81 FR 58878 - Longshore and Harbor Workers' Compensation Act: Maximum and Minimum Compensation Rates
DEPARTMENT OF LABOR
Office of Workers' Compensation Programs Federal Register Volume 81, Issue 166 (August 26, 2016)
Office of Workers' Compensation Programs
Federal Register Volume 81, Issue 166 (August 26, 2016)
| Page Range | 58878-58890 | |
| FR Document | 2016-20467 |
[Federal Register Volume 81, Number 166 (Friday, August 26, 2016)] [Proposed Rules] [Pages 58878-58890] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-20467] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF LABOR Office of Workers' Compensation Programs 20 CFR Part 702 RIN 1240-AA06 Longshore and Harbor Workers' Compensation Act: Maximum and Minimum Compensation Rates AGENCY: Office of Workers' Compensation Programs, Labor. ACTION: Notice of proposed rulemaking; request for comments. ----------------------------------------------------------------------- SUMMARY: The Office of Workers' Compensation Programs is proposing rules to implement the Longshore and Harbor Workers' Compensation Act's maximum and minimum compensation provisions. Some of these provisions, which cap the amounts of compensation and death benefits payable to entitled claimants and provide a floor below which compensation may not fall, have become the topic of litigation. The proposed rules would clarify how the Department interprets and applies these provisions. In addition, the proposed rules would implement the Act's annual compensation-adjustment mechanism for permanent total disability compensation and death benefits. DATES: The Department invites written comments on the proposed regulations from interested parties. Written comments must be received by October 25, 2016. ADDRESSES: You may submit written comments, identified by RIN number 1240-AA06, by any of the following methods. To facilitate the receipt and processing of comment letters, OWCP encourages interested parties to submit their comments electronically.Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions on the Web site for submitting comments. Fax: (202) 693-1380 (this is not a toll-free number). Only comments of ten or fewer pages (including a Fax cover sheet and attachments, if any) will be accepted by Fax. 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 C-4319, 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 http://www.regulations.gov, including any personal information provided. Docket: To read background documents or comments received, go to http://www.regulations.gov. FOR FURTHER INFORMATION CONTACT: Antonio Rios, Director, Division of Longshore and Harbor Workers' Compensation, Office of Workers' Compensation Programs, U.S. Department of Labor, Room C-4319, 200 Constitution Avenue NW., Washington, DC 20210. Telephone: (202)-693- 0038 (this is not a toll-free number). 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, 33 U.S.C. 901- 50 (LHWCA or Act), establishes a federal workers' compensation system for an employee's disability or death arising in the course of covered maritime employment. 33 U.S.C. 903(a), 908, 909. This proposed rule would implement the Act's provisions on maximum and minimum amounts of compensation payable. A. The Act's Compensation Scheme Disability, which the Act defines as ``incapacity because of injury to earn the wages which the employee was receiving at the time of injury,'' 33 U.S.C. 902(10), ``is in essence an economic, not a medical concept.'' Metro. Stevedores v. Rambo, 515 U.S. 291, 297 (1995). From its inception in 1927, the Act has provided that ``the average weekly wage of the injured employee at the time of the injury'' must be used as the basis for computing his or her compensation rate. 33 U.S.C. 910. Thus, ``[a]n employee's compensation depends on the severity of his disability and his preinjury pay.'' Roberts v. Sea-Land Services, Inc., 566 U.S. __, 132 S.Ct. 1350, 1354 (2012). Several statutory sections have an impact on determining the amount of compensation payable. Section 10, ``Determination of Pay,'' 33 U.S.C. 910, is the starting point in the statutory scheme. It sets out rules for calculating the employee's average weekly wage (AWW) as of the time of the employee's disabling injury. This AWW serves as the basis for all future benefit calculations for that worker throughout the life of his or her claim. The second step is to determine what percentage of the employee's AWW a claimant will receive in compensation. This is determined under section 8, ``Compensation for Disability,'' and section 9, ``Compensation for Death,'' 33 U.S.C. 908, 909. Compensation payable for disability varies based on the nature and extent of an employee's disability. Section 8 establishes four basic categories of disability: Permanent total, temporary total, permanent partial, and temporary partial. 33 U.S.C. 908(a)-(c), (e). In general, an injury is ``total'' if the worker is unable to work after the injury and ``partial'' if the worker is able to work at a diminished wage. A disability is ``temporary'' if the employee's medical condition is improving and becomes ``permanent'' when he or she reaches maximum medical improvement. See 33 U.S.C. 908(a)-(c), (e); see also Potomac Elec. Power Co. v. Director, OWCP, 449 U.S. 268 (1980). And section 9 provides compensation payable to the employees' eligible survivors for injuries causing death. 30 U.S.C. 909. For all disability categories, the Act uses a ``two-thirds'' rule to compute compensation. Totally disabled employees--those who are unable to return to their original employment or earn wages in suitable alternative employment--receive two-thirds the AWW they were earning at the time of injury. 33 U.S.C. 908(a)-(b). Partially disabled employees--those who experience the loss or loss-of-use of body parts specified in the statute--are entitled to two-thirds of their date-of- injury AWW for a specified number of weeks. 33 U.S.C. 908(c)(1)-(19). Other partially disabled employees--those [[Page 58879]] who are able to work after their injuries at a diminished wage--receive two-thirds of the difference between their pre-disability AWW and their residual earning capacity (i.e., the post-injury wages they earn or could earn through suitable alternative employment). See 33 U.S.C. 908(c)(21), (e). Finally, the compensation rate for survivors of an employee who suffers a work-related death is usually based on the deceased employee's AWW at the time of death, and, with certain exceptions, can be as high as two-thirds of that wage. 33 U.S.C. 909(b). The third step is to apply the statute's compensation-limiting rules. Despite the general two-thirds rule, section 6, ``Compensation,'' 33 U.S.C. 906, both caps the compensation amounts that can be received (a ``maximum'') and provides a floor below which compensation may not fall (a ``minimum''). These limits are applied after calculating two-thirds of the worker's date-of-injury AWW. The Act sets the maximum for all disability compensation categories at 200 percent of the ``applicable national average weekly wage.'' 33 U.S.C. 906(b)(1). Total compensation for death--the amount payable to all survivors in the aggregate--is also limited to that 200-percent figure, or to the deceased employee's AWW, whichever is less. 33 U.S.C. 909(e)(1); Donovan v. Newport News Shipbuilding & Dry Dock Co., 31 BRBS 2 (1997). The Act sets the minimum for total disability compensation at the lower of: (1) 50 percent of the applicable national average weekly wage; or (2) the employee's actual AWW. 33 U.S.C. 906(b)(2). The Act does not provide minimums for the remaining compensation categories. The Secretary of Labor determines the national average weekly wage before October 1 of each year, and it applies for a fiscal year (FY), from October 1 until the next September 30. 33 U.S.C. 906(b)(3). A given fiscal year's national average weekly wage, and the resulting maximum and minimum rates, apply to ``employees or survivors currently receiving compensation for permanent total disability or death during such [fiscal year], as well as those newly awarded compensation during such [fiscal year].'' 33 U.S.C. 906(c) (emphasis added). Under the ``currently receiving'' clause, the maximum rate for claimants receiving benefits for permanent total disability or death is ``adjusted each fiscal year--and typically increases, in step with the usual inflation-driven rise in the national average weekly wage.'' Roberts, 132 S.Ct. at 1354 n.2. In fact, because the national average weekly wage has risen every year since Congress added this self- adjustment feature to section 6 in 1972, each year's maximum rate has risen as well. Thus, applying a later fiscal year's maximum generally results in a higher compensation rate. Finally, in addition to section 6's provisions allowing adjustments to the maximum compensation rate, section 10(f) provides another mechanism for adjusting compensation amounts over time. ``[B]enefits payable for permanent total disability or death'' are increased at the beginning of each fiscal year (October 1) by the same percentage as any increase in the national average weekly wage (as calculated under section 6), but no more than 5 percent. 33 U.S.C. 910(f). The primary difference between the two adjustment provisions is that section 10(f) applies to all claimants receiving compensation for permanent total disability or death, while section 6(c) assists only those affected by the maximum rate. Through these provisions, compensation payable to a claimant each year increases by the same amount as wage-growth generally, ensuring that the value of the workers' compensation is not eroded over time. In recent litigation, disputes have arisen over which fiscal year's maximum rate or rates apply to a given claimant, specifically: (1) In what fiscal year is a claimant ``newly awarded compensation''; and (2) in what fiscal year is a claimant ``currently receiving compensation for permanent total disability or death.'' On the first question, the dispute is whether a claimant is ``newly awarded compensation'' when he or she first becomes disabled--and therefore entitled to compensation-- or when an administrative law judge issues a compensation order. On the second question, the dispute is whether a claimant is ``currently receiving compensation for permanent total disability'' when he or she first becomes permanently totally disabled or when he or she actually receives compensation for permanent total disability. The Supreme Court resolved the first of these questions in its Roberts decision. But the second issue has not been addressed by all circuits around the country, and thus remains subject to litigation. The proposed rules would codify the Supreme Court's decision, resolve the second issue in a manner consistent with the courts that have addressed it, implement other aspects of the Act's maximum and minimum compensation provisions, and address the related section 10(f) annual adjustment provision. B. Section 6(c)'s ``Newly Awarded Compensation During Such Period'' Clause The Supreme Court construed this part of section 6(c) in Roberts and held ``that an employee is `newly awarded compensation' when he first becomes disabled and thereby becomes statutorily entitled to benefits, no matter whether, or when, a compensation order issues on his behalf.'' 132 S.Ct. at 1363. Mr. Roberts was injured and became disabled in FY 2002. An administrative law judge (ALJ) order awarding compensation, however, was not issued until FY 2007. While Mr. Roberts' employer initially made some compensation payments, it stopped in May 2005 and did not resume payments until after the ALJ's FY 2007 order. The ALJ found that Mr. Roberts' disability was: Temporary total from March 11, 2002, to July 11, 2005; permanent total from July 12, 2005, to October 9, 2005; and permanent partial beginning on October 10, 2005. Roberts v. Director, Office of Workers' Compensation Programs, 625 F.3d 1204, 1205 (9th Cir. 2010). Because the employer had ceased paying compensation in May 2005, before Mr. Roberts' period of permanent total disability, it did not pay him for that disability until after the ALJ's order in FY 2007. The ALJ found that Mr. Roberts' compensation rate for total disability--two-thirds of his AWW--was $1,902.05, and that his compensation rate for permanent partial disability--two-thirds of the difference between his average weekly and his residual wage-earning capacity--was $1,422.05. He found, however, that Mr. Roberts was subject, for all periods of disability, to the maximum rate of $966.08 in effect during FY 2002, because that was when he first became disabled, and was thus ``newly awarded compensation.'' Id. at 1206. On Mr. Roberts' motion for reconsideration, the ALJ determined that he had applied the wrong maximum rate for the period from October 1, 2005, through October 9, 2005. The ALJ found that Mr. Roberts was entitled to the FY 2006 maximum rate of $1,703.64 per week for that period because he was ``currently receiving compensation for permanent total disability'' during that time. Id. The Benefits Review Board, relying on its earlier decision in Reposky v. Int'l Transp. Services, 40 BRBS 65, 74-76 (2006) (holding that a claimant is newly awarded compensation ``when benefits commence, generally at the time of injury''), affirmed the ALJ's decision. The Ninth Circuit followed suit. In affirming the ALJ's decision, it held that [[Page 58880]] an injured employee is ``newly awarded'' compensation when he or she first becomes entitled to compensation rather than when a formal compensation order is issued. Roberts, 625 F.3d at 1208. Although Mr. Roberts argued that ``awarded'' could mean only ``assigned by formal order in the course of adjudication,'' and that ``newly awarded'' must therefore mean newly issued a compensation order, id. at 1206, the court rejected that argument. It reasoned that the LHWCA sometimes uses ``awarded'' to mean ``entitled to.'' It found that use applied to section 6, and held that a claimant is ``newly awarded'' compensation when he first becomes entitled to compensation, which is when he first becomes disabled. The Supreme Court agreed with the Ninth Circuit's interpretation of section 6(c)'s ``newly awarded compensation'' clause. The Court acknowledged that Mr. Roberts' contrary view was ``appealing'' because ``[i]n ordinary usage, `award' most often means `give by judicial decree' or `assign after careful judgment.' '' Roberts, 132 S. Ct. at 1356 (quoting Webster's Third New International Dictionary 152 (2002)). It recognized, however, that ``award'' can also mean ``grant'' or ``confer or bestow upon.'' Thus, deciding that ``the text of Sec. 906(c), in isolation, is indeterminate[,]'' the Court considered its function in the context of the statute as a whole. Id. at 1357. The Court concluded that in the Act's ``comprehensive, reticulated regime for worker benefits--in which Sec. 906 plays a pivotal role--`awarded compensation' is much more sensibly interpreted to mean `statutorily entitled to compensation because of disability,' '' id. at 1357, than ``awarded compensation in a formal order.'' Id. at 1356. The Court gave several reasons for its holding. First, the Court recognized that construing ``newly awarded compensation'' to mean a formal compensation order would be ``incompatible with the Act's design.'' Id. at 1357. The Court reasoned that this construction of the clause would be impossible to apply in the many cases where benefits are paid voluntarily and a formal compensation order is never issued. Noting that the three provisions of section 6 that relate to the maximum compensation rate ``work together to cap disability benefits,'' and that section 6(b)(1)'s cap on benefits ``applies globally, to all disability claims,'' the Court concluded that section 6(c)'s ``newly awarded'' clause must also apply globally. Id. at 1358. Second, the Court examined the Act's administrative structure, which requires employers to pay compensation within 14 days after the employer knows of the worker's injury (see 30 U.S.C. 914(b)). It determined that using the national average weekly wage at the time of disability to determine the applicable maximum ``coheres'' with that structure. Roberts, 132 S. Ct. at 1358. The Court recognized that the employer, as well as OWCP, must be able to calculate the amount of compensation due at the time of payment, a calculation that necessarily includes consideration of any applicable cap. Because an employer is ``powerless to predict'' future events related to the compensation claim or what a later national average weekly wage will be, the court reasoned that ``[i]t is difficult to see how an employer can apply or certify a national average weekly wage other than the one in effect at the time an employee becomes disabled.'' Roberts, 132 S. Ct. at 1358- 59. Reading section 6(c) in the context of the Act's comprehensive scheme, the Court further explained that ``applying the national average weekly wage for the fiscal year in which an employee becomes disabled advances the LHWCA's purpose to compensate disability,'' which focuses on wages at the time of the injury as the basis to compute compensation. Id. at 1359 (citing 33 U.S.C. 902(10)). It is thus ``logical to apply the national average weekly wage for the same point in time.'' Id. Moreover, the Court found that applying the date-of-disability maximum rate as suggested by the Director and Employer ``avoids disparate treatment of similarly situated employees . . . who earn the same salary and suffer the same injury on the same day.'' Id. at 1359. By contrast, Mr. Roberts' approach could subject such employees to different rates based solely on the ``happenstance of their obtaining orders in different fiscal years.'' Id. Third, the Court believed its approach ``discourages gamesmanship in the claims process.'' Id. at 1360. Using the date a compensation order issues would encourage claimants to delay the adjudication process or initiate additional administrative proceedings seeking to take advantage of a later year's national average weekly wage. At the same time, an employer who promptly pays compensation at the correct rate would be subject to an increased cap retroactively for those payments based on a later compensation order. The Court refused to ``reward'' claimants with these ``windfalls'' while ``punishing'' employers who have met their statutory obligations. Id. C. Section 6(c)'s ``Currently Receiving Compensation for Permanent Total Disability or Death Benefits During Such Period'' Clause While the Supreme Court's Roberts decision settled the interpretation of the ``newly awarded'' clause, the Court declined to consider section 6(c)'s ``currently receiving'' clause, leaving the phrase's correct interpretation open to further litigation. The Ninth Circuit Roberts court had interpreted the ``currently receiving'' clause consistently with the ``newly awarded'' clause, noting that ``[u]nder both clauses, the inquiry into the applicable maximum rate focuses on an employee's entitlement to compensation.'' Roberts, 625 F.3d at 1208. It held that ``the `currently receiving' clause of section 6(c) unambiguously refers to the period during which an employee was entitled to receive compensation for permanent total disability, regardless of whether his employer actually paid it.'' Id. at 1209. Consequently, the court determined that Mr. Roberts was ``currently receiving compensation for permanent total disability'' as of July 12, 2005, and thus entitled to the FY 2005 maximum rate from that date through September 30, 2005 (the end of FY 2005), and to the FY 2006 rate from October 1, 2005, through October 9, 2005. Beginning October 10, 2005--when Mr. Roberts regained an earning capacity, making his disability permanent partial--the court concluded he was once again subject to the FY 2002 maximum rate. Id. at 1206, 1209. Although the Eleventh Circuit initially disagreed with the Ninth Circuit's construction of the ``currently receiving'' clause, Boroski