The Washington PostDemocracy Dies in Darkness

Obama administration clashes with friends over workers’ comp

President Obama’s administration, with support from House Republicans, is pushing reductions to workers’ compensation for federal employees — to the consternation of fellow Democrats and his union allies.

Like the Obama administration, Rep. Tim Walberg (Mich.), the Republican chairman of a House Education and the Workforce subcommittee, cited “concerns” that workers’ comp benefits “are too generous and can discourage an employee’s return to work.”

The changes proposed by the Labor Department would save Uncle Sam money, but at the cost of cutting future payments to most workers injured on the job. But nowhere in the department’s recent statement to the House workforce-protections subcommittee did the agency provide evidence to back the administration’s concern about “disincentives” for the return to work.

“I am disappointed that the Department of Labor would come forward for the third time in the past five years with a proposal to cut benefits for injured workers that is not evidence-based, and whose justification has been completely debunked by the Government Accountability Office,” said Rep. Robert “Bobby” Scott (Va.), the top Democrat on the full committee. He finds it “incomprehensible that we are now considering” hits to feds “who have suffered a disabling work-related injury while doing their jobs in service to the American people.”

Certainly, Obama has been much more of a friend to unions and federal workers than Republicans have. His bone fides with them remain largely intact. Yet, proposing changes in the Federal Employees Compensation Act’s (FECA) workers’-comp formula is another of those strange-bedfellows situations that show not all issues are black and white. Or red and blue.

Currently, the compensation level for injured workers with no dependents is two-thirds of their pre-injury wages. For employees with dependents, about 64 percent of the recipients, the compensation level is 75 percent. Among several proposals, including some Democrats like, the Labor Department is calling for one rate, 70 percent for all, which would mean reduced benefits for the majority of future recipients.

“The 75 percent compensation rate can result in benefits greater than the injured worker’s usual take-home pay,” Leonard J. Howie III, director of the Labor Department’s office of workers’ compensation programs, recently told the House workforce subcommittee. The administration says the current program, with its tax-free compensation, can encourage workers to stay off the job longer than necessary. Without a restructuring, which would apply to future recipients, “we cannot overcome the fundamental disincentives in the current law,” Howie said. Yet, his 10-page statement did not demonstrate that employees actually are discouraged from working. In fact, he said more than 90 percent return to work within two years. He estimated the savings of the labor Department’s proposals would be $360 million over a 10-year period.

Democrats and workers reject the notion that employees don’t return to work as quickly as they could because of disincentives in the current law. With better than 90 percent “going back within two years, you’ve got a system where fundamentally people are going back to work,” said Rep. Mark Pocan (D-Wis.).

Bearing silent witness at the hearing were several injured members of the National Association of Letter Carriers (NALC), who did not testify. Though they would not be directly hit by the Labor Department’s plan, they attended the session to represent those who whose injuries are yet to come. The injured employees at the hearing didn’t appreciate any suggestion that workers’-comp recipients are malingerers.

“It angers me that anyone would propose to reduce payments to injured workers who want nothing more than to recover and return to work ASAP,” said Joel X. Cabrera, 55, a San Gabriel, Calif., postal employee, told the Federal Diary. He just recently returned to work after being crushed by another vehicle two years ago as he loaded mail onto this work vehicle. He was in intensive care for three months and had four surgeries.

“Since I was lucky enough not lose my legs and life, I was determined to return to the route I had been doing the past 30 years,” where, he said, the kids call him “Uncle Joey.”

Although workers’ comp payments are tax-free, other factors work against it being a lucrative time off.

“For instance, consider Dan Hohenstein,” Ron Watson, NALC’s director of retired members, told the subcommittee, referring to an injured worker in the audience. “If Dan had not suffered that catastrophic injury in January 2011, for the period beginning that date until he returned to full-time work in 2014 he would have earned tens of thousands of dollars in overtime, he would have received thousands of dollars in matching [retirement] funds from the Postal Service, he would have banked thousands of dollars of value in sick and annual leave. He lost all of those benefits, and more, solely because he suffered an on-the-job injury.”

Labor supports reforming workers’ comp, Watson said, “provided it does not result in unfair harm to the injured workers the FECA was designed to protect.”

Harm comes in more than one form. Suffering a serious injury then dealing with the bureaucracy “is financially and emotionally draining,” said Keith Wagner, a Seattle letter carrier. He remains disabled more than three years after an on-the-job car accident. His Christian faith helps him “keep a positive upbeat spirit,” but he said dealing with the injury “takes a lot out of you.”