hoffman New York precedent. Nizamuddowlah v. Bengal Cabaret had held in 1979 that an undocumented worker was entitled to recover under New York's Minimum Wage Act for time worked but not paid. The court had relied on the absence of any immigration-status exclusion in the "employee" definition. Labor Law § 190(2) (Article 6) and § 671(2) (Article 19-A) followed the same all-inclusive pattern, with no immigration-status carve-out. Sure-Tan, Inc. v. NLRB had similarly read the NLRA's "employee" definition to include undocumented workers, and Hoffman expressly did not disturb that part of Sure-Tan.

IRCA policy considered. Several federal courts went further: enforcing wage laws for work already performed actually furthers IRCA's policy by removing the incentive to hire undocumented workers in the first place. If employers could escape paying wages by hiring people not authorized to work, IRCA's policy against the underground labor market would be weakened. Flores v. Amigon and Singh v. Jutla made that point explicitly.

Non-backpay remedies. The AG noted that Hoffman was concerned with "wages that could not lawfully have been earned." That phrase doesn't reach the non-wage components of New York's wage payment laws: civil penalties under § 197, costs and attorney's fees and liquidated damages under § 198, § 663, and § 681, and criminal penalties under § 198-a, § 662, and § 680. These remedies are not "wages" in the Hoffman sense and are not preempted.

State court tort context. Balbuena v. IDR Realty had recently allowed an undocumented worker to recover lost wages in a state-law tort action, and Cano v. Mallory Management had similarly allowed undocumented workers to sue in tort. The AG cited these as additional support for the general principle that Hoffman does not strip undocumented workers of state-law remedies.

Federalism. Reading IRCA to foreclose state wage-law enforcement would raise federalism concerns. Hines v. Davidowitz frames the conflict-preemption test: state law is preempted when it "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Wage payments for work already performed don't stand as an obstacle to immigration enforcement; if anything, they support it.

Currency note

This opinion was issued in 2003. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What did Hoffman Plastic actually hold?
A: That the NLRB could not award backpay to an undocumented worker for time he did not work, because he had used a false birth certificate to get the job. The Court framed the issue as backpay "for years of work not performed."

Q: Why doesn't Hoffman bar wage recovery for work already done?
A: Because the conceptual problem in Hoffman, paying for work that could never have been lawfully performed, doesn't exist when the work was actually performed. The wage is owed for what the worker did, not for what the worker would have done.

Q: Does Hoffman preempt all state wage-and-hour enforcement for undocumented workers?
A: No. Federal courts and federal agencies have uniformly read Hoffman as limited to the backpay-for-time-not-worked context. State wage laws covering work actually performed are not preempted.

Q: What are the practical consequences for an undocumented worker not paid for work done?
A: The Department of Labor can investigate (Labor Law § 21, § 660, § 678), take assignment of wage claims (§ 196(1)(b)), bring civil actions (§ 196(1)(b), § 663, § 681), and pursue criminal prosecutions for repeat violations (§ 198-a, § 662, § 680). Workers can also file complaints under § 196-a.

Q: What about liquidated damages and penalties?
A: The AG concluded these remedies are not "wages" in the Hoffman sense and so are not preempted. The DOL can pursue them alongside the underlying wage recovery.

Q: Does the policy of IRCA fight wage-law enforcement here?
A: To the contrary. The federal courts in Flores v. Amigon and Singh v. Jutla pointed out that wage-law enforcement against employers of undocumented workers reduces the incentive to hire them in the first place. That serves the IRCA purpose, not undermines it.

Background and statutory framework

New York's wage payment regime is in three Labor Law articles. Article 6 (§§ 190-199-c) covers payment of wages: frequency (§ 191), form (§ 192), permissible deductions (§ 193). § 196 gives the Commissioner of Labor investigation, assignment, and prosecution powers. § 197 imposes a $500 fine for each failure to pay. § 198-a makes failure to pay a misdemeanor (felony for repeat offenders). Article 19 (§§ 650-665) is the Minimum Wage Act. Article 19-A (§§ 670-684) covers minimum wages for farm workers. Both authorize the Commissioner to investigate, file civil actions, and seek liquidated damages for willful violations. § 21 is the Commissioner's general investigation and enforcement authority, including the express power to "investigate the condition of aliens relative to their employment in industry" (§ 21(10)).

Hoffman, Sure-Tan, and IRCA. Sure-Tan (1984) read the NLRA's "employee" definition to include undocumented workers but limited backpay for time the workers were not lawfully entitled to be present and employed. IRCA (Pub. L. No. 99-603 (1986)) made it illegal both to hire and to seek employment as an undocumented worker. Hoffman extended Sure-Tan's logic by holding that the NLRB could not award backpay to a worker whose employment was obtained by fraud and could not lawfully have continued under IRCA.

