Longshore and Harbor Workers' Compensation Act: Electronic Filing, Settlement, and Civil Money Penalty Procedures, 80698-80712 [2020-23224]

Agencies

• DEPARTMENT OF LABOR
• Office of Workers' Compensation Programs

[Federal Register Volume 85, Number 240 (Monday, December 14, 2020)]
[Proposed Rules]
[Pages 80698-80712]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23224]


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DEPARTMENT OF LABOR

Office of Workers' Compensation Programs

20 CFR Part 702

RIN 1240-AA13


Longshore and Harbor Workers' Compensation Act: Electronic 
Filing, Settlement, and Civil Money Penalty Procedures

AGENCY: Office of Workers' Compensation Programs, Labor.

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The Office of Workers' Compensation Programs (OWCP) 
administers the Longshore and Harbor Workers' Compensation Act and its 
extensions. To improve program administration, OWCP proposes to amend 
its existing regulations to require parties to file documents 
electronically, unless otherwise provided by statute or allowed by 
OWCP, and to streamline the settlement process. Additionally, to 
promote accountability and ensure fairness, OWCP proposes new rules for 
imposing and reviewing civil money penalties prescribed by the 
Longshore Act. The new rules will set forth the procedures to contest 
OWCP's penalty determinations.

DATES: The Department invites written comments on the proposed 
regulations from interested parties. Written comments must be received 
by February 12, 2021.

ADDRESSES: You may submit written comments, identified by RIN number 
1240-AA13, by any of the following methods. To facilitate the receipt 
and processing of comments, OWCP encourages interested parties to 
submit such comments electronically.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions on the website for submitting comments.
     Regular Mail or Hand Delivery/Courier: Submit comments on 
paper to the Division of Longshore and Harbor Workers' Compensation, 
Office of Workers' Compensation Programs, U.S. Department of Labor, 
Room S-3229, 200 Constitution Avenue NW, Washington, DC 20210. The 
Department's receipt of U.S. mail may be significantly delayed due to 
security procedures. You must take this into consideration when 
preparing to meet the deadline for submitting comments.
    Instructions: All submissions received must include the agency name 
and the Regulatory Information Number (RIN) for this rulemaking. All 
comments received will be posted without change to https://www.regulations.gov, including any personal information provided.
    Docket: For access to the docket to read background documents or 
comments received, go to https://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Antonio Rios, Director, Division of 
Longshore and Harbor Workers' Compensation, Office of Workers' 
Compensation Programs, (202)-693-0040, [email protected]. TTY/TDD 
callers may dial toll free 1-877-889-5627 for further information.

SUPPLEMENTARY INFORMATION: 

I. Background of This Rulemaking

    The Longshore and Harbor Workers' Compensation Act (LHWCA or Act), 
33 U.S.C. 901-50, establishes a comprehensive federal workers' 
compensation system for an employee's disability or death arising in 
the course of covered maritime employment. Metro. Stevedore Co. v. 
Rambo, 515 U.S. 291, 294 (1995). The Act's provisions have been 
extended to (1) contractors working on military bases or U.S. 
government contracts outside the United States (Defense Base Act, 42 
U.S.C. 1651-54); (2) employees of nonappropriated fund 
instrumentalities (Nonappropriated Fund Instrumentalities Act, 5 U.S.C. 
8171-73); (3) employees engaged in operations that extract natural 
resources from the outer continental shelf (Outer Continental Shelf 
Lands Act, 43 U.S.C. 1333(b)); and (4) private employees in the 
District of Columbia injured prior to July 26, 1982 (District of 
Columbia Workers' Compensation Act of May 17, 1928, Public Law 70-419 
(formerly codified at 36 D.C. Code 501 et seq. (1973) (repealed 1979)). 
Consequently, the Act and its extensions cover a broad range of claims 
for injuries that occur throughout the United States and around the 
world.
    OWCP's sound administration of these programs involves periodic 
reexamination of the procedures used for claims processing and related 
issues. OWCP has identified three areas where improvements can be made. 
The first is expanding electronic filing and requiring private parties 
to transmit all documents and information to OWCP electronically, 
except when the individual does not have a computer, lacks access to 
the internet, or lacks the ability to utilize the internet. Receiving 
documents and information in electronic form speeds claims 
administration and simplifies recordkeeping requirements. The second is 
streamlining settlement procedures. This too should speed the 
settlement-approval process and lessen the parties' burdens to submit 
multiple documents to have a settlement considered. Finally, OWCP is 
updating its existing penalty regulations and filling a gap by 
proposing a procedural scheme for employers to challenge penalties 
assessed against them. These rules will better apprise employers of 
their obligations and give them a clear path to exercise their rights 
to challenge any penalty imposed by OWCP.
    On April 28, 2020, OWCP hosted a public outreach webinar to solicit 
stakeholders' views on how OWCP could improve its processes in the 
three areas covered in this rulemaking. See E.O. 13563, sec. 2(c) 
(January 18, 2011) (requiring public consultation prior to issuing a 
proposed regulation). OWCP has considered the feedback received during 
that session in developing the proposed rules.
    This rule is not an Executive Order 13771 regulatory action because 
it is not significant under Executive Order 12866.

II. Direct Final Rulemaking

    In addition to this Notice of Proposed Rulemaking (NPRM), OWCP is 
concurrently publishing a companion direct final rule (DFR) elsewhere 
in this issue of the Federal Register. In direct final rulemaking, an 
agency publishes a DFR in the Federal Register with a statement that 
the rule will go into effect unless the agency receives significant 
adverse comment within a specified period. The agency concurrently 
publishes an identical proposed rule. If the agency receives no 
significant adverse comment in response to the DFR, the rule goes into 
effect. If the agency receives significant adverse comment, the agency 
withdraws the DFR and treats such comment as submissions on the 
proposed rule. An agency typically uses direct final rulemaking when it 
anticipates the rule will be non-controversial.
    By simultaneously publishing this NPRM with a DFR, notice-and-
comment rulemaking will be expedited if OWCP receives significant 
adverse comment and withdraws the DFR. The proposed and direct final 
rules are substantively identical, and their respective comment

[[Page 80699]]

periods run concurrently. OWCP will treat comment received on the NPRM 
as comment regarding the companion DFR and vice versa. Thus, if OWCP 
receives significant adverse comment on either the NPRM or the DFR, 
OWCP will publish a Federal Register notice withdrawing the DFR and 
will proceed with this proposed rule.
    For purposes of the DFR, a significant adverse comment is one that 
explains why the rule (1) is inappropriate, including challenges to the 
rule's underlying premise or approach; or (2) will be ineffective or 
unacceptable without a change. In determining whether a significant 
adverse comment necessitates withdrawal of the DFR, OWCP will consider 
whether the comment raises an issue serious enough to warrant a 
substantive response had it been submitted in a standard notice-and-
comment process. A comment recommending an addition to the rule will 
not be considered significant and adverse unless the comment explains 
how the DFR would be ineffective without the addition.
    OWCP requests comments on all issues related to this rule, 
including economic or other regulatory impacts on the regulated 
community.

III. Overview of the Proposed Rule

A. Electronic Transmission of Documents and Information and Electronic 
Signatures

    The Department's current regulations implementing the LHWCA at 20 
CFR part 702 allow OWCP and private parties to exchange documents and 
information through certain electronic methods or in paper form, at the 
sender's option. 20 CFR 702.101. The Department added optional 
electronic transmission to the regulations in 2015. 80 FR 12917-33 
(March 12, 2015). Since then, OWCP has continued to expand its use of 
electronic case files and is working towards a fully electronic case-
file environment.
    Electronic case files have many advantages, including allowing 
claims staff remote access to documents and information; efficient case 
file transmission to the Office of Administrative Law Judges, the 
Benefits Review Board, and other tribunals; elimination of possible 
mail-handling delays due to unforeseen weather or other events, safety 
restrictions, and the like; and cost savings in reduced copying, 
scanning, and storage of paper documents. Electronic filing methods are 
ubiquitous, and the public generally is very familiar with them. In 
addition to the substantial business conducted in a fully electronic 
environment, government agencies and court systems routinely use 
electronic transmission systems to receive documents and information. 
In fact, OWCP estimates that more than 80 percent of all documents it 
now receives in the Longshore program are transmitted electronically by 
the private parties.
    For these reasons, the Department is now proposing a rule that 
would require all private parties transmitting documents and 
information to OWCP to do so electronically except when a district 
director allows a different filing method because the individual does 
not have a computer, lacks access to the internet, or lacks the ability 
to utilize the internet. The exception is consistent with the E-
Government Act of 2002's directive that agencies must ensure the 
continued availability of services for persons who do not have 
computers or internet access. Sec. 202(c), Public Law 107-347, 116 
Stat. 2899, 2911 (44 U.S.C. 3501 note). OWCP envisions a simple process 
for requesting relief under the exception and will allow individuals to 
self-certify their inability to use electronic filing. OWCP is unaware 
of any law that would prohibit it from making electronic filing 
mandatory for all other parties.
    In proposing this rule, OWCP has considered the principles 
underlying the Government Paperwork Elimination Act (GPEA), 44 U.S.C. 
3504, and the Electronic Signatures in Global and National Commerce Act 
(E-SIGN), 15 U.S.C. 7001 et seq. GPEA requires agencies, when 
practicable, to store documents electronically and to allow individuals 
and entities to communicate with agencies electronically. The GPEA also 
provides that electronic documents and signatures will not be denied 
legal effect merely because of their electronic form. Similarly, E-SIGN 
generally provides that electronic documents have the same legal effect 
as their hard copy counterparts and allows electronic records to be 
used in place of hard copy documents with appropriate safeguards. 15 
U.S.C. 7001. Under E-SIGN, federal agencies retain the authority to 
specify the means by which they receive documents, 15 U.S.C. 7004(a), 
and to modify the disclosures required by Section 101(c), 15 U.S.C. 
7001(c), under appropriate circumstances.
    Moreover, by 2022, the National Archives and Records Administration 
(NARA) will, to the fullest extent possible, no longer accept temporary 
or permanent records from agencies in a non-electronic format. See 
National Archives and Records Administration, 2018-2022 Strategic Plan 
at 12 (Feb. 2018); Delivering Government Solutions in the 21st Century 
at 22, 100-102 (June 21, 2018). Requiring electronic filings now will 
make more efficient OWCP's compliance with NARA's recordkeeping 
directives.
    The proposed rules would also allow the use of electronically 
signed documents consistent with E-SIGN. In April 2020, the Longshore 
program began accepting documents signed using certain electronic 
methods. See Industry Notice No. 179 (April 20, 2020) https://www.dol.gov/owcp/dlhwc/lsindustrynotices/industrynotice179.pdf. This 
rule would codify that practice. Allowing the use of improvements in 
signature technology will facilitate an easier and faster exchange of 
documents between parties and OWCP. The use of electronic signatures is 
voluntary, and parties may continue to submit documents with ``wet'' 
ink signatures, so long as they are scanned and submitted 
electronically. At the same time, OWCP is conscious of the need to 
safeguard the integrity of electronic signatures and to ensure that 
each signature truthfully reflects the purported signatory's intent to 
sign. To that end, the proposed rule sets out criteria to be followed 
by parties submitting electronically-signed documents.