v. DynCorp Int'l, 662 F.3d 1197 (11th Cir. 2011), that court reversed its position after the Supreme Court decided Roberts. Boroski v. DynCorp Int'l, 700 F.3d 446 (11th Cir. 2012) on remand from 132 S.Ct. 2430 (2012). Mr. Boroski was first disabled by his work-related injury in April 2002. His employer, DynCorp International, timely contested his compensation claim and thus did not voluntarily pay him compensation. An ALJ entered an order in FY 2008 awarding him permanent total disability compensation from 2002 and continuing. DynCorp based its subsequent payments on the maximum compensation rate applicable for FY 2002, and adjusted the amount upward each year, beginning on October 1, 2002, as required by section 10(f). Mr. Boroski objected, arguing that he was not ``currently receiving compensation for permanent total disability'' until FY 2008, when the employer actually began [[Page 58881]] paying him, and was thus entitled to the FY 2008 maximum rate from the outset. The Eleventh Circuit rejected Mr. Boroski's argument and held that `` `currently receiving compensation' in Sec. 906(c) means `currently entitled to compensation.' '' Boroski, 700 F.3d at 451. The court agreed with the Director that for each year after 2002 during which Mr. Boroski was entitled to compensation for permanent total disability, he was ``currently receiving compensation for permanent total disability,'' and thus subject to the new fiscal year's maximum rate, regardless of when the compensation was actually paid. Taking its analytical lead from the Supreme Court in Roberts, the Boroski court considered the ``currently receiving'' clause's role in the context of the entire statute. The court noted that using the maximum for the year in which compensation was actually paid (2008) rather than for the first year Mr. Boroski was disabled (2002) would lead to ``two different and irreconcilable weekly benefit payment amounts'' under the Supreme Court's interpretation of the ``newly awarded'' clause, which also applied to his compensation calculation. Id. at 451. The Director's contrary interpretation instead harmonized the two clauses of section 6(c). The court also found the Director's position more consistent with section 10(f)'s annual adjustment mechanism. The court reasoned that the Director's interpretation of the ``currently receiving'' clause operates similarly, ``gradually increasing benefits to maintain the value of an injured employee's wages, determined `at the time of the injury.' '' Id. at 452. Mr. Boroski's interpretation--under which ``employers who first pay benefits to an injured employee in a year other than the year of the injury would pay all past due payments based on the national average weekly wage for the year in which the first payment is made . . . effectively giv[ing] the injured employee a raise to the later year's national average weekly wage, and would make that raise retroactive to the date of his disability''--would be ``incongruous'' with section 10(f). Id. at 452. The court also rejected Mr. Boroski's assertion that Congress intended his interpretation to encourage prompt payment of benefits. The court noted that claimants are entitled to interest on late payments of compensation, and found that interest both adequately compensates claimants for the delayed receipt of benefits and discourages employers from refusing to promptly pay legitimate claims. Finally, the court determined that the Director's interpretation avoided disparate treatment of similarly situated claimants. ``Under the Director's interpretation, Boroski receives the same benefits as a similarly situated employee who was first injured and who first received payment in 2002, and, additionally, Boroski receives interest on all late payments, to compensate him for the delay.'' Id. at 453. By contrast, under Mr. Boroski's interpretation--in which Mr. Boroski ``would receive, in addition to interest, higher benefits for the same period of disability than claimants who timely receive their benefits''--the same hypothetical employee ``would receive approximately $30,000 less than Boroski.'' Id. For all of these reasons, the Eleventh Circuit held, as had the Ninth Circuit in Roberts, that an employee is ``currently receiving compensation for permanent total disability'' when he is entitled to such compensation, not when he is actually paid that compensation. To date, the remaining circuits have not weighed in on this issue. The Benefits Review Board subsequently reached the same conclusion as the Ninth and Eleventh Circuits. Lake v. L-3 Communications, 47 BRBS 45 (2013). In Lake, the Board held that a claimant is ``currently receiving compensation'' under section 6(c) ``during a period in which he is entitled to receive such compensation, regardless of whether his employer actually pays it.'' Id. at 48. The Board also held that when a claimant's temporary total disability changes to permanent total disability during a fiscal year, the maximum rate in effect during that year applies immediately. Id. at 48. In reaching this conclusion, the Board overruled this portion of its earlier contrary decision in Reposky, 40 BRBS at 65. The Board thus held that the FY 2009 maximum rate applied as of December 10, 2008, the date that Mr. Lake's entitlement to permanent total disability benefits commenced, until the next October 1, when the new fiscal year's maximum rate applied. The Board also addressed a related question on the interplay between sections 6 and 10(f) in Lake. The employer argued that Mr. Lake, who first reached permanent total disability status in FY 2009, was not entitled to the FY 2009 maximum rate. Instead, the employer contended that he was limited to a section 10(f) increase on the FY 2006 maximum rate that he had been receiving since his injury, followed by a section 10(f) adjustment each subsequent October 1. The Board rejected this argument. Citing its earlier contrary holding in Marko v. Morris Boney Co., 23 BRBS 353 (1990), the Board reiterated its conclusion that, ``in a permanent total disability case in which two- thirds of the claimant's actual [AWW] exceeds the Section 6(b)(3) statutory maximum rate, he is entitled to the benefit of the new maximum rate each fiscal year . . . until such time as two-thirds of his actual average weekly wage falls below 200 percent of the applicable [national average weekly wage], and then annual adjustments under Section 10(f) apply.'' Lake, 47 BRBS at 50. The Board found its holding compelled by the plain language of section 6(c) and supported by the Ninth Circuit's Roberts decision. II. Summary of the Proposed Rule A. General Information As discussed in the Section-by-Section Explanation below, this proposed rule implements the Act's provisions governing the maximum and minimum amount of disability compensation and death benefits payable. The proposed regulations do not govern general compensation calculations (referred to in the rules as the ``calculated compensation rate''), and the fact that compensation payable is subject to these maximum and minimum rates does not mean that claimants are necessarily entitled to them. Rather, the proposed regulations simply provide that disability compensation and death benefits can go no higher than the applicable maximum rate or lower than the applicable minimum rate. The proposed rule includes two subparts. Subpart G describes the annual adjustment to compensation and death benefits provided under section 10(f) of the Act, 33 U.S.C. 910(f). While section 10(f) allows for an annual adjustment to all payments of compensation for permanent total disability or death benefits, including those cases where neither the maximum nor the minimum rates are implicated, the Department has included section 10(f) in this rulemaking because its application can be closely tied with the maximum compensation or death benefits payable in certain cases. These interrelationships are detailed in the Section- by-Section Explanation below. Subpart H includes proposed regulations implementing the Act's maximum and minimum provisions. The Department has organized these sections first to cover general topics, then by whether the rules govern maximum or minimum compensation payable, and finally by categories of compensation payable (i.e., temporary [[Page 58882]] total or partial, permanent total or partial, and death benefits). B. Section-by-Section Explanation This discussion contains an explanation of each proposed rule. Many of the rules include examples that use the Department's yearly calculation of the applicable national average weekly wage, the maximum and minimum weekly compensation rates, and percentage adjustments available under section 10(f), 33 U.S.C. 910(f). This information is routinely available on OWCP's Web site. See https://www.dol.gov/owcp/dlhwc/ (last visited Aug. 1, 2016). For the reader's convenience, these amounts for FY 2000 to FY 2016 are provided in the following chart. ---------------------------------------------------------------------------------------------------------------- Maximum weekly Minimum weekly Section 10(f) Period NAWW \1\ rate (200% of rate (50% of percent NAWW) NAWW) increase (%) ---------------------------------------------------------------------------------------------------------------- (FY 16) 10/01/2015-09/30/2016................... $703.00 $1,406.00 $351.50 2.10 (FY 15) 10/01/2014-09/30/2015................... 688.51 1,377.02 344.26 2.25 (FY 14) 10/01/2013-09/30/2014................... 673.34 1,346.68 336.67 1.62 (FY 13) 10/01/2012-09/30/2013................... 662.59 1,325.18 331.30 2.31 (FY 12) 10/01/2011-09/30/2012................... 647.60 1,295.20 323.80 3.05 (FY 11) 10/01/2010-09/30/2011................... 628.42 1,256.84 314.21 2.63 (FY 10) 10/01/2009-09/30/2010................... 612.33 1,224.66 306.17 2.00 (FY 09) 10/01/2008-09/30/2009................... 600.31 1,200.62 300.16 3.47 (FY 08) 10/01/2007-09/30/2008................... 580.18 1,160.36 290.09 4.12 (FY 07) 10/01/2006-09/30/2007................... 557.22 1114.44 278.61 3.80 (FY 06) 10/01/2005-09/30/2006................... 536.82 1073.64 268.41 2.53 (FY 05) 10/01/2004-09/30/2005................... 523.58 1,047.16 261.79 1.59 (FY 04) 10/01/2003-09/30/2004................... 515.39 1,030.78 257.70 3.44 (FY 03) 10/01/2002-09/30/2003................... 498.27 996.54 249.14 3.15 (FY 02) 10/01/2001-09/30/2002................... 483.04 966.08 241.52 3.45 (FY 01) 10/01/2000-09/30/2001................... 466.91 933.82 233.46 3.61 (FY 00) 10/01/1999-09/30/2000................... 450.64 901.28 225.32 3.39 ---------------------------------------------------------------------------------------------------------------- Some examples also include compensation calculations. When compensation is based on 66 and \2/3\ percent of the injured employee's average weekly wage (e.g., compensation for permanent total disability), the formula for calculating this percentage is expressed as: Average weekly wage amount x 2 / 3. --------------------------------------------------------------------------- \1\ For purposes of this chart, ``NAWW'' means the applicable national average weekly earnings of production or nonsupervisory workers on private nonagricultural payrolls during the first three quarters of the preceding fiscal year as determined by the Department. --------------------------------------------------------------------------- Subpart G--Section 10(f) Adjustments 20 CFR 702.701 What is an annual section 10(f) adjustment and how is it calculated? Section 10(f) of the Act, 33 U.S.C. 910(f), provides for an annual upward percentage adjustment of permanent total disability compensation rates and death benefits so that the value of the compensation received does not erode over time. Proposed Sec. 702.701 sets out the basic rules for section 10(f) adjustments. Proposed paragraphs (a) and (b) describe the section 10(f) adjustment and how the fiscal year percentage is determined. Consistent with the statute, paragraph (a) states that section 10(f) adjustments apply each fiscal year to permanent total disability compensation and death benefits, and that those adjustments may only increase amounts payable. 33 U.S.C. 910(f) (``benefits payable for permanent total disability or death . . . shall be increased''); 33 U.S.C. 910(g) (``in no event shall compensation for death benefits be reduced''). Paragraph (b) describes how the Department calculates the annual section 10(f) adjustment, a method dictated by section 10(f) itself. In any given fiscal year, the 10(f) adjustment is the percentage increase in the applicable national average weekly wage over the prior fiscal year's applicable national average or five percent, whichever is lower. See 33 U.S.C. 910(f)(1), (2). Proposed paragraphs (c) through (e) set out how the fiscal year percentage is applied in individual cases. Paragraph (c) specifies that section 10(f) adjustments are applied each October 1 to the prior year's compensation or death benefits payable to the claimant. By using the statutory term ``payable,'' the Department intends the percentage increase to apply to the compensation and death benefits due during the prior year, even if not actually paid. Paragraph (d) implements the statutory requirements that calculations resulting from section 10(f) adjustments are rounded to the nearest dollar and that no adjustment is made if the amount is less than one dollar. See 33 U.S.C. 910(g). And paragraph (e) provides that section 10(f) adjustments may not increase compensation or death benefits beyond the maximum rate for any fiscal year. This limitation is consistent with LHWCA section 6(b)(1)'s command that compensation payments, whether for disability or death, must not exceed the applicable fiscal year's maximum rate. Finally, proposed paragraph (f) states that the adjustments do not apply to compensation for temporary or partial disability, including temporary total disability, temporary partial disability, and permanent partial disability. The paragraph reflects the limitation set forth in paragraph (a) and is added for clarity. Subpart H--Maximum and Minimum Compensation Rates General 20 CFR 702.801 Scope and Intent of This Subpart Proposed Sec. 702.801 describes the statutory provisions this subpart is intended to implement. Paragraph (a) generally lists the statutory provisions that affect the maximum and minimum compensation and death benefits payable to entitled individuals. Section 6(b) of the LHWCA, 33 U.S.C. 906(b), sets the maximum compensation rate for death or disability compensation at 200 percent of the applicable national average weekly wage, and the minimum compensation rate for total disability at the lower of the employee's average weekly wage or 50 percent of the applicable national average weekly wage. Section 6(b) also provides that the [[Page 58883]] Secretary of Labor determines the applicable national average weekly wage for each one-year period from October 1 to September 30. Section 6(c), 33 U.S.C. 906(c), provides that the Secretary's determination of the national average weekly wage for each one-year period ``shall apply to employees or survivors currently receiving compensation for permanent total disability or death benefits during such period, as well as those newly awarded compensation during such period.'' Section 9(e), 33 U.S.C. 909(e), includes provisions that affect the minimum death benefits payable to a deceased employee's survivors. Because the interpretation of section 6(c) is important to determining how the maximum and minimum provisions apply and has been the subject of litigation, proposed paragraph (b) more specifically addresses section 6(c)'s ``newly awarded compensation'' and ``currently receiving compensation'' phrases. Paragraph (b)(1) adopts the Supreme Court's conclusion in Roberts that a claimant, regardless of the nature or extent of disability, is ``newly awarded compensation'' when he or she first becomes disabled and entitled to compensation. See supra Section I. B. Claimants are initially subject to the maximum and minimum rates derived from the national average weekly wage in effect during the fiscal year his or her disability begins. Paragraph (b)(2) applies the Supreme Court's Roberts analysis to death benefits by providing that a deceased employee's survivor is ``newly awarded compensation'' on the day of the employee's death, the first time a survivor may be entitled to death benefits. See discussion infra at proposed Sec. 702.807. And paragraph (b)(3) provides that a claimant is ``currently receiving compensation'' during the period for which the compensation is payable, regardless of when it is actually paid. This construction is consistent with the Ninth and Eleventh Circuits' interpretations. See supra Section I. C. While these phrases are not used in the remainder of the proposed subpart, the concepts set forth in paragraph (b) underlie the rules. 20 CFR 702.802 Applicability of This Subpart Proposed Sec. 702.802(a) lists several circumstances in which this subpart's rules do not apply, including: Approved settlements made under section 8(i) of the Act, 33 U.S.C. 908(i); payments for an employee's compensable death made to the Special Fund when the employee has no eligible survivors, 33 U.S.C. 944(c)(1); payments for medical expenses, 33 U.S.C. 907; and any other compensation calculated and paid in a lump sum, such as the two years of death benefits payable to an employee's eligible surviving spouse who remarries, 33 U.S.C. 909(b), or when compensation payments are commuted, 33 U.S.C. 909(g). In all of these circumstances, the maximum and minimum weekly rates do not apply either because the compensation due is not based on a weekly rate (e.g., medical expenses) or it is not necessarily paid on a weekly basis (e.g., settlements, commutations). Although not subject to the rules in this subpart, the maximum and minimum compensation rates will nevertheless be relevant in some of these circumstances. For example, the Department would consider such compensation rates in calculating a commuted award or death benefits payable when a survivor remarries. Similarly, the Department anticipates that private parties will consider the maximum and minimum compensation rates in settlement negotiations, and the Department will consider them in deciding whether to approve settlements. Proposed Sec. 702.802(b) provides that the rules governing minimum compensation and death benefits payable do not apply to claims arising under the Defense Base Act (DBA), 42 U.S.C. 1651 et seq. The DBA specifically precludes application of the LHWCA's minimum compensation provisions: ``The minimum limit on weekly compensation for disability, established by section 6(b), and the minimum limit on the average weekly wages on which death benefits are to be computed, established by section 9(e) of the [Longshore] Act, shall not apply in computing compensation and death benefits under [the DBA].'' 42 U.S.C. 1652(a). The Secretary's regulations implementing the DBA also reflect this limitation. See 20 CFR 704.103. The limitation in proposed Sec. 702.802(b) comports with these authorities. 20 CFR 702.803 Definitions This section defines certain terms used in this subpart; these definitions do not apply outside of this subpart. Proposed paragraph (a) defines a claimant's ``calculated compensation rate'' as the weekly compensation or death benefits payable prior to any consideration of the maximum or minimum rates, or a section 10(f) adjustment. As discussed above (see supra Section I. A.), this figure is a specified percentage of the employee's average weekly wage at the time of the injury or death. But there are exceptions. For example, in certain claims, the calculated compensation rate is based on the national average weekly wage rather than on the employee's actual earnings. 