Federal Employees' Compensation Act:

Redefining Continuation of Pay Could Result in Additional Refunds to the Government

GGD-95-135, Jun 8, 1995

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Pursuant to a congressional request, GAO reviewed several issues relating to the Federal Employees' Compensation Act (FECA) and how it is administered by the Department of Labor's Office of Workers' Compensation Programs.

GAO found that: (1) the federal government is not reimbursed for continuation of pay (COP) by federal employees receiving both regular salary payments and third-party damages; (2) the federal government could recover up to $2 million per year if it obtained refunds of COP in third-party cases; (3) additional costs and effort to obtain refunds of COP in third-party cases would be minimal if previous reinstatement procedures were used; (4) some agencies have a separate COP code in their payroll systems that allows them to easily determine the amount of COP paid to their employees; and (5) the amount of COP that could be refunded to the government would greatly exceed the administrative costs to recover COP.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matter for Congressional Consideration

    Matter: To preclude employees from, in effect, receiving double recoveries and to help reduce the costs to the federal government of employees' work-related injuries caused by third parties, Congress should amend FECA to expressly provide for refunds of amounts paid as COP when employees receive third-party recoveries. Subsection(e) of 5 U.S.C. 8118 could be amended to provide that COP shall not be considered compensation "except for the purpose of refunds to the United States from third-person recoveries pursuant to section 8132 of this title." In addition, section 8132 could be amended to provide that amounts refunded shall be credited to the Employees' Compensation Fund "except for continuation of pay under section 8118 of this title, which shall be credited to the employing agency that paid it."

    Status: Closed - Not Implemented

    Comments: This recommendation is more than 4 years old and congressional action has never been initiated.