Federal Employees' Compensation Act

Redefining Continuation of Pay Could Result in Additional Refunds to the Government Gao ID: GGD-95-135 June 8, 1995

The federal government used to obtain refunds for continuation of pay benefits when federal workers received damages from third parties who were liable for work-related injuries that caused these employees to be absent from work. The government discontinued this practice in 1986 following decisions by the Employees' Compensation Appeals Board and a federal appeals court. This report examines the costs and the benefits of the government reestablishing its former practice of obtaining refunds of continuation of pay when employees recover damages from responsible third parties.

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.

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.

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