AEU Longshore Blog ISSUE: Amendments to the Act – Part 2

This is a continuation of the discussion of possible amendments to the Longshore and Harbor Workers’ Compensation Act.  In that post was a list of what I consider to be the top tier of potential amendments.  Following is what I consider to be a second tier of potential amendments.

  1. The occupational exclusions in section 902(3) covering clerical, secretarial, security, and data processing work should be simplified and clarified. Rather than require that the listed occupations be performed “exclusively” in an “office”, the requirement should be that the employee be performing these duties as a “primary” responsibility for the employer at the time of the injury.
  2. Previous proposals have included an amendment that effectively ends section 908(f)’s second injury provision. For example, an amendment can state that no new order granting section 908(f) relief can be issued except for cases of modification in existing 8(f) cases.
  3. Various sections of the Act can be amended to create a right for the employer to seek restitution in instances of fraud and overpayment of benefits. This would overturn existing case law.
  4. In the case of concurrent benefits for separate injuries, an amendment can overturn existing case law and limit combined weekly benefits to two-thirds of the average weekly wage at the time of the latest injury.
  5. An amendment can be brought back to codify the one-year pending appeal limit on appeals to the Benefits Review Board (BRB). The amendment can read, “If the Board fails to resolve an appeal during the one year period following the date on which the appeal was filed, the decision that was the basis of the appeal is automatically affirmed and such affirmation shall be considered a final order by the Board.”
  6. Section 8(j) should be amended to reverse the current interpretation of the phrase a “disabled employee”. The present language reads, “The employer may inform a disabled employee of his obligation to report to the employer not less than semiannually any earnings from employment or self-employment, on such forms as the Secretary shall specify in regulations”.  The term “disabled employee” can be replaced simply by “an employee”.
  7. The Section 916 anti-assignment provision can be amended and clarified as to when benefits may be subject to withholding, garnishment, or assignment. In the past, the following additional language has been suggested: “Benefits due or payable under this Act shall be subject to withholding and any other legal process in the same form and manner, and in the same extent, as withholding and other legal processes apply under section 206 of the Employment Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. 1056).”
  8. The definition of wages in section 902(13) can be clarified. An amendment can provide that “wages” does not include incentives or one-time payments, severance pay, settlement of employment claims, a bonus that is not guaranteed, container royalties, stock, or stock options.
  9. Previous proposed amendments have attempted to simplify the confused, multi-part judicial tests and litigation surrounding the issue of the common law doctrine of borrowed employee. Language can be introduced for section 904(d) that provides that in the situation where an employee who is working for another employer at the direction of the employee’s primary employer, all employers of the employee at the time of the injury shall be treated as a single employer for purposes of liability under the Act.
  10. An amendment may be advisable to codify existing case law regarding employer’s legitimate personnel actions. The definition of “injury” in section 902(2) can be amended to provide that, “Physical or mental conditions caused in part or in whole by an employer’s personnel actions shall not be considered an injury or disease compensable under this Act. Physical or mental conditions caused in part or in whole by an employer’s personnel action may only be compensable under applicable State or Federal employment laws other than workers’ compensation laws.”  This would codify existing case law.
  11. Previous proposals have sought to help the Office of Administrative Law Judges (OALJ) and BRB interpret the Section 20 presumptions and the difference between the evidentiary burdens of production and persuasion by expressly stating the correct procedure. Proposed language: “A presumption shall not be considered evidence once rebutted. Once a presumption has been rebutted, the burden of production of evidence and burden of persuasion shall be governed by section 556(d) of Title 5, United States Code” (the Administrative Procedures Act).
  12. Other potential amendments to section 20 provide substantive changes to existing case law as well as new rules of evidence. Proposed language is as follows: “The injury, its occupational cause, and any resulting manifestations of disability must be proven to a reasonable degree of medical certainty, based on objective relevant medical findings…” and “…notwithstanding section 4(c) or section 8(c)(13)(B), the employment exposure or accident shall be the major contributing cause of any injury.” Also, “…pain or other subjective complaints alone, in the absence of objective relevant medical findings, is not compensable.”
  13. Previous proposed amendments have included a proposal to change the weekly compensation rate from “66 2/3 percent of the average weekly wage” to “75 percent of the spendable earnings”. A proposed definition of “spendable earnings” was, “The spendable earnings of an employee shall be the average weekly wage … reduced by subtracting the Federal, State, and local taxes that would have been withheld based on standard deductions and on the domicile of the employee at the time of the injury, and reduced by subtracting the tax that would have been withheld under section 3101 of the Internal Revenue Code of 1986.”
  14. Previous proposals have also included an amendment to section 944 to change the formula for the Special Fund assessment. The formula and calculation factors for self-insured employers remain the same, while for insurance carriers the current paid indemnity loss factor is replaced by a premium surcharge rate calculated by the U.S. Department of Labor based on premium data that it would collect. The proposal allows insurance carriers to change the assessment from a percent of paid losses to a premium surcharge.
  15. Previous proposals have included a change to section 921(c) to clarify the issue of judicial deference. The following language was proposed: “A litigating position of the Secretary shall not be entitled to any deference, unless such position has been expressly adopted by the Secretary as a rule made on the record after opportunity for an agency hearing pursuant to section 556 and 557 of Title 5, United State Code.”
  16. Finally, past proposals have included language addressing interpretation and statutory intent along the lines of, “…in a claim brought under this Act, the facts are not to be given a broad liberal construction in favor of the employee or of the employer…” This change seeks to eliminate the ubiquitous references in formal orders and court decisions to the remedial purposes of the Act and the need for a liberal interpretation in favor of the claimant. The U.S. Supreme Court has, in fact, held that the Administrative Procedures Act, which governs adjudications under the Longshore Act, does not permit doubts to be automatically resolved in the injured worker’s favor.

