Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
Updated June 22, 2022 Fact checked by Fact checked by Diane CostagliolaDiane Costagliola is a researcher, librarian, instructor, and writer who has published articles on personal finance, home buying, and foreclosure.
The Longshore and Harbor Workers' Compensation Act (LHWCA) is a federal law that gives medical and other benefits, such as vocational rehabilitation, to certain maritime employees. The LHWCA covers longshoremen, harbor workers, and many other maritime employees. Other employees include those who load and unload ships, truck drivers who haul shipping containers away from the docks and also civilian employees on military bases as part of the Defense Base Act.
The compensation act pays benefits to injured workers who have temporary or permanent partial or total disabilities. The paid benefits cover a portion of lost wages, all reasonable and necessary medical treatments, and travel expenses associated with receiving those medical treatments. If a worker cannot return to maritime employment after an injury, the act also provides free job retraining. The LHWCA also covers surviving spouses of employees who died of work-related injuries.
Congress passed the Longshore and Harbor Workers' Compensation Act (LHWCA) in 1927 because courts were not awarding workers' compensation to injured maritime workers under state laws. Even with the LHWCA in place, many maritime workers were still suing ship owners for injuries. As a result, ship owners began to require their workers to hold them harmless in the event of an injury. The LHWCA was amended in 1972 and again in 1984 to specify eligibility requirements and prevent benefits being administered too broadly or too narrowly. The amendments guarantee protection in proportion to the level of risk that a worker's job entails.
If injured on the job, maritime workers must meet status and situs tests to qualify for LHWCA benefits. Workers not meeting the criteria may still be eligible for state workers' compensation benefits. However, the state benefits are usually less generous than LHWCA benefits. For example, state benefits provide for 60% of an employee's weekly wage as part of temporary disability benefits. The LHWCA provides for 2/3rd of the weekly wage for the same benefit. Some states allow workers to file for both types of claims concurrently. But the worker must choose only one type benefit, if he or she is eligible for both.
The LHWCA status test states that at least part of the injured worker’s duties must be related to maritime duties. The situs test asserts that the employee must work on, near, or next to navigable waters. Eligible locations include any area that is utilized for loading, unloading, building, repairing, or dismantling a maritime vehicle, even if this area is up to a mile away from the water’s edge.
The LHWCA is distinct from the Jones Act. The former covers maritime workers and does not include "master or member of the crew" for any vessel. On the other hand, the Jones Act was designed to cover seamen.
The LHWCA does not cover employees who are not at increased risk of injury, such as office workers. The act also does not cover specific marina employees, certain recreational water vehicle workers, aquaculture workers, or boat and ship captains and crew. Other workers not covered by the LHWCA include those working in seaside clubs, camps, restaurants, museums, and retail stores.
Employers who seek to secure workers compensation insurance under the LHWCA may purchase it from private insurers or, if denied, from state funds or assigned risk plans or pools. Alternatively, employers may choose to self-insure with a plan that has the approval of the US Department of Labor (DOL).