GAO: Federal Workers Disabled in the Line of Duty Face Significant Cuts to Important Benefits Under Pending Proposals
WASHINGTON – Proposals by the Department of Labor and approved by the U.S. Senate as part of a postal reform bill (S. 1789) would reduce wage replacement benefits for work-related injuries far below what workers would have received had they been able to work a full career, the Government Accountability Office (GAO) found in two reports released today.
These provisions include reducing workers’ compensation at retirement age from 75 percent to 50 percent of the worker’s wages, lowering benefits for those with dependents, and reducing benefits for families of those killed in the line of duty. Under the Senate bill, these cuts would be deeper than the Department of Labor’s proposal and retroactive for many workers.
“A just workers compensation system should aim to compensate injured workers for what they would have earned had they been able to complete their career. Proposals approved by the Senate abandon this important principle and leave injured workers decidedly worse off financially than if they had not been injured at all,” said Rep. George Miller (D-Calif.), the senior Democratic member of the House Committee on Education and the Workforce. “Congress should reassess these proposals. No worker should be financially better or worse off as a result of a debilitating service-related injury.”
Since 1916, the Federal Employees’ Compensation Act (FECA) has provided workers' compensation benefits for federal employees who were injured or killed through the performance of duty. While the program has not been updated in nearly 40 years, its cornerstone provides payments to replace lost wages for the duration of the injury. In November 2011, the House of Representatives approved bipartisan legislation (H.R. 2465) that would improve program integrity and modernize several obsolete benefit levels.
“GAO’s analysis shows that the Senate’s bill undermines a core principle underlying workers compensation: In exchange for giving up their right to sue, workers who are disabled as a result of their service should receive compensation equal to what the worker would have received if the they had not been injured,” said Rep. Lynn Woolsey (D-Calif.), the senior Democratic member of the Workforce Protections Subcommittee. “It is imperative that the House put the brakes on these harmful proposals and work together to reform the Federal Employees’ Compensation Act in a manner that takes full account of GAO’s most recent findings.”
GAO’s new reports compare median benefits for workers at retirement age who were permanently injured with median retirement benefits for an identical group of workers who worked a full career and participate in the Federal Employees Retirement System (FERS). A February 2012 report by GAO compared FECA benefits to retirement benefits under the old Civil Service Retirement System (CSRS), which is being replaced by FERS. Since CSRS is nearly phased out, today’s report is the first known study of how FERS-covered federal employees fare under the proposed FECA changes.
Specifically, GAO found:
- Median FECA benefits under current law for totally disabled workers are "on a par with or less than" what workers would have received under FERS had they worked a full 30-year career.
- Under proposals by the Department of Labor and passed by the Senate, non-postal workers disabled as part of their service would receive 31 to 35 percent less than if they were not injured and retired after 30 years under the current retirement system.
- GAO estimated that these revisions also adversely impact federal postal workers. Median FECA benefits would be 22 to 29 percent lower than what postal workers would have received in retirement benefits had they worked a full 30-year career.
- For injured workers with dependents, GAO found that the Department of Labor’s proposal would decrease their pre-retirement median wage replacement rates from 81.6 percent under current law to 75.8 percent under the proposals.
- GAO found a disproportionate impact on wage replacement rates for "those injured at lower GS (salary) levels and those who missed longer careers."
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