Longshore and Harbor Workers' Compensation Act: Maximum and Minimum Compensation Rates, 17287-17293 [2018-08133]
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Rules and Regulations
Federal Register
Vol. 83, No. 76
Thursday, April 19, 2018
This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents.
DEPARTMENT OF LABOR
Office of Workers’ Compensation
Programs
20 CFR Part 702
RIN 1240–AA06
Longshore and Harbor Workers’
Compensation Act: Maximum and
Minimum Compensation Rates
Office of Workers’
Compensation Programs, Labor.
ACTION: Final rule.
AGENCY:
This final rule contains
regulations implementing the Longshore
and Harbor Workers’ Compensation
Act’s provisions on maximum and
minimum amounts of compensation
payable. These regulations clarify how
the Department interprets and applies
these provisions in accordance with
several court decisions to ensure injured
workers are compensated properly and
insurers and employers are aware of
their responsibilities. In addition, the
rule implements the Act’s annual
compensation-adjustment mechanism
for permanent total disability
compensation and death benefits.
DATES: This rule is effective May 21,
2018.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
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Douglas Fitzgerald, Director, Division of
Longshore and Harbor Workers’
Compensation, Office of Workers’
Compensation Programs, 202–354–9620
(this is not a toll-free number),
Fitzgerald.Douglas@dol.gov. TTY/TDD
callers may dial toll free 1–877–889–
5627 for further information.
SUPPLEMENTARY INFORMATION:
I. Background of This Rulemaking
On August 26, 2016, the Department
issued a Notice of Proposed Rulemaking
(NPRM) under the Longshore and
Harbor Workers’ Compensation Act, 33
U.S.C. 901 et seq. (LHWCA or Act),
proposing rules implementing the
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LHWCA’s provisions on maximum and
minimum amounts of compensation
payable. 81 FR 58878–90 (Aug. 26,
2016). The comment period closed on
October 25, 2016.
As explained in the NPRM, 81 FR
58878–79, the LHWCA establishes a
federal workers’ compensation system
for an employee’s disability or death
arising in the course of covered
maritime employment. 33 U.S.C. 903(a),
908, 909. LHWCA compensation is
generally based on the employee’s
average weekly wages at the time of his
or her disabling injury or death. 33
U.S.C. 910. Section 6 of the Act caps
compensation at a maximum of twice
the applicable fiscal year’s national
average weekly wage (NAWW). 33
U.S.C. 906(b)(1). Section 6 also
establishes a minimum below which
compensation may not fall. The
minimum rate is the lower of fifty
percent of the NAWW or the employee’s
actual average weekly wages. 33 U.S.C.
906(b)(2). The Secretary of Labor
determines the NAWW for each fiscal
year, and that determination applies to
employees or survivors ‘‘currently
receiving’’ compensation for permanent
total disability or death, as well as those
‘‘newly awarded’’ compensation of any
type, including for partial and
temporary disability. 33 U.S.C.
906(b)(3), (c).
In addition to the provisions in
section 6 that allow for adjustments to
the maximum and minimum
compensation rates based on the
NAWW, section 10(f) of the Act
provides another mechanism for
adjusting compensation amounts so that
their value is not eroded over time.
Benefits payable for permanent total
disability or death are increased at the
beginning of each fiscal year by the
same percentage as any increase in the
NAWW, but no more than five percent
per year. 33 U.S.C. 910(f). Section 10(f)
applies to all claimants receiving
compensation for permanent total
disability or death, while section 6
applies only to those whose
compensation is affected by the
maximum or minimum rates.
The Department proposed rules to
implement the minimum and maximum
compensation rate provisions of section
6(c), specifically clarifying which
maximum compensation rates apply to
any particular injury under the section’s
‘‘newly awarded’’ and ‘‘currently
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receiving’’ clauses, and relatedly, how
the Act’s minimum compensation
provisions apply. Additionally, the
proposed rules implement section
10(f)’s annual adjustment provision
generally and address how section 10(f)
integrates with section 6’s maximum
and minimum compensation rates.
As the NPRM discussed, these rules
are primarily based on the Supreme
Court’s controlling decision in Roberts
v. Sea-Land Services, Inc., 566 U.S. 93
(2012), the Ninth and Eleventh Circuits’
decisions in Roberts v. Dir., OWCP, 625
F.3d 1204 (9th Cir. 2010), and Boroski
v. Dyncorp Intern., 700 F.3d 446 (11th
Cir. 2012), and the Benefits Review
Board’s decisions in Reposky v. Int’l
Transp. Servs., 40 BRBS 65 (2006), and
Lake v. L–3 Communications, 47 BRBS
45 (2013). Aside from one small
exception, those decisions and this rule
comport with the Director’s
longstanding interpretation and
application of the maximum and
minimum compensation provisions. 81
FR 58887. Additionally, the Department
has been following the Ninth Circuit’s
construction of the statute since 2012
and the regulations reflect this
construction as well.
The Department received only six
written comments in response to the
NPRM from a variety of entities in the
longshore industry. The commenters
included longshore employer
associations, insurance-industry
members, and longshore claims
administrators associations. These
comments are addressed in Section III
below.
This rule is not an Executive Order
13771 regulatory action because this
rule is not significant under Executive
Order 12866.
II. Statutory Authority
Section 39(a) of the LHWCA, 33
U.S.C. 939(a), authorizes the Secretary
of Labor to prescribe rules and
regulations necessary for the
administration of the Act.
III. Response to Significant Comments
and Explanation of Changes
Most commenters provided general
remarks about the rulemaking rather
than comments on specific proposed
regulations. Thus, rather than including
a full section-by-section analysis in the
discussion below, the Department’s
response is organized by the broader
issues raised. The Department
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appreciates these comments and has
made one change to the final rule in
response.
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A. Application of ‘‘Newly Awarded
Compensation’’ Clause
Several commenters stated that the
proposed rules addressing the
application of section 6(c)’s ‘‘newly
awarded’’ clause were unnecessary
because the Supreme Court had already
clearly addressed how to apply the
clause in Roberts, 132 U.S. 1350. The
fact that the Supreme Court has
addressed the issue does not make this
part of the rule unnecessary. The rule
seeks to ensure a consistent application
of section 6(c) in its entirety by
addressing the proper application of
both the ‘‘newly awarded’’ and
‘‘currently receiving’’ clauses. Codifying
the Supreme Court’s ruling in a
regulation clarifies and informs all
stakeholders of the proper interpretation
of the provision. The rule also provides
additional guidance with concrete
examples of how the Roberts decision
applies in a variety of factual situations.
Accordingly, the Department believes
the regulations implementing the
‘‘newly awarded’’ clause are important
and has retained them in the final rule.
B. Application of ‘‘Currently Receiving’’
Clause
Several commenters objected
generally to the proposed rules
clarifying the application of the
‘‘currently receiving’’ clause of section
6(c). These commenters argued that the
rule is premature because the Supreme
Court declined to address the
application of that clause in Roberts,
564 U.S. 1066, and to date, only two
Courts of Appeals have addressed it. See
Boroski, 700 F.3d 446, Roberts, 625 F.3d
1204. Some of these commenters
expressed concerns that the rule would
preempt further development through
the courts on matters that were not
considered at any stage of the Roberts
litigation, namely, the computation of
the minimum compensation rate under
section 6(b), computation of weekly
compensation payable for death under
section 9(e), or the computation of a
claimant’s average weekly wage under
section 10. On the other hand, one
commenter commended the Department
for using the rulemaking process to
resolve legal issues arising from judicial
statutory interpretations.
The Department is not required to
wait for an issue to be adjudicated by
the Supreme Court or any other court
before it can promulgate regulations to
administer the LHWCA. Indeed,
litigation often demonstrates the need
for an agency regulation. See generally
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Smiley v. Citibank (South Dakota), N.A.,
517 U.S. 735, 740–41 (1996) (fact that
agency regulation was prompted by
litigation does not undermine deference
agency is due; ‘‘That it was litigation
which disclosed the need for the
regulation is irrelevant.’’) Here, the
litigation in Roberts, Boroski, Reposky,
Lake and other cases highlighted the
need for regulations in this area. And
this rule falls well within the scope of
the Secretary of Labor’s authority to
prescribe rules and regulations
necessary for the administration of the
LHWCA. 33 U.S.C. 939(a).
Furthermore, as explained in the
NPRM, the rule does not mark a change
in the Director’s longstanding
interpretation and application of the
maximum and minimum compensation
provisions. 81 FR 58887. The
Department has been following the
Ninth Circuit’s construction of the
statute in its entirety since 2012, and
aside from one small exception, had
been following this construction since
the Board’s 2006 decision in Reposky,
40 BRBS 65. That exception involved
cases in which the employee’s disability
was initially something other than
permanent total—temporary total,
permanent partial, or temporary
partial—and in a later fiscal year
became permanently totally disabling.
In Reposky, the Department took the
view that the employee’s compensation
amount should remain at the maximum
rate in effect on the date of disability
until the next October 1, at which time
the employee would become subject to
the new fiscal year’s maximum rate. But
the Ninth Circuit held in Roberts that
the employee need not wait until the
next October 1 and is instead
immediately subject to the maximum
rate in effect on the day he or she
becomes permanently totally disabled
under section 6(c)’s ‘‘currently
receiving’’ clause. Roberts, 625 F.3d at
1208–09. The rule reflects this
construction and clarifies the
Department’s longstanding
interpretation of the other aspects of
section 6(c).
One commenter contended that the
rule is inconsistent with the Benefit
Review Board’s approach in Pittman v.
New Century Fabricators, Inc., 50 BRBS
17 (2016). In Pittman, the Board
declined to extend the Supreme Court’s
reasoning in Estate of Cowart v. Nicklos
Drilling Co., 505 U.S. 469 (1992), to an
issue not directly addressed by the
Court. The Board held that ‘‘absent a
Supreme Court or circuit court decision
to the contrary,’’ prior Board decisions
on the specific issue in the case
established the precedent that bound
the Board. 50 BRBS at 20. The comment
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argues that because the Supreme Court
declined to address the application of
the ‘‘currently receiving’’ clause in
Roberts, the Board’s approach in
Pittman would dictate that the
Department should not address the
application of the clause. This ignores
two facts. First, Pittman says nothing
about the Department’s authority to
issue a rule. Second, while the Supreme
Court did not interpret the ‘‘currently
receiving’’ clause, the Ninth and
Eleventh Circuits did, and this rule is
consistent with both those rulings. See
Boroski, 700 F.3d 446; Roberts, 625 F.3d
1204.
