What is the Defense Base Act?
The Defense Base Act (DBA) is an extension to the federal workers’ compensation program which covers longshoremen and harbor workers. The Defense Base Act covers persons employed at U.S. defense bases overseas. The Defense Base Act is designed to provide medical treatment and compensation to employees of defense contractors injured in the scope and course of employment.
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.
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).