[Federal Register Volume 83, Number 76 (Thursday, April 19, 2018)]
[Rules and Regulations]
[Pages 17287-17293]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08133]



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 Rules and Regulations
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  Federal Register / Vol. 83, No. 76 / Thursday, April 19, 2018 / Rules 
and Regulations  

[[Page 17287]]



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: Final rule.

-----------------------------------------------------------------------

SUMMARY: This final rule contains regulations implementing the 
Longshore and Harbor Workers' Compensation Act's provisions on maximum 
and minimum amounts of compensation payable. These regulations clarify 
how the Department interprets and applies these provisions in 
accordance with several court decisions to ensure injured workers are 
compensated properly and insurers and employers are aware of their 
responsibilities. In addition, the rule implements the Act's annual 
compensation-adjustment mechanism for permanent total disability 
compensation and death benefits.

DATES: This rule is effective May 21, 2018.

FOR FURTHER INFORMATION CONTACT: Douglas Fitzgerald, Director, Division 
of Longshore and Harbor Workers' Compensation, Office of Workers' 
Compensation Programs, 202-354-9620 (this is not a toll-free number), 
[email protected]. TTY/TDD callers may dial toll free 1-877-
889-5627 for further information.

SUPPLEMENTARY INFORMATION:

I. Background of This Rulemaking

    On August 26, 2016, the Department issued a Notice of Proposed 
Rulemaking (NPRM) under the Longshore and Harbor Workers' Compensation 
Act, 33 U.S.C. 901 et seq. (LHWCA or Act), proposing rules implementing 
the LHWCA's provisions on maximum and minimum amounts of compensation 
payable. 81 FR 58878-90 (Aug. 26, 2016). The comment period closed on 
October 25, 2016.
    As explained in the NPRM, 81 FR 58878-79, the LHWCA 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. LHWCA compensation is generally based on the 
employee's average weekly wages at the time of his or her disabling 
injury or death. 33 U.S.C. 910. Section 6 of the Act caps compensation 
at a maximum of twice the applicable fiscal year's national average 
weekly wage (NAWW). 33 U.S.C. 906(b)(1). Section 6 also establishes a 
minimum below which compensation may not fall. The minimum rate is the 
lower of fifty percent of the NAWW or the employee's actual average 
weekly wages. 33 U.S.C. 906(b)(2). The Secretary of Labor determines 
the NAWW for each fiscal year, and that determination applies to 
employees or survivors ``currently receiving'' compensation for 
permanent total disability or death, as well as those ``newly awarded'' 
compensation of any type, including for partial and temporary 
disability. 33 U.S.C. 906(b)(3), (c).
    In addition to the provisions in section 6 that allow for 
adjustments to the maximum and minimum compensation rates based on the 
NAWW, section 10(f) of the Act provides another mechanism for adjusting 
compensation amounts so that their value is not eroded over time. 
Benefits payable for permanent total disability or death are increased 
at the beginning of each fiscal year by the same percentage as any 
increase in the NAWW, but no more than five percent per year. 33 U.S.C. 
910(f). Section 10(f) applies to all claimants receiving compensation 
for permanent total disability or death, while section 6 applies only 
to those whose compensation is affected by the maximum or minimum 
rates.
    The Department proposed rules to implement the minimum and maximum 
compensation rate provisions of section 6(c), specifically clarifying 
which maximum compensation rates apply to any particular injury under 
the section's ``newly awarded'' and ``currently receiving'' clauses, 
and relatedly, how the Act's minimum compensation provisions apply. 
Additionally, the proposed rules implement section 10(f)'s annual 
adjustment provision generally and address how section 10(f) integrates 
with section 6's maximum and minimum compensation rates.
    As the NPRM discussed, these rules are primarily based on the 
Supreme Court's controlling decision in Roberts v. Sea-Land Services, 
Inc., 566 U.S. 93 (2012), the Ninth and Eleventh Circuits' decisions in 
Roberts v. Dir., OWCP, 625 F.3d 1204 (9th Cir. 2010), and Boroski v. 
Dyncorp Intern., 700 F.3d 446 (11th Cir. 2012), and the Benefits Review 
Board's decisions in Reposky v. Int'l Transp. Servs., 40 BRBS 65 
(2006), and Lake v. L-3 Communications, 47 BRBS 45 (2013). Aside from 
one small exception, those decisions and this rule comport with the 
Director's longstanding interpretation and application of the maximum 
and minimum compensation provisions. 81 FR 58887. Additionally, the 
Department has been following the Ninth Circuit's construction of the 
statute since 2012 and the regulations reflect this construction as 
well.
    The Department received only six written comments in response to 
the NPRM from a variety of entities in the longshore industry. The 
commenters included longshore employer associations, insurance-industry 
members, and longshore claims administrators associations. These 
comments are addressed in Section III below.
    This rule is not an Executive Order 13771 regulatory action because 
this rule is not significant under Executive Order 12866.