33 U.S.C. 909(e), 910(d)(2)(B). Proposed paragraph (b) defines the phrase ``date of disability'' as the date an employee first becomes economically impaired--or, in other words, unable to earn the same wages--as a result of a covered injury. The phrase incorporates the statutory definition of ``disability,'' see 33 U.S.C. 902(10), and is based on the Supreme Court's decision in Roberts, which held that the maximum compensation rate applicable on the day the employee became ``entitled to compensation because of disability'' controlled. Roberts, 132 S.Ct. at 1357. The phrase is used in this subpart to delineate when certain minimum or maximum compensation rates apply. The proposed rule, however, excepts from the general ``date of disability'' definition three situations that demand special treatment. Paragraph (b)(2)(i) provides that for scheduled permanent partial disabilities under 33 U.S.C. 908(c)(1)-(20) that are not preceded by another category of disability (i.e., permanent total, temporary total, or temporary partial), the date of disability is when the employee first becomes permanently impaired by the injury to the scheduled member. This exception is necessary because an employee may suffer a scheduled injury without any loss in wage-earning capacity, which is the touchstone for the general ``date of disability'' definition. Paragraph (b)(2)(ii) establishes a separate date of disability for occupational diseases because the disease may manifest after voluntary retirement, when the employee does not experience a loss of wage- earning capacity. Paragraph (b)(2)(iii) provides that for very short- term disabilities lasting no more than 14 days, the date of disability is 4 days after the injury affected the employee's wage earning capacity. For such a short-term disability, section 6(a) of the Act provides that no compensation is payable for the first 3 days of disability. 33 U.S.C. 906(a). Thus, using the fourth day as the ``date of disability'' for determining the maximum and minimum compensation payable reflects the date on which the employee is actually entitled to compensation. The remaining definitions explain how basic terms are used in the proposed rule. Paragraph (c) defines the dates of a standard fiscal year. Paragraphs (d) and (e) define ``maximum rate'' and ``minimum rate'' as the weekly compensation rates the Department calculates for each fiscal year. And paragraph (f) defines a ``section 10(f) adjustment'' as the annual [[Page 58884]] compensation increase some claimants receive under LHWCA section 10(f), 33 U.S.C. 910(f). See proposed Sec. 702.701. 20 CFR 702.804 What are the weekly maximum and minimum rates for each fiscal year and how are they calculated? Proposed Sec. 702.804 explains how the Department calculates basic weekly maximum and minimum rates for each fiscal year. Paragraph (a) notes that these weekly compensation rates are one factor considered when calculating compensation and death benefits payable. Paragraphs (b) and (c) set forth the calculation formulas for weekly maximum and minimum rates. Both are based on the national average weekly wage, which the Act defines as the ``national average weekly earnings of production or nonsupervisory workers on private nonagricultural payrolls.'' 33 U.S.C. 902(19). These statistics are compiled on an ongoing basis by the Department's Bureau of Labor Statistics. Before each new fiscal year, the Department calculates the average earnings of these employees for the period October 1 through June 30 (i.e., the first three quarters) of the current fiscal year. 33 U.S.C. 906(b)(3). The Act pegs the maximum weekly rate at 200 percent of this number and the minimum at 50 percent. 33 U.S.C. 906(b)(1), (2). For example, the national average weekly earnings of production or nonsupervisory workers on private, nonagricultural payrolls for the period from October 1, 2013, to June 30, 2014 (i.e., the first three quarters of FY 2014), were $688.51. As a result, the Department determined that the maximum compensation rate for FY 2015 was $1,377.02 ($688.51 x 2) and the minimum compensation rate was $344.26 ($688.51 x 2). Maximum Rates 20 CFR 702.805 What weekly maximum rates apply to compensation for permanent partial disability, temporary total disability, and temporary partial disability? Proposed Sec. 702.805 provides that the maximum rate in effect for the fiscal year on the employee's date of disability applies to all compensation payable for temporary partial disability, temporary total disability, or permanent partial disability, including compensation payable in subsequent fiscal years. This rule effectuates the Supreme Court's construction of the ``newly awarded compensation'' clause by applying the maximum rate for the fiscal year the employee's disability begins. For these types of compensation, the date-of-disability fiscal year's maximum rate applies to all compensation payments--including compensation payable for subsequent fiscal years--because section 6(c)'s ``currently receiving compensation'' clause does not apply. 33 U.S.C. 906(c) (maximum rate determinations ``with respect to a period shall apply to employees or survivors currently receiving compensation for permanent total disability or death benefits during such period[.]''). The first example at paragraph (b)(1) sets out a common scenario involving an injured employee who is temporarily totally disabled for a period prior to being permanently partially disabled. Although his compensation periods span more than one fiscal year, the maximum rate that applies remains the rate in effect on his date of disability. See proposed Sec. 702.803(b)(1). The second example at paragraph (b)(2) is slightly more complicated. The employee incurs two separate periods of temporary total disability from the same injury; each period begins in a different fiscal year. Under section 6(c), the maximum rate applicable at the beginning of the first disability period applies to all payments for temporary total disability, including those in the second period. The third example at paragraph (b)(3) addresses an occupational disease discovered post-retirement. Occupational diseases occurring after an employee has voluntarily retired are considered permanent partial disabilities. 20 CFR 702.601(b). Thus, compensation payable in this instance is subject to the maximum rate in effect on the date of disability--when the employee becomes aware of the relationship between employment, the disease and any disability. See proposed Sec. 702.803(b)(2)(ii). 20 CFR 702.806 What weekly maximum rates apply to compensation for permanent total disability? Proposed Sec. 702.806 implements both the ``newly awarded'' and ``currently receiving'' compensation clauses for permanent total disability compensation as they pertain to the maximum compensation payable. Paragraph (a) provides that the maximum rate for the fiscal year during which the employee first becomes permanently and totally disabled applies to all compensation payable during that fiscal year. Paragraph (b) then provides that all periods of permanent total disability in subsequent fiscal years arising from the same injury are subject to the maximum rates for those subsequent fiscal years because the employee is then ``currently receiving compensation.'' Proposed paragraph (c) addresses how the 10(f) adjustment applies in a ``cross-over'' year. A cross-over year is one in which the claimant's compensation was paid at the maximum rate in the current fiscal year, but the claimant's calculated compensation rate does not exceed the maximum rate set for the next fiscal year. In those circumstances, the rule requires that the claimant's compensation for the next fiscal year be increased by the amount of the 10(f) adjustment up to the maximum for that fiscal year. The examples in proposed paragraph (d) apply these principles. Paragraph (d)(1) presents the relatively straightforward situation of an employee who is permanently totally disabled from the time of injury. He is ``newly awarded'' compensation in the fiscal year he became disabled and his compensation is subject to that fiscal year's maximum rate. In subsequent years, he is ``currently receiving'' compensation and his compensation is subject to the maximum rate for each subsequent fiscal year. Paragraph (d)(2) adds an additional wrinkle to the first example. Here, the employee suffers a period of temporary total disability that spans more than one fiscal year before he becomes permanently totally disabled. The maximum that applies to the entire temporary total disability compensation period is the fiscal year rate in effect on the date of disability (in the example, FY 2000), which is when the employee is ``newly awarded'' compensation. See proposed Sec. 702.805(a). When the employee becomes permanently totally disabled two years later, however, he is ``currently receiving'' permanent total disability compensation and the maximum rate in effect at that time (in the example, FY 2002) applies. Compensation for permanent total disability in succeeding years is subject to those subsequent fiscal years' maximum rates because he continues to be ``currently receiving'' compensation. Finally, proposed paragraph (d)(3) demonstrates how the rule operates in a ``cross-over'' year. In the example, employee C's calculated compensation rate exceeds the annual fiscal year maximum rate each year from when he was first permanently totally disabled in FY 2009 through FY 2012. In FY 2013, however, the employee's calculated compensation rate falls below the maximum rate and remains below that rate even after the addition of a section 10(f) adjustment. Thus, for FY 2013, employee C's compensation is not limited by the maximum rate. [[Page 58885]] 20 CFR 702.807 What weekly maximum rates apply to death benefits? Determining the maximum rates for death benefits in any particular case can be straightforward or involve several statutory provisions. The proposed rule integrates these provisions to provide a comprehensive approach to the issue. LHWCA section 6(b)(1) applies the ``applicable'' maximum rate to all compensation for disability or death. For death benefits purposes, proposed Sec. 702.807(a) defines the ``applicable'' rate as the fiscal-year rate in effect when the employee died. By using the employee's date of death, the rule applies the ``newly awarded'' clause in the same manner as the Supreme Court applied it to disability claims in Roberts: A survivor's right to benefits first arises at the time of death. See generally Ingalls Shipbuilding, Inc. v. Director, OWCP, 519 U.S. 248, 257-58 (1997) (survivors seeking death benefits cannot satisfy prerequisites prior to employee's death); Travelers Insurance Co. v. Marshall, 634 F.2d 843, 846 (5th Cir. 1981) (section 9 ``cause of action for death benefits certainly does not arise until [employee's] death''). Proposed Sec. 702.807(b) sets out the general rules for determining the death-benefits cap in the year the employee died. These limits are compelled by LHWCA section 6(b)(1) along with the provisions of section 9(e), 33 U.S.C. 909(e). Section 9(e) provides an alternative method for computing death benefits for survivors of lower-wage employees to boost the benefit amount. If the deceased employee's actual average weekly wage was lower than the national average weekly wage, death benefits are calculated as a percentage of the national average weekly wage instead of a percentage of the actual wage. This results in a higher calculated compensation rate than if the calculation were based on the employee's actual wage. Survivors are entitled to benefits at the higher calculated rate except when that rate exceeds the employee's full actual weekly wage. In that event, section 9(e)(1) sets an initial cap by providing that total weekly death benefits ``shall not exceed the lesser of the average weekly wages of the deceased'' (or the section 6(b)(1) maximum rate). 33 U.S.C. 909(e)(1). Thus, in no event may weekly death benefits payable in the year of the employee's death exceed the employee's actual average weekly wages. Proposed paragraph (b) implements these provisions by limiting ``aggregate'' weekly death benefits--meaning the death benefits payable to all survivors combined--to the lower of the maximum rate applicable for the fiscal year in which the employee died or the employee's actual average weekly wages. Proposed paragraph (c) sets out rules governing payments for subsequent fiscal years. Consistent with the ``currently receiving'' clause, paragraph (c)(1) provides that each subsequent fiscal year's maximum rate applies to aggregate death benefits. Paragraph (c)(2) provides an exception to the section 9(e)(1) feature limiting death benefits to no more than the employee's actual average weekly wages. If death benefits were paid at the employee's full average weekly wage in the year of death, paragraph (c)(2) provides that death benefits payable may be adjusted upward under section 10(f). See Donovan, 31 BRBS 2 (holding that section 9(e)(1) does not bar application of 10(f) adjustments even if adjusted death benefits amount exceeds deceased employee's actual average weekly wage). Finally, proposed paragraph (d) addresses LHWCA section 9(e)'s specific limit on death benefits payable when death results from an occupational disease that manifested after the employee retired voluntarily (i.e., he or she did not retire because of disability). In those circumstances, LHWCA section 9(e)(2) provides that ``total weekly benefits shall not exceed one fifty-second part of the employee's average annual earnings during the 52-week period preceding retirement.'' 33 U.S.C. 909(e)(2). Proposed paragraph (d)(1) implements this provision, as well as the general section 6(b) maximum cap, by providing that aggregate death benefits paid during the year of the employee's death must not exceed the lower of that fiscal year's maximum rate or one-fifty-second part of the employee's average annual earnings during the 52-weeks preceding retirement. Proposed paragraph (d)(2)(i) provides that each subsequent fiscal year's maximum rate applies to aggregate death benefits because death benefits are subject to the ``currently receiving'' clause. If death benefits in the year of death were paid at one-fifty-second part of the employee's average annual earnings, proposed paragraph (d)(2)(ii) provides that the death benefits payable may be adjusted upward under section 10(f). The example at proposed paragraph (e)(1) illustrates that the maximum rate applicable at the time of the employee's death applies to death benefits, even when the employee's injury occurred in an earlier fiscal year. Employee A's injury occurred in FY 2013 but he did not die as a result of the injury until FY 2014. His survivor's death benefits for the remainder of the year in which he died are subject to the FY 2014 maximum rate, with subsequent death benefits subject to each subsequent fiscal year's rate. Paragraph (e)(2)'s example demonstrates how the death-benefits- calculation method for survivors of low-wage earners interfaces with the cap placed on those benefits in some circumstances. In the example, employee B's weekly earnings fell below the national average during the year of her death. Thus, her survivor's death benefits are computed using the higher national average weekly wage. 33 U.S.C. 909(e); see proposed Sec. 702.811(a). Because that calculated compensation rate of $331.30 exceeds the employee's actual average weekly wage of $300.00, death benefits are capped at the employee's actual wages, except for section 10(f) adjustments in subsequent fiscal years. Paragraph (e)(3) sets out an example involving an occupational disease discovered more than one year post-retirement that leads to death. Employee C's compensation during his lifetime is calculated based on the FY 2002 national average weekly wage because his disease manifested then and he had voluntarily retired more than one year earlier. Based on the date of employee C's death, his survivors' death benefits are calculated based on the national average weekly wage for FY 2015. 33 U.S.C. 910(d)(2)(B); 20 CFR 702.604(b). This calculation yields a weekly figure greater than 1/52 part of the employee's last year of earnings. Thus, the total death benefits payable are capped at 1/52 part of the employee's actual earnings, except for section 10(f) adjustments in subsequent fiscal years. Minimum Rates 20 CFR 702.808 What weekly minimum rates apply to compensation for partial disability? The LHWCA places no minimum compensation requirements on payments for temporary partial disability or permanent partial disability. Accordingly, proposed Sec. 702.808 simply states that there is no minimum rate for these types of compensation. 20 CFR 702.809 What weekly minimum rates apply to compensation for temporary total disability? Proposed Sec. 702.809 provides that the minimum rate in effect for the fiscal year on the employee's date of disability applies to all compensation payable for temporary total disability, including [[Page 58886]] compensation payable in subsequent fiscal years. LHWCA section 6(b)(2) generally provides that compensation for total disability cannot fall below 50 percent of the ``applicable'' national average weekly wage unless the employee's actual average weekly wages are less than that amount. In that event, the employee receives his or her average weekly wages as compensation. This rule effectuates the Supreme Court's construction of the ``newly awarded compensation'' clause by applying the minimum rate for the fiscal year the employee's disability begins. See generally Montoya v. Navy Exchange Service Command, 49 BRBS 51 (2015) (applying Roberts, employee entitled to minimum rate in effect on date of disability onset). The date-of-disability fiscal year's minimum rate applies to all temporary total disability compensation payments--including compensation payable for subsequent fiscal years-- because section 6(c)'s ``currently receiving'' clause does not apply to compensation for temporary disabilities. See 33 U.S.C. 906(c) (national average weekly wage determinations ``with respect to a period shall apply to employees or survivors currently receiving compensation for permanent total disability or death benefits during such period''). Thus, the applicable minimum remains the one in effect on the date of disability. Proposed paragraph (b)'s example demonstrates how the minimum rate provision works when the employee's calculated compensation rate falls below it. In the example, employee A's calculated compensation rate for FY 2014 (the year of his injury) is $333.34 per week. That number falls below the FY 2014 minimum rate of $336.67. Thus, employee A's compensation is raised to the minimum rate. Although his temporary total disability continues into FY 2015, his rate remains tied to the FY 2014 minimum because neither section 6(c)'s ``currently receiving'' clause nor section 10(f)'s adjustments apply to compensation for temporary disabilities. See 33 U.S.C. 906(c), 910(f). 20 CFR 702.810 What weekly minimum rates apply to compensation for permanent total disability? Proposed Sec. 702.810(a) provides that the lower of the minimum rate in effect on the date of disability or the employee's actual average weekly wage on that date sets the floor below which compensation may not fall. This rule implements LHWCA section 6(b)(2)'s direction that compensation for total disability be no less than 50 percent of the ``applicable'' national average weekly wage unless the employee's actual average weekly wages are less than that amount. In that event, the employee receives his or her average weekly wages as compensation. By using the date of disability to describe the applicable fiscal year's minimum rate, paragraph (a) also implements section 6(c)'s ``newly awarded'' clause. Proposed paragraph (b) describes how the minimum applies in subsequent fiscal years. It sets the minimum compensation level at the lower of the minimum rate for each subsequent fiscal year or the employee's actual average weekly wages on the date of disability. By applying subsequent fiscal years' minimum rates, the regulation implements section 6(c)'s ``currently receiving'' clause. Proposed paragraph (c)'s example shows how this regulation applies when a low-wage earner suffers a permanent total disability. Because his calculated compensation rate for the fiscal year in which he first became disabled (in the example, FY 2003) was below the applicable fiscal year minimum rate, and his actual weekly wages were above the fiscal year minimum, he is compensated at the minimum rate. But in subsequent fiscal years, when the minimum rises above the employee's actual average weekly wages at the time of disability, he receives his actual wages in compensation, subject in following years to section 10(f) adjustments. 