The rule is also consistent with the
Board’s decision in Lake, 47 BRBS 45,
which adopted the same interpretation
of section 6(c)’s ‘‘currently receiving’’
clause as the Ninth and Eleventh
Circuits. In Lake, the Board held that a
claimant is ‘‘currently receiving
compensation’’ under section 6(c)
‘‘during a period in which he is entitled
to receive compensation, regardless of
whether his employer actually pays it.’’
Id. at 48. The Board also held that when
a claimant’s temporary total disability
changes to permanent total disability
during a fiscal year, the maximum rate
in effect during that year applies
immediately. Id. Thus, the rule’s
implementation of the section 6(c)
‘‘currently receiving’’ clause is
consistent with the precedent from the
Board and all courts of appeals that
have ruled on the issue.
Two commenters stated that Congress
did not intend the ‘‘currently receiving’’
clause to have any effect beyond the
four-fiscal-year period after the 1972
amendments to the LHWCA, which
annually increased the maximum
compensation rate until it reached 200
percent of the national average weekly
wage in 1975. They contended that
Congress intended section 6(c) to apply
only to claimants who were ‘‘currently
receiving compensation for permanent
total disability or death’’ during the
four-year phase-in period.
Later statutory enactments, however,
demonstrate that Congress intended to
apply the ‘‘currently receiving’’ clause
beyond the phase-in period. In 1984,
Congress amended section 6 again to
remove the phase-in provisions yet
retained the ‘‘currently receiving’’
clause and reenacted it as section 6(c).
If Congress had intended the outcome
urged by the commenters—to have
section 6(c)’s ‘‘currently receiving
clause’’ apply only to the phase-in
years—it could have drafted section 6(c)
to say exactly that. Instead, Congress
removed the phase-in provisions,
making reference to them impossible. It
nonetheless retained section 6(c) and
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changed the text of the provision to
make clear that all claimants ‘‘currently
receiving compensation for permanent
total disability or death’’ are subject to
the maximum rate based on the national
average weekly wage as set under
section 6(b)(3). Congress knew that,
under section 6(b)(3), the national
average weekly wage is determined
anew every year, and thus must be
deemed to have understood that the
maximum rate applicable to those
currently receiving compensation for
permanent total disability or death
would also change annually. See
generally Pucetti v. Ceres Gulf, 24 BRBS
25, 31 (1990) (considering phase-in
provisions in context of 1984
amendments and holding that ‘‘during a
yearly period when a given national
average weekly wage is in effect, those
‘currently receiving’ benefits for
permanent total disability or death are
entitled to that year’s new maximum.’’);
see Dir., OWCP v. Perini North River
Assoc., 459 U.S. 297 (1983) (where
Congress amended the Act to extend
coverage to land-based workers if they
met a status test for maritime
employees, it was presumed to know
that the law already covered those
injured on navigable waters, and its
amendment of the Act was not intended
to require those ‘‘traditionally covered’’
employees to also prove status).
Several commenters stated that
section 6 does not allow for the
maximum compensation rate applicable
to a claimant to change each year, i.e.,
that even a permanently totally disabled
claimant is forever subject to the
maximum rate in effect at the time of his
injury. First, this is contrary to the text
of the provision. Section 6 sets the
maximum rate at 200 percent of the
national average weekly wage, 33 U.S.C.
906(b)(1), requires a new national
average weekly wage to be determined
each October 1, 33 U.S.C. 906(b)(3), and
provides that a given year’s
determination ‘‘shall apply to
employees . . . currently receiving
compensation for permanent total
disability’’ during that year. As a
claimant can be ‘‘currently receiving
compensation for permanent total
disability’’ in more than one year, it is
apparent that he can be subject to a
different national average weekly
wage—and, thus, a different maximum
rate as determined by that national
average weekly wage—for each year in
which he is being compensated for
permanent total disability. Second, the
commenter’s approach is contrary to the
legislative history of the 1972
Amendments. See H.R. Report 92–1441
at 3; S. Report 92–1125 at 5–6. Third,
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the Board rejected this very argument in
Marko v. Morris Boney, Inc., 23 BRBS
353 (1990), a decision the Board
reaffirmed in Lake, 47 BRBS at 48–50.
Finally, this approach would treat those
receiving compensation for permanent
total disability or death the same as
those receiving compensation for any
other type of disability, while the statute
clearly treats permanent total disability
and death differently.
C. Impact on Average Weekly Wage
Calculations
A few commenters expressed concern
that the rule could adversely affect how
an individual’s average weekly wage is
calculated under section 10, 33 U.S.C.
910. The Department does not intend
this rule to govern the basic average
weekly wage calculation necessary to
determine the amount of compensation
payable. As explained in the NPRM,
‘‘[t]he proposed regulations do not
govern general compensation
calculations.’’ 81 FR 58881. Instead, the
maximum and minimum regulations
apply only once that calculation (called
the ‘‘calculated compensation rate’’ in
the rule) is made.
D. Application of the Rule to Existing
Injuries, Disabilities, and Deaths
Two commenters stated that the
Department should limit the proposed
rule’s applicability to future injuries.
They contended applying the new rules
to currently existing matters could lead
to large additional liabilities (which are
not fully secured) if claimants with
pending cases seek increased
compensation under the new standards.
In general, an agency may apply a
new regulation to existing matters when
it does not change the legal landscape.
Thus, a rule that ‘‘is substantively
consistent with prior regulations or
prior agency practices, and has been
accepted by all Courts of Appeals to
consider the issue,’’ may be applied to
matters pending at the time the
regulation is promulgated. Nat’l Mining
Assoc. v. Dept. of Labor, 292 F.3d 849,
860 (D.C. Cir. 2002). Conversely,
agencies are not required ‘‘to apply rules
retroactively even where it would be
permissible for them to do so.’’ Grant
Medical Center v. Hargan, 875 F.3d 701,
706 (D.C. Cir. 2017).
Under these principles, the
Department believes it could choose to
apply the rule to all matters, including
those injuries, disabilities, and deaths
occurring before the rule’s effective
date. The Department’s interpretation of
the ‘‘newly awarded’’ and ‘‘currently
receiving’’ clauses is longstanding (since
at least 1979 for the former and 2012 for
the latter) and fully consistent with all
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Court of Appeals and Supreme Court
precedent. See Nat’l Mining Assoc., 292
F.3d at 860. The rules implementing the
minimum compensation provisions and
section 10(f) similarly ensconce the
Department’s longstanding positions
and are not inconsistent with any Court
of Appeals precedent.
But given the commenters’ expressed
concern, the Department has decided to
apply the rule only to injuries and
deaths occurring after the rule’s
effective date and has added a clause to
§ 702.802(a) to make this clear. Because
the current case law interpreting these
provisions and the rule reach the same
conclusions, the Department sees little
difference in applying the rule
retroactively and applying it only
prospectively. The Department makes
this change, however, to emphasize its
intent not to upset any settled
expectations the regulated parties may
hold.
Despite the Department’s decision on
this issue, parties should be aware that
existing case law construing section 6(c)
still governs injuries, disabilities and
deaths occurring before the rule’s
effective date. The Department will
continue to administer claims in
accordance with those precedents.
Rivers v. Roadway Exp., Inc., 511 U.S.
298, 312–313 and n.12 (‘‘A judicial
construction of a statute is an
authoritative statement of what the
statute meant before as well as after the
decision of the case giving rise to that
construction,’’ and thus ‘‘of what the
statute has meant continuously since
the date when it became law.’’).
Finally, the examples in the
regulations continue to use maximum
and minimum compensation rates for
injuries or deaths that occurred in fiscal
years prior to the effective date of this
rule. This is done out of necessity; the
Department cannot calculate with any
certainty future maximum and
minimum compensation amounts
because they are based on the NAWW,
which is determined anew each year.
The Department believes using concrete
numbers from past fiscal years will
better inform the regulated parties about
how the regulations should be applied.
Of course, because the examples apply
the current state of the law, they may be
instructive in calculating compensation
for disabilities and deaths occurring
before the rule’s effective date even
though not explicitly governed by the
rule.
IV. Collection of Information (Subject to
the Paperwork Reduction Act)
This rulemaking imposes no new
collections of information.
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V. Executive Orders 12866 and 13563
(Regulatory Planning and Review)
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Executive Orders 12866 and 13563
direct agencies to assess all costs and
benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). Executive Order 13563
emphasizes the importance of
quantifying both costs and benefits,
reducing costs, harmonizing rules, and
promoting flexibility. The Department
has considered this rule with these
principles in mind and has concluded
that the regulated community will
benefit from this regulation.
This rule will provide the parties with
greater guidance on applying the Act’s
maximum and minimum compensation
provisions and section 10(f) adjustments
in determining the amount of disability
compensation or death benefits payable.
By clarifying how these provisions
apply, the rule will also promote
consistency so that similarly situated
claimants receive similar compensation
or death benefits. In addition, the rule
will benefit the regulated community by
forestalling further litigation over the
‘‘currently receiving’’ clause in cases
governed by this rule. The Department
also sees no countervailing burden—
economic or otherwise—other than
those imposed by the statute itself that
would counsel against promulgating
this rule.
One commenter generally stated that
the Department had not fully addressed
the proposed rule’s financial impact on
the industry or compensation claimants,
noting the importance of predictability
for reserving funds to cover
compensation payments. The final rule
sets out clear standards for applying the
LHWCA’s maximum and minimum
compensation provisions and will thus
provide the predictability the
commenter seeks.
Finally, because this is not a
‘‘significant regulatory action’’ within
the meaning of Executive Order 12866,
the Office of Management and Budget
waived its review.
VI. Regulatory Flexibility Act and
Executive Order 13272 (Proper
Consideration of Small Entities in
Agency Rulemaking)
The Regulatory Flexibility Act of
1980, as amended (5 U.S.C. 601 et seq.),
requires an agency to prepare a
regulatory flexibility analysis when it
proposes regulations that will have ‘‘a
significant economic impact on a
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substantial number of small entities’’ or
to certify that the proposed regulations
will have no such impact, and to make
the analysis or certification available for
public comment.