This has been merely a summary of most of what I consider to be the most significant changes previously proposed for amendment to the Longshore Act.  Presumably, these would form the basis for possible Longshore Act Amendments of 2018.

This series will conclude in the next post with my own suggestions for possible amendments, not previously proposed.

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.

AEU Longshore Blog ISSUE: Amendments to the Act – Part One

It’s been 100 years since the U.S. Supreme Court’s decision in Southern Pacific RR Co. v. Jensen, (244 U.S. 205 (1917)), established the “Jensen” line, limiting the coverage of states’ workers’ compensation laws to the landward side of the water’s edge and creating a gap in workers’ compensation coverage for employees working over the navigable waters of the U.S.  The decision ultimately led to the passage of the Longshore and Harbor Workers’ Compensation Act in 1927.

The Longshore Act was significantly amended in 1972 and 1984.  Since 1984 there have been several unsuccessful attempts to add amendments (and, of course, one success, amending the recreational vessel exclusion in 2009).

Previous unsuccessful amendments, in my opinion, can be grouped into two categories.

First, listed here in Part One, are significant changes that should be made in the interest of equity and to match broad changes that have been enacted in many state workers’ compensation laws.

Second, to be listed in Part Two, are changes that would be welcomed by the insurance carrier/maritime employer/self-insured employer community rationalized as restoring balance in the administration of the Act.

Part One – Significant changes

The intoxication defense in section 903(c) should be amended to strike the requirement for a successful defense that the injury must be occasioned “solely” by the intoxication of the employee.  Simply remove the word “solely”.  A corresponding change would have to be made in section 920(c) that creates a rebuttable presumption in favor of the injured worker.

The last maritime employer doctrine should be addressed.  The Act can be amended to reflect liability for intervening, post maritime employment.  Suggested language proposed in the past has been along the lines of, “Intervening Employment – If the last employment exposure that contributed to an injury or death was the result of employment that was not covered under this Act, no benefits shall be payable under this Act for the injury or death.”

The problem of concurrent Longshore Act and state act jurisdiction in many states should be addressed.  Section 905(a) can be amended to reflect that state workers’ compensation laws are expressly preempted by the Longshore Act.  Procedures can be provided in section 905 for the maritime employer to enforce this preemption of state laws.

The free choice of physician provision in section 907 should be addressed.  Previous proposals have reflected changes in many state laws that provide that insurance carriers may designate participating networks of health care panels that would be the obligatory choice for medical services and supplies for injured workers.

With regard to hearing loss several changes should be considered.  A combination of the aggravation rule and the last maritime employer rule has maritime employers frequently paying for hearing loss that they did not cause.  One change would involve language to remove the effects of lifestyle and aging from awards for hearing loss.  For example, the employer would not be liable for any part of an employee’s hearing loss caused by presbycusis, non-occupational causes, and documented pre-employment hearing loss.  The employer should only be liable for the percent of hearing loss for which it is responsible.  Pre-employment and post-employment should also be accounted for in a more equitable manner than in the current jurisprudence.

The time limits for notice of injury and filing a claim in sections 912 and 913 should be amended to reflect outside time limits.  The employer should be protected against claims filed years after an alleged workplace injury or exposure.

Past draft amendments have included a proposed change to section 921(b)(3) dealing with the payment of benefits in disputed cases.  Current language reads, “The payment of the amounts required by an award shall NOT be stayed pending final decision in any such proceeding unless ordered by the Board.  No stay shall be issued unless irreparable injury would otherwise ensue to the employer or carrier” (emphasis added, and a stay is virtually never issued).  Proposed new language would read something along the lines of, “Disputed amounts required by an award shall be stayed”.

An attempt should be made to improve the methodology for calculating the injured worker’s Average Weekly Wage.  Current methods under section 910(a) inflate the compensation rate calculation by a judicially created presumption that a worker who works 75% of the year preceding his injury is credited with a full year.  Also, section 10(c), the very broad and discretionary calculation provision, has resulted in workers receiving credit for part-time jobs, short overseas assignments that inflate weekly wages by a factor of three times or more and assorted other methods of inflating an injured worker’s wage earning “capacity” at the time of the injury.

The 20% penalty provision in section 14(f) should be amended.  An amendment should provide that payment under an award is due within 10 business days after receipt by the employer or carrier of a priority delivery or communication containing the award.

Finally, the issue of reduction or offset against disability payments based on receipt of retirement income from Social Security or retirement benefits furnished by the employer should be considered.

These are what I consider to be the most important, significant changes to be considered in amending the Longshore Act.

In Part Two, we’ll review further changes that would be welcomed by insurance carriers, maritime employers, and self-insured employers alike.

 

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John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of the AEU Longshore Blog.