Defense Base Act

The Defense Base Act of 1941 provides workers' compensation protections to employment outside the United States when working for private employers on U.S. military bases, when working on public works contracts (construction and service contracts), or when working on foreign assistance contracts funded by the U.S.

It is intended to provide disability compensation and medical benefits to covered employees for work-related injuries, and death benefits to eligible survivors of employees whose deaths are work-related.

Contractors and subcontractors working overseas are required to purchase workers' compensation insurance or to qualify as a self-insurer. They are also required to submit timely, written reports to the Department of Labor (DOL) in the event of an employee's injury or death, to make timely payment of all compensation due for disability or death, and to submit a timely, written report of such payment to the DOL.

Contractors should check to see if their contracts contain the FAR 52.228-3 clause, Workers Compensation Insurance (Defense Base Act). If so, there are some very specific requirements. One that many contractors fail to comply with is the requirement that it must have insurance (either purchased or self-insured) before it begins work on the contract. It also requires that the contractor keep the policy in force until contract performance is completed.

Another provision of this clause that is often overlooked is the requirement to include the clause in all subcontract to which the Defense Base Act applies. A listing of contracts to which the clause applies is found in FAR 28.309. Essentially, if the prime contract contains the clause, most likely subcontracts under that prime are covered as well.