[Federal Register Volume 85, Number 240 (Monday, December 14, 2020)]
[Rules and Regulations]
[Pages 80601-80616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23223]


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DEPARTMENT OF LABOR

Office of Workers' Compensation Programs

20 CFR Part 702

RIN 1240-AA13


Longshore and Harbor Workers' Compensation Act: Electronic 
Filing, Settlement, and Civil Money Penalty Procedures

AGENCY: Office of Workers' Compensation Programs, Labor.

ACTION: Direct final rule; request for comments.

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SUMMARY: The Office of Workers' Compensation Programs (OWCP) 
administers the Longshore and Harbor Workers' Compensation Act and its 
extensions. To improve program administration, OWCP is amending its 
existing regulations to require parties to file documents 
electronically, unless otherwise provided by statute or allowed by 
OWCP, and to streamline the settlement process. Additionally, to 
promote accountability and ensure fairness, OWCP is promulgating new 
rules for imposing and reviewing civil money penalties prescribed by 
the Longshore Act. The new rules set forth the procedures to contest 
OWCP's penalty determinations.

DATES: This direct final rule is effective March 15, 2021, without 
further action unless OWCP receives written significant adverse 
comments to this rule by February 12, 2021. If OWCP receives 
significant adverse comments, it will publish a timely withdrawal of 
the final rule in the Federal Register.

ADDRESSES: You may submit written comments, identified by RIN number 
1240-AA13, by any of the following methods. To facilitate the receipt 
and processing of comments, OWCP encourages interested parties to 
submit such comments electronically.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions on the website for submitting comments.
     Regular Mail or Hand Delivery/Courier: Submit comments on 
paper to the Division of Federal Employees' Longshore and Harbor 
Workers' Compensation, Office of Workers' Compensation Programs, U.S. 
Department of Labor, Room S-3229, 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: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Antonio Rios, Director, Division of 
Federal Employees' Longshore and Harbor Workers' Compensation, Office 
of Workers' Compensation Programs, (202)-693-0040, 
[email protected]. 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 (LHWCA or Act), 
33 U.S.C. 901-50, establishes a comprehensive federal workers' 
compensation system for an employee's disability or death arising in 
the course of covered maritime employment. Metro. Stevedore Co. v. 
Rambo, 515 U.S. 291, 294 (1995). The Act's provisions have been 
extended to (1) contractors working on military bases or U.S. 
government contracts outside the United States (Defense Base Act, 42 
U.S.C. 1651-54); (2) employees of nonappropriated fund 
instrumentalities (Nonappropriated Fund Instrumentalities Act, 5 U.S.C. 
8171-73); (3) employees engaged in operations that extract natural 
resources from the outer continental shelf (Outer Continental Shelf 
Lands Act, 43 U.S.C. 1333(b)); and (4) private employees in the 
District of Columbia injured prior to July 26, 1982 (District of 
Columbia Workers' Compensation Act of May 17, 1928, Public Law 70-419 
(formerly codified at 36 DC Code 501 et seq. (1973) (repealed 1979)). 
Consequently, the Act and its extensions cover a broad range of claims 
for injuries that occur throughout the United States and around the 
world.
    OWCP's sound administration of these programs involves periodic 
reexamination of the procedures used for claims processing and related 
issues. OWCP has identified three areas where improvements can be made. 
The first is expanding electronic filing and requiring private parties 
to transmit all documents and information to OWCP electronically, 
except when the individual does not have a computer, lacks access to 
the internet, or lacks the ability to utilize the internet. Receiving 
documents and information in electronic form speeds claims 
administration and simplifies recordkeeping requirements. The second is 
streamlining settlement procedures. This too should speed the 
settlement-approval process and lessen the parties' burdens to submit 
multiple documents to have a settlement considered. Finally, OWCP is 
updating its existing penalty regulations and filling a gap by 
proposing a procedural scheme for employers to challenge penalties 
assessed against them. These

[[Page 80602]]

rules will better apprise employers of their obligations and give them 
a clear path to exercise their rights to challenge any penalty imposed 
by OWCP.
    On April 28, 2020, OWCP hosted a public outreach webinar to solicit 
stakeholders' views on how OWCP could improve its processes in the 
three areas covered in this rulemaking. See E.O. 13563, sec. 2(c) 
(January 18, 2011) (requiring public consultation prior to issuing a 
regulation). OWCP has considered the feedback received during that 
session in developing these rules.
    This rule is not an Executive Order 13771 regulatory action because 
it is not significant under Executive Order 12866.

II. Direct Final Rulemaking

    In addition to this direct final rule (DFR), OWCP is concurrently 
publishing a companion Notice of Proposed Rulemaking (NPRM) elsewhere 
in this issue of the Federal Register. In direct final rulemaking, an 
agency publishes a DFR in the Federal Register with a statement that 
the rule will go into effect unless the agency receives significant 
adverse comment within a specified period. The agency concurrently 
publishes an identical proposed rule. If the agency receives no 
significant adverse comment in response to the DFR, the rule goes into 
effect. If the agency receives significant adverse comment, the agency 
withdraws the DFR and treats such comment as submissions on the NPRM. 
An agency typically uses direct final rulemaking when it anticipates 
the rule will be non-controversial.
    By simultaneously publishing this DFR with an NPRM, notice-and-
comment rulemaking will be expedited if OWCP receives significant 
adverse comment and withdraws the DFR. The proposed and direct final 
rules are substantively identical, and their respective comment periods 
run concurrently. OWCP will treat comment received on the DFR as 
comment regarding the companion NPRM and vice versa. Thus, if OWCP 
receives significant adverse comment on either the DFR or the NPRM, 
OWCP will publish a Federal Register notice withdrawing this DFR and 
will proceed with the proposed rule.
    For purposes of the DFR, a significant adverse comment is one that 
explains why the rule (1) is inappropriate, including challenges to the 
rule's underlying premise or approach; or (2) will be ineffective or 
unacceptable without a change. In determining whether a significant 
adverse comment necessitates withdrawal of the DFR, OWCP will consider 
whether the comment raises an issue serious enough to warrant a 
substantive response had it been submitted in a standard notice-and-
comment process. A comment recommending an addition to the rule will 
not be considered significant and adverse unless the comment explains 
how the DFR would be ineffective without the addition. OWCP requests 
comments on all issues related to this rule, including economic or 
other regulatory impacts on the regulated community.

III. Overview of the Rule

A. Electronic Transmission of Documents and Information and Electronic 
Signatures

    The Department's current regulations implementing the LHWCA at 20 
CFR part 702 allow OWCP and private parties to exchange documents and 
information through certain electronic methods or in paper form, at the 
sender's option. 20 CFR 702.101. The Department added optional 
electronic transmission to the regulations in 2015. 80 FR 12917-33 
(March 12, 2015). Since then, OWCP has continued to expand its use of 
electronic case files and is working towards a fully electronic case-
file environment.
    Electronic case files have many advantages, including allowing 
claims staff remote access to documents and information; efficient case 
file transmission to the Office of Administrative Law Judges, the 
Benefits Review Board, and other tribunals; elimination of possible 
mail-handling delays due to unforeseen weather or other events, safety 
restrictions, and the like; and cost savings in reduced copying, 
scanning, and storage of paper documents. Electronic filing methods are 
ubiquitous, and the public generally is very familiar with them. In 
addition to the substantial business conducted in a fully electronic 
environment, government agencies and court systems routinely use 
electronic transmission systems to receive documents and information. 
In fact, OWCP estimates that more than 80 percent of all documents it 
now receives in the Longshore program are transmitted electronically by 
the private parties.
    For these reasons, the Department has revised the current 
regulations to require all private parties transmitting documents and 
information to OWCP to do so electronically except when a district 
director allows a different filing method because the individual does 
not have a computer, lacks access to the internet, or lacks the ability 
to utilize the internet. The exception is consistent with the E-
Government Act of 2002's directive that agencies must ensure the 
continued availability of services for persons who do not have 
computers or internet access. Sec. 202(c), Public Law 107-347, 116 
Stat. 2899, 2911 (44 U.S.C. 3501 note). OWCP envisions a simple process 
for requesting relief under the exception and will allow individuals to 
self-certify their inability to use electronic filing. OWCP is unaware 
of any law that prohibits it from making electronic filing mandatory 
for all other parties.
    In promulgating this rule, OWCP has considered the principles 
underlying the Government Paperwork Elimination Act (GPEA), 44 U.S.C. 
3504, and the Electronic Signatures in Global and National Commerce Act 
(E-SIGN), 15 U.S.C. 7001 et seq. GPEA requires agencies, when 
practicable, to store documents electronically and to allow individuals 
and entities to communicate with agencies electronically. The GPEA also 
provides that electronic documents and signatures will not be denied 
legal effect merely because of their electronic form. Similarly, E-SIGN 
generally provides that electronic documents have the same legal effect 
as their hard copy counterparts and allows electronic records to be 
used in place of hard copy documents with appropriate safeguards. 15 
U.S.C. 7001. Under E-SIGN, federal agencies retain the authority to 
specify the means by which they receive documents, 15 U.S.C. 7004(a), 
and to modify the disclosures required by section 101(c), 15 U.S.C. 
7001(c), under appropriate circumstances.
    Moreover, by 2022, the National Archives and Records Administration 
(NARA) will, to the fullest extent possible, no longer accept temporary 
or permanent records from agencies in a non-electronic format. See 
National Archives and Records Administration, 2018-2022 Strategic Plan 
at 12 (Feb. 2018); Delivering Government Solutions in the 21st Century 
at 22, 100-102 (June 21, 2018). Requiring electronic filings now will 
make more efficient OWCP's compliance with NARA's recordkeeping 
directives.
    The rule also includes new provisions allowing the use of 
electronically signed documents consistent with E-SIGN. In April 2020, 
the Longshore program began accepting documents signed using certain 
electronic methods. See Industry Notice No. 179 (April 20, 2020), 
https://www.dol.gov/owcp/dlhwc/lsindustrynotices/industrynotice179.pdf. 
This rule codifies that practice. Allowing the use of improvements in 
signature technology will facilitate an easier and faster exchange of 
documents between parties and OWCP. The use of electronic

[[Page 80603]]

signatures is voluntary, and parties may continue to submit documents 
with ``wet'' ink signatures, so long as they are scanned and submitted 
electronically. At the same time, OWCP is conscious of the need to 
safeguard the integrity of electronic signatures and to ensure that 
each signature truthfully reflects the purported signatory's intent to 
sign. To that end, the rule establishes criteria to be followed by 
parties submitting electronically-signed documents.