B. Streamlining the Settlement Process

    Section 8(i) of the Act, 33 U.S.C. 908(i), allows parties to settle 
compensation cases. Parties may agree to settle amounts payable for 
disability compensation, death benefits, medical benefits, attorney's 
fees, and costs. An adjudicator--a district director or an 
administrative law judge--must review each settlement application. 
Unless the settlement amount is inadequate or was procured by duress, 
the adjudicator must approve it. Section 8(i) also provides that when 
all parties are represented by counsel, a settlement application is 
deemed approved 30 days after its submission if the adjudicator does 
not disapprove it.
    The settlement application process should be easy for the parties 
to follow and lead to prompt resolution of compensation cases. However, 
in some instances, the settlement application process has become overly 
complicated. To justify the settlement application, parties submit 
large amounts of documentation (e.g., all of the employee's medical 
treatment records) that is well beyond what is necessary for full 
consideration of the application in most cases. In addition to the 
extra burdens placed on parties, this practice creates unnecessary 
administrative burdens for OWCP and the Office of Administrative Law 
Judges (OALJ).

[[Page 80700]]

    The proposed revisions of the settlement regulations at Sec. Sec.  
702.241-702.243 would streamline the application process by focusing on 
the relevant information the parties must initially submit to properly 
adjudicate the settlement application. The adjudicator may then 
exercise his or her discretion and ask for additional documentation 
from the parties in those cases where necessary to determine whether 
the settlement is adequate in amount and procured without duress. The 
proposed rules also allow the adjudicator to defer to the parties' 
representations regarding the adequacy of the settlement amount and 
whether the settlement was procured by duress. The Department believes 
these changes will make both the application and approval process more 
efficient, lessening the burden on parties and adjudicators alike. The 
Department has also taken this opportunity to propose reorganizing, and 
in some cases simplifying, much of the information contained in the 
current settlement regulations.

C. Procedures for Civil Money Penalties

    The proposed regulations contain new and amended provisions 
implementing the Act's civil money penalty provisions. The Act allows 
OWCP to impose a penalty when an employer or insurance carrier fails to 
timely report a work-related injury or death, 33 U.S.C. 930(e), or 
fails to timely report its final payment of compensation to a claimant, 
33 U.S.C. 914(g). See 20 CFR 702.204, 702.236. An employer who 
discharges or discriminates against an employee because of that 
employee's attempt to claim compensation under the Act may also be 
penalized. 33 U.S.C. 948a; 20 CFR 702.271. The proposed rule would 
revise current Sec.  702.204 to provide for graduated penalties for an 
entity's failure to file, or falsification of, the required report of 
an employee's work-related injury or death. See 33 U.S.C. 930(a); 20 
CFR 702.201. The proposed rule provides that the penalty assessed will 
increase for each additional violation the employer has committed over 
the prior two years. The current regulation states only the maximum 
penalty allowable, without providing further guidance.
    The proposed regulations also contain a new Subpart I setting out 
procedures for assessing and challenging penalties. These rules would 
allow an entity against whom a penalty is assessed the opportunity for 
a hearing before an administrative law judge, and to petition the 
Secretary of Labor (Secretary) for further review. After receiving 
notice from the district director that the assessment of a penalty is 
being considered and a subsequent decision assessing the penalty, the 
respondent may request a hearing before an administrative law judge. 
The ensuing decision will address whether the respondent violated the 
statutory or regulatory provision under which the penalty was assessed, 
and whether the amount of the penalty assessed is correct. Any party 
aggrieved by the decision may petition for the Secretary's review, 
which will be discretionary and based on the record. These additional 
levels of review are consistent with Recommendation 93-1 of the 
Administrative Conference of the United States, which recommends that 
formal adjudication under the Administrative Procedure Act be made 
available where a civil money penalty is at issue. The proposed 
procedures will fully protect employers' and insurance carriers' rights 
to challenge OWCP's action before any penalty becomes final and subject 
to collection, and ensure transparency and fairness in the enforcement 
proceedings. See generally Executive Order 13892, Promoting the Rule of 
Law Through Transparency and Fairness in Civil Administrative 
Enforcement and Adjudication (October 9, 2019).

IV. Section-by-Section Analysis

A. Regulations Related to Electronic Transmission of Documents and 
Information and Electronic Signatures

Section 702.101 Exchange of Documents and Information; Electronic 
Signatures
    Proposed Sec.  702.101 revises several parts of the current 
regulation to require electronic submission of all documents and 
information to OWCP, permits the use of electronic signatures, and 
amends the title of the regulation to include electronic signatures. 
Proposed paragraph (a) begins by excepting from the mandatory 
electronic submission and exchange requirements those instances where 
the statute either allows filings by mail or mandates service by mail: 
Sections 702.203 (employer's report of injury or death, implementing 33 
U.S.C. 930(d)), 702.215 (notice of injury or death, implementing 33 
U.S.C. 912(c)), and 702.349 (service of compensation orders, 
implementing 33 U.S.C. 919(e)). Although parties are not required to 
submit reports and notices of injury or death to OWCP electronically, 
OWCP encourages them to do so.
    Proposed paragraph (a) combines current paragraphs (a) and (b) and 
breaks the combined text into three subsections that address three 
categories of document and information exchanges. Paragraph (a)(1) 
provides that parties (and their representatives) sending documents and 
information to OWCP must submit them electronically through an OWCP-
authorized system. OWCP's Secure Electronic Access Portal (SEAPortal) 
is an example of such a system. A district director may make an 
exception to this rule for parties who do not have computers or access 
to the internet, or who lack the ability to use the internet. When a 
district director authorizes a party to use an alternative submission 
method, the party may use any of the methods set forth in the current 
rule: Postal mail, commercial delivery service, hand delivery, or 
another method OWCP authorizes. In all instances, documents are 
considered filed when received by OWCP.
    Proposed paragraph (a)(2) provides that OWCP may send documents and 
information to parties and their representatives by a reliable 
electronic method (e.g., email), postal mail, commercial delivery 
service, hand delivery, or electronically through an OWCP-authorized 
system. These methods are the same as those in the current regulation 
with one exception. For documents and information OWCP sends via a 
reliable electronic method, the proposed rule eliminates the 
requirement that the party or representative must agree in writing to 
receive documents by that method. OWCP is now routinely obtaining 
electronic contact information, such as email addresses, from parties 
and representatives, and plans to increase its use of standard 
electronic business communication practices. Service of compensation 
orders, however, would still be governed by Sec.  702.349 and thus be 
sent electronically only when a party or representative affirmatively 
waives their statutory right to registered or certified mail service.
    Proposed paragraph (a)(3) governs exchange of documents and 
information between opposing parties and representatives. Like the 
current rule, the proposed provision allows the parties flexibility to 
choose the method of service they wish to use. They may use the same 
methods as OWCP, although parties must agree in writing to receive 
documents by a reliable electronic method. Requiring written 
confirmation from the recipient will continue to protect all parties 
and representatives from any misunderstandings about service.
    Proposed paragraph 702.101(g) is a new provision that allows 
parties to submit electronically-signed documents to OWCP. The rule is 
intended to permit the widest possible use of electronic

[[Page 80701]]

technology. Electronic signatures would be accepted on all submissions 
to OWCP that require a signature, not merely those non-exhaustive 
examples listed in the text of the proposed rule.
    Proposed paragraph (g)(1) explains how key terms are used in the 
remainder of the paragraph. A ``document'' includes both paper and 
electronic writings. The documents listed in this definition--
applications, claim forms, notices of payment, and reports of injury--
are meant to serve as examples of the types of documents parties could 
electronically sign and submit to OWCP, but are not meant to be an 
exhaustive list. Electronic signatures on other types of documents not 
listed here would also be accepted by OWCP.
    An ``electronic signature'' is a mark created by electronic means 
that shows an intent to sign the document. An electronic signature is 
binding on a business entity only if the signatory has appropriate 
legal authority to bind the entity.
    ``Electronic signature devices'' are tools parties may use to 
create electronic signatures. As with documents, the examples of 
electronic signature devices provided in this paragraph are not an 
exhaustive list. Parties could utilize other types of electronic 
signature devices, as long as the device is uniquely usable by the 
signatory at the time the signature is made. The purpose of this 
limitation is to ensure the signature's trustworthiness. The definition 
of ``electronic signature programs'' is designed to permit the 
submission of documents electronically signed with third-party software 
programs such as--but not limited to--AdobeSign, DocuSign, and E-Sign.
    The definition of ``signatory'' is limited to individual, human 
persons; a corporation or business cannot be a signatory, though a 
signatory can sign on behalf of a corporation or business. This 
definition is designed to ensure that if the validity of a signature is 
challenged, it will be possible for all parties involved to verify who 
created it.
    Proposed paragraph (g)(2) lists the allowable methods for creating 
and affixing electronic signatures and adds the proviso that OWCP can 
approve other methods.
    Proposed paragraph (g)(3) clarifies that all electronic signatures 
made on the same document need not be created by the same method; a 
document could, for example, contain a ``/s'' signature from a claimant 
(as specified in paragraph (g)(2)(iii)) and a separate signature from 
an employer's agent made by drawing a mark with a stylus on a touch-
screen (as specified in paragraph (g)(2)(iv)). OWCP recognizes that 
some of the methods described in paragraph (g)(2) may overlap. For 
example, an electronic signature program may involve a signatory first 
logging in through the use of an electronic signature device such as a 
PIN number, and then typing their name following a ``/s'' mark. A 
signature that incorporates multiple acceptable methods is still an 
acceptable electronic signature. These provisions are designed to be as 
inclusive as possible while militating against the possibility of abuse 
or fraud.
    Finally, proposed paragraph (g)(4) would impose obligations on 
parties that submit electronically-signed documents. This subparagraph 
is designed to mitigate the possibility of a legal challenge to the 
integrity of a signature or the identity of the signatory. Paragraph 
(g)(4)(i) is designed to prevent the use of signatures that leave the 
actual identity of the signatory ambiguous; examples of such signatures 
might be those that indicate only a PIN, ambiguous username, or email 
address that is shared by multiple members of a business or other 
organization. Paragraphs (g)(4)(ii)-(iii) impose record-keeping 
obligations on parties. By requiring parties to keep information about 
how and when an electronic signature was created, OWCP ensures that 
some means of authenticating the signature exists if the document's 
validity is ever disputed.
    The remaining proposed revisions to Sec.  702.101 are technical in 
nature. Existing paragraphs (c)-(f) are renumbered to (b)-(e), and 
cross-references to other paragraphs throughout the section have been 
updated. In addition, because proposed paragraph (a)(2) would not 
require parties and representatives to consent in writing to receive 
documents and information from OWCP via reliable electronic methods, 
proposed paragraph (c) removes the words ``OWCP'' and ``as 
appropriate'' from current paragraph (d). Even though much of Sec.  
702.101 remains unchanged, the Department has chosen to re-publish the 
section in full for the public's convenience.
Section 702.203 Employer's Report; How Given
    Section 30 of the Longshore Act, 33 U.S.C. 930, governs how and 
when employers must report employee injuries and deaths. In general, 
employers must send reports within 10 days of the injury or death, or 
knowledge of an injury or death. The Act explicitly allows an employer 
to comply with the reporting requirement by ``mailing'' the report ``in 
a stamped envelope, within the time prescribed.'' 33 U.S.C. 930(d). 
Current Sec.  702.203(b), which implements section 30(d), acknowledges 
this mailing provision and provides that employers may send the reports 
to OWCP by U.S. Postal mail, commercial delivery service, or 
electronically. To encourage electronic filing yet preserve the 
statutory mail provision, proposed Sec.  702.203(b) eliminates 
commercial delivery service as a submission option but retains the 
mailing provisions. If an employer chooses to mail the report, the rule 
places the burden on the employer to preserve evidence of the date the 
report is mailed to OWCP. This could easily be accomplished by using 
certified mail. Finally, to clarify electronic submission procedures, 
the proposed rule requires submission via an OWCP-authorized system and 
includes a cross-reference to proposed Sec.  702.101(a)(1). This 
revision eliminates the use of other electronic transmission methods 
and the need to specify when filing is complete under those methods.
Section 702.215 Notice; How Given
    Section 12 of the Longshore Act, 33 U.S.C. 912, governs how and 
when employees and survivors give notices of injury or death to 
employers and OWCP. The Act requires that such notices be given to the 
district director ``by delivering it to him or sending it by mail 
addressed to his office.'' 33 U.S.C. 912(c). Without amendment of 
current Sec.  702.215, the proposed revisions to Sec.  702.101 would 
effectively eliminate this statutory mailing option. Section 702.215 
provides that ``[n]otice may be given to the district director by 
submitting a copy of the form supplied by OWCP to the district 
director, or orally in person or by telephone.'' The ``submitting'' 
language brings to bear the transmission methods specified in Sec.  
702.101. See 20 CFR 702.101(e); 48 CFR 12921 (March 12, 2015). Since 
proposed Sec.  702.101(a) would require electronic filing of these 
notices, OWCP proposes to amend Sec.  702.215 to preserve the option of 
filing by mail in compliance with the Act. The proposed rule makes 
clear that employees and survivors may also file these notices 
electronically through an OWCP-authorized system.

