lhwca

By: Chauvin Kean

The following is an overview of the Longshore and Harbor Workers’ Compensation Act (“LHWCA”) which introduces general concepts concerning coverage and benefits under the Act.  It should be noted that there are many more procedural and substantive aspects of the LHWCA that are not covered in this brief overview.

Background on the LHWCA:

In general, the LHWCA is a standard workers’ compensation scheme providing certain maritime workers with the right to recover “no fault” benefits from their employer for an injury suffered during the course and scope of their employment. Subject to certain exceptions, the LHWCA provides the employer immunity from a tort lawsuit if the benefits are owed and paid out to the injured worker.

In 1927, Congress passed the first iteration of the LHWCA following the U.S. Supreme Court’s decision in Southern Pacific Co. v. Jensen, 244 U.S. 205 (1917), which held that the U.S. Constitution prohibits maritime workers injured on navigable waters from recovering against their employers under state workers’ compensation schemes. This decision created a de facto hard line in the sand, known as the Jensen line, which delineated the precise line of state workers’ compensation coverage at the water’s edge. The Court’s decision highlighted a gap in coverage for maritime workers (non-seaman) who regularly worked aboard vessels on navigable waters and adjacent wharfs and piers. Those non-seaman workers, not regularly assigned to a particular vessel or fleet of vessels, walked in and out of coverage during the course and scope of their employment.

Remedying this gap in coverage, the LHWCA was intended to be a “gap filler” to provide maritime workers (non-seaman) injured on navigable waters with a remedy against their employer. Since its initial enactment, Congress amended the Act in 1972 to expand the geographic scope of coverage for the LHWCA shoreside – covering maritime employees (non-seaman workers) injured not only on navigable waters, but also on “any adjoining pier, wharf, dry dock, terminal, building way, marine railway, or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel.” [1]

Distinguishing Seamen from LHWCA Workers:

Seamen (i.e., masters or members of the crew of a vessel) are specifically excluded from coverage under the LHWCA. A Seaman is a person employed as a member of the crew of a vessel. As defined in case law, a Seaman is one who (1) has a connection to a vessel or identifiable fleet of vessels that is substantial in “duration and nature” and (2) contributes to the function of the vessel or accomplishment of its mission. As a general rule of thumb, workers who spend approximately 30% or more of their time working on a particular vessel or commonly owned/controlled fleet of vessels are likely to be classified as Seamen.

If the employee is a Seaman, he or she is entitled to sue the employer in tort for negligence and/or for failing to provide a seaworthy vessel. Seaman are also entitled to receive “maintenance and cure” benefits, which are medical care and living expenses, if they are injured or fall ill while in the service of the vessel. These benefits are owed until the Seaman reaches maximum medical cure.

Workers covered and not covered under the LHWCA:

Under the LHWCA, there are generally speaking three categories of employees who might be covered under the LHWCA. The first two categories are covered directly by the Act while the third is covered indirectly through application of another federal statute known as the Outer Continental Shelf Lands Act (“OCSLA”).

The first group includes maritime workers injured on one of the aforementioned landward extensions (wharf, pier, dock, etc.). For a worker to be covered under the Act for an injury on land, the non-seaman maritime employee must meet the situs and status factors announced in the Act. To satisfy the situs factor, the non-seaman injured worker must have been injured near navigable waters on a pier, wharf, drydock, marine railway, “or other adjoining area customarily used by an employer in loading, unloading, repairing, dismantling, or building a vessel.” [2]  The status factor is met if the non-seaman employee spent some portion of his or her employment performing an essential or integral aspect of loading/unloading a vessel, ship building, ship repairing, or ship breaking. If both situs and status are found, the injured non-seaman employee is likely covered under the Act.

The second category of maritime employees who may be covered under the LHWCA are non-seaman workers injured on navigable waters during the course and scope of their employment. It has been held that the 1972 amendments to the Act did not intend to restrict or take away coverage to workers who would have been covered pre-1972.  Non-seaman maritime employees injured on navigable waters were generally covered before 1972.  Such workers continue to be covered under the Act, as long as it can be said that his/her presence on navigable waters at the time of injury was not “transient or fortuitous” (i.e. taking a ferry to work at a land-based job). Generally, the employee will not be considered transiently or fortuitously on navigable waters if he or she performs a “not insubstantial” amount of work on navigable waters. [3]   Some examples of non-seaman workers who may be covered under the LHWCA are oilfield roustabout or mechanics injured on a vessel if the worker’s job requires him or her to travel and perform some work activities on vessels.  Another example might be a non-seaman construction worker injured on a vessel during bridge building or a similar type of project.

The third category of non-seaman maritime employees who might be covered under the LHWCA are workers engaged in the exploration or development of natural resources on the Outer Continental Shelf (“OCS”). Generally, workers injured on fixed platforms are covered by the LHWCA. The OCSLA specifically provides that employees working on fixed platforms shall be covered under the LHWCA. [4]  Generally, this application would apply to any fixed platform on the OSC located more than 3 nautical miles from shore. This general measurement varies by state based upon statutory application of the OSC. [5]

It should be noted that most platform employees working on platforms located within state territorial waters will not be covered via then aforementioned OCSLA extension of LHWCA coverage. Those platform workers will generally be regulated and covered under the adjacent state’s workers’ compensation scheme. However, in certain narrow circumstances, it is possible that platform workers whose regular assigned duties include the loading/unloading of cargo from vessels will be covered directly under the act. [6]

Benefits Owed Under the LHWCA:

The LHWCA sets forth benefits that are statutorily defined to generally be 66.66% of the average weekly wage, which is based up on the preceding 52 weeks prior to the injury producing event. The maximum and minimum compensation rates are set forth on the Department of Labor Office of Workers’ Compensation website.