For the reasons set forth in the NPRM,
the Department determined that a
complete regulatory flexibility analysis
was not necessary, and certified that the
proposed rules would not have a
significant economic impact on a
substantial number of small entities. 81
FR 58887. The Department invited
public comment on the certification and
delivered a copy of the certification to
the chief counsel for Advocacy of the
Small Business Administration. See
generally 5 U.S.C. 605.
The Chief Counsel for Advocacy has
not filed comments on the certification.
Although one commenter generally
stated that the Department had not
quantified the economic impact on
industry or the benefit to Longshore
employees, the commenter provided no
additional information regarding the
rule’s potential impact on small entities.
Because the comments provide no basis
for departing from its prior conclusion,
the Department again certifies that this
rule will not have a significant
economic impact on a substantial
number of small entities. As a result, no
regulatory flexibility analysis is
required.
VII. Unfunded Mandates Reform Act of
1995
Title II of the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. 1531 et
seq.) directs agencies to assess the
effects of Federal regulatory actions on
State, local, and tribal governments, and
the private sector, ‘‘other than to the
extent that such regulations incorporate
requirements specifically set forth in
law.’’ For purposes of the Unfunded
Mandates Reform Act, this rule does not
include any Federal mandate that may
result in increased expenditures by
State, local, and tribal governments, or
increased expenditures by the private
sector of more than $100,000,000.
XIII. Executive Order 13132
(Federalism)
The Department has reviewed this
rule in accordance with Executive Order
13132 regarding federalism, and has
determined that it does not have
‘‘federalism implications.’’ The rule will
not ‘‘have substantial direct effects on
the States, on the relationship between
the national government and the States,
or on the distribution of power and
responsibilities among the various
levels of government.’’
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IX. Executive Order 12988 (Civil Justice
Reform)
This rule meets the applicable
standards in sections 3(a) and 3(b)(2) of
Executive Order 12988, Civil Justice
Reform, to minimize litigation,
eliminate ambiguity, and reduce
burden.
List of Subjects in 20 CFR Part 702
Administrative practice and
procedure, Claims, Longshore and
harbor workers, Maximum
compensation rates, Minimum
compensation rates, Workers’
compensation.
For the reasons stated in the
preamble, the Department of Labor
amends 20 CFR part 702 as follows:
PART 702—ADMINISTRATION AND
PROCEDURE
1. The authority citation for part 702
is revised to read as follows:
■
Authority: 5 U.S.C. 301, and 8171 et seq.;
33 U.S.C. 901 et seq.; 42 U.S.C. 1651 et seq.;
43 U.S.C. 1333; Reorganization Plan No. 6 of
1950, 15 FR 3174, 64 Stat. 1263; Secretary’s
Order 10–2009, 74 FR 58834.
2. Add subparts G and H to read as
follows:
■
Subpart G—Section 10(f) Adjustments
Sec.
702.701 What is an annual section 10(f)
adjustment and how is it calculated?
Subpart H—Maximum and Minimum
Compensation Rates
General
Sec.
702.801 Scope and intent of this subpart.
702.802 Applicability of this subpart.
702.803 Definitions.
702.804 What are the weekly maximum and
minimum rates for each fiscal year and
how are they calculated?
Maximum Rates
702.805 What weekly maximum rates apply
to compensation for permanent partial
disability, temporary total disability, and
temporary partial disability?
702.806 What weekly maximum rates apply
to compensation for permanent total
disability?
702.807 What weekly maximum rates apply
to death benefits?
Minimum Rates
702.808 What weekly minimum rates apply
to compensation for partial disability?
702.809 What weekly minimum rates apply
to compensation for temporary total
disability?
702.810 What weekly minimum rates apply
to compensation for permanent total
disability?
702.811 What weekly minimum rates apply
to death benefits?
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Subpart G—Section 10(f) Adjustments
§ 702.701 What is an annual section 10(f)
adjustment and how is it calculated?
(a) Claimants receiving compensation
for permanent total disability or death
benefits are entitled to section 10(f)
adjustments each fiscal year. A section
10(f) adjustment cannot decrease the
compensation or death benefits payable
to any claimant.
(b) The section 10(f) adjustment for a
given fiscal year is the lower of:
(1) The percentage by which the new
fiscal year’s national average weekly
wage exceeds the prior fiscal year’s
national average weekly wage as
determined by the Department (see
§ 702.804(b)); or
(2) 5 percent.
(c) Section 10(f) percentage increases
are applied each October 1 to the
amount of compensation or death
benefits payable in the prior fiscal year.
(d) In applying section 10(f)
adjustments—
(1) Calculations are rounded to the
nearest dollar; and
(2) No adjustment is made if the
calculated amount is less than one
dollar.
(e) A section 10(f) adjustment must
not increase a claimant’s weekly
compensation or death benefits beyond
the applicable fiscal year’s maximum
rate.
(f) Section 10(f) adjustments do not
apply to compensation for temporary or
partial disability.
Subpart H—Maximum and Minimum
Compensation Rates
General
rmajette on DSKBCKNHB2PROD with RULES
§ 702.801
Scope and intent of this subpart.
(a) This subpart implements the Act’s
provisions that affect the maximum and
minimum rates of compensation and
death benefits payable to employees and
survivors. These statutory provisions
include sections 6(b) and (c), and 9(e).
33 U.S.C. 906(b), (c); 909(e). It is
intended that these statutory provisions
be construed as provided in this
subpart.
(b) These regulations implement
section 6(c), 33 U.S.C. 906(c), based on
the following concepts:
(1) An employee is ‘‘newly awarded
compensation’’ when he or she first
becomes disabled due to an injury;
(2) A survivor is ‘‘newly awarded
compensation’’ on the date the
employee died; and
(3) An employee or survivor is
‘‘currently receiving compensation’’
when compensation for permanent total
disability or death benefits is payable,
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Jkt 244001
regardless of when payment is actually
made.
§ 702.802
Applicability of this subpart.
(a) This subpart applies to all
compensation and death benefits paid
under the Act as a result of injuries or
deaths occurring on or after May 21,
2018 with the following exceptions:
(1) Amounts payable under an
approved settlement (see 33 U.S.C.
908(i));
(2) Amounts paid for an employee’s
death to the Special Fund (see 33 U.S.C.
944(c)(1));
(3) Any payments for medical
expenses (see 33 U.S.C. 907); and
(4) Any other lump sum payment of
compensation or death benefits,
including aggregate death benefits paid
when a survivor remarries (see 33 U.S.C.
909(b)) or aggregate compensation paid
under a commutation (see 33 U.S.C.
909(g)).
(b) The rules in this subpart governing
minimum disability compensation and
death benefits do not apply to claims
arising under the Defense Base Act, 42
U.S.C. 1651 (see 42 U.S.C. 1652(a); 20
CFR 704.103).
§ 702.803
Definitions.
The following definitions apply to
this subpart:
Calculated compensation rate means
the amount of weekly compensation for
total disability or death that a claimant
would be entitled to if there were no
maximum rates, minimum rates, or
section 10(f) adjustments.
Date of disability. (1) Except as
provided in paragraph (2) of this
definition, the date of disability is the
date on which the employee first
became incapable, because of an injury,
of earning the same wages the employee
was receiving at the time of the injury.
(2) Exceptions:
(i) For scheduled permanent partial
disability benefits under 33 U.S.C.
908(c)(1)–(20) that are not preceded by
a permanent total, temporary total, or
temporary partial disability resulting
from the same injury, the date of
disability is the date on which the
employee first becomes permanently
impaired by the injury to the scheduled
member.
(ii) For an occupational disease that
does not immediately result in
disability, the date of disability is the
date on which the employee becomes
aware, or in the exercise of reasonable
diligence or by reason of medical advice
should have been aware, of the
relationship between his or her
employment, the disease, and the
disability.
(iii) For any disability lasting 14 or
fewer days, the date of disability is 4
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17291
days after the date on which the
employee first became incapable,
because of an injury, of earning the
same wages the employee was receiving
at the time of the injury.
Fiscal year or FY means the period
from October 1 of a calendar year until
September 30 of the following calendar
year.
Maximum rate means the maximum
weekly compensation rate calculated by
the Department for a given fiscal year as
described in § 702.804(b).
Minimum rate means the minimum
weekly compensation rate calculated by
the Department for a given fiscal year as
described in § 702.804(c).
Section 10(f) adjustment means the
annual increase that certain claimants
receiving compensation for permanent
total disability or death are entitled to
each fiscal year under 33 U.S.C. 910(f)
and as calculated by the Department as
described in § 702.701(b).
§ 702.804 What are the weekly maximum
and minimum rates for each fiscal year and
how are they calculated?
(a) For each fiscal year, the
Department must determine a weekly
maximum and minimum compensation
rate. These amounts are called the
maximum and minimum rates in this
subchapter. In combination with other
factors, these rates are used to determine
compensation payments under the Act.
(b) The maximum compensation rate
in effect for a given fiscal year is 200%
of the national average weekly earnings
of production or nonsupervisory
workers on private, nonagricultural
payrolls, as calculated by the
Department, for the first three quarters
of the preceding fiscal year.
(c) The minimum compensation rate
in effect for a given fiscal year is 50%
of the national average weekly earnings
of production or nonsupervisory
workers on private, nonagricultural
payrolls, as calculated by the
Department, for the first three quarters
of the preceding fiscal year.
Maximum Rates
§ 702.805 What weekly maximum rates
apply to compensation for permanent
partial disability, temporary total disability,
and temporary partial disability?
(a) The maximum rate in effect on the
date of disability applies to all
compensation payable for permanent
partial disability, temporary partial
disability, and temporary total
disability.
(b) Examples:
(1) Employee A suffers a covered
workplace injury on April 1, 2000, is
temporarily totally disabled from that
day through June 4, 2002, and is
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Federal Register / Vol. 83, No. 76 / Thursday, April 19, 2018 / Rules and Regulations
thereafter permanently partially
disabled. All compensation payable for
A’s disability is subject to the FY 2000
maximum rate.
(2) Employee B suffers a covered
workplace injury on August 25, 2010,
and is temporarily totally disabled until
September 25, 2010, when he returns to
work. On January 3, 2011, he again
becomes temporarily totally disabled
from the same injury. He ceases work
and is unable to return until November
22, 2012. All compensation payable for
B’s disability is subject to the FY 2010
maximum rate.
(3) Employee C retires on May 6,
2011. She discovers on November 10,
2012, that she has a compensable
occupational disease. All compensation
payable for C’s occupational disease is
subject to the FY 2013 maximum rate.
