ISSUE: Longshore and Harbor Workers’ Compensation Act Amendments of 2011

Part Four

This is a continuation of a series listing key proposed changes to the Longshore Act contained in S. 669 now pending in the 112th Congress.

Thirty One – New Section 908(k) proposes to clarify the provision for the maximum rate payable in cases where the employee qualifies concurrently for compensation for disability caused by 2 or more injuries.  It states that, “In no case shall the amount of compensation payable for all such injuries when combined exceed the lesser of (1) 75 percent of spendable earnings at the time of the last injury, or (2) the maximum rate of compensation, as determined under section 6(b), at the time of the last injury.”  Aside from the issue of ‘spendable earnings’, this overturns case law in some instances.

Thirty Two – Section 909(a) is amended to increase the amount of reasonable funeral expenses payable from $3,000 to $7,500.

Thirty Three – Section 916 is amended by striking “no assignment” and adding, “(b) Limitation – 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 (29 U.S.C. 1056)”.

Thirty Four – Section 902(1) is amended to clarify the definition of “person”.  The definition of “person” does not include the Secretary (of Labor).

Thirty Five – The definition of “wages” in Section 902(13) is amended to provide that “wages” does not include “… an incentive or 1 time payment, severance pay, a settlement of an employment law claim, a bonus that is not guaranteed, container royalties, stock, or stock options.”

Thirty Six – New Section 902(25) provides a definition of fraud, to include “… failing to provide material information that could result in the obtaining or denying, in whole or in part, of compensation under this Act.”

Thirty Seven – New Section 904(c)(3) requires a finding by the treating physician of the percentage of the employee’s disability that was a result of an injury arising out of and occurring in the course of the employment involved and what percentage of such disability was the result of prior injury and other nonoccupational factors.

Thirty Eight – New Sections 904(e)(1)(A) and 904(e)(1)(B) deal with the last responsible employer doctrine.  Subsection (B) provides that “the employer responsible for the benefits under this section shall retain all rights and defenses that any employer who contributed to the injury or death would otherwise have had.”

Thirty Nine – New Section 904(e)(3) defines “Noncontributing Employment Exposure”.  Employment exposure is noncontributing if the medical condition that resulted in the injury or death was diagnosed before employment commenced, or the employer did not expose the employee to conditions capable of causing or contributing to the injury or death.

Forty – Section 908(a)(13)(B)(iii) provides that the measurement of presbycusis shall be in accordance with the methodology adopted in section 1910.95 of title 29, Code of Federal Regulations, appendix F, applied to the applicable decibel levels for hearing loss determinations as provided in clause (ii).

Forty One – Section 908(a)(13)(B)(iv) provides clarification for the weighing of audiogram evidence by providing statutory audiogram standards.

Forty Two – Section 908(j)(1) is changed.  The present language, “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” is changed by striking “a disabled employee” and inserting “an employee”.  This intends to change current case law.

Forty Three – Section 910(a)(4) changes Section 10(c) by replacing the phrase “average annual earnings” with “average weekly wages” each time it appears.

Forty Four – New Section 910(e) defines “spendable earnings”.

“METHOD OF CALCULATION – The spendable earnings of an employee shall be the average weekly wage, as calculated under subsection (a), 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.”

Forty Five – Section 912(a)(3) provides that the notice of hearing loss in a hearing loss case shall be given not later than 1 year after the last date of employment or not later than 1 year after the diagnosis of a non-traumatic injury, whichever occurs first.

Forty Six – New Section 920(a)(4) provides that “No other presumptions shall be authorized under the Act.”  Presumably we would no longer see references to an unwritten presumption of coverage.  And goodbye as well to Mr. Matulic’s presumption (work 75% of the year prior to the injury and you are presumed to have worked the full year with the result that under section 910(a) the average weekly wage is inflated).

Forty Seven – New Section 920(c)(1) provides more guidance for adjudicators under new Rules of Evidence.

(E)     in cases involving occupational disease or repetitive exposure both causation and sufficient exposure to support causation shall be proven by clear and convincing evidence; and

(F)     pain or other subjective complaints alone, in the absence of objective relevant medical findings, is not compensable.


