Michigan Supreme Court Weighs Undocumented Workers Wage Loss Benefits

(MICHIGAN, USA) The Michigan Supreme Court heard oral arguments on October 9, 2025, in a closely watched case that could reshape who receives wage-loss benefits under the state’s workers’ compensation system. The question is not yet whether injured undocumented immigrants qualify for weekly checks after a workplace injury. Instead, the justices focused on whether the plaintiff, the Michigan Immigrant Rights Center (MIRC), filed its lawsuit in time. The outcome of this early step will decide if the high court sends the case back to a lower court to decide the core legal issue.

At stake is a 17-year practice that denies wage-loss benefits to undocumented workers who get hurt on the job in Michigan. MIRC sued Governor Gretchen Whitmer in 2021 to challenge that practice, which traces back to a 2003 Michigan Court of Appeals ruling, known as Sanchez v. Eagle Alloy. For now, undocumented workers can get medical care for work injuries but are cut off from wage-loss benefits while they heal, creating deep gaps for families already living paycheck to paycheck.

How a 2003 ruling shaped today’s dispute

The legal foundation for the state’s current approach comes from Sanchez v. Eagle Alloy. In that case, the appeals court interpreted Michigan law to allow employers and insurers to deny wage-loss benefits to people who lack legal work authorization, reasoning that such workers fall within an exclusion for employees who have “committed a crime.” That reading has guided compensation denials ever since, reaching far beyond any single employer or industry.

MIRC argues the practice violates Michigan Supreme Court precedent and basic fairness. “If we want work conditions that are dignified, fair and healthy, we must ensure that workers’ compensation system is administered as intended to protect all workers,” said MIRC attorney Anna Hill Galendez. She added that “many employers gladly hire workers who don’t have work permits because they can pay them less and get away with more.”

Analysis by VisaVerge.com suggests state-level limits on wage-loss benefits for undocumented workers often lead to quiet cost-shifting, where families, local clinics, and charities absorb expenses instead of employers and their insurers.

MIRC’s case also raises broader civil rights concerns. The group likens the state’s stance to trying to enforce old, invalid laws after courts have moved on, arguing that officials cannot lean on a rigid reading of past cases to keep denying wage-loss checks when injured workers still face real harm.

What the justices weighed: timing over merits

The court session centered on a procedural timing question. The state says MIRC missed a one-year filing deadline, arguing the claimed harm began in 2019, when MIRC hired an additional staff member to handle growing calls from injured undocumented workers.

Assistant Attorney General Gallant Fish told the justices that, even if the policy continues, the clock ran out and MIRC hasn’t shown a series of fresh legal wrongs that would restart the deadline.

MIRC counters the harm is ongoing because every new denial drives more people to seek help, straining staff and budgets. “We receive call after call from injured undocumented workers who are tremendously suffering, struggling to make ends meet to feed themselves and their families because they can’t access this basic assistance for wage loss after they’ve been severely injured at work,” Galendez said.

The court’s decision on timing will determine the case’s next step:

1. If MIRC wins on timing, the dispute returns to a lower court for a ruling on the core legal question: whether undocumented workers are entitled to wage-loss benefits under Michigan’s workers’ compensation law despite Sanchez v. Eagle Alloy.
2. If MIRC loses, the state’s procedural defense stands and the merits of the underlying policy likely won’t be reached in this suit.

The case’s path and timeline

The lawsuit has already traveled a long road:

• 2021: MIRC filed suit in the Michigan Court of Claims.
• 2022: The Court of Claims denied the state’s motion for summary judgment, allowing the case to continue.
• May 30, 2024: A Michigan Court of Appeals panel reversed, finding MIRC filed too late without reaching the merits.
• December 2, 2024: The Michigan Supreme Court agreed to hear the case.
• October 9, 2025: Oral arguments took place before the high court.

Human impact and broader consequences

Behind the legal timeline are workers who lose income after injuries that would qualify others for wage-loss checks. Key facts and findings:

• The University of Michigan’s Poverty Solutions reports Michigan has around 91,000 undocumented immigrants.
• Over 50% of that population are from Latin America; more than 75% are from Mexico.
• Estimated annual medical expenses tied to workplace injuries for undocumented workers in Michigan are about $720,100, according to the same report.

When wage-loss benefits are blocked, families face immediate rent and food insecurity. Advocates say denying benefits also discourages reporting of unsafe conditions, which can raise injury risks for all co-workers. They argue that when employers know certain workers lack financial protection, it weakens safety incentives across job sites.

Forty-three social service, religious, and labor organizations have signed a letter urging change, saying that fair benefits help build healthier workplaces statewide.

Arguments from both sides

Supporters of expanding benefits say:

• Michigan’s workers’ compensation system is designed to be no-fault and universal on the job.
• Real-world hiring practices make it unfair to exclude workers after employers benefit from their labor.
• Denial of benefits leads to underreporting, weakened safety incentives, and unpaid medical bills absorbed by communities.

Critics say:

• The law is clear after Sanchez v. Eagle Alloy, and any change should come from legislators, not courts.
• Public funds and private insurance pools should protect those who are authorized to work under federal law.

Advocates add that, in many cases, injured workers accept quick, low settlements — or none at all — because they fear retaliation or deportation. While immigration enforcement is federal, state compensation rules still shape whether people come forward after a workplace injury. That choice affects not only undocumented families but also the wider safety culture in industries like construction, agriculture, food processing, and caregiving.

Important takeaway: The court is not being asked to change federal immigration policy. The focus is whether Michigan’s reading of its own workers’ compensation law can continue to deny wage-loss benefits after injuries when employers have already accepted the benefit of a worker’s labor.

Potential implications if the case proceeds

If the case returns to the lower court, the trial judge will have to:

• Balance the 2003 appeals precedent (Sanchez v. Eagle Alloy) with current due process and fairness arguments.
• Consider the real-world effects documented in the record, including financial harms to families and community-wide safety impacts.

For workers: the practical question is simple — if you get hurt at work and can’t return right away, can you receive wage-loss checks to cover basic needs while you heal?

For employers and insurers: clarity matters too. A ruling that extends wage-loss coverage to undocumented workers would likely change claims handling, reserves, and employer obligations. A ruling that upholds the current system could prompt new legislative proposals.

Where to find more information

Workers, employers, and attorneys can review benefit basics and filing steps with the state’s Workers’ Disability Compensation Agency at the official Michigan government site: Michigan Workers’ Disability Compensation Agency. That page explains core definitions, benefit types, and timelines for workplace injury claims.

For now, the Michigan Supreme Court will decide only if the case goes forward. If it does, the next round could finally address whether undocumented workers—whose labor keeps many industries running—are entitled to the same wage-loss protection other injured workers receive under Michigan’s workers’ compensation law.