Newly Awarded LHWCA Compensation Based on Year of Injury

In Roberts v. Sea-Land Services, Inc., 132 S. Ct. 1350 (2012), the US Supreme Court ruled that under the Longshore Harbor and Workers Compensation Act (LHWCA), a claimant is “newly awarded compensation” when he first becomes disabled and is therefore statutorily entitled to compensation.  Thus, the injured worker’s amount of LHWCA compensation is based on the year in which the injury occurred, rather than the year in which an official judicial award of compensation is granted.  The Court reasoned that a qualifying injury creates a statutory entitlement to benefits immediately, regardless of whether any official judicial or administrative action is taken.  In so holding, the Court resolved a split among the Circuit Courts and overruled a prior Fifth Circuit decision holding that compensation is calculated based on the year an official judicial decree awarding benefits is entered despite when the injury occurred.

This could be very significant for employers when the average national weekly wage for a position decreases over time.  For example, if there is a significant reduction in average pay for a particular position between the time the employee is injured and the time the employee seeks benefits through court action, the employer will still be on the hook for the higher average pay at the time of injury.   

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.