Medical benefits are owed to counter or minimize the effects of any condition that is causally related the work injury. Once the injured worker reaches maximum medical improvement (“MMI”), any disability persisting is considered permanent. Permanent and total disability benefits are subject to annual costs of living increases. All other injuries are compensable at the scheduled rates as outlined within the statute, 33 U.S.C. § 908(c)(1)-(20). If the worker’s injuries result in death, benefits will be depend on the type and number of beneficiaries of the decedent as set forth in 33 U.S.C. § 909 of the LHWCA.

Procedural Aspects of LHWCA:

Generally, a claimant must file a LHWCA claim within one year from the date of injury or death. However, the “clock” does not start running against the claimant until the employer files a Form LS-202 (First Report of Injury or Occupational Illness). This Form is due within 10 days of the injury or death or from the date the employer first has knowledge of the injury or death. Failure to timely file this Form may result in a monetary penalty imposed upon the employer. The rule of thumb is – when in doubt regarding the employee’s status, file an LS-202.

Once filed, the “clock” will begin to run against the claimant and he or she will have a limited time to assert a claim. If payment is made by the employer without an award to the claimant, a claim may still be asserted and filed within one year after the date of the last payment of compensation to the injured worker.

If a claim is made and is undisputed by the employer, payment of compensation is due within 14 days after the employer gained knowledge of the alleged injury or death. With this, the employer should file Form LS-206, Payment of Compensation Without Award. Failure to timely make the required payments and/or making later payments could result in a penalty of 10% of the amount(s) due to the claimant. Furthermore, misdemeanor criminal fines may be assessed to the employer for the same failures.

If a claim is made and the claim is disputed or will be disputed, then the employer must file Form LS-207, Notice of Controversion of Right of Compensation, within 14 days after the employer gained knowledge of the injury or death. This same Form can be filed at any time should a dispute between the claimant and the employer arise, even if entitlement to compensation was initially uncontested (i.e., claimant refuses to undergo treatment, etc.).

Once there has been a change in the benefits status, the employer should file Form LS-208, Notice of Final Payment or Suspension of Compensation Payments, if payments are changed, suspended, or terminated (i.e., change from total temporary disability to total partial disability, etc.).

Second Injury Fund:

If an employee has a pre-existing permanent partial disability, which combines with and contributes to the effects of an injury to make the claimant more disabled than he or she previously was, then the employer may be entitled to “Second Injury Fund” relief. This enables liability for permanent disability to be limited to 104 weeks, after which the Second Injury Fund assumes the liability for payment of permanent disability benefits. [7]

The requirements for obtaining Second Injury Fund relief are: (1) the claimant has a pre-existing permanent-partial disability; (2) the pre-existing disability, in combination with the subsequent work-related injury, contributes to a greater degree of permanent disability; and (3) the pre-existing disability was manifest to the employer.

If the requirements are met, the employer may make an application for Second Injury Fund relief setting forth, in detail, the grounds for relief. This application should be made as soon as permanency becomes an issue. Events that may give rise to the employer/carrier’s obligation to raise 33 U.S.C. § 908(f) are: the issue of permanency being raised at the informal conference; the employer/carrier is voluntarily paying permanent disability benefits; or the employer/carrier has knowledge that the claimant’s condition is permanent.

Settlement:

If an employer wishes to provide the claimant with a lump sum settlement, the settlement must be approved by the Department of Labor with an Application for Settlement pursuant to 33 U.S.C. § 908(i). Lump sum settlement of indemnity benefits can be achieved with medicals being left open. However, medical benefits cannot be settled without also settling indemnity.

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[1]  33 U.S.C. § 903(a); see also, 33 U.S.C. § 902(4) (defining “employer”).

[2]  33 U.S.C. § 903(a).

[3] Bienvenu v. Texaco, Inc., 164 F. 3d 888 (5th Cir. 1999) (holding that just 8.3% of time working on a vessel was substantial enough to avoid a finding of transient/fortuitous presence). 

[4]  43 U.S.C.A. § 1333(b) (West 2016). 

[5]  The OSC for Texas and the Gulf Coast side of Florida begin 3 marine leagues or 9 nautical miles from the baseline from which the breadth of the territorial sea is measured. The OSC off the coast of Louisiana begins at 3 nautical miles from the baseline from which the breadth of the territorial sea is measured. The OSC off all other States begins 3 international nautical miles from the baseline from which the breadth of the territorial sea is measured, which is only 4.1 feet shorter than a U.S. nautical mile.

[6]  See, Coastal Prod. Serv. Inc. v. Hudson, 555 F. 3d 426 (5th Cir. 2009) (holding that platform worker in state territorial waters was covered by the LHWCA where he regularly unloaded oil from a storage tank onto barges for transportation off the platform).

[7] 33 U.S.C. § 908(f).