B. Streamlining the Settlement Process

    Section 8(i) of the Act, 33 U.S.C. 908(i), allows parties to settle 
compensation cases. Parties may agree to settle amounts payable for 
disability compensation, death benefits, medical benefits, attorney's 
fees, and costs. An adjudicator--a district director or an 
administrative law judge--must review each settlement application. 
Unless the settlement amount is inadequate or was procured by duress, 
the adjudicator must approve it. Section 8(i) also provides that when 
all parties are represented by counsel, a settlement application is 
deemed approved 30 days after its submission if the adjudicator does 
not disapprove it.
    The settlement application process should be easy for the parties 
to follow and lead to prompt resolution of compensation cases. However, 
in some instances, the settlement application process has become overly 
complicated. To justify the settlement application, parties submit 
large amounts of documentation (e.g., all of the employee's medical 
treatment records) that is well beyond what is necessary for full 
consideration of the application in most cases. In addition to the 
extra burdens placed on parties, this practice creates unnecessary 
administrative burdens for OWCP and the Office of Administrative Law 
Judges (OALJ).
    The revised settlement regulations at Sec. Sec.  702.241-702.243 
streamline the application process by focusing on the relevant 
information the parties must initially submit to properly adjudicate 
the settlement application. The adjudicator may then exercise his or 
her discretion and ask for additional documentation from the parties in 
those cases where necessary to determine whether the settlement is 
adequate in amount and procured without duress. The rules also allow 
the adjudicator to defer to the parties' representations regarding the 
adequacy of the settlement amount and whether the settlement was 
procured by duress. The Department believes these changes will make 
both the application and approval process more efficient, lessening the 
burden on parties and adjudicators alike. The Department has also taken 
this opportunity to reorganize, and in some cases simplify, much of the 
information contained in the current settlement regulations.

C. Procedures for Civil Money Penalties

    OWCP is amending the current regulations and promulgating new ones 
implementing the Act's civil money penalty provisions. The Act allows 
OWCP to impose a penalty when an employer or insurance carrier fails to 
timely report a work-related injury or death, 33 U.S.C. 930(e), or 
fails to timely report its final payment of compensation to a claimant, 
33 U.S.C. 914(g). See 20 CFR 702.204, 702.236. An employer who 
discharges or discriminates against an employee because of that 
employee's attempt to claim compensation under the Act may also be 
penalized. 33 U.S.C. 948a; 20 CFR 702.271. The rule revises current 
Sec.  702.204 to provide for graduated penalties for an entity's 
failure to file, or falsification of, the required report of an 
employee's work-related injury or death. See 33 U.S.C. 930(a); 20 CFR 
702.201. The rule provides that the penalty assessed will increase for 
each additional violation the employer has committed over the prior two 
years. The current regulation states only the maximum penalty 
allowable, without providing further guidance.
    The regulations also contain a new Subpart I setting out procedures 
for assessing and challenging penalties. These rules allow an entity 
against whom a penalty is assessed the opportunity for a hearing before 
an administrative law judge, and to petition the Secretary of Labor 
(Secretary) for further review. After receiving notice from the 
district director that the assessment of a penalty is being considered 
and a subsequent decision assessing the penalty, the respondent may 
request a hearing before an administrative law judge. The ensuing 
decision will address whether the respondent violated the statutory or 
regulatory provision under which the penalty was assessed, and whether 
the amount of the penalty assessed is correct. Any party aggrieved by 
the decision may petition for the Secretary's review, which will be 
discretionary and based on the record. These additional levels of 
review are consistent with Recommendation 93-1 of the Administrative 
Conference of the United States, which recommends that formal 
adjudication under the Administrative Procedure Act be made available 
where a civil money penalty is at issue. These procedures will fully 
protect employers' and insurance carriers' rights to challenge OWCP's 
action before any penalty becomes final and subject to collection, and 
ensure transparency and fairness in the enforcement proceedings. See 
generally Executive Order 13892, Promoting the Rule of Law Through 
Transparency and Fairness in Civil Administrative Enforcement and 
Adjudication (October 9, 2019).

IV. Section-by-Section Analysis

A. Regulations Related to Electronic Transmission of Documents and 
Information and Electronic Signatures

Section 702.101 Exchange of Documents and Information; Electronic 
Signatures
    This rule revises several parts of Sec.  702.101 to require 
electronic submission of all documents and information to OWCP, permits 
the use of electronic signatures, and amends the title of the 
regulation to include electronic signatures. Paragraph (a) begins by 
excepting from the mandatory electronic submission and exchange 
requirements those instances where the statute either allows filings by 
mail or mandates service by mail: Sections 702.203 (employer's report 
of injury or death, implementing 33 U.S.C. 930(d)), 702.215 (notice of 
injury or death, implementing 33 U.S.C. 912(c)), and 702.349 (service 
of compensation orders, implementing 33 U.S.C. 919(e)). Although 
parties are not required to submit reports and notices of injury or 
death to OWCP electronically, OWCP encourages them to do so.
    Paragraph (a) combines current paragraphs (a) and (b) and breaks 
the combined text into three subsections that address three categories 
of document and information exchanges. Paragraph (a)(1) provides that 
parties (and their representatives) sending documents and information 
to OWCP must submit them electronically through an OWCP-authorized 
system. OWCP's Secure Electronic Access Portal (SEAPortal) is an 
example of such a system. A district director may make an exception to 
this rule for parties who do not have computers or access to the 
internet, or who lack the ability to use the internet. When a district 
director authorizes a party to use an alternative submission method, 
the party may use any of the methods set forth in the current rule: 
Postal mail, commercial delivery service, hand delivery, or another 
method OWCP authorizes. In all instances, documents are considered 
filed when received by OWCP.
    Paragraph (a)(2) provides that OWCP may send documents and 
information to parties and their representatives by a

[[Page 80604]]

reliable electronic method (e.g., email), postal mail, commercial 
delivery service, hand delivery, or electronically through an OWCP-
authorized system. These methods are the same as those in the current 
regulation with one exception. For documents and information OWCP sends 
via a reliable electronic method, the rule eliminates the requirement 
that the party or representative must agree in writing to receive 
documents by that method. OWCP is now routinely obtaining electronic 
contact information, such as email addresses, from parties and 
representatives, and plans to increase its use of standard electronic 
business communication practices. Service of compensation orders, 
however, is still governed by Sec.  702.349 and thus may be sent 
electronically only when a party or representative affirmatively waives 
their statutory right to registered or certified mail service.
    Paragraph (a)(3) governs exchange of documents and information 
between opposing parties and representatives. Like the current rule, 
the revised provision allows the parties flexibility to choose the 
method of service they wish to use. They may use the same methods as 
OWCP, although parties must agree in writing to receive documents by a 
reliable electronic method. Requiring written confirmation from the 
recipient continues to protect all parties and representatives from any 
misunderstandings about service.
    Paragraph 702.101(g) is a new provision that allows parties to 
submit electronically-signed documents to OWCP. The rule is intended to 
permit the widest possible use of electronic technology. Electronic 
signatures will be accepted on all submissions to OWCP that require a 
signature, not merely those non-exhaustive examples listed in the text 
of the rule.
    Paragraph (g)(1) explains how key terms are used in the remainder 
of the paragraph. A ``document'' includes both paper and electronic 
writings. The documents listed in this definition--applications, claim 
forms, notices of payment, and reports of injury--are meant to serve as 
examples of the types of documents parties could electronically sign 
and submit to OWCP, but are not meant to be an exhaustive list. 
Electronic signatures on other types of documents not listed here will 
also be accepted by OWCP.
    An ``electronic signature'' is a mark created by electronic means 
that shows an intent to sign the document. An electronic signature is 
binding on a business entity only if the signatory has appropriate 
legal authority to bind the entity.
    ``Electronic signature devices'' are tools parties may use to 
create electronic signatures. As with documents, the examples of 
electronic signature devices provided in this paragraph are not an 
exhaustive list. Parties may utilize other types of electronic 
signature devices, as long as the device is uniquely usable by the 
signatory at the time the signature is made. The purpose of this 
limitation is to ensure the signature's trustworthiness. The definition 
of ``electronic signature programs'' is designed to permit the 
submission of documents electronically signed with third-party software 
programs such as--but not limited to--AdobeSign, DocuSign, and E-Sign.
    The definition of ``signatory'' is limited to individual, human 
persons; a corporation or business cannot be a signatory, though a 
signatory can sign on behalf of a corporation or business. This 
definition is designed to ensure that if the validity of a signature is 
challenged, it will be possible for all parties involved to verify who 
created it.
    Paragraph (g)(2) lists the allowable methods for creating and 
affixing electronic signatures and adds the proviso that OWCP can 
approve other methods.
    Paragraph (g)(3) clarifies that all electronic signatures made on 
the same document need not be created by the same method; a document 
could, for example, contain a ``/s'' signature from a claimant (as 
specified in paragraph (g)(2)(iii)) and a separate signature from an 
employer's agent made by drawing a mark with a stylus on a touch-screen 
(as specified in paragraph (g)(2)(iv)). OWCP recognizes that some of 
the methods described in paragraph (g)(2) may overlap. For example, an 
electronic signature program may involve a signatory first logging in 
through the use of an electronic signature device such as a PIN number, 
and then typing their name following a ``/s'' mark. A signature that 
incorporates multiple acceptable methods is still an acceptable 
electronic signature. These provisions are designed to be as inclusive 
as possible while militating against the possibility of abuse or fraud.
    Finally, paragraph (g)(4) imposes obligations on parties that 
submit electronically-signed documents. This subparagraph is designed 
to mitigate the possibility of a legal challenge to the integrity of a 
signature or the identity of the signatory. Paragraph (g)(4)(i) is 
designed to prevent the use of signatures that leave the actual 
identity of the signatory ambiguous; examples of such signatures might 
be those that indicate only a PIN, ambiguous username, or email address 
that is shared by multiple members of a business or other organization. 
Paragraphs (g)(4)(ii)-(iii) impose record-keeping obligations on 
parties. By requiring parties to keep information about how and when an 
electronic signature was created, OWCP ensures that some means of 
authenticating the signature exists if the document's validity is ever 
disputed.
    The remaining revisions to Sec.  702.101 are technical in nature. 
Existing paragraphs (c)-(f) are renumbered to (b)-(e), and cross-
references to other paragraphs throughout the section have been 
updated. In addition, because paragraph (a)(2) does not require parties 
and representatives to consent in writing to receive documents and 
information from OWCP via reliable electronic methods, paragraph (c) 
removes the words ``OWCP'' and ``as appropriate'' from current 
paragraph (d). Even though much of Sec.  702.101 remains unchanged, the 
Department has chosen to re-publish the section in full for the 
public's convenience.
Section 702.203 Employer's Report; How Given
    Section 30 of the Longshore Act, 33 U.S.C. 930, governs how and 
when employers must report employee injuries and deaths. In general, 
employers must send reports within 10 days of the injury or death, or 
knowledge of an injury or death. The Act explicitly allows an employer 
to comply with the reporting requirement by ``mailing'' the report ``in 
a stamped envelope, within the time prescribed.'' 33 U.S.C. 930(d). 
Current Sec.  702.203(b), which implements section 30(d), acknowledges 
this mailing provision and provides that employers may send the reports 
to OWCP by U.S. Postal mail, commercial delivery service, or 
electronically. To encourage electronic filing yet preserve the 
statutory mail provision, revised Sec.  702.203(b) eliminates 
commercial delivery service as a submission option but retains the 
mailing provisions. If an employer chooses to mail the report, the rule 
places the burden on the employer to preserve evidence of the date the 
report is mailed to OWCP. This could easily be accomplished by using 
certified mail. Finally, to clarify electronic submission procedures, 
the rule requires submission via an OWCP-authorized system and includes 
a cross-reference to revised Sec.  702.101(a)(1). This revision 
eliminates the use of other electronic transmission methods and the 
need to specify when filing is complete under those methods.