20 CFR 702.811 What weekly minimum rates apply to death benefits? Rather than applying weekly minimum rates like those used for temporary total or permanent total disability compensation--specified amounts below which compensation may not fall--section 9(e) of the Act, 33 U.S.C. 909(e), uses a different mechanism to ensure a minimum compensation level for an employee's survivors. Section 9(e) does this by using the national average weekly wage calculated by the Department under section 6(b) as a proxy to compute death benefits when the deceased employee's actual weekly wage falls below the national average. See 33 U.S.C. 902(19) (defining national average weekly wage for LHWCA purposes). Using the national average weekly wage ensures that death benefits will be paid at a minimal level. Proposed paragraph (a) sets out this procedure by providing that the average weekly wage used to compute death benefits is the greater of the employee's actual wages or the national average. The regulation also provides that the applicable national average weekly wage is the one in effect when the employee died, which is when a survivor's right to benefits first arises. See generally Ingalls Shipbuilding, 519 U.S. at 257-58 (survivors seeking death benefits cannot satisfy prerequisites prior to employee's death); Travelers Insurance, 634 F.2d at 846 (section 9 ``cause of action for death benefits certainly does not arise until [employee's] death''). Paragraph (b) adds that the weekly minimum rate, as that phrase is used in this subpart, does not apply to death benefits. III. Statutory Authority Section 39(a) of the LHWCA, 33 U.S.C. 939(a), authorizes the Secretary of Labor to prescribe rules and regulations necessary for the administration of the Act. IV. Information Collection Requirements (Subject to the Paperwork Reduction Act) Imposed Under the Proposed Rule This rulemaking would impose no new collections of information. V. Executive Orders 12866 and 13563 (Regulatory Planning and Review) Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Department has considered this proposed rule with these principles in mind and has concluded that the regulated community will benefit from this regulation. This proposed rule will benefit the parties by providing them with greater guidance on applying the Act's maximum and minimum compensation provisions and section 10(f) adjustments in determining the amount of disability compensation or death benefits payable. By clarifying how these provisions apply, the rule will also promote consistency so that similarly situated claimants receive similar compensation or death benefits. In addition, the rule will benefit the regulated community by forestalling further litigation over the ``currently receiving'' clause, which neither the Supreme Court nor several circuit courts have yet construed. Indeed, the absence of regulations implementing these statutory provisions led to much of the litigation described above. See supra Sections I. B. and C. [[Page 58887]] The Department also sees no countervailing burden--economic or otherwise--other than those imposed by the statute itself that would counsel against promulgating this rule. 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. VI. Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531 et seq.) directs agencies to assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector, ``other than to the extent that such regulations incorporate requirements specifically set forth in law.'' For purposes of the Unfunded Mandates Reform Act, this rule does not include any Federal mandate that may result in increased expenditures by State, local, and tribal governments, or increased expenditures by the private sector of more than $100,000,000. VII. Regulatory Flexibility Act and Executive Order 13272 (Proper Consideration of Small Entities in Agency Rulemaking) The Regulatory Flexibility Act of 1980, as amended (5 U.S.C. 601 et seq.), requires an agency to prepare a regulatory flexibility analysis when it proposes regulations that will have ``a significant economic impact on a substantial number of small entities'' or to certify that the proposed regulations will have no such impact, and to make the analysis or certification available for public comment. The Department has determined that a regulatory flexibility analysis under the RFA is not required for this rulemaking. While many longshore employers are 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. The proposed rules reflect current payment practices and thus impose no new costs on employers or their insurance carriers. As explained above, the proposed rules mainly codify case law interpreting how the Act's maximum and minimum provisions work; the rules are based primarily on the Supreme Court's controlling decision in Roberts, the Ninth and Eleventh Circuits' decisions in Roberts and Boroski, and the Benefits Review Board's decisions in Reposky and Lake. With one small exception, these decisions comport with the Director's longstanding interpretation and application of the maximum and minimum compensation provisions. That exception involved cases in which the employee's disability was initially something less than permanent total--temporary total, permanent partial, or temporary partial--and in a later fiscal year became permanently totally disabling. Prior to the Ninth Circuit's decision in Roberts, the Department took the view that the employee would have remained at the maximum rate in effect on the date of disability until the next October 1. On that October 1, his compensation rate would be determined by applying section 10(f) to increase his maximum rate by the same percentage as the increase to the national average weekly wage. But the Ninth Circuit held that the employee need not wait until the next October 1 and is instead immediately subject to the maximum rate in effect on the day he or she becomes permanently totally disabled under section 6(c)'s ``currently receiving'' clause. Roberts, 625 F.3d at 1208-09. The Department has been following the Ninth Circuit's construction of the statute since 2012, and the regulations reflect this construction as well. 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 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. XIII. Executive Order 13132 (Federalism) The Department has reviewed this proposed rule in accordance with 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. IX. 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 is revised to read as follows: Authority: 5 U.S.C. 301, and 8171 et seq.; 33 U.S.C. 901 et seq.; 42 U.S.C. 1651 et seq.; 43 U.S.C. 1333; Reorganization Plan No. 6 of 1950, 15 FR 3174, 64 Stat. 1263; Secretary's Order 10-2009, 74 FR 58834. 0 2. In part 702, add subparts G and H as follows: Subpart G--Section 10(f) Adjustments Sec. 702.701 What is an annual section 10(f) adjustment and how is it calculated? Subpart H--Maximum and Minimum Compensation Rates General Sec. 702.801 Scope and intent of this subpart. 702.802 Applicability of this subpart. 702.803 Definitions. 702.804 What are the weekly maximum and minimum rates for each fiscal year and how are they calculated? Maximum Rates Sec. 702.805 What weekly maximum rates apply to compensation for permanent partial disability, temporary total disability, and temporary partial disability? 702.806 What weekly maximum rates apply to compensation for permanent total disability? 702.807 What weekly maximum rates apply to death benefits? Minimum Rates Sec. 702.808 What weekly minimum rates apply to compensation for partial disability? 702.809 What weekly minimum rates apply to compensation for temporary total disability? 702.810 What weekly minimum rates apply to compensation for permanent total disability? 702.811 What weekly minimum rates apply to death benefits? [[Page 58888]] Subpart G--Section 10(f) Adjustments Sec. 702.701 What is an annual section 10(f) adjustment and how is it calculated? (a) Claimants receiving compensation for permanent total disability or death benefits are entitled to section 10(f) adjustments each fiscal year. A section 10(f) adjustment cannot decrease the compensation or death benefits payable to any claimant. (b) The section 10(f) adjustment for a given fiscal year is the lower of: (1) The percentage by which the new fiscal year's national average weekly wage exceeds the prior fiscal year's national average weekly wage as determined by the Department (see Sec. 702.804(b)); or (2) 5 percent. (c) Section 10(f) percentage increases are applied each October 1 to the amount of compensation or death benefits payable in the prior fiscal year. (d) In applying section 10(f) adjustments-- (1) Calculations are rounded to the nearest dollar; and (2) No adjustment is made if the calculated amount is less than one dollar. (e) A section 10(f) adjustment must not increase a claimant's weekly compensation or death benefits beyond the applicable fiscal year's maximum rate. (f) Section 10(f) adjustments do not apply to compensation for temporary or partial disability. Subpart H--Maximum and Minimum Compensation Rates General Sec. 702.801 Scope and intent of this subpart. (a) This subpart implements the Act's provisions that affect the maximum and minimum rates of compensation and death benefits payable to employees and survivors. These statutory provisions include sections 6(b) and (c), and 9(e). 33 U.S.C. 906(b), (c); 909(e). It is intended that these statutory provisions be construed as provided in this subpart. (b) These regulations implement section 6(c), 33 U.S.C. 906(c), based on the following concepts: (1) An employee is ``newly awarded compensation'' when he or she first becomes disabled due to an injury; (2) A survivor is ``newly awarded compensation'' on the date the employee died; and (3) An employee or survivor is ``currently receiving compensation'' when compensation for permanent total disability or death benefits is payable, regardless of when payment is actually made. Sec. 702.802 Applicability of this subpart. (a) This subpart applies to all compensation and death benefits paid under the Act with the following exceptions: (1) Amounts payable under an approved settlement (see 33 U.S.C. 908(i)); (2) Amounts paid for an employee's death to the Special Fund (see 33 U.S.C. 944(c)(1)); (3) Any payments for medical expenses (see 33 U.S.C. 907); and (4) Any other lump sum payment of compensation or death benefits, including aggregate death benefits paid when a survivor remarries (see 33 U.S.C. 909(b)) or aggregate compensation paid under a commutation (see 33 U.S.C. 909(g)). (b) The rules in this subpart governing minimum disability compensation and death benefits do not apply to claims arising under the Defense Base Act, 42 U.S.C. 1651 (see 42 U.S.C. 1652(a); 20 CFR 704.103). Sec. 702.803 Definitions. The following definitions apply to this subpart: (a) Calculated compensation rate means the amount of weekly compensation for total disability or death that a claimant would be entitled to if there were no maximum rates, minimum rates, or section 10(f) adjustments. (b) Date of disability (1) Except as provided in paragraph (b)(2), the date of disability is the date on which the employee first became incapable, because of an injury, of earning the same wages the employee was receiving at the time of the injury. (2) Exceptions: (i) For scheduled permanent partial disability benefits under 33 U.S.C. 908(c)(1)-(20) that are not preceded by a permanent total, temporary total, or temporary partial disability resulting from the same injury, the date of disability is the date on which the employee first becomes permanently impaired by the injury to the scheduled member. (ii) For an occupational disease that does not immediately result in disability, the date of disability is the date on which the employee becomes aware, or in the exercise of reasonable diligence or by reason of medical advice should have been aware, of the relationship between his or her employment, the disease, and the disability. (iii) For any disability lasting 14 or fewer days, the date of disability is 4 days after the date on which the employee first became incapable, because of an injury, of earning the same wages the employee was receiving at the time of the injury. (c) Fiscal year or FY means the period from October 1 of a calendar year until September 30 of the following calendar year. (d) Maximum rate means the maximum weekly compensation rate calculated by the Department for a given fiscal year as described in Sec. 702.804(b). (e) Minimum rate means the minimum weekly compensation rate calculated by the Department for a given fiscal year as described in Sec. 702.804(c). (f) Section 10(f) adjustment means the annual increase that certain claimants receiving compensation for permanent total disability or death are entitled to each fiscal year under 33 U.S.C. 910(f) and as calculated by the Department as described in Sec. 702.701(b). Sec. 702.804 What are the weekly maximum and minimum rates for each fiscal year and how are they calculated? (a) For each fiscal year, the Department must determine a weekly maximum and minimum compensation rate. These amounts are called the maximum and minimum rates in this subchapter. In combination with other factors, these rates are used to determine compensation payments under the Act. (b) The maximum compensation rate in effect for a given fiscal year is 200% of the national average weekly earnings of production or nonsupervisory workers on private, nonagricultural payrolls, as calculated by the Department, for the first three quarters of the preceding fiscal year. (c) The minimum compensation rate in effect for a given fiscal year is 50% of the national average weekly earnings of production or nonsupervisory workers on private, nonagricultural payrolls, as calculated by the Department, for the first three quarters of the preceding fiscal year. Maximum Rates Sec. 702.805 What weekly maximum rates apply to compensation for permanent partial disability, temporary total disability, and temporary partial disability? (a) The maximum rate in effect on the date of disability applies to all compensation payable for permanent partial disability, temporary partial disability, and temporary total disability. (b) Examples: (1) Employee A suffers a covered workplace injury on April 1, 2000, is temporarily totally disabled from that day through June 4, 2002, and is [[Page 58889]] thereafter permanently partially disabled. All compensation payable for A's disability is subject to the FY 2000 maximum rate. (2) Employee B suffers a covered workplace injury on August 25, 2010, and is temporarily totally disabled until September 25, 2010, when he returns to work. On January 3, 2011, he again becomes temporarily totally disabled from the same injury. He ceases work and is unable to return until November 22, 2012. All compensation payable for B's disability is subject to the FY 2010 maximum rate. (3) Employee C retires on May 6, 2011. She discovers on November 10, 2012, that she has a compensable occupational disease. All compensation payable for C's occupational disease is subject to the FY 2013 maximum rate. See Sec. 702.601(b) (occupational diseases discovered post-retirement are compensated as permanent partial disabilities). Sec. 702.806 What weekly maximum rates apply to compensation for permanent total disability? (a) The maximum rate in effect on the date that the employee became totally and permanently disabled applies to all compensation payable for permanent total disability during that fiscal year. (b) For all periods the employee is permanently and totally disabled in subsequent fiscal years, the weekly compensation payable is subject to each subsequent year's maximum rate. (c) If a claimant is receiving compensation for permanent total disability at the maximum rate for the current fiscal year, but the next fiscal year's maximum rate will be higher than the claimant's calculated compensation rate, the claimant's compensation for the next fiscal year will increase by the amount of the 10(f) adjustment, subject to the maximum rate for the next fiscal year. (d) Examples: (1) Employee A suffers a covered workplace injury on April 1, 2000, and is permanently and totally disabled from that date forward. A's compensation for the period from April 1, 2000, until September 30, 2000, is subject to the FY 2000 maximum rate. Beginning October 1, 2000, A's compensation for FY 2001 is subject to the FY 2001 maximum rate, compensation for FY 2002 is subject to the FY 2002 maximum rate, etc. (2) Employee B suffers a covered workplace injury on April 1, 2000, is temporarily totally disabled from that day through June 3, 2002, and is thereafter permanently totally disabled. B's compensation for the period from April 1, 2000, through June 3, 2002, is subject to the FY 2000 maximum rate (see Sec. 702.805(a)). B's compensation for the period from June 4, 2002, through September 30, 2002, is subject to the FY 2002 maximum rate. Beginning October 1, 2002, B's compensation for FY 2003 is subject to the FY 2003 maximum rate, compensation for FY 2004 is subject to the FY 2004 maximum rate, etc. (3) Employee C suffers a covered workplace injury in FY 2009 and is permanently totally disabled from that day forward. He was earning $1,950.00 a week when he was injured, making his calculated compensation rate $1,300.00 ($1,950.00 x 2 / 3). His calculated compensation rate exceeds the maximum rate from FY 2009-2012; thus, his compensation is limited to each year's maximum rate. In FY 2013, C's calculated compensation rate of $1,300.00 is, for the first time, less than the FY 2013 maximum rate of $1,325.18. Applying the FY 2013 2.31% section 10(f) adjustment to C's FY 2012 compensation rate of $1,295.20 results in a compensation rate of $1,325.00 ($1,295.20 x .0231 = $29.92 (rounded to the nearest cent); $1,295.20 + $29.92 = $1,325.12, rounded to the nearest dollar). This amount falls just below the FY 2013 maximum rate of $1,325.18. Thus, C's benefit rate for FY 2013 is $1,325.00, and is not limited by the maximum rate. Sec. 702.807 What weekly maximum rates apply to death benefits? (a) The maximum rate in effect on the date that the employee died applies to all death benefits payable during that fiscal year. (b) Aggregate weekly death benefits paid to all eligible survivors during the fiscal year in which the employee died must not exceed the lower of-- (1) The maximum rate for that fiscal year; or (2) The employee's average weekly wages. (c) For subsequent fiscal years-- (1) Aggregate weekly death benefits paid during each subsequent fiscal year are subject to each subsequent year's maximum rate. (2) If death benefits were paid in the first year at the employee's full average weekly wage under paragraph (b)(2), the aggregate weekly death benefits paid for each subsequent year may not exceed the current benefit rate plus the subsequent year's section 10(f) adjustment (see Sec. 702.701). (d) Post-retirement occupational diseases. Notwithstanding paragraphs (a)-(c), if an employee's death results from an occupational disease where the date of disability occurred after the employee voluntarily retired-- (1) Aggregate weekly death benefits paid to all eligible survivors during the fiscal year in which the employee died must