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Revisions sought to Longshore Workers’ Comp Act penalty rules

The U.S. Department of Labor has proposed revisions to the regulatory scheme for assessing penalties against employers and insurance carriers for the violation of reporting requirements under the Longshore & Harbor Workers’ Compensation Act.

The proposed rulemaking announced by the department’s Office of Workers’ Compensation Programs focuses on the process used to assess civil penalties against entities that fail to report worker injuries in an accurate and timely manner.

The LHWCA provides for the payment of compensation, medical care, and vocational rehabilitation services to employees disabled from on-the-job injuries that occur on the navigable waters of the U.S. or in adjoining areas customarily used in the loading, unloading, repairing or building of a vessel. The LHWCA also provides for payment of survivor benefits to dependents if the work injury causes, or contributes to, the employee’s death.

Benefits are typically paid by a self-insured employer or by a private insurance company on the employer’s behalf.

According to the agency’s notice of rulemaking published in the Federal Register on Sept. 12, the proposed amendments are intended to help clarify the process and allow additional opportunities to contest penalties.

In furtherance of those goals, the proposed rule would add new sections and amend existing sections of 20 C.F.R. 702, which sets forth the procedures implementing the act’s civil money penalty provisions.

The act allows the imposition of penalties when an employer or insurance carrier fails to timely report a work-related injury or death, or fails to timely report its final payment of compensation to a claimant. The proposed rule would revise current Section 702.204 to provide for graduated penalties for an entity’s failure to timely file, or falsification of, the required report of an employee’s work-related injury or death.

The proposal 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 or a graduated penalty scheme.

The proposed rule would also add new sections which would add procedures for notifying entities of failures to accurately and timely file, provide an opportunity for a response before a notice of proposed penalty is issued, and provide guidance in determining the amount of the proposed penalty by setting forth aggravating and mitigating factors to consider.

The proposed rule also sets out procedures for challenging certain penalties which would allow the entity against whom the penalty is assessed the opportunity for a hearing before an administrative law judge, and to petition the secretary of labor for further review.

Comments on the proposals must be submitted in writing by Nov. 13.