B. Regulations Pertaining to Settlements

Section 702.241 Settlements: Definitions; General Information
    Proposed Sec.  702.241 contains basic information about settlements 
under section 8(i) of the Longshore Act, 33 U.S.C. 908(i). Proposed 
paragraph (a) retains the current definition of the term

[[Page 80702]]

``Adjudicator,'' adds a definition for ``Compensation case,'' and 
includes the definition for ``Counsel'' located in current Sec.  
702.241(h). Paragraph (b) sets out several basic concepts: That an 
adjudicator must approve all settlements; the types of compensation, 
fees, and costs that a settlement may include; the ``inadequate'' and 
``procured by duress'' standard applied in reviewing settlements; and, 
where all parties are represented by counsel, that the settlement is 
deemed approved 30 days after receipt of a completed application unless 
an adjudicator requests additional information or disapproves the 
application within that time period.
    Proposed paragraph (c) specifies when a settlement application is 
considered received by an adjudicator or higher tribunal. The proposed 
rule eliminates the provision in current Sec.  702.241(c) allowing 
settlement applications filed with an administrative law judge to be 
considered received ``five days before the date on which the formal 
hearing is scheduled to be held.'' In OWCP's experience, judges act 
quickly on settlement applications when received. Removing this 
provision will help eliminate any confusion parties may have over when 
a judge will consider their settlement proposal and promote prompt 
resolution. Paragraph (d) retains the provision in current Sec.  
702.241(f) regarding days that count towards the 30-day settlement 
period. And paragraph (e) retains the provision in current Sec.  
702.241(g) that limits settlements to claims in existence at the time 
of the settlement and provides that settlements for the injured 
employee do not affect survivors' claims for death benefits.
    Additional note: Current Sec.  702.241(b) has been moved to 
proposed Sec.  702.242(e) and revised. Current Sec.  701.241(d) has 
been moved to proposed Sec.  702.243(f) and revised. Current Sec.  
701.241(e) has been moved to proposed Sec.  702.243(i) and revised.
Section 702.242 Settlement Application; Contents and Submission
    Proposed Sec.  702.242 sets out the information parties must 
include in a settlement application and how parties must submit the 
application. Paragraph (a) simplifies the requirements in current Sec.  
702.242(a) by requiring that the parties use an application form 
prescribed by OWCP. The form will be a self-sufficient document that 
requires all information necessary for a complete application and 
signatures necessary to indicate agreement to the settlement. The form 
will also apprise claimants of the effect of the settlement (e.g., 
waiver of rights to further compensation). Using a form should simplify 
the application process for the parties, who will no longer have to 
create their own documents. A form also has the advantage of allowing 
OWCP to adopt technology that will allow full online completion and 
submission of the settlement application.
    Proposed paragraph (a) also lists the components that must be 
included in the settlement application. In large part, this list 
reflects the requirements set forth in current Sec.  702.242(a) and 
(b). Parties are required to include basic facts about the case, 
amounts to be paid under the settlement, the signatures of the parties 
agreeing to the settlement and attesting that the settlement is 
adequate and not procured by duress, and a statement regarding 
severability of the parts of the settlement, where appropriate.
    Proposed paragraph (b) provides that the adjudicator can request 
any additional information he or she deems necessary to decide whether 
the settlement is adequate or was procured by duress. This allows the 
adjudicator to tailor a request for additional information (e.g., a 
medical report, projections of future medical treatment expenses) to 
the facts of the particular case. Paragraph (c) limits the 
adjudicator's consideration to the information in the application, any 
specific information the adjudicator requests from the parties, and 
information in the case record when the settlement application is 
filed.
    Proposed paragraphs (d) and (e) prescribe how parties submit 
completed settlement applications. These provisions require parties to 
submit applications to the district director except when the case is 
pending before the OALJ. In that instance, parties may either ask OALJ 
to remand the case to the district director and then submit the 
application to the district director after remand or submit the 
application to OALJ for consideration. Parties who submit settlement 
applications while a case is pending before a higher tribunal--the 
Benefits Review Board or a court--must submit them to the district 
director and ask the tribunal to return the case to the district 
director, who is an adjudicator with the authority to consider the 
application. These procedures reflect current practice.
Section 702.243 Settlement Approval and Disapproval
    Proposed Sec.  702.243 governs how settlement applications are 
reviewed and the consequences of that review. Proposed paragraph (a) 
requires adjudicators to review the settlement application within 30 
days of receipt. During that time period, the adjudicator must notify 
the parties if the application is incomplete and ask for any additional 
information as allowed under proposed Sec.  702.242(b). The notice must 
also inform the parties that the 30-day period in proposed Sec.  
702.241(b) will not begin to run until the adjudicator receives the 
completed application and additional information. This formulation is 
consistent with current Sec.  702.243(a), which states that an 
incomplete application tolls the 30-day time period for deeming the 
application approved.
    Proposed paragraph (b) combines two requirements in current Sec.  
702.243(b) and (c) regarding adjudicating a settlement. The adjudicator 
must issue a compensation order approving or disapproving the 
settlement application. If the application is disapproved in any part, 
the adjudicator must include a statement of the reasons for finding the 
settlement (or part thereof) inadequate or procured by duress. This 
provision also requires the adjudicator to file and serve the 
compensation order under the procedures set forth in Sec.  702.349. 
Although OWCP already follows these procedures, adding a reference to 
Sec.  702.349 will ensure that parties will be able to choose to 
receive orders on settlements via electronic means rather than by 
registered or certified mail.
    Proposed paragraph (c) instructs adjudicators to consider the 
information in the settlement application, any additional information 
the adjudicator requested under proposed Sec.  702.242(b), and the 
parties' attestations in the application in determining whether the 
proposed settlement is adequate and was procured without duress. The 
rule also allows the adjudicator to defer to the parties' attestations 
regarding adequacy and duress. This provision replaces current Sec.  
702.243(f)'s more detailed standard for determining whether the 
settlement amount is adequate, allowing the adjudicator to consider 
only that information important to the particular case.
    Like current Sec.  702.243(e), proposed paragraph (d) continues to 
provide that disapproval of any part of a settlement applies to the 
entire settlement unless the parties state in the application that they 
agree to settle various parts independently. OWCP will incorporate this 
question into the settlement application.
    Proposed paragraph (e) sets out the actions parties may take after 
an adjudicator disapproves a settlement application. When disapproved 
by a district director, the parties may submit an amended settlement 
application to

[[Page 80703]]

the district director or request an administrative law judge hearing on 
the disapproval. Any party may also ask for an administrative law judge 
hearing on the merits of the case. Similarly, when disapproved by an 
administrative law judge, the parties may submit an amended settlement 
application to the judge, appeal to the Benefits Review Board, or 
proceed with a hearing on the merits.
    Proposed paragraph (f) sets out the circumstances when a settlement 
is deemed approved. Consistent with section 8(i)(1), 33 U.S.C. 
908(i)(1), this regulation applies only when all parties are 
represented by counsel. If the adjudicator neither approves nor 
disapproves the settlement application within 30 days after an 
adjudicator receives a complete application and any additional 
information the adjudicator requests under proposed Sec.  702.242(b), 
the settlement will be deemed approved.
    Proposed paragraph (g) retains the provision in current Sec.  
702.243(b) that an employer's and insurance carrier's liability for a 
compensation case is not discharged until the settlement application is 
approved. This includes both approvals issued by an adjudicator and 
those settlements deemed approved under the provisions of this section.
    Proposed paragraph (h) addresses the effect of settling attorney 
fees. The rule retains the thrust of the provision in current Sec.  
702.241(e): Approval of a settlement application that includes attorney 
fees constitutes approval of fees for all purposes. Paragraph (h) adds 
that fees in a settlement application may include fees for services 
rendered before a different adjudicator or tribunal. This will allow 
one adjudicator to resolve all fee maters, eliminating any need for the 
parties to seek fee resolutions from any other adjudicator or tribunal.
    Proposed paragraph (i) revises current Sec.  702.243(g) regarding 
how adjudicators consider settlements in cases being paid under a final 
compensation order. The current regulation requires adjudicators to 
disapprove any settlement amount that falls below the present value of 
compensation payments commuted (as prescribed in the regulation) unless 
the parties show that the amount is adequate. Proposed paragraph (i) 
expands the adjudicator's discretion by making the comparison between 
the settlement and commuted amounts permissible rather than mandatory. 
This will allow the adjudicator more flexibility to ratify the parties' 
agreement as to the settlement amount. OWCP also proposes to remove 
from current Sec.  702.243(g) the reference to the U.S. Life Table 
developed by the Department of Health and Human Services. This table is 
insufficient because it does not provide life expectancies for people 
in foreign countries that could be covered by the Longshore Act or its 
extensions, particularly the Defense Base Act. Proposed paragraph (i) 
instead allows OWCP to specify the life expectancy tables or 
calculators to be used under this provision.