II. 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.

III. Response to Significant Comments and Explanation of Changes

    Most commenters provided general remarks about the rulemaking 
rather than comments on specific proposed regulations. Thus, rather 
than including a full section-by-section analysis in the discussion 
below, the Department's response is organized by the broader issues 
raised. The Department

[[Page 17288]]

appreciates these comments and has made one change to the final rule in 
response.

A. Application of ``Newly Awarded Compensation'' Clause

    Several commenters stated that the proposed rules addressing the 
application of section 6(c)'s ``newly awarded'' clause were unnecessary 
because the Supreme Court had already clearly addressed how to apply 
the clause in Roberts, 132 U.S. 1350. The fact that the Supreme Court 
has addressed the issue does not make this part of the rule 
unnecessary. The rule seeks to ensure a consistent application of 
section 6(c) in its entirety by addressing the proper application of 
both the ``newly awarded'' and ``currently receiving'' clauses. 
Codifying the Supreme Court's ruling in a regulation clarifies and 
informs all stakeholders of the proper interpretation of the provision. 
The rule also provides additional guidance with concrete examples of 
how the Roberts decision applies in a variety of factual situations. 
Accordingly, the Department believes the regulations implementing the 
``newly awarded'' clause are important and has retained them in the 
final rule.

B. Application of ``Currently Receiving'' Clause

    Several commenters objected generally to the proposed rules 
clarifying the application of the ``currently receiving'' clause of 
section 6(c). These commenters argued that the rule is premature 
because the Supreme Court declined to address the application of that 
clause in Roberts, 564 U.S. 1066, and to date, only two Courts of 
Appeals have addressed it. See Boroski, 700 F.3d 446, Roberts, 625 F.3d 
1204. Some of these commenters expressed concerns that the rule would 
preempt further development through the courts on matters that were not 
considered at any stage of the Roberts litigation, namely, the 
computation of the minimum compensation rate under section 6(b), 
computation of weekly compensation payable for death under section 
9(e), or the computation of a claimant's average weekly wage under 
section 10. On the other hand, one commenter commended the Department 
for using the rulemaking process to resolve legal issues arising from 
judicial statutory interpretations.
    The Department is not required to wait for an issue to be 
adjudicated by the Supreme Court or any other court before it can 
promulgate regulations to administer the LHWCA. Indeed, litigation 
often demonstrates the need for an agency regulation. See generally 
Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735, 740-41 (1996) 
(fact that agency regulation was prompted by litigation does not 
undermine deference agency is due; ``That it was litigation which 
disclosed the need for the regulation is irrelevant.'') Here, the 
litigation in Roberts, Boroski, Reposky, Lake and other cases 
highlighted the need for regulations in this area. And this rule falls 
well within the scope of the Secretary of Labor's authority to 
prescribe rules and regulations necessary for the administration of the 
LHWCA. 33 U.S.C. 939(a).
    Furthermore, as explained in the NPRM, the rule does not mark a 
change in the Director's longstanding interpretation and application of 
the maximum and minimum compensation provisions. 81 FR 58887. The 
Department has been following the Ninth Circuit's construction of the 
