Defense Base Act: Understanding Average Weekly Wage & 10(i)

‍The Defense Base Act (DBA) is an important law that provides benefits to contractors employed on U.S. military bases overseas. In this blog, we will explore two key aspects of the DBA: Average Weekly Wage (AWW) and settlement.

Average Weekly Wage (AWW)

The calculation of the Average Weekly Wage is a fundamental part of determining the compensation for injured contractors under the DBA. The AWW represents the worker’s earnings over a specific period and serves as the basis for benefit calculations. It is essential to accurately determine the AWW to ensure fair compensation for injured workers.

For Defense Base Act cases, the AWW is generally your earnings in the 52 weeks prior to your injury under section 910(c) of the Act.

Factors Affecting AWW Calculation

Several factors come into play when calculating the AWW under the DBA. These factors include:

1. Employment Contract: The terms of the worker’s employment contract are considered when determining the AWW. The duration and nature of the contract can impact the calculation.
2. Overseas Earnings: If the worker earned wages overseas, those earnings are typically included in the AWW calculation. This ensures that the compensation reflects the worker’s overall wage-earning capacity.
3. Additional Allowances: Some workers may receive additional allowances, such as the Foreign Area Living Allowance (FALA), as part of their contract. These allowances are often included in the AWW calculation, as they are considered part of the worker’s overall compensation.

Case Study: Tony Barhorst v. Combat Support Association, Ltd.

In the case of Tony Barhorst v. Combat Support Association, Ltd., the calculation of the claimant’s AWW was a crucial issue. Barhorst, a carpenter working in Kuwait, was injured in a motor vehicle accident during his government contract. The employer argued that using only the claimant’s overseas earnings for the three weeks of work would result in an excessively high AWW.

The Benefits Review Board (BRB) affirmed the Administrative Law Judge’s (ALJ) findings that the claimant’s expected earnings for the duration of the contract represented his wage-earning capacity. The inclusion of the FALA payments in the AWW calculation was also affirmed, as these payments were considered part of the claimant’s overall compensation.

Case Study: Bassim Albonajim v. AECOM and Ace American Insurance Co.

The case of Bassim Albonajim v. AECOM and Ace American Insurance Co. sheds light on the settlement process under the DBA. Albonajim, a translator who worked in Iraq, filed a claim for benefits under the DBA based on a diagnosis of Post Traumatic Stress Disorder (PTSD) related to his brief overseas employment.

The Administrative Law Judge (ALJ) granted Summary Decision for the claimant, finding that his condition was related to his employment. However, the ALJ denied disability benefits, stating that the claimant did not suffer a loss of wage-earning capacity because he was earnings more at the “time of injury” then he was when he worked for AECOM.

The Benefits Review Board (BRB) found a way to award benefits based on the claimant’s earnings from 10 years prior to the date of injury. The BRB held that  “Section 10(i) does not apply because it does not capture the worker’s loss of earning capacity from his inability to work overseas, the 52 weeks preceding the claimant’s July 2020 knowledge of his injury, when the claimant did not work overseas, does not accurately or equitably compensate for his injury.” They BRB reasoned that the claimant’s loss of choice to return to overseas employment constituted a loss of wage-earning capacity.

This decision showcases the importance of careful analysis and interpretation of the DBA provisions in settlement cases.

Conclusion

Understanding Average Weekly Wage (AWW) is crucial for determining the value of a defense base act case. Accurately calculating the AWW ensures fair compensation for injured contractors,

By examining relevant cases such as Tony Barhorst v. Combat Support Association, Ltd. and Bassim Albonajim v. AECOM, we can gain insights into the application of AWW calculations under the DBA.