administrative and financial problems to employers, especially to employers such as mine in the construction industry.

We suggest one method of eliminating some of these difficulties would be to legislatively prohibit the employees covered by the Longshoremen's and Harbor Workers' Act from recovering damages under the doctrine of unseaworthiness. This would leave open his right of action to recover in those cases where negligence can be shown, but would not require the owner of the vessel to give the construction worker a warrantee of seaworthiness

Now I would like to refer to some of the specific provisions of S. 2485.

In the absence of an amendment to preclude coverage of construction workers, or define it, there are several proposed modifications in S. 2485 to which we are opposed because they do not limit the employer's liability and they encourage claims of questionable value.

I am certain that you recognize the need of any employer to properly preevaluate all items of cost in order to determine the proper price for goods or services. This is particularly true in the construction industry where competitive bidding usually determines the contractor who will perform the construction work. For this reason, specific benefits under any compensation regulation must be outlined in sufficient detail to permit analysis for pricing as well as adequate insurance coverages and limits. There must also be protection from abuses and injustices against employers, as well as employees. Many of the amendments proposed by S. 2485 do not support these guidelines.

The provision of the bill increasing the maximum compensation limit from $70 to $105 per week is alarming to the construction industry. As previously mentioned, all construction workers are covered by State regulations. These State regulations and benefits vary throughout the United States and in some degree they reflect the variations in the cost of living throughout the country.

Only five States presently have weekly compensation rates at the $70 level. Nevertheless, this bill will increase the weekly benefit by 50 percent for all covered employees. To permit workers performing identical tasks, such disparaging different rates seem illogical. It would seem that if an increase is indicated, it should be at a more modest level and not at the 50-percent level proposed, or it should bear some relationship to the overall economy of the area where the worker is employed. Furthermore, the increase should apply to temporary rather than permanent disability, since the advent of permanent disability allows certain other benefits to accrue as a result of pension, welfare and social security contributions.

Another revision covered by section 3 of the bill removes the $24,000 limitation now payable for temporary, total or permanent partial disability. The removal of this limitation will encourage malingering and, coupled with the increased benefits proposed, it will encourage injured employees to remain nonproductive rather than seek employment in other locations or industries. This could be particularly true in construction work which is traditionally seasonal as well as transient. We strongly urge that a limitation be included, even if at a level higher than the current $24,000 limitation.

The proposed modification outlined in section 6 of the bill would frustrate the entire philosophy of established schedules of awards.

These schedules are determined with average benefits in mind and the employer costs are based upon such schedules. We feel that the proposal of section 6 should be deleted entirely.

We note that section 7 of the bill pertains to second injuries. Our experience in this regard is limited, since construction workers and projects do not involve long-term or permanent employment in identical areas. Our basic concern involves the liability we would be assumming to finance a special fund which ostensibly is to be administered solely by the Department of Labor.

The provision for pro-rated assessments to keep the fund solvent is unclear as to limitations on employers or their insurance carriers. No procedures are established for industry or its representatives to examine or dispute the so-called second injury payments from the fund. Financing a fund of this type involves cost factors which contractors could not anticipate in preparation of firm priced bids. Without firm cost factors, contingencies must be added either by contractors or their insurors, all of which unduly increases the cost of construction. The unknown cost of this special fund is only one of the nonspecific, contingent items contained in S. 2485.

Another of these potential high-cost items involves the changes in the notice provisions of the act. The construction industry prides itself on its prompt and effective care of injured workers. Whenever an injpury occurs, all supervisory and management employees on the job exert maximum effort to obtain quick and effective medical attention. An essential part of this entire program is prompt notification by the injured employee. Such prompt notification is not only necessary for proper treatment, but is also necessary to prevent more serious injury to the employee and his fellow workers, or incidentally to the equipment the contractor may have on the project.

The proposal contained in Section 11 of this bill does nothing to improve existing procedures and valid claims. It does encourage claims of doubtful merit not only by the injured party, but by his beneficiary. It is conceivable that a claim could be filed by a beneficiary after all employment records are destroyed and all knowledgeable witnesses deceased.