See § 702.601(b) (occupational diseases
discovered post-retirement are
compensated as permanent partial
disabilities).
rmajette on DSKBCKNHB2PROD with RULES
§ 702.806 What weekly maximum rates
apply to compensation for permanent total
disability?
(a) The maximum rate in effect on the
date that the employee became totally
and permanently disabled applies to all
compensation payable for permanent
total disability during that fiscal year.
(b) For all periods the employee is
permanently and totally disabled in
subsequent fiscal years, the weekly
compensation payable is subject to each
subsequent year’s maximum rate.
(c) If a claimant is receiving
compensation for permanent total
disability at the maximum rate for the
current fiscal year, but the next fiscal
year’s maximum rate will be higher than
the claimant’s calculated compensation
rate, the claimant’s compensation for
the next fiscal year will increase by the
amount of the 10(f) adjustment, subject
to the maximum rate for the next fiscal
year.
(d) Examples:
(1) Employee A suffers a covered
workplace injury on April 1, 2000, and
is permanently and totally disabled
from that date forward. A’s
compensation for the period from April
1, 2000, until September 30, 2000, is
subject to the FY 2000 maximum rate.
Beginning October 1, 2000, A’s
compensation for FY 2001 is subject to
the FY 2001 maximum rate,
compensation for FY 2002 is subject to
the FY 2002 maximum rate, etc.
(2) Employee B suffers a covered
workplace injury on April 1, 2000, is
temporarily totally disabled from that
day through June 3, 2002, and is
thereafter permanently totally disabled.
B’s compensation for the period from
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14:35 Apr 18, 2018
Jkt 244001
April 1, 2000, through June 3, 2002, is
subject to the FY 2000 maximum rate
(see § 702.805(a)). B’s compensation for
the period from June 4, 2002, through
September 30, 2002, is subject to the FY
2002 maximum rate. Beginning October
1, 2002, B’s compensation for FY 2003
is subject to the FY 2003 maximum rate,
compensation for FY 2004 is subject to
the FY 2004 maximum rate, etc.
(3) Employee C suffers a covered
workplace injury in FY 2009 and is
permanently totally disabled from that
day forward. He was earning $1,950.00
a week when he was injured, making his
calculated compensation rate $1,300.00
($1,950.00 × 2 ÷ 3). His calculated
compensation rate exceeds the
maximum rate from FY 2009–2012;
thus, his compensation is limited to
each year’s maximum rate. In FY 2013,
C’s calculated compensation rate of
$1,300.00 is, for the first time, less than
the FY 2013 maximum rate of $1,325.18.
Applying the FY 2013 2.31% section
10(f) adjustment to C’s FY 2012
compensation rate of $1,295.20 results
in a compensation rate of $1,325.00
($1,295.20 × .0231 = $29.92, rounded to
the nearest cent; $1,295.20 + $29.92 =
$1,325.12, rounded to the nearest
dollar). This amount falls just below the
FY 2013 maximum rate of $1,325.18.
Thus, C’s benefit rate for FY 2013 is
$1,325.00, and is not limited by the
maximum rate.
§ 702.807 What weekly maximum rates
apply to death benefits?
(a) The maximum rate in effect on the
date that the employee died applies to
all death benefits payable during that
fiscal year.
(b) Aggregate weekly death benefits
paid to all eligible survivors during the
fiscal year in which the employee died
must not exceed the lower of—
(1) The maximum rate for that fiscal
year; or
(2) The employee’s average weekly
wages.
(c) For subsequent fiscal years—
(1) Aggregate weekly death benefits
paid during each subsequent fiscal year
are subject to each subsequent year’s
maximum rate.
(2) If death benefits were paid in the
first year at the employee’s full average
weekly wage under paragraph (b)(2) of
this section, the aggregate weekly death
benefits paid for each subsequent year
may not exceed the current benefit rate
plus the subsequent year’s section 10(f)
adjustment (see § 702.701).
(d) Post-retirement occupational
diseases: Notwithstanding paragraphs
(a) through (c) of this section, if an
employee’s death results from an
occupational disease where the date of
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Frm 00006
Fmt 4700
Sfmt 4700
disability occurred after the employee
voluntarily retired—
(1) Aggregate weekly death benefits
paid to all eligible survivors during the
fiscal year in which the employee died
must not exceed the lower of:
(i) The maximum rate for that fiscal
year; or
(ii) One fifty-second part of the
employee’s average annual earnings
during the 52-week period preceding
retirement.
(2) For subsequent fiscal years—
(i) Aggregate weekly death benefits
paid during each subsequent fiscal year
are subject to each subsequent year’s
maximum rate.
(ii) If death benefits were paid in the
first year at 1/52 part of the employee’s
average annual earnings prior to
retirement under paragraph (d)(1)(ii) of
this section, the aggregate weekly death
benefits paid for each subsequent year
may not exceed the current benefit rate
plus the subsequent year’s section 10(f)
adjustment (see § 702.701).
(e) Examples:
(1) Employee A suffers a covered
workplace injury on May 1, 2013, and
is permanently and totally disabled
from that date until August 1, 2014,
when he dies due to the injury. He has
one eligible survivor and his average
weekly wage at the time of injury was
$3,000.00. The calculated compensation
rate for A’s survivor is $1,500.00 (i.e.,
50% of A’s average weekly wage). A’s
weekly survivor’s benefits for the period
from August 2, 2014, to September 30,
2014, are limited to the FY 2014
maximum rate of $1,346.68. Beginning
October 1, 2014, A’s survivor’s benefits
for FY 2015 are subject to the FY 2015
maximum rate, benefits for FY 2016 are
subject to the FY 2016 maximum rate,
etc.
(2) Employee B suffers a covered
workplace injury and dies on December
1, 2012. She has one eligible survivor
and her average weekly wage was
$300.00. Because B’s average weekly
wage of $300.00 falls below the FY 2013
national average weekly wage of
$662.59, death benefits are calculated at
50% of that national average wage (see
33 U.S.C. 909(e)). This yields a
calculated compensation rate of
$331.30. But because this rate exceeds
B’s actual average weekly wages, weekly
death benefits payable during FY 2013
are limited to $300.00. In FY 2014, B’s
survivor is entitled to a 1.62% section
10(f) adjustment, resulting in weekly
death benefits of $305.00 ($300.00 ×
.0162 = $4.86; $300.00 + $4.86 =
$304.86, rounded to the nearest dollar).
B’s survivor would continue to receive
section 10(f) adjustments in subsequent
fiscal years.
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(3) Employee C retired on February 1,
1998. During his last year of
employment, he earned $23,000. He
discovers on April 15, 2002, that he has
a compensable occupational disease
resulting in a 50% permanent
impairment. See § 702.601(b). Because
he retired more than one year before this
date, his payrate for calculating
compensation is the FY 2002 national
average weekly wage, or $483.04. See
§ 702.603(b). He is entitled to weekly
compensation of $161.01 ($483.04 × 2 ÷
3 × 50%). C dies from the disease on
June 1, 2015, leaving two survivors. The
payrate for calculating death benefits is
the FY 2015 national average weekly
wage, or $688.51. See § 702.604(b). The
survivors’ aggregate calculated
compensation rate is $459.01 ($688.51 ×
2 ÷ 3). But because compensation
cannot exceed 1⁄52 part of C’s last year
of earnings, aggregate weekly death
benefits payable for FY 2015 are limited
to $442.31 ($23,000 ÷ 52). For FY 2016,
C’s survivors are entitled to a 2.10%
section 10(f) adjustment resulting in
weekly death benefits of $452.00
($442.31 × .021 = $9.29, rounded to the
nearest cent; $442.31 + $9.29 = $451.60,
rounded to the nearest dollar). C’s
survivors would continue to receive
section 10(f) adjustments in subsequent
fiscal years.
Minimum Rates
§ 702.808 What weekly minimum rates
apply to compensation for partial disability?
There is no minimum rate for
compensation paid for partial disability,
whether temporary or permanent.
§ 702.809 What weekly minimum rates
apply to compensation for temporary total
disability?
(a) The minimum compensation
payable for temporary total disability is
the lower of:
(1) The minimum rate in effect on the
date of disability, or
rmajette on DSKBCKNHB2PROD with RULES
(2) The employee’s average weekly
wage on the date of disability.
(b) Example: Employee A suffers a
covered workplace injury on May 6,
2014. He is temporarily totally disabled
until November 6, 2015, when he
returns to work. His average weekly
wages at the time of disability were
$500.00. Because his calculated
compensation rate (i.e., 66 and 2⁄3% of
$500.00, or $333.34) is lower than the
$336.67 FY 2014 minimum rate, A’s
compensation is raised to $336.67 for
the entire period of his disability.
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Jkt 244001
§ 702.810 What weekly minimum rates
apply to compensation for permanent total
disability?
(a) The weekly minimum
compensation payable for the fiscal year
in which the employee became
permanently and totally disabled is the
lower of:
(1) The minimum rate in effect on the
date of disability, or
(2) The employee’s average weekly
wage on the date of disability.
(b) For all periods the employee is
permanently and totally disabled in
subsequent fiscal years, the weekly
minimum compensation payable is the
lower of:
17293
Signed at Washington, DC, on April 13,
2018.
Julia K. Hearthway,
Director, Office of Workers’ Compensation
Programs.
[FR Doc. 2018–08133 Filed 4–18–18; 8:45 am]
BILLING CODE 4510–CR–P
DEPARTMENT OF LABOR
Mine Safety and Health Administration
30 CFR Parts 56 and 57
[Docket No. MSHA–2014–0030]
RIN 1219–AB87
(1) Each subsequent fiscal year’s
minimum rate, or
Examinations of Working Places in
Metal and Nonmetal Mines
(2) The employee’s average weekly
wage on the date of disability.
AGENCY:
(c) Example: Employee A suffers a
covered workplace injury on April 1,
2003, and is permanently totally
disabled from that day forward. He was
earning $250.00 a week when he was
injured. His calculated compensation
rate is $166.67 ($250 × 2 ÷ 3). The FY
2003 minimum rate is $249.14. Because
A’s calculated compensation rate is
below the FY 2003 minimum rate, and
his actual weekly wage is above that
rate, he is entitled to compensation at
the minimum rate of $249.14 from April
1, 2003, to September 30, 2003. The FY
2004 minimum rate is $257.70. Because
A’s actual weekly wages on the date of
disability are lower than the FY 2004
minimum rate, A’s minimum weekly
compensation rate for FY 2004 is
$250.00. His weekly compensation rate
for FY 2004, however, is higher because
of a section 10(f) adjustment. For FY
2004, A’s compensation rate is
increased by a 3.44% section 10(f)
adjustment, raising his compensation
level to $258.00 ($249.14 × .0344 =
$8.57; $249.14 + $8.57 = $257.71,
rounded to the nearest dollar).