statute in its entirety since 2012, and aside from one small exception, 
had been following this construction since the Board's 2006 decision in 
Reposky, 40 BRBS 65. That exception involved cases in which the 
employee's disability was initially something other than permanent 
total--temporary total, permanent partial, or temporary partial--and in 
a later fiscal year became permanently totally disabling. In Reposky, 
the Department took the view that the employee's compensation amount 
should remain at the maximum rate in effect on the date of disability 
until the next October 1, at which time the employee would become 
subject to the new fiscal year's maximum rate. But the Ninth Circuit 
held in Roberts 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 rule reflects this construction and clarifies the Department's 
longstanding interpretation of the other aspects of section 6(c).
    One commenter contended that the rule is inconsistent with the 
Benefit Review Board's approach in Pittman v. New Century Fabricators, 
Inc., 50 BRBS 17 (2016). In Pittman, the Board declined to extend the 
Supreme Court's reasoning in Estate of Cowart v. Nicklos Drilling Co., 
505 U.S. 469 (1992), to an issue not directly addressed by the Court. 
The Board held that ``absent a Supreme Court or circuit court decision 
to the contrary,'' prior Board decisions on the specific issue in the 
case established the precedent that bound the Board. 50 BRBS at 20. The 
comment argues that because the Supreme Court declined to address the 
application of the ``currently receiving'' clause in Roberts, the 
Board's approach in Pittman would dictate that the Department should 
not address the application of the clause. This ignores two facts. 
First, Pittman says nothing about the Department's authority to issue a 
rule. Second, while the Supreme Court did not interpret the ``currently 
receiving'' clause, the Ninth and Eleventh Circuits did, and this rule 
is consistent with both those rulings. See Boroski, 700 F.3d 446; 
Roberts, 625 F.3d 1204.
    The rule is also consistent with the Board's decision in Lake, 47 
BRBS 45, which adopted the same interpretation of section 6(c)'s 
``currently receiving'' clause as the Ninth and Eleventh Circuits. 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 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. Thus, the rule's implementation of the 
section 6(c) ``currently receiving'' clause is consistent with the 
precedent from the Board and all courts of appeals that have ruled on 
the issue.
    Two commenters stated that Congress did not intend the ``currently 
receiving'' clause to have any effect beyond the four-fiscal-year 
period after the 1972 amendments to the LHWCA, which annually increased 
the maximum compensation rate until it reached 200 percent of the 
national average weekly wage in 1975. They contended that Congress 
intended section 6(c) to apply only to claimants who were ``currently 
receiving compensation for permanent total disability or death'' during 
the four-year phase-in period.
    Later statutory enactments, however, demonstrate that Congress 
intended to apply the ``currently receiving'' clause beyond the phase-
in period. In 1984, Congress amended section 6 again to remove the 
phase-in provisions yet retained the ``currently receiving'' clause and 
reenacted it as section 6(c). If Congress had intended the outcome 
urged by the commenters--to have section 6(c)'s ``currently receiving 
clause'' apply only to the phase-in years--it could have drafted 
section 6(c) to say exactly that. Instead, Congress removed the phase-
in provisions, making reference to them impossible. It nonetheless 
retained section 6(c) and

[[Page 17289]]