C. Regulations Related to Civil Money Penalties

Section 702.204 Employer's Report; Penalty for Failure To Furnish or 
for Falsifying
    Proposed Sec.  702.204 revises the current regulation in several 
ways. First, paragraph (a)(1) defines a knowing or willful violation 
sufficient to impose a penalty. Paragraph (c) provides that the number 
of penalties assessed in the prior two years against an entity--
including its parent company, subsidiaries, or related entities--will 
be considered in assessing further penalties. Paragraph (c) also lists 
the penalty amounts that will be imposed, beginning at two percent of 
the maximum penalty amount for a first violation, with the penalty 
doubling for each subsequent violation through the sixth violation. The 
seventh violation will result in the maximum penalty. OWCP has proposed 
a percentage scheme because the maximum penalty amount will be adjusted 
every year under the Federal Civil Penalties Inflation Adjustment Act 
of 1990, as amended by the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015, Public Law 114-74, section 701.
Section 702.233 Additional Compensation for Failure To Pay Without An 
Award
    OWCP proposes to substitute the phrase ``additional compensation'' 
for the word ``penalty'' in Sec.  702.233's current title (i.e., 
``Penalty for failure to pay an award''). Section 702.233 implements 
section 14(e) of the Act, 33 U.S.C. 914(e), which provides that 
claimants are entitled to an additional 10 percent of any compensation 
payable without an award when not paid within 14 days of when it is 
due. The Board has held that payments under section 14(e) are 
``compensation'' and not ``penalties.'' Robirds v. ICTSI Oregon, Inc., 
52 BRBS 79 (2019)(en banc); appeal docketed Ninth Cir. No. 19-1634. In 
reaching its conclusion, the Board relied on the Federal Circuit's 
decision in Ingalls Shipbuilding, Inc. v. Dalton, 119 F.3d 972, 979 
(Fed. Cir. 1997), which held that payments under section 14(e) are 
compensation. The majority of courts have also construed the similar 
language in section 14(f) of the Act, 33 U.S.C. 914(f) (requiring 
payment of additional 20 percent for late payments under terms of an 
award), as payments of ``compensation'' rather than a penalty. See 
Newport News Shipbuilding and Dry Dock Co. v. Brown, 376 F.3d 245, 251 
(4th Cir. 2004) (``[I]t is plain that an award for late payment under 
[section] 14(f) is compensation.''); Tahara v. Matson Terminals, Inc., 
511 F.3d 950, 953-54 (9th Cir. 2007) (same); but see Burgo v. General 
Dynamics Corp., 122 F.3d 140, 145-46 (2d Cir. 1997). Using ``additional 
compensation'' in the title of Sec.  702.233 promotes accuracy and 
clarifies the instances in which the new penalty procedures apply.
Section 702.236 Penalty for Failure To Report Termination of Payments
    Proposed Sec.  702.236 revises the current rule to incorporate the 
penalty procedural rules proposed in new Subpart I.
Section 702.271 Discrimination Against Employees Who Bring Proceedings; 
Prohibition
    Proposed Sec.  702.271 revises the current rule by dividing 
paragraph (a) into paragraphs (a) and (b), and renumbering the 
subdivisions of paragraph (a), for clarity. Current paragraph (a)(2) is 
deleted and replaced by proposed Sec.  702.273, which sets forth the 
range of penalties to be assessed and incorporates the penalty 
procedural rules proposed in new Subpart I. Given this change, the 
words ``and penalty'' are deleted from the section's title and the 
punctuation has been altered. Current paragraphs (b), (c), and (d) are 
redesignated (c), (d), and (e).
Section 702.273 Penalty for Discrimination
    Proposed Sec.  702.273 replaces and revises current Sec.  
702.271(a)(2). It sets forth the range of penalties for discharge or 
discrimination, and incorporates the penalty procedural rules proposed 
in new Subpart I. The proposed rule also stays proceedings on any 
penalty assessed by the district director prior to a hearing until the 
Administrative Law Judge or higher tribunal resolves the underlying 
discrimination complaint.
Section 702.901 Scope of This Part
    Proposed Sec.  702.901 provides that the procedures set forth in 
Subpart I apply when the district director imposes civil monetary 
penalties under Sec. Sec.  702.204, 702.236, or 702.273, and that any

[[Page 80704]]

penalties collected are to be deposited into the special fund described 
in 33 U.S.C. 944.
Section 702.902 Definitions
    Proposed Sec.  702.902 defines ``respondent'' as the employer, 
insurance carrier, or self-insured employer against whom the district 
director is seeking to assess a penalty.
Section 702.903 Notice of Penalty; Response; Consequences of No 
Response
    Proposed Sec.  702.903 is a new provision governing OWCP's notice 
of any penalty assessed and the respondent's response. Paragraph (a) 
requires OWCP to serve a written notice on the respondent by a method 
that verifies the delivery date because date of receipt triggers the 
respondent's response period. Paragraph (b) prescribes the contents of 
the notice, which include the consequences of not responding to the 
notice or supplying an inadequate response. Paragraph (c) gives the 
respondent 30 days to respond with documentation regarding any facts 
relevant to the reason for the penalty, as well as any documentation 
that may lead to mitigation of the penalty amount under the Small 
Business Regulatory Enforcement Fairness Act, 5 U.S.C. 601 (note), if 
the penalty arises under Sec.  702.236. Paragraph (d) provides that, if 
there are further proceedings before an administrative law judge, that 
judge may consider only the evidence submitted to the district 
director, unless exceptional circumstances prevented the respondent 
from submitting it to the district director. OWCP has proposed this 
restriction so that OWCP can evaluate all evidence the respondent 
wishes to introduce in assessing the penalty. Finally, paragraph (e) 
provides that if the respondent does not respond within 30 days, the 
assessment of the penalty and its amount becomes final and collection 
may begin under Sec.  702.912.
Section 702.904 Decision on Penalty After Timely Response; Request for 
Hearing
    Proposed Sec.  702.904 addresses the district director's decision 
and any appeal to an administrative law judge. Paragraph (a) provides 
that the district director's decision must state the reasons for the 
assessment of the penalty and its amount, and set forth the 
consequences of a respondent's failure to timely respond. Paragraph (b) 
provides that the respondent may request a hearing before an 
administrative law judge within 15 days of receiving the decision by 
filing a request with the district director, and sets forth the 
requirements the request must meet. Paragraph (c) provides that a 
timely hearing request will stay the collection of a penalty until 
final resolution of the penalty by the administrative law judge or the 
Secretary. Paragraph (d) provides that, if the respondent does not 
request a hearing within 15 days, the assessment and penalty become 
final, and collection of the penalty may be instituted under Sec.  
702.912.
Section 702.905 Referral to the Office of Administrative Law Judges
    Proposed Sec.  702.905 addresses referral of an assessment and 
penalty for a hearing before an administrative law judge. Paragraph (a) 
provides that, when the district director receives a request for 
hearing, the district director will immediately notify the Chief 
Administrative Law Judge, who will assign the case to an administrative 
law judge. The district director will also forward the administrative 
record, which consists of the district director's decision, the 
documentation the district director relied on in making the decision, 
all written responses and documentation filed by the respondent with 
the district director, and a statement of the issues referred for 
hearing. Paragraph (b) provides that the rules set forth in 29 CFR part 
18 will apply to any hearing before an administrative law judge.
Section 702.906 Decision and Order of Administrative Law Judge
    Proposed Sec.  702.906 governs the contents, issuance, service, and 
finality of the administrative law judge's decision. Paragraph (a) 
provides that the administrative law judge may consider only the issues 
referred for hearing by the district director. Paragraph (b) limits the 
administrative law judge's determinations on those issues to whether 
the respondent has violated the provision under which the penalty was 
assessed, and whether the penalty is appropriate under the standards 
set forth in Sec. Sec.  702.204, 702.236, 702.271, and 702.903(c)(2). 
Limiting the judge's consideration to these issues will help streamline 
the hearing and decision process. Paragraph (c) requires the 
administrative law judge's decision to include a statement of findings 
and conclusions on each issue referred, with the reasons and bases for 
those findings and conclusions. Paragraph (d) requires the 
administrative law judge to serve both the respondent and the district 
director with the decision on the day it is issued through a trackable 
delivery method. Paragraph (e) provides that any party may move for 
reconsideration of the decision within 30 days of its issuance, and 
that any such motion will suspend the running of time to file a 
petition for review under Sec.  702.908. Paragraph (f) provides that, 
absent a timely request for reconsideration or petition for review, the 
administrative law judge's decision will be deemed final, and recovery 
of the penalty may be instituted under Sec.  702.912.
Section 702.908 Review by the Secretary
    Proposed Sec.  702.908 allows any party aggrieved by an 
administrative law judge's decision to petition the Secretary for 
review. Paragraph (a) requires that any petition be filed within 30 
days. Under paragraph (b), a timely motion for reconsideration filed 
with the administrative law judge tolls the time for filing a petition 
with the Secretary; the 30-day period will not begin to run until the 
judge issues a decision on reconsideration. Paragraph (c) sets out the 
requirements for the petition for review. And paragraph (d) provides 
the mailing address for sending the petition but allows the Secretary 
to designate alternative filing methods, such as an electronic filing 
system. Documents are not considered filed until actually received by 
the Secretary.
Section 702.909 Discretionary Review
    Proposed Sec.  702.909(a) provides that the Secretary's review of a 
timely petition is discretionary. Paragraph (a)(1) provides that, if 
the Secretary declines review, the administrative law judge's decision 
will be considered the final agency decision. Under paragraph (b)(2), 
if the Secretary chooses to review the decision, the Secretary will 
notify the parties of the issues to be reviewed and set a schedule for 
the parties to submit written arguments. Paragraph (b) requires the 
district director to forward the administrative record to the Secretary 
if the Secretary decides to review the administrative law judge's 
decision.
Section 702.910 Final Decision of the Secretary
    Proposed Sec.  702.910 limits the Secretary's review to the hearing 
record. The Secretary will review findings of fact under a substantial 
evidence standard and conclusions of law de novo. The Secretary may 
affirm, reverse, modify, or vacate the decision, and may remand to the 
Office of Administrative Law Judges for further review. The Secretary's 
decision must be served on all parties and the Chief Administrative Law 
Judge.

[[Page 80705]]

Section 702.911 Settlement of Penalty
    Proposed Sec.  702.911 provides that the respondent and the 
district director may enter into a settlement at any time during 
proceedings before the administrative law judge or the Secretary. This 
provision is meant to allow flexibility and forestall further 
litigation if the district director and the respondent reach agreement 
at any point during the proceedings.
Section 702.912 Collection and Recovery of a Penalty
    Paragraph (a) of proposed Sec.  702.912 provides that, when a 
penalty becomes final under Sec. Sec.  702.903(e), 702.904(d), or 
702.906(f), the penalty is immediately due and payable to the 
Department on behalf of the special fund described in 33 U.S.C. 944. 
Paragraph (b) provides that, if payment is not received within 30 days 
after it becomes due and payable, it may be recovered by a civil action 
brought by the Secretary.

