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be paid at the end of his schedule award for the degree of wage loss, if any, which he has suffered.

A similar provision was enacted by Congress in the 1966 amendments to the Federal Employees' Compensation Act.


The existing act provides for an award of "proper and equitable compensation” up to $3,500 for serious facial and head disfigurement. This does not go far enough.

We have had a number of cases where injuries have resulted in serious disfigurement of other areas of the body, such as the arms or hands. The bill enlarges the existing provisions to include and award for disfigurement of the neck and of other normally exposed areas of the body likely to handicap the employee in securing or maintaining employment.

In addition to waterfront workers, the act covers many types of workers of both sexes who must meet the public. To them, and the public they meet, a serious disfigurement of the neck or to other areas of the body is as cosmetically offensive as a disfigurement of the face and head. In some cases it may even affect their livelihood.


The act provides that compensation shall be allowed after a wait of 3 days after disability occurs. However, if the disability continues for 28 days, the first 3 days will be compensated retroactively.

To lessen the financial burden for the injured worker, the bill reduces the period of disability for retroactive payment with respect to the waiting period to 21 days. This is the same waiting period as under the Federal Employees' Compensation Act.


The bill eliminates the $24,000 total money allowance now payable for temporary total or permanent partial disability. There is no limit in permanent total disabílity or death cases. We feel it completely equitable that compensation should be paid to an injured worker for as long as he or she is disabled.

The worker should not be made to feel that an injury has a fixed dollar value and that he will be "dumped” if he fails to recover before such fixed dollar figure is reached. His need does not stop at an arbitrary figure. The cases would not be numerous and they usually present circumstances of hardship. A limit of this kind is another instance of an employee's being deprived of a tenable substitute for his right to recoup injury losses.

Here, I think it is interesting to note that 16 States recognize the principle of continuing compensation for the duration of disability.


The Longshore Act presently provides that an employer in "second injury" cases where the employee has an existing impairment-shall provide compensation only for the disability caused by the “second

injury.” The assigning and prorating of liability under this provision has been very difficult.

To provide greater certainty as to an emplover's liability in these cases and to encourage the employment of handicapped workers, the bill establishes specific limitations on compensation liability in the event of employment-related disability or death.

In such circumstances, the employer's liability is limited, under the bill, to the payment of compensation for 104 weeks——2 years or for the number of weeks under the schedule for a permanent disability, whichever is greater.

When the second injury” results in total disability or death, continuing benefits will be paid from the special fund, established under the act, after the expiration of compensation paid by the employer.



The special funds established under the act pay residual compensation in "second injury” cases, as just referred to, and also for compensation and medical services when an employer is insolvent; for prosthetic devices and for vocational retraining and maintenance allow

The funds are financed by assessments of $1,000 on employers in fatal cases where there is no surviving beneficiary.

Withdrawals on these funds have been so heavy in recent years that additional funding is imperative. To provide this funding, the employer's assessment in nonsurvivor death cases would be increased by S. 2485 to $5,000 and residual payments under schedule awards when an employee dies while receiving compensation under the schedule and leaves no survivors would be channeled into it.

In addition, when the fund at the beginning of a calendar year is less than $300,000, the bill authorizes prorated assessments against each carrier or self-insurer.

ATTORNEY'S FEES In the ordinary case under the longshore and related acts, benefit payments are made voluntarily and the filing of a formal claim is not required. However, in cases resisted by employers or insurance carriers, approximately 11,000 conferences are required annually and approximately 350 formal hearings are completed. A nominal percentage of the cases are resisted up to final court decision.

Where it is necessary to employ an attorney to pursue a claim, the employee must bear attorney and court costs, if any.

S. 2485 shifts this cost to the employer or insurance carrier when an award is made or increased after being contested. Costs so chargeable will be those approved by the deputy commissioner administering the act, or by the court and will be added to the award and become a lien on it.

COMMUTATION OF AWARDS TO ALIENS Under existing law, the Secretary of Labor, upon application of a carrier, is required to commute future installments of death benefits payable to aliens—who are not residents or about to become nonresidents of the United States or Canada-by paying in a lump sum

one-half of the commuted amount of future installments. The employer is thereupon discharged from further liability.

This requirement has resulted in unfair discrimination against aliens. In the interest of justice, the bill makes commutation discretionary with the Secretary and eliminates the requirement for one-half diminution in all cases.


The existing time limitation provisions for giving notice of injury and filing claims for compensation in many instances merely defeat valid claims of workers whom the act is designed to protect. Originally, the concept of injury and of occupational disease was thought of in terms of immediate awareness of a condition and its actual or potential disabling effects, but we know so much more about latent conditions today.

Alatent condition and its relationship to an employment injury or an occupational disease may not become manifest until many years after the expiration of the time limitation provisions.

A clear example of this is a condition which may develop 10 or 20 years after exposure to ionizing radiation. With progress of medical science, etiological causes of diseases or conditions secondary to injury become better known or understood.

The act's time limitations should be flexible enough to protect workers and permit approval of valid claims for disabling conditions which do not become manifest within a specified period.

The bill, therefore, provides for the giving of notice within 30 days after injury or death or within 30 days after the employee or beneficiary is aware of or should have been aware of a relationship between the injury or death and the employment. The time requirement for filing a claim for disability or death has a similar limitation provision.


The bill establishes user charge systems for financing the costs and expenses of administering the Longshore and related Acts. These are new features.

One provides for pro rata assessments against each carrier and selfinsurer for the costs of administering the safety and health provisions of section 41 of the act.

The other provides for pro rata assessments against carriers (including self-insurers) for the administrative costs of the act and its extension.