changed the text of the provision to make clear that all claimants 
``currently receiving compensation for permanent total disability or 
death'' are subject to the maximum rate based on the national average 
weekly wage as set under section 6(b)(3). Congress knew that, under 
section 6(b)(3), the national average weekly wage is determined anew 
every year, and thus must be deemed to have understood that the maximum 
rate applicable to those currently receiving compensation for permanent 
total disability or death would also change annually. See generally 
Pucetti v. Ceres Gulf, 24 BRBS 25, 31 (1990) (considering phase-in 
provisions in context of 1984 amendments and holding that ``during a 
yearly period when a given national average weekly wage is in effect, 
those `currently receiving' benefits for permanent total disability or 
death are entitled to that year's new maximum.''); see Dir., OWCP v. 
Perini North River Assoc., 459 U.S. 297 (1983) (where Congress amended 
the Act to extend coverage to land-based workers if they met a status 
test for maritime employees, it was presumed to know that the law 
already covered those injured on navigable waters, and its amendment of 
the Act was not intended to require those ``traditionally covered'' 
employees to also prove status).
    Several commenters stated that section 6 does not allow for the 
maximum compensation rate applicable to a claimant to change each year, 
i.e., that even a permanently totally disabled claimant is forever 
subject to the maximum rate in effect at the time of his injury. First, 
this is contrary to the text of the provision. Section 6 sets the 
maximum rate at 200 percent of the national average weekly wage, 33 
U.S.C. 906(b)(1), requires a new national average weekly wage to be 
determined each October 1, 33 U.S.C. 906(b)(3), and provides that a 
given year's determination ``shall apply to employees . . . currently 
receiving compensation for permanent total disability'' during that 
year. As a claimant can be ``currently receiving compensation for 
permanent total disability'' in more than one year, it is apparent that 
he can be subject to a different national average weekly wage--and, 
thus, a different maximum rate as determined by that national average 
weekly wage--for each year in which he is being compensated for 
permanent total disability. Second, the commenter's approach is 
contrary to the legislative history of the 1972 Amendments. See H.R. 
Report 92-1441 at 3; S. Report 92-1125 at 5-6. Third, the Board 
rejected this very argument in Marko v. Morris Boney, Inc., 23 BRBS 353 
(1990), a decision the Board reaffirmed in Lake, 47 BRBS at 48-50. 
Finally, this approach would treat those receiving compensation for 
permanent total disability or death the same as those receiving 
compensation for any other type of disability, while the statute 
clearly treats permanent total disability and death differently.

C. Impact on Average Weekly Wage Calculations

    A few commenters expressed concern that the rule could adversely 
affect how an individual's average weekly wage is calculated under 
section 10, 33 U.S.C. 910. The Department does not intend this rule to 
govern the basic average weekly wage calculation necessary to determine 
the amount of compensation payable. As explained in the NPRM, ``[t]he 
proposed regulations do not govern general compensation calculations.'' 
81 FR 58881. Instead, the maximum and minimum regulations apply only 
once that calculation (called the ``calculated compensation rate'' in 
the rule) is made.

D. Application of the Rule to Existing Injuries, Disabilities, and 
Deaths

    Two commenters stated that the Department should limit the proposed 
rule's applicability to future injuries. They contended applying the 
new rules to currently existing matters could lead to large additional 
liabilities (which are not fully secured) if claimants with pending 
cases seek increased compensation under the new standards.
    In general, an agency may apply a new regulation to existing 
matters when it does not change the legal landscape. Thus, a rule that 
``is substantively consistent with prior regulations or prior agency 
practices, and has been accepted by all Courts of Appeals to consider 
the issue,'' may be applied to matters pending at the time the 
regulation is promulgated. Nat'l Mining Assoc. v. Dept. of Labor, 292 
F.3d 849, 860 (D.C. Cir. 2002). Conversely, agencies are not required 
``to apply rules retroactively even where it would be permissible for 
them to do so.'' Grant Medical Center v. Hargan, 875 F.3d 701, 706 
(D.C. Cir. 2017).
    Under these principles, the Department believes it could choose to 
apply the rule to all matters, including those injuries, disabilities, 
and deaths occurring before the rule's effective date. The Department's 
interpretation of the ``newly awarded'' and ``currently receiving'' 
clauses is longstanding (since at least 1979 for the former and 2012 
for the latter) and fully consistent with all Court of Appeals and 
Supreme Court precedent. See Nat'l Mining Assoc., 292 F.3d at 860. The 
rules implementing the minimum compensation provisions and section 
10(f) similarly ensconce the Department's longstanding positions and 
are not inconsistent with any Court of Appeals precedent.
    But given the commenters' expressed concern, the Department has 
decided to apply the rule only to injuries and deaths occurring after 
the rule's effective date and has added a clause to Sec.  702.802(a) to 
make this clear. Because the current case law interpreting these 
provisions and the rule reach the same conclusions, the Department sees 
little difference in applying the rule retroactively and applying it 
only prospectively. The Department makes this change, however, to 
emphasize its intent not to upset any settled expectations the 
regulated parties may hold.
    Despite the Department's decision on this issue, parties should be 
aware that existing case law construing section 6(c) still governs 
injuries, disabilities and deaths occurring before the rule's effective 
date. The Department will continue to administer claims in accordance 
with those precedents. Rivers v. Roadway Exp., Inc., 511 U.S. 298, 312-
313 and n.12 (``A judicial construction of a statute is an 
authoritative statement of what the statute meant before as well as 
after the decision of the case giving rise to that construction,'' and 
thus ``of what the statute has meant continuously since the date when 
it became law.'').
    Finally, the examples in the regulations continue to use maximum 
and minimum compensation rates for injuries or deaths that occurred in 
fiscal years prior to the effective date of this rule. This is done out 
of necessity; the Department cannot calculate with any certainty future 
maximum and minimum compensation amounts because they are based on the 
NAWW, which is determined anew each year. The Department believes using 
concrete numbers from past fiscal years will better inform the 
regulated parties about how the regulations should be applied. Of 
course, because the examples apply the current state of the law, they 
may be instructive in calculating compensation for disabilities and 
deaths occurring before the rule's effective date even though not 
explicitly governed by the rule.