[[Page 80605]]

Section 702.215 Notice; How Given
    Section 12 of the Longshore Act, 33 U.S.C. 912, governs how and 
when employees and survivors give notices of injury or death to 
employers and OWCP. The Act requires that such notices be given to the 
district director ``by delivering it to him or sending it by mail 
addressed to his office.'' 33 U.S.C. 912(c). Without amendment of 
current Sec.  702.215, the revisions to Sec.  702.101 would effectively 
eliminate this statutory mailing option. Current Sec.  702.215 provides 
that ``[n]otice may be given to the district director by submitting a 
copy of the form supplied by OWCP to the district director, or orally 
in person or by telephone.'' The ``submitting'' language brings to bear 
the transmission methods specified in Sec.  702.101. See 20 CFR 
702.101(e); 48 CFR 12921 (March 12, 2015). Since revised Sec.  
702.101(a) would require electronic filing of these notices, OWCP has 
amended Sec.  702.215 to preserve the option of filing by mail in 
compliance with the Act. The rule makes clear that employees and 
survivors may also file these notices electronically through an OWCP-
authorized system.

B. Regulations Pertaining to Settlements

Section 702.241 Settlements: Definitions; General Information
    Revised Sec.  702.241 contains basic information about settlements 
under section 8(i) of the Longshore Act, 33 U.S.C. 908(i). Paragraph 
(a) retains the current definition of the term ``Adjudicator,'' adds a 
definition for ``Compensation case,'' and includes the definition for 
``Counsel'' located in current Sec.  702.241(h). Paragraph (b) sets out 
several basic concepts: That an adjudicator must approve all 
settlements; the types of compensation, fees, and costs that a 
settlement may include; the ``inadequate'' and ``procured by duress'' 
standard applied in reviewing settlements; and, where all parties are 
represented by counsel, that the settlement is deemed approved 30 days 
after receipt of a completed application unless an adjudicator requests 
additional information or disapproves the application within that time 
period.
    Paragraph (c) specifies when a settlement application is considered 
received by an adjudicator or higher tribunal. The rule eliminates the 
provision in current Sec.  702.241(c) allowing settlement applications 
filed with an administrative law judge to be considered received ``five 
days before the date on which the formal hearing is scheduled to be 
held.'' In OWCP's experience, judges act quickly on settlement 
applications when received. Removing this provision helps eliminate any 
confusion parties may have over when a judge will consider their 
settlement proposal and promote prompt resolution. Paragraph (d) 
retains the provision in current Sec.  702.241(f) regarding days that 
count towards the 30-day settlement period. And paragraph (e) retains 
the provision in current Sec.  702.241(g) that limits settlements to 
claims in existence at the time of the settlement and provides that 
settlements for the injured employee do not affect survivors' claims 
for death benefits.
    Additional note: Current Sec.  702.241(b) has been moved to revised 
Sec.  702.242(e) and revised. Current Sec.  701.241(d) has been moved 
to revised Sec.  702.243(f) and revised. Current Sec.  701.241(e) has 
been moved to revised Sec.  702.243(i) and revised.
Section 702.242 Settlement Application; Contents and Submission
    Revised Sec.  702.242 sets out the information parties must include 
in a settlement application and how parties must submit the 
application. Paragraph (a) simplifies the requirements in current Sec.  
702.242(a) by requiring that the parties use an application form 
prescribed by OWCP. The form is a self-sufficient document that 
requires all information necessary for a complete application and 
signatures necessary to indicate agreement to the settlement. The form 
also apprises claimants of the effect of the settlement (e.g., waiver 
of rights to further compensation). Using a form should simplify the 
application process for the parties, who will no longer have to create 
their own documents. A form also has the advantage of allowing OWCP to 
adopt technology that will allow full online completion and submission 
of the settlement application.
    Paragraph (a) also lists the components that must be included in 
the settlement application. In large part, this list reflects the 
requirements set forth in current Sec.  702.242(a) and (b). Parties are 
required to include basic facts about the case, amounts to be paid 
under the settlement, the signatures of the parties agreeing to the 
settlement and attesting that the settlement is adequate and not 
procured by duress, and a statement regarding severability of the parts 
of the settlement, where appropriate.
    Paragraph (b) provides that the adjudicator can request any 
additional information he or she deems necessary to decide whether the 
settlement is adequate or was procured by duress. This allows the 
adjudicator to tailor a request for additional information (e.g., a 
medical report, projections of future medical treatment expenses) to 
the facts of the particular case. Paragraph (c) limits the 
adjudicator's consideration to the information in the application, any 
specific information the adjudicator requests from the parties, and 
information in the case record when the settlement application is 
filed.
    Paragraphs (d) and (e) prescribe how parties submit completed 
settlement applications. These provisions require parties to submit 
applications to the district director except when the case is pending 
before the OALJ. In that instance, parties may either ask OALJ to 
remand the case to the district director and then submit the 
application to the district director after remand or submit the 
application to OALJ. Parties who submit settlement applications while a 
case is pending before a higher tribunal--the Benefits Review Board or 
a court--must submit them to the district director and ask the tribunal 
to return the case to the district director, who is an adjudicator with 
the authority to consider the application. These procedures reflect 
current practice.
Section 702.243 Settlement Approval and Disapproval
    Revised Sec.  702.243 governs how settlement applications are 
reviewed and the consequences of that review. Paragraph (a) requires 
adjudicators to review the settlement application within 30 days of 
receipt. During that time period, the adjudicator must notify the 
parties if the application is incomplete and ask for any additional 
information as allowed under revised Sec.  702.242(b). The notice must 
also inform the parties that the 30-day period in revised Sec.  
702.241(b) will not begin to run until the adjudicator receives the 
completed application and additional information. This formulation is 
consistent with current Sec.  702.243(a), which states that an 
incomplete application tolls the 30-day time period for deeming the 
application approved.
    Paragraph (b) combines two requirements in current Sec.  702.243(b) 
and (c) regarding adjudicating a settlement. The adjudicator must issue 
a compensation order approving or disapproving the settlement 
application. If the application is disapproved in any part, the 
adjudicator must include a statement of the reasons for finding the 
settlement (or part thereof) inadequate or procured by duress. This 
provision also requires the adjudicator to file and serve the 
compensation order under the procedures set forth in Sec.  702.349. 
Although OWCP already follows these procedures, adding a reference to

[[Page 80606]]

Sec.  702.349 ensures that parties will be able to choose to receive 
orders on settlements via electronic means rather than by registered or 
certified mail.
    Paragraph (c) instructs adjudicators to consider the information in 
the settlement application, any additional information the adjudicator 
requested under revised Sec.  702.242(b), and the parties' attestations 
in the application in determining whether the proposed settlement is 
adequate and was procured without duress. The rule also allows the 
adjudicator to defer to the parties' attestations regarding adequacy 
and duress. This provision replaces current Sec.  702.243(f)'s more 
detailed standard for determining whether the settlement amount is 
adequate, allowing the adjudicator to consider only that information 
important to the particular case.
    Like current Sec.  702.243(e), revised paragraph (d) continues to 
provide that disapproval of any part of a settlement applies to the 
entire settlement unless the parties state in the application that they 
agree to settle various parts independently. OWCP will incorporate this 
question into the settlement application.
    Paragraph (e) sets out the actions parties may take after an 
adjudicator disapproves a settlement application. When disapproved by a 
district director, the parties may submit an amended settlement 
application to the district director or request an administrative law 
judge hearing on the disapproval. Any party may also ask for an 
administrative law judge hearing on the merits of the case. Similarly, 
when disapproved by an administrative law judge, the parties may submit 
an amended settlement application to the judge, appeal to the Benefits 
Review Board, or proceed with a hearing on the merits.
    Paragraph (f) sets out the circumstances when a settlement is 
deemed approved. Consistent with section 8(i)(1), 33 U.S.C. 908(i)(1), 
this regulation applies only when all parties are represented by 
counsel. If the adjudicator neither approves nor disapproves the 
settlement application within 30 days after an adjudicator receives a 
complete application and any additional information the adjudicator 
requests under revised Sec.  702.242(b), the settlement will be deemed 
approved.
    Paragraph (g) retains the provision in current Sec.  702.243(b) 
that an employer's and insurance carrier's liability for a compensation 
case is not discharged until the settlement application is approved. 
This includes both approvals issued by an adjudicator and those 
settlements deemed approved under the provisions of this section.
    Paragraph (h) addresses the effect of settling attorney fees. The 
revised rule retains the thrust of the provision in current Sec.  
702.241(e): Approval of a settlement application that includes attorney 
fees constitutes approval of fees for all purposes. Paragraph (h) adds 
that fees in a settlement application may include fees for services 
rendered before a different adjudicator or tribunal. This will allow 
one adjudicator to resolve all fee maters, eliminating any need for the 
parties to seek fee resolutions from any other adjudicator or tribunal.
    Paragraph (i) revises current Sec.  702.243(g) regarding how 
adjudicators consider settlements in cases being paid under a final 
compensation order. The current regulation requires adjudicators to 
disapprove any settlement amount that falls below the present value of 
compensation payments commuted (as prescribed in the regulation) unless 
the parties show that the amount is adequate. Revised paragraph (i) 
expands the adjudicator's discretion by making the comparison between 
the settlement and commuted amounts permissible rather than mandatory. 
This will allow the adjudicator more flexibility to ratify the parties' 
agreement as to the settlement amount. OWCP also has removed from 
current Sec.  702.243(g) the reference to the U.S. Life Table developed 
by the Department of Health and Human Services. This table is 
insufficient because it does not provide life expectancies for people 
in foreign countries that could be covered by the Longshore Act or its 
extensions, particularly the Defense Base Act. Revised paragraph (i) 
instead allows OWCP to specify the life expectancy tables or 
calculators to be used under this provision.

C. Regulations Related to Civil Money Penalties

Section 702.204 Employer's Report; Penalty for Failure To Furnish or 
For Falsifying
    Revised Sec.  702.204 revises the current regulation in several 
ways. First, paragraph (a)(1) defines a knowing or willful violation 
sufficient to impose a penalty. Paragraph (c) provides that the number 
of penalties assessed in the prior two years against an entity- 
including its parent company, subsidiaries, or related entities-will be 
considered in assessing further penalties. Paragraph (c) also lists the 
penalty amounts that will be imposed, beginning at two percent of the 
maximum penalty amount for a first violation, with the penalty doubling 
for each subsequent violation through the sixth violation. The seventh 
violation will result in the maximum penalty. OWCP has adopted a 
percentage scheme because the maximum penalty amount will be adjusted 
every year under the Federal Civil Penalties Inflation Adjustment Act 
of 1990, as amended by the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015, Public Law 114-74, 701.
Section 702.233 Additional Compensation for Failure To Pay Without an 
Award
    OWCP has substituted the phrase ``additional compensation'' for the 
word ``penalty'' in current Sec.  702.233's title (i.e., ``Penalty for 
failure to pay an award''). Section 702.233 implements section 14(e) of 
the Act, 33 U.S.C. 914(e), which provides that claimants are entitled 
to an additional 10 percent of any compensation payable without an 
award when not paid within 14 days of when it is due. The Board has 
held that payments under section 14(e) are ``compensation'' and not 
``penalties.'' Robirds v. ICTSI Oregon, Inc., 52 BRBS 79 (2019) (en 
banc); appeal docketed Ninth Cir. No. 19-1634. In reaching its 
conclusion, the Board relied on the Federal Circuit's decision in 
Ingalls Shipbuilding, Inc. v. Dalton, 119 F.3d 972, 979 (Fed. Cir. 
1997), which held that payments under section 14(e) are compensation. 
The majority of courts have also construed the similar language in 
section 14(f) of the Act, 33 U.S.C. 914(f) (requiring payment of 
additional 20 percent for late payments under terms of an award), as 
payments of ``compensation'' rather than a penalty. See Newport News 
Shipbuilding and Dry Dock Co. v. Brown, 376 F.3d 245, 251 (4th Cir. 
2004) (``[I]t is plain that an award for late payment under [section] 
14(f) is compensation.''); Tahara v. Matson Terminals, Inc., 511 F.3d 
950, 953-54 (9th Cir. 2007) (same); but see Burgo v. General Dynamics 
Corp., 122 F.3d 140, 145-46 (2d Cir. 1997). Using ``additional 
compensation'' in the title of Sec.  702.233 promotes accuracy and 
clarifies the instances in which the new penalty procedures apply.
Section 702.236 Penalty for Failure To Report Termination of Payments
    Current Sec.  702.236 has been revised to incorporate the penalty 
procedural rules in new Subpart I.
Section 702.271 Discrimination Against Employees Who Bring Proceedings; 
Prohibition
    Current Sec.  702.271 has been revised by dividing paragraph (a) 
into paragraphs (a) and (b), and renumbering the

[[Page 80607]]

subdivisions of paragraph (a), for clarity. Current paragraph (a)(2) is 
deleted and replaced by revised Sec.  702.273, which sets forth the 
range of penalties to be assessed and incorporates the penalty 
procedural rules in new Subpart I. Given this change, the words ``and 
penalty'' have been deleted from the section's title and the 
punctuation has been altered. Current paragraphs (b), (c), and (d) are 
redesignated (c), (d), and (e).
Section 702.273 Penalty for Discrimination
    Revised Sec.  702.273 replaces current Sec.  702.271(a)(2). It sets 
forth the range of penalties for discharge or discrimination, and 
incorporates the penalty procedural rules in new Subpart I. The rule 
also stays proceedings on any penalty assessed by the district director 
prior to a hearing until the Administrative Law Judge or higher 
tribunal resolves the underlying discrimination complaint.
Section 702.901 Scope of This Part
    New Sec.  702.901 provides that the procedures set forth in Subpart 
I apply when the district director imposes civil monetary penalties 
under Sec. Sec.  702.204, 702.236, or 702.273, and that any penalties 
collected are to be deposited into the special fund described in 33 
U.S.C. 944.
Section 702.902 Definitions
    New Sec.  702.902 defines ``respondent'' as the employer, insurance 
carrier, or self-insured employer against whom the district director is 
seeking to assess a penalty.
Section 702.903 Notice of Penalty; Response; Consequences of no 
Response
    New Sec.  702.903 governs OWCP's notice of any penalty assessed and 
the respondent's response. Paragraph (a) requires OWCP to serve a 
written notice on the respondent by a method that verifies the delivery 
date because date of receipt triggers the respondent's response period. 
Paragraph (b) prescribes the contents of the notice, which include the 
consequences of not responding to the notice or supplying an inadequate 
response. Paragraph (c) gives the respondent 30 days to respond with 
documentation regarding any facts relevant to the reason for the 
penalty, as well as any documentation that may lead to mitigation of 
the penalty amount under the Small Business Regulatory Enforcement 
Fairness Act, 5 U.S.C. 601 (note), if the penalty arises under Sec.  
702.236. Paragraph (d) provides that, if there are further proceedings 
before an administrative law judge, that judge may consider only the 
evidence submitted to the district director, unless exceptional 
circumstances prevented the respondent from submitting it to the 
district director. OWCP has adopted this restriction so that OWCP can 
evaluate all evidence the respondent wishes to introduce in assessing 
the penalty. Finally, paragraph (e) provides that if the respondent 
does not respond within 30 days, the assessment of the penalty and its 
amount becomes final and collection may begin under Sec.  702.912.
Section 702.904 Decision on Penalty After Timely Response; Request for 
Hearing
    New Sec.  702.904 addresses the district director's decision and 
any appeal to an administrative law judge. Paragraph (a) provides that 
the district director's decision must state the reasons for the 
assessment of the penalty and its amount, and set forth the 
consequences of a respondent's failure to timely respond. Paragraph (b) 
provides that the respondent may request a hearing before an 
administrative law judge within 15 days of receiving the decision by 
filing a request with the district director, and sets forth the 
requirements the request must meet. Paragraph (c) provides that a 
timely hearing request will stay the collection of a penalty until 
final resolution of the penalty by the administrative law judge or the 
Secretary. Paragraph (d) provides that, if the respondent does not 
request a hearing within 15 days, the assessment and penalty become 
final, and collection of the penalty may be instituted under Sec.  
702.912.
Section 702.905 Referral to the Office of Administrative Law Judges
    New Sec.  702.905 addresses referral of an assessment and penalty 
for a hearing before an administrative law judge. Paragraph (a) 
provides that, when the district director receives a request for 
hearing, the district director will immediately notify the Chief 
Administrative Law Judge, who will assign the case to an administrative 
law judge. The district director will also forward the administrative 
record, which consists of the district director's decision, the 
documentation the district director relied on in making the decision, 
all written responses and documentation filed by the respondent with 
the district director, and a statement of the issues referred for 
hearing. Paragraph (b) provides that the rules set forth in 29 CFR part 
18 apply to any hearing before an administrative law judge.
Section 702.906 Decision and Order of Administrative Law Judge
    New Sec.  702.906 governs the contents, issuance, service, and 
finality of the administrative law judge's decision. Paragraph (a) 
provides that the administrative law judge may consider only the issues 
referred for hearing by the district director. Paragraph (b) limits the 
administrative law judge's determinations on those issues to whether 
the respondent has violated the provision under which the penalty was 
assessed, and whether the penalty is appropriate under the standards 
set forth in Sec. Sec.  702.204, 702.236, 702.271, and 702.903(c)(2). 
Limiting the judge's consideration to these issues will help streamline 
the hearing and decision process. Paragraph (c) requires the 
administrative law judge's decision to include a statement of findings 
and conclusions on each issue referred, with the reasons and bases for 
those findings and conclusions. Paragraph (d) requires the 
administrative law judge to serve both the respondent and the district 
director with the decision on the day it is issued through a trackable 
delivery method. Paragraph (e) provides that any party may move for 
reconsideration of the decision within 30 days of its issuance, and 
that any such motion will suspend the running of time to file a 
petition for review under Sec.  702.908. Paragraph (f) provides that, 
absent a timely request for reconsideration or petition for review, the 
administrative law judge's decision will be deemed final, and recovery 
of the penalty may be instituted under Sec.  702.912.
Section 702.908 Review by the Secretary
    New Sec.  702.908 allows any party aggrieved by an administrative 
law judge's decision to petition the Secretary for review. Paragraph 
(a) requires that any petition be filed within 30 days. Under paragraph 
(b), a timely motion for reconsideration filed with the administrative 
law judge tolls the time for filing a petition with the Secretary; the 
30-day period will not begin to run until the judge issues a decision 
on reconsideration. Paragraph (c) sets out the requirements for the 
petition for review. And paragraph (d) provides the mailing address for 
sending the petition but allows the Secretary to designate alternative 
filing methods, such as an electronic filing system. Documents are not 
considered filed until actually received by the Secretary.

[[Page 80608]]

Section 702.909 Discretionary Review
    New Sec.  702.909(a) provides that the Secretary's review of a 
timely petition is discretionary. Paragraph (a)(1) provides that, if 
the Secretary declines review, the administrative law judge's decision 
will be considered the final agency decision. Under paragraph (b)(2), 
if the Secretary chooses to review the decision, the Secretary will 
notify the parties of the issues to be reviewed and set a schedule for 
the parties to submit written arguments. Paragraph (b) requires the 
district director to forward the administrative record to the Secretary 
if the Secretary decides to review the administrative law judge's 
decision.
Section 702.910 Final Decision of the Secretary
    New Sec.  702.910 limits the Secretary's review to the hearing 
record. The Secretary will review findings of fact under a substantial 
evidence standard and conclusions of law de novo. The Secretary may 
affirm, reverse, modify, or vacate the decision, and may remand to the 
Office of Administrative Law Judges for further review. The Secretary's 
decision must be served on all parties and the Chief Administrative Law 
Judge.
Section 702.911 Settlement of Penalty
    New Sec.  702.911 provides that the respondent and the district 
director may enter into a settlement at any time during proceedings 
before the administrative law judge or the Secretary. This provision is 
meant to allow flexibility and forestall further litigation if the 
district director and the respondent reach agreement at any point 
during the proceedings.
Section 702.912 Collection and Recovery of a Penalty
    Paragraph (a) of new Sec.  702.912 provides that, when a penalty 
becomes final under Sec. Sec.  702.903(e), 702.904(d), or 702.906(f), 
the penalty is immediately due and payable to the Department on behalf 
of the special fund described in 33 U.S.C. 944. Paragraph (b) provides 
that, if payment is not received within 30 days after it becomes due 
and payable, it may be recovered by a civil action brought by the 
Secretary.

