ESA Proposed Rule

Office of Workers' Compensation Programs; Longshore Act Civil Money Penalties Adjustment [07/02/1997]

Volume 62, Number 127, Page 35715-35716

[DOCID:fr02jy97-30]

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DEPARTMENT OF LABOR

Employment Standards Administration

20 CFR Part 702

RIN 1215-AB17

 
Office of Workers' Compensation Programs; Longshore Act Civil 
Money Penalties Adjustment

AGENCY: Employment Standards Administration, Labor.

ACTION: Proposed rule.

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SUMMARY: The Department of Labor is proposing to revise certain 
provisions of the regulations implementing the Longshore and Harbor 
Workers' Compensation Act (LHWCA). More specifically, the regulatory 
changes will increase the maximum civil penalties that can be assessed 
under the LHWCA as required by the Federal Civil Monetary Penalties 
Inflation Adjustment Act of 1990 (FCPIAA) (Pub. L. 101-410, 104 Stat. 
890), as amended by the Debt Collection Improvement Act of 1996 (DCIA) 
(Pub. L. 104-134, 110 Stat. 1321-1373).

DATES: Written comments must be submitted on or before August 1, 1997.

ADDRESSES: Send written comments to Joseph F. Olimpio, Director for 
Longshore and Harbor Workers' Compensation, Employment Standards 
Administration, U.S. Department of Labor, Room C-4315, 200 Constitution 
Avenue, NW., Washington, DC 20210-0002. Tel. (202) 219-8721.

FOR FURTHER INFORMATION CONTACT: Joseph F. Olimpio at the address and 
telephone number listed above.

SUPPLEMENTARY INFORMATION: The DCIA, amending the Federal Civil 
Monetary Penalties Inflation Adjustment Act of 1990 (FCPIAA) (Pub. L. 
104-410, 104 Stat. 890), requires each agency to issue regulations 
adjusting the civil money penalties that they are authorized to levy. 
The DCIA requires that the civil money penalty covered by the DCIA 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 
consumers (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. The increase is then mathematically 
rounded pursuant to section 5 of the FCPIAA to arrive at the final 
adjusted figure, which may not, for the first adjustment under the 
FCPIAA as amended, exceed 10% of the current statutory civil penalty 
amount.
    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 he 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).
    Due to inflation since the civil money penalties in the LHWCA 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 proposed regulations 
become effective.

Executive Order 12866

    The Department has determined that this regulatory action is not a 
``significant'' rule within the meaning of Executive Order 12866 
concerning federal regulations, 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

[[Page 35716]]

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 
obligation 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 
proposed regulation 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 procedures 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, it will be noted that 
during the period 1995 through 1996, an average of $25,000.00 in civil 
penalties was collected each year in 206 cases. Under the amended rule, 
the total additional amount collected would not exceed $2,500.00. As a 
result, the Assistant Secretary hereby certifies that the rule, if 
adopted as proposed, 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 1995, as well 
as E.O. 12875, this rule does not include any federal mandate that may 
result in increased expenditures by State, local and tribal 
governments, or increased expenditures by the private sector of more 
than $100 million.

Paperwork Reduction Act

    The proposed rule does not contain any collection of information 
requirements.

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, it is proposed that part 
702 of chapter VI of title 20, Code of Federal Regulations, be 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. 939, 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 for each such failure, refusal, false statement, 
or misrepresentation. Provided, however, that for any violation 
occurring on or after (insert effective date of revised regulations), 
the maximum civil penalty may not exceed $11,000.00. The district 
director shall have 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. Provided, however, 
that for any violation occurring on or after (insert effective date of 
revised regulations) the civil penalty will be $110.00. The district 
director shall have 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) 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: has claimed or attempted to claim compensation 
under this Act; or 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. Any employer who violates this section shall be liable to a 
penalty of not less than $1,000 or more than $5,000 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 that 
employee has ceased to be qualified to perform the duties of the 
employment. Provided, however, that for any violation occurring on or 
after (insert the effective date of the regulations) the employer shall 
be liable to a penalty of not less than $1,100.00 or more than 
$5,500.00.
* * * * *
    Signed at Washington, DC, this 25th day of June, 1997.
Bernard E. Anderson,
Assistant Secretary for Employment Standards.

Shelby Hallmark,
Acting Director, Office of Workers' Compensation Programs.
[FR Doc. 97-17351 Filed 7-1-97; 8:45 am]
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