Defense Base Act

BACKGROUND

Defense Base ActThe Defense Base Act (DBA) was enacted by legislation in 1941. Its primary goal was to cover civilian government contractor and subcontractor employees who work on military bases overseas or outside the United States (U.S.). It was amended to include public works contracts with the government to construct a variety of overseas non-military projects, such as dams, schools, roads, and harbors. Another amendment added numerous enterprises directly and indirectly involved with national security of the U.S. and its allies. Today, almost any contract with a U.S. government agency for work outside the U.S. of a military or other nature probably requires Defense Base Act coverage.

DBA is a federal law directly related to The United States Longshore and Harbor Workers’ Compensation Act (USL&HWCA). The U.S. Department of Labor, Office of Workers Compensation Programs, Division of Longshore and Harbor Workers Compensation administers it. It ensures that workers compensation benefits are provided to covered workers correctly and on time. DBA adopts the provisions of USL&HWCA with only a few exceptions. The insurance requirements for the DBA are essentially identical to those of USL&HWCA.

COVERAGE UNDER THE DEFENSE BASE ACT

DBA covers the following employment situations:

  • Work for private employers on U.S. military bases or on any lands outside the U.S. used for military purposes. This includes those in U.S. territories and possessions.
  • Work on public works contracts outside the U.S. with any U.S. government agency. This includes construction and service contracts in connection with national defense or war activities.
  • Work on contracts the U.S. approves and funds under the Foreign Assistance Act. This generally provides for cash sales of military equipment, materials, and services to its allies in cases where the contract is performed outside the U.S.
  • Work for American employers that provide welfare or similar services outside the U.S. for the benefit of the Armed Forces. An example is the United Services Organization (USO).
  • Employees of any sub-contractors of the prime or general contractor involved in a contract in connection with any of the above

COVERAGE ISSUES

Several points must be considered with respect to coverage:

  • Courts frequently rely on precedent when they determine liability issues. Two specific doctrines are especially important in finding coverage under the Act:
    • The Zone of Special Danger Doctrine requires that a worker’s injury or death must arise out of or in the course of employment. It further states that when unique conditions or circumstances of employment place an employee in a zone of danger, an accident that results in injury or death is not required to be strictly related to job duties.
    • The Reasonable Recreation Doctrine allows for a worker’s injury or death to arise out of or in the course of the employer’s furnished, funded, or promoted recreational facilities. This may also include some non-sponsored activities.
      Note: Even when taken together, these two doctrines may not guarantee an employee “around the clock coverage.”
  • Failing to obtain DBA coverage may result in serious penalties. Government contracts usually include provisions that require bidding contractors to purchase and maintain certain required coverage. Not doing so may result in both fines and possible loss of the contract. Employers that do not provide the required DBA coverage may also be subject to common law suits and the normal common law defenses may be waived. Stated a different way, claimants or their heirs may have to simply file a suit and not necessarily prove negligence. Claims may also be brought directly against the employer in Federal Court.

BENEFITS UNDER THE DEFENSE BASE ACT

DBA provides disability, medical, and death benefits to covered workers injured or killed in the course of their employment, whether it occurred during working hours or not. Compensation for total disability is for two-thirds of the employee’s average weekly earnings, up to periodically adjusted maximum amounts per week. Compensation also applies for partial loss of earnings. The death benefit is one-half of the employee’s average weekly earnings to the surviving spouse or to one child and two-thirds of those earnings for two or more such survivors, subject to the current weekly maximum. Permanent total disability and death benefits may be payable for life and are also subject to annual cost of living adjustments. There is no minimum compensation rate.

Note: The Act includes detailed instructions and procedures to report injuries and file claims.