US DOL Proposed Rule Would Result in Increased Longshore Maximum Benefits

Comments due by October 26

The US Department of Labor on August 26, 2016 filed proposed rules for comment on the definition of minimum and maximum compensation rate annual adjustments. See https://www.gpo.gov/fdsys/pkg/FR-2016-08-26/pdf/2016-20467.pdf

The main issue in contention is that the US DOL Office of Workers’ Compensation Programs is proposing to employ the average weekly wage of the injured individual at the time of his injury as his compensation rate, but is then proposing to use the Maximum average weekly rate at the time of the award as the max rate on the claim.   The  max rate at the time of injury should be applied to be consistent.

 This US DOL interpretation impacts high paid employees and terminal operators most severely.

 To simplify ,If claimant is hurt in 2015 with an Average Weekly Wage of $2,000 with a 2015 max rate of $1,200, the claimant would receive $1,200 a week subject to a yearly COLA—which has always been the formula.  The OWCP is proposing that if the injured claimant were to receive a change in condition  award in  say 2019 the max rate at that time should apply, which could be $1,400.

 The actual language of the statute being interpreted is found in 33 USC 910(f) and provides:

(f) Effective October 1 of each year, the compensation or death benefits payable for permanent total disability or death arising out of injuries subject to this Act shall be increased by the lesser of —

(1) a percentage equal to the percentage (if any) by which the applicable national weekly wage for the period beginning on such October 1, as determined under section 6(b) [33 USC § 906(b)], exceeds the applicable national average weekly wage, as so determined, for the period beginning with the preceding October 1; or

(2) 5 per centum.

Section 906(b) sets the maximum compensation rate and Section 906(c) describes the applicability of the determination

(b) Maximum rate of compensation.

(1) Compensation for disability or death (other than compensation for death required by this Act to be paid in a lump sum) shall not exceed an amount equal to 200 per centum of the applicable national average weekly wage, as determined by the Secretary under paragraph (3).

(2) Compensation for total disability shall not be less than 50 per centum of the applicable national average weekly wage determined by the Secretary under paragraph (3), except that if the employee’s average weekly wages as computed under section 10 are less than 50 per centum of such national average weekly wage, he shall receive his average weekly wages as compensation for total disability.

(3) As soon as practicable after June 30 of each year, and in any event prior to October 1 of such year, the Secretary shall determine the national average weekly wage for the three consecutive calendar quarters ending June 30. Such determination shall be the applicable national average weekly wage for the period beginning with October 1 of that year and ending with September 30 of the next year. The initial determination under this paragraph shall be made as soon as practicable after the enactment of this subsection.

(c) Applicability of determinations. Determinations under subsection (b)(3) with respect to a period shall apply to employees or survivors currently receiving compensation for permanent total disability or death benefits during such period, as well as those newly awarded compensation during such period.

 Below is the detailed draft comments from Tony Filiato, Anthony R. Filiato, Esq., Vice President & General Counsel, Signal Administration, Inc., Managers’ Agents for the Signal Mutual Indemnity Association Ltd.

UWC encourages impacted members to review this issue and submit comments by the October 26, 2016 deadline.

Related Documents:

Tags: