Let’s break down some of the nuances in DBA coverage eligibility.
All contractors who perform work under United States Government-funded contracts outside of the U.S. are required to purchase DBA Insurance under the U.S. Department of Labor Defense Base Act. This Act ensures that Workers’ Compensation benefits are provided for employees of these contractors.
Employees Eligible for DBA Insurance
- Those working for private employers on U.S. military bases or on any lands used by the U.S. for military purposes outside of the United States, including those in U.S. Territories and possessions
- Those working on public work contracts with any U.S. government agency, including construction and service contracts in connection with national defense or with war activities outside the United States
- Those working on contracts approved and funded by the U.S. under the Foreign Assistance Act, generally providing for cash sale of military equipment, materials and services to its allies, if the contract is performed outside of the United States
- Those working for American employers providing welfare or similar services outside of the United States for the benefit of the Armed Forces, e.g. the USO
If any one of the above criteria is met, these employees, regardless of nationality, are covered under the Defense Base Act.1
DBA Insurance for Non-U.S. Citizens
Coverage is not just for employees who are U.S. Citizens. Coverage is extended to U.S. Nationals, Third Country Nationals and local workers if they are employed under a contract that requires DBA coverage. (One exception is the U.S. Territory of Guam, where DBA was waived and all work performed under a U.S. Government contract is subject to a local tariff-rated Workers’ Compensation system.)
DBA Insurance Waivers
A contractor can apply to the U.S. Department of Labor to have DBA coverage waived for their Third Country Nationals and local workers if an alternative form of Workers’ Compensation is secured provided to these employees. (Waivers do not apply to employees who are U.S. citizens, legal residents of the U.S., or employees hired in the U.S.) There are currently seven countries where the Department of Defense has obtained a waiver for their Third Country Nationals and local employees: Germany, South Korea, Italy, France, Israel, Spain, Belgium and Japan. These waivers have been in effect since January 1, 2012, and will expire on December 31, 2015.
The LATITUDE DBA Insurance program understands the complexities and unique business needs associated with government contracts and the Defense Base Act. Contact the LATITUDE DBA Insurance program today to explore your options.