V. Legal Basis for the Rule

    Section 39(a) of the LHWCA, 33 U.S.C. 939(a)(1), authorizes the 
Secretary of Labor to prescribe rules and regulations necessary for the 
administration of the Act. The LHWCA also grants the Secretary 
authority to determine by regulation how certain statutory notice and 
filing requirements are met. See 33 U.S.C. 907(j)(1) (the Secretary is 
authorized to ``make rules and regulations and to establish 
procedures'' regarding debarment of physicians and health care 
providers under 33 U.S.C. 907(c)); 33 U.S.C. 912(c) (employer must 
notify employees of the official designated to receive notices of 
injury ``in a manner prescribed by the Secretary in regulations''); 33 
U.S.C. 919(a) (claim for compensation may be filed ``in accordance with 
regulations prescribed by the Secretary''); 33 U.S.C. 919(b) (notice of 
claim to be made ``in accordance with regulations prescribed by the 
Secretary''); 33 U.S.C. 935 (``the Secretary shall by regulation 
provide for the discharge, by the carrier,'' of the employer's 
liabilities under the Act). This rule falls well within these statutory 
grants of authority.

VI. Information Collection Requirements (Subject to the Paperwork 
Reduction Act) Imposed Under the Rule

    The Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501 et seq., 
and its attendant regulations, 5 CFR part 1320, require that the 
Department consider the impact of paperwork and other information 
collection burdens imposed on the public. A Federal agency generally 
cannot conduct or sponsor a collection of information, and the public 
is generally not required to respond to an information collection, 
unless it is approved by the Office of Management and Budget (OMB) 
under the PRA and displays a currently valid OMB Control Number. In 
addition, notwithstanding any other provisions of law, no person shall 
generally be subject to penalty for failing to comply with a collection 
of information that does not display a valid Control Number. See 5 CFR 
1320.5(a) and 1320.6.
    All forms and documents currently approved by OMB are subject to 
electronic submission except when a party obtains permission from OWCP 
to use a different submission method or otherwise provided by statute. 
The Department has submitted an Information Collection Request (ICR) 
for all of these forms under the procedures for review and clearance 
contained in 5 CFR 1320.13. The Exchange of Documents and Information; 
Electronic Signatures Rule (see new Sec.  702.101) does not materially 
change any other ICR with regard to the information collected, but does 
change the manner in which forms that collect information may be 
submitted. The Department is requiring private parties to use an 
electronic method for the transmission of information to OWCP.
    The collection of information requirements are contained within 
ICRs assigned the following OMB control numbers: 1240-0003, 1240-0004, 
1240-0005, 1240-0008, 1240-0012, 1240-0014, 1240-0025, 1240-0026, 1240-
0029, 1240-0036, 1240-0040, 1240-0041, 1240-0042, 1240-0045 1240-0053, 
and 1240-0058. The regulatory sections specifying the submission 
procedures are found in the following sections: 20 CFR 702.111, 
702.121, 702.132, 702.162, 702.174, 702.175, 702.201, 702.202, 702.221, 
702.234, 702.235, 702.236, 702.242, 702.243, 702.251, 702.285, 702.317, 
702.321, 702.349, 702.407, 702.419, 703.116, 703.203, 703.204, 703.205, 
703.209, 703.210, 703.212, 703.303 and 703.310. See also 42 U.S.C. 
1652.
    Although the rule does not eliminate current methods of submission 
for these collections by mail where consistent with statute, the 
parties will have to submit more documents electronically. OWCP 
anticipates electronic submission will lead to cost savings in hours 
and mailing costs (envelopes and postage) for the parties. Given the 
response rate for each of the existing collections, current combined 
mailing costs are estimated at $118,657. Under this new rule, the 
Department anticipates a 97 percent rate of electronic submission, an 
accompanying reduction in postal mail submission, and a resulting cost 
savings of $115,097. The Department has submitted a request to OMB for 
a non-substantive change for each existing ICR cited above to obtain 
approval for the changed cost estimate resulting from electronic 
submission.
    This rule imposes two new information collections. First, revised 
Sec.  702.201(a)(1)(i) generally requires parties and their 
representatives to submit documents and information electronically to 
OWCP. But the rule allows an OWCP district director to allow an 
alternative filing method for individuals who do not have a computer, 
access to the internet, or the ability to use the internet. OWCP plans 
to use a new form that will allow individuals to self-certify that they 
qualify for this exception. For this form, OWCP estimates 3,048 
respondents with an annual time burden of 254 hours. Because this form 
will only be used when other documents are being submitted, there is no 
additional cost burden. Second, revised Sec.  702.242 requires parties 
to apply for approval of a settlement using an application form 
prescribed by OWCP. As explained in the section-by-section analysis 
above, OWCP believes use of a comprehensive form will lessen the 
burdens on the parties and the adjudicators who must

[[Page 80609]]

review the settlements. Although OWCP already has an approved 
settlement application form (see OMB control number 1240-0058, Form LS-
8), the new form will collect some additional information in a 
substantially revised format. For this form, OWCP estimates 5,400 
respondents with an annual time burden of 1,782 hours and other costs 
burden of $289.17. The Department has submitted a request to OMB for 
approval of both new information collections.
    The submitted ICRs for the new collections imposed by this rule 
will be available for public inspection for at least 30 days under the 
``Currently Under Review'' portion of the Information Collection Review 
section on the reginfo.gov website, available at: http://www.reginfo.gov/public/do/PRAMain. Currently approved information 
collections are available for public inspection under the ``Current 
Inventory'' portion of the same website.
    Request for Comments: As part of its continuing effort to reduce 
paperwork and respondent burden, the Department conducts a pre-
clearance consultation program to provide the general public and 
Federal agencies an opportunity to comment on proposed and/or 
continuing collections of information. This program helps to ensure 
requested data can be provided in the desired format, reporting burden 
(time and financial resources) is minimized, collection instruments are 
clearly understood, and the impact of collection requirements can be 
properly assessed. Comments on the information collection requirements 
may be submitted to the Department in the same manner as for any other 
portion of this rule.
    In addition to having an opportunity to file comments with the 
agency, the PRA provides that an interested party may file comments on 
the information collection requirements directly with the Office of 
Management and Budget, at Office of Information and Regulatory Affairs, 
Attn: OMB Desk Officer for DOL-OWCP Office of Management and Budget, 
Room 10235, 725 17th Street NW, Washington, DC 20503; by Fax: 202-395-
5806 (this is not a toll-free number); or by email: 
[email protected]. Commenters are encouraged, but not 
required, to send a courtesy copy of any comments to the general 
addressee for this rulemaking. The OMB will consider all written 
comments it receives within 30 days of publication of this DFR in the 
Federal Register. To help ensure appropriate consideration, comments 
should mention at least one of the OMB control numbers noted in this 
section.
    The OMB and the Department are particularly interested in comments 
that address the following:
     Evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the proposed collection of information, including the 
validity of the methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, through the use of appropriate automated, 
electronic, or other technological collection techniques or other forms 
of information technology, e.g., permitting electronic submission of 
responses.
    The information collections in this rule may be summarized as 
follows:
    1. Title of Collection: Employer's First Report of Injury or 
Occupational Disease, Employer's Supplementary Report of Accident or 
Occupational Illness.
    OMB Control Number: 1240-0003.
    Total Estimated Number of Responses: 24,631.
    Total Estimated Annual Time Burden: 6,158 hours.
    Total Estimated Annual Other Costs Burden: $232.76.
    2. Title of Collection: Carrier's Report of Issuance of Policy.
    OMB Control Number: 1240-0004.
    Total Estimated Number of Responses: 1,500.
    Estimated Annual Time Burden: 25 hours.
    Total Estimated Annual Other Costs Burden: $0.47.
    3. Title of Collection: Securing Financial Obligations Under the 
Longshore and Harbor Workers' Compensation Act and its Extensions.
    OMB Control Number: 1240-0005.
    Total Estimated Number of Responses: 695.
    Estimated Annual Time Burden: 869 hours.
    Total Estimated Annual Other Costs Burden: $12.08.
    4. Title of Collection: Regulations Governing the Administration of 
the Longshore and Harbor Workers' Compensation Act.
    OMB Control Number: 1240-0014.
    Total Estimated Number of Responses: 90,759.
    Estimated Annual Time Burden: 32,971 hours.
    Estimated Annual Other Costs Burden: $786.09.
    5. Title of Collection: Request for Earnings Information.
    OMB Control Number: 1240-0025.
    Total Estimated Number of Responses: 100.
    Estimated Annual Time Burden: 25 hours.
    Estimated Annual Other Costs Burden: $0.95.
    6. Title of Collection: Application for Continuation of Death 
Benefit for Student.
    OMB Control Number: 1240-0026.
    Total Estimated Number of Responses: 20.
    Total Estimated Annual Time Burden: 10 hours.
    Total Estimated Annual Other Costs Burden: $0.19.
    7. Title of Collection: Request for Examination and/or Treatment.
    OMB Control Number: 1240-0029.
    Total Estimated Number of Responses: 90,000.
    Estimated Annual Time Burden: 48,750 hours.
    Total Estimated Annual Other Costs Burden: $2,532,816.
    8. Title of Collection: Longshore and Harbor Workers' Compensation 
Act Pre-Hearing Statement.
    OMB Control Number: 1240-0036.
    Total Est. Number of Responses: 3,513.
    Estimated Annual Time Burden: 586 hours.
    Total Estimated Annual Other Costs Burden: $61.13.
    9. Title of Collection: Certification of Funeral Expenses.
    OMB Control Number: 1240-0040.
    Total Estimated Number of Responses: 75.
    Total Estimated Annual Time Burden: 19 hours.
    Total Estimated Annual Other Costs Burden: $0.71.
    10. Title of Collection: Notice of Final Payment or Suspension of 
Compensation Benefits.
    OMB Control Number: 1240-0041.
    Total Estimated Number of Responses: 37,800.
    Total Estimated Annual Time Burden: 6,300 hours.
    Total Estimated Annual Other Costs Burden: $357.21.
    11. Title of Collection: Notice of Controversion of Right to 
Compensation.
    OMB Control Number: 1240-0042.
    Total Estimated Number of Responses: 18,000.
    Total Estimated Annual Time Burden: 4,500 hours.
    Total Estimated Annual Other Costs Burden: $295.97.
    12. Title of Collection: Request for Electronic Service of Orders--
Waiver of Certified Mail Requirement.