not exceed the lower of: (i) The maximum rate for that fiscal year; or (ii) One fifty-second part of the employee's average annual earnings during the 52-week period preceding retirement. (2) For subsequent fiscal years-- (i) Aggregate weekly death benefits paid during each subsequent fiscal year are subject to each subsequent year's maximum rate. (ii) If death benefits were paid in the first year at 1/52 part of the employee's average annual earnings prior to retirement under paragraph (d)(1)(ii), the aggregate weekly death benefits paid for each subsequent year may not exceed the current benefit rate plus the subsequent year's section 10(f) adjustment (see Sec. 702.701). (e) Examples: (1) Employee A suffers a covered workplace injury on May 1, 2013, and is permanently and totally disabled from that date until August 1, 2014, when he dies due to the injury. He has one eligible survivor and his average weekly wage at the time of injury was $3,000.00. The calculated compensation rate for A's survivor is $1,500.00 (i.e., 50% of A's average weekly wage). A's weekly survivor's benefits for the period from August 2, 2014, to September 30, 2014, are limited to the FY 2014 maximum rate of $1,346.68. Beginning October 1, 2014, A's survivor's benefits for FY 2015 are subject to the FY 2015 maximum rate, benefits for FY 2016 are subject to the FY 2016 maximum rate, etc. (2) Employee B suffers a covered workplace injury and dies on December 1, 2012. She has one eligible survivor and her average weekly wage was $300.00. Because B's average weekly wage of $300.00 falls below the FY 2013 national average weekly wage of $662.59, death benefits are calculated at 50% of that national average wage (see 33 U.S.C. 909(e)). This yields a calculated compensation rate of $331.30. But because this rate exceeds B's actual average weekly wages, weekly death benefits payable during FY 2013 are limited to $300.00. In FY 2014, B's survivor is entitled to a 1.62% section 10(f) adjustment, resulting in weekly death benefits of $305.00 ($300.00 x .0162 = $4.86; $300.00 + $4.86 = $304.86, rounded to the nearest dollar). B's survivor would continue to receive section 10(f) adjustments in subsequent fiscal years. [[Page 58890]] (3) Employee C retired on February 1, 1998. During his last year of employment, he earned $23,000. He discovers on April 15, 2002, that he has a compensable occupational disease resulting in a 50% permanent impairment. See Sec. 702.601(b). Because he retired more than one year before this date, his payrate for calculating compensation is the FY 2002 national average weekly wage, or $483.04. See Sec. 702.603(b). He is entitled to weekly compensation of $161.01 ($483.04 x 2 / 3 x 50%). C dies from the disease on June 1, 2015, leaving two survivors. The payrate for calculating death benefits is the FY 2015 national average weekly wage, or $688.51. See Sec. 702.604(b). The survivors' aggregate calculated compensation rate is $459.01 ($688.51 x 2 / 3). But because compensation cannot exceed 1/52 part of C's last year of earnings, aggregate weekly death benefits payable for FY 2015 are limited to $442.31 ($23,000 / 52). For FY 2016, C's survivors are entitled to a 2.10% section 10(f) adjustment resulting in weekly death benefits of $452.00 ($442.31 x 021 = $9.29 (rounded to the nearest cent); $442.31 + $9.29 = $451.60, rounded to the nearest dollar). C's survivors would continue to receive section 10(f) adjustments in subsequent fiscal years. Minimum Rates Sec. 702.808 What weekly minimum rates apply to compensation for partial disability? There is no minimum rate for compensation paid for partial disability, whether temporary or permanent. Sec. 702.809 What weekly minimum rates apply to compensation for temporary total disability? (a) The minimum compensation payable for temporary total disability is the lower of: (1) The minimum rate in effect on the date of disability, or (2) The employee's average weekly wage on the date of disability. (b) Example: Employee A suffers a covered workplace injury on May 6, 2014. He is temporarily totally disabled until November 6, 2015, when he returns to work. His average weekly wages at the time of disability were $500.00. Because his calculated compensation rate (i.e., 66 and \2/3\% of $500.00, or $333.34) is lower than the $336.67 FY 2014 minimum rate, A's compensation is raised to $336.67 for the entire period of his disability. Sec. 702.810 What weekly minimum rates apply to compensation for permanent total disability? (a) The weekly minimum compensation payable for the fiscal year in which the employee became permanently and totally disabled is the lower of: (1) The minimum rate in effect on the date of disability, or (2) The employee's average weekly wage on the date of disability. (b) For all periods the employee is permanently and totally disabled in subsequent fiscal years, the weekly minimum compensation payable is the lower of: (1) Each subsequent fiscal year's minimum rate, or (2) The employee's average weekly wage on the date of disability. (c) Example: Employee A suffers a covered workplace injury on April 1, 2003, and is permanently totally disabled from that day forward. He was earning $250.00 a week when he was injured. His calculated compensation rate is $166.67 ($250 x 2 / 3). The FY 2003 minimum rate is $249.14. Because A's calculated compensation rate is below the FY 2003 minimum rate, and his actual weekly wage is above that rate, he is entitled to compensation at the minimum rate of $249.14 from April 1, 2003, to September 30, 2003. The FY 2004 minimum rate is $257.70. Because A's actual weekly wages on the date of disability are lower than the FY 2004 minimum rate, A's minimum weekly compensation rate for FY 2004 is $250.00. His weekly compensation rate for FY 2004, however, is higher because of a section 10(f) adjustment. For FY 2004, A's compensation rate is increased by a 3.44% section 10(f) adjustment, raising his compensation level to $258.00 ($249.14 x .0344 = $8.57; $249.14 + $8.57 = $257.71, rounded to the nearest dollar). Sec. 702.811 What weekly minimum rates apply to death benefits? (a) The average weekly wage used to compute death benefits is the greater of-- (1) The deceased employee's average weekly wages; or (2) The national average weekly wage in effect at the time of the employee's death. (b) The weekly minimum rate does not apply to death benefits. Leonard J. Howie III, Director, Office of Workers' Compensation Programs. [FR Doc. 2016-20467 Filed 8-25-16; 8:45 am] BILLING CODE 4510-CR-P
![58878 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules
The Commission believes that providing methods. To facilitate the receipt and economic, not a medical concept.’’
the public additional time to consider processing of comment letters, OWCP Metro. Stevedores v. Rambo, 515 U.S.
thoroughly the matters addressed by the encourages interested parties to submit 291, 297 (1995). From its inception in
release and to submit comprehensive their comments electronically. 1927, the Act has provided that ‘‘the
responses to the release would benefit • Federal eRulemaking Portal: http:// average weekly wage of the injured
the Commission in its consideration of www.regulations.gov. Follow the employee at the time of the injury’’ must
final rules. Therefore, the Commission instructions on the Web site for be used as the basis for computing his
is extending the comment period for submitting comments. or her compensation rate. 33 U.S.C. 910.
Release Nos. 33–10098 and 34–78086, • Fax: (202) 693–1380 (this is not a Thus, ‘‘[a]n employee’s compensation
‘‘Modernization of Property Disclosures toll-free number). Only comments of ten depends on the severity of his disability
for Mining Registrants,’’ until or fewer pages (including a Fax cover and his preinjury pay.’’ Roberts v. Sea-
September 26, 2016. sheet and attachments, if any) will be Land Services, Inc., 566 U.S. ll, 132
By the Commission. accepted by Fax. S.Ct. 1350, 1354 (2012).
Dated: August 23, 2016.
• Regular Mail or Hand Delivery/ Several statutory sections have an
Courier: Submit comments on paper to impact on determining the amount of
Brent J. Fields, compensation payable. Section 10,
the Division of Longshore and Harbor
Secretary. Workers’ Compensation, Office of ‘‘Determination of Pay,’’ 33 U.S.C. 910,
[FR Doc. 2016–20548 Filed 8–25–16; 8:45 am] Workers’ Compensation Programs, U.S. is the starting point in the statutory
BILLING CODE 8011–01–P Department of Labor, Room C–4319, 200 scheme. It sets out rules for calculating
Constitution Avenue NW., Washington, the employee’s average weekly wage
DC 20210. The Department’s receipt of (AWW) as of the time of the employee’s
DEPARTMENT OF LABOR U.S. mail may be significantly delayed disabling injury. This AWW serves as
due to security procedures. You must the basis for all future benefit
Office of Workers’ Compensation take this into consideration when calculations for that worker throughout
Programs preparing to meet the deadline for the life of his or her claim.
submitting comments. The second step is to determine what
20 CFR Part 702 Instructions: All submissions received percentage of the employee’s AWW a
must include the agency name and the claimant will receive in compensation.
RIN 1240–AA06
Regulatory Information Number (RIN) This is determined under section 8,
Longshore and Harbor Workers’ for this rulemaking. All comments ‘‘Compensation for Disability,’’ and
Compensation Act: Maximum and received will be posted without change section 9, ‘‘Compensation for Death,’’ 33
Minimum Compensation Rates to http://www.regulations.gov, including U.S.C. 908, 909. Compensation payable
for disability varies based on the nature
any personal information provided.
AGENCY: Office of Workers’ and extent of an employee’s disability.
Docket: To read background
Compensation Programs, Labor. Section 8 establishes four basic
documents or comments received, go to
ACTION: Notice of proposed rulemaking; categories of disability: Permanent total,
http://www.regulations.gov.
request for comments. temporary total, permanent partial, and
FOR FURTHER INFORMATION CONTACT: temporary partial. 33 U.S.C. 908(a)–(c),
SUMMARY: The Office of Workers’ Antonio Rios, Director, Division of (e). In general, an injury is ‘‘total’’ if the
Compensation Programs is proposing Longshore and Harbor Workers’ worker is unable to work after the injury
rules to implement the Longshore and Compensation, Office of Workers’ and ‘‘partial’’ if the worker is able to
Harbor Workers’ Compensation Act’s Compensation Programs, U.S. work at a diminished wage. A disability
maximum and minimum compensation Department of Labor, Room C–4319, 200 is ‘‘temporary’’ if the employee’s
provisions. Some of these provisions, Constitution Avenue NW., Washington, medical condition is improving and
which cap the amounts of compensation DC 20210. Telephone: (202)–693–0038 becomes ‘‘permanent’’ when he or she
and death benefits payable to entitled (this is not a toll-free number). TTY/ reaches maximum medical
claimants and provide a floor below TDD callers may dial toll free 1–877– improvement. See 33 U.S.C. 908(a)–(c),
which compensation may not fall, have 889–5627 for further information. (e); see also Potomac Elec. Power Co. v.
become the topic of litigation. The SUPPLEMENTARY INFORMATION: Director, OWCP, 449 U.S. 268 (1980).
proposed rules would clarify how the And section 9 provides compensation
I. Background of This Rulemaking
Department interprets and applies these payable to the employees’ eligible
provisions. In addition, the proposed The Longshore and Harbor Workers’ survivors for injuries causing death. 30
rules would implement the Act’s annual Compensation Act, 33 U.S.C. 901–50 U.S.C. 909.
compensation-adjustment mechanism (LHWCA or Act), establishes a federal For all disability categories, the Act
for permanent total disability workers’ compensation system for an uses a ‘‘two-thirds’’ rule to compute
compensation and death benefits. employee’s disability or death arising in compensation. Totally disabled
DATES: The Department invites written the course of covered maritime employees—those who are unable to
comments on the proposed regulations employment. 33 U.S.C. 903(a), 908, 909. return to their original employment or
from interested parties. Written This proposed rule would implement earn wages in suitable alternative
the Act’s provisions on maximum and employment—receive two-thirds the
comments must be received by October
minimum amounts of compensation AWW they were earning at the time of
mstockstill on DSK3G9T082PROD with PROPOSALS
25, 2016.
payable. injury. 33 U.S.C. 908(a)–(b). Partially
ADDRESSES: You may submit written disabled employees—those who
comments, identified by RIN number A. The Act’s Compensation Scheme experience the loss or loss-of-use of
1240–AA06, by any of the following Disability, which the Act defines as body parts specified in the statute—are
‘‘incapacity because of injury to earn the entitled to two-thirds of their date-of-
2016); and letter from Jeffrey Klenda, Chair of Ur-
Energy Inc. (August 19, 2016). Comments are
wages which the employee was injury AWW for a specified number of
available on the Commission’s Web site at: https:// receiving at the time of injury,’’ 33 weeks. 33 U.S.C. 908(c)(1)–(19). Other
www.sec.gov/comments/s7-10-16/s71016.htm. U.S.C. 902(10), ‘‘is in essence an partially disabled employees—those
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00012 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/1.svg)
![Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules 58879
who are able to work after their injuries the national average weekly wage has B. Section 6(c)’s ‘‘Newly Awarded
at a diminished wage—receive two- risen every year since Congress added Compensation During Such Period’’
thirds of the difference between their this self-adjustment feature to section 6 Clause
pre-disability AWW and their residual in 1972, each year’s maximum rate has The Supreme Court construed this
earning capacity (i.e., the post-injury risen as well. Thus, applying a later part of section 6(c) in Roberts and held
wages they earn or could earn through fiscal year’s maximum generally results ‘‘that an employee is ‘newly awarded
suitable alternative employment). See in a higher compensation rate. compensation’ when he first becomes
33 U.S.C. 908(c)(21), (e). Finally, the Finally, in addition to section 6’s disabled and thereby becomes
compensation rate for survivors of an provisions allowing adjustments to the statutorily entitled to benefits, no matter
employee who suffers a work-related maximum compensation rate, section whether, or when, a compensation order
death is usually based on the deceased 10(f) provides another mechanism for issues on his behalf.’’ 132 S.Ct. at 1363.
employee’s AWW at the time of death, adjusting compensation amounts over Mr. Roberts was injured and became
and, with certain exceptions, can be as time. ‘‘[B]enefits payable for permanent disabled in FY 2002. An administrative
high as two-thirds of that wage. 33 total disability or death’’ are increased law judge (ALJ) order awarding
U.S.C. 909(b). at the beginning of each fiscal year compensation, however, was not issued
The third step is to apply the statute’s (October 1) by the same percentage as
compensation-limiting rules. Despite until FY 2007. While Mr. Roberts’
any increase in the national average employer initially made some
the general two-thirds rule, section 6, weekly wage (as calculated under
‘‘Compensation,’’ 33 U.S.C. 906, both compensation payments, it stopped in
section 6), but no more than 5 percent. May 2005 and did not resume payments
caps the compensation amounts that can 33 U.S.C. 910(f). The primary difference
be received (a ‘‘maximum’’) and until after the ALJ’s FY 2007 order. The
between the two adjustment provisions ALJ found that Mr. Roberts’ disability
provides a floor below which is that section 10(f) applies to all
compensation may not fall (a was: Temporary total from March 11,
claimants receiving compensation for 2002, to July 11, 2005; permanent total
‘‘minimum’’). These limits are applied permanent total disability or death,
after calculating two-thirds of the from July 12, 2005, to October 9, 2005;
while section 6(c) assists only those and permanent partial beginning on
worker’s date-of-injury AWW. The Act affected by the maximum rate. Through
sets the maximum for all disability October 10, 2005. Roberts v. Director,
these provisions, compensation payable Office of Workers’ Compensation
compensation categories at 200 percent to a claimant each year increases by the
of the ‘‘applicable national average Programs, 625 F.3d 1204, 1205 (9th Cir.
same amount as wage-growth generally, 2010). Because the employer had ceased
weekly wage.’’ 33 U.S.C. 906(b)(1). Total ensuring that the value of the workers’
compensation for death—the amount paying compensation in May 2005,
compensation is not eroded over time. before Mr. Roberts’ period of permanent
payable to all survivors in the
In recent litigation, disputes have total disability, it did not pay him for
aggregate—is also limited to that 200-
arisen over which fiscal year’s that disability until after the ALJ’s order
percent figure, or to the deceased
maximum rate or rates apply to a given in FY 2007.
employee’s AWW, whichever is less. 33
U.S.C. 909(e)(1); Donovan v. Newport claimant, specifically: (1) In what fiscal The ALJ found that Mr. Roberts’
News Shipbuilding & Dry Dock Co., 31 year is a claimant ‘‘newly awarded compensation rate for total disability—
BRBS 2 (1997). The Act sets the compensation’’; and (2) in what fiscal two-thirds of his AWW—was $1,902.05,
minimum for total disability year is a claimant ‘‘currently receiving and that his compensation rate for
compensation at the lower of: (1) 50 compensation for permanent total permanent partial disability—two-thirds
percent of the applicable national disability or death.’’ On the first of the difference between his average
average weekly wage; or (2) the question, the dispute is whether a weekly and his residual wage-earning
employee’s actual AWW. 33 U.S.C. claimant is ‘‘newly awarded capacity—was $1,422.05. He found,
906(b)(2). The Act does not provide compensation’’ when he or she first however, that Mr. Roberts was subject,
minimums for the remaining becomes disabled—and therefore for all periods of disability, to the
compensation categories. entitled to compensation—or when an maximum rate of $966.08 in effect
The Secretary of Labor determines the administrative law judge issues a during FY 2002, because that was when
national average weekly wage before compensation order. On the second he first became disabled, and was thus
October 1 of each year, and it applies for question, the dispute is whether a ‘‘newly awarded compensation.’’ Id. at
a fiscal year (FY), from October 1 until claimant is ‘‘currently receiving 1206. On Mr. Roberts’ motion for
the next September 30. 33 U.S.C. compensation for permanent total reconsideration, the ALJ determined
906(b)(3). A given fiscal year’s national disability’’ when he or she first becomes that he had applied the wrong
average weekly wage, and the resulting permanently totally disabled or when he maximum rate for the period from
maximum and minimum rates, apply to or she actually receives compensation October 1, 2005, through October 9,
‘‘employees or survivors currently for permanent total disability. 2005. The ALJ found that Mr. Roberts
receiving compensation for permanent The Supreme Court resolved the first was entitled to the FY 2006 maximum
total disability or death during such of these questions in its Roberts rate of $1,703.64 per week for that
[fiscal year], as well as those newly decision. But the second issue has not period because he was ‘‘currently
awarded compensation during such been addressed by all circuits around receiving compensation for permanent
[fiscal year].’’ 33 U.S.C. 906(c) the country, and thus remains subject to total disability’’ during that time. Id.
