USPS Woes Threaten Workers' Comp

Financial trouble plaguing the U.S. Postal Service could have a broader impact on all federal employees, according to the Labor Department.

If USPS, which expects to run out of cash by the end of September, fails to make its scheduled $1.2 billion payment to the government's workers' compensation, Labor will be unable to provide any benefits in the last four months of fiscal 2012, Reuters reports. Postal employees are the largest group of workers covered under the 1916 Federal Employees' Compensation Act, representing 40 percent of the benefits paid for work-related disabilities.

According to the report, USPS officials expect to make the workers' comp payment but could consider making a smaller contribution -- just enough to allow Labor to meet its obligations. The Postal Service already has suspended payments to its Federal Employees Retirement System account in an effort to conserve cash.