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Office of Workers' Compensation Programs

Division of Longshore and Harbor Workers' Compensation (DLHWC)


  1. Purpose and Scope. This part of the LHWCA PM describes the various penalties which may be assessed under certain sections of the Act. It describes the criteria necessary for the assessment of the penalty and the procedures to be followed.

    Chapter 8-201 deals with the assessment of interest against the EC for the late payment of compensation. Chapter 8-202 deals with the section 14(e) penalty assessed for failure to timely controvert a claim. Chapter 8-203 provides guidance on the section 14(f) penalty assessed for failure to timely pay a final award of compensation.

    The chapters listed in the preceding paragraph deal with a penalty or interest paid directly to a claimant in addition to the compensation due. Chapters 8-301 through 8-400 deal with penalties that are assessed against the EC and are paid directly to the Department of Labor. Instructions are provided for penalties under section 14(g) (late filing of Form LS-208), section 30(e) (late filing of Form LS-202), and section 49 (discrimination motivated by the filing of a claim).

  2. Authority. The District Director, and in some instances Claims Examiners, are authorized to assess penalties and interest against the EC. Guidance is provided for the enforcement and/or collection of the penalty and/or interest in each chapter.
  3. State Guaranty Funds/Associations. Several states have a state guaranty fund or association designed to protect claimants from financial loss caused by the insolvency of the original insurer.

    In cases where the original insurer becomes insolvent and there is a state guaranty fund, applicable penalties and/or interest should be assessed against that guaranty fund. If the guaranty fund responds and shows that it is not liable for penalties or interest because, for example, it is exempt under state law from paying any federal longshore claims, or is exempt from paying any penalties or interest, the responsible employer should be assessed the liability for penalties and/or interest (see Canty v. S.E.L. Maduro and Florida Insurance Guaranty Association, 26 BRBS 147, and the cases cited therein). Any exemption of a state guaranty fund or association does not absolve the responsible employer from its liability under the Act.

    If a guaranty fund shows that it is exempt from the payment of penalties and/or interest in a particular case, it should not automatically be considered exempt in all future similar cases. The fund/association should submit documentation in support of the alleged exemption in each case.

    If the responsible employer is also insolvent and liability for the payment of benefits falls to the Special Fund under section 18(b), the Special Fund will not pay penalties or interest (see the Longshore (LHWCA) Procedure Manual, Chapter 6-202.7a(10)).