§ 702.811 What weekly minimum rates
apply to death benefits?
(a) The average weekly wage used to
compute death benefits is the greater
of—
(1) The deceased employee’s average
weekly wages; or
(2) The national average weekly wage
in effect at the time of the employee’s
death.
(b) The weekly minimum rate does
not apply to death benefits.
PO 00000
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Sfmt 4700
Mine Safety and Health
Administration, Labor.
Announcement of public
meetings.
ACTION:
The Mine Safety and Health
Administration (MSHA) is announcing
the dates and locations of additional
public stakeholder meetings on the
Agency’s standards for Examinations of
Working Places in Metal and Nonmetal
Mines.
SUMMARY:
The meeting dates and locations
are listed in the SUPPLEMENTARY
INFORMATION section of this document.
DATES:
Federal Register
Publications: Access rulemaking
documents electronically at https://
www.msha.gov/regsinfo.htm or https://
www.regulations.gov [Docket Number:
MSHA–2014–0030].
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Sheila A. McConnell, Director, Office of
Standards, Regulations, and Variances,
MSHA, at mcconnell.sheila.a@dol.gov
(email), 202–693–9440 (voice), or 202–
693–9441 (fax). These are not toll-free
numbers.
SUPPLEMENTARY INFORMATION:
I. Stakeholder Meetings
On April 9, 2018, MSHA published a
document (83 FR 15055) announcing six
stakeholder meetings. To expand
stakeholder outreach, MSHA has
scheduled another meeting in Seattle,
Washington and two video
teleconference (VTC) meetings to be
broadcast to seven local offices from
MSHA headquarters in Arlington, VA.
For the convenience of the public, the
complete list of stakeholder meetings is
included in this document.
E:\FR\FM\19APR1.SGM
19APR1
]]>Agencies
[Federal Register Volume 83, Number 76 (Thursday, April 19, 2018)]
[Rules and Regulations]
[Pages 17287-17293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08133]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
========================================================================
Federal Register / Vol. 83, No. 76 / Thursday, April 19, 2018 / Rules
and Regulations
[[Page 17287]]
DEPARTMENT OF LABOR
Office of Workers' Compensation Programs
20 CFR Part 702
RIN 1240-AA06
Longshore and Harbor Workers' Compensation Act: Maximum and
Minimum Compensation Rates
AGENCY: Office of Workers' Compensation Programs, Labor.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule contains regulations implementing the
Longshore and Harbor Workers' Compensation Act's provisions on maximum
and minimum amounts of compensation payable. These regulations clarify
how the Department interprets and applies these provisions in
accordance with several court decisions to ensure injured workers are
compensated properly and insurers and employers are aware of their
responsibilities. In addition, the rule implements the Act's annual
compensation-adjustment mechanism for permanent total disability
compensation and death benefits.
DATES: This rule is effective May 21, 2018.
FOR FURTHER INFORMATION CONTACT: Douglas Fitzgerald, Director, Division
of Longshore and Harbor Workers' Compensation, Office of Workers'
Compensation Programs, 202-354-9620 (this is not a toll-free number),
[email protected]. TTY/TDD callers may dial toll free 1-877-
889-5627 for further information.
SUPPLEMENTARY INFORMATION:
I. Background of This Rulemaking
On August 26, 2016, the Department issued a Notice of Proposed
Rulemaking (NPRM) under the Longshore and Harbor Workers' Compensation
Act, 33 U.S.C. 901 et seq. (LHWCA or Act), proposing rules implementing
the LHWCA's provisions on maximum and minimum amounts of compensation
payable. 81 FR 58878-90 (Aug. 26, 2016). The comment period closed on
October 25, 2016.
As explained in the NPRM, 81 FR 58878-79, the LHWCA establishes a
federal workers' compensation system for an employee's disability or
death arising in the course of covered maritime employment. 33 U.S.C.
903(a), 908, 909. LHWCA compensation is generally based on the
employee's average weekly wages at the time of his or her disabling
injury or death. 33 U.S.C. 910. Section 6 of the Act caps compensation
at a maximum of twice the applicable fiscal year's national average
weekly wage (NAWW). 33 U.S.C. 906(b)(1). Section 6 also establishes a
minimum below which compensation may not fall. The minimum rate is the
lower of fifty percent of the NAWW or the employee's actual average
weekly wages. 33 U.S.C. 906(b)(2). The Secretary of Labor determines
the NAWW for each fiscal year, and that determination applies to
employees or survivors ``currently receiving'' compensation for
permanent total disability or death, as well as those ``newly awarded''
compensation of any type, including for partial and temporary
disability. 33 U.S.C. 906(b)(3), (c).
In addition to the provisions in section 6 that allow for
adjustments to the maximum and minimum compensation rates based on the
NAWW, section 10(f) of the Act provides another mechanism for adjusting
compensation amounts so that their value is not eroded over time.
Benefits payable for permanent total disability or death are increased
at the beginning of each fiscal year by the same percentage as any
increase in the NAWW, but no more than five percent per year. 33 U.S.C.
910(f). Section 10(f) applies to all claimants receiving compensation
for permanent total disability or death, while section 6 applies only
to those whose compensation is affected by the maximum or minimum
rates.
The Department proposed rules to implement the minimum and maximum
compensation rate provisions of section 6(c), specifically clarifying
which maximum compensation rates apply to any particular injury under
the section's ``newly awarded'' and ``currently receiving'' clauses,
and relatedly, how the Act's minimum compensation provisions apply.
Additionally, the proposed rules implement section 10(f)'s annual
adjustment provision generally and address how section 10(f) integrates
with section 6's maximum and minimum compensation rates.
As the NPRM discussed, these rules are primarily based on the
Supreme Court's controlling decision in Roberts v. Sea-Land Services,
Inc., 566 U.S. 93 (2012), the Ninth and Eleventh Circuits' decisions in
Roberts v. Dir., OWCP, 625 F.3d 1204 (9th Cir. 2010), and Boroski v.
Dyncorp Intern., 700 F.3d 446 (11th Cir. 2012), and the Benefits Review
Board's decisions in Reposky v. Int'l Transp. Servs., 40 BRBS 65
(2006), and Lake v. L-3 Communications, 47 BRBS 45 (2013). Aside from
one small exception, those decisions and this rule comport with the
Director's longstanding interpretation and application of the maximum
and minimum compensation provisions. 81 FR 58887. Additionally, the
Department has been following the Ninth Circuit's construction of the
statute since 2012 and the regulations reflect this construction as
well.
The Department received only six written comments in response to
the NPRM from a variety of entities in the longshore industry. The
commenters included longshore employer associations, insurance-industry
members, and longshore claims administrators associations. These
comments are addressed in Section III below.
This rule is not an Executive Order 13771 regulatory action because
this rule is not significant under Executive Order 12866.
II. Statutory Authority
Section 39(a) of the LHWCA, 33 U.S.C. 939(a), authorizes the
Secretary of Labor to prescribe rules and regulations necessary for the
administration of the Act.
III. Response to Significant Comments and Explanation of Changes
Most commenters provided general remarks about the rulemaking
rather than comments on specific proposed regulations. Thus, rather
than including a full section-by-section analysis in the discussion
below, the Department's response is organized by the broader issues
raised. The Department
[[Page 17288]]
appreciates these comments and has made one change to the final rule in
response.
A. Application of ``Newly Awarded Compensation'' Clause
Several commenters stated that the proposed rules addressing the
application of section 6(c)'s ``newly awarded'' clause were unnecessary
because the Supreme Court had already clearly addressed how to apply
the clause in Roberts, 132 U.S. 1350. The fact that the Supreme Court
has addressed the issue does not make this part of the rule
unnecessary. The rule seeks to ensure a consistent application of
section 6(c) in its entirety by addressing the proper application of
both the ``newly awarded'' and ``currently receiving'' clauses.
Codifying the Supreme Court's ruling in a regulation clarifies and
informs all stakeholders of the proper interpretation of the provision.
The rule also provides additional guidance with concrete examples of
how the Roberts decision applies in a variety of factual situations.
Accordingly, the Department believes the regulations implementing the
``newly awarded'' clause are important and has retained them in the
final rule.
B. Application of ``Currently Receiving'' Clause
Several commenters objected generally to the proposed rules
clarifying the application of the ``currently receiving'' clause of
section 6(c). These commenters argued that the rule is premature
because the Supreme Court declined to address the application of that
clause in Roberts, 564 U.S. 1066, and to date, only two Courts of
Appeals have addressed it. See Boroski, 700 F.3d 446, Roberts, 625 F.3d
1204. Some of these commenters expressed concerns that the rule would
preempt further development through the courts on matters that were not
considered at any stage of the Roberts litigation, namely, the
computation of the minimum compensation rate under section 6(b),
computation of weekly compensation payable for death under section
9(e), or the computation of a claimant's average weekly wage under
section 10. On the other hand, one commenter commended the Department
for using the rulemaking process to resolve legal issues arising from
judicial statutory interpretations.
The Department is not required to wait for an issue to be
adjudicated by the Supreme Court or any other court before it can
promulgate regulations to administer the LHWCA. Indeed, litigation
often demonstrates the need for an agency regulation. See generally
Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 740-41 (1996)
(fact that agency regulation was prompted by litigation does not
undermine deference agency is due; ``That it was litigation which
disclosed the need for the regulation is irrelevant.'') Here, the
litigation in Roberts, Boroski, Reposky, Lake and other cases
highlighted the need for regulations in this area. And this rule falls
well within the scope of the Secretary of Labor's authority to
prescribe rules and regulations necessary for the administration of the
LHWCA. 33 U.S.C. 939(a).