(A)     Expert Testimony – With respect to a claim under this Act, expert testimony shall not be considered if it does not meet the requirements of Rule 702 of the Federal Rules of Evidence.

(B)     Medical Opinion – In order to be considered with respect to a claim under this Act, a medical opinion shall be based on not less than 1 peer reviewed study that – (i) has been published in a major medical journal; and (ii) is accepted by the majority of the scientific community.

I hear you.  That’s enough.  There are more changes contained in the proposed amendments, but I think I’ve got at least most of the more important ones.

These proposals contain some very employer friendly changes (e.g., the section 907 changes in treating physician, the section 908 introduction of spendable earnings, the section 921 stay on payments under an Order); they contain plenty of advice and instruction for the Office of Administrative Law Judges and the Benefits Review Board (e.g., the changes in the section 920 presumptions, the section 901A statement of intent, the section 920(c) and elsewhere new rules of evidence); they contain equitable provisions simply seeking to introduce fairness into the administration of the Act (e.g., the section 914(f) penalty provision, the section 910(a) calculation of average weekly wage, the section 904(c) exclusion of nonoccupational factors, the sections 912 and 913 notice and claim time limits, the section 904(e) changes in last responsible employer liability, the section 905(a) attempt to resolve concurrent jurisdiction issues, and the section 922(b) provision for restitution for fraud); and they contain provisions that the insurance industry believes represent sound business practice (the section 908(f) elimination of the second injury provision and the section 944 change in the assessment formula for insurance carriers to a premium based ratio).

Without a doubt, these are significant amendments.  It is now up to Congress.

ISSUE: “Longshore and Harbor Workers’ Compensation Act Amendments of 2011”

 Part Three

This is a continuation of a summary of the most significant proposed changes contained in pending Bill S. 669 (112th Congress) to amend the Longshore Act.

Twenty – Section 920 is extensively amended.  Section 920(a)(2) states, “A presumption described in paragraph (1) 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.”  Presumably this is an attempt to help the Administrative Law Judges and the Benefits Review Board understand the difference between the evidentiary burdens of production and persuasion.

Twenty One – Section 920(a)(3) is new, dealing with rebutting the nonintoxication presumption of Section 920(a)(1)(C).  The proposed language provides several ways in which the presumption may be rebutted, including a refusal of a drug or alcohol test by the employee, the employee testing positive for illegal drugs, and the employee having a blood alcohol concentration level above the permitted driving limit.

Twenty Two – New Section 920(b) states, “It shall be an affirmative and complete defense to any employee claim under this Act that the employee or employee’s agent knowingly made a false statement that is material to obtaining a benefit or payment.”

Twenty Three – New Section 920(c) provides new Rules of Evidence.  It provides, for example, that, “(A) the injury, its occupational cause, and any resulting manifestations or disability  must be proven to a reasonable degree of medical certainty, based on objective relevant medical findings” and “(B) notwithstanding section 4(c) or section 8(c)(13)(B), the employment exposure or accident shall be the major contributing cause of any injury” and “(F) pain or other subjective complaints alone, in the absence of objective relevant medical findings, is not compensable.”

Refer back to Section 902 for definitions for these key new standards.  Clearly, these changes are an attempt to address some of the more extreme manifestations of the currently interpreted “liberal” and “remedial” purposes of the Act.

Twenty Four – Section 921 is very significantly amended.  Section 921(b)(3) is changed.  The 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.”  The proposed new language reads, “Disputed amounts required by an award shall be stayed.”

Again, this is an attempt to read some equity into the Act.

Twenty Five – New Section 921(b)(6) codifies the one year appeal period.  “If the Board fails to resolve an appeal during the 1 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.”

Twenty Six – New Section 921(c) expressly states that, “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 States Code)”.

Twenty Seven – New Section 922(b) provides that if any payment of compensation has been made as a result of fraud, a carrier may at any time seek an order for immediate termination or suspension of all future payments, and full restitution of all amounts paid as a result of the fraud.

