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"If he did not, and the employer knowlingly hired an illegal, the employer should be required to pay the employer share of his workman's compensation PLUS the state match. (I believe the employer pays part of the Worker's Comp and part comes from State funding - the taxpayers shouldn't have to pay this employer's mistake - just the employer.) Maybe more of these exploiters will be less willing to hire these invaders."

I have a different concept of how workmen's comp works. I seem to recall that there is a payroll tax and I believe there is an employee component and an employer component. The benefits, on the other hand, are paid out of the fund that is created by these payroll tax revenues coming in.

At issue is what happens when an employee who has not had these taxes paid on his/her behalf gets injured. It isn't fair to pay for his benefits out of a fund that he and his employer never contributed to having him covered in. It is also not fair to simply allow his employer to pay back premiums. That would be like not carrying health insurance, then paying back premiums after you have a heart attack and expecting the insurance company to cover it.

At the risk of redundancy, I think it is emininently fair to assess the cost of benefits to the employer who knowingly hired an illegal and did not pay worker's comp premiums. Of course, you raise a good point in distinguishing between employers who knowingly hire illegals and those who are misled by forged documents. The second group is definitely more problematic.

Employees in Alabama do not contribute a dime to workman's comp premiums - the employer pays it all. The premiums are based on the risks involved with work (high for roofers, low for sod layers) and the experience rating earned by the employer's record of claims.

The Home Builders Self Insurers Fund was created to pool like businesses' premiums and promote stringent safety practices to ultimately reduce these premiums. If a business in the fund does not have a claim for a calender year, that business can expect a dividend (refund of premiums paid) a couple of years later after all claims in the fund have been satisfied for that year. The dividend is substantial enough to be an incentive for an employer to be ultra-safe. (I receive such a dividend every year often times as much as 60% of annual premium paid.)

It is my understanding that an employer in Alabama is not required to carry workman's comp if they have less than five employees. A builder who hires sub-contractors should ask for a copy of the comp coverage, deduct the comp premium from their checks, or get the waiver of comp in the case of less than five employees. A builder also knows that regardless of comp coverage or not, he will ultimately be held responsible. He's simply the one with the biggest pockets.

I am required to have on file an I-9 form for every new hire, swearing that I have seen the necessary documents verifying that person's eligibility for U.S. employment. How employers are getting away without such a form is something I plan to pursue.