Longshore Act Civil Money Penalties Adjustment

DEPARTMENT OF LABOR

Employment Standards Administration

20 CFR Part 702

RIN 1215-AB17

Longshore Act Civil Money Penalties Adjustment

AGENCY: Office of Workers' Compensation Program, Employment Standards

Administration, Labor.

ACTION: Final rule.

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SUMMARY: On July 2, 1997, the Department of Labor published a proposal

to amend various provisions of the regulations implementing the

Longshore and Harbor Workers' Compensation Act (LHWCA). More

specifically, the amendments, which are now being published in final

with only minor word changes in Secs. 702.204 and 702.236, will

increase the maximum civil penalties that may be assessed under the

LHWCA as required by the Federal Civil Penalties Inflation Adjustment

Act of 1990 (FCPIAA), as amended by the Debt Collection Improvement Act

of 1996 (DCIA).

EFFECTIVE DATE: The rule is effective on November 17, 1997.

FOR FURTHER INFORMATION CONTACT:

Joseph F. Olimpio, Director for Longshore and Harbor Workers'

Compensation, Employment Standards Administration, Room C-4315, Frances

Perkins Building, 200 Constitution Avenue, NW., Washington, DC 20210;

Telephone (202) 219-8721.

SUPPLEMENTARY INFORMATION: The LHWCA authorizes the assessment of a

civil money penalty in three situations: (1) Where an employer fails to

file a report within sixteen days of the final payment of compensation,

it shall be assessed a $100.00 civil penalty (LHWCA, section 14(g));

(2) where an employer, insurance carrier, or self-insured employer

knowingly and willfully fails to file any report required by section

30, or knowingly or willfully makes a false statement or

misrepresentation in any required report, the employer, insurance

carrier, or self-insured employer shall be assessed a civil penalty not

to exceed $10,000.00 (LHWCA, section 30(e)); and (3) where an employer

is found to have discriminated against an employee because the employee

had claimed or attempted to claim compensation, or has testified or is

about to testify in proceedings under the LHWCA, the employer shall be

liable for a civil penalty of not less than $1,000.00 or more than

$5,000.00 (LHWCA, section 49). The DCIA, amending the FCPIAA, requires

each agency to issue regulations adjusting the amount of civil money

penalties they may levy. The DCIA requires that the civil money

penalties be adjusted by a cost-of-living increase equal to the

percentage, if any, by which the Department of Labor's Consumer Price

Index for all-urban customers (CPI) for June of the calendar year

preceding the adjustment exceeds the June CPI for the calendar year in

which the civil penalty amount was last set or adjusted. Due to

inflation since the LHWCA civil money penalties were last set or

adjusted, the increase will, in every case, be the maximum 10%

initially permitted under the DCIA. The adjusted civil penalties will

apply only to violations occurring after the regulations become

effective.

The Department did not receive any comments concerning the

substance of its proposal. It did, however, receive a letter from the

Chief Counsel of the Office of Advocacy at the Small Business

Administration requesting clarification on whether the expected

increase in the amount to be collected under the revised regulations is

$2,500.00 in the aggregate, or $2,500.00 per case. Under the revised

rules, the Department expects to collect an additional $2,500.00 for

all cases in

[[Page 53956]]

which civil money penalties are assessed. This estimate is based on an

analysis of the penalties collected in 1995 and 1996. During that

period the total civil penalties collected for all cases was

$50,000.00, or an average of $25,000.00 for each year. Each year

penalties were collected from an average of 206 cases, so that the

average penalty in each case was $121.36. Thus, assuming the maximum 10

percent increase is collected in each case under the final rule, the

average increase for each individual case is estimated to be $12.14.

Executive Order 12866

The Department has determined that this regulatory action is not a

``significant'' rule within the meaning of Executive Order 12866,

because it is not likely to result in: (1) An annual effect on the

economy of $100 million or more, or an adverse and material effect on a

sector of the economy, productivity, competition, jobs, the

environment, public health or safety, or State, local or tribal

governments or communities; (2) the creation of a serious inconsistency

or interference with an action taken or planned by another agency; (3)

a material alteration in the budgetary impacts of entitlement, grants,

user fees, or loan programs or the rights and obligations of recipients

thereof; or (4) the raising of novel legal or policy issues arising out

of legal mandates, the President's priorities, or the principles set

forth in Executive Order 12866.

