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

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.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Franklin A. Curtis Team: General Accounting Office: Human Resources Division Phone: (202) 275-5451