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The Longshore and Harbor Workers’ Compensation Act (LHWCA), 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. The Office of Workers’ Compensation Programs (OWCP) administers the Longshore and Harbor Workers’ Compensation Act and its extensions.

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 DC 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 (1973) (repealed 1979)).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 has just proposed new rules for imposing and reviewing civil money penalties prescribed by the Longshore Act. The proposed rules would also set forth the procedures to contest OWCP’s penalty determinations.

The proposed rules would add new sections and amend existing sections to implement 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.

The proposed rule would revise current § 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. 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 or a graduated penalty scheme.

The proposed rule would also add new §§ 702.206, 207, and 208. These proposed sections would add procedures for the District Director to notify entities of failures to accurately and timely file, provide an opportunity for a response before the District Director issues a notice of proposed penalty, and provide guidance to both the District Director and the Director in determining the amount of the proposed penalty and penalty by setting forth aggravating and mitigating factors they may consider.

The proposed rule also contains a new subpart I setting out procedures for challenging proposed penalties and penalties under both § 702.204 (for an entity’s failure to timely file, or falsification of, the required report of an employee’s work-related injury or death) and § 702.236 (for failing to report the termination of payments). These proposed procedures 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.

During the hearing, entities would have the opportunity to submit facts and arguments for consideration consistent with the Rules of Practice and Procedure for Administrative Hearings Before the Office of Administrative Law Judges (29 CFR part 18).

The ALJ would determine whether the respondent violated the statutory or regulatory provision under which the penalty was assessed and whether the amount of the penalty assessed was appropriate. Consistent with section 557 of the APA, the ALJ’s decision would become the decision of the Agency without further proceedings, unless within 30 days, the respondent requested reconsideration of the ALJ’s decision

The Department invites written comments on the proposed rule from interested parties. Written comments must be received by November 13, 2023.  Written comments may be submitted in on of several methods detailed in the Federal Register announcement of this proposed rule change.

The Federal Register announcement also contains a Section-by-Section Explanation of the proposed rule if you would like a better understanding of what is proposed.