Final Longshore Rule Out
Wednesday, March 14, 2012
Posted by: Matt Gruhn
In 2009, after
a long fought battle by a coalition of recreational boating trade groups, the
Longshore and Harbor Workers’ Compensation Act was successfully amended
by the American Recovery and Reinvestment Act of 2009 to exclude certain
additional recreational vessel yard
workers from the federal law’s definition of "employee” as it related to repair
and dismantling of recreational
vessels. For the past couple of years,
the Department of Labor has been writing the federal regulation to the law,
which is of great interest to businesses that employ workers who build, repair,
or dismantle recreational vessels. The
boating industry was very concerned that the Longshore issue would require
duplication of insurance coverage increasing the overhead costs and making
repairs in certain areas uncompetitive to boat yards in nearby countries.
30, 2011, the Department of Labor published its final rule to implement the
law. The final rule includes nearly all the changes requested by the
coalition of recreational boating groups working on the issue. The preamble provides
guidance that will directly result in many boat manufacturers and repair facilities
to be able to revisit whether their operations need a Longshore rider on their
Workers’ Compensation policy.
following are highlights of the Department of Labor final rule.
- Clear guidance is provided that if a boat
manufacturer or repair facility is landlocked (not adjacent to navigable body
of water), there is no need for LHWCA
- For manufacturing facilities adjacent to a
navigable water, the exemption for the under 65 foot exemption continues to
apply for boats intended for the recreational market.
- Work on vessels owned by police, government, and
municipalities are excluded. This
exemption frees up facilities to do work on these vessels without triggering
the LHWCA coverage.
- The 65-foot exemption limitation is lifted for
facilities that repair recreational vessels adjacent to or on navigable waters. However, these facilities will have to look
at the current use of the vessel to apply the exemption.
One of the keys to the re-write of
the rule, is the definition of "recreational vessel." The rule incorporated the Coast Guard’s
standards for categorizing vessels. The
final rule also contains two key provisions designed to make the definition
easier to apply. The final rule provides
that manufacturers and builders may determine whether a vessel is recreational
by the nature of the vessel’s design rather that the end use of the vessel, and
rule includes within the definition of recreational vessels non-military
vessels that are recreational by design and owned or chartered by federal,
state, or municipal governments.