(emphasis added). Under the ‘‘currently litigation. The proposed rules would The Benefits Review Board, relying on
mstockstill on DSK3G9T082PROD with PROPOSALS
receiving’’ clause, the maximum rate for codify the Supreme Court’s decision, its earlier decision in Reposky v. Int’l
claimants receiving benefits for resolve the second issue in a manner Transp. Services, 40 BRBS 65, 74–76
permanent total disability or death is consistent with the courts that have (2006) (holding that a claimant is newly
‘‘adjusted each fiscal year—and addressed it, implement other aspects of awarded compensation ‘‘when benefits
typically increases, in step with the the Act’s maximum and minimum commence, generally at the time of
usual inflation-driven rise in the compensation provisions, and address injury’’), affirmed the ALJ’s decision.
national average weekly wage.’’ Roberts, the related section 10(f) annual The Ninth Circuit followed suit. In
132 S.Ct. at 1354 n.2. In fact, because adjustment provision. affirming the ALJ’s decision, it held that
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00013 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/2.svg)
![58880 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules
an injured employee is ‘‘newly employers to pay compensation within C. Section 6(c)’s ‘‘Currently Receiving
awarded’’ compensation when he or she 14 days after the employer knows of the Compensation for Permanent Total
first becomes entitled to compensation worker’s injury (see 30 U.S.C. 914(b)). It Disability or Death Benefits During Such
rather than when a formal compensation determined that using the national Period’’ Clause
order is issued. Roberts, 625 F.3d at average weekly wage at the time of
1208. Although Mr. Roberts argued that disability to determine the applicable While the Supreme Court’s Roberts
‘‘awarded’’ could mean only ‘‘assigned maximum ‘‘coheres’’ with that structure. decision settled the interpretation of the
by formal order in the course of Roberts, 132 S. Ct. at 1358. The Court ‘‘newly awarded’’ clause, the Court
adjudication,’’ and that ‘‘newly recognized that the employer, as well as declined to consider section 6(c)’s
awarded’’ must therefore mean newly OWCP, must be able to calculate the ‘‘currently receiving’’ clause, leaving the
issued a compensation order, id. at amount of compensation due at the time phrase’s correct interpretation open to
1206, the court rejected that argument. of payment, a calculation that further litigation. The Ninth Circuit
It reasoned that the LHWCA sometimes necessarily includes consideration of Roberts court had interpreted the
uses ‘‘awarded’’ to mean ‘‘entitled to.’’ any applicable cap. Because an ‘‘currently receiving’’ clause
It found that use applied to section 6, employer is ‘‘powerless to predict’’ consistently with the ‘‘newly awarded’’
and held that a claimant is ‘‘newly future events related to the clause, noting that ‘‘[u]nder both
awarded’’ compensation when he first compensation claim or what a later clauses, the inquiry into the applicable
becomes entitled to compensation, national average weekly wage will be, maximum rate focuses on an employee’s
which is when he first becomes the court reasoned that ‘‘[i]t is difficult entitlement to compensation.’’ Roberts,
disabled. to see how an employer can apply or 625 F.3d at 1208. It held that ‘‘the
The Supreme Court agreed with the certify a national average weekly wage ‘currently receiving’ clause of section
Ninth Circuit’s interpretation of section other than the one in effect at the time 6(c) unambiguously refers to the period
6(c)’s ‘‘newly awarded compensation’’ an employee becomes disabled.’’ during which an employee was entitled
clause. The Court acknowledged that Roberts, 132 S. Ct. at 1358–59. to receive compensation for permanent
Mr. Roberts’ contrary view was Reading section 6(c) in the context of total disability, regardless of whether
‘‘appealing’’ because ‘‘[i]n ordinary the Act’s comprehensive scheme, the his employer actually paid it.’’ Id. at
usage, ‘award’ most often means ‘give by Court further explained that ‘‘applying 1209. Consequently, the court
judicial decree’ or ‘assign after careful the national average weekly wage for the determined that Mr. Roberts was
judgment.’ ’’ Roberts, 132 S. Ct. at 1356 fiscal year in which an employee ‘‘currently receiving compensation for
(quoting Webster’s Third New becomes disabled advances the permanent total disability’’ as of July 12,
International Dictionary 152 (2002)). It LHWCA’s purpose to compensate 2005, and thus entitled to the FY 2005
recognized, however, that ‘‘award’’ can disability,’’ which focuses on wages at maximum rate from that date through
also mean ‘‘grant’’ or ‘‘confer or bestow September 30, 2005 (the end of FY
the time of the injury as the basis to
upon.’’ Thus, deciding that ‘‘the text of 2005), and to the FY 2006 rate from
compute compensation. Id. at 1359
§ 906(c), in isolation, is October 1, 2005, through October 9,
(citing 33 U.S.C. 902(10)). It is thus
indeterminate[,]’’ the Court considered 2005. Beginning October 10, 2005—
‘‘logical to apply the national average
its function in the context of the statute when Mr. Roberts regained an earning
weekly wage for the same point in
as a whole. Id. at 1357. The Court capacity, making his disability
time.’’ Id.
concluded that in the Act’s permanent partial—the court concluded
‘‘comprehensive, reticulated regime for Moreover, the Court found that
applying the date-of-disability he was once again subject to the FY
worker benefits—in which § 906 plays a 2002 maximum rate. Id. at 1206, 1209.
pivotal role—‘awarded compensation’ is maximum rate as suggested by the
much more sensibly interpreted to mean Director and Employer ‘‘avoids Although the Eleventh Circuit
‘statutorily entitled to compensation disparate treatment of similarly situated initially disagreed with the Ninth
because of disability,’ ’’ id. at 1357, than employees . . . who earn the same Circuit’s construction of the ‘‘currently
‘‘awarded compensation in a formal salary and suffer the same injury on the receiving’’ clause, Boroski v. DynCorp
order.’’ Id. at 1356. same day.’’ Id. at 1359. By contrast, Mr. Int’l, 662 F.3d 1197 (11th Cir. 2011),
The Court gave several reasons for its Roberts’ approach could subject such that court reversed its position after the
holding. First, the Court recognized that employees to different rates based solely Supreme Court decided Roberts. Boroski
construing ‘‘newly awarded on the ‘‘happenstance of their obtaining v. DynCorp Int’l, 700 F.3d 446 (11th Cir.
compensation’’ to mean a formal orders in different fiscal years.’’ Id. 2012) on remand from 132 S.Ct. 2430
compensation order would be Third, the Court believed its approach (2012). Mr. Boroski was first disabled by
‘‘incompatible with the Act’s design.’’ ‘‘discourages gamesmanship in the his work-related injury in April 2002.
Id. at 1357. The Court reasoned that this claims process.’’ Id. at 1360. Using the His employer, DynCorp International,
construction of the clause would be date a compensation order issues would timely contested his compensation
impossible to apply in the many cases encourage claimants to delay the claim and thus did not voluntarily pay
where benefits are paid voluntarily and adjudication process or initiate him compensation. An ALJ entered an
a formal compensation order is never additional administrative proceedings order in FY 2008 awarding him
issued. Noting that the three provisions seeking to take advantage of a later permanent total disability compensation
of section 6 that relate to the maximum year’s national average weekly wage. At from 2002 and continuing. DynCorp
compensation rate ‘‘work together to cap the same time, an employer who based its subsequent payments on the
mstockstill on DSK3G9T082PROD with PROPOSALS
disability benefits,’’ and that section promptly pays compensation at the maximum compensation rate applicable
6(b)(1)’s cap on benefits ‘‘applies correct rate would be subject to an for FY 2002, and adjusted the amount
globally, to all disability claims,’’ the increased cap retroactively for those upward each year, beginning on October
Court concluded that section 6(c)’s payments based on a later compensation 1, 2002, as required by section 10(f). Mr.
‘‘newly awarded’’ clause must also order. The Court refused to ‘‘reward’’ Boroski objected, arguing that he was
apply globally. Id. at 1358. claimants with these ‘‘windfalls’’ while not ‘‘currently receiving compensation
Second, the Court examined the Act’s ‘‘punishing’’ employers who have met for permanent total disability’’ until FY
administrative structure, which requires their statutory obligations. Id. 2008, when the employer actually began
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00014 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/3.svg)
![Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules 58881
paying him, and was thus entitled to the Finally, the court determined that the contrary holding in Marko v. Morris
FY 2008 maximum rate from the outset. Director’s interpretation avoided Boney Co., 23 BRBS 353 (1990), the
The Eleventh Circuit rejected Mr. disparate treatment of similarly situated Board reiterated its conclusion that, ‘‘in
Boroski’s argument and held that claimants. ‘‘Under the Director’s a permanent total disability case in
‘‘ ‘currently receiving compensation’ in interpretation, Boroski receives the which two-thirds of the claimant’s
§ 906(c) means ‘currently entitled to same benefits as a similarly situated actual [AWW] exceeds the Section
compensation.’ ’’ Boroski, 700 F.3d at employee who was first injured and 6(b)(3) statutory maximum rate, he is
451. The court agreed with the Director who first received payment in 2002, entitled to the benefit of the new
that for each year after 2002 during and, additionally, Boroski receives maximum rate each fiscal year . . .
which Mr. Boroski was entitled to interest on all late payments, to until such time as two-thirds of his
compensation for permanent total compensate him for the delay.’’ Id. at actual average weekly wage falls below
disability, he was ‘‘currently receiving 453. By contrast, under Mr. Boroski’s 200 percent of the applicable [national
compensation for permanent total interpretation—in which Mr. Boroski average weekly wage], and then annual
disability,’’ and thus subject to the new ‘‘would receive, in addition to interest, adjustments under Section 10(f) apply.’’
fiscal year’s maximum rate, regardless of higher benefits for the same period of Lake, 47 BRBS at 50. The Board found
when the compensation was actually disability than claimants who timely its holding compelled by the plain
paid. receive their benefits’’—the same language of section 6(c) and supported
Taking its analytical lead from the hypothetical employee ‘‘would receive by the Ninth Circuit’s Roberts decision.
Supreme Court in Roberts, the Boroski approximately $30,000 less than
Boroski.’’ Id. II. Summary of the Proposed Rule
court considered the ‘‘currently
receiving’’ clause’s role in the context of For all of these reasons, the Eleventh A. General Information
the entire statute. The court noted that Circuit held, as had the Ninth Circuit in
Roberts, that an employee is ‘‘currently As discussed in the Section-by-
using the maximum for the year in Section Explanation below, this
which compensation was actually paid receiving compensation for permanent
total disability’’ when he is entitled to proposed rule implements the Act’s
(2008) rather than for the first year Mr. provisions governing the maximum and
such compensation, not when he is
Boroski was disabled (2002) would lead minimum amount of disability
actually paid that compensation. To
to ‘‘two different and irreconcilable compensation and death benefits
date, the remaining circuits have not
weekly benefit payment amounts’’ payable. The proposed regulations do
weighed in on this issue.
under the Supreme Court’s The Benefits Review Board not govern general compensation
interpretation of the ‘‘newly awarded’’ subsequently reached the same calculations (referred to in the rules as
clause, which also applied to his conclusion as the Ninth and Eleventh the ‘‘calculated compensation rate’’),
compensation calculation. Id. at 451. Circuits. Lake v. L–3 Communications, and the fact that compensation payable
The Director’s contrary interpretation 47 BRBS 45 (2013). In Lake, the Board is subject to these maximum and
instead harmonized the two clauses of held that a claimant is ‘‘currently minimum rates does not mean that
section 6(c). receiving compensation’’ under section claimants are necessarily entitled to
The court also found the Director’s 6(c) ‘‘during a period in which he is them. Rather, the proposed regulations
position more consistent with section entitled to receive such compensation, simply provide that disability
10(f)’s annual adjustment mechanism. regardless of whether his employer compensation and death benefits can go
The court reasoned that the Director’s actually pays it.’’ Id. at 48. The Board no higher than the applicable maximum
interpretation of the ‘‘currently also held that when a claimant’s rate or lower than the applicable
receiving’’ clause operates similarly, temporary total disability changes to minimum rate.
‘‘gradually increasing benefits to permanent total disability during a The proposed rule includes two
maintain the value of an injured fiscal year, the maximum rate in effect subparts. Subpart G describes the
employee’s wages, determined ‘at the during that year applies immediately. annual adjustment to compensation and
time of the injury.’ ’’ Id. at 452. Mr. Id. at 48. In reaching this conclusion, death benefits provided under section
Boroski’s interpretation—under which the Board overruled this portion of its 10(f) of the Act, 33 U.S.C. 910(f). While
‘‘employers who first pay benefits to an earlier contrary decision in Reposky, 40 section 10(f) allows for an annual
injured employee in a year other than BRBS at 65. The Board thus held that adjustment to all payments of
the year of the injury would pay all past the FY 2009 maximum rate applied as compensation for permanent total
due payments based on the national of December 10, 2008, the date that Mr. disability or death benefits, including
average weekly wage for the year in Lake’s entitlement to permanent total those cases where neither the maximum
which the first payment is made . . . disability benefits commenced, until the nor the minimum rates are implicated,
effectively giv[ing] the injured employee next October 1, when the new fiscal the Department has included section
a raise to the later year’s national year’s maximum rate applied. 10(f) in this rulemaking because its
average weekly wage, and would make The Board also addressed a related application can be closely tied with the
that raise retroactive to the date of his question on the interplay between maximum compensation or death
disability’’—would be ‘‘incongruous’’ sections 6 and 10(f) in Lake. The benefits payable in certain cases. These
with section 10(f). Id. at 452. The court employer argued that Mr. Lake, who interrelationships are detailed in the
also rejected Mr. Boroski’s assertion that first reached permanent total disability Section-by-Section Explanation below.
Congress intended his interpretation to status in FY 2009, was not entitled to Subpart H includes proposed
mstockstill on DSK3G9T082PROD with PROPOSALS
encourage prompt payment of benefits. the FY 2009 maximum rate. Instead, the regulations implementing the Act’s
The court noted that claimants are employer contended that he was limited maximum and minimum provisions.
entitled to interest on late payments of to a section 10(f) increase on the FY The Department has organized these
compensation, and found that interest 2006 maximum rate that he had been sections first to cover general topics,
both adequately compensates claimants receiving since his injury, followed by then by whether the rules govern
for the delayed receipt of benefits and a section 10(f) adjustment each maximum or minimum compensation
discourages employers from refusing to subsequent October 1. The Board payable, and finally by categories of
promptly pay legitimate claims. rejected this argument. Citing its earlier compensation payable (i.e., temporary
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00015 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/4.svg)
![Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules 58883
Secretary of Labor determines the expenses, 33 U.S.C. 907; and any other rate is based on the national average
applicable national average weekly compensation calculated and paid in a weekly wage rather than on the
wage for each one-year period from lump sum, such as the two years of employee’s actual earnings. 33 U.S.C.
