WHO IS COVERED BY THE DEFENSE BASE ACT?

Generally, workers employed by American contractors performing public works for the U.S. government in U.S. territories, at U.S. military bases located outside the continental United States and in support of military aid programs within allied nations. 42 U.S.C. section 1651 (a). Also, persons who are employed overseas by welfare and morale projects such as the American Red Cross, the U.S.O. and the Salvation Army are generally covered. “Public Works” is defined in 42 U.S.C section 1651(b)(1).

TECHNICAL REQUIREMENTS & FILINGS

The initial technical requirement of the Act is to report the injury immediately to one’s immediate supervisor. Notice of the injury should also be given in writing using form LS 201. Once that is done, medical treatment is generally offered. It is the employee’s responsibility to file a claim (form LS 203) with the Office of Workers’ Compensation Programs. This is required within one year of the date of injury or the last payment of compensation, whichever is later. Other forms utilized in Defense Base Act claims may be accessed at the LHWCA Forms Page.

PAYMENT OF COMPENSATION

There is a three day waiting period (the period of time one must wait before compensation is due) under the LHWCA. Thereafter, if an injury is serious enough to prevent the employee from returning to work, the employer (or its insurer) must pay compensation to the injured worker. The amount of compensation paid is generally calculated by taking an employee’s wages from the year prior to the injury and dividing by 52. This is known as the average weekly wage (AWW). If the employee has worked in the same job for the entire period, the calculation is simple enough. If the employee has not worked “substantially the whole year” in the same type of employment, alternate methods may be used to determine AWW. 33 USC Section 910(b). A similar employee can be used or if Sections (a) or (b) cannot be fairly applied, there are several alternatives such as taking a daily wage and multiplying it be the number of days per week ordinarily worked. Courts are split on the issue of whether lower stateside earnings should be used to determine AWW and compensation rated. See a discussion of this in in the post – Are You Receiving the Proper Amount in Workers’ Compensation Benefits? Once the average weekly wage (AWW) is established, this is multiplied by two-thirds and this figure, the compensation rate (CR) is the amount of money the injured worker is to receive each week he or she is disabled. There is a maximum rate which changes periodically. Generally, DBA insurers pay every two weeks. Once the compensation rate for “total disability” is established, it does not change and there are no increases for cost of living or inflation.Compensation rates can be calculated using our TTD and PPD (scheduled award) calculators.

Benefits are generally paid until the injured worker returns to work or is capable of returning to work and suitable work is available. For example, if an injured worker fully recovers from his or her injury and can return to his or her regular job, total disability benefits end. Also, even if an injured worker cannot return to his regular job due to a physicians restrictions, compensation end if the employer offers the employee suitable work. Short of offering a job, the employer/insurer may stop compensation for total disability if it can prove that there are suitable jobs which exist in the employees commuting area. If those jobs to not meet or exceed the injured worker’s previously established AWW, the employer/carrier may have to pay either partial disability benefits or a “scheduled award”, depending on the nature of the original injury.

There are certain injuries which are subject to a scheduled award. For example, if an injured worker has an arm injury, is at MMI, work is available and has a 10% permanent impairment rating, he or she would be entitled to a scheduled award but no further total disability benefits unless there is a change in condition. However, if a person has a back injury and is at MMI, he or she would still be entitled to total disability benefits if he can prove that he or she has made a diligent but unsuccessful attempt to find suitable work. This is normally a issue which is litigated and there are many scenarios which may come into play. 33 U.S.C. section 908 contains a complete list of “scheduled injuries.”

“Maximum medical improvement” is a medical term which signifies that the employee has recovered from his or her injuries as much as can be expected and the medical providers have done everything they can do medically. If the employee reached this point and still cannot work, he or she may be entitled to “permanent and total” (PTD) disability benefits. These benefits are generally reserved for those injured workers who will most likely be unable to work for the rest of their lives. This benefit carries with it an automatic cost of living allowance.

MEDICAL TREATMENT

While under the Longshore & Harbor Workers’ Compensation Act (LHWCA), the employee has the right to choose his or her physician to be seen at the employer/insurer’s expense. Because these cases generally originate overseas in military areas, this may not be practical at the time of the injury. An employee injured in Iraq may only have one source of treatment. Therefore, there is no choice. In that situation, an employee can accept the treatment without making his or her “choice of physician” at that time. If the injury is serious enough to require a return home, the employee can make his or her choice of physicians at that time. The choice is a one time election; if the election is made overseas, it cannot be made thereafter once the injured worker returns home. The medical benefits under the DBA includes prescription medications, medical equipment or appliances, mileage, parking and other medical expenses that are prescribed by an authorized physician and both reasonable and necessary. The medical expenses are paid under a fee schedule and the total bill is normally not paid. However, the injured worker is not responsible for the portion not paid.