[[Page 80610]]

    OMB Control Number: 1240-0053.
    Total Estimated Number of Responses: 14,000.
    Estimated Annual Time Burden: 770 hours.
    Estimated Annual Other Costs Burden: $0.00.
    13. Title of Collection: Request for Intervention, Longshore and 
Harbor Workers' Compensation Act.
    OMB Control Number: 1240-0058.
    Total Estimated Number of Responses: 12,414.
    Total Estimated Annual Time Burden: 3,189 hours.
    Total Estimated Annual Other Costs Burden: $342.91.
    14. Title of Collection: Rehabilitation Plan and Award.
    OMB Control Number: 1240-0045.
    Total Estimated Number of Responses: 3,913.
    Estimated Annual Time Burden: 1,957 hours.
    Estimated Annual Other Costs Burden: 0.00.
    15. Title of Collection: Rehabilitation Maintenance Certificate.
    OMB Control Number: 1240-0012.
    Total Estimated Number of Responses: 3,452.
    Estimated Annual Time Burden: 575 hours.
    Estimated Annual Other Costs Burden: $0.00.
    16. Title of Collection: Rehabilitation Action Report.
    OMB Control Number: 1240-0008.
    Total Estimated Number of Responses: 4,066.
    Estimated Annual Time Burden: 678 hours.
    Estimated Annual Other Costs Burden: $0.00.

VII. 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 for several reasons.
    Requiring most parties and representatives to submit documents 
electronically to OWCP will speed claims processing and allow OWCP to 
be more responsive to requests for assistance. Currently, OWCP must 
scan paper submissions into digital format and add them to the 
electronic case file before claims staff can take any action on them. 
When coupled with the time to deliver paper submissions to OWCP, this 
can delay responding to a request by several days. In contrast, 
electronic submissions are immediately associated with the case file 
and available to claims staff. Codifying the use of digital signatures 
in the regulations will also simplify electronic and even paper 
submissions (when allowed).
    Similarly, streamlining the settlement process by limiting the 
amount of information the parties must submit with every application 
will reduce administrative burdens on both the parties and OWCP. All of 
these changes will result in more expeditious resolution of disputes, 
thus furthering the ``certain, prompt recovery for employees'' the Act 
guarantees. Roberts v. Sea-Land Servs., Inc., 556 U.S. 93, 97; 132 
S.Ct. 1350, 1354 (2012).
    The Department does not believe parties will incur additional costs 
as a result of the revisions to the electronic submission of documents 
and information regulation and may see a small financial benefit. As 
noted, more than 80 percent of documents currently sent to OWCP are 
submitted electronically. For these parties and representatives, no 
change in their current practices will be needed. Although the parties 
and representatives who currently submit paper documents will have to 
alter their practice, these alterations may result in cost savings by 
reducing paper copying charges and mailing or delivery expenses. Even 
if parties and representatives incurred minimal additional costs, they 
would be outweighed by the benefits reaped--primarily more expeditious 
claims processing and delivery of compensation.
    The Department also believes that promulgating procedural rules 
related to civil money penalties benefits employers (and their 
insurance carriers) against whom OWCP may assess penalties. Currently, 
the regulations contain no set procedures for employers to challenge 
penalties, which can lead to procedural decisions being made on a case-
by-case basis. The new rules establish a transparent and consistent 
pathway for assessment and adjudication of penalties: Clear notice of 
the penalty and an opportunity to contest it before imposed by OWCP; 
hearing by an administrative law judge upon request; discretionary 
review by the Secretary; and a stay of payment for the penalty assessed 
until review is complete and the decision becomes final. These 
procedures clearly protect an employer's rights to be fully heard 
before having to pay a penalty.
    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.

VIII. 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.'' 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.

IX. 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.) (RFA), requires an agency to prepare a regulatory flexibility 
analysis when it proposes or adopts regulations that will have ``a 
significant economic impact on a substantial number of small entities'' 
or to certify that the 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 and a handful of insurance carriers may be small 
entities within the meaning of the RFA, see generally 77 FR 19471-72 
(March 30, 2012), this rule will not have a significant economic impact 
on them. Most employers and insurance carriers already submit documents 
and information to OWCP electronically, and electronic filing is 
usually associated with slightly lower costs than traditional paper 
filings. Thus, mandating electronic submission will have little to no 
impact on these parties. Similarly, streamlining the settlement-
application submission process will have no negative economic impact 
and a potentially small positive impact on employers and carriers. 
Finally, the regulations related to penalties generally set procedures 
with no economic impact. To the extent the rules affect the penalty 
amount assessed

[[Page 80611]]

by OWCP, the rules explicitly take into account small entities by 
incorporating the mitigation provisions in section 223 of the Small 
Business Regulatory Enforcement Fairness Act, 5 U.S.C. 601 (note), 
where appropriate. See new Sec.  702.903(c)(2).
    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, however, 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.

X. 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,'' if 
promulgated as a final rule.

XI. 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 set forth 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 continues 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; 28 U.S.C. 2461 note 
(Federal Civil Penalties Inflation Adjustment Act of 1990); Pub. L. 
114-74 at sec. 701; Reorganization Plan No. 6 of 1950, 15 FR 3174, 
64 Stat. 1263; Secretary's Order 10-2009, 74 FR 58834.


0
2. Revise Sec.  702.101 to read as follows:


Sec.  702.101  Exchange of documents and information; electronic 
signatures.

    (a) Except as otherwise provided by Sec. Sec.  702.203, 702.215 and 
702.349, all documents and information under this subchapter--
    (1) Sent to OWCP--
    (i) Must be submitted electronically through an OWCP-authorized 
system unless a district director permits an alternative submission 
method for individuals who do not have a computer, lack access to the 
internet, or lack the ability to utilize the internet. Documents and 
information submitted through an OWCP-authorized electronic system are 
considered filed when received.
    (ii) When authorized to use an alternative method, submission may 
be made by postal mail, commercial delivery service (such as Federal 
Express or United Parcel Service), hand delivery, or another method 
authorized by OWCP. Documents and information submitted using an 
alternative method are considered filed when received by OWCP.
    (2) Sent by OWCP to parties and their representatives must be 
sent--
    (i) Electronically by a reliable electronic method;
    (ii) In hard copy by postal mail, commercial delivery service (such 
as Federal Express or United Parcel Service), or hand delivery; or
    (iii) Electronically through an OWCP-authorized system that 
delivers documents to the parties and their representatives or notifies 
them when documents have been added to the case file.
    (3) Sent by any party or representative to another party or 
representative must be sent by any method allowed under paragraphs 
(a)(2)(i) through (iii) of this section, except that when sent by a 
reliable electronic method, the receiving party or representative must 
agree in writing to receive documents and information by that method.
    (b) For purposes of paragraph (a) of this section, reliable 
electronic methods for delivering documents include, but are not 
limited to, email, facsimile, and web portal.
    (c) Any party or representative may revoke his or her agreement to 
receive documents and information electronically by giving written 
notice to the party or the representative with whom he or she had 
agreed to receive documents and information electronically.
    (d) The provisions in paragraphs (a) through (c) of this section 
apply when parties are directed by the regulations in this subchapter 
to advise; apply; approve; authorize; demand; file; forward; furnish; 
give; give notice; inform; issue; make; notice, notify; provide; 
publish; receive; recommend; refer; release; report; request; respond; 
return; send; serve; service; submit; or transmit.
    (e) Any reference in this subchapter to an application, copy, 
filing, form, letter, written notice, or written request includes both 
hard-copy and electronic documents.
    (f) Any requirement in this subchapter that a document or 
information be submitted in writing, or that it be signed, executed, or 
certified does not preclude its submission or exchange electronically.
    (g) Any requirement in this subchapter that a document be signed 
may be satisfied by an electronic signature.
    (1) Definitions. For purposes of this paragraph--
    Document means any form of writing submitted to OWCP, including 
applications, claim forms, notices of payments, and reports of injury.
    Electronicsignature means a mark on a document, created by 
electronic means, that indicates the signatory's endorsement of or 
assent to the terms of a document. An electronic signature may serve as 
the binding signature for a business or other corporate or collective 
entity if the signatory has the legal authority to bind the entity.
    Electronic signature device means a code, password, or other 
mechanism that is used by a signatory to create or 
inputelectronicsignatures on a document or to log in to an electronic 
signature program. The code, password or mechanism must be unique to 
the signatory at the time the signature is created and the signatory 
must be uniquely entitled to use it. The device is compromised if the 
code or mechanism is available for use by any other person. Examples of 
such devices include a unique username and password, a PIN number or 
other numeric code, biometrics, cryptographic controls such as 
asymmetric or symmetric cryptography, and software that takes a scan of 
a user's ID.
    Electronic signature program means a software application that 
allows a signatory to log in using an electronic signature device and 
electronically sign a document.
    Signatory means any person who, on behalf of themselves or an 
entity for whom they are authorized to sign, places an electronic 
signature on a document.
    (2) Acceptable methods of creating an electronic signature 
include--

[[Page 80612]]

    (i) The use of an electronic signature device;
    (ii) The use of an electronic signature program, provided that such 
program includes the use of an electronic signature device;
    (iii) The signatory typing their name onto an electronic document 
following a ``/s'' mark;
    (iv) The signatory using a mouse, touchpad, stylus, or other 
equivalent device to physically draw their signature on a display 
screen;
    (v) Other methods allowed by OWCP.
    (3) A document containing multiple electronic signatures may 
utilize the same method or methods of signing with respect to each 
signature, or may utilize different methods, provided the methods are 
acceptable methods pursuant to paragraph (g)(2) of this section.
    (4) Entities submitting electronically-signed documents must--
    (i) Ensure that all signatures allow OWCP to clearly identify the 
signatory. Any signature made on behalf of a business or other 
collective entity should identify the individual person signing.
    (ii) Keep a record of how the electronic signature was obtained, 
including any electronic signature programs and/or electronic signature 
devices used, and be able to provide this information at OWCP's 
request.
    (iii) Keep a record of the date the signature was created and be 
able to provide this information at OWCP's request.
    (h) Any reference in this subchapter to transmitting information to 
an entity's address may include that entity's electronic address or 
electronic portal.
    (i) Subject to paragraph (a) of this section, any requirement in 
this subchapter that a document or information--
    (1) Be sent to a specific district director means that the document 
or information should be sent to the electronic (or physical when 
permitted) address provided by OWCP for that district director; and
    (2) Be filed by a district director in his or her office means that 
the document or information may be filed in an electronic (or physical 
when permitted) location specified by OWCP for that district director.

0
3. Revise Sec.  702.203(b) to read as follows:


Sec.  702.203  Employer's report; how given.

* * * * *
    (b) Employers may send a report of injury to the district director 
electronically through an OWCP-authorized system (see Sec.  
702.101(a)(1)). If the employer sends its report of injury by U.S. 
postal mail, the report will be considered filed on the date that the 
employer mails the document. If the report is filed by mail, the 
employer must retain documentation demonstrating when the report was 
mailed.

0
4. Revise Sec.  702.204 to read as follows:


Sec.  702.204  Employer's report; penalty for failure to furnish and or 
falsifying.

