U.S. Department of Labor Adopts Rule to Foster Accurate And Prompt Benefit Payments in Longshore Claims

WASHINGTON, DC – The U.S. Department of Labor’s Office of Workers’ Compensation Programs (OWCP) has adopted new regulations that clarify how maximum and minimum compensation rates apply to claims payable under the Longshore and Harbor Workers’ Compensation Act (LHWCA) and its extensions. The rule will be published in the Federal Register on April 19.

Current regulations offer little guidance to employers and injured workers on applying the maximum and minimum provisions. The final rule clarifies the Department’s interpretation of the relevant statutory provisions. It also provides concrete directions on how to apply the maximum and minimum provisions in an individual case.

“This rule provides clear guidance to injured workers, insurance carriers, and self-insured employers to help increase the efficiency of compensation payments, reduce incorrect payments, and prevent unnecessary litigation,” said Julia K. Hearthway, Office of Workers’ Compensation Programs Director.

Generally, an 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 also sets a ceiling and floor for weekly compensation payments based on the national average weekly wage as determined each fiscal year by the Secretary of Labor. 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.

Specifically, the final rule:

Implements decisions of the U.S. Supreme Court and two courts of appeals interpreting the LHWCA’s maximum compensation provisions.

Clarifies how the LHWCA minimum compensation provisions apply.

Outlines the relationship between maximum and minimum compensation rates and the LHWCA’s annual adjustment provision, which is designed to prevent time from eroding the compensation’s value.

The 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 the LHWCA’s enactment, Congress has extended it 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/.