The federal court line. Five federal trial-level decisions in 2002 read Hoffman as confined to backpay for work not performed: Flores v. Amigon (E.D.N.Y.), Flores v. Albertsons (C.D. Cal.), Singh v. Jutla (N.D. Cal.), Cortez v. Medina's Landscaping (N.D. Ill.), and Liu v. Donna Karan (S.D.N.Y.). All allowed Fair Labor Standards Act claims for work already performed by undocumented workers. Federal agency guidance reached the same conclusion (DOL Fact Sheet #48; NLRB GC 02-06).

The pre-Hoffman New York rule. Nizamuddowlah v. Bengal Cabaret held that the Minimum Wage Act's "employee" definition did not exclude undocumented workers. Labor Law § 190(2) and § 671(2) defined "employee" without any immigration-status carve-out, consistent with Sure-Tan's reading of the NLRA's "employee" definition and Patel v. Quality Inn South's reading of the FLSA's "employee" definition.

State court tort recognition. Balbuena v. IDR Realty held that Hoffman did not inhibit a state court's ability to award lost wages to an undocumented worker in a tort action under New York common law. Cano v. Mallory Management allowed undocumented workers to use the state court system for tort claims.

Citations and references

Statutes:

• Labor Law §§ 21, 190, 192, 193, 196(1)(a)-(c), 196-a, 197, 198, 198-a, 199-c (Article 6)
• Labor Law §§ 660, 662(2), 663, 671(2), 678, 680(2), 681 (Articles 19 and 19-A)
• 8 U.S.C. § 1101 et seq. (Immigration and Nationality Act)
• 29 U.S.C. § 151 (NLRA)
• Pub. L. No. 99-603 (IRCA)

Cases:

• Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, 535 U.S. 137 (2002)
• Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984)
• Nizamuddowlah v. Bengal Cabaret, Inc., 69 A.D.2d 875 (2d Dep't 1979)
• Patel v. Quality Inn South, 846 F.2d 700 (11th Cir. 1988), cert. denied, 489 U.S. 1011 (1989)
• Flores v. Amigon, 233 F. Supp. 2d 462 (E.D.N.Y. 2002)
• Flores v. Albertsons, Inc., 2002 U.S. Dist. LEXIS 6171 (C.D. Cal. Apr. 9, 2002)
• Singh v. Jutla & C.D. & R Oil, Inc., 214 F. Supp. 2d 1056 (N.D. Cal. 2002)
• Cortez v. Medina's Landscaping, 2002 U.S. Dist. LEXIS 18831 (N.D. Ill. Sept. 30, 2002)
• Liu v. Donna Karan Int'l, Inc., 207 F. Supp. 2d 191 (S.D.N.Y. 2002)
• Balbuena v. IDR Realty, LLC, N.Y. L.J., May 28, 2003 (Sup. Ct. N.Y. County May 16, 2003)
• Cano v. Mallory Mgmt., 195 Misc. 2d 666 (Sup. Ct. Richmond County 2003)
• Hines v. Davidowitz, 312 U.S. 52 (1941)

Federal agency guidance:

• Employment Standards Administration Wage and Hour Division, U.S. Dep't of Labor, Fact Sheet #48
• Office of General Counsel, NLRB, GC 02-06 (July 19, 2002)

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/2003-F3_pw.pdf

Original opinion text

LABOR LAW, ART. 6, 19, 19-A, §§ 21, 190, 192, 193, 196(1)(a)-(c), 196-a, 197, 198, 198-a, 199-c, 660, 662(2), 663, 671, 678, 680(2), 681; 8 U.S.C. §§ 1108, et seq.; 29 U.S.C. § 151; PUB. L. No. 99-603

The decision of the United States Supreme Court in Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, 535 U.S. 137 (2002), does not preclude the New York State Department of Labor from enforcing State wage payment laws on behalf of undocumented immigrants.

October 21, 2003

Jerome Tracy
Counsel
N. Y. S. Department of Labor
Governor W. Averell Harriman State Office Building
Albany, New York 12240

Formal Opinion
No. 2003-F3

Dear Mr. Tracy:

You have requested an opinion regarding the effect of the Supreme Court's holding in Hoffman Plastic Compounds, Inc. v. National Labor Relations Board, 535 U.S. 137 (2002), on enforcement by the New York State Department of Labor ("Department") of its wage payment laws on behalf of undocumented immigrants. We believe that Hoffman does not preclude enforcement of State wage payment laws on behalf of undocumented immigrants.