    (a) Any employer, insurance carrier, or self-insured employer who 
knowingly and willfully fails or refuses to send any report required by 
Sec.  702.201, or who knowingly or willfully makes a false statement or 
misrepresentation in any report, shall be subject to a civil penalty 
not to exceed $24,441 for each such failure, refusal, false statement, 
or misrepresentation for which penalties are assessed after January 15, 
2020.
    (1) For purposes of failing or refusing to send a report required 
by Sec.  702.201, an employer, insurance carrier, or self-insured 
employer--
    (i) Acts knowingly if it has actual knowledge of the employee's 
injury or death, that the injury or death is likely covered by the Act, 
and that a report is required; or if it had reason to know about the 
employee's injury or death, that the injury or death is likely covered 
by the Act, and that a report is required.
    (ii) Acts willfully if it intentionally disregards the reporting 
requirement or is indifferent to the reporting requirement.
    (2) Proof of either a false statement or misrepresentation made 
knowingly and willfully in a report required by Sec.  702.201 is 
sufficient to warrant imposition of a penalty under this section.
    (b) The district director has the authority and responsibility for 
assessing the penalty described in paragraph (a) of this section using 
the procedures set forth at subpart I of this part.
    (c) In determining the penalty amount under paragraph (a) of this 
section, the district director will consider how many penalties, if 
any, have been assessed against the employer, insurance carrier, or 
self-insured employer in the two years preceding the most recent 
reporting violation. In determining the number of prior penalties 
assessed, the district direct will include penalties assessed against 
an entity's parent company, subsidiaries, and related entities. The 
district director will assess a penalty in an amount equaling the 
following percentages of the maximum penalty, rounded up to the next 
dollar.

                        Table 1 to Paragraph (c)
------------------------------------------------------------------------
                                                              Percentage
                                                              of maximum
                    Number of violations                       penalty
                                                               assessed
------------------------------------------------------------------------
First late/falsified report:                                           2
Second late/falsified report:                                          4
Third late/falsified report:                                           8
Fourth late/falsified report:                                         16
Fifth late/falsified report:                                          32
Sixth late/falsified report:                                          64
Seventh (and above) late/falsified report:                           100
------------------------------------------------------------------------


0
5. Revise Sec.  702.215 to read as follows:


Sec.  702.215  Notice; how given.

    Notice must be effected by delivering it to the individual 
designated to receive such notices at the physical or electronic 
address designated by the employer. Notice may be given to the district 
director by submitting a copy of the form supplied by OWCP to the 
district director electronically through an OWCP-authorized system, by 
mail, or orally in person or by telephone.

0
6. Revise the section heading of Sec.  702.233 to read as follows:


Sec.  702.233   Additional compensation for failure to pay without an 
award.

* * * * *

0
7. Revise Sec.  702.236 to read as follows:


Sec.  702.236  Penalty for failure to report termination of payments.

    Any employer failing to notify the district director that the final 
payment of compensation has been made as required by Sec.  702.235 
shall be assessed a civil penalty in the amount of $297 for any 
violation for which penalties are assessed after January 15, 2020. The 
district director has the authority and responsibility for assessing 
this penalty using the procedures set forth at subpart I of this part.

0
8. Revise Sec.  702.241 to read as follows:


Sec.  702.241   Settlements: Definitions; general information.

    (a) As used in Sec. Sec.  702.241 through 702.243, the term--
    Adjudicator means district director or administrative law judge 
(ALJ).
    Compensation case means a claim for compensation or other statement 
indicating potential entitlement to compensation or benefits.
    Counsel means any attorney admitted to the bar of any state, 
territory or the District of Columbia.
    (b) Parties may settle a compensation case only with an 
adjudicator's approval. The settlement may include disability 
compensation, death benefits, medical benefits, attorney's fees, and 
costs. An adjudicator must approve the

[[Page 80613]]

settlement unless it is inadequate or was procured by duress. If all 
parties to the settlement are represented by counsel, completed 
applications will be deemed approved unless specifically disapproved by 
an adjudicator within 30 days of receipt of the application unless the 
adjudicator requests additional information under Sec.  702.243(a).
    (c) Receipt of a settlement application occurs--
    (1) For submissions to a district director, on the day OWCP 
receives a complete application.
    (2) For submissions to an ALJ, when the application is considered 
filed under the OALJ's rules of practice and procedure (29 CFR part 
18).
    (3) For compensation cases pending before a higher tribunal, the 
date the tribunal takes action indicating the adjudicator should 
consider the settlement (e.g., enters an order remanding the case, 
dismisses the appeal).
    (d) The 30-day period for consideration of a settlement begins the 
day after the adjudicator's receipt of a complete application. If the 
30th day is a Saturday, Sunday or legal holiday, the next business day 
will be considered the 30th day.
    (e) An agreement by the parties to settle a compensation case is 
limited to the rights of the parties and to claims then in existence. 
Settlement of disability compensation or medical benefits for the 
injured employee will not affect, in any way, the right of the 
employee's survivor(s) to claim death benefits.

0
9. Revise Sec.  702.242 to read as follows:


Sec.  702.242  Settlement application; contents and submission.

    (a) A settlement application must be made on a form prescribed by 
OWCP. The settlement application must include all information required 
by the form, including--
    (1) A brief summary of the facts of the case, including a 
description of the incident; a description of the nature of the injury; 
the degree of impairment or disability; the claimant's average weekly 
wage; and a summary of compensation paid;
    (2) The amounts to be paid under the settlement for compensation, 
medical benefits, death benefits, attorney's fees and costs, as 
appropriate;
    (3) The signatures of all parties agreeing to the settlement as 
stated in the application and attesting that the settlement is adequate 
and was not procured by duress; and
    (4) If the settlement application includes the parties' agreement 
on more than one form of compensation or benefits, a statement whether 
the parties agree to settle the parts independently if the adjudicator 
does not approve the settlement in its entirety.
    (b) The adjudicator may request additional information from the 
parties if he or she believes, under the particular circumstances of 
the case, that such information is necessary to determine whether the 
settlement is adequate or has been procured by duress.
    (c) The adjudicator will not consider any information a party 
submits other than the settlement application required by paragraph (a) 
of this section, additional information requested by the adjudicator 
under paragraph (b) of this section, or information in the case record 
before the settlement application is filed.
    (d) To submit a completed settlement application--
    (1) The parties must submit the application to a district director 
in all cases unless the case is pending before the OALJ. Submission 
must be made under the procedures set forth at Sec.  702.101(a) except 
that if a hard copy is submitted under that provision, the application 
must be sent by certified mail with return receipt requested or by a 
commercial delivery service with tracking capability that provides 
reliable proof of delivery to the district director.
    (2) In cases pending before the OALJ, the parties may either--
    (i) Request that the case be remanded to the district director for 
consideration of the application and, after remand, file the 
application with a district director under paragraph (d)(1) of this 
section; or
    (ii) Submit the application to OALJ under the procedures set forth 
in the OALJ's rules of practice and procedures (29 CFR part 18) for 
consideration.
    (e) If the parties submit a settlement application to a district 
director while the compensation case is pending at the Benefits Review 
Board or a court, the parties must notify the Board or the court and 
request that the case be remanded or otherwise returned to the district 
director for consideration of the application.

0
10. Revise Sec.  702.243 to read as follows:


Sec.  702.243   Settlement approval and disapproval.

    (a) Within 30 days of receipt, the adjudicator must evaluate the 
settlement application and notify the parties in writing if the 
application is incomplete or if the adjudicator requests additional 
information. If all parties are represented by counsel, any such notice 
must also state that the 30-day period in Sec.  702.241(b) will not 
commence until the adjudicator receives the completed application and 
the additional information.
    (b) The adjudicator must issue a compensation order approving or 
disapproving the settlement application, and file and serve it on the 
parties in accordance with Sec.  702.349 unless the settlement has 
already been deemed approved under paragraph (f) of this section. If 
the adjudicator disapproves the settlement application in any part, the 
order must include the adjudicator's reasons for finding the settlement 
inadequate or procured by duress.
    (c) In determining whether the settlement is adequate and procured 
without duress, the adjudicator must consider all of the information 
required by Sec.  702.242(a), any additional information requested 
under Sec.  702.242(b), and the parties' attestations in the settlement 
application, to which the adjudicator may defer.
    (d) If the adjudicator disapproves any part of a settlement 
application, the entire application is disapproved unless the parties 
have stated in the application that they agree to settle the parts 
independently.
    (e) After a settlement application is disapproved by--
    (1) A district director, the parties may submit an amended 
application to the district director or request a hearing before an ALJ 
on either the settlement disapproval or the merits of the case under 
sections 8 and 19 of the Act, 33 U.S.C. 908 and 919.
    (2) An ALJ, the parties may submit an amended application to the 
ALJ, file an appeal with the Benefits Review Board under section 21 of 
Act, 33 U.S.C. 921, or proceed with a hearing on the merits of the 
case.
    (f) If all parties to the settlement are represented by counsel and 
the adjudicator does not formally approve or disapprove the application 
within 30 days after receipt of a complete settlement application and 
any additional requested information (see Sec.  702.242(b)), the 
application will be deemed approved. A settlement application that is 
deemed approved under this paragraph will be considered filed in the 
office of the district director on the last day of the 30-day period as 
calculated under Sec.  702.241(d).
    (g) The liability of an employer/insurance carrier is not 
discharged until the settlement is specifically approved by a 
compensation order issued by the adjudicator or deemed approved under 
Sec.  702.241(b) and paragraph (f) of this section.

[[Page 80614]]

    (h) Attorney's fees in a settlement application may include fees 
for work performed before other adjudicators and tribunals. If the 
settlement is approved, the attorney's fees will be considered approved 
within the meaning of Sec.  702.132.
    (i) When parties settle cases being paid under a final compensation 
order where no substantive issues are in dispute, the adjudicator, in 
determining whether the proposed settlement amount is adequate, may 
compare the amount to the present value of future compensation payments 
commuted, computed by:
    (1) Determining the probability of the death of the beneficiary 
before the expiration of the period during which he or she is entitled 
to compensation according to a current life expectancy table or 
calculator specified by OWCP; and
    (2) Applying the discount rate specified at 28 U.S.C. 1961.

0
11. In Sec.  702.271:
0
a. Revise the section heading and paragraph (a);
0
b. Redesignate paragraphs (b) through (d) as (c) through (e); and
0
c. Add new paragraph (b).
    The revisions and addition read as follows:


Sec.  702.271   Discrimination against employees who bring proceedings; 
prohibition.

    (a) No employer or its duly authorized agent may discharge or in 
any manner discriminate against an employee as to his or her employment 
because that employee:
    (1) Has claimed or attempted to claim compensation under the Act; 
or
    (2) Has testified or is about to testify in a proceeding under the 
Act.
    (b) To discharge or refuse to employ a person who has been 
adjudicated to have filed a fraudulent claim for compensation or 
otherwise made a false statement or misrepresentation under section 
31(a)(1) of the Act, 33 U.S.C. 931(a)(1), is not a violation of 
paragraph (a) of this section.
* * * * *

0
12. Revise Sec.  702.273 to read as follows:


Sec.  702.273  Penalty for discrimination.

