Labor Needs To Adjust Compensation Benefits It Pays Injured Federal Employees to Levels Appropriate to Their Disabilities

HRD-84-29: Published: Mar 26, 1984. Publicly Released: Mar 26, 1984.

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GAO reviewed the Office of Workers' Compensation Programs' (OWCP) efforts to establish wage earning capacities which the Federal Employees' Compensation Act requires to be used in determining the compensation benefits to be paid to injured Federal employees.

For 5 of the 16 OWCP district offices in which GAO sampled injured Federal employees' claims, GAO estimated that over 2,000 beneficiaries were receiving benefits for total disability even though their files contained medical evidence of partial disability. Because such evidence is not the sole factor to be considered in establishing an employee's wage earning capacity, OWCP would likely be precluded from reducing some of these employees' benefits. However, if OWCP had been able to establish a wage earning capacity in each case where evidence of partial disability existed, GAO estimated that annual Federal compensation costs could have been reduced by as much as $12.5 million. GAO also reviewed cases for which OWCP had previously determined an employee's wage earning capacity and found that compensation benefits were often not adjusted to reflect increased earnings. In 1984, OWCP implemented a new case management system that provides for better monitoring of compensation cases with increased emphasis on reemployment of disabled employees. This monitoring should eventually result in either terminating partially disabled employees' compensation benefits or reducing them through the establishment of wage earning capacities.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: Labor believes that it has already responded to the concerns in the GAO report. Labor has a plan for addressing the problems discussed in the report, successful implementation of the plan is not yet assured.

    Recommendation: The Secretary of Labor should direct OWCP to ensure that it implements the plans for reviewing long-term roll cases for the purposes of terminating or adjusting, where appropriate, partially disabled employees' compensation benefits. If this effort is not successful, the Secretary should consider establishing a task force to: (1) identify from the backlog of periodic roll cases beneficiaries who are no longer totally disabled; (2) collect the information needed to establish their wage earning capacities; and (3) where appropriate, adjust their compensation benefits.

    Agency Affected: Department of Labor


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