Labor Needs to Adjust Compensation Benefits It Pays Injured Federal Employees to Levels Appropriate to Their Disabilities.
GENERAL ACCOUNTING OFFICE WASHINGTON DC HUMAN RESOURCES DIV
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The Department of Labor could have reduced federal workers compensation costs by establishing wage earning capacities for partially disabled federal employees. From reviewing a sample of injured employees claims at five district offices, GAO estimated that about one-third of the employees for whom Labor was paying benefits for total disability were partially disabled based on the medical evidence in their files. GAO recognizes that in addition to a finding of partial disability, Labor must consider other factors--such as suitability and availability of employment--before it can establish an employees wage earning capacity and these other factors would likely preclude Labor from reducing some employees benefits. However, if Labor had been able to establish an earning capacity for all these partially disabled employees, GAO estimates that annual workers compensation costs would have been reduced by as much as 12.5 million. In addition, some employees had actual earnings at least 12 percent above their established wage earning capacity. Increased earnings indicate that conditions may exist for further reducing an employees benefits. In early 1984, Labor was taking actions which, if effectively implemented, should resolve many of the problems discussed in this report.
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