Furthermore, as explained in the NPRM, the rule does not mark a
change in the Director's longstanding interpretation and application of
the maximum and minimum compensation provisions. 81 FR 58887. The
Department has been following the Ninth Circuit's construction of the
statute in its entirety since 2012, and aside from one small exception,
had been following this construction since the Board's 2006 decision in
Reposky, 40 BRBS 65. That exception involved cases in which the
employee's disability was initially something other than permanent
total--temporary total, permanent partial, or temporary partial--and in
a later fiscal year became permanently totally disabling. In Reposky,
the Department took the view that the employee's compensation amount
should remain at the maximum rate in effect on the date of disability
until the next October 1, at which time the employee would become
subject to the new fiscal year's maximum rate. But the Ninth Circuit
held in Roberts that the employee need not wait until the next October
1 and is instead immediately subject to the maximum rate in effect on
the day he or she becomes permanently totally disabled under section
6(c)'s ``currently receiving'' clause. Roberts, 625 F.3d at 1208-09.
The rule reflects this construction and clarifies the Department's
longstanding interpretation of the other aspects of section 6(c).
One commenter contended that the rule is inconsistent with the
Benefit Review Board's approach in Pittman v. New Century Fabricators,
Inc., 50 BRBS 17 (2016). In Pittman, the Board declined to extend the
Supreme Court's reasoning in Estate of Cowart v. Nicklos Drilling Co.,
505 U.S. 469 (1992), to an issue not directly addressed by the Court.
The Board held that ``absent a Supreme Court or circuit court decision
to the contrary,'' prior Board decisions on the specific issue in the
case established the precedent that bound the Board. 50 BRBS at 20. The
comment argues that because the Supreme Court declined to address the
application of the ``currently receiving'' clause in Roberts, the
Board's approach in Pittman would dictate that the Department should
not address the application of the clause. This ignores two facts.
First, Pittman says nothing about the Department's authority to issue a
rule. Second, while the Supreme Court did not interpret the ``currently
receiving'' clause, the Ninth and Eleventh Circuits did, and this rule
is consistent with both those rulings. See Boroski, 700 F.3d 446;
Roberts, 625 F.3d 1204.
The rule is also consistent with the Board's decision in Lake, 47
BRBS 45, which adopted the same interpretation of section 6(c)'s
``currently receiving'' clause as the Ninth and Eleventh Circuits. In
Lake, the Board held that a claimant is ``currently receiving
compensation'' under section 6(c) ``during a period in which he is
entitled to receive compensation, regardless of whether his employer
actually pays it.'' Id. at 48. The Board also held that when a
claimant's temporary total disability changes to permanent total
disability during a fiscal year, the maximum rate in effect during that
year applies immediately. Id. Thus, the rule's implementation of the
section 6(c) ``currently receiving'' clause is consistent with the
precedent from the Board and all courts of appeals that have ruled on
the issue.
Two commenters stated that Congress did not intend the ``currently
receiving'' clause to have any effect beyond the four-fiscal-year
period after the 1972 amendments to the LHWCA, which annually increased
the maximum compensation rate until it reached 200 percent of the
national average weekly wage in 1975. They contended that Congress
intended section 6(c) to apply only to claimants who were ``currently
receiving compensation for permanent total disability or death'' during
the four-year phase-in period.
Later statutory enactments, however, demonstrate that Congress
intended to apply the ``currently receiving'' clause beyond the phase-
in period. In 1984, Congress amended section 6 again to remove the
phase-in provisions yet retained the ``currently receiving'' clause and
reenacted it as section 6(c). If Congress had intended the outcome
urged by the commenters--to have section 6(c)'s ``currently receiving
clause'' apply only to the phase-in years--it could have drafted
section 6(c) to say exactly that. Instead, Congress removed the phase-
in provisions, making reference to them impossible. It nonetheless
retained section 6(c) and
[[Page 17289]]
changed the text of the provision to make clear that all claimants
``currently receiving compensation for permanent total disability or
death'' are subject to the maximum rate based on the national average
weekly wage as set under section 6(b)(3). Congress knew that, under
section 6(b)(3), the national average weekly wage is determined anew
every year, and thus must be deemed to have understood that the maximum
rate applicable to those currently receiving compensation for permanent
total disability or death would also change annually. See generally
Pucetti v. Ceres Gulf, 24 BRBS 25, 31 (1990) (considering phase-in
provisions in context of 1984 amendments and holding that ``during a
yearly period when a given national average weekly wage is in effect,
those `currently receiving' benefits for permanent total disability or
death are entitled to that year's new maximum.''); see Dir., OWCP v.
Perini North River Assoc., 459 U.S. 297 (1983) (where Congress amended
the Act to extend coverage to land-based workers if they met a status
test for maritime employees, it was presumed to know that the law
already covered those injured on navigable waters, and its amendment of
the Act was not intended to require those ``traditionally covered''
employees to also prove status).
Several commenters stated that section 6 does not allow for the
maximum compensation rate applicable to a claimant to change each year,
i.e., that even a permanently totally disabled claimant is forever
subject to the maximum rate in effect at the time of his injury. First,
this is contrary to the text of the provision. Section 6 sets the
maximum rate at 200 percent of the national average weekly wage, 33
U.S.C. 906(b)(1), requires a new national average weekly wage to be
determined each October 1, 33 U.S.C. 906(b)(3), and provides that a
given year's determination ``shall apply to employees . . . currently
receiving compensation for permanent total disability'' during that
year. As a claimant can be ``currently receiving compensation for
permanent total disability'' in more than one year, it is apparent that
he can be subject to a different national average weekly wage--and,
thus, a different maximum rate as determined by that national average
weekly wage--for each year in which he is being compensated for
permanent total disability. Second, the commenter's approach is
contrary to the legislative history of the 1972 Amendments. See H.R.
Report 92-1441 at 3; S. Report 92-1125 at 5-6. Third, the Board
rejected this very argument in Marko v. Morris Boney, Inc., 23 BRBS 353
(1990), a decision the Board reaffirmed in Lake, 47 BRBS at 48-50.
Finally, this approach would treat those receiving compensation for
permanent total disability or death the same as those receiving
compensation for any other type of disability, while the statute
clearly treats permanent total disability and death differently.
C. Impact on Average Weekly Wage Calculations
A few commenters expressed concern that the rule could adversely
affect how an individual's average weekly wage is calculated under
section 10, 33 U.S.C. 910. The Department does not intend this rule to
govern the basic average weekly wage calculation necessary to determine
the amount of compensation payable. As explained in the NPRM, ``[t]he
proposed regulations do not govern general compensation calculations.''
81 FR 58881. Instead, the maximum and minimum regulations apply only
once that calculation (called the ``calculated compensation rate'' in
the rule) is made.
D. Application of the Rule to Existing Injuries, Disabilities, and
Deaths
Two commenters stated that the Department should limit the proposed
rule's applicability to future injuries. They contended applying the
new rules to currently existing matters could lead to large additional
liabilities (which are not fully secured) if claimants with pending
cases seek increased compensation under the new standards.
In general, an agency may apply a new regulation to existing
matters when it does not change the legal landscape. Thus, a rule that
``is substantively consistent with prior regulations or prior agency
practices, and has been accepted by all Courts of Appeals to consider
the issue,'' may be applied to matters pending at the time the
regulation is promulgated. Nat'l Mining Assoc. v. Dept. of Labor, 292
F.3d 849, 860 (D.C. Cir. 2002). Conversely, agencies are not required
``to apply rules retroactively even where it would be permissible for
them to do so.'' Grant Medical Center v. Hargan, 875 F.3d 701, 706
(D.C. Cir. 2017).
Under these principles, the Department believes it could choose to
apply the rule to all matters, including those injuries, disabilities,
and deaths occurring before the rule's effective date. The Department's
interpretation of the ``newly awarded'' and ``currently receiving''
clauses is longstanding (since at least 1979 for the former and 2012
for the latter) and fully consistent with all Court of Appeals and
Supreme Court precedent. See Nat'l Mining Assoc., 292 F.3d at 860. The
rules implementing the minimum compensation provisions and section
10(f) similarly ensconce the Department's longstanding positions and
are not inconsistent with any Court of Appeals precedent.
But given the commenters' expressed concern, the Department has
decided to apply the rule only to injuries and deaths occurring after
the rule's effective date and has added a clause to Sec. 702.802(a) to
make this clear. Because the current case law interpreting these
provisions and the rule reach the same conclusions, the Department sees
little difference in applying the rule retroactively and applying it
only prospectively. The Department makes this change, however, to
emphasize its intent not to upset any settled expectations the
regulated parties may hold.
Despite the Department's decision on this issue, parties should be
aware that existing case law construing section 6(c) still governs
injuries, disabilities and deaths occurring before the rule's effective
date. The Department will continue to administer claims in accordance
with those precedents. Rivers v. Roadway Exp., Inc., 511 U.S. 298, 312-
313 and n.12 (``A judicial construction of a statute is an
authoritative statement of what the statute meant before as well as
after the decision of the case giving rise to that construction,'' and
thus ``of what the statute has meant continuously since the date when
it became law.'').
Finally, the examples in the regulations continue to use maximum
and minimum compensation rates for injuries or deaths that occurred in
fiscal years prior to the effective date of this rule. This is done out
of necessity; the Department cannot calculate with any certainty future
maximum and minimum compensation amounts because they are based on the
NAWW, which is determined anew each year. The Department believes using
concrete numbers from past fiscal years will better inform the
regulated parties about how the regulations should be applied. Of
course, because the examples apply the current state of the law, they
may be instructive in calculating compensation for disabilities and
deaths occurring before the rule's effective date even though not
explicitly governed by the rule.
IV. Collection of Information (Subject to the Paperwork Reduction Act)
This rulemaking imposes no new collections of information.
[[Page 17290]]
V. Executive Orders 12866 and 13563 (Regulatory Planning and Review)
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, reducing costs, harmonizing rules, and promoting flexibility.
The Department has considered this rule with these principles in mind
and has concluded that the regulated community will benefit from this
regulation.
This rule will provide the parties with greater guidance on
applying the Act's maximum and minimum compensation provisions and
section 10(f) adjustments in determining the amount of disability
compensation or death benefits payable. By clarifying how these
provisions apply, the rule will also promote consistency so that
similarly situated claimants receive similar compensation or death
benefits. In addition, the rule will benefit the regulated community by
forestalling further litigation over the ``currently receiving'' clause
in cases governed by this rule. The Department also sees no
countervailing burden--economic or otherwise--other than those imposed
by the statute itself that would counsel against promulgating this
rule.
One commenter generally stated that the Department had not fully
addressed the proposed rule's financial impact on the industry or
compensation claimants, noting the importance of predictability for
reserving funds to cover compensation payments. The final rule sets out
clear standards for applying the LHWCA's maximum and minimum
compensation provisions and will thus provide the predictability the
commenter seeks.
