Managers group calls for workers' comp cuts

Managers group calls for workers' comp cuts

ksaldarini@govexec.com

Federal workers' compensation benefits need to be cut because they are too costly for agencies and they discourage workers from returning to the job, a group representing federal managers said recently.

In a letter to the Labor Department's Office of Workers' Compensation Programs (OWCP), Michael B. Styles, President of the Federal Managers Association, proposed several reforms to the Federal Employees' Compensation Act (FECA), including a reduction of benefits from 75 to 66.66 percent of income.

OWCP's primary function is to administer FECA, which allows federal employees to apply for disability and medical benefits for workplace injuries.

Under the law, disbursements for FECA payments are charged back to federal agencies as an incentive for agencies to provide a safe working environment. Agencies, therefore, must pay out of their salary and expense accounts for injured employees benefits.

The charge back provision does more harm than good, according to the managers group.

"The charge back provision was instituted to make agencies accountable for safety; however, it has led to many managers seeing their rapidly downsizing budgets tapped to pay for long-term disability cases," Styles said in the ltter.

In some cases, workers can earn more on disability than their regular take-home salary because of the way taxation works, said Mark Gable, legislative director for FMA.

By setting the maximum rate of benefits at 66.66 percent of income, regardless of dependents, the financial disincentive for injured feds to return to their jobs would be removed, FMA said.

According to Jose J. Guzman, national vice president of FMA and a retired Army depot manager, concerns about FECA abuse are legitimate. In his experience, some people would prefer nontaxable FECA benefits to their salaries, Guzman said.

"In my department I had about 19 people who were under that scenario. I would try to get them back to work as soon as I could," Guzman said.

In addition to reducing FECA benefits, FMA is proposing that retirement-age recipients be funded separately from younger employees; FECA increases be tied to employee pay raises, not the Consumer Price Index; and the right for injured workers to resume employment be lengthened from one to three years.

Colleen M. Kelley, president of the National Treasury Employees Union balked at the proposals. "We believe that there should be no changes made to FECA. We think that there's no reason that any employee who suffers from any kind of a job related injury or illness should have to suffer any further financial devestation or risk because of the injury," Kelley said.

An OWCP spokeswoman said OWCP Deputy Director Shelby Hallmark is currently reviewing the proposals. Hallmark declined to comment until that review is complete.

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