V. Legal Basis for the Proposed Rule

    Section 39(a) of the LHWCA, 33 U.S.C. 939(a)(1), authorizes the 
Secretary of Labor to prescribe rules and regulations necessary for the 
administration of the Act. The LHWCA also grants the Secretary 
authority to determine by regulation how certain statutory notice and 
filing requirements are met. See 33 U.S.C. 907(j)(1) (the Secretary is 
authorized to ``make rules and regulations and to establish 
procedures'' regarding debarment of physicians and health care 
providers under 33 U.S.C. 907(c)); 33 U.S.C. 912(c) (employer must 
notify employees of the official designated to receive notices of 
injury ``in a manner prescribed by the Secretary in regulations''); 33 
U.S.C. 919(a) (claim for compensation may be filed ``in accordance with 
regulations prescribed by the Secretary''); 33 U.S.C. 919(b) (notice of 
claim to be made ``in accordance with regulations prescribed by the 
Secretary''); 33 U.S.C. 935 (``the Secretary shall by regulation 
provide for the discharge, by the carrier,'' of the employer's 
liabilities under the Act). This rule falls well within these statutory 
grants of authority.

VI. Information Collection Requirements (Subject to the Paperwork 
Reduction Act) Imposed Under the Proposed Rule

    The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., 
and its attendant regulations, 5 CFR part 1320, require that the 
Department consider the impact of paperwork and other information 
collection burdens imposed on the public. A Federal agency generally 
cannot conduct or sponsor a collection of information, and the public 
is generally not required to respond to an information collection, 
unless it is approved by the Office of Management and Budget (OMB) 
under the PRA and displays a currently valid OMB Control Number. In 
addition, notwithstanding any other provisions of law, no person shall 
generally be subject to penalty for failing to comply with a collection 
of information that does not display a valid Control Number. See 5 CFR 
1320.5(a) and 1320.6.
    If the proposed rule is adopted in final, all forms and documents 
currently approved by OMB are subject to electronic submission except 
when a party obtains permission from OWCP to use a different submission 
method or otherwise provided by statute. The Department has submitted 
an Information Collection Request (ICR) for all of these forms under 
the procedures for review and clearance contained in 5 CFR 1320.13. The 
Exchange of Documents and Information; Electronic Signatures Rule (see 
proposed Sec.  702.101) does not materially change any other ICR with 
regard to the information collected, but does change the manner in 
which forms that collect information may be submitted. The Department 
will require private parties to use an electronic method for the 
transmission of information to OWCP.
    The collection of information requirements are contained within 
ICRs assigned the following OMB control numbers: 1240-0003, 1240-0004, 
1240-0005, 1240-0008, 1240-0012, 1240-0014, 1240-0025, 1240-0026, 1240-
0029, 1240-0036, 1240-0040, 1240-0041, 1240-0042, 1240-0045, 1240-0053, 
and 1240-0058. The regulatory sections specifying the submission 
procedures are found in the following sections: 20 CFR 702.111, 
702.121, 702.132, 702.162, 702.174, 702.175, 702.201, 702.202, 702.221, 
702.234, 702.235, 702.236, 702.242, 702.243, 702.251, 702.285, 702.317, 
702.321, 702.349, 702.407, 702.419, 703.116, 703.203, 703.204, 703.205, 
703.209, 703.210, 703.212, 703.303, and 703.310. See also 42 U.S.C. 
1652.
    Although the rule does not eliminate current methods of submission 
for these collections by mail where consistent with statute, the 
parties will have to submit more documents electronically. OWCP 
anticipates electronic submission will lead to cost savings in hours 
and mailing costs (envelopes and postage) for the parties. Given the 
response rate for each of the existing collections, current combined 
mailing costs are estimated at $118,657. Once the rule becomes final, 
the Department anticipates a 97 percent rate of electronic submission, 
an accompanying reduction in postal mail submission, and a resulting 
cost savings of $115,097. The Department has submitted a request to OMB 
for a non-substantive change for each existing ICR cited above to 
obtain approval for the changed cost estimate resulting from electronic 
submission.
    The proposed rule imposes two new information collections. First, 
proposed Sec.  702.201(a)(1)(i) generally requires parties and their 
representatives to submit documents and information electronically to 
OWCP. But the rule allows an OWCP district director to allow an 
alternative filing method for individuals who do not have a computer, 
access to the internet, or the ability to use the internet. OWCP plans 
to use a new form that will allow individuals to self-certify that they 
qualify for this exception. For this form, OWCP estimates 3,048 
respondents with an annual time burden of 254 hours. Because this form 
will only be used when other documents are being submitted, there is no 
additional cost burden. Second, proposed Sec.  702.242 requires parties 
to apply for approval of a settlement using an application form 
prescribed by OWCP. As explained in the section-by-section analysis 
above, OWCP believes use of a comprehensive form will lessen the 
burdens on the parties and the adjudicators who must review the 
settlements. Although OWCP already has an approved settlement 
application form (see OMB control number 1240-0058, Form LS-8), the new 
form will collect some additional information in a substantially 
revised format. For this form, OWCP estimates 5,400 respondents with an 
annual time burden of 1,782 hours and other costs burden of $289.17. 
The Department has submitted a request to OMB for approval of both new 
information collections.
    The submitted ICRs for the new collections imposed by this rule 
will be available for public inspection for at least 30 days under the 
``Currently Under Review'' portion of the Information Collection Review 
section on the reginfo.gov website, available at: https://www.reginfo.gov/public/do/PRAMain. Currently approved information 
collections are available for public inspection under the ``Current 
Inventory'' portion of the same website.
    Request for Comments: As part of its continuing effort to reduce 
paperwork and respondent burden, the Department conducts a pre-
clearance consultation program to provide the general public and 
Federal agencies an opportunity to comment on proposed and/or 
continuing collections of information. This program helps to ensure 
requested

[[Page 80706]]

data can be provided in the desired format, reporting burden (time and 
financial resources) is minimized, collection instruments are clearly 
understood, and the impact of collection requirements can be properly 
assessed. Comments on the information collection requirements may be 
submitted to the Department in the same manner as for any other portion 
of this rule.
    In addition to having an opportunity to file comments with the 
agency, the PRA provides that an interested party may file comments on 
the information collection requirements in a proposed rule directly 
with the Office of Management and Budget, at Office of Information and 
Regulatory Affairs, Attn: OMB Desk Officer for DOL-OWCP Office of 
Management and Budget, Room 10235, 725 17th Street NW, Washington, DC 
20503; by Fax: 202-395-5806 (this is not a toll-free number); or by 
email: [email protected]. Commenters are encouraged, but not 
required, to send a courtesy copy of any comments to the general 
addressee for this rulemaking. The OMB will consider all written 
comments it receives within 30 days of publication of this NPRM in the 
Federal Register. To help ensure appropriate consideration, comments 
should mention at least one of the OMB control numbers noted in this 
section.
    The OMB and the Department are particularly interested in comments 
that address the following:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, through the use of appropriate automated, 
electronic, or other technological collection techniques or other forms 
of information technology, e.g., permitting electronic submission of 
responses.
    The information collections in this rule may be summarized as 
follows:
    1. Title of Collection: Employer's First Report of Injury or 
Occupational Disease, Employer's Supplementary Report of Accident or 
Occupational Illness.
    OMB Control Number: 1240-0003.
    Total Estimated Number of Responses: 24,631.
    Total Estimated Annual Time Burden: 6,158 hours.
    Total Estimated Annual Other Costs Burden: $232.76.
    2. Title of Collection: Carrier's Report of Issuance of Policy.
    OMB Control Number: 1240-0004.
    Total Estimated Number of Responses: 1,500.
    Estimated Annual Time Burden: 25 hours.
    Total Estimated Annual Other Costs Burden: $0.47.
    3. Title of Collection: Securing Financial Obligations Under the 
Longshore and Harbor Workers' Compensation Act and its Extensions.
    OMB Control Number: 1240-0005.
    Total Estimated Number of Responses: 695.
    Estimated Annual Time Burden: 869 hours.
    Total Estimated Annual Other Costs Burden: $12.08.
    4. Title of Collection: Regulations Governing the Administration of 
the Longshore and Harbor Workers' Compensation Act.
    OMB Control Number: 1240-0014.
    Total Estimated Number of Responses: 90.759.
    Estimated Annual Time Burden: 32,971 hours.
    Estimated Annual Other Costs Burden: $786.09.
    5. Title of Collection: Request for Earnings Information.
    OMB Control Number: 1240-0025.
    Total Estimated Number of Responses: 100.
    Estimated Annual Time Burden: 25 hours.
    Estimated Annual Other Costs Burden: $0.95.
    6. Title of Collection: Application for Continuation of Death 
Benefit for Student.
    OMB Control Number: 1240-0026.
    Total Estimated Number of Responses: 20.
    Total Estimated Annual Time Burden: 10 hours.
    Total Estimated Annual Other Costs Burden: $0.19.
    7. Title of Collection: Request for Examination and/or Treatment.
    OMB Control Number: 1240-0029.
    Total Estimated Number of Responses: 90,000.
    Estimated Annual Time Burden: 48,750 hours.
    Total Estimated Annual Other Costs Burden: $2,532,816.
    8. Title of Collection: Longshore and Harbor Workers' Compensation 
Act Pre-Hearing Statement.
    OMB Control Number: 1240-0036.
    Total Est. Number of Responses: 3,513.
    Estimated Annual Time Burden: 586 hours.
    Total Estimated Annual Other Costs Burden: $61.13.
    9. Title of Collection: Certification of Funeral Expenses.
    OMB Control Number: 1240-0040.
    Total Estimated Number of Responses: 75.
    Total Estimated Annual Time Burden: 19 hours.
    Total Estimated Annual Other Costs Burden: $0.71.
    10. Title of Collection: Notice of Final Payment or Suspension of 
Compensation Benefits.
    OMB Control Number: 1240-0041.
    Total Estimated Number of Responses: 37,800.
    Total Estimated Annual Time Burden: 6,300 hours.
    Total Estimated Annual Other Costs Burden: $357.21.
    11. Title of Collection: Notice of Controversion of Right to 
Compensation.
    OMB Control Number: 1240-0042.
    Total Estimated Number of Responses: 18,000.
    Total Estimated Annual Time Burden: 4,500 hours.
    Total Estimated Annual Other Costs Burden: $295.97.
    12. Title of Collection: Request for Electronic Service of Orders--
Waiver of Certified Mail Requirement.
    OMB Control Number: 1240-0053.
    Total Estimated Number of Responses: 14,000.
    Estimated Annual Time Burden: 770 hours.
    Estimated Annual Other Costs Burden: $0.00.
    13. Title of Collection: Request for Intervention, Longshore and 
Harbor Workers' Compensation Act.
    OMB Control Number: 1240-0058.
    Total Estimated Number of Responses: 12,414.
    Total Estimated Annual Time Burden: 3,189 hours.
    Total Estimated Annual Other Costs Burden: $342.91.
    14. Title of Collection: Rehabilitation Plan and Award.
    OMB Control Number: 1240-0045.
    Total Estimated Number of Responses: 3,913.
    Estimated Annual Time Burden: 1957 hours.
    Estimated Annual Other Costs Burden: $0.00.
    15. Title of Collection: Rehabilitation Maintenance Certificate.
    OMB Control Number: 1240-0012.
    Total Estimated Number of Responses: 3,452.