Finally, because this is not a ``significant regulatory action''
within the meaning of Executive Order 12866, the Office of Management
and Budget waived its review.
VI. Regulatory Flexibility Act and Executive Order 13272 (Proper
Consideration of Small Entities in Agency Rulemaking)
The Regulatory Flexibility Act of 1980, as amended (5 U.S.C. 601 et
seq.), requires an agency to prepare a regulatory flexibility analysis
when it proposes regulations that will have ``a significant economic
impact on a substantial number of small entities'' or to certify that
the proposed regulations will have no such impact, and to make the
analysis or certification available for public comment.
For the reasons set forth in the NPRM, the Department determined
that a complete regulatory flexibility analysis was not necessary, and
certified that the proposed rules would not have a significant economic
impact on a substantial number of small entities. 81 FR 58887. The
Department invited public comment on the certification and delivered a
copy of the certification to the chief counsel for Advocacy of the
Small Business Administration. See generally 5 U.S.C. 605.
The Chief Counsel for Advocacy has not filed comments on the
certification. Although one commenter generally stated that the
Department had not quantified the economic impact on industry or the
benefit to Longshore employees, the commenter provided no additional
information regarding the rule's potential impact on small entities.
Because the comments provide no basis for departing from its prior
conclusion, the Department again certifies that this rule will not have
a significant economic impact on a substantial number of small
entities. As a result, no regulatory flexibility analysis is required.
VII. Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531
et seq.) directs agencies to assess the effects of Federal regulatory
actions on State, local, and tribal governments, and the private
sector, ``other than to the extent that such regulations incorporate
requirements specifically set forth in law.'' For purposes of the
Unfunded Mandates Reform Act, this rule does not include any Federal
mandate that may result in increased expenditures by State, local, and
tribal governments, or increased expenditures by the private sector of
more than $100,000,000.
XIII. Executive Order 13132 (Federalism)
The Department has reviewed this rule in accordance with Executive
Order 13132 regarding federalism, and has determined that it does not
have ``federalism implications.'' The rule will not ``have substantial
direct effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
IX. Executive Order 12988 (Civil Justice Reform)
This rule meets the applicable standards in sections 3(a) and
3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden.
List of Subjects in 20 CFR Part 702
Administrative practice and procedure, Claims, Longshore and harbor
workers, Maximum compensation rates, Minimum compensation rates,
Workers' compensation.
For the reasons stated in the preamble, the Department of Labor
amends 20 CFR part 702 as follows:
PART 702--ADMINISTRATION AND PROCEDURE
0
1. The authority citation for part 702 is revised to read as follows:
Authority: 5 U.S.C. 301, and 8171 et seq.; 33 U.S.C. 901 et
seq.; 42 U.S.C. 1651 et seq.; 43 U.S.C. 1333; Reorganization Plan
No. 6 of 1950, 15 FR 3174, 64 Stat. 1263; Secretary's Order 10-2009,
74 FR 58834.
0
2. Add subparts G and H to read as follows:
Subpart G--Section 10(f) Adjustments
Sec.
702.701 What is an annual section 10(f) adjustment and how is it
calculated?
Subpart H--Maximum and Minimum Compensation Rates
General
Sec.
702.801 Scope and intent of this subpart.
702.802 Applicability of this subpart.
702.803 Definitions.
702.804 What are the weekly maximum and minimum rates for each
fiscal year and how are they calculated?
Maximum Rates
702.805 What weekly maximum rates apply to compensation for
permanent partial disability, temporary total disability, and
temporary partial disability?
702.806 What weekly maximum rates apply to compensation for
permanent total disability?
702.807 What weekly maximum rates apply to death benefits?
Minimum Rates
702.808 What weekly minimum rates apply to compensation for partial
disability?
702.809 What weekly minimum rates apply to compensation for
temporary total disability?
702.810 What weekly minimum rates apply to compensation for
permanent total disability?
702.811 What weekly minimum rates apply to death benefits?
[[Page 17291]]
Subpart G--Section 10(f) Adjustments
Sec. 702.701 What is an annual section 10(f) adjustment and how is it
calculated?
(a) Claimants receiving compensation for permanent total disability
or death benefits are entitled to section 10(f) adjustments each fiscal
year. A section 10(f) adjustment cannot decrease the compensation or
death benefits payable to any claimant.
(b) The section 10(f) adjustment for a given fiscal year is the
lower of:
(1) The percentage by which the new fiscal year's national average
weekly wage exceeds the prior fiscal year's national average weekly
wage as determined by the Department (see Sec. 702.804(b)); or
(2) 5 percent.
(c) Section 10(f) percentage increases are applied each October 1
to the amount of compensation or death benefits payable in the prior
fiscal year.
(d) In applying section 10(f) adjustments--
(1) Calculations are rounded to the nearest dollar; and
(2) No adjustment is made if the calculated amount is less than one
dollar.
(e) A section 10(f) adjustment must not increase a claimant's
weekly compensation or death benefits beyond the applicable fiscal
year's maximum rate.
(f) Section 10(f) adjustments do not apply to compensation for
temporary or partial disability.
Subpart H--Maximum and Minimum Compensation Rates
General
Sec. 702.801 Scope and intent of this subpart.
(a) This subpart implements the Act's provisions that affect the
maximum and minimum rates of compensation and death benefits payable to
employees and survivors. These statutory provisions include sections
6(b) and (c), and 9(e). 33 U.S.C. 906(b), (c); 909(e). It is intended
that these statutory provisions be construed as provided in this
subpart.
(b) These regulations implement section 6(c), 33 U.S.C. 906(c),
based on the following concepts:
(1) An employee is ``newly awarded compensation'' when he or she
first becomes disabled due to an injury;
(2) A survivor is ``newly awarded compensation'' on the date the
employee died; and
(3) An employee or survivor is ``currently receiving compensation''
when compensation for permanent total disability or death benefits is
payable, regardless of when payment is actually made.
Sec. 702.802 Applicability of this subpart.
(a) This subpart applies to all compensation and death benefits
paid under the Act as a result of injuries or deaths occurring on or
after May 21, 2018 with the following exceptions:
(1) Amounts payable under an approved settlement (see 33 U.S.C.
908(i));
(2) Amounts paid for an employee's death to the Special Fund (see
33 U.S.C. 944(c)(1));
(3) Any payments for medical expenses (see 33 U.S.C. 907); and
(4) Any other lump sum payment of compensation or death benefits,
including aggregate death benefits paid when a survivor remarries (see
33 U.S.C. 909(b)) or aggregate compensation paid under a commutation
(see 33 U.S.C. 909(g)).
(b) The rules in this subpart governing minimum disability
compensation and death benefits do not apply to claims arising under
the Defense Base Act, 42 U.S.C. 1651 (see 42 U.S.C. 1652(a); 20 CFR
704.103).
Sec. 702.803 Definitions.
The following definitions apply to this subpart:
Calculated compensation rate means the amount of weekly
compensation for total disability or death that a claimant would be
entitled to if there were no maximum rates, minimum rates, or section
10(f) adjustments.
Date of disability. (1) Except as provided in paragraph (2) of this
definition, the date of disability is the date on which the employee
first became incapable, because of an injury, of earning the same wages
the employee was receiving at the time of the injury.
(2) Exceptions:
(i) For scheduled permanent partial disability benefits under 33
U.S.C. 908(c)(1)-(20) that are not preceded by a permanent total,
temporary total, or temporary partial disability resulting from the
same injury, the date of disability is the date on which the employee
first becomes permanently impaired by the injury to the scheduled
member.
(ii) For an occupational disease that does not immediately result
in disability, the date of disability is the date on which the employee
becomes aware, or in the exercise of reasonable diligence or by reason
of medical advice should have been aware, of the relationship between
his or her employment, the disease, and the disability.
(iii) For any disability lasting 14 or fewer days, the date of
disability is 4 days after the date on which the employee first became
incapable, because of an injury, of earning the same wages the employee
was receiving at the time of the injury.
Fiscal year or FY means the period from October 1 of a calendar
year until September 30 of the following calendar year.
Maximum rate means the maximum weekly compensation rate calculated
by the Department for a given fiscal year as described in Sec.
702.804(b).
Minimum rate means the minimum weekly compensation rate calculated
by the Department for a given fiscal year as described in Sec.
702.804(c).
Section 10(f) adjustment means the annual increase that certain
claimants receiving compensation for permanent total disability or
death are entitled to each fiscal year under 33 U.S.C. 910(f) and as
calculated by the Department as described in Sec. 702.701(b).
Sec. 702.804 What are the weekly maximum and minimum rates for each
fiscal year and how are they calculated?
(a) For each fiscal year, the Department must determine a weekly
maximum and minimum compensation rate. These amounts are called the
maximum and minimum rates in this subchapter. In combination with other
factors, these rates are used to determine compensation payments under
the Act.
(b) The maximum compensation rate in effect for a given fiscal year
is 200% of the national average weekly earnings of production or
nonsupervisory workers on private, nonagricultural payrolls, as
calculated by the Department, for the first three quarters of the
preceding fiscal year.
(c) The minimum compensation rate in effect for a given fiscal year
is 50% of the national average weekly earnings of production or
nonsupervisory workers on private, nonagricultural payrolls, as
calculated by the Department, for the first three quarters of the
preceding fiscal year.
Maximum Rates
Sec. 702.805 What weekly maximum rates apply to compensation for
permanent partial disability, temporary total disability, and temporary
partial disability?
(a) The maximum rate in effect on the date of disability applies to
all compensation payable for permanent partial disability, temporary
partial disability, and temporary total disability.
(b) Examples:
(1) Employee A suffers a covered workplace injury on April 1, 2000,
is temporarily totally disabled from that day through June 4, 2002, and
is
[[Page 17292]]
thereafter permanently partially disabled. All compensation payable for
A's disability is subject to the FY 2000 maximum rate.
(2) Employee B suffers a covered workplace injury on August 25,
2010, and is temporarily totally disabled until September 25, 2010,
when he returns to work. On January 3, 2011, he again becomes
temporarily totally disabled from the same injury. He ceases work and
is unable to return until November 22, 2012. All compensation payable
for B's disability is subject to the FY 2010 maximum rate.