October 1 to September 30. Section 6(c), death benefits payable to an employee’s 909(e), 910(d)(2)(B).
33 U.S.C. 906(c), provides that the eligible surviving spouse who remarries, Proposed paragraph (b) defines the
Secretary’s determination of the 33 U.S.C. 909(b), or when compensation phrase ‘‘date of disability’’ as the date
national average weekly wage for each payments are commuted, 33 U.S.C. an employee first becomes economically
one-year period ‘‘shall apply to 909(g). In all of these circumstances, the impaired—or, in other words, unable to
employees or survivors currently maximum and minimum weekly rates earn the same wages—as a result of a
receiving compensation for permanent do not apply either because the covered injury. The phrase incorporates
total disability or death benefits during compensation due is not based on a the statutory definition of ‘‘disability,’’
such period, as well as those newly weekly rate (e.g., medical expenses) or see 33 U.S.C. 902(10), and is based on
awarded compensation during such it is not necessarily paid on a weekly the Supreme Court’s decision in
period.’’ Section 9(e), 33 U.S.C. 909(e), basis (e.g., settlements, commutations). Roberts, which held that the maximum
includes provisions that affect the Although not subject to the rules in this compensation rate applicable on the day
minimum death benefits payable to a subpart, the maximum and minimum the employee became ‘‘entitled to
deceased employee’s survivors. compensation rates will nevertheless be compensation because of disability’’
Because the interpretation of section relevant in some of these circumstances. controlled. Roberts, 132 S.Ct. at 1357.
6(c) is important to determining how the For example, the Department would The phrase is used in this subpart to
maximum and minimum provisions consider such compensation rates in delineate when certain minimum or
apply and has been the subject of calculating a commuted award or death maximum compensation rates apply.
litigation, proposed paragraph (b) more benefits payable when a survivor The proposed rule, however, excepts
specifically addresses section 6(c)’s remarries. Similarly, the Department from the general ‘‘date of disability’’
‘‘newly awarded compensation’’ and anticipates that private parties will definition three situations that demand
‘‘currently receiving compensation’’ consider the maximum and minimum special treatment. Paragraph (b)(2)(i)
phrases. Paragraph (b)(1) adopts the compensation rates in settlement provides that for scheduled permanent
Supreme Court’s conclusion in Roberts negotiations, and the Department will partial disabilities under 33 U.S.C.
that a claimant, regardless of the nature consider them in deciding whether to 908(c)(1)–(20) that are not preceded by
or extent of disability, is ‘‘newly approve settlements. another category of disability (i.e.,
awarded compensation’’ when he or she Proposed § 702.802(b) provides that permanent total, temporary total, or
first becomes disabled and entitled to the rules governing minimum temporary partial), the date of disability
compensation. See supra Section I. B. compensation and death benefits is when the employee first becomes
Claimants are initially subject to the payable do not apply to claims arising permanently impaired by the injury to
maximum and minimum rates derived under the Defense Base Act (DBA), 42 the scheduled member. This exception
from the national average weekly wage U.S.C. 1651 et seq. The DBA specifically is necessary because an employee may
in effect during the fiscal year his or her precludes application of the LHWCA’s suffer a scheduled injury without any
disability begins. Paragraph (b)(2) minimum compensation provisions: loss in wage-earning capacity, which is
applies the Supreme Court’s Roberts ‘‘The minimum limit on weekly the touchstone for the general ‘‘date of
analysis to death benefits by providing compensation for disability, established disability’’ definition. Paragraph
that a deceased employee’s survivor is by section 6(b), and the minimum limit (b)(2)(ii) establishes a separate date of
‘‘newly awarded compensation’’ on the on the average weekly wages on which disability for occupational diseases
day of the employee’s death, the first death benefits are to be computed, because the disease may manifest after
time a survivor may be entitled to death established by section 9(e) of the voluntary retirement, when the
benefits. See discussion infra at [Longshore] Act, shall not apply in employee does not experience a loss of
proposed § 702.807. And paragraph computing compensation and death wage-earning capacity. Paragraph
(b)(3) provides that a claimant is benefits under [the DBA].’’ 42 U.S.C. (b)(2)(iii) provides that for very short-
‘‘currently receiving compensation’’ 1652(a). The Secretary’s regulations term disabilities lasting no more than 14
during the period for which the implementing the DBA also reflect this days, the date of disability is 4 days
compensation is payable, regardless of limitation. See 20 CFR 704.103. The after the injury affected the employee’s
when it is actually paid. This limitation in proposed § 702.802(b) wage earning capacity. For such a short-
construction is consistent with the comports with these authorities. term disability, section 6(a) of the Act
Ninth and Eleventh Circuits’ provides that no compensation is
20 CFR 702.803 Definitions payable for the first 3 days of disability.
interpretations. See supra Section I. C.
While these phrases are not used in the This section defines certain terms 33 U.S.C. 906(a). Thus, using the fourth
remainder of the proposed subpart, the used in this subpart; these definitions day as the ‘‘date of disability’’ for
concepts set forth in paragraph (b) do not apply outside of this subpart. determining the maximum and
underlie the rules. Proposed paragraph (a) defines a minimum compensation payable
claimant’s ‘‘calculated compensation reflects the date on which the employee
20 CFR 702.802 Applicability of This rate’’ as the weekly compensation or is actually entitled to compensation.
Subpart death benefits payable prior to any The remaining definitions explain
Proposed § 702.802(a) lists several consideration of the maximum or how basic terms are used in the
mstockstill on DSK3G9T082PROD with PROPOSALS
circumstances in which this subpart’s minimum rates, or a section 10(f) proposed rule. Paragraph (c) defines the
rules do not apply, including: Approved adjustment. As discussed above (see dates of a standard fiscal year.
settlements made under section 8(i) of supra Section I. A.), this figure is a Paragraphs (d) and (e) define
the Act, 33 U.S.C. 908(i); payments for specified percentage of the employee’s ‘‘maximum rate’’ and ‘‘minimum rate’’
an employee’s compensable death made average weekly wage at the time of the as the weekly compensation rates the
to the Special Fund when the employee injury or death. But there are Department calculates for each fiscal
has no eligible survivors, 33 U.S.C. exceptions. For example, in certain year. And paragraph (f) defines a
944(c)(1); payments for medical claims, the calculated compensation ‘‘section 10(f) adjustment’’ as the annual
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00017 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/6.svg)
![58884 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules
compensation increase some claimants applies to all compensation payments— Proposed paragraph (c) addresses how
receive under LHWCA section 10(f), 33 including compensation payable for the 10(f) adjustment applies in a ‘‘cross-
U.S.C. 910(f). See proposed § 702.701. subsequent fiscal years—because over’’ year. A cross-over year is one in
section 6(c)’s ‘‘currently receiving which the claimant’s compensation was
20 CFR 702.804 What are the weekly
compensation’’ clause does not apply. paid at the maximum rate in the current
maximum and minimum rates for each
33 U.S.C. 906(c) (maximum rate fiscal year, but the claimant’s calculated
fiscal year and how are they calculated?
determinations ‘‘with respect to a period compensation rate does not exceed the
Proposed § 702.804 explains how the shall apply to employees or survivors maximum rate set for the next fiscal
Department calculates basic weekly currently receiving compensation for year. In those circumstances, the rule
maximum and minimum rates for each permanent total disability or death requires that the claimant’s
fiscal year. Paragraph (a) notes that benefits during such period[.]’’). compensation for the next fiscal year be
these weekly compensation rates are The first example at paragraph (b)(1) increased by the amount of the 10(f)
one factor considered when calculating sets out a common scenario involving adjustment up to the maximum for that
compensation and death benefits an injured employee who is temporarily fiscal year.
payable. Paragraphs (b) and (c) set forth totally disabled for a period prior to The examples in proposed paragraph
the calculation formulas for weekly being permanently partially disabled. (d) apply these principles. Paragraph
maximum and minimum rates. Both are Although his compensation periods
based on the national average weekly (d)(1) presents the relatively
span more than one fiscal year, the straightforward situation of an employee
wage, which the Act defines as the maximum rate that applies remains the
‘‘national average weekly earnings of who is permanently totally disabled
rate in effect on his date of disability. from the time of injury. He is ‘‘newly
production or nonsupervisory workers See proposed § 702.803(b)(1). The
on private nonagricultural payrolls.’’ 33 awarded’’ compensation in the fiscal
second example at paragraph (b)(2) is year he became disabled and his
U.S.C. 902(19). These statistics are slightly more complicated. The
compiled on an ongoing basis by the compensation is subject to that fiscal
employee incurs two separate periods of year’s maximum rate. In subsequent
Department’s Bureau of Labor Statistics. temporary total disability from the same
Before each new fiscal year, the years, he is ‘‘currently receiving’’
injury; each period begins in a different compensation and his compensation is
Department calculates the average fiscal year. Under section 6(c), the
earnings of these employees for the subject to the maximum rate for each
maximum rate applicable at the subsequent fiscal year. Paragraph (d)(2)
period October 1 through June 30 (i.e., beginning of the first disability period
the first three quarters) of the current adds an additional wrinkle to the first
applies to all payments for temporary example. Here, the employee suffers a
fiscal year. 33 U.S.C. 906(b)(3). The Act total disability, including those in the
pegs the maximum weekly rate at 200 period of temporary total disability that
second period. The third example at
percent of this number and the spans more than one fiscal year before
paragraph (b)(3) addresses an
minimum at 50 percent. 33 U.S.C. he becomes permanently totally
occupational disease discovered post-
906(b)(1), (2). For example, the national disabled. The maximum that applies to
retirement. Occupational diseases
average weekly earnings of production the entire temporary total disability
occurring after an employee has
or nonsupervisory workers on private, compensation period is the fiscal year
voluntarily retired are considered
nonagricultural payrolls for the period rate in effect on the date of disability (in
permanent partial disabilities. 20 CFR
from October 1, 2013, to June 30, 2014 the example, FY 2000), which is when
702.601(b). Thus, compensation payable
(i.e., the first three quarters of FY 2014), the employee is ‘‘newly awarded’’
in this instance is subject to the
were $688.51. As a result, the compensation. See proposed
maximum rate in effect on the date of
Department determined that the disability—when the employee becomes § 702.805(a). When the employee
maximum compensation rate for FY aware of the relationship between becomes permanently totally disabled
2015 was $1,377.02 ($688.51 × 2) and employment, the disease and any two years later, however, he is
the minimum compensation rate was disability. See proposed ‘‘currently receiving’’ permanent total
$344.26 ($688.51 × 2). § 702.803(b)(2)(ii). disability compensation and the
maximum rate in effect at that time (in
Maximum Rates 20 CFR 702.806 What weekly the example, FY 2002) applies.
20 CFR 702.805 What weekly maximum rates apply to compensation Compensation for permanent total
maximum rates apply to compensation for permanent total disability? disability in succeeding years is subject
for permanent partial disability, Proposed § 702.806 implements both to those subsequent fiscal years’
temporary total disability, and the ‘‘newly awarded’’ and ‘‘currently maximum rates because he continues to
temporary partial disability? receiving’’ compensation clauses for be ‘‘currently receiving’’ compensation.
Proposed § 702.805 provides that the permanent total disability compensation Finally, proposed paragraph (d)(3)
maximum rate in effect for the fiscal as they pertain to the maximum demonstrates how the rule operates in a
year on the employee’s date of disability compensation payable. Paragraph (a) ‘‘cross-over’’ year. In the example,
applies to all compensation payable for provides that the maximum rate for the employee C’s calculated compensation
temporary partial disability, temporary fiscal year during which the employee rate exceeds the annual fiscal year
total disability, or permanent partial first becomes permanently and totally maximum rate each year from when he
disability, including compensation disabled applies to all compensation was first permanently totally disabled in
mstockstill on DSK3G9T082PROD with PROPOSALS
payable in subsequent fiscal years. This payable during that fiscal year. FY 2009 through FY 2012. In FY 2013,
rule effectuates the Supreme Court’s Paragraph (b) then provides that all however, the employee’s calculated
construction of the ‘‘newly awarded periods of permanent total disability in compensation rate falls below the
compensation’’ clause by applying the subsequent fiscal years arising from the maximum rate and remains below that
maximum rate for the fiscal year the same injury are subject to the maximum rate even after the addition of a section
employee’s disability begins. For these rates for those subsequent fiscal years 10(f) adjustment. Thus, for FY 2013,
types of compensation, the date-of- because the employee is then ‘‘currently employee C’s compensation is not
disability fiscal year’s maximum rate receiving compensation.’’ limited by the maximum rate.
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00018 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/7.svg)
![Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules 58885
20 CFR 702.807 What weekly maximum rate applicable for the fiscal 2014. His survivor’s death benefits for
maximum rates apply to death benefits? year in which the employee died or the the remainder of the year in which he
Determining the maximum rates for employee’s actual average weekly died are subject to the FY 2014
death benefits in any particular case can wages. maximum rate, with subsequent death
be straightforward or involve several Proposed paragraph (c) sets out rules benefits subject to each subsequent
governing payments for subsequent fiscal year’s rate.
statutory provisions. The proposed rule
fiscal years. Consistent with the Paragraph (e)(2)’s example
integrates these provisions to provide a
‘‘currently receiving’’ clause, paragraph demonstrates how the death-benefits-
comprehensive approach to the issue.
LHWCA section 6(b)(1) applies the (c)(1) provides that each subsequent calculation method for survivors of low-
‘‘applicable’’ maximum rate to all fiscal year’s maximum rate applies to wage earners interfaces with the cap
compensation for disability or death. aggregate death benefits. Paragraph placed on those benefits in some
For death benefits purposes, proposed (c)(2) provides an exception to the circumstances. In the example,
section 9(e)(1) feature limiting death employee B’s weekly earnings fell below
§ 702.807(a) defines the ‘‘applicable’’
benefits to no more than the employee’s the national average during the year of
rate as the fiscal-year rate in effect when
actual average weekly wages. If death her death. Thus, her survivor’s death
the employee died. By using the
benefits were paid at the employee’s full benefits are computed using the higher
employee’s date of death, the rule
average weekly wage in the year of national average weekly wage. 33 U.S.C.
applies the ‘‘newly awarded’’ clause in
death, paragraph (c)(2) provides that 909(e); see proposed § 702.811(a).
the same manner as the Supreme Court
death benefits payable may be adjusted Because that calculated compensation
applied it to disability claims in
upward under section 10(f). See rate of $331.30 exceeds the employee’s
Roberts: A survivor’s right to benefits
Donovan, 31 BRBS 2 (holding that actual average weekly wage of $300.00,
first arises at the time of death. See
section 9(e)(1) does not bar application death benefits are capped at the
generally Ingalls Shipbuilding, Inc. v. of 10(f) adjustments even if adjusted
Director, OWCP, 519 U.S. 248, 257–58 employee’s actual wages, except for
death benefits amount exceeds deceased section 10(f) adjustments in subsequent
(1997) (survivors seeking death benefits employee’s actual average weekly
cannot satisfy prerequisites prior to fiscal years.
wage). Paragraph (e)(3) sets out an example
employee’s death); Travelers Insurance Finally, proposed paragraph (d)
Co. v. Marshall, 634 F.2d 843, 846 (5th involving an occupational disease
addresses LHWCA section 9(e)’s specific discovered more than one year post-
Cir. 1981) (section 9 ‘‘cause of action for limit on death benefits payable when
death benefits certainly does not arise retirement that leads to death. Employee
death results from an occupational C’s compensation during his lifetime is
until [employee’s] death’’). disease that manifested after the
Proposed § 702.807(b) sets out the calculated based on the FY 2002
employee retired voluntarily (i.e., he or national average weekly wage because
general rules for determining the death- she did not retire because of disability).
benefits cap in the year the employee his disease manifested then and he had
In those circumstances, LHWCA section
died. These limits are compelled by voluntarily retired more than one year
9(e)(2) provides that ‘‘total weekly
LHWCA section 6(b)(1) along with the earlier. Based on the date of employee
benefits shall not exceed one fifty-
provisions of section 9(e), 33 U.S.C. C’s death, his survivors’ death benefits
second part of the employee’s average
909(e). Section 9(e) provides an are calculated based on the national
annual earnings during the 52-week
alternative method for computing death average weekly wage for FY 2015. 33
period preceding retirement.’’ 33 U.S.C.
benefits for survivors of lower-wage U.S.C. 910(d)(2)(B); 20 CFR 702.604(b).