The purpose of these assessments is to relieve the Federal Government of costs which must be borne out of general tax revenues—approximately $3.4 million annually. The President, in his budget recommendations for the fiscal year ending June 30, 1967, advocated the extension of "user charges."

In the words of the President, a user-charge provision is “in keeping with the policy that a greater share of the cost of certain programs which provide special benefits or privileges should be borne by identifiable primary beneficiaries."

The Longshore Act, a workman's compensation act pertaining to private employment, may appropriately include costs for administration similar to those in the States which also cover private employment. In the States, the proportion of administrative costs met through assessment has been increasing and now amounts to two-thirds of the total of the costs of the agencies where provisions for these costs are in effect. A percentage of the insurance premium is generally assessed against the carrier with an equivalent method of assessment against the self-insurer.

There is attached a table No. 4 showing the 27 States which have some form of assessment.

The assessments in the States range from 0.009 in Ohio to 4.0 percent in Delaware. Amounts collected range from $40,000 in Delaware to $10,902,212 in New York.

The assessment method of financing is suggested by the Council of State Governments in its recommended workman's compensation and rehabilitation law.

(Table IV follows:)


[blocks in formation]

Appropriation; preaudit by State comp-
troller and State auditor. Surplus re-
mains in workmen's compensation fund
in State treasury; available for future

Appropriation; budget controls. Surplus

returned to general fund at expiration
of fiscal year.
Appropriation; budget controls. Surplus


1,662, 785

411, 240



86, 283



2-percent assessment on pre

1.73-percent assessment on

1-percent assessment on prem-

0.877-percent assessment on

amount of compensation pay

Assessment on premiums...
0.0002-percent assessment on

4.25-percent assessment on

amount of compensation pay.

2-percent assessment on prem-


carried over to following year. Appropriation; budget and audit controls.

Surplus escheats to general treasury. Appropriation. Surplus retained in work

men's compensation fund. Appropriation. Surplus turned in to work

men's compensation fund for future

years. None. Appropriation. Unused balance of appro

priation reverts to the State treasury. All funds placed in State treasury and

drawn through State auditor's office. Appropriation; review by State purchas

ing agent, State comptroller, and State auditor. Surplus reverts to the ordinary

revenue of the State. Appropriation. Surplus reverts to the



693, 767

240, 357


809, 182


434, 490

3.25-percent assessment on

premiums; assessment on

payrolls of self-insurers.
2-percent assessment on prem-



235, 139

Appropriation. Surplus deposited in

general fund and used for general

purposes. Appropriation; budget and audit controls.

New York.

10,902, 212

North Carolina.....

166, 172



0.093-percent assessment on

amount of compensation pay

4-percent assessment on pay.

0.009-percent assessment on

hypothetical premiums of

4.5-percent assessment on

0.25-percent assessment on

2-percent assessment on


South Carolina....




Appropriation; budget control. Surplus

deposited in general fund. Appropriation; statutory and executive

controls. Surplus remains in trust fund. Appropriation. Appropriation. Unexpended balances lapse

unless appropriation specifies otherwise. Appropriation. Surplus placed in special fund for industrial commission. When fund exceeds $700,000, the Commission reduces the tax on compensation premiums to reduce surplus.



1 Not available.
2 Maryland-Actual rate was 0.000209354 percent.
3 Mississippi-Rate was 4 percent for Ist half of year and 442 percent for latter halt.

Mrs. PETERSON. The Congress over the years has enacted many laws authorizing user charges with respect to various types of programs. The importance of user charges and the well-precedented establishment of this method of financing services performed by the Government is shown by the fact that in 1965 collections for these charges were $1,408,000.

The Longshoremen's and Harbor Workers' Compensation Act, unique in its scope and issuing from the exclusive power of Congress, should be in the forefront of progressive employee protective measures.

We strongly urge, therefore, that S. 2485 be enacted in behalf of the persons who will benefit by it directly, and as a demonstration of the belief of Congress in effective, equitable workmen's compensation measures.

Thank you for this opportunity to be with you.
Senator YARBOROUGH. Thank you, Mrs. Peterson.

The reporter has been directed to print all the tables attached to your statement.

Mrs. Peterson, earlier in your statement, you were testifying about the compensation awards to aliens and pointing out that under existing law the Secretary of Labor, upon application of the carriers, is required to commute future installments of death benefits payable to aliens by paying in lump sum one-half of the commuted amount of future installment payments and, thereupon, the employer is discharged from further liability.

You say this requirement has resulted in unfair discrimination against aliens. In the interest of justice, the bill makes commutation discretionary with the Secretary and eliminates the requirement for one-half of the diminution in all cases.

Does the Secretary have any standards now under any type of labor legislation granting him such discretion?

Mrs. PETERSON. There is a tremendous amount of experience under the administration of FECA.

Senator YARBOROUGH. I wonder what kinds of standards he applies in that case, in making it discretionary?

Mrs. PETERSON. I would think he would apply somewhat the same standards that are used now, which Congress has laid down in the guidelines of the FECA.

Mr. Tinsley, who administers this, can respond further.

Mr. TINSLEY. That is correct, Mr. Chairman. There is a provision in the Federal Employees Compensation Act that places the discretion in the hands of the Secretary of Labor in either continuing to pay benefits on a monthly or a weekly basis, or to pay the case in a lump sum.

The guidelines that we follow depend on the nature of the case, the type of disability, the needs of the injured party, the situation that exists as to whether or not he has small children, older children, whether he is alone, whether he is married, and basically just what his needs are going to be, the amount of the lump-sum in terms of being able to meet his particular needs.

We attempt to look at it in terms of the needs of this particular individual. Would it be to his benefit to receive this payment in a lump sum?

Senator YARBOROUGH. I was wondering if the country he was in had any effect on that. Suppose there were Vietnamese civilians work

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