Proposed Changes to Longshore Act will Affect Defenses.

A bill to change the Longshore and Harbor Workers’ Compensation Act (LHWCA) was recently referred to the Senate Committee on Health, Education, Labor and Pensions. (Track it!:  S. 669)  This bill is in the first step in the legislative process. Introduced bills and resolutions first go to committees that deliberate, investigate, and revise them before they go to general debate.
 
What is on the table?
There is a lot to like in the proposed bill for those of us defending Longshore Act claims:
 
LIKE IT:  A proposed amendment to the act (adding a new section, “901A”) stating “in a claim brought under this Act, the facts are not to be given a broad liberal construction in favor of the employee or of the employer, and the laws pertaining to a claim brought under this Act are to be construed in accordance with the basic principles of statutory construction and not liberally in favor of either the employee or employer.”  In other words: the “liberality and generosity” usually afforded to the claimant by the “remedial” legislation is not to be taken by the Courts as an excuse to make every inference in favor of the claimant.
 
LOVE IT:  Extensive revisions to Section 7 (33 U.S.C. 907 et seq.) allowing a carrier to “designate 1 or more participating networks or 1 or more health care panels, or both, for purposes of providing medical services to employees under this Act. An injured employee served by a carrier that has designated an approved participating network under subparagraph (C) or a health care panel under subparagraph (D) shall not be entitled to recover any amount expended by the employee for medical services and supplies unless the employee has secured such medical services and supplies through a physician or other health care provider that is a participant in such network or panel, respectively.”  In other words, medical cost control with the employer/carrier picking the doctors and medical facilities.  Hooray!
 
GOOD:  The revised law would provide a real defense to intoxication by removing the word  “solely” from the sentence, “No compensation shall be payable if the injury was occasioned solely by the intoxication of the employee or by the willful intention of the employee to injure or kill himself or another”. Section 903(c).  Proving a legally drunk claimant’s injury is “solely” due to his intoxication, in light of other possible factors (fatigue, etc.) makes the current defense illusory.  The proposed changes also add a later section ( 920(a)(3)) Section 920(a)(3) which allows that the the nonintoxication presumption of Section 920(a)(1)(c) can be rebutted, by a refusal of a drug or alcohol test by the employee, by the employee testing positive for illegal drugs, or by  the employee having a blood alcohol concentration level above the permitted driving limit.
 
OK:  The employer no longer has to show “irreparable harm” in order to obtain a stay of an order under appeal.  Section 921 would read “Disputed amounts required by an award shall be stayed.”
 
FINALLY:  A proposed change to the way penalties are assessed: The 20% penalty provision of Section 914(f) is changed by striking “within ten days after it becomes due” and inserting instead “within 10 business days after receipt by the employer or carrier of a priority mailing containing the order.”  
 
So far, so good.  But the proposed bill is not all roses. 
 
HATE IT: Ending the Second Injury relief of 908(f) except for modifications of existing 8(f) cases.
 
WHAT THE . . .?: The proposed law would raise the compensation rate to 75% of “spendable earnings” rather than 66.% of average weekly wage.  This introduces a new concept:  “spendable earnings.”  Currently, only six states base workers’ compensation benefits on “spendable earnings” (Rhode Island, Alaska, Connecticut, Iowa, Maine, and Michigan).    The proposed changes calculate “spendable earnings” as follows: first, divide the actual earnings of the employee for the provisos 52 weeks by 52, then subtract “the Federal, State, and local taxes that would have been withheld based on standard deductions and on the domicile of the employee at the time of the injury, and reduced by subtracting the tax that would have been withheld under section 3101 of the Internal Revenue Code of 1986.”  The proposed changes require that a new table be drafted to assist in this calculation.  (Proposed change to Section 10).  Clearly unnecessary and burdensome.
 
What’s next?  We will continue to monitor the progress of this proposed bill and let you know if it makes it out of committee! 

Full text of proposed changes: Link.

Greg Lois is the managing partner of LOIS LLC, a 19-attorney law firm dedicated to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@lois-llc.com