The Defense Base Act
Feb 8, 2010
- Jack Martone, The American Equity Underwriters, Inc.
The Defense Base Act (42 U.S.C. 1651) (DBA) is a workers’ compensation law that extends the benefits of the Longshore and Harbor Workers’ Compensation Act to employees outside of the continental United States under certain circumstances (under the DBA Alaska and Hawaii are part of the Continental U.S.). It was passed in 1941, supplemented in 1942 by the War Hazards Compensation Act, and amended in 1953 and 1958 to broaden its coverage.
Since September 2001 there have been nearly 60,000 injuries reported under the DBA, including nearly 2,000 deaths. There are a lot of civilian contractors working overseas on government contracts.
The DBA covers the following employment activities:
- All employees working overseas for private employers on U.S. military bases or on any lands used by the U.S. for military purposes outside the continental U.S. in any Territory or possession;
- All employees working on public works contracts with any U.S. Government agency outside the continental U.S.;
- All employees working on contracts approved or funded by the U.S. Under the Foreign Assistance Act, generally providing for cash sale of military equipment, materials, or services to allies, if the contract is performed outside the continental U.S.;
- All employees working for American employers providing welfare or similar services outside the U.S. for the benefit of the armed forces (such as the USA).
If you have employees working overseas then you should be thinking about the Defense Base Act.
Here are the top ten things that you should know about DBA coverage:
- The Defense Base Act is not a good name for this law. It does not have to be about defense, and it does not have to be on a military base;
- The DBA applies to all employees, not just to Americans;
- The DBA applies to subcontractors just like prime contractors;
- The DBA applies to foreign employers employing only third country nationals;
- The language in a contract does not determine whether or not the DBA applies. The statutory language determines the coverage. If the government contracting officer makes a mistake and does not require DBA coverage, then it is the contractor/employer who faces the consequences of being uninsured;
- The DBA may apply regardless of the length of the contract, whether just a few days, a year, or longer;
- The DBA has no exclusion for corporate officers. They are covered;
- The DBA may apply even if an Iraqi ministry is administering the contract, the contractor is not an American company, and none of the employees is American;
- The U.S. Navy cannot waive the DBA just because they think that it costs too much;
- The U.S. Department of Labor can waive the application of the DBA under certain circumstances. One of the conditions for waiver is that the waived employees must be covered by the local workers’ compensation law. Because there is no local workers’ compensation law in Iraq or Afghanistan, there is no effective waiver of the DBA in Iraq or Afghanistan;
- The Longshore Act minimum rate does not apply under the DBA;
- The reference point for whether a waiver applies is where the contract is to be performed, not the country of origin of the worker;
- Section 1651(a)(1) of the DBA says, “…irrespective of the place injury or death occurs, and shall include any injury or death occurring to any such employee during transportation to or from the place of employment, where the U.S. or the employer provides the transportation or the cost thereof.” You could have a DBA exposure within the continental U.S.;
- The DBA, if it applies, is the worker’s exclusive remedy;
- There does not necessarily have to be a causal relationship between the employment of the injured worker and the injury, nor is it even necessary that the employee be engaged at the time of the injury in an activity of benefit to his employer. All that is required is that the “obligations and conditions” of employment create the “Zone of Special Danger” out of which the injury arose.
ABOUT THE AUTHOR
John A. (Jack) Martone served for 27 years in the U.S. Department of Labor, Office of Workers’ Compensation Programs, as the Chief, Branch of Insurance, Financial Management, and Assessments and Acting Director, Division of Longshore and Harbor Workers’ Compensation. Jack joined The American Equity Underwriters, Inc. (AEU) in 2006, where he serves as Senior Vice President, AEU Advisory Services and is the moderator of AEU's Longshore Insider.
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