I. Hoffman

A. Background

In 1984, the Supreme Court decided Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984), a case in which an employer, retaliating against employees who had engaged in union-organizing efforts, reported to the Immigration and Naturalization Service (INS) the presence of several such employees who were undocumented aliens. Id. at 887. The INS investigated and, as a result of the investigation, five employees agreed to leave the country rather than face deportation. Id.

Reviewing this decision, the Supreme Court decided that undocumented aliens were included within the definition of "employee" for purposes of the NLRA and that the application of the NLRA to undocumented aliens was consistent with the mandate of the Immigration and Nationality Act, 8 U.S.C. § 1101 et seq. Id. at 891-92. The Court concluded, however, that in computing the backpay due to undocumented immigrants who left their positions of employment because of unfair labor practices, the employees would not be eligible for backpay for any time when they were not lawfully entitled to be present, and thus employed, in the United States. Id. at 903.

At the time of the Sure-Tan decision, the Immigration and Nationality Act did not make illegal the hiring of an undocumented alien or the acceptance of employment by such an immigrant. See Sure-Tan, 467 U.S. at 892-93. Subsequent to Sure-Tan, Congress amended the INA by enacting the Immigration Reform and Control Act. Pub. L. No. 99-603, 100 Stat. 3359 (1986). Under IRCA, "it is impossible for an undocumented alien to obtain employment in the United States without [either the employer or the employee] directly contravening explicit congressional policies." Hoffman, 535 U.S. at 148.

B. The Supreme Court's Decision in Hoffman

The narrow question presented in Hoffman was whether the NLRB was authorized to award backpay for violations of the NLRA to Castro, an undocumented immigrant who was illegally terminated from his employment. When applying for work at Hoffman in 1988, Castro produced a birth certificate to establish that he could legally be employed. Hoffman, 535 U.S. at 141. Several months after he was hired, he engaged in activities supportive of union-organizing efforts. He was subsequently terminated. In 1992, the NLRB found that Hoffman, the employer, had fired him in violation of the NLRA and awarded him backpay.

In 1993, Hoffman and the NLRB appeared before an administrative law judge to determine the amount of backpay due to the employee. During the course of the hearing, Castro admitted that the birth certificate he had presented to Hoffman to verify his authorization to work in the United States was not his.

In a 5-4 decision, the Court determined that the NLRB was not authorized to award backpay to Castro because "such relief is foreclosed by federal immigration policy, as expressed by Congress in the [IRCA]." Id. at 140. The Court concluded that it could not "overlook" IRCA's prohibition on the employment of undocumented immigrants to allow the Board "to award backpay 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 a criminal fraud." Id. at 148-49.

II. Analysis

You ask whether the decision in Hoffman that the NLRB cannot award backpay to an undocumented immigrant constrains the Department's enforcement of New York's wage payment laws on behalf of such immigrants. Because enforcement of New York's wage laws does not implicate the concerns articulated by the Court in Hoffman, we believe that Hoffman does not preclude these enforcement efforts.

A. New York State's Wage Payment Laws

The payment of wages to employees is governed by several articles of the State Labor Law. See Labor Law Articles 6 (payment of wages), 19 (minimum wage standards), and 19-A (minimum wage standards for farm workers) (collectively, "wage payment laws").

Article 6 prescribes certain duties an employer has to its employees regarding the payment of wages. Failure of an employer to pay the wages as statutorily required constitutes a misdemeanor for the first offense and a felony for the second offense. Id. § 198-a. The Commissioner of Labor ("Commissioner") is authorized to investigate, take assignment of claims, and prosecute. Id. § 196(1)(a)-(c). The statute directs the Commissioner to recover a $500 fine for each failure. Id. § 197.

Articles 19 and 19-A authorize the Commissioner to investigate employers regarding minimum wage compliance. Failure to pay at least the minimum wage constitutes a misdemeanor. Id. §§ 662(2), 680(2). Either an employee or the Commissioner on behalf of an employee may bring a civil action against an employer to recover the amount of underpayment. Id. §§ 663, 681. Willful violation subjects an employer to liquidated damages equal to 25% of the wages underpaid.

In addition to the enumerated enforcement powers, the Commissioner has general investigation and enforcement authority. Labor Law § 21. More specifically, he is granted the power to "investigate the condition of aliens relative to their employment in industry." Labor Law § 21(10). Additionally, an employee may file with the Commissioner a complaint regarding a violation of the wage payment laws. Labor Law § 196-a.

