What is the Defense Base Act?

The Defense Base Act is a piece of legislation requiring employees working for US government contractors overseas to be covered with worker's compensation insurance policies. Contractors who do not show evidence of such policies to cover their employees can be fined and may lose their government contracts. This includes contractors on US military bases, as well as people contracted on overseas public works projects deemed important to the national security of the United States.

Originally passed in 1941, the Defense Base Act was initially developed to cover longshoremen and related workers on military bases overseas. If injured in the course of their work, they were not eligible for care from the military because they were not members of the military and this was a cause of concern for labor activists. Over time, the scope of the legislation was expanded to cover growing numbers of government contract workers and to address concerns about people involved in public works projects off military bases.

Under the Defense Base Act, if a person is working for a government contractor overseas, whether on a military base or off, conducting businesses deemed important for national security, that person must be covered with appropriate worker's compensation insurance. Policies originated for workers in the United States often exclude overseas coverage, and a special policy may need to be obtained. Defense work is also associated with high risks and subsequently insuring contract workers to comply with the Defense Base Act is often very costly.

This labor legislation is designed to protect people in the event of accidents and other events that make it difficult for them to work. Temporary benefits can be paid out to workers who are suspended from duty due to workplace injuries and the insurance also provides coverage for people who acquire permanent disabilities on the job. Defense workers can also opt to explore life insurance policies and other options for coverage in the event of a death.

Auditors can request the paperwork associated with worker's compensation insurance policies to make sure contractors are complying with the Defense Base Act. Employees concerned about regulatory compliance may file whistleblower complaints with labor agencies, alerting them to a suspected breach of labor law and requesting an investigation. Such employees need to have documentation to back up their claims and are usually warned that using a whistleblower system for exercising personal grudges can come with penalties, as investigations are expensive and hard to administer when they involve companies working overseas in the defense industry.