[Federal Register Volume 62, Number 201 (Friday, October 17, 1997)]
[Rules and Regulations]
[Pages 53955-53957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27593]


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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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