(3) Employee C retires on May 6, 2011. She discovers on November
10, 2012, that she has a compensable occupational disease. All
compensation payable for C's occupational disease is subject to the FY
2013 maximum rate. See Sec. 702.601(b) (occupational diseases
discovered post-retirement are compensated as permanent partial
disabilities).
Sec. 702.806 What weekly maximum rates apply to compensation for
permanent total disability?
(a) The maximum rate in effect on the date that the employee became
totally and permanently disabled applies to all compensation payable
for permanent total disability during that fiscal year.
(b) For all periods the employee is permanently and totally
disabled in subsequent fiscal years, the weekly compensation payable is
subject to each subsequent year's maximum rate.
(c) If a claimant is receiving compensation for permanent total
disability at the maximum rate for the current fiscal year, but the
next fiscal year's maximum rate will be higher than the claimant's
calculated compensation rate, the claimant's compensation for the next
fiscal year will increase by the amount of the 10(f) adjustment,
subject to the maximum rate for the next fiscal year.
(d) Examples:
(1) Employee A suffers a covered workplace injury on April 1, 2000,
and is permanently and totally disabled from that date forward. A's
compensation for the period from April 1, 2000, until September 30,
2000, is subject to the FY 2000 maximum rate. Beginning October 1,
2000, A's compensation for FY 2001 is subject to the FY 2001 maximum
rate, compensation for FY 2002 is subject to the FY 2002 maximum rate,
etc.
(2) Employee B suffers a covered workplace injury on April 1, 2000,
is temporarily totally disabled from that day through June 3, 2002, and
is thereafter permanently totally disabled. B's compensation for the
period from April 1, 2000, through June 3, 2002, is subject to the FY
2000 maximum rate (see Sec. 702.805(a)). B's compensation for the
period from June 4, 2002, through September 30, 2002, is subject to the
FY 2002 maximum rate. Beginning October 1, 2002, B's compensation for
FY 2003 is subject to the FY 2003 maximum rate, compensation for FY
2004 is subject to the FY 2004 maximum rate, etc.
(3) Employee C suffers a covered workplace injury in FY 2009 and is
permanently totally disabled from that day forward. He was earning
$1,950.00 a week when he was injured, making his calculated
compensation rate $1,300.00 ($1,950.00 x 2 / 3). His calculated
compensation rate exceeds the maximum rate from FY 2009-2012; thus, his
compensation is limited to each year's maximum rate. In FY 2013, C's
calculated compensation rate of $1,300.00 is, for the first time, less
than the FY 2013 maximum rate of $1,325.18. Applying the FY 2013 2.31%
section 10(f) adjustment to C's FY 2012 compensation rate of $1,295.20
results in a compensation rate of $1,325.00 ($1,295.20 x .0231 =
$29.92, rounded to the nearest cent; $1,295.20 + $29.92 = $1,325.12,
rounded to the nearest dollar). This amount falls just below the FY
2013 maximum rate of $1,325.18. Thus, C's benefit rate for FY 2013 is
$1,325.00, and is not limited by the maximum rate.
Sec. 702.807 What weekly maximum rates apply to death benefits?
(a) The maximum rate in effect on the date that the employee died
applies to all death benefits payable during that fiscal year.
(b) Aggregate weekly death benefits paid to all eligible survivors
during the fiscal year in which the employee died must not exceed the
lower of--
(1) The maximum rate for that fiscal year; or
(2) The employee's average weekly wages.
(c) For subsequent fiscal years--
(1) Aggregate weekly death benefits paid during each subsequent
fiscal year are subject to each subsequent year's maximum rate.
(2) If death benefits were paid in the first year at the employee's
full average weekly wage under paragraph (b)(2) of this section, the
aggregate weekly death benefits paid for each subsequent year may not
exceed the current benefit rate plus the subsequent year's section
10(f) adjustment (see Sec. 702.701).
(d) Post-retirement occupational diseases: Notwithstanding
paragraphs (a) through (c) of this section, if an employee's death
results from an occupational disease where the date of disability
occurred after the employee voluntarily retired--
(1) Aggregate weekly death benefits paid to all eligible survivors
during the fiscal year in which the employee died must not exceed the
lower of:
(i) The maximum rate for that fiscal year; or
(ii) One fifty-second part of the employee's average annual
earnings during the 52-week period preceding retirement.
(2) For subsequent fiscal years--
(i) Aggregate weekly death benefits paid during each subsequent
fiscal year are subject to each subsequent year's maximum rate.
(ii) If death benefits were paid in the first year at 1/52 part of
the employee's average annual earnings prior to retirement under
paragraph (d)(1)(ii) of this section, the aggregate weekly death
benefits paid for each subsequent year may not exceed the current
benefit rate plus the subsequent year's section 10(f) adjustment (see
Sec. 702.701).
(e) Examples:
(1) Employee A suffers a covered workplace injury on May 1, 2013,
and is permanently and totally disabled from that date until August 1,
2014, when he dies due to the injury. He has one eligible survivor and
his average weekly wage at the time of injury was $3,000.00. The
calculated compensation rate for A's survivor is $1,500.00 (i.e., 50%
of A's average weekly wage). A's weekly survivor's benefits for the
period from August 2, 2014, to September 30, 2014, are limited to the
FY 2014 maximum rate of $1,346.68. Beginning October 1, 2014, A's
survivor's benefits for FY 2015 are subject to the FY 2015 maximum
rate, benefits for FY 2016 are subject to the FY 2016 maximum rate,
etc.
(2) Employee B suffers a covered workplace injury and dies on
December 1, 2012. She has one eligible survivor and her average weekly
wage was $300.00. Because B's average weekly wage of $300.00 falls
below the FY 2013 national average weekly wage of $662.59, death
benefits are calculated at 50% of that national average wage (see 33
U.S.C. 909(e)). This yields a calculated compensation rate of $331.30.
But because this rate exceeds B's actual average weekly wages, weekly
death benefits payable during FY 2013 are limited to $300.00. In FY
2014, B's survivor is entitled to a 1.62% section 10(f) adjustment,
resulting in weekly death benefits of $305.00 ($300.00 x .0162 = $4.86;
$300.00 + $4.86 = $304.86, rounded to the nearest dollar). B's survivor
would continue to receive section 10(f) adjustments in subsequent
fiscal years.
[[Page 17293]]
(3) Employee C retired on February 1, 1998. During his last year of
employment, he earned $23,000. He discovers on April 15, 2002, that he
has a compensable occupational disease resulting in a 50% permanent
impairment. See Sec. 702.601(b). Because he retired more than one year
before this date, his payrate for calculating compensation is the FY
2002 national average weekly wage, or $483.04. See Sec. 702.603(b). He
is entitled to weekly compensation of $161.01 ($483.04 x 2 / 3 x 50%).
C dies from the disease on June 1, 2015, leaving two survivors. The
payrate for calculating death benefits is the FY 2015 national average
weekly wage, or $688.51. See Sec. 702.604(b). The survivors' aggregate
calculated compensation rate is $459.01 ($688.51 x 2 / 3). But because
compensation cannot exceed \1/52\ part of C's last year of earnings,
aggregate weekly death benefits payable for FY 2015 are limited to
$442.31 ($23,000 / 52). For FY 2016, C's survivors are entitled to a
2.10% section 10(f) adjustment resulting in weekly death benefits of
$452.00 ($442.31 x .021 = $9.29, rounded to the nearest cent; $442.31 +
$9.29 = $451.60, rounded to the nearest dollar). C's survivors would
continue to receive section 10(f) adjustments in subsequent fiscal
years.
Minimum Rates
Sec. 702.808 What weekly minimum rates apply to compensation for
partial disability?
There is no minimum rate for compensation paid for partial
disability, whether temporary or permanent.
Sec. 702.809 What weekly minimum rates apply to compensation for
temporary total disability?
(a) The minimum compensation payable for temporary total disability
is the lower of:
(1) The minimum rate in effect on the date of disability, or
(2) The employee's average weekly wage on the date of disability.
(b) Example: Employee A suffers a covered workplace injury on May
6, 2014. He is temporarily totally disabled until November 6, 2015,
when he returns to work. His average weekly wages at the time of
disability were $500.00. Because his calculated compensation rate
(i.e., 66 and \2/3\% of $500.00, or $333.34) is lower than the $336.67
FY 2014 minimum rate, A's compensation is raised to $336.67 for the
entire period of his disability.
Sec. 702.810 What weekly minimum rates apply to compensation for
permanent total disability?
(a) The weekly minimum compensation payable for the fiscal year in
which the employee became permanently and totally disabled is the lower
of:
(1) The minimum rate in effect on the date of disability, or
(2) The employee's average weekly wage on the date of disability.
(b) For all periods the employee is permanently and totally
disabled in subsequent fiscal years, the weekly minimum compensation
payable is the lower of:
(1) Each subsequent fiscal year's minimum rate, or
(2) The employee's average weekly wage on the date of disability.
(c) Example: Employee A suffers a covered workplace injury on April
1, 2003, and is permanently totally disabled from that day forward. He
was earning $250.00 a week when he was injured. His calculated
compensation rate is $166.67 ($250 x 2 / 3). The FY 2003 minimum rate
is $249.14. Because A's calculated compensation rate is below the FY
2003 minimum rate, and his actual weekly wage is above that rate, he is
entitled to compensation at the minimum rate of $249.14 from April 1,
2003, to September 30, 2003. The FY 2004 minimum rate is $257.70.
Because A's actual weekly wages on the date of disability are lower
than the FY 2004 minimum rate, A's minimum weekly compensation rate for
FY 2004 is $250.00. His weekly compensation rate for FY 2004, however,
is higher because of a section 10(f) adjustment. For FY 2004, A's
compensation rate is increased by a 3.44% section 10(f) adjustment,
raising his compensation level to $258.00 ($249.14 x .0344 = $8.57;
$249.14 + $8.57 = $257.71, rounded to the nearest dollar).
Sec. 702.811 What weekly minimum rates apply to death benefits?
(a) The average weekly wage used to compute death benefits is the
greater of--
(1) The deceased employee's average weekly wages; or
(2) The national average weekly wage in effect at the time of the
employee's death.
(b) The weekly minimum rate does not apply to death benefits.
Signed at Washington, DC, on April 13, 2018.
Julia K. Hearthway,
Director, Office of Workers' Compensation Programs.
[FR Doc. 2018-08133 Filed 4-18-18; 8:45 am]
BILLING CODE 4510-CR-P