SETTLEMENT AND ATTORNEYS’ FEES

There is a mechanism under which cases under the DBA may be settled. Settlements are voluntary and no one side an force the other to settle. Like most other workers’ compensation systems, there are no damages’ such as pain and suffering. The amount of the settlement depends on what the employer/insurer could expect to pay if the case is not settled. Also, while there is a program where an Administrative Law Judge (ALJ) will mediate a case for the parties, there is no provision in the Act which allows an injured worker or employer/insurer to present the case before and ALJ to determine its value. As to attorneys’ fees, in these cases, there are no contingency fees allowed (i.e. 25% of benefits collected) and attorneys are paid based on an hourly rate. These fees are generally paid after litigation or at settlement and by the employer/insurer. After a hearing, if the injured worker prevails, his or her attorney submits a Fee Petition to the judge for approval. The employer/insurer is given the opportunity to respond to the petition. The approved fee is paid by the insurer. Similarly, if a case is settled, the fee is generally paid by the insurer and may be subject to negotiation with the insurer as part of the settlement package. These fees are also subject to approval of either the judge or the District Director of the Office of Workers’ Compensation Programs (OWCP).

Getting back to my conference, one of the issues was average weekly wage (AWW).  Generally, AWW is calculated by first determining if the claimant worked substantially the whole year prior to the injury.  If so, was this work with the same employer or, at least, similar employment?  If so, the wages are simply calculated, divided by 52 and an AWW is determined.  There are several problems which rear their ugly heads, such as: what constitutes “substantially the whole year” and what type of job qualifies as “similar employment”.  According to cases decided under the Longshore and Harbor Workers’ Act (LHWCA), 37 weeks is the benchmark for the term “substantially the whole year”.  Therefore, if you have worked 37 out of the last 52 weeks, you may qualify. 

If it is determined that you have not worked substantially the whole year preceding your injury, the LHWCA gives several alternatives to determining your AWW.  These involve determining if you are a five or six day employee and what your daily rate of pay turns out to be.

Now that you have the background of the LHWCA, let me tell you where the problems arise.  First, most people who choose to work in Iraq, Afghanistan or other areas where defense bases are located, choose not to be there for an indefinite time.  Therefore, most claimants in Defense Base Act (DBA) cases, do not work substantially the whole year before their injury at the wages paid overseas. 

Secondly, insurance carriers are making a conscious effort to establish the date of injury at the earliest possible date.  This does not necessarily coincide with the date of disability.  Therefore, an injured worker may continue to serve his employer overseas only to see his much lower stateside wages be factored in to his AWW.  In the case I had today, the injured worker had a problem with his lungs.  This arose from the horrible air quality in Kabul, Afghanistan.  One doctor there attributed this to toxins, including airborne fecal matter, in the air.  My client first saw a doctor in September but did not stop working until the following August.  Instead of getting credit for trying to work, the insurer is contenting that, because he only worked for two months overseas, his stateside earnings should be used to determine his AWW.  The claimant’s stateside earnings were about half of his earnings in Afghanistan.  We argued that, because the employer put the employee at risk and paid him accordingly, he was entitled to the higher AWW.  This is not a novel theory;  it has been put forth in many DBA cases but the issue has still not been finally decided.  I had one case where the insurer calculated my client’s wages at less than $300.00 per week.

As you can see from the articles on this blog, insurers are doing everything possible to cut expenses and reap huge profits from the tragedy in Iraq and Afghanistan.  Where do they draw the line?  Should the OWCP and our courts allow this travesty of justice?  The answer of course is “NO” but how do we prevent it? 

We prevent it by fighting back.  Every one of the thousands of individual injured under the DBA should look into whether the insurer is paying the proper amount in wages.  Please do not under any circumstances think the insurance companies which handle these claims are going to be fair to you.  For the most part, they are going to do all that they can do to see that injured workers are going to be paid as little as possible.  They do this in a number of ways but it all starts with the average weekly wage.

Anyone who is currently receiving benefits or even those who received benefits in the past should determine whether there AWW was calculated properly.  Under the LHWCA, there is a provision which provides that if no method contained in the Act can fairly calculate a person’s AWW, then the OWCP or and Administrative Law Judge should do so.  I take this to mean that ones safety, risk and sacrifice should be taken into account.  You have already taken the risk.  You should be compensated for it.

For additional information on average weekly wage, compensation rate and the Defense Base Act, please visit our website.