Overseas Subcontractors And The Defense Base Act
For Overseas Subcontractors, The Defense Base Act (DBA) is a very important part of the Workers Compensation system. The Defense Base Act provides compensation for disability or death to persons employed at the military, air, and naval bases outside the United States.
The Act was passed in 1941. The DBA is very short compared to much of the Federal Laws, Rules, and Regulations. I had always assumed the DBA also covered any subcontractor employees. That was not correct. Then again, I am not a DBA expert.
Part 1(c) of the DBA covers subcontracted employees. A memo in 2003 – Explaining the Defense Base Act DBA – explains this in detail.
Coverage under the Defense Base Act
The Defense Base Act covers the following employment activities:
- Working for private employers on U.S. military bases or on any lands used by the U.S. for military purposes
outside of the United States, including those in U.S. Territories and possessions;
- Working on public work contracts with any U.S. government agency, including construction and service contracts in connection with national defense or with war activities outside the United States;
- Working on contracts approved and funded by the U.S. under the Foreign Assistance Act, generally providing for cash sale of military equipment, materials, and services to its allies, if the contract is performed outside of the United States;
- Working for American employers providing welfare or similar services outside of the United States for the benefit of the Armed Forces, e.g. the USO.
If any one of the above criteria is met, all employees engaged in such employment, regardless of nationality, are covered under the Act.
The 2003 Memo points out the requirement of the subcontractors to cover their employees with WC. Section 4(a) of the Act requires every employer to be liable for, and to secure the payment of, disability, medical, and death benefits to its employees in the event of injury or death. If a subcontractor fails to secure the payment of compensation, the contractor will be liable for and be required to secure the payment of such benefits.
The memo then covers a very important point with non-covered employees that are injured while working for the subcontractor.
The injured employee may elect to sue the employer for tort damages on account of such injury or death.
An unusual clause in the DBA is the uninsured defendant may not plead as a defense that the injury was caused by the negligence of a fellow servant, or that the employee assumed the risk of his employment, or that the injury was due to the contributory negligence of the employee.
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