B. Impact of Hoffman

We understand from your letter that, prior to Hoffman, the Department took the position that it was authorized to enforce State wage payment laws on behalf of undocumented workers. New York's wage payment laws have indeed been held to be enforceable by an immigrant not authorized to work in the United States. Nizamuddowlah v. Bengal Cabaret, Inc., 69 A.D.2d 875 (2d Dep't 1979); cf. Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984); Patel v. Quality Inn South, 846 F.2d 700 (11th Cir. 1988), cert. denied, 489 U.S. 1011 (1989). For the reasons discussed below, we believe that the Commissioner may continue, after Hoffman, to enforce New York's wage payment laws on behalf of undocumented immigrants.

While Hoffman interpreted the federal NLRA as not authorizing a backpay remedy for undocumented workers in light of the policies underlying IRCA, it does not address the relationship between these policies and those underlying State wage or other labor laws. We believe that the holding in Hoffman does not require the conclusion that enforcement of New York's wage payment laws is similarly foreclosed.

Hoffman is inapposite to the wage law enforcement actions that are the subject of your inquiry primarily because a backpay award to an undocumented worker for work that was not actually performed is fundamentally different from an award mandating payment of wages for work that the undocumented worker has already performed for the employer. The State's wage payment laws protect the latter. Hoffman's holding relates only to the former.

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. Nor does IRCA itself indicate that such a result is intended.

Each federal court to have considered the question has recognized the fundamental distinction between backpay for work not performed and an award of wages for work actually performed, and based on this distinction, has concluded that the holding in Hoffman does not apply to cases arising under the Fair Labor Standards Act. See Flores v. Amigon, 233 F. Supp. 2d 462 (E.D.N.Y. 2002); Flores v. Albertsons, Inc., 2002 U.S. Dist. LEXIS 6171 (C.D. Cal. Apr. 9, 2002); Singh v. Jutla & C.D. & R Oil, Inc., 214 F. Supp. 2d 1056 (N.D. Cal. 2002); Cortez v. Medina's Landscaping, 2002 U.S. Dist. LEXIS 18831 (N.D. Ill. Sept. 30, 2002); see also Liu v. Donna Karan Int'l, Inc., 207 F. Supp. 2d 191 (S.D.N.Y. 2002).

Federal agencies responsible for administering federal labor laws have also reached the same conclusion. See Employment Standards Administration Wage and Hour Division, U.S. Dep't of Labor, Fact Sheet #48; Office of General Counsel, NLRB, GC 02-06.

We agree with these courts that the distinction between backpay and payment for work performed is valid, and thus, that Hoffman should not be read to bar state enforcement actions for wages for work actually performed. We also take note of a further point expressed in these opinions. Federal courts have explained that the policies underlying IRCA would be furthered, not undermined, by payment of wages earned but not paid to undocumented immigrants. As explained by the district court in Flores v. Amigon: "If employers know that they will not only be subject to civil penalties . . . and criminal prosecution . . . when they hire illegal aliens, but they will also be required to pay them at the same rates as legal workers for work actually performed, there are virtually no incentives left for an employer to hire an undocumented alien in the first instance." 233 F. Supp. 2d at 464.

Nor does Hoffman suggest that the State's authority to enforce its wage payment laws on behalf of undocumented workers is expressly or implicitly preempted by IRCA. Hoffman did not hold that IRCA makes unlawful any payment of back wages to undocumented aliens; rather, it construed the NLRB's remedial authority in light of the "policies underlying IRCA." 535 U.S. at 149. Cf. Hines v. Davidowitz, 312 U.S. 52, 67 (1941).

We believe that Hoffman does not prevent the Department from enforcing the State's wage payment laws on behalf of illegal immigrants where "no federal statute is at issue, nor is there any federal Constitutional issue in dispute." Balbuena v. IDR Realty, LLC, N.Y. L.J., May 28, 2003, at 18; see also Cano v. Mallory Mgmt., 195 Misc. 2d 666 (Sup. Ct. Richmond County 2003).

Finally, inasmuch as Hoffman was concerned with the award of backpay for "wages that could not lawfully have been earned," 535 U.S. at 149, its holding does not, in our opinion, preclude the award of non-wage monetary payments available pursuant to New York's wage payment laws. See Labor Law §§ 197, 198, 198-a, 662, 663, 681; see also Singh v. Jutla, 214 F. Supp. 2d at 1060-61.

We therefore are of the opinion that the Hoffman decision should not be read to preclude the State from enforcing its wage payment laws on behalf of undocumented workers to obtain payment for work actually performed.

Very truly yours,

ELIOT SPITZER
Attorney General