FAR 28.305—Overseas workers’ compensation and war-hazard insurance.
Plain-English Summary
FAR 28.305 explains how overseas workers’ compensation and war-hazard protection work when federal contracts involve employees working outside the United States. It defines the term "public-work contract," explains when the Defense Base Act (DBA) extends Longshore and Harbor Workers’ Compensation Act benefits to overseas employees, and describes how the War Hazards Compensation Act adds protection for war-related risks such as injury, death, capture, or detention. The section also addresses the relationship between DBA coverage and contractor-provided insurance or self-insurance, and it explains the special rule that if the DBA is waived, war-hazard benefits are also waived for the affected employees. Finally, it covers the contractor’s obligation to provide alternative workers’ compensation coverage and war-hazard liability protection when a waiver applies, and it requires the contract to allow the related costs as allowable contract costs. In practice, this section matters because it determines who must be insured, what risks must be covered, when waivers are possible, and how those insurance or liability costs are treated in the contract price.
Key Rules
Public-work contract definition
This section uses a broad definition of "public-work contract" that includes construction, alteration, removal, repair, dredging, harbor improvements, dams, roadways, housing, and related preparatory or ancillary work. It also includes certain service-contract projects and work connected with national defense or war activities.
DBA coverage for overseas work
The Defense Base Act extends Longshore and Harbor Workers’ Compensation Act coverage to certain employees working outside the United States, including those performing public-work contracts and certain Foreign Assistance Act contracts. This coverage applies unless a specific statutory exception excludes the contract.
Foreign assistance contract exceptions
For Foreign Assistance Act contracts, DBA coverage generally applies except for contracts approved or financed by the Development Loan Fund, unless the Secretary of Labor decides otherwise, and contracts exclusively for materials or supplies. These exceptions narrow the scope of mandatory DBA coverage for certain foreign assistance work.
War-hazard protection follows DBA
When DBA coverage applies, the War Hazards Compensation Act extends protection against war-related risks such as injury, death, capture, or detention. If the contractor provides DBA workers’ compensation through insurance or self-insurance, employees automatically receive this war-hazard protection as well.
Waiver authority
The Secretary of Labor may waive DBA applicability to a contract, subcontract, work location, or employee classification when the agency head recommends a waiver. This is an exception process, not the default rule, and it must be formally approved.
Waiver shifts contractor liability
If DBA is waived, the related War Hazards Compensation Act benefits are also waived for the affected employees. The contractor must then provide workers’ compensation coverage for work injury or death and assume liability for war-hazard injury, death, capture, or detention.
Cost allowability requirement
When a waiver applies, the contract must allow either the contractor’s liability costs or the reasonable cost of insurance against that liability as an allowable contract cost. This ensures the contractor can recover the required coverage expense under the contract terms.
Responsibilities
Contracting Officer / Agency
Identify whether the contract involves overseas work that may trigger DBA and war-hazard coverage requirements. If a waiver is being considered, support the agency head’s recommendation process and ensure the contract includes the required cost-allowability language when a waiver applies.
Agency Head
Recommend a waiver to the Secretary of Labor when appropriate. This recommendation is the prerequisite for the Secretary to waive DBA applicability to a contract, subcontract, work location, or employee classification.
Secretary of Labor
Determine whether to waive DBA applicability based on the agency head’s recommendation. Also decide, in the Development Loan Fund exception, whether certain contracts should nevertheless be covered.
Contractor
Provide DBA workers’ compensation coverage for covered overseas employees through insurance or self-insurance when DBA applies. If DBA is waived, provide alternative workers’ compensation coverage, assume liability for war-hazard risks, and obtain or account for allowable insurance or liability costs under the contract.
Employees
Rely on the coverage structure established by the contract and applicable law for compensation and war-hazard protection. Their coverage status depends on whether DBA applies or has been waived for their work.
Practical Implications
Contractors working overseas should determine early whether the work is a public-work contract or otherwise falls under DBA coverage, because insurance planning and pricing depend on that classification.
A DBA waiver does not eliminate risk coverage obligations; it changes them. Contractors still must cover work injury or death and separately assume war-hazard liability for affected employees.
Contracting officers should make sure waiver language and cost allowability are handled explicitly in the contract, or the contractor may face unreimbursed insurance or liability costs.
The Foreign Assistance Act exceptions can be easy to miss, especially for contracts involving only materials or supplies or Development Loan Fund financing.
Because war-hazard protection follows DBA coverage automatically, contractors using insurance or self-insurance for DBA should confirm their coverage structure is sufficient for both ordinary workers’ compensation and war-risk exposure.
Official Regulatory Text
(a) "Public-work contract," as used in this subpart, means any contract for a fixed improvement or for any other project, fixed or not, for the public use of the United States or its allies, involving construction, alteration, removal, or repair, including projects or operations under service contracts and projects in connection with the national defense or with war activities, dredging, harbor improvements, dams, roadways, and housing, as well as preparatory and ancillary work in connection therewith at the site or on the project. (b) The Defense Base Act ( 42 U.S.C.1651 , etseq .) extends the Longshoremen’s and Harbor Workers’ Compensation Act ( 33 U.S.C. 901 ) to various classes of employees working outside the United States, including those engaged in performing- (1) Public-work contracts; or (2) Contracts approved or financed under the Foreign Assistance Act of1961 (Pub.L.87-195) other than- (i) Contracts approved or financed by the Development Loan Fund (unless the Secretary of Labor, acting upon the recommendation of a department or agency, determines that such contracts should be covered); or (ii) Contracts exclusively for materials or supplies. (c) When the Defense Base Act applies (see 42 U.S.C.1651 , etseq .) to these employees, the benefits of the Longshoremen’s and Harbor Workers’ Compensation Act are extended through operation of the War Hazards Compensation Act ( 42 U.S.C.1701 , etseq .) to protect the employees against the risk of war hazards (injury, death, capture, or detention). When, by means of an insurance policy or a self-insurance program, the contractor provides the workers’ compensation coverage required by the Defense Base Act, the contractor’s employees automatically receive war-hazard risk protection. (d) When the agency head recommends a waiver to the Secretary of Labor, the Secretary may waive the applicability of the Defense Base Act to any contract, subcontract, work location, or classification of employees. (e) If the Defense Base Act is waived for some or all of the contractor’s employees, the benefits of the War Hazards Compensation Act are automatically waived with respect to those employees for whom the Defense Base Act is waived. For those employees, the contractor shall provide workers’ compensation coverage against the risk of work injury or death and assume liability toward the employees and their beneficiaries for war-hazard injury, death, capture, or detention. The contract shall provide either that the costs of this liability or the reasonable costs of insurance against this liability shall be allowed as a cost under the contract.