IV. Collection of Information (Subject to the Paperwork Reduction Act)

    This rulemaking imposes no new collections of information.

[[Page 17290]]

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 rule with these principles in mind 
and has concluded that the regulated community will benefit from this 
regulation.
    This rule will provide the parties 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 
in cases governed by this rule. 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.
    One commenter generally stated that the Department had not fully 
addressed the proposed rule's financial impact on the industry or 
compensation claimants, noting the importance of predictability for 
reserving funds to cover compensation payments. The final rule sets out 
clear standards for applying the LHWCA's maximum and minimum 
compensation provisions and will thus provide the predictability the 
commenter seeks.
    Finally, because this is not a ``significant regulatory action'' 
within the meaning of Executive Order 12866, the Office of Management 
and Budget waived its review.

VI. 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.
    For the reasons set forth in the NPRM, the Department determined 
that a complete regulatory flexibility analysis was not necessary, and 
certified that the proposed rules would not have a significant economic 
impact on a substantial number of small entities. 81 FR 58887. The 
Department invited public comment on the certification and delivered a 
copy of the certification to the chief counsel for Advocacy of the 
Small Business Administration. See generally 5 U.S.C. 605.
    The Chief Counsel for Advocacy has not filed comments on the 
certification. Although one commenter generally stated that the 
Department had not quantified the economic impact on industry or the 
benefit to Longshore employees, the commenter provided no additional 
information regarding the rule's potential impact on small entities. 
Because the comments provide no basis for departing from its prior 
conclusion, the Department again certifies that this rule will not have 
a significant economic impact on a substantial number of small 
entities. As a result, no regulatory flexibility analysis is required.

VII. 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.

XIII. Executive Order 13132 (Federalism)

    The Department has reviewed this rule in accordance with Executive 
Order 13132 regarding federalism, and has determined that it does not 
have ``federalism implications.'' The 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.''

IX. Executive Order 12988 (Civil Justice Reform)

    This 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 stated in the preamble, the Department of Labor 
amends 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. Add subparts G and H to read 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

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

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 17291]]

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 as a result of injuries or deaths occurring on or 
after May 21, 2018 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:
    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.
    Date of disability. (1) Except as provided in paragraph (2) of this 
definition, 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.
    Fiscal year or FY means the period from October 1 of a calendar 
year until September 30 of the following calendar year.
    Maximum rate means the maximum weekly compensation rate calculated 
by the Department for a given fiscal year as described in Sec.  
702.804(b).
    Minimum rate means the minimum weekly compensation rate calculated 
by the Department for a given fiscal year as described in Sec.  
702.804(c).
    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 17292]]

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) of this section, 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) through (c) of this section, 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) of this section, 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 17293]]

    (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.

    Signed at Washington, DC, on April 13, 2018.
Julia K. Hearthway,
Director, Office of Workers' Compensation Programs.
[FR Doc. 2018-08133 Filed 4-18-18; 8:45 am]
 BILLING CODE 4510-CR-P