US Labor Department proposes new rule to foster accurate, prompt benefit payments in longshore claims

WASHINGTON – The U.S. Department of Labor’s Office of Workers’ Compensation Programs has proposed a new rule to provide clarity regarding maximum and minimum compensation rates for claims payable under the Longshore and Harbor Workers’ Compensation Act and its extensions.

Current regulations offer little guidance to employers and injured workers on applying the maximum and minimum provisions. The proposed rule would clarify the department’s interpretation of relevant statutory provisions. It will also establish concrete directions on how to apply the maximum and minimum provisions in an individual case.

Generally, the employee’s average weekly wage at the time a disabling injury or death occurs is the basis for determining the amount of compensation payable. The LHWCA sets an overall cap and bottom floor for compensation based on the national average weekly wage determined by the secretary of labor each fiscal year. The maximum rate is twice the applicable fiscal year’s national average weekly wage, while the minimum rate is the lower of 50 percent of the national average weekly wage or the employee’s actual average weekly wages.

“This rule provides crucial guidance to insurance carriers and self-insured employers that will help them increase the efficiency of compensation payments, reduce incorrect payments and prevent unnecessary litigation,” said OWCP Director Leonard Howie.

Specifically, the proposed rule would:

• Implement a U.S. Supreme Court and two courts of appeals’ decisions interpreting the act’s maximum compensation provisions.
• Clarify how the act’s minimum compensation provisions apply.
• Outline the relationship between maximum and minimum compensation rates and the act’s annual adjustment provision, which is designed to prevent time from eroding the compensation’s value.

The proposed rule is available at the Federal Register at: https://www.federalregister.gov/articles/2016/08/26/2016-20467/longshore-and-harbor-workers-compensation-act-maximum-and-minimum-compensation-rates.

The office’s Division of Longshore and Harbor Workers’ Compensation minimizes the impact of land-based, maritime employment injuries and deaths on injured employees and their families by ensuring that workers’ compensation benefits are provided promptly and properly under the LHWCA. The division oversees the delivery of compensation and medical benefits; offers technical and compliance assistance; and provides informal dispute resolution services to workers, employers, and insurers.

Since its enactment, the federal government has extended the LHWCA to other groups of employees under the Defense Base Act, the Outer Continental Shelf Lands Act, and the Non-Appropriated Fund Instrumentalities Act. For more information, visit http://www.dol.gov/owcp/dlhwc/.