Twenty Eight – New Section 922(b) also deals with overpayments.  It provides that if a carrier makes a payment under the Act to a person in amounts in excess of the amounts owed, the carrier may seek an order for repayment by such person, including a credit against any future payment due under the Act or wages paid to the employee.

Twenty Nine – New Section 931(d) provides that the Secretary of Labor shall report credible incidents of fraud involving more than $10,000 to the appropriate United States Attorney.

Thirty – Section 944 is amended 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 DOL based on premium data that it will collect.  Self-insurers would pay the same assessment under the new formula as they do under the current law.  The amendment allows the insurance carriers to change the assessment from a percent of paid losses to a premium surcharge.

That’s it for what I consider the thirty most significant changes.  I’ll get to the other 40 or 50 important changes in the near future.

ISSUE: “Longshore and Harbor Workers’ Compensation Act Amendments of 2011”

Part Two

This is a continuation of a summary of the most significant proposed changes contained in pending Bill S. 669 (112th Congress) to amend the Longshore Act.

Eleven – Section 907 – Medical Services and Supplies – is extensively amended.

The most important change is to Section 907(b)(1), which provides that a carrier may designate one or more participating networks or one or more health care panels, or both, (refer to the new definitions in Section 902) that would be the obligatory source for medical services and supplies for injured workers.  This replaces the key provision in the current law granting injured workers their choice of treating physician.

Twelve – Section 908 changes the compensation rate by replacing “66 2/3 per cent of the average weekly wage” with “75 percent of the spendable earnings”.   This change applies in all sections where the current rate is set at 66 2/3 per cent of the average weekly wage.  The proposed amendments in Section 910(e) define “spendable earnings” basically as take home pay.

Thirteen – We noted in Part One that amended Section 904(c) adds language that attempts to remove the effects of lifestyle and aging from the award of workers’ compensation benefits.  The proposed change to Section 908(c)(13) specifically provides that, with regard to hearing loss, “The employer shall pay compensation only for any hearing loss caused by an injury arising out of and in the course of employment with such employer, and shall not be liable for that part of the employee’s hearing loss caused by presbycusis, nonoccupational causes, and documented preemployment hearing loss.  The percentage of loss caused by those conditions shall be deducted from the percentage of the employee’s hearing loss before determining the employer’s liability.”

Fourteen – Proposed Section 908(f) effectively ends the second injury provision.  The amendments state that no new order granting section 908(f) relief shall be granted except for cases of modification in existing 8(f) cases, or for survivor’s claims related to existing 8(f) cases.   Section 908(f) presently accounts for about 89% of Special Fund annual disbursements.

Fifteen – Sections 910(a) through (e) are entirely replaced.  The new wording seeks to change the way that the average weekly wage is calculated.  Essentially, if the injured worker works 40 out of the 52 weeks in the year preceding the injury then his average weekly wage equals actual earnings divided by 52.  If he has not worked 40 of the previous 52 weeks, then his average weekly wage should be based on workers in his same classification who did work those weeks.  This change seeks to overturn judicial interpretations in which the courts inflate the worker’s average weekly wage under the present Section 910.

Sixteen – New Section 912(a) seeks to put an outside limit on the “Notice of injury or death” requirement.  Basically it is proposed that in the event of a traumatic injury, “in no case shall the notice be given more than one year after the trauma occurs”.  In the case of a non-traumatic injury, “in no case shall the notice be given more than one year after the diagnosis of a non-traumatic injury or a death resulting from such injury”.

Seventeen – New language in Section 912(b) provides that, “In order to facilitate prompt settlement of cases, notice of an injury shall also include an opportunity for the employer to have the employee answer questions under oath ….  Failure by an employee to be available for such questioning (unless waived by the employer in writing), or failure to fully and truthfully answer material questions, shall be considered a failure to give notice under this Act”.

Eighteen – New Section 913(a) seeks to put an outside time limit on the filing of claims.  It provides that, “The right to compensation for disability or death under this Act shall be barred unless a claim therefore is filed not later than 90 days after providing notice under section 12.  If payment of compensation has been made without an award on account of such injury or death, a claim may be filed not later than 90 days after the date of the last payment”.

