Longshore and Harbor Workers' Compensation Act Explained

Julia Kagan is a financial and consumer journalist and former senior editor for personal finance at Investopedia.

Definition The Longshore and Harbor Workers' Compensation Act (LHWCA) is a federal statute that provides medical care and other essential benefits to specific maritime workers.

What is the Longshore and Harbor Workers' Compensation Act?

The Longshore and Harbor Workers' Compensation Act (LHWCA) is a federal law designed to offer medical benefits and vocational rehabilitation to certain maritime workers. This legislation covers longshoremen, harbor workers, and various other maritime personnel. It also includes workers involved in loading and unloading ships, truck drivers transporting shipping containers from docks, and civilian employees on military bases under the Defense Base Act.

Understanding the Longshore and Harbor Workers' Compensation Act

The LHWCA provides compensation to injured workers suffering from temporary or permanent, partial or total disabilities. Benefits include partial wage replacement, coverage for all reasonable and necessary medical treatments, and reimbursement for travel expenses incurred during medical care. Additionally, if a worker is unable to return to maritime employment post-injury, the act offers free job retraining programs. The LHWCA also extends benefits to surviving spouses of workers who died due to work-related injuries.

Enacted in 1927, the LHWCA was created because state laws often failed to grant workers' compensation to injured maritime workers. Despite the act, many maritime workers continued to sue shipowners for injuries, prompting shipowners to require indemnity agreements from their employees. Amendments in 1972 and 1984 refined eligibility criteria to ensure benefits are appropriately allocated according to the risk level associated with workers' jobs.

Key Takeaways

• The LHWCA provides medical care and benefits like vocational rehabilitation to longshoremen, harbor workers, and other maritime employees.
• Eligibility for LHWCA benefits requires passing both status and situs tests.
• Originally passed in 1927, the act has been amended twice to clarify and adjust coverage.
• Workers ineligible for LHWCA benefits may still qualify for state workers' compensation programs.

LHWCA Eligibility and Limitations

To qualify for LHWCA benefits after a workplace injury, maritime workers must satisfy status and situs tests. Those who do not meet these requirements might still access state workers' compensation, though these benefits are typically less generous. For instance, while state programs often cover 60% of an employee's weekly wage during temporary disability, the LHWCA offers two-thirds of the weekly wage. Some states permit filing claims under both programs simultaneously, but recipients must choose one benefit.

The status test mandates that the injured worker's duties involve maritime activities. The situs test requires that the employee works on or near navigable waters, including locations used for loading, unloading, constructing, repairing, or dismantling maritime vessels—even if these areas are up to a mile from the water's edge.

The LHWCA differs from the Jones Act; the former excludes "master or member of the crew" of any vessel, whereas the Jones Act specifically covers seamen.

The LHWCA excludes employees not exposed to elevated injury risks, such as office staff, as well as certain marina workers, recreational watercraft operators, aquaculture workers, and vessel captains and crews. It also does not cover workers employed at seaside clubs, camps, restaurants, museums, or retail establishments.

Employers seeking LHWCA workers' compensation insurance can obtain coverage from private insurers or, if denied, through state funds or assigned risk pools. Alternatively, employers may opt for self-insurance plans approved by the U.S. Department of Labor (DOL).

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