28.305 Overseas workers’ compensation and war-hazard insurance
Source: FAR 28.305 on acquisition.gov
Contractors performing overseas public-work contracts must secure appropriate workers’ compensation and war-hazard insurance, or provide alternative coverage if the Defense Base Act is waived.
Overview
FAR 28.305 addresses the requirements for overseas workers’ compensation and war-hazard insurance for employees working outside the United States under certain government contracts. It defines what constitutes a "public-work contract" and explains the application of the Defense Base Act (DBA), which extends the Longshoremen’s and Harbor Workers’ Compensation Act to employees engaged in public-work contracts or contracts financed under the Foreign Assistance Act (with some exceptions). The section also covers the extension of war-hazard protection through the War Hazards Compensation Act and outlines procedures for waivers and contractor obligations if the DBA is waived.
Key Rules
- Definition of Public-Work Contract
- Includes construction, alteration, repair, and related activities for U.S. or allied public use, both fixed and non-fixed projects.
- Application of the Defense Base Act (DBA)
- DBA applies to employees working overseas on public-work contracts or certain Foreign Assistance Act contracts, except for those financed by the Development Loan Fund or exclusively for materials/supplies.
- War-Hazard Insurance Coverage
- When DBA applies, employees are automatically covered for war hazards through the War Hazards Compensation Act if the contractor provides required workers’ compensation insurance.
- Waiver Provisions
- The Secretary of Labor may waive DBA coverage upon agency head recommendation, affecting both DBA and war-hazard coverage.
- Contractor Obligations if DBA is Waived
- Contractors must provide alternative workers’ compensation and assume liability for war-hazard risks, with costs allowable under the contract.
Responsibilities
- Contracting Officers: Ensure contracts include appropriate insurance requirements and address waivers as needed.
- Contractors: Obtain required insurance or provide alternative coverage if DBA is waived; assume liability for war-hazard risks when applicable.
- Agencies: May recommend DBA waivers and must ensure compliance with insurance provisions.
Practical Implications
- Ensures overseas employees are protected against work-related and war-hazard risks.
- Contractors must carefully assess insurance obligations and costs, especially if waivers are involved.
- Failure to comply can result in significant liability and contract noncompliance.
(a) "Public-work contract," as used in this subpart, means any contract for a fixed improvement or for any other project, fixed or not, for the public use of the United States or its allies, involving construction, alteration, removal, or repair, including projects or operations under service contracts and projects in connection with the national defense or with war activities, dredging, harbor improvements, dams, roadways, and housing, as well as preparatory and ancillary work in connection therewith at the site or on the project.
(b) The Defense Base Act (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1651&num=0&edition=prelim" target="_blank">42 U.S.C.1651, etseq.) extends the Longshoremen’s and Harbor Workers’ Compensation Act (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title33-section901&num=0&edition=prelim" target="_blank">33 U.S.C. 901) to various classes of employees working outside the United States, including those engaged in performing-
(1) Public-work contracts; or
(2) Contracts approved or financed under the Foreign Assistance Act of1961 (Pub.L.87-195) other than-
(i) Contracts approved or financed by the Development Loan Fund (unless the Secretary of Labor, acting upon the recommendation of a department or agency, determines that such contracts should be covered); or
(ii) Contracts exclusively for materials or supplies.
(c) When the Defense Base Act applies (see http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1651&num=0&edition=prelim" target="_blank">42 U.S.C.1651, etseq.) to these employees, the benefits of the Longshoremen’s and Harbor Workers’ Compensation Act are extended through operation of the War Hazards Compensation Act (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1701&num=0&edition=prelim" target="_blank">42 U.S.C.1701, etseq.) to protect the employees against the risk of war hazards (injury, death, capture, or detention). When, by means of an insurance policy or a self-insurance program, the contractor provides the workers’ compensation coverage required by the Defense Base Act, the contractor’s employees automatically receive war-hazard risk protection.
(d) When the agency head recommends a waiver to the Secretary of Labor, the Secretary may waive the applicability of the Defense Base Act to any contract, subcontract, work location, or classification of employees.
(e) If the Defense Base Act is waived for some or all of the contractor’s employees, the benefits of the War Hazards Compensation Act are automatically waived with respect to those employees for whom the Defense Base Act is waived. For those employees, the contractor shall provide workers’ compensation coverage against the risk of work injury or death and assume liability toward the employees and their beneficiaries for war-hazard injury, death, capture, or detention. The contract shall provide either that the costs of this liability or the reasonable costs of insurance against this liability shall be allowed as a cost under the contract.