Regulatory Flexibility Act

The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires each

agency to perform an initial regulatory flexibility analysis for all

proposed rules unless the head of the agency certifies that the rule

will not, if promulgated, have a significant economic impact on a

substantial number of small entities. Small entities include small

businesses, organizations, and governmental jurisdictions. This rule

does no more than mechanically increase certain statutory civil money

penalties to account for inflation, pursuant to specific directions set

forth in the FCPIAA, as amended. The statute specifies the procedure

for calculating the adjusted civil money penalties and does not allow

the Department to vary the calculation to minimize the effect on small

entities. Moreover, as noted above, the total additional amount

collected from all projected cases will not exceed $2,500.00.

Therefore, the Assistant Secretary hereby certifies that the rule will

not have a significant impact on a substantial number of small entities

within the meaning of the Regulatory Flexibility Act.

Unfunded Mandates Reform Act

For purposes of the Unfunded Mandates Reform Act of 1985, as well

as E.O. 12875, this rules does not include any federal mandate that may

result in increased expenditures by State, local or tribal government,

or increased expenditures by the private sector of more than $100

million.

Paperwork Reduction Act

The rule does not contain any collection of information

requirements.

Submission to Congress and the General Accounting Office

In accordance with the Small Business Regulatory Enforcement Act of

1996, the Department will submit to each House of the Congress and to

the Comptroller General a report regarding the issuance of today's

final rule prior to the effective date set forth at the outset of this

notice. The report will note that this rule does not constitute a

``major rule'' as defined by 5 U.S.C. 804(2).

List of Subjects in 20 CFR Part 702

Administrative practice and procedure, Claims, Insurance,

Longshoremen, Vocational rehabilitation, and Workers' Compensation.

For the reasons set forth in the preamble, part 702 of chapter VI

of title 20, Code of Federal Regulations, is amended as follows:

PART 702--ADMINISTRATION AND PROCEDURE

1. The authority citation for part 702 is revised to read as

follows:

Authority: 5 U.S.C. 301, 8171 et seq., Reorganization Plan No. 6

of 1950, 15 FR 3174, 3 CFR 1949-1953, Comp., p. 1004, 64 Stat. 1263;

28 U.S.C. 2461, 33 U.S.C. 930, 36 D.C. Code 501 et seq., 42 U.S.C.

1651 et seq., 43 U.S.C. 1331; Secretary's Order 5-96, 62 FR 107.

2. Section 702.204 is revised to read as follows:

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

falsifying.

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 $10,000.00 for each such failure, refusal, false

statement, or misrepresentation. Provided, however, that for any

violations occurring on or after November 17, 1997 the maximum civil

penalty may not exceed $11,000.00. The district director has the

authority and responsibility for assessing a civil penalty under this

section.

3. Section 702.236 is revised 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 $100.00. Provided,

however, that for any violation occurring on or after November 17, 1997

the civil penalty will be $110.00. The district director has the

authority and responsibility for assessing a civil penalty under this

section.

4. Paragraph (a) of Sec. 702.271 is revised to read as follows:

Sec. 702.271 Discrimination against employees who bring proceedings,

prohibition and penalty.

(a)(1) No employer or its duly authorized agent may discharge or in

any manner discriminate against an employee as to his/her employment

because that employee: (i) Has claimed or attempted to claim

compensation under this Act; or (ii) has testified or is about to

testify in a proceeding under this Act. 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 this section.

(2) Any employer who violates this section shall be liable to a

penalty of not less that $1,000.00 or more than $5,000.00 to be paid

(by the employer alone, and not by a carrier) to the district director

for deposit in the special fund described in section 44 of the Act, 33

U.S.C. 944; and shall restore the employee to his or her employment

along with all wages lost due to the discrimination unless the employee

has ceased to be qualified to perform the duties of employment.

Provided however, that for any violation occurring on or after November

17, 1997 the employer shall be liable to a penalty of not less than

$1,100.00 or more than $5,500.00.

* * * * *

[[Page 53957]]

Signed at Washington, D.C., this 14th day of October 1997.

Bernard E. Anderson,

Assistant Secretary for Employment Standards.

Shelby Hallmark,

Acting Director, Office of Workers' Compensation Programs.

[FR Doc. 97-27593 Filed 10-16-97; 8:45 am]

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