[[Page 80707]]

    Estimated Annual Time Burden: 575 hours.
    Estimated Annual Other Costs Burden: $0.00.
    16. Title of Collection: Rehabilitation Action Report.
    OMB Control Number: 1240-0008.
    Total Estimated Number of Responses: 4,066.
    Estimated Annual Time Burden: 678 hours.
    Estimated Annual Other Costs Burden: $0.00.

VII. 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 proposed rule with these principles 
in mind and has concluded that the regulated community would benefit 
from this regulation for several reasons.
    Requiring most parties and representatives to submit documents 
electronically to OWCP will speed claims processing and allow OWCP to 
be more responsive to requests for assistance. Currently, OWCP must 
scan paper submissions into digital format and add them to the 
electronic case file before claims staff can take any action on them. 
When coupled with the time to deliver paper submissions to OWCP, this 
can delay responding to a request by several days. In contrast, 
electronic submissions are immediately associated with the case file 
and available to claims staff. Codifying the use of digital signatures 
in the regulations will also simplify electronic and even paper 
submissions (when allowed).
    Similarly, streamlining the settlement process by limiting the 
amount of information the parties must submit with every application 
will reduce administrative burdens on both the parties and OWCP. All of 
these changes will result in more expeditious resolution of disputes, 
thus furthering the ``certain, prompt recovery for employees'' the Act 
guarantees. Roberts v. Sea-Land Servs., Inc., 556 U.S. 93, 97; 132 
S.Ct. 1350, 1354 (2012).
    The Department does not believe parties would incur additional 
costs as a result of the revisions to the electronic submission of 
documents and information regulation and may see a small financial 
benefit. As noted, more than 80 percent of documents currently sent to 
OWCP are submitted electronically. For these parties and 
representatives, no change in their current practices would be needed. 
Although the parties and representatives who currently submit paper 
documents would have to alter their practice, these alterations may 
result in cost savings by reducing paper copying charges and mailing or 
delivery expenses. Even if parties and representatives incurred minimal 
additional costs, they would be outweighed by the benefits reaped--
primarily more expeditious claims processing and delivery of 
compensation.
    The Department also believes that promulgating procedural rules 
related to civil money penalties would benefit employers (and their 
insurance carriers) against whom OWCP may assess penalties. Currently, 
the regulations contain no set procedures for employers to challenge 
penalties, which can lead to procedural decisions being made on a case-
by-case basis. The proposed rules would establish a transparent and 
consistent pathway for assessment and adjudication of penalties: Clear 
notice of the penalty and an opportunity to contest it before imposed 
by OWCP; hearing by an administrative law judge upon request; 
discretionary review by the Secretary; and a stay of payment for the 
penalty assessed until review is complete and the decision becomes 
final. These procedures would clearly protect an employer's rights to 
be fully heard before having to pay a penalty.
    Finally, because this is not a ``significant regulatory action'' 
within the meaning of Executive Order 12866, the Office of Management 
and Budget has not reviewed it prior to publication.

VIII. 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.'' 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.

IX. 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.) (RFA), 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.
    The Department has determined that a regulatory flexibility 
analysis under the RFA is not required for this rulemaking. While many 
longshore employers and a handful of insurance carriers may be small 
entities within the meaning of the RFA, see generally 77 FR 19471-72 
(March 30, 2012), this rule, if adopted in final, will not have a 
significant economic impact on them. Most employers and insurance 
carriers already submit documents and information to OWCP 
electronically, and electronic filing is usually associated with 
slightly lower costs than traditional paper filings. Thus, mandating 
electronic submission will have little to no impact on these parties. 
Similarly, streamlining the settlement-application submission process 
will have no negative economic impact and a potentially small positive 
impact on employers and carriers. Finally, the regulations related to 
penalties generally set procedures with no economic impact. To the 
extent the proposed rules affect the penalty amount assessed by OWCP, 
the rules explicitly take into account small entities by incorporating 
the mitigation provisions in section 223 of the Small Business 
Regulatory Enforcement Fairness Act, 5 U.S.C. 601 (note), where 
appropriate. See proposed Sec.  702.903(c)(2).
    Based on these facts, the Department certifies that this rule will 
not have a significant economic impact on a substantial number of small 
entities. Thus, a regulatory flexibility analysis is not required. The 
Department, however, invites comments from members of the public who 
believe the regulations will have a significant economic impact on a 
substantial number of small longshore employers or insurers. The 
Department has provided the Chief Counsel for Advocacy of the Small 
Business Administration with a copy of this certification. See 5 U.S.C. 
605.

X. Executive Order 13132 (Federalism)

    The Department has reviewed this proposed rule in accordance with

[[Page 80708]]

Executive Order 13132 regarding federalism, and has determined that it 
does not have ``federalism implications.'' The proposed 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,'' 
if promulgated as a final rule.

XI. Executive Order 12988 (Civil Justice Reform)

    This proposed 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 set forth in the preamble, the Department of Labor 
proposes to amend 20 CFR part 702 as follows:

PART 702--ADMINISTRATION AND PROCEDURE

0
1. The authority citation for part 702 continues 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; 28 U.S.C. 2461 note 
(Federal Civil Penalties Inflation Adjustment Act of 1990); Pub. L. 
114-74 at sec. 701; Reorganization Plan No. 6 of 1950, 15 FR 3174, 
64 Stat. 1263; Secretary's Order 10-2009, 74 FR 58834.

0
2. Revise Sec.  702.101 to read as follows:


Sec.  702.101  Exchange of documents and information; electronic 
signatures.

    (a) Except as otherwise provided by Sec. Sec.  702.203, 702.215 and 
702.349, all documents and information under this subchapter--
    (1) Sent to OWCP--
    (i) Must be submitted electronically through an OWCP-authorized 
system unless a district director permits an alternative submission 
method for individuals who do not have a computer, lack access to the 
internet, or lack the ability to utilize the internet. Documents and 
information submitted through an OWCP-authorized electronic system are 
considered filed when received.
    (ii) When authorized to use an alternative method, submission may 
be made by postal mail, commercial delivery service (such as Federal 
Express or United Parcel Service), hand delivery, or another method 
authorized by OWCP. Documents and information submitted using an 
alternative method are considered filed when received by OWCP.
    (2) Sent by OWCP to parties and their representatives must be 
sent--
    (i) Electronically by a reliable electronic method;
    (ii) In hard copy by postal mail, commercial delivery service (such 
as Federal Express or United Parcel Service), or hand delivery; or
    (iii) Electronically through an OWCP-authorized system that 
delivers documents to the parties and their representatives or notifies 
them when documents have been added to the case file.
    (3) Sent by any party or representative to another party or 
representative must be sent by any method allowed under paragraphs 
(a)(2)(i) through (iii) of this section, except that when sent by a 
reliable electronic method, the receiving party or representative must 
agree in writing to receive documents and information by that method.
    (b) For purposes of paragraph (a) of this section, reliable 
electronic methods for delivering documents include, but are not 
limited to, email, facsimile and web portal.
    (c) Any party or representative may revoke his or her agreement to 
receive documents and information electronically by giving written 
notice to the party or the representative with whom he or she had 
agreed to receive documents and information electronically.
    (d) The provisions in paragraphs (a) through (c) of this section 
apply when parties are directed by the regulations in this subchapter 
to advise; apply; approve; authorize; demand; file; forward; furnish; 
give; give notice; inform; issue; make; notice, notify; provide; 
publish; receive; recommend; refer; release; report; request; respond; 
return; send; serve; service; submit; or transmit.
    (e) Any reference in this subchapter to an application, copy, 
filing, form, letter, written notice, or written request includes both 
hard-copy and electronic documents.
    (f) Any requirement in this subchapter that a document or 
information be submitted in writing, or that it be signed, executed, or 
certified does not preclude its submission or exchange electronically.
    (g) Any requirement in this subchapter that a document be signed 
may be satisfied by an electronic signature.
    (1) Definitions. For purposes of this paragraph--
    Document means any form of writing submitted to OWCP, including 
applications, claim forms, notices of payments, and reports of injury.
    Electronic signature means a mark on a document, created by 
electronic means, that indicates the signatory's endorsement of or 
assent to the terms of a document. An electronic signature may serve as 
the binding signature for a business or other corporate or collective 
entity if the signatory has the legal authority to bind the entity.
    Electronic signature device means a code, password, or other 
mechanism that is used by a signatory to create or input electronic 
signatures on a document or to log in to an electronic signature 
program. The code, password, or mechanism must be unique to the 
signatory at the time the signature is created and the signatory must 
be uniquely entitled to use it. The device is compromised if the code 
or mechanism is available for use by any other person. Examples of such 
devices include a unique username and password, a PIN number or other 
numeric code, biometrics, cryptographic controls such as asymmetric or 
symmetric cryptography, and software that takes a scan of a user's ID.
    Electronic signature program means a software application that 
allows a signatory to log in using an electronic signature device and 
electronically sign a document.
    Signatory means any person who, on behalf of themselves or an 
entity for whom they are authorized to sign, places an electronic 
signature on a document.
    (2) Acceptable methods of creating an electronic signature 
include--
    (i) The use of an electronic signature device;
    (ii) The use of an electronic signature program, provided that such 
program includes the use of an electronic signature device;
    (iii) The signatory typing their name onto an electronic document 
following a ``/s'' mark;
    (iv) The signatory using a mouse, touchpad, stylus, or other 
equivalent device to physically draw their signature on a display 
screen;
    (v) Other methods allowed by OWCP.
    (3) A document containing multiple electronic signatures may 
utilize the same method or methods of signing with respect to each 
signature, or may utilize different methods, provided the methods are 
acceptable methods pursuant to paragraph (g)(2) of this section.

[[Page 80709]]

    (4) Entities submitting electronically-signed documents must--
    (i) Ensure that all signatures allow OWCP to clearly identify the 
signatory. Any signature made on behalf of a business or other 
collective entity should identify the individual person signing.
    (ii) Keep a record of how the electronic signature was obtained, 
including any electronic signature programs and/or electronic signature 
devices used, and be able to provide this information at OWCP's 
request.
    (iii) Keep a record of the date the signature was created and be 
able to provide this information at OWCP's request.
    (h) Any reference in this subchapter to transmitting information to 
an entity's address may include that entity's electronic address or 
electronic portal.
    (i) Subject to paragraph (a) of this section, any requirement in 
this subchapter that a document or information--
    (1) Be sent to a specific district director means that the document 
or information should be sent to the electronic (or physical when 
permitted) address provided by OWCP for that district director; and
    (2) Be filed by a district director in his or her office means that 
the document or information may be filed in an electronic (or physical 
when permitted) location specified by OWCP for that district director.
0
3. Revise Sec.  702.203(b) to read as follows:


Sec.  702.203  Employer's report; how given.

