FECA Seen as Creating Disincentives to Work

The Federal Employees Compensation Act system of compensating federal workers for illnesses and injuries suffered on the job contains disincentives against returning to work by those who might otherwise be able to, the head of the Labor Department’s Office of Workers’ Compensation Programs recently told a House hearing. Shelby Hallmark said that while the basic rate of FECA compensation, 66 2/3 percent of salary tax-free, is comparable to most state systems, the majority of federal employees receive an augmented benefit, 75 percent, reflecting at least one dependent. The result is that FECA benefits “frequently exceed the employee’s pre-injury take home pay. Few state systems provide any augmentation for dependents, and none approaches the federal level,” Hallmark said.