BACKGROUND: U.S. Federal law requires all contractors and subcontractors to secure Defense Base Act workers’ compensation insurance for their employees working overseas when they are engaged in the following activities:
- 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
- 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 U.S.
- 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
- 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, all employees engaged in such employment, regardless of nationality, must be covered under the Defense Base Act unless they have an official waiver from the Department of Labor. However, it is the Department of Labor’s policy that the waiver does not apply to citizens or legal residents of the U.S. or to employees hired in the U.S.