    (a) * * *
    (b) Employers may send a report of injury to the district director 
electronically through an OWCP-authorized system (see Sec.  
702.101(a)(1)). If the employer sends its report of injury by U.S. 
postal mail, the report will be considered filed on the date that the 
employer mails the document. If the report is filed by mail, the 
employer must retain documentation demonstrating when the report was 
mailed.
0
4. Revise Sec.  702.204 to read as follows:


Sec.  702.204  Employer's report; penalty for failure to furnish and or 
falsifying.

    (a) Any employer, insurance carrier, or self-insured employer who 
knowingly and willfully fails or refuses to send any report required by 
Sec.  702.201, or who knowingly or willfully makes a false statement or 
misrepresentation in any report, shall be subject to a civil penalty 
not to exceed $24,441 for each such failure, refusal, false statement, 
or misrepresentation for which penalties are assessed after January 15, 
2020.
    (1) For purposes of failing or refusing to send a report required 
by Sec.  702.201, an employer, insurance carrier, or self-insured 
employer--
    (i) Acts knowingly if it has actual knowledge of the employee's 
injury or death, that the injury or death is likely covered by the Act, 
and that a report is required; or if it had reason to know about the 
employee's injury or death, that the injury or death is likely covered 
by the Act, and that a report is required.
    (ii) Acts willfully if it intentionally disregards the reporting 
requirement or is indifferent to the reporting requirement.
    (2) Proof of either a false statement or misrepresentation made 
knowingly and willfully in a report required by Sec.  702.201 is 
sufficient to warrant imposition of a penalty under this section.
    (b) The district director has the authority and responsibility for 
assessing the penalty described in paragraph (a) of this section using 
the procedures set forth at subpart I of this part.
    (c) In determining the penalty amount under paragraph (a) of this 
section, the district director will consider how many penalties, if 
any, have been assessed against the employer, insurance carrier, or 
self-insured employer in the two years preceding the most recent 
reporting violation. In determining the number of prior penalties 
assessed, the district direct will include penalties assessed against 
an entity's parent company, subsidiaries, and related entities. The 
district director will assess a penalty in an amount equaling the 
following percentages of the maximum penalty, rounded up to the next 
dollar:

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                                                              Percentage
                                                              of maximum
                    Number of violations                       penalty
                                                               assessed
------------------------------------------------------------------------
First late/falsified report:...............................            2
Second late/falsified report:..............................            4
Third late/falsified report:...............................            8
Fourth late/falsified report:..............................           16
Fifth late/falsified report:...............................           32
Sixth late/falsified report:...............................           64
Seventh (and above) late/ falsified report:................          100
------------------------------------------------------------------------

0
5. Revise Sec.  702.215 to read as follows:


Sec.  702.215  Notice; how given.

    Notice must be effected by delivering it to the individual 
designated to receive such notices at the physical or electronic 
address designated by the employer. Notice may be given to the district 
director by submitting a copy of the form supplied by OWCP to the 
district director electronically through an OWCP-authorized system, by 
mail, or orally in person or by telephone.
0
6. Revise the section heading of Sec.  702.233 to read as follows:


Sec.  702.233  Additional compensation for failure to pay without an 
award.

* * * * *
0
7. Revise Sec.  702.236 to read as follows:


Sec.  702.236  Penalty for failure to report termination of payments.

    Any employer failing to notify the district director that the final 
payment of compensation has been made as required by Sec.  702.235 
shall be assessed a civil penalty in the amount of $297 for any 
violation for which penalties are assessed after January 15, 2020. The 
district director has the authority and responsibility for assessing 
this penalty using the procedures set forth at Subpart I of this part.
0
8. Revise Sec.  702.241 to read as follows:


Sec.  702.241  Settlements: Definitions; general information.

    (a) As used in Sec. Sec.  702.241 through 702.243, the term--
    Adjudicator means district director or administrative law judge 
(ALJ).
    Compensation case means a claim for compensation or other statement 
indicating potential entitlement to compensation or benefits.
    Counsel means any attorney admitted to the bar of any state, 
territory, or the District of Columbia.
    (b) Parties may settle a compensation case only with an 
adjudicator's approval. The settlement may include disability 
compensation, death benefits, medical benefits, attorney's fees, and 
costs. An adjudicator must approve the settlement unless it is 
inadequate or was procured by duress. If all parties to the settlement 
are represented by counsel, completed applications will be deemed 
approved unless specifically disapproved by an adjudicator within 30 
days of receipt of the application unless the adjudicator requests 
additional information under Sec.  702.243(a).
    (c) Receipt of a settlement application occurs--
    (1) For submissions to a district director, on the day OWCP 
receives a complete application.
    (2) For submissions to an ALJ, when the application is considered 
filed under the OALJ's rules of practice and procedure (29 CFR part 
18).
    (3) For compensation cases pending before a higher tribunal, the 
date the tribunal takes action indicating the

[[Page 80710]]

adjudicator should consider the settlement (e.g., enters an order 
remanding the case, dismisses the appeal).
    (d) The 30-day period for consideration of a settlement begins the 
day after the adjudicator's receipt of a complete application. If the 
30th day is a Saturday, Sunday, or legal holiday, the next business day 
will be considered the 30th day.
    (e) An agreement by the parties to settle a compensation case is 
limited to the rights of the parties and to claims then in existence. 
Settlement of disability compensation or medical benefits for the 
injured employee will not affect, in any way, the right of the 
employee's survivor(s) to claim death benefits.
0
9. Revise Sec.  702.242 to read as follows:


Sec.  702.242  Settlement application; contents and submission

    (a) A settlement application must be made on a form prescribed by 
OWCP. The settlement application must include all information required 
by the form, including--
    (1) A brief summary of the facts of the case, including a 
description of the incident; a description of the nature of the injury; 
the degree of impairment or disability; the claimant's average weekly 
wage; and a summary of compensation paid;
    (2) The amounts to be paid under the settlement for compensation, 
medical benefits, death benefits, attorney's fees and costs, as 
appropriate;
    (3) The signatures of all parties agreeing to the settlement as 
stated in the application and attesting that the settlement is adequate 
and was not procured by duress; and
    (4) If the settlement application includes the parties' agreement 
on more than one form of compensation or benefits, a statement whether 
the parties agree to settle the parts independently if the adjudicator 
does not approve the settlement in its entirety.
    (b) The adjudicator may request additional information from the 
parties if he or she believes, under the particular circumstances of 
the case, that such information is necessary to determine whether the 
settlement is adequate or has been procured by duress.
    (c) The adjudicator will not consider any information a party 
submits other than the settlement application required by paragraph (a) 
of this section, additional information requested by the adjudicator 
under paragraph (b) of this section, or information in the case record 
before the settlement application is filed.
    (d) To submit a completed settlement application--
    (1) The parties must submit the application to a district director 
in all cases unless the case is pending before the OALJ. Submission 
must be made under the procedures set forth at Sec.  702.101(a) except 
that if a hard copy is submitted under that provision, the application 
must be sent by certified mail with return receipt requested or by a 
commercial delivery service with tracking capability that provides 
reliable proof of delivery to the district director.
    (2) In cases pending before the OALJ, the parties may either--
    (i) Request that the case be remanded to the district director for 
consideration of the application and, after remand, file the 
application with a district director under paragraph (d)(1) of this 
section; or
    (ii) Submit the application to OALJ under the procedures set forth 
in the OALJ's rules of practice and procedures (29 CFR part 18) for 
consideration.
    (e) If the parties submit a settlement application to a district 
director while the compensation case is pending at the Benefits Review 
Board or a court, the parties must notify the Board or the court and 
request that the case be remanded or otherwise returned to the district 
director for consideration of the application.
0
10. Revise Sec.  702.243 to read as follows:


Sec.  702.243  Settlement approval and disapproval.

    (a) Within 30 days of receipt, the adjudicator must evaluate the 
settlement application and notify the parties in writing if the 
application is incomplete or if the adjudicator requests additional 
information. If all parties are represented by counsel, any such notice 
must also state that the 30-day period in Sec.  702.241(b) will not 
commence until the adjudicator receives the completed application and 
the additional information.
    (b) The adjudicator must issue a compensation order approving or 
disapproving the settlement application, and file and serve it on the 
parties in accordance with Sec.  702.349 unless the settlement has 
already been deemed approved under paragraph (f) of this section. If 
the adjudicator disapproves the settlement application in any part, the 
order must include the adjudicator's reasons for finding the settlement 
inadequate or procured by duress.
    (c) In determining whether the settlement is adequate and procured 
without duress, the adjudicator must consider all of the information 
required by Sec.  702.242(a), any additional information requested 
under Sec.  702.242(b), and the parties' attestations in the settlement 
application, to which the adjudicator may defer.
    (d) If the adjudicator disapproves any part of a settlement 
application, the entire application is disapproved unless the parties 
have stated in the application that they agree to settle the parts 
independently.
    (e) After a settlement application is disapproved by--
    (1) A district director, the parties may submit an amended 
application to the district director or request a hearing before an ALJ 
on either the settlement disapproval or the merits of the case under 
sections 8 and 19 of the Act, 33 U.S.C. 908 and 919.
    (2) An ALJ, the parties may submit an amended application to the 
ALJ, file an appeal with the Benefits Review Board under section 21 of 
Act, 33 U.S.C. 921, or proceed with a hearing on the merits of the 
case.
    (f) If all parties to the settlement are represented by counsel and 
the adjudicator does not formally approve or disapprove the application 
within 30 days after receipt of a complete settlement application and 
any additional requested information (see Sec.  702.242(b)), the 
application will be deemed approved. A settlement application that is 
deemed approved under this paragraph will be considered filed in the 
office of the district director on the last day of the 30-day period as 
calculated under Sec.  702.241(d).
    (g) The liability of an employer/insurance carrier is not 
discharged until the settlement is specifically approved by a 
compensation order issued by the adjudicator or deemed approved under 
Sec.  702.241(b) and paragraph (f) of this section.
    (h) Attorney's fees in a settlement application may include fees 
for work performed before other adjudicators and tribunals. If the 
settlement is approved, the attorney's fees will be considered approved 
within the meaning of Sec.  702.132.
    (i) When parties settle cases being paid under a final compensation 
order where no substantive issues are in dispute, the adjudicator, in 
determining whether the proposed settlement amount is adequate, may 
compare the amount to the present value of future compensation payments 
commuted, computed by:
    (1) Determining the probability of the death of the beneficiary 
before the expiration of the period during which he or she is entitled 
to compensation according to a current life expectancy table or 
calculator specified by OWCP; and

[[Page 80711]]

    (2) Applying the discount rate specified at 28 U.S.C. 1961.
0
11. In Sec.  702.271:
0
a. Revise the section heading and paragraph (a);
0
b. Redesignate paragraphs (b) through (d) as (c) through (e); and
0
c. Add new paragraph (b).
    The revisions and addition read as follows:


Sec.  702.271  Discrimination against employees who bring proceedings; 
prohibition.

