52.228-4
Workers’ Compensation and War-Hazard Insurance Overseas
Contractors performing overseas work with DBA or WHCA waivers must still provide equivalent workers’ compensation and war-hazard insurance for affected employees and ensure subcontractors do the same.
Overview
FAR 52.228-4 requires contractors performing overseas work to provide workers’ compensation and war-hazard insurance coverage for employees who would otherwise be covered by the Defense Base Act (DBA) or War Hazards Compensation Act (WHCA), but for whom a waiver has been granted by the Secretary of Labor. The clause ensures that such employees still receive appropriate insurance protection, either as required by their home country’s laws or as specified by international agreements, even when U.S. statutory coverage is waived. Contractors must also flow down these requirements to applicable subcontractors.
Key Rules
- Workers’ Compensation Insurance Requirement
- Contractors must provide workers’ compensation insurance (or equivalent) for employees overseas who are exempt from the DBA due to a waiver, in accordance with the laws of their home country, before starting contract performance and maintain it throughout the contract.
- War-Hazard Insurance Requirement
- Contractors must provide war-hazard insurance protection for employees exempt from the WHCA due to a waiver, ensuring benefits align with controlling laws or agreements, and must apply WHCA standards for coverage, proof, and exclusions.
- Subcontractor Flowdown
- Contractors must include similar insurance requirements in all subcontracts where the DBA or WHCA would apply but for the waiver, unless the contractor assumes direct liability for subcontractor employees.
Responsibilities
- Contracting Officers: Ensure inclusion of this clause in applicable overseas contracts and verify compliance.
- Contractors: Obtain and maintain required insurance for covered employees and ensure subcontractors comply.
- Agencies: Oversee contractor compliance and address any issues related to waivers or insurance adequacy.
Practical Implications
- This clause protects overseas employees from gaps in insurance coverage due to statutory waivers, reducing risk for both employees and the government.
- Contractors must be diligent in understanding waiver status, local legal requirements, and ensuring proper flowdown to subcontractors.
- Common pitfalls include failing to secure proper insurance before performance or neglecting to include required clauses in subcontracts.