Such a situation cannot be within the agreed philosophy of Workmen's Compensation benefits. We urge that this provision be stricken from the bill. We understand that occupational disease hazards may exist in a very limited number of occupations. If the incidence of this hazard merits special atention, it should be handled as such, without removing the necessary provisions requiring notice from any and all claims arising under the act.

Section 12 of this bill deals with the addition of legal fees to the compensation award. As a practical matter I'm certain you realize that in any injury on construction work, the vast majority of Workmen's Compensation benefits are paid on a voluntary basis as a result of notice being given to the State Compensation Commission, or the Deputy Commissioner.

Claims under the Longshoremen's and Harbor Workers' Act are usually not made until months later, and they many times involve the question of covered employment. Without question, many of these claims are resisted by employers and their insurance carriers. The provisions of this bill would attempt to dissuade the employers from

resisting on the basis that if they did resist, the Deputy Commissioner could force them to pay the legal fees of the plaintiff. In this way the employers would be discouraged from disputing and defending themselves from unfounded claims.

A particularly adverse development would be the increased cost to employers which would result from assumption of these legal fees. There would be no inducement for settlement on the part of plaintiff's and the entire balance between defendants and plaintiffs would be upset, since there would be no inducement for attorneys for the plaintiff to seriously discuss settlement.

The present-day cost of pursuing litigation is high enough in terms of time and money. For the Federal Government to grossly increase this cost and shift it to only one party would be tragic. We urge that section 12 be deleted in its entirety.

Under the proposed legislation new sections are added to provide that the Secretary of Labor can make assessments against insurance companies or employers in order to finance the administration of the act itself as well as the costs of administering the safety and health provisions of the act. While we do not oppose the idea of establishing cost-related user fees for some clearly defined beneficiaries, we do not feel the proposed assessments are within the limitations of this definition.

Industry promotes its own safety programs and the establishment of fees to finance a Labor Department Safety and Health Section for Longshoremen and Harbor Workers is a duplication of effort which will not be beneficial to employer or employee. The construction industry through the Associated General Contractors of America has and is making great strides in reducing job-connected injuries. It is neither desirable nor necessary for the Federal Government through the Department of Labor to interfere or weaken the safety programs already functioning well in our industry.

A separate but equally important point to be made against the proposed user charges involves the cost to the contractor and ultimately to the public. Construction contractors, through premium taxes are already supporting State-administered workmen's compensation bureaus. There is no need to establish and support duplicate facilities which could well involve contradictory opinions. The legislation of safety is neither necessary nor beneficial. When legislation is needed, it has come from the various States who are more familiar with the needs and desires of the citizens Federal preemption in this area is unnecessary and should be removed from the bill.

In summary, I wish to reiterate that the considered opinion of our association is that construction work should be excluded from the act and returned to the exclusive jurisdiction of the State-administered workmen's compensation laws. If this is not done, the provisions of S. 2485 should be rewritten to adequately insure that costs for insurance can be ascertained realistic prior to assumption of the risk.

In this way the employers will be able to participate in a system of workmen's compensation which preserves their right to establish their ultimate liability in advance. They will also be able to avoid the unwholesome, yet growing, tendency of encouraging claims of doubtful value.

We strongly urge that the Congress promote effective workmen's compensation measures by amending S. 2485 as we have outlined. Senator YARBOROUGH. Thank you, Mr. Massman, for your state

ment.

You say that you are not a specialist in admiralty, but a businessman. If you are not a lawyer, my brethren at the Bar had better look out if businessmen come in with papers like this without legal training. We have carefully noted your objections to the act and particularly your desire for specificity and definitiveness, so that the companies will have an accurate estimate as is possible as to what this job will ultimately cost them.

I want to say a comprehensive safety bill for American industry, particularly that that moves in interstate commerce, the evidence under that bill shows that some 2,000 American businesses that belong to the National Safety Council with their safety programs in these companies, their rate of injuries is approximately one-fourth the rate of injury in the companies that don't belong to the National Safety Council.