    Any employer who violates Sec.  702.271(a) will be subject to a 
civil penalty of not less than $2,444 or more than $12,219 when 
assessed after January 15, 2020 to be paid by the employer alone (and 
not by a carrier). The district director has the authority and 
responsibility for assessing this penalty using the procedures set 
forth at subpart I of this part. Any penalty assessed by the district 
director prior to a hearing on the discrimination complaint will be 
stayed pending final resolution of the complaint by the Administrative 
Law Judge or higher tribunal.

0
13. In part 702, add subpart I to read as follows:
Subpart I--Procedures for Civil Money Penalties
Sec.
702.901 Scope of this part.
702.902 Definitions.
702.903 Notice of penalty; response; consequences of no response.
702.904 Decision on penalty after timely response; request for 
hearing.
702.905 Referral to the Office of Administrative Law Judges.
702.906 Decision and order of Administrative Law Judge.
702.907 [Reserved]
702.908 Review by the Secretary.
702.909 Discretionary review.
702.910 Final decision of the Secretary.
702.911 Settlement of penalty.
702.912 Collection and recovery of penalty.

Subpart I--Procedures for Civil Money Penalties


Sec.  702.901   Scope of this part.

    (a) These procedures apply when the district director imposes the 
civil money penalties prescribed by Sec.  702.204, Sec.  702.236, or 
Sec.  702.273.
    (b) The district director will deposit all penalties collected into 
the special fund described in section 44 of the Act, 33 U.S.C. 944.


Sec.  702.902   Definitions.

    In addition to the definitions provided in Sec. Sec.  701.301 and 
701.302, the following definition applies to this subpart:
    Respondent means the employer, insurance carrier, or self-insured 
employer against whom the district director is seeking to assess a 
civil penalty.


Sec.  702.903   Notice of penalty; response; consequences of no 
response.

    (a) The district director will serve a written notice through an 
electronic method authorized by OWCP or by trackable delivery method on 
each respondent against whom he or she is considering assessing a 
penalty. Where service is not accepted by a respondent, the notice will 
be deemed received by the respondent on the attempted date of delivery.
    (b) The notice must set forth the--
    (1) Facts giving rise to the penalty;
    (2) Statutory and regulatory basis for the penalty;
    (3) Amount of the proposed penalty, including an explanation for 
the amount set;
    (4) Consequences of not submitting all documentation to the 
district director as set forth in paragraph (d) of this section; and
    (5) Consequences of failing to timely respond to the notice as set 
forth in paragraph (e) of this section.
    (c) The respondent must respond within 30 days of receipt of the 
notice. The response may include--
    (1) Documentation regarding any facts relevant to the reason for 
the penalty; and
    (2) Documentation supporting a request for mitigation of the 
penalty amount under Section 223 of the Small Business Regulatory 
Enforcement Fairness Act, 5 U.S.C. 601 (note), if the penalty arises 
under Sec.  702.236.
    (d) Documentation not presented to the district director may not be 
admitted in any further proceedings before an Administrative Law Judge 
or other tribunal unless the respondent demonstrates exceptional 
circumstances prevented submission to the district director.
    (e) If the respondent does not respond within 30 days of receipt of 
the notice, the assessment and amount of the penalty set forth in the 
notice will be deemed final, and collection and recovery of the penalty 
may be instituted under Sec.  702.911.


Sec.  702.904   Decision on penalty after timely response; request for 
hearing.

    (a) If the respondent files a timely response to the notice 
described in Sec.  702.903, the district director will review the facts 
and any argument presented and issue a decision on the penalty. The 
decision must--
    (1) Include a statement of the reasons for the assessment and the 
amount of the penalty;
    (2) Set forth the respondent's right to request a hearing on the 
district director's decision and the method for doing so; and
    (3) Set forth the consequences of failing to timely respond to the 
decision as set forth in paragraph (d) of this section.
    (b) The respondent has 15 days from receipt of the decision to 
request a hearing before an Administrative Law Judge by filing a 
request for hearing with the district director. The request must--
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) State the specific determinations in the district director's 
decision with which the respondent disagrees;
    (4) Be signed by the respondent making the request or by the 
respondent's authorized representative;
    (5) State both the physical mailing address and electronic mailing 
address

[[Page 80615]]

for the respondent and the authorized representative for receipt of 
further communications.
    (c) A timely hearing request will operate to stay collection of the 
penalty until final resolution of the penalty is reached by the 
Administrative Law Judge or the Secretary, as appropriate.
    (d) If the respondent does not request a hearing within 15 days of 
receipt of the notice, the assessment and amount of the penalty set 
forth in the district director's decision will be deemed final, and 
collection and recovery of the penalty may be instituted under Sec.  
702.912.


Sec.  702.905   Referral to the Office of Administrative Law Judges.

    (a) When the district director receives a request for hearing in 
response to a decision issued under Sec.  702.904, the district 
director will immediately notify the Chief Administrative Law Judge, 
who will assign an Administrative Law Judge to the case. The district 
director will also forward to the Office of Administrative Law Judges 
the following documentation, which will be considered the 
administrative record:
    (1) The district director's notice and decision issued under 
Sec. Sec.  702.903 and 702.904;
    (2) The documentation upon which the district director relied in 
making his or her decision;
    (3) All written responses and documentation filed by the respondent 
with the district director;
    (4) A statement of the issues referred by the district director for 
hearing.
    (b) Except as otherwise provided in this subpart, the Rules of 
Practice and Procedure for Administrative Hearings Before the Office of 
Administrative Law Judges at 29 CFR part 18 will apply to hearings 
under this subpart.


Sec.  702.906   Decision and order of Administrative Law Judge.

    (a) The Administrative Law Judge must consider only those issues 
referred by the district director for hearing.
    (b) On issues properly before him or her, the Administrative Law 
Judge must limit his or her determinations to:
    (1) Whether the respondent has violated the sections of the Act and 
regulations under which the penalty was assessed;
    (2) The correctness of the penalty assessed by the district 
director as set forth in Sec. Sec.  702.204, 702.236, 702.271, and 
702.903(c)(2).
    (c) The decision of the Administrative Law Judge must include a 
statement of findings and conclusions, with reasons and bases therefor, 
upon each material issue referred.
    (d) On the date of issuance, the Administrative Law Judge must 
serve a copy of the decision and order on the district director and the 
respondent by a trackable delivery method.
    (e) Any party may ask the Administrative Law Judge to reconsider 
his or her decision by filing a motion within 30 days of the date of 
issuance of the decision. A timely motion for reconsideration will 
suspend the running of the time for any party to file a petition for 
review under Sec.  702.908.
    (f) If no party files a motion for reconsideration or petition for 
review within 30 days of the issuance of the Administrative Law Judge's 
decision, the decision will be deemed final, and collection and 
recovery of the penalty may be instituted under Sec.  702.912.
    (g) At the conclusion of all hearing proceedings, the 
Administrative Law Judge will forward the complete hearing record to 
the district director who referred the matter for hearing, who will 
retain custody of the record.


Sec.  702.907  [Reserved]


Sec.  702.908  Review by the Secretary.

    (a) Any party aggrieved by the decision of the Administrative Law 
Judge may petition the Secretary for review of the decision by filing a 
petition within 30 days of the date on which the decision was issued. 
Copies of the petition must be served on all parties and on the Chief 
Administrative Law Judge.
    (b) If any party files a timely motion for reconsideration under 
Sec.  702.906(e), any petition for review, whether filed prior to or 
subsequent to the filing of a timely motion for reconsideration, will 
be dismissed without prejudice as premature. The 30-day time limit for 
filing a petition for review by any party will begin upon issuance of a 
decision on reconsideration.
    (c) The petition for review must--
    (1) Be dated;
    (2) Be typewritten or legibly written;
    (3) State the specific determinations in the Administrative Law 
Judge's decision with which the party disagrees;
    (4) Be signed by the party or the party's authorized 
representative; and
    (5) Attach copies of the Administrative Law Judge's decision and 
any other documents admitted into the record by the Administrative Law 
Judge that would assist the Secretary in determining whether review is 
warranted.
    (d) All documents submitted to the Secretary, including a petition 
for review, must be filed with the Secretary of Labor, U.S. Department 
of Labor, 200 Constitution Ave. NW, Washington, DC 20210 or alternative 
method required by the Secretary. Documents are not considered filed 
with the Secretary until actually received.


Sec.  702.909   Discretionary review.

    (a) Following receipt of a timely petition for review, the 
Secretary will determine whether the Administrative Law Judge's 
decision warrants review. This determination is solely within the 
Secretary's discretion.
    (1) If the Secretary does not notify the parties within 30 days of 
the petition for review's filing that he or she will review the 
decision, the Administrative Law Judge's decision will be considered 
the final decision of the agency at the expiration of that 30 days.
    (2) If the Secretary decides to review the decision, the Secretary 
will notify the parties within 30 days of the petition for review's 
filing of the issue or issues to be reviewed and set a schedule for the 
parties to submit written argument in whatever form the Secretary deems 
appropriate.
    (b) If the Secretary decides to review the decision, the district 
director must forward the administrative record compiled before the 
Administrative Law Judge to the Secretary.


Sec.  702.910   Final decision of the Secretary.

    The Secretary's review will be based upon the hearing record. The 
findings of fact in the decision under review shall be conclusive if 
supported by substantial evidence in the record as a whole. The 
Secretary's review of conclusions of law will be de novo. Upon review 
of the decision, the Secretary may affirm, reverse, modify, or vacate 
the decision, and may remand the case to the Office of Administrative 
Law Judges for further proceedings. The Secretary's final decision must 
be served upon all parties and the Chief Administrative Law Judge.


Sec.  702.911   Settlement of penalty.

    At any time during proceedings under this subpart, the district 
director and the respondent may enter into a settlement of the penalty.


Sec.  702.912  Collection and recovery of penalty.

    (a) When the determination of the amount of the penalty becomes 
final (see Sec. Sec.  903(e), 904(d), 906(f), 909(a)(1), 910), the 
penalty is immediately due and payable to the U.S. Department of Labor 
on behalf of the special fund described in section 44 of the Act, 33 
U.S.C. 944. The respondent will promptly remit the final penalty 
imposed to the Secretary of Labor.
    (b) If such remittance is not received within 30 days after it 
becomes due and

[[Page 80616]]

payable, it may be recovered in a civil action brought by the Secretary 
in any court of competent jurisdiction, in which litigation the 
Secretary shall be represented by the Solicitor of Labor.

Julia K. Hearthway,
Director, Office of Workers' Compensation Programs.
[FR Doc. 2020-23223 Filed 12-11-20; 8:45 am]
BILLING CODE 4510-CR-P