Nineteen – Section 914(f) (the 20 percent penalty provision) is changed by striking “within ten days after it becomes due” and inserting instead “within 10 business days after receipt by the employer or carrier of a priority mailing containing the order.”  This wording provides a much more equitable provision for the employer.

I’m going to stop here for now, so I can pick up significant proposed change Number Twenty with the Section 920 presumptions.    


ISSUE: “Longshore and Harbor Workers’ Compensation Act Amendments of 2011”

Part One

You may have heard that a Bill to amend the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 901) has been reintroduced by Senator Johnny Isakson (R-GA).  It was referred to the Committee on Health, Education, Labor, and Pensions on March 29, 2011, and is designated S. 669 in the 112th Congress.

The Longshore Act was last amended in 1984.  The pending Bill S. 669 contains many significant changes, and good arguments can be made that changes are needed.  Since there are so many new provisions included in these amendments, I intend to provide a summary of the most significant proposed changes in a continuing, intermittent series. 

One – Right up front, the Bill seeks to add Section 901A to the Act, to expressly state that, “… 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, and to encourage adjudicators to render decisions under the Act in accordance with basic principles of statutory construction.  The 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.

Two – The Bill seeks to add to the definition of injury in Section 902(2), “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 change more or less reflects current Longshore Act case law.

Three – The Bill modifies the clerical, secretarial, security, or data processing exclusion in Section 902(3)(A) by replacing “employed exclusively to perform” with “primarily performing” and by inserting “on the day of the injury”.  This seems to be a reasonable modification to an exclusion that has been extremely narrowly construed.

Four – There are numerous changes and additions to the definitions in Section 902.  Sections 902(21) and 902(22) are changed, adding definitions of “participating network” and “health care panel”.  Sections 902(23) and 902(24) are added, providing definitions for the terms, “nationally recognized evidence-based treatment standards” and “objective relevant medical findings”.  Section 902(26) is added, defining “major contributing cause” and Section 902(27) is added, defining “standard premium”.  The significance of these additions, and other changes to the Section 902 definitions, will be apparent when we get to later Sections of the Act.  

Five – Section 903(c) is modified by striking “solely” from the sentence, “No compensation shall be payable if the injury was occasioned solely by the intoxication of the employee or by the willful intention of the employee to injure or kill himself or another”.

Six – Section 904(c) adds language attempting to remove the effects of lifestyle and aging (non-occupational factors) from the award of workers’ compensation benefits, and to provide that credit for prior awards shall not be based on the dollar amount of the prior award, but rather by the percentage impairment rating.

Seven – Section 904(d) deals with the uncertainties inherent in the “borrowing employer” doctrine.  It 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 this Act ….”  Indemnification agreements are still enforceable.

Eight – Section 904(e) is added in an attempt to address inequities produced by application of the “Last Maritime Employer” doctrine.  A key proposed change is Section 904(e)(2), which provides, “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”.

Nine – Proposed changes to Section 905(a) seek to protect the maritime employer’s workers’ compensation immunity based on exclusivity of remedy.  As we know, maritime employers have a costly problem in so-called “concurrent states”, where the Longshore Act and state workers’ compensation laws apply simultaneously to most injuries. Also, although the Longshore Act is intended to be the maritime employee’s exclusive remedy against his employer in the event of an on the job injury, maritime employers, especially in concurrent states, find themselves defending actions in court against employees who have come in under state created causes of action.

Proposed Section 905(a) provides several methods for the maritime employer to preempt “any State law that provides additional remedies for an injured employee … at law or in admiralty (and adds) ‘or otherwise’”.  The proposed change does not expressly provide that state workers’ compensation laws may be preempted by the methods provided.  It simply adds “or otherwise” to “at law or in admiralty”.  I’m not sure why the proposed change does not specify that “Any state law …” includes state workers’ compensation laws.

Ten – Proposed Sections 905(d)(2) and 905(d)(3) provide procedures for the carrier to enforce this state law preemption, including, if necessary, by injunction.

I’m going to stop here for now, and pick up the very significant proposed changes to the medical treatment provisions in Section 907 next time.  Stay tuned for much more.