Overview
This section outlines the requirements for providing workers' compensation and war-hazard insurance to employees working outside the United States under "public-work contracts" or specific foreign assistance programs. It establishes the mandatory application of the Defense Base Act (DBA) and the associated protections of the War Hazards Compensation Act.
Key Rules
- Definition of Public-Work Contract: Broadly includes any contract for fixed improvements or projects for the public use of the U.S. or its allies, encompassing construction, service contracts, national defense activities, and dredging.
- Defense Base Act (DBA) Coverage: Extends the Longshoremen’s and Harbor Workers’ Compensation Act to overseas employees on public-work contracts or Foreign Assistance Act contracts (excluding contracts solely for materials or supplies).
- War-Hazard Protection: When DBA insurance is provided, employees automatically receive protection under the War Hazards Compensation Act against injury, death, capture, or detention resulting from war hazards.
- Waiver Authority: The Secretary of Labor may waive DBA requirements for specific contracts, locations, or employee classes upon the recommendation of an agency head.
- Liability Under Waivers: If a DBA waiver is granted, war-hazard protection is also waived. In these cases, the contractor must provide alternative workers' compensation and assume liability for war hazards, the costs of which are generally allowable under the contract.
Practical Implications
- Contractors performing service or construction work overseas must budget for mandatory DBA insurance premiums in their proposals unless a specific waiver is active.
- In high-risk environments where a waiver is granted, contractors must proactively secure private insurance or account for the financial liability of war-related risks (such as employee kidnapping or detention), ensuring these costs are documented for reimbursement.