FAR 52.228-4—Workers’ Compensation and War-Hazard Insurance Overseas.
Plain-English Summary
FAR 52.228-4 addresses insurance and benefit protection for contractor employees working overseas when the Secretary of Labor has waived application of the Defense Base Act (DBA) and, in turn, the War Hazards Compensation Act (WHCA). The clause has two separate but related parts: paragraph (a) covers workers’ compensation insurance or equivalent coverage for employees who would otherwise be covered by the DBA but for a waiver, and paragraph (b) covers war-hazard benefits for employees who would otherwise be covered by the WHCA but for a waiver. It also requires flowdown of these protections to affected subcontractors, unless the prime contractor elects to assume direct liability for subcontractor employees under the war-hazard portion. In practice, this clause ensures that employees working overseas do not lose basic injury/death protection simply because a statutory waiver removes the normal DBA/WHCA framework. It matters because it shifts real compliance obligations onto the contractor before performance begins, requires continuous coverage through contract completion, and can affect subcontract drafting, pricing, reimbursement, and risk allocation.
Key Rules
DBA waiver triggers coverage
Paragraph (a) applies only when the contractor employs people who would have been covered by the Defense Base Act except for a waiver by the Secretary of Labor. If that waiver exists, the contractor must still provide workers’ compensation insurance or an equivalent level of protection required by the employees’ country of nationality.
Coverage must start before performance
For affected employees under paragraph (a), the contractor must have the required workers’ compensation insurance or equivalent in place before beginning contract performance. The contractor must keep that coverage in force until the work is completed.
Mandatory subcontract flowdown for workers’ compensation
If the DBA would have applied to subcontractor employees but for the waiver, the prime contractor must insert a similar clause in those subcontracts. This ensures the same workers’ compensation or equivalent coverage requirement is passed down to lower-tier performers.
WHCA waiver triggers war-hazard protection
Paragraph (b) applies when the contractor or any subcontractor employs persons who would have been covered by the War Hazards Compensation Act except for a waiver by the Secretary of Labor. The contractor must provide the same protection the WHCA would provide, subject to reimbursement provisions elsewhere in the contract.
Benefits follow controlling law or agreement
Under paragraph (b), the level of war-hazard benefits must conform to any applicable foreign law or international agreement governing the employees’ entitlement. However, the WHCA standards still control other issues such as what counts as a war hazard, proof of loss, and exclusion of benefits already covered by workers’ compensation insurance or equivalent coverage.
War-hazard subcontract flowdown or direct assumption
Unless the contractor elects to assume direct liability for subcontractor employees, it must insert a similar war-hazard clause in subcontracts that would otherwise fall under the WHCA but for the waiver. This preserves war-hazard protection for subcontractor personnel and clarifies who bears the risk.
Responsibilities
Contracting Officer
Include this clause when prescribed by FAR 28.309(b) and ensure the contract structure reflects any reimbursement provisions or other clauses that interact with war-hazard protection. The contracting officer should also be alert to whether the work location and employee mix make DBA/WHCA waivers and subcontract flowdowns relevant.
Contractor
Provide required workers’ compensation insurance or equivalent coverage before performance begins and maintain it through completion for employees covered by a DBA waiver. Provide WHCA-equivalent protection for employees covered by a WHCA waiver, subject to contract reimbursement terms, and comply with applicable foreign law or international agreements on benefit levels.
Contractor
Insert required flowdown clauses in subcontracts for affected employees unless the contractor has elected to assume direct liability for subcontractor employees under the war-hazard portion. Ensure subcontract terms mirror the clause’s protection requirements and do not leave gaps in coverage.
Subcontractor
When the clause is flowed down, provide the required workers’ compensation or war-hazard protection for its own employees as required by the subcontract and applicable waiver conditions. Subcontractors must coordinate with the prime on coverage, claims, and any proof-of-loss requirements.
Secretary of Labor
Grant waivers from DBA or WHCA coverage where appropriate, which is the event that activates the alternative coverage obligations in this clause. The waiver determines whether the contractor must provide substitute insurance or benefits under the clause.
Practical Implications
This clause is a risk-allocation and employee-protection mechanism, not just a paperwork requirement; contractors should verify overseas insurance arrangements before mobilization, not after work starts.
A common pitfall is assuming that a DBA or WHCA waiver eliminates coverage obligations entirely. It does not — it replaces statutory coverage with substitute insurance or benefits, and the contractor must still act.
Contractors should review subcontract templates carefully because the clause requires specific flowdown language, and missing or incomplete flowdowns can leave the prime exposed.
For war-hazard coverage, contractors need to coordinate with reimbursement provisions elsewhere in the contract; the clause says protection is provided subject to reimbursement as otherwise allowed, so pricing and billing should reflect that structure.
Because benefit levels may be governed by foreign law or international agreement, contractors operating in multiple countries should confirm local legal requirements and not rely on a one-size-fits-all insurance package.
Official Regulatory Text
As prescribed in 28.309 (b) , insert the following clause: Workers’ Compensation and War-Hazard Insurance Overseas (Apr 1984) (a) This paragraph applies if the Contractor employs any person who, but for a waiver granted by the Secretary of Labor, would be subject to workers’ compensation insurance under the Defense Base Act ( 42 U.S.C.1651 , etseq .). On behalf of employees for whom the applicability of the Defense Base Act has been waived, the Contractor shall (1) provide, before commencing performance under this contract, at least that workers’ compensation insurance or the equivalent as the laws of the country of which these employees are nationals may require, and (2) continue to maintain it until performance is completed. The Contractor shall insert, in all subcontracts under this contract to which the Defense Base Act would apply but for the waiver, a clause similar to this paragraph (a) (including this sentence) imposing upon those subcontractors this requirement to provide such workers’ compensation insurance coverage. (b) This paragraph applies if the Contractor or any subcontractor under this contract employs any person who, but for a waiver granted by the Secretary of Labor, would be subject to the War Hazards Compensation Act ( 42 U.S.C.1701 , etseq .). On behalf of employees for whom the applicability of the Defense Base Act (and hence that of the War Hazards Compensation Act) has been waived, the Contractor shall, subject to reimbursement as provided elsewhere in this contract, afford the same protection as that provided in the War Hazards Compensation Act, except that the level of benefits shall conform to any law or international agreement controlling the benefits to which the employees may be entitled. In all other respects, the standards of the War Hazards Compensation Act shall apply; e.g., the definition of war-hazard risks (injury, death, capture, or detention as the result of a war hazard as defined in the Act), proof of loss, and exclusion of benefits otherwise covered by workers’ compensation insurance or the equivalent. Unless the Contractor elects to assume directly the liability to subcontractor employees created by this clause, the Contractor shall insert, in all subcontracts under this contract to which the War Hazards Compensation Act would apply but for the waiver, a clause similar to this paragraph (b) (including this sentence) imposing upon those subcontractors this requirement to provide war-hazard benefits. (End of clause)