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The Defense Base Act requires US government contractors to provide workers’ compensation insurance for employees working overseas on projects important to national security. Failure to comply can result in fines and loss of contracts. The legislation was originally for longshoremen on military bases and has since expanded. Auditors can request insurance documents, and employees can file whistleblower complaints with evidence.
The Defense Base Act is a piece of legislation that requires employees who work for U.S. government contractors overseas to be covered by workers’ compensation insurance policies. Contractors who fail to show evidence of such policies to cover their employees can be fined and may lose their government contracts. This includes contractors to US military bases, as well as individuals contracted to overseas public works projects deemed important to US national security.
Originally passed in 1941, the Defense Base Act was initially developed to cover longshoremen and related workers on overseas military bases. If injured in the course of their work, they were not entitled to military treatment because they were not members of the armed forces and this was a cause for concern for union activists. Over time, the scope of the legislation has been broadened to cover increasing numbers of government contract workers and to address concerns about people involved in public works projects outside military bases.
Under the Defense Base Act, if a person works for a government contractor overseas, whether on or off a military base, conducting activities deemed important to national security, that person must be covered by adequate worker’s insurance. Policies created for workers in the United States often exclude overseas coverage and you may need to obtain a special policy. Defense work is also associated with high risks and as a result, ensuring that contract workers comply with the Defense Base Act is often very costly.
This labor legislation is designed to protect people in the event of accidents and other events that make their work difficult. The temporary indemnity can be paid to workers suspended from service due to an accident at work and the insurance also provides coverage for people who acquire permanent disability at work. Defense workers may also choose to explore life insurance policies and other death coverage options.
Auditors can request documents associated with workers’ compensation insurance policies to ensure that contractors comply with the Defense Base Act. Employees concerned about regulatory compliance can file whistleblower complaints with employment agencies, alerting them of a suspected violation of the employment law and requesting an investigation. Such employees must have documentation to substantiate their claims and are usually warned that using a reporting system to exercise personal grievances can result in penalties, as investigations are costly and difficult to administer when involving companies operating overseas in the defense sector.
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