    (a) No employer or its duly authorized agent may discharge or in 
any manner discriminate against an employee as to his or her employment 
because that employee:
    (1) Has claimed or attempted to claim compensation under the Act; 
or
    (2) Has testified or is about to testify in a proceeding under the 
Act.
    (b) To discharge or refuse to employ a person who has been 
adjudicated to have filed a fraudulent claim for compensation or 
otherwise made a false statement or misrepresentation under section 
31(a)(1) of the Act, 33 U.S.C. 931(a)(1), is not a violation of 
paragraph (a) of this section.
* * * * *
0
12. Revise Sec.  702.273 to read as follows:


Sec.  702.273  Penalty for discrimination.

    Any employer who violates Sec.  702.271(a) will be subject to a 
civil penalty of not less than $2,444 or more than $12,219 when 
assessed after January 15, 2020 to be paid by the employer alone (and 
not by a carrier). The district director has the authority and 
responsibility for assessing this penalty using the procedures set 
forth at subpart I of this part. Any penalty assessed by the district 
director prior to a hearing on the discrimination complaint will be 
stayed pending final resolution of the complaint by the Administrative 
Law Judge or higher tribunal.
0
13. Add subpart I to read as follows:
Subpart I--Procedures for Civil Money Penalties
Sec.
702.901 Scope of this part.
702.902 Definitions.
702.903 Notice of penalty; response; consequences of no response.
702.904 Decision on penalty after timely response; request for 
hearing.
702.905 Referral to the Office of Administrative Law Judges.
702.906 Decision and order of Administrative Law Judge.
702.907 [Reserved]
702.908 Review by the Secretary.
702.909 Discretionary review.
702.910 Final decision of the Secretary.
702.911 Settlement of penalty.
702.912 Collection and recovery of penalty.

Subpart I--Procedures for Civil Money Penalties


Sec.  702.901  Scope of this part.

    (a) These procedures apply when the district director imposes the 
civil money penalties prescribed by Sec.  702.204, Sec.  702.236, or 
Sec.  702.273.
    (b) The district director will deposit all penalties collected into 
the special fund described in section 44 of the Act, 33 U.S.C. 944.


Sec.  702.902  Definitions.

    In addition to the definitions provided in Sec. Sec.  701.301 and 
701.302, the following definition applies to this subpart:
    Respondent means the employer, insurance carrier, or self-insured 
employer against whom the district director is seeking to assess a 
civil penalty.


Sec.  702.903  Notice of penalty; response; consequences of no 
response.

    (a) The district director will serve a written notice through an 
electronic method authorized by OWCP or by trackable delivery method on 
each respondent against whom he or she is considering assessing a 
penalty. Where service is not accepted by a respondent, the notice will 
be deemed received by the respondent on the attempted date of delivery.
    (b) The notice must set forth the--
    (1) Facts giving rise to the penalty;
    (2) Statutory and regulatory basis for the penalty;
    (3) Amount of the proposed penalty, including an explanation for 
the amount set;
    (4) Consequences of not submitting all documentation to the 
district director as set forth in paragraph (d) of this section; and
    (5) Consequences of failing to timely respond to the notice as set 
forth in paragraph (e) of this section.
    (c) The respondent must respond within 30 days of receipt of the 
notice. The response may include--
    (1) Documentation regarding any facts relevant to the reason for 
the penalty; and
    (2) Documentation supporting a request for mitigation of the 
penalty amount under Section 223 of the Small Business Regulatory 
Enforcement Fairness Act, 5 U.S.C. 601 (note), if the penalty arises 
under Sec.  702.236.
    (d) Documentation not presented to the district director may not be 
admitted in any further proceedings before an Administrative Law Judge 
or other tribunal unless the respondent demonstrates exceptional 
circumstances prevented submission to the district director.
    (e) If the respondent does not respond within 30 days of receipt of 
the notice, the assessment and amount of the penalty set forth in the 
notice will be deemed final, and collection and recovery of the penalty 
may be instituted under Sec.  702.911.


Sec.  702.904  Decision on penalty after timely response; request for 
hearing.

    (a) If the respondent files a timely response to the notice 
described in Sec.  702.903, the district director will review the facts 
and any argument presented and issue a decision on the penalty. The 
decision must--
    (1) Include a statement of the reasons for the assessment and the 
amount of the penalty;
    (2) Set forth the respondent's right to request a hearing on the 
district director's decision and the method for doing so; and
    (3) Set forth the consequences of failing to timely respond to the 
decision as set forth in paragraph (d) of this section.
    (b) The respondent has 15 days from receipt of the decision to 
request a hearing before an Administrative Law Judge by filing a 
request for hearing with the district director. The request must--
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) State the specific determinations in the district director's 
decision with which the respondent disagrees;
    (4) Be signed by the respondent making the request or by the 
respondent's authorized representative;
    (5) State both the physical mailing address and electronic mailing 
address for the respondent and the authorized representative for 
receipt of further communications.
    (c) A timely hearing request will operate to stay collection of the 
penalty until final resolution of the penalty is reached by the 
Administrative Law Judge or the Secretary, as appropriate.
    (d) If the respondent does not request a hearing within 15 days of 
receipt of the notice, the assessment and amount of the penalty set 
forth in the district director's decision will be deemed final, and 
collection and recovery of the penalty may be instituted under Sec.  
702.912.


Sec.  702.905  Referral to the Office of Administrative Law Judges.

    (a) When the district director receives a request for hearing in 
response to a decision issued under Sec.  702.904, the district 
director will immediately notify

[[Page 80712]]

the Chief Administrative Law Judge, who will assign an Administrative 
Law Judge to the case. The district director will also forward to the 
Office of Administrative Law Judges the following documentation, which 
will be considered the administrative record:
    (1) The district director's notice and decision issued under 
Sec. Sec.  702.903 and 702.904;
    (2) The documentation upon which the district director relied in 
making his or her decision;
    (3) All written responses and documentation filed by the respondent 
with the district director;
    (4) A statement of the issues referred by the district director for 
hearing.
    (b) Except as otherwise provided in this subpart, the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges at 29 CFR part 18 will apply to hearings 
under this subpart.


Sec.  702.906  Decision and order of Administrative Law Judge.

    (a) The Administrative Law Judge must consider only those issues 
referred by the district director for hearing.
    (b) On issues properly before him or her, the Administrative Law 
Judge must limit his or her determinations to:
    (1) Whether the respondent has violated the sections of the Act and 
regulations under which the penalty was assessed;
    (2) The correctness of the penalty assessed by the district 
director as set forth in Sec. Sec.  702.204, 702.236, 702.271, and 
702.903(c)(2).
    (c) The decision of the Administrative Law Judge must include a 
statement of findings and conclusions, with reasons and bases therefor, 
upon each material issue referred.
    (d) On the date of issuance, the Administrative Law Judge must 
serve a copy of the decision and order on the district director and the 
respondent by a trackable delivery method.
    (e) Any party may ask the Administrative Law Judge to reconsider 
his or her decision by filing a motion within 30 days of the date of 
issuance of the decision. A timely motion for reconsideration will 
suspend the running of the time for any party to file a petition for 
review under Sec.  702.908.
    (f) If no party files a motion for reconsideration or petition for 
review within 30 days of the issuance of the Administrative Law Judge's 
decision, the decision will be deemed final, and collection and 
recovery of the penalty may be instituted under Sec.  702.912.
    (g) At the conclusion of all hearing proceedings, the 
Administrative Law Judge will forward the complete hearing record to 
the district director who referred the matter for hearing, who will 
retain custody of the record.


Sec.  702.907   [Reserved]


Sec.  702.908  Review by the Secretary.

    (a) Any party aggrieved by the decision of the Administrative Law 
Judge may petition the Secretary for review of the decision by filing a 
petition within 30 days of the date on which the decision was issued. 
Copies of the petition must be served on all parties and on the Chief 
Administrative Law Judge.
    (b) If any party files a timely motion for reconsideration under 
Sec.  702.906(e), any petition for review, whether filed prior to or 
subsequent to the filing of a timely motion for reconsideration, will 
be dismissed without prejudice as premature. The 30-day time limit for 
filing a petition for review by any party will begin upon issuance of a 
decision on reconsideration.
    (c) The petition for review must--
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) State the specific determinations in the Administrative Law 
Judge's decision with which the party disagrees;
    (4) Be signed by the party or the party's authorized 
representative; and
    (5) Attach copies of the Administrative Law Judge's decision and 
any other documents admitted into the record by the Administrative Law 
Judge that would assist the Secretary in determining whether review is 
warranted.
    (d) All documents submitted to the Secretary, including a petition 
for review, must be filed with the Secretary of Labor, U.S. Department 
of Labor, 200 Constitution Ave., NW, Washington, DC 20210 or 
alternative method required by the Secretary. Documents are not 
considered filed with the Secretary until actually received.


Sec.  702.909  Discretionary review.

    (a) Following receipt of a timely petition for review, the 
Secretary will determine whether the Administrative Law Judge's 
decision warrants review. This determination is solely within the 
Secretary's discretion.
    (1) If the Secretary does not notify the parties within 30 days of 
the petition for review's filing that he or she will review the 
decision, the Administrative Law Judge's decision will be considered 
the final decision of the agency at the expiration of that 30 days.
    (2) If the Secretary decides to review the decision, the Secretary 
will notify the parties within 30 days of the petition for review's 
filing of the issue or issues to be reviewed and set a schedule for the 
parties to submit written argument in whatever form the Secretary deems 
appropriate.
    (b) If the Secretary decides to review the decision, the district 
director must forward the administrative record compiled before the 
Administrative Law Judge to the Secretary.


Sec.  702.910  Final decision of the Secretary.

    The Secretary's review will be based upon the hearing record. The 
findings of fact in the decision under review shall be conclusive if 
supported by substantial evidence in the record as a whole. The 
Secretary's review of conclusions of law will be de novo. Upon review 
of the decision, the Secretary may affirm, reverse, modify, or vacate 
the decision, and may remand the case to the Office of Administrative 
Law Judges for further proceedings. The Secretary's final decision must 
be served upon all parties and the Chief Administrative Law Judge.


Sec.  702.911  Settlement of penalty.

    At any time during proceedings under this subpart, the district 
director and the respondent may enter into a settlement of the penalty.


Sec.  702.912  Collection and recovery of penalty.

    (a) When the determination of the amount of the penalty becomes 
final (see Sec. Sec.  903(e), 904(d), 906(f), 909(a)(1), 910), the 
penalty is immediately due and payable to the U.S. Department of Labor 
on behalf of the special fund described in section 44 of the Act, 33 
U.S.C. 944. The respondent will promptly remit the final penalty 
imposed to the Secretary of Labor.
    (b) If such remittance is not received within 30 days after it 
becomes due and payable, it may be recovered in a civil action brought 
by the Secretary in any court of competent jurisdiction, in which 
litigation the Secretary shall be represented by the Solicitor of 
Labor.

Julia K. Hearthway,
Director, Office of Workers' Compensation Programs.
[FR Doc. 2020-23224 Filed 12-11-20; 8:45 am]
BILLING CODE 4510-CR-P