Maybe one way of cutting the cost of workmen's compensation, that is, insurance premiums that employers have to pay, are rigid safety programs. One sure way, of course, of eliminating cost is a high degree of safety compatible with efficient operation of the business.

Mr. MASSMAN. Our firm has been a member of the National Safety Council for approximately 40 years.

Senator YARBOROUGH. I have no further questions. You have a comprehensive paper that raises a good many questions, but in the interest of time and the other witnesses waiting here and the statements they have, I will forego questions.

You may be excused.

The next witness is Mrs. Jean H. Sisco, vice president of personnel for Woodward & Lothrop, representing the Board of Trade of Metropolitan Washington, and accompanied by attorneys.

Come around, Mrs. Sisco.

STATEMENT OF MRS. JEAN H. SISCO, VICE PRESIDENT OF PERSONNEL, WOODWARD & LOTHROP; ACCOMPANIED BY RICHARD TURNER, ATTORNEY, D.C. TRANSIT CO.; AND JAMES HOURIHAN, ATTORNEY, LAW FIRM OF HOGAN & HARTSON, REPRESENTING THE BOARD OF TRADE OF METROPOLITAN WASHINGTON, WASHINGTON, D.C.

Mrs. Sisco. Mr. Chairman, if I may I would like to introduce the gentlemen with me: Mr. James Hourihan on my right from the firm of Hogan & Hartson; and Mr. Richard Turner on my left from the D.C. Transit Co.

Senator YARBOROUGH. Thank you. Proceed in your own way, Mrs. Sisco.

Mrs. SISCO. Thank you, sir.

Mr. Chairman, my name is Jean Sisco. I represent the Metropolitan Washington Board of Trade for which I serve as a member of the

board of directors and as chairman of the employment security committee.

In 1928 the District of Columbia was subjected to workmen's compensation coverage under the Longshoremen's and Harbor Workers' Compensation Act because Congress could not agree on the specific content of a separate statute for the District of Columbia. As a result, District of Columbia employers and employees have been denied the right to participate effectively in the development of their own local workmen's compensation statute. Since the District represents only a minor portion of the total coverage of the act, it cannot be expected that a great deal of congressional time and staff be expended in developing rational modifications of the law for the District alone.

That prior amendments to the act have not been drawn with a primary view to District of Columbia needs is evident. Generally, District of Columbia employers must pay much higher insurance rates than the surrounding suburban jurisdictions. The National Council on Compensation Insurance has furnished us with figures showing the premium rate per $100 of payroll in two high-risk occupations. These indicate the substantial additional cost that District employers must pay under present law.

As you see in my testimony speaking of code 5213, for concrete construction workers in Maryland, it's $4.44; in Virginia it's $2.67; whereas in the District of Columbia it is $5.98 per $100 of payroll.

In code 5057, iron or steel erection workers, in Maryland it is $14.18; in Virginia it is $4.84; and in the District of Columbia it is $20.61.

The National Council on Compensation Insurance has also indicated that the benefit amendments in S. 2485 alone would add over 39 percent to the present base premium rate. The other provisions of the bill, including the sections on assessment, would add considerably to this figure.

Exhibit No. 1 attached to my statement points out the great divergence existent in area benefits. The District's present $70 maximum weekly benefit exceeds Maryland by $15 per week and Virginia by $25 per week. In disability cases only five States in the Union pay at benefit rates higher than the District. Only four States pay more for death-and I might insert here, Mr. Chairman, that all 50 States now have their own Workmen's Compensation Act-the District stands alone.

The benefit structure of the Longshoremen's and Harbor Workers' Compensation Act is based upon the high average weekly wages prevalent in waterfront occupations. It does not relate properly to local employment.

At present the District of Columbia has no ability to participate effectively in relating the local workmen's compensation program to its needs. In order to rectify this situation we are now drafting legislation which will place all of the current provisions of the Longshoremen's and Harbor Workers' Compensation Act in language appropriate to the District of Columbia Code. Bills will be introduced in both the House and Senate during this session.

We feel that such legislation would provide the District with effective participation in the development of its workmen's compensation