909(e)(2). Proposed paragraph (d)(1)
employees to boost the benefit amount. This calculation yields a weekly figure
implements this provision, as well as
If the deceased employee’s actual greater than 1/52 part of the employee’s
the general section 6(b) maximum cap,
average weekly wage was lower than the by providing that aggregate death last year of earnings. Thus, the total
national average weekly wage, death benefits paid during the year of the death benefits payable are capped at 1/
benefits are calculated as a percentage of employee’s death must not exceed the 52 part of the employee’s actual
the national average weekly wage lower of that fiscal year’s maximum rate earnings, except for section 10(f)
instead of a percentage of the actual or one-fifty-second part of the adjustments in subsequent fiscal years.
wage. This results in a higher calculated employee’s average annual earnings Minimum Rates
compensation rate than if the during the 52-weeks preceding
calculation were based on the 20 CFR 702.808 What weekly
retirement. Proposed paragraph (d)(2)(i)
employee’s actual wage. Survivors are minimum rates apply to compensation
provides that each subsequent fiscal
entitled to benefits at the higher for partial disability?
year’s maximum rate applies to
calculated rate except when that rate aggregate death benefits because death The LHWCA places no minimum
exceeds the employee’s full actual benefits are subject to the ‘‘currently compensation requirements on
weekly wage. In that event, section receiving’’ clause. If death benefits in payments for temporary partial
9(e)(1) sets an initial cap by providing the year of death were paid at one-fifty- disability or permanent partial
that total weekly death benefits ‘‘shall second part of the employee’s average disability. Accordingly, proposed
not exceed the lesser of the average annual earnings, proposed paragraph § 702.808 simply states that there is no
weekly wages of the deceased’’ (or the (d)(2)(ii) provides that the death benefits minimum rate for these types of
section 6(b)(1) maximum rate). 33 U.S.C. payable may be adjusted upward under compensation.
909(e)(1). Thus, in no event may weekly section 10(f).
mstockstill on DSK3G9T082PROD with PROPOSALS
death benefits payable in the year of the The example at proposed paragraph 20 CFR 702.809 What weekly
employee’s death exceed the employee’s (e)(1) illustrates that the maximum rate minimum rates apply to compensation
actual average weekly wages. Proposed applicable at the time of the employee’s for temporary total disability?
paragraph (b) implements these death applies to death benefits, even Proposed § 702.809 provides that the
provisions by limiting ‘‘aggregate’’ when the employee’s injury occurred in minimum rate in effect for the fiscal
weekly death benefits—meaning the an earlier fiscal year. Employee A’s year on the employee’s date of disability
death benefits payable to all survivors injury occurred in FY 2013 but he did applies to all compensation payable for
combined—to the lower of the not die as a result of the injury until FY temporary total disability, including
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00019 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/8.svg)
![58886 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules
compensation payable in subsequent actual average weekly wages are less a survivor’s right to benefits first arises.
fiscal years. LHWCA section 6(b)(2) than that amount. In that event, the See generally Ingalls Shipbuilding, 519
generally provides that compensation employee receives his or her average U.S. at 257–58 (survivors seeking death
for total disability cannot fall below 50 weekly wages as compensation. By benefits cannot satisfy prerequisites
percent of the ‘‘applicable’’ national using the date of disability to describe prior to employee’s death); Travelers
average weekly wage unless the the applicable fiscal year’s minimum Insurance, 634 F.2d at 846 (section 9
employee’s actual average weekly wages rate, paragraph (a) also implements ‘‘cause of action for death benefits
are less than that amount. In that event, section 6(c)’s ‘‘newly awarded’’ clause. certainly does not arise until
the employee receives his or her average Proposed paragraph (b) describes how [employee’s] death’’). Paragraph (b) adds
weekly wages as compensation. This the minimum applies in subsequent that the weekly minimum rate, as that
rule effectuates the Supreme Court’s fiscal years. It sets the minimum phrase is used in this subpart, does not
construction of the ‘‘newly awarded compensation level at the lower of the apply to death benefits.
compensation’’ clause by applying the minimum rate for each subsequent fiscal
year or the employee’s actual average III. Statutory Authority
minimum rate for the fiscal year the
employee’s disability begins. See weekly wages on the date of disability. Section 39(a) of the LHWCA, 33
generally Montoya v. Navy Exchange By applying subsequent fiscal years’ U.S.C. 939(a), authorizes the Secretary
Service Command, 49 BRBS 51 (2015) minimum rates, the regulation of Labor to prescribe rules and
(applying Roberts, employee entitled to implements section 6(c)’s ‘‘currently regulations necessary for the
minimum rate in effect on date of receiving’’ clause. administration of the Act.
disability onset). The date-of-disability Proposed paragraph (c)’s example
IV. Information Collection
fiscal year’s minimum rate applies to all shows how this regulation applies when
Requirements (Subject to the
temporary total disability compensation a low-wage earner suffers a permanent
Paperwork Reduction Act) Imposed
payments—including compensation total disability. Because his calculated
Under the Proposed Rule
payable for subsequent fiscal years— compensation rate for the fiscal year in
because section 6(c)’s ‘‘currently which he first became disabled (in the This rulemaking would impose no
receiving’’ clause does not apply to example, FY 2003) was below the new collections of information.
compensation for temporary disabilities. applicable fiscal year minimum rate, V. Executive Orders 12866 and 13563
See 33 U.S.C. 906(c) (national average and his actual weekly wages were above (Regulatory Planning and Review)
weekly wage determinations ‘‘with the fiscal year minimum, he is
respect to a period shall apply to compensated at the minimum rate. But Executive Orders 12866 and 13563
employees or survivors currently in subsequent fiscal years, when the direct agencies to assess all costs and
receiving compensation for permanent minimum rises above the employee’s benefits of available regulatory
total disability or death benefits during actual average weekly wages at the time alternatives and, if regulation is
such period’’). Thus, the applicable of disability, he receives his actual necessary, to select regulatory
minimum remains the one in effect on wages in compensation, subject in approaches that maximize net benefits
the date of disability. following years to section 10(f) (including potential economic,
Proposed paragraph (b)’s example adjustments. environmental, public health and safety
demonstrates how the minimum rate effects, distributive impacts, and
20 CFR 702.811 What weekly equity). Executive Order 13563
provision works when the employee’s minimum rates apply to death benefits?
calculated compensation rate falls emphasizes the importance of
below it. In the example, employee A’s Rather than applying weekly quantifying both costs and benefits,
calculated compensation rate for FY minimum rates like those used for reducing costs, harmonizing rules, and
2014 (the year of his injury) is $333.34 temporary total or permanent total promoting flexibility. The Department
per week. That number falls below the disability compensation—specified has considered this proposed rule with
FY 2014 minimum rate of $336.67. amounts below which compensation these principles in mind and has
Thus, employee A’s compensation is may not fall—section 9(e) of the Act, 33 concluded that the regulated
raised to the minimum rate. Although U.S.C. 909(e), uses a different community will benefit from this
his temporary total disability continues mechanism to ensure a minimum regulation.
into FY 2015, his rate remains tied to compensation level for an employee’s This proposed rule will benefit the
the FY 2014 minimum because neither survivors. Section 9(e) does this by parties by providing them with greater
section 6(c)’s ‘‘currently receiving’’ using the national average weekly wage guidance on applying the Act’s
clause nor section 10(f)’s adjustments calculated by the Department under maximum and minimum compensation
apply to compensation for temporary section 6(b) as a proxy to compute death provisions and section 10(f) adjustments
disabilities. See 33 U.S.C. 906(c), 910(f). benefits when the deceased employee’s in determining the amount of disability
actual weekly wage falls below the compensation or death benefits payable.
20 CFR 702.810 What weekly national average. See 33 U.S.C. 902(19) By clarifying how these provisions
minimum rates apply to compensation (defining national average weekly wage apply, the rule will also promote
for permanent total disability? for LHWCA purposes). Using the consistency so that similarly situated
Proposed § 702.810(a) provides that national average weekly wage ensures claimants receive similar compensation
the lower of the minimum rate in effect that death benefits will be paid at a or death benefits. In addition, the rule
on the date of disability or the minimal level. Proposed paragraph (a) will benefit the regulated community by
mstockstill on DSK3G9T082PROD with PROPOSALS
employee’s actual average weekly wage sets out this procedure by providing that forestalling further litigation over the
on that date sets the floor below which the average weekly wage used to ‘‘currently receiving’’ clause, which
compensation may not fall. This rule compute death benefits is the greater of neither the Supreme Court nor several
implements LHWCA section 6(b)(2)’s the employee’s actual wages or the circuit courts have yet construed.
direction that compensation for total national average. The regulation also Indeed, the absence of regulations
disability be no less than 50 percent of provides that the applicable national implementing these statutory provisions
the ‘‘applicable’’ national average average weekly wage is the one in effect led to much of the litigation described
weekly wage unless the employee’s when the employee died, which is when above. See supra Sections I. B. and C.
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00020 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/9.svg)
![58890 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Proposed Rules
(3) Employee C retired on February 1, § 702.810 What weekly minimum rates DEPARTMENT OF THE INTERIOR
1998. During his last year of apply to compensation for permanent total
employment, he earned $23,000. He disability? National Indian Gaming Commission
discovers on April 15, 2002, that he has (a) The weekly minimum
a compensable occupational disease compensation payable for the fiscal year 25 CFR Part 515
resulting in a 50% permanent in which the employee became RIN 3141–AA65
impairment. See § 702.601(b). Because permanently and totally disabled is the
he retired more than one year before this lower of: Privacy Act Procedures
date, his payrate for calculating (1) The minimum rate in effect on the
date of disability, or AGENCY: National Indian Gaming
compensation is the FY 2002 national Commission, Department of the Interior.
average weekly wage, or $483.04. See (2) The employee’s average weekly
wage on the date of disability. ACTION: Notice of proposed rulemaking.
§ 702.603(b). He is entitled to weekly
compensation of $161.01 ($483.04 × 2 ÷ (b) For all periods the employee is SUMMARY: The purpose of this document
3 × 50%). C dies from the disease on permanently and totally disabled in is to propose amendments to the
June 1, 2015, leaving two survivors. The subsequent fiscal years, the weekly procedures followed by the National
payrate for calculating death benefits is minimum compensation payable is the Indian Gaming Commission
the FY 2015 national average weekly lower of: (Commission) when processing a
wage, or $688.51. See § 702.604(b). The (1) Each subsequent fiscal year’s request under the Privacy Act of 1974.
survivors’ aggregate calculated minimum rate, or The proposed amendments make the
compensation rate is $459.01 ($688.51 × (2) The employee’s average weekly following changes to the current
2 ÷ 3). But because compensation wage on the date of disability. regulations. These changes will serve to
cannot exceed 1/52 part of C’s last year (c) Example: Employee A suffers a update certain Commission information,
of earnings, aggregate weekly death covered workplace injury on April 1, streamline how the Commission
2003, and is permanently totally processes its Privacy Act requests, and
benefits payable for FY 2015 are limited
disabled from that day forward. He was aligns those processes with its
to $442.31 ($23,000 ÷ 52). For FY 2016,
earning $250.00 a week when he was procedures for processing Freedom of
C’s survivors are entitled to a 2.10%
injured. His calculated compensation Information Act requests.
section 10(f) adjustment resulting in rate is $166.67 ($250 × 2 ÷ 3). The FY
weekly death benefits of $452.00 DATES: Written comments on this
2003 minimum rate is $249.14. Because proposed rule must be received on or
($442.31 × 021 = $9.29 (rounded to the A’s calculated compensation rate is
nearest cent); $442.31 + $9.29 = before October 11, 2016.
below the FY 2003 minimum rate, and
$451.60, rounded to the nearest dollar). ADDRESSES: Comments may be mailed to
his actual weekly wage is above that
C’s survivors would continue to receive Attn: National Indian Gaming
rate, he is entitled to compensation at
section 10(f) adjustments in subsequent Commission, FOIA/PA Officer, C/O
the minimum rate of $249.14 from April
fiscal years. Department of the Interior, 1849 C Street
1, 2003, to September 30, 2003. The FY
NW., Mail Stop #1621, Washington, DC
Minimum Rates 2004 minimum rate is $257.70. Because
20240 or faxed to (202) 632–7066 (this
A’s actual weekly wages on the date of
is not a toll free number). Comments
§ 702.808 What weekly minimum rates disability are lower than the FY 2004
may be inspected between 9:00 a.m. and
apply to compensation for partial disability? minimum rate, A’s minimum weekly
noon and between 2:00 p.m. and 5:00
compensation rate for FY 2004 is
There is no minimum rate for p.m., Monday through Friday, at 90 K
$250.00. His weekly compensation rate
compensation paid for partial disability, Street NE., Washington, DC 20002.
for FY 2004, however, is higher because
whether temporary or permanent. Comments may also be submitted
of a section 10(f) adjustment. For FY
electronically at www.regulations.gov or
§ 702.809 What weekly minimum rates 2004, A’s compensation rate is
emailed to pacomments@nigc.gov.
apply to compensation for temporary total increased by a 3.44% section 10(f)
adjustment, raising his compensation FOR FURTHER INFORMATION CONTACT:
disability?
level to $258.00 ($249.14 × .0344 = Andrew Mendoza at (202) 632–7003 or
(a) The minimum compensation $8.57; $249.14 + $8.57 = $257.71, by fax (202) 632–7066 (these numbers
payable for temporary total disability is rounded to the nearest dollar). are not toll free).
the lower of: SUPPLEMENTARY INFORMATION:
§ 702.811 What weekly minimum rates
(1) The minimum rate in effect on the apply to death benefits? I. Comments Invited
date of disability, or
(a) The average weekly wage used to Interested parties are invited to
(2) The employee’s average weekly compute death benefits is the greater participate in this proposed rulemaking
wage on the date of disability. of— by submitting such written data, views,
(b) Example: Employee A suffers a (1) The deceased employee’s average or arguments as they may desire.
covered workplace injury on May 6, weekly wages; or Comments that provide the factual basis
2014. He is temporarily totally disabled (2) The national average weekly wage supporting the views and suggestions
until November 6, 2015, when he in effect at the time of the employee’s presented are particularly helpful in
death. developing reasoned regulatory
mstockstill on DSK3G9T082PROD with PROPOSALS
returns to work. His average weekly
wages at the time of disability were (b) The weekly minimum rate does decisions on the proposal.
$500.00. Because his calculated not apply to death benefits. II. Background
compensation rate (i.e., 66 and 2⁄3% of Leonard J. Howie III,
$500.00, or $333.34) is lower than the The Indian Gaming Regulatory Act
Director, Office of Workers’ Compensation (IGRA), enacted on October 17, 1988,
$336.67 FY 2014 minimum rate, A’s Programs. established the National Indian Gaming
compensation is raised to $336.67 for [FR Doc. 2016–20467 Filed 8–25–16; 8:45 am] Commission. Congress enacted the
the entire period of his disability. BILLING CODE 4510–CR–P Privacy Act in 1974 (Pub. L. 93–579, 5
VerDate Sep<11>2014 17:00 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00024 Fmt 4702 Sfmt 4702 E:\FR\FM\26AUP1.SGM 26AUP1](https://thefederalregister.org/doc/81_FR_59044/page/13.svg)
Document Created: 2016-08-26 10:40:07
Document Modified: 2016-08-26 10:40:07
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Proposed Rules | |
| Action | Notice of proposed rulemaking; request for comments. | |
| Dates | The Department invites written comments on the proposed regulations from interested parties. Written comments must be received by October 25, 2016. | |
| Contact | Antonio Rios, Director, Division of Longshore and Harbor Workers' Compensation, Office of Workers' Compensation Programs, U.S. Department of Labor, Room C-4319, 200 Constitution Avenue NW., Washington, DC 20210. Telephone: (202)-693- 0038 (this is not a toll-free number). TTY/TDD callers may dial toll free 1-877-889-5627 for further information. | |
| FR Citation | 81 FR 58878 | |
| RIN Number | 1240-AA06 | |
| CFR Associated | Administrative Practice and Procedure; Claims; Longshore and Harbor Workers; Maximum Compensation Rates; Minimum Compensation Rates and Workers' Compensation |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR