IMPROVEMENT OF BENEFITS UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67B00446R000600010001-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 223
• Document Creation Date: December 16, 2016
• Document Release Date: July 11, 2005
• Sequence Number: 1
• Publication Date: September 16, 1965
• Content Type: OPEN

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IMPROVEMENT OF BENEFITS UNDER THE FEDERAL
EMPLOYEES' COMPENSATION ACT
F
&j ISEL
HEARINGS FILE copy-,
SELECT SUBCOMMITTEE ON LABOR
COMMITTEE ON EDUCATION AND LABOR
HOUSE OF REPRESENTATIVES
EIGIITY-NINTII CONGRESS
H.R. 10721 and Similar Bills
TO AMEND THE FEDERAL EMPLOYEES' COMPENSATION ACT
TO IMPROVE ITS BENEFITS, AND FOR OTHER PURPOSES
HEARINGS HELD IN WASHINGTON, D.C.
SEPTEMBER 8,14,15', AND 16, 1965
Printed for the use of the Committee on Education and Labor
ADAM C. POWELL, Chu-irman
U.S. GOVERNMENT PRINTING OFFICE
N-030 WASHINGTON : 1965
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ADAM
CARL D. PERKINS, Kentucky
EDITH GREEN, Oregon
JAMES ROOSEVELT, California
FRANK THOMPSON, JR? New Jersey
F,LMER J. IMOLLAND, Peune)lcanla
JOHN II. DENT, Penneylcnltia
ROMAN C. PUCINSKI, Illiaol+
DOMINICK V. DANIELS, New Jersey
JOHN BRADEMAS, Indiana
JAMES G. O'IIARA. Michigan
RALPH J. SCOTT. North Carolina
HUGH L. CAREY. New York
AL'(:USTU S F. HAWKINS, California
CARLTON R. SICKLES, Maryland
SAM GIBBONS, Florida
WILLIAM I). I?YIRD, Michigan
WILLIAM D. HATHAWAY, Maine
PATSY T. MINK. Hawaii
JAMES it. SCIJEUER, New York
LLOYD MEEDS. Washington
WILLIAM H. AYRES, Ohio
ROBERT P. GRIFFIN, Michigan
ALBERT It, QUIE. Minnesota
CHARLES E. GOODELL. New York
JOHN M. ASH1tROOK. Ohio
DAZE MARTIN, Nebraska
ALPIIONZO BELL. California
OLDEN It. REID, New York
GLENN ANDREWS, Alabama
EDWARD J. GURNEY, Florida
jht I)AnGANS, Chief Clerk
tarrtxg MsxIEN-
ItL'YSELL C. DERRICKROS, Staff Director
('. SrMMSER .STONE, Special Aaaiatant to the Chairman
Dr. GRACE liu'ELL, Education Chief
LEON ARRAMsoN, Chief Counsel for Labor-Management
MlcitAEL J. IYEIuSNTEIN, Minority Counsel for Education and Labor
r' I RLD8 W. RanrLlFFE, Special Education Counsel for Minority
SELECT SUBCOMMITTEE OS LABOR
ELMF,R J. HOLLAND, PennlJNDER THE FECA
which can he awarded to the employee or to his family if the most
tragic events associated with his emplo yment should befall him-
total disability or death. We ajpreciate that the increase in maximum
award which this bill prow ides is all advantage over that which is now
provided.
We recommend favoi,ible action on the bill now before you.
Mr. Chairman, I appreciate the opportunity to appear before you.
Mr. O*IIAii_>. 1 agree with you, sir. The clement that I hope to
concentrate oil in our discussions are the relatively small number that
are involved in an over-sea capacity and who presumably, in many cases,
are in situations of danger. At Ilie same time, they represent a small
proportion of the total Federal Government employment, something
less than 7 percent, even a fraction of that is what we are talking about.
And I hope the figures that the Solicitor of Labor will produce for this
comuuttee, will indicate exactly how much is involved from the point
of view of cost to the Federal (government as a possible formula some-
what more generous than what is presently called for.
Mr. Pue.iN sxr. But. by the same token, that same formula then be-
comes a guideline across the country?
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39
Mr. KONTOS. Yes, sir; it could.
Mr. PuciNSKI. This is where I think the committee has to be very
cautious in what it does. I wonder really if the time has not come,
if we should not give some consideration to staying with the bill the.
way it is, because it does recognize the existing inequity and I think
the bill is necessary.
Mr. KONTOS. I agree.
Mr. PucINsKi. But perhaps the time has come when you ought to
prepare for us some additional language. If you are concerned about
the ceiling for hazardous duty, maybe we should have something in
here. I don't know if the Hays amendment is going to do it. Per-
haps we should have some consideration here for removing it.
I would be willing to waive the ceiling for any Federal employee
who hasbeen sent into hazardous duty and suffered disability. I think
that those people are being called to make great sacrifices and encoun-
ter personal danger and even danger to, their families.
It would seem to me we ought to give some thought to providing
better protection for those people. But I don't like to see their exam
ple being used to apply across the board. -
Mr. KONTOS. These were examples that dramatized the situation.
Again, I repeat we are talking about a relatively small number of peo-
ple who fall beyond the maximum and it is, even in our own service,
less than half of our total numbers that are eligible. But I would
like to repeat that we support the bill.
We think it is a very useful., important step and we could live with
the bill in its present form.
In answer to your question about hazardous- pay, I think the Hays
bill amendments that have been proposed do take care of that very
fully indeed.
Mr. PucINSX1. Will it take care of it in this compensation also?
Mr. KONTOS. The hardship differential?
Mr. PUCINSKI. Will the Hays amendment apply?
Mr. O'HAuA. It does not affect the maximum under that act, does it?
Mr. KONTOS. No; it will increase by up to 50 percent the salary of
those that will be involved in serving abroad in hazardous areas.
Mr. PUCINSKI. Perhaps the author of the bill may want to give
some thought to putting in an amendment here to remove the ceiling
where the disabilities occurred under hazardous conditions.
Thank you very much for your fine testimony.
Mr. O'HAI.A. Mr. Gurney?
Mr. GuiNxY. We had a lot of testimony on the ceiling, yet I have one
more question on it. Is it the position of your three agencies that you
recommend that a percentage ceiling-without trying to pin you down
tt to the amount-is a more realistic approach to this thing then .
fixed dollar amount?
Mr. KONTOS. Yes, sir; that is my personal view, and I think it re=
fleets the consensus of the three agencies I represent. On the other
hand, we are anxious that this interim step be taken as rapidly as pos-
sible,but the specific answer to your question is "Yes."
Mr, 1 iUNEY? The other question is this: With regard to the AID
employee .?170 now a captive of the Vietcong, is his full salary being
a 2 MFR ii- i under the Missing Persons Act.
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40 IMPROVE MENT OF BENEFITS UNDER THE FECA
Mr. KoxTos. This is Mr. Abe Lerner, head of our Employee-Man-
agement Relations Division.
Mr. GURNEY. What. happens in this sort of case? Suppose it is de-
termined that lie died 6 months ago. Is there any attempt to recover
back money for the family ?
Mr. I.ERNEII. No, sir; the death is not official, for salary purposes,
until the head of the agency makes an official finding of death based on
the evidence available.
In one ease which Mr. Kontos cited, Joe Grainger was discovered in
April to have been killed while resisting recapture in January. In
order for us to have enough background to clearly identify all the
facts, it was sometime beyond April that. an official finding of death
was made, and the salary continued until that time.
Mr. Gummy. Does that act cover all Federal employee.-,?
Mr. LERYER. And members of the Armed Forces. All Federal em-
ployees and members of the Armed Forces.
Mr. BELL. Mr. Kontos, you mentioned the Hays bill. Perhaps I
am being repetitious, but how would you define "hazardous"? Is there
any trouble with that. particular aspect, or have you discussed it? I
may have missed it.
Mr. Korros. We have not discussed it.
Mr. BELL. Did the Hays billdefune"hazardous"?
Alr. KoxTos. I think it makes general reference to the subject. I
do not. think it goes into great detail.
Mr. BELL. Members of the Armed Forces, for example, are in areas
of actual combat. There might be a question as to what would be haz-
ardous, in your t ype of operat ion. Is this correct?
Mr. KoNTos. 'i'es, sir; it wotild be aproblein of definition. It. seems
we could agree that Vietnam is hazardous. We could agree that In-
dian and Pakistan host (lit ies put people in it hazardous zone.
Mr. You would not agree that Berlin could he a hazardous
zone?
Mr. Kolvrros. That's right. If you would like, we could submit, for
the record our current views on what constitutes a hazard.
Mr. O'IIARA. If you would, please.
(Information furnished follows:)
AGF:NoY FOR IxTt:RNATIO\AL DEVELOPMENT,
Washintllon, D.C., Scplcrabcr 1.3, 1965.
Mr. JAMES IIARRISON.
Director, Sciccl Subconzmittce on Labor,
Rayburn. Building.
DEAR MR. IIARRISON : In the course of my testimony in supixlrt of Mr. Ilath-
away's bill. l'LB. 10721, on September 8, the question was aksed what the criteria
were for the establishment of _salary differentials for U.S. civilians stationed
abroad. imarttculnrly for those in hazardous areas.
The Secretary of State has been given the authority to establish differentials
up to 25 lacrc?ent of salary under section 2.'31 of the Overseas Differentials and
Allowances Act (Public l.atw 80 707). We submit an outline of the criteria
and methods used.
Mr. Hays' bill, 1T.11. 6`2'77. which is now before the Senate. amends section 2.31
!,y Pro riding t)hnt "1f) a forejwn Decal tsherc there is danger of injurrv due to hostile
activity" the additional compensation can be fixed as high as 50 percent of base
salary-Vietnam ii an obvious example. Criteria for establishing dlffereut'culs
beyond the present 25 percent are now being det?clopetl for the Secretary. Among
the background elements which will be under consideration are the Depariutent
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IMPROVEMENT OF BENEFITS UNDER THE FECA 41
of Defense criteria for members of the uniformed services in similar areas.
These appear under title 37 of the United States Code. A copy is enclosed.
We will be happy to forward more complete information concerning the estab
lishment of civilian differentials in areas of hostile activity as soon as it is
developed.
Sincerely yours,
0. WILLIAM KONTOS,
Director, Office of Personnel Administration.
OUTLINE OF AurnouiTY FOR, AND SYSTEM USED IN, DETERMINING FOREIGN POST
DIFFERENTIAL CLASSIFICATIONS FOR CIVILIAN PERSONNEL
By Executive Order 1'0903, dated January 9, 1961, as amended, the President
has given the Secretary of State authority and responsibility under section 231
of the Overseas Differentials and Allowances Act (Public Law 86-707) for
prescribing regulations and establishing foreign post (salary) differentials for
civilian employees. Payment of the post differential is limited to places involv-
ing one or more of the following :
(a) Extraordinarily difficult living conditions,
(b) Excessive physical hardship, or
(e) Notably unhealthful conditions.
These three elements have been divided into 11 major categories :
Extraordinarily difficult living conditions
,Inadequate housing accommodations.
Lack of cultural and recreational facilities.
Geographic isolation.
Inadequate transportation facilities.
Lack of food and consumer services.
Excessive physical hardship :
Deleterious effects of climate and. altitude.
Dangerous conditions affecting life, physical well-being, or mental
health.
Notably unhealthful conditions :
Incidence of disease and epidemics.
Lack of public sanitation.
Inadequate health control measures.
Inadequate medical and hospital facilities.
For purposes of objective analysis, the 11 major categories of hardship have
been subdivided into 77 factors, many of which are again divided into variations
of the same factor. Each factor or variation of factor is given specific point
weight. It is the combination of these weights as applied to environmental
conditions at the post which determines its differential classification under the
point-score system used by the Department of State. For example, the category,
"Isolation" is subdivided into the following factors :
A. Geographic restrictions.
B. Places of interest.
C. Population.
D. Distance from, any city.
E. Transportation away from post.
F. Regional transportation.
G. Local transportation.
H. Mail.
1. Size of English-speaking colony.
J. Sizeaof American colony.
K. Restriction of social life due to customs of language.
In the explanatory standards used for evaluation of each factor "Geogra'phid
restriction," as an example, is described as follows :
.:? Personnel geographically restricted by natural barriers, official regula-
tions or otherwise similarly isolated. Examples : 5niallislands where main
land cannot, be Basil;, reached by ferry or other commuting facilities ;' towns
removed from other civilization or isolated by desert, jungle, mountains,
etc. ; restriction to specified areas such as to a city or sector thereof by
regulation of U;S. or local government:
(1) Considerable geographic isolation, where personnel can get awayfrom
post only infrequently,
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42 IMPROVEMENT OF BENEFITS UNDER THE FECA
(2) Extreme geographic Isolation, resulting in virtual confinement to post.
Item (1) carries only half the point weight of Item t`2), thus providing de-
lineation between places which are fairly isolated and places at which isolation
has considerably more effect on employees' life. Scoring for Item (1) or item
(2), not both, is of course applied.
From the answers to questions on form DSP--3t;, "Foreign Post Differential
Questionnaire," as well its other available sources of current information. the
State Department's differential analysts follow this system in evaluating the
11 major categories of hardship conditions at posts by applying appropriate
weights, where warranted, to one of the variations under each of the 77 factors.
Under the system, the highest score In any one factor such as "Geographic re-
strictions" will not alone he sufficient to provide a differential classification. A
combination of scores under all applicable categories is necessary to achieve
this result. It is the total score of applied weights, measured against pre-
determined cutoffs, which determines whether the post warrants a differential
classification of 0, 10, 15, 20, or 2?'i percent. At least annually, posts are rated
individually by at least two analysts and the higher for each are reconciled and
approved by at least two officials before any eiassitieatioon is recommended to
the Secretory for approval.
A certain degree of hardship is considered to be inherent In any foreign as-
signment, even for posts like Paris and Rome. To qualify for a 10-percent
differential is a post must have a total point score, In excess of the lowest pre-
determined cutoff. Higher differential classifications are warranted for rela-
tively higher total point scores, Because of the statutory limitation of 2N per-
cent, however, some posts which involve extreme hardship conditions cannot be
classified at a higher rate even though their accumulative point scores would
warrant higher classification.
There Is a range of several points between cutoffs in each of the differential
classifications which tueans that a post classified at, tray, 10 percent might be
high, mecliunt, or low In that range. A later analysis of current environmental
conditions at the post might show improvements which require eliminating the
10-p orcent cinssifcalioo. It might show worsened conditions which warrant
increasing the clnssiflcation, or it might show either such change in conditions
hat in insufficient degree to place the post's point score in a different classification
bracket. Successive analysis over 3 or 4 years could gradually increase or de-
crease the post's point score without change In classification. 'i'hc fifth analysis,
however. might increase or decrease the score just a few points but just suft-
ciently to warrant a changed classification. it is this change in classification.
particularly if it is a decrease. which is difficult for employees to understand
particularly when they have been at the post only a short time and have seen or
felt no change in conditions,
310. Special pay: duty subject to hostile fire,
(a) Except In little of war declared by Congress, and under regulations pre-
scribed by the Secretary of Defense, a member of a uniformed service mnv be
paid special pay at the rate of 'I a month for any month in which he was
entitled to basic pay and in which he- -
(1) was subject to hostile fire or explosion of hostile mines ;
(2) was on duty in an area In which he was in imminent danger of being
exposed to hostile fire or explosion of hostile mines and hi which, during
the period he was on duty In that area. other members of tile uniformed
services were subject to hostile fire or explosion of hostile mines: or
(3) was killed, injured, or wounded by hostile fire, explosion, of a hostile
mine, or any other hostile action.
A member covered by clause t 3) who is hospitalized for the treatment- of his
Injury or wound may be paid special pay under this section for not more than
3 additional months during which lie is so hospitalized.
(b) A member may not be paid more than one special pay under this section
for tiny month. A member may be paid special pay under this section In addi-
tion to any other pay and allowances to which he may be entitled.
(c) Any determination of fact that Is made in administering this section is
conclusive. Such a determination may not be reviewed by any other officer or
agency of the United States unless (here has been fraud or gross ilegilgence.
However, the determination may be changed on the basis of new evidence or for
other good cause.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 43'
(d) The Secretary of Defense shall report to Congress by March 1 of each
year on the administration of this section during the preceding calendar year.
(Added Public Law 88-132,9(a) (1), Oct. 2,1963, 77'Stat. 216.)
Mr. PUCINSii'.I. Would my colleague yield
Mr. BELL. Yes, sir.
Mr. PuoINsK.i. I can appreciate the difficulty in trying to define a.
hazardous area or zone, but I don't think the agency would have any
difficulty in determining, after the injury has been suffered, after the,
disability has been suffered, whether that disability was suffered under
hazardous conditions or not.
Mr. BELL. I agree and I am not inferring that the gentleman's point
is not well taken, but as you said, there is a broad pattern and in order-
to set that pattern, you have to have something that is uniform or
fairly uniform at least.
This is a question I should have asked Mr. Donahue when he was
here, but I just thought I would mention it to you to. get your ppinion
on it. Ito talks about, in this bill, education for dependents, the age
limit is 23.
I know some States say 25, but 23 seems.-to, be maybe a little close
to the line. I might ask the chairman about this point because with
military service maybe they did not get the skills they need-they
could be behind.
Mr. PUOINSKI. Do you yield?
Mr. BELL. Yes, sir.
Mr. PucINSKI. It is significant that the masses of American work-
ers covered by social security get compensation for their children only
up to 22, and this Congress set that limitation at 22'.
Mr. BELL. This is 23, so it is a variation for that.
Mr. O'HARA. I think the gentleman is perfectly correct. This is
one of the questions we ought to look at though. What arbitrary
age we are going to set? I might add at this point that I completed
law school just 2 months before my 30th birthday. So, I will be sym-
pathetic.
Mr. BELL. There are also problems of birthdays. Some children's
birthdays happen at the wrong time.
Mr. PUCINsKI. The only point I was making on age 22, Mr. Chair-
mn.n, is that the gentleman who is paying the taxes to support all these,
programs, the workingman in this country, the best he can get out
of his social security, if he should be killed and leaves a young family,.
is until age 22.
Now we are talking about 23, 25. Let's think about the man who.
i.s paying these bills.
Mr. BELL. I think your point is well taken. However, you are
breaking the pattern when you say 23. You might as well analyze it
properly.
Mr. PucINSKI. You might also keep in mind that under social se-
curity the worker is paying into that fund. He is paying half the
benefits of that social security. IIe is paying it.
As far as I know, under. the Federal program I don't think there is
any contribution by the employees.
i Mr. O'HAiz.A. Under workmen's compensation laws in the States-it
is my understanding that there is no deduction made from wages. Of
course, the amounts set aside are paid in premiums by the employer
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44 IMPROVEMENT OF BENEFITS UNDER THE FECA
for workmen's compensation, and they are a form of wage cost, al-
though unlike the FECA.
But under workmen's compensation laws the average age varies
considerably. Some are 18, some 21, some with a special provision
for skills, some without.
I want to thank the gent.leman very much for coming over and
we are certainly sympathetic with the problems that many of your
employees face, and I believe you can leave with the assurances that
we are going to consider the maximums very carefully.
Dir. TIolland, the chairman of this subcommittee, has asked me to
announce that he has invited witnesses from Government employee.
organizations and other interested groups to appear on the 14th and
15th of September.
On the 16th, Mr. Arthur Larson, forlner L== rider Secretary of Labor,
now with Duke University and Mr. Samuel IIorevitz, an attorney
from Boston, both of whole are recognized authorities on workmen's
compensation, will appear.
Without objection, the committee will now stand in adjournment.
Mr. Ilo*;TOS. Thank you very much, Dir. Chairman.
Mr. O'II. a . We will meet again on the 14t.h in this room at. 10 a.m.
(Whereupon, at 11:45 a..m., the hearing adjourned, to reconvene at
10 a.m., Tuesday, September 14,1965.)
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IMPROVEMENT OF BENEFITS UNDER THE FEDERAL
EMPLOYEES' COMPENSATION ACT
TUESDAY, SEPTEMBER 14, 1965
HOUSE OP REPRESENTATIVES,
SELECT SUBCOMMITTEE ON LABOR
OP THE COMMITTEE ON EDUCATION AND LABOR,
Washington, D.C.
The subcommittee met at 10 a.m., pursuant to recess, in room 2261,
Rayburn House Office Building, Hon. James G. O'Hara presiding.
Present : Representatives O'Hara, Pucinski, Hathaway, and Quie.
Also present : Jim Harrison, staff director; Michael J. Bernstein,
minority counsel; and Susan M. Parry, clerk.
Mr. O'HARA. The Select Subcommittee on Labor of the House Com-
mittee on Education and Labor will come to order.
The purpose of today's hearing is to continue the hearings begun
last week on H.R. 10721 and related bills to amend the Federal Em-
ployees' Compensation Act, to improve its benefits and make other
changes in the act designed to improve its operation.
Our first witness today is our very distinguished colleague from
Florida, Congressman Dante Fascell, and if he is anywhere near as
expert on Federal employees' compensation as he is on almost every-
thing else that comes up in the House, especially the business of his
committees and is as helpful on this matter as he is on those I am
sure we will be able to adjourn the hearings immediately following
his testimony and mark up the bill.
Congressman Fascell, we would be pleased to have your testimony.
(Statement referred to follows:)
STATEMENT OF .LION. DANTE B. FASCELL, A REPRESENTATIVE IN CONGRESS FROM
THE STATE Or FLORIDA
Mr. Chairman and members of the subcommittee, I appreciate your kindness
in extending me an opportunity to appear here today to make a statement in
support of H.R. 5288, which I introduced on February 23, 1965.
This bill proposes to make two separate changes in the Federal Employees'
Compensation Act. I believe that these changes are desirable and necessary to
prevent certain hardships to employees whose injuries require .them to come
under the FECA program.
Section 1 of II.R. 5288 is designed to provide financial relief to injured workers
who experience delays in receiving their awards under the compensation pro-
gram. It would allow an employee to continue to receive his regular pay between
the time of his injury and. the time when lie receives his first compensation pay-
nient. Any amounts duo the United States by reason of the continued payment
of the employees' salary or remuneration would, under the terms of the bill, be
recoverable by withholding; sums from his compensation payments in a manner
which would be equitable to'the employee and to the Government. One of the
effects of this recovery provision would be to prevent abuse of the benefits
extended by the bill.
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46 IMPROVEI ENT OF BENEFITS UNDER THE FECA
Under present law, as you know, an injured worker awaiting his first compen
sation check may use up any annual or sick leave to which he is entitled, if Ht
so chooses, but he then receives no further payment, from the Government until
his claim is processed and his first FECA payment is sent to him. In many
instances this cast be a prolonged and difficult period, running for months in
some cases. During this tittle the employee must provide for himself and his
family as best lie can.
An injured worker may experience delays of varying periods both within the
agency that employs him and within the Bureau of Employees' Compensation,
which processes all claims after they leave the employment agency. I am in-
formed that the average period Of elapsed time between the date of an injury
and the date it reaches the BEC is 48 days. This represents the time lapse
within the agency.
Most claims are processed fairly rapidly by Lite Bureau. According to a state-
ment by its Director, 1 percent of the claims they receive are processed within
I week to 10 dayS; 85 percent are processed in 3 weeks, and [lie remainder take
a longer time for it variety of reasons. Those eases in which there are difficulties
in establishing a causal relationship between the injury and the conditions of
employment usually take the longest time in processing.
So the sitwition Is this. Mr. Chair?min. Considerable delays are experienced
in processing these FDC A claims and dur[Itg the waiting period an employee must
either utilize what leave he might have, or go 'without a fixed source of Income
until his first compensation payment Is sent to him.
In many eases employees are forced to go a step further and utilize their sick
leave rather than apply for FECA payments. There just canto to my notice an
article in the current issue of the Federal Times concerning the practice by postal
employees of utilizing sick leave and foregoing FECA benefits. I ant sure that
the provisions of my bill would alleviate the prohleins discussed in this article.
I ask permission to submit a copy of this article for Insertion In the record.
Section 2 of H.R. 5288 would allow an employee who has been granted tin award
under Lite FECA program and who returns immediately to Federal employment
to earn anneal and sick leave credits for the period that he was on the FECA
rolls. Under present law no annual or sick leave credits are earned during the
period an employee Is on leave without. pity and drawing FECA benefits. The
situation is just the opposite with respect to an employee who is on annual or
sick leave. Such an employee continues to accrue leave credits while he is on
leave.
It is patently unfair. in my opinion, to the employee who is injured on the
job to be denied a benefit extruded to another employee who is on vacation or
absent from work because of illness.
In considering this bill we must remember tbut the vast majority of Federal
employees are dependent upon their paychecks to keep their households function-
ing. A letter carrier earning around $5,000 or $G.000 a year, for example, cannot
afford to miss It single paycheck without feeling an immediate strain on his
resources. Those who are forced to undergo 5 or G weeks without income, as
many now do while awaiting their compensation awards, are confronted with a
severe financial struggle. The bill I have introduced, with its built-in safeguard
against abuse, is necessary to help these workers In surmounting the problems
they face tit these dire times.
IN POST OFFICE-SIcK LE_ vE ABUSE CUT TIED TO FASTER CLAIMS PROCESSING
WAsrIINGTON.-POSE Office Department will seek speedier processing of claims
to the Bureau of Employees' Compensation. The action was recommended by
n special labor-management committee Investigating use of sick leave by postal
employees, James 11. Rademacher. who represented the National Association of
Letter Carriers, complained of delays In the processing of claims for injury
compensation and suggested that such delays might be responsible for Increased
use of sick leave by postal workers.
The committee endorsed Rademacher's suggestion and recommended that the
matter be discussed with the Bureau of Employees' Compensation in the Labor
Department.
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IMPROVEMENT OF BENEFITS UNDE
Two other measures were recommended as safeguards against the abuse of
sick leave by employees.. The group agreed to an educational program through
Department and union publications and other channels emphasizing the value
and proper use of sick leave.
. Changes in the administration of sick leave regulations also were suggested.
Deputy Assistant Postmaster General Richard E. Orton, who was in charge of
the management side of the committee, said that a draft of the changes will
be sent to unions and to the Postmaster General for approval.
He said that the process should be completed within 3 or 4 weeks. Specifics of
the changes were not made public, but they would not change amount of sick
leave (13 working days) or rules of accumulation.
Sick leave cost the department $127.3 million in fiscal 1965. Employees used
40.3 million hours of sick leave during that time, about 2 million hours more
than the year before.
Rademacher suggested that employees might make more compensation claims
instead of using so much sick leave if compensation could be obtained more
rapidly. Compensation pays about three-fourths of an employees pay ; sick leave
pays the full amount.
Orton agreed to confer with Bureau of Employees' Compensation officials about
the problem of speeding claims processing.
BEC Director Thomas Tinsley told Federal Times that he has been concerned
with the same problem and is interested in expediting claims.
"We'd like to give service so that an employee never misses a paycheck," lie
said.
Tinsley suggested that a good part of the delay is in the transmittal of claims
from the agency to the BEC. He said that some claims; of postal employees
may be sent from post office to regional office before they arrive at BEC. Process-
ing could be expedited if claims were sent directly from the post office to the
EEC, he said.
As it is, Tinsley said, his agency processes 75 percent of the claims: within 1
week to 10 days after they arrive at BE. About 95 percent are processed in 3
weeks, he said. The remainder might be delayed because a form was incomplete
or because the examiner might need special information or confirmation of facts,
he said.
About half the BEG caseload concerns postal employees. The agency handles
about 110,000 continuing cases. each year, and it receives about 14,000 new claims
each year.
The committee that recommended the discussion with BEC has completed a
7-month study of sick leave and its alleged abuses in the Post Office Department.
The group was appointed in response to charges from the General Accounting
Office that postal and other Federal employees had been abusing sick leave rights.
Rademacher and the United Federation of Postal Clerks representative to
the committee, Francis S. Filbey, agreed that the committee had found virtually
no evidence of abuse of sick leave by postal employees.
Rademacher flatly stated : "There was no abuse at all."
Filbey said that the recommendations of the committee, including the educa-
tional program and other measures, were adequate to deal with any isolated
instances of abuse.
Radecacher said that if there is any abuse, It is perpetrated by some post-
masters. These officials, he said, could take as much as a year's sick leave just
before they retire.
Daniel Jaspan of the National Association of Postal Supervisors was the other
member of the committee.
General Accounting Office has asked Post Office and the Civil Service Commis-
sion to adopt a rule prohibiting an employee from engaging in other employment
while he is on sick leave. Both agencies have rejected the rule as arbitrary;
they agree that a postman with an injured log may be unable to deliver mail but
could handle deskwork while he is recovering.
The sick leave educational program is intended to take a positive approach. to
the situation, Orton said. The assistant chief of personnel said : "We don't
want to hound our employees."
'Through publicity in trade magazines, local conferences, and other measures,
the Department will counsel its employees to make proper use of sick leave, he
said.
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48 IMPROVEMENT OF BENEFITS UNDER TIIE FECA
STATEMENT OF HON. DANTE B. FASCELL, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. FASCFLL. Mr. (,liairnian and members of the subcommittee,
first lot nie express my appreciation for allowing me to appear and
discuss the matters which are under consideration by your committee
and to extend my commendation to you for undertaking the some-
times not highly publicized efforts of making amendments of a tech-
nical nature to this kind of a law. However, these matters are ex-
t.reinely important. to a lot of people who are involved.
Let me file a disclaimer immediately. I don't claim to be an ex-
pert on anything, particularly on the subject matter that is before
this committee.
I am approaching it. strictly as a layman who secs that there are
inequities which seem to be rather patent. I ask that the committee
consider the inequities and then take whatever remedial action with
such technical changes as may be necessary to accomplish what is
suggested here.
One section of H.R.. 5288 simply provides financial relief to in-
jured workers who are awaiting their determination or award under
the, compensation program.
Under the present.'la.w the injured worker awaiting his first com-
pensation check uses up his annual or sick leave if he chooses, and
then receives no further payment, at all until such time as his claim is
processed and his first FECA payment is made. So this presents a
problem, notwithstanding the fact that normal or average determi-
nation time is good and there is no, shall I say, negligence on the
part of the Bureau with respect to processing. But just the normal
processing time presents problems to the employees. Therefore the
bill suggests that an employee be allowed to continue to receive his
regular pay between the time of his injuries and the time he receives
his first compensation payment.
That is the theory. There may have to be amendments to that
idea. You may have to write in some safeguards, but this is geu-
eraally the theory.
Also under another section of this bill, section 2, we would provide
there that the employee would be entitled to accrue retirement credits
just. as if lie were on sick leave.
I frankly rind it. very dif .cult. to understand the difference between
an employee who is injured and One on sick leave. Yet the injured
employee on compensation would not be entitled to his retirement
credits and the one who is on sick leave would.
Ti. seems to me that. is an inequity and this is the problem which the
second section of the bill seeks to deal with. As I say, there may be
technical additions because. of other matters in the law with which I
am not familiar. This subcommittee may have to amend. the hropostil
to accomplish these purposes, but from an cquitable viewpoint it Would
seen to me that these. Iwo matters are matters Which are jvatently in-
equitable and need correct ion and attention by this committee.
To illustrate, and, of course, you could get probably thousands of
these kinds of letters, but. this is a short one curd. it points up the
problem, T believe- -let inc read this letter.
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IMPROVEMEN 0 B D
It says:
Our Florida newspaper, the Mailman; carries the item about your bill to
alleviate the hardship incurred by Federal employees injured in the line of duty ;
to wit, quicker payments of benefits and continued credits of sick or annual leave
during periods of nonworking status.
If this letter will aid my brothers and sisters in Federal employment, you have
here my permission to use this letter as you choose fitting. To reinforce your
belief in such a law may I state my present case briefly.
I was injured Wednesday, January 7; my right ankle bone and in the achilles
tendon while delivering mail. I made out the required forms for the day of labor,
tried to work 3 hours or more a day on a bad foot because of the shortage of help,
and dated my claim February 2 rather than date of accident.
What with filling out other forms and forms being lost or misplaced I received
no pay until today, March 18, or a total of 50 days, 7 weeks. But I am lucky.
My wife works and I have no young children and my mortgage payments are low,
but despite these factors in my favor I have had to,struggle and lose interest on
my bank savings.
I have lost sick and annual leave and receive 75 percent of my wages. How-
ever, one of those less fortunate than I, how could they have lived?
This man thus states theproblem.
As I say, this is not anybody's fault,. It is just one of those things,
and I think the average time the Bureau would report is a lot less than
that for most cases. In most cases it may not present a problem, but
there are enough of these so that some adjustment needs to be made.
Mr. O'HARA. Mr. Fascell, I thank you for your statement. Without
objection, the full statement and the article attached thereto will be
entered in the record immediately preceding your oral presentation.
Mr. FASCELL. Thank you, Mr. Chairman. The organizations can
speak for themselves, but I think generally they support the theory of
this legislation.
Mr. legislation.
I think the theory is very good and I would like to
discuss it with you just f ora moment or two.
of the difficulties arises if the claim is denied. What
I think one
do we do then? Do we attempt to recover the amount of salary paid
during the interim period?
There are very few, but there are a few claims that could be said to
be completely unjustified just as there are under State workmen's
compensation statutes where a fellow hurts his back digging in the
rose garden in his backyard.
Mr. FASCELL. A man could get drunk and cut off his wrist and this
would be a clear case of a noncompensable injury; I am sure this is
not a new problem. It has been met in other statutes somewhere or
in other practices.
Mr. O'HARA. That is correct and I am not familiar with
Mr. FASCELL. I am not either.
Mr. O'IIARA (continuing). Procedures under which it has operated.
I am going to ask counsel to attempt to determine just how this prob-
lem is handled, especially since H.P. 10865, a bill introduced by my-
self, would establish a hearing procedure, which may have the effect
of having fairer and more complete determinations, but may also have
the effect of delaying the original award to some extent, and I think
that we are going to have to wrestle with that problem of what
happens in the interim period.
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'E ,T OF BENEFITS UNDER THE FECA
dir. FASCFLL. Mr. Chairman, you put your finger on the entire
problem. It is probably the reason why this Hasn't been tackled be-
fore. But I think that you could write reasonable safeguards in this
to prevent any kind of abuse or any substantial losses.
You could write time limitations. You could write amount limita-
tions if you wanted to. You could write negligence limitations. I
imagine there are half a dozen different ways to approach the problem
tof the safeguards with reference to the problem you are talking about.
Mr. O'ILUA. I think your proposal to amen) section 8 to preserve
the accumulation of annual and sick leave credits during a period of
nonemployment because of work-connected disability is an excellent
suggestion.
I think the committee will certainly give that its thorough consid-
eration and attempt. to determine if there is any good reason why we
should not do this.
Mr. FASOELL. Mr. Chairman, I was going to say there may be an-
other side to that and there probably is. but I am not aware what it is.
Mr. O'II_Lii.. lam not aware of it, either.
Mr. FASCEL L. We are going to rely on the good judgment of this
committee to do what is right and what is fair to protect the Govern-
ment and employees, too.
As I say, looking at it strictly as a layman, it. seems to me these are
matters that ought to be consi lered and some adjustment made.
Mr. O'I I:ui 1. Mr. Ilathaway
Mr. IIATHAWWAY. I just wanted to thank Congressman Fascell for
bringing these inequities to our attention, and if you have any further
suggestions with respectt, to the problem which Mr. O'Hara pointed out
of paying someone and it turning out later that the person was not
entitled to it, we would certainly appreciate it.
Mr. FASCELL. I haven't given that really any thought, but I shall and
maybe contact counsel on any suggestions.
Mr. IIATii.AWAF. Thank you.
Mr. FASCELL. Frankly, I have been out of that business so long I am
afraid to tell you about any aspects of the law any more.
Mr. 011,111'A. We find ourselves in a similar position, Mr. Fascell.
I am not only finding that I am forgetting what I once knew; I am
finding that things are changing quite a bit since I practiced last.
Mr. FASCELL. Of course, that is one of the nice things about the
position that you have. Mr. Chairman and members of the committee.
This job is a constant. challenge educationally speaking. It keeps
us from getting stale and rertainfy keeps us from getting bored.
I know that I find it equally as interesting as you do because we will
be tallying about this matter here today and then 30 minutes later we
will be talking about something entirely different..
JIr. O`ILui.A. And we might spend a full clay reading Journal some
other day.
Mr. F.ASCELL. Yes, or be engaged in some other illuminating effort.
Nir. O'ILut . Yes, that's right..
I thank the gentleman very much.
Mr. FasCEi.L. Thank you very much and I certainly appreciate
your consideratioIn.
Mr. O`II.iitA. Thank you.
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IMPROVEMENT: OF BENEFITS UNDER THE FECA 51
Mr. FASCELL. Thank you.
Mr. O'I-IARA. Without objection at this point, the statements of a
number of Members who have submitted statements with regard to
amendments to the Federal Employees' Compensation Act will be in
sorted in the record, to wit : the statements of the gentleman from New
York, Mr. Mutter, the gentleman from California, Mr. Miller, the
gentleman from Maryland, Mr. Sickles, the gentleman from Cali-
fornia, Mr. Dyal., the gentleman from Kentucky, Mr. Farnsley, the
gentleman from California, Mr. Hosmer, and the gentleman from
Illinois, Mr. Collier.
(Statements to be furnished follow:)
STATEMENT OF HON. ARR.AIIAM J. MTiLTER, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF NEw YORK
Mr. Chairman, early this year I introduced H.U. 596 to amend the Federal
Employees' Compensation Act to cover civil defense workers. This act, as you
know, is the 1 ederal Government's workmen's compensation program for its
employees and provides compensation for disability and death, 'medical care
and rehabilitation services to those who are injured in the line of duty.
Workers who are concerned with civil defense and who are employees of the
Federal Government, whether in Washington or elsewhere, of course, already
are under the Federal Employees' !Compensation Act. My 'bill would give this
protection to civil defense workers who are under the jurisdiction of State and
local governments and who are injured while engaged in, training for, or travel-
ing to or from activities relating to civil defense as defined in the Federal Civil
Defense Act. Not only does it seem to me that the risk of injury is greatest at
these operational levels, but some of the workers at the State and local levels
receive no pay !but are motivated solely by a sense of patriotic duty.
State and local civil defense employees and volunteers may be covered by
State workmen's compensation laws. 'Coverage, however, is spotty, varies
greatly among the 'States, and may be limited to a certain category such as mem-
bers of mobile support units. Also, in some States coverage is elective, not com-
pulsory. I firmly believe that a program initiated by the Federal Government
in the name of national defense should give uniform protection to the workers
in the program.
The Federal Government already has demonstrated its awareness that it must
take on more responsibility if there is to be an effective civil defense organiza-
ti?on on a national scale. The original Civil Defense Act of '19550 has placed the
responsibility for civil defense primarily on the States and their political sub-
divisions. In 1958 the act was amended to make civil defense the joint respon-
sibility of the Federal 'Government and the States and their political su'bdivi-
sions. Also, the Federal Government now pays half of the administrative and
personnel costs for State and local civil defense workers and half of the travel
expenses and per diem allowances of persons attending civil defense schools.
An eligible civil defense agency's cost for State workmen's compensation bene-
fits for civil defense employees is a qualified item. for Federal matching; the
cost of workmen's compensation awards to civil defense volunteers is not eligible
for Federal matching.
There is adequate precedent for extending the protection of the Federal Em-
ployees'' Compensation Act to groups who are not employed by the Federal Gov-
ernment. Such groups include Peace Corps volunteers, Job Corps enrollees, and
members of the Reserve Officers Training Corps and of the Civil Air Patrol.
The Civilian Conservation Corps, Works Progress Administration, American
Citizens in the Philippines who were interned by the Japanese, and civilian
reservists during their annual 2uweek training course were among those covered
by the act at one time or another.
Many States include relief work during natural disasters as a civil defense
activity. Civil defense workers have proved indispensable during such emer-
gencies as demonstrated during the Alaskan earthquake and the flooding of the
Ohio River in 19G4, to name but a few instances. Although my bill would limit
Federal Employees' Compensation Act coverage to injuries sustainedin the per-
formance of defense oriented activities, it undoubtedly would attract more par-
ticipants to civil defense work. Thus, it could have the incidental, but the none-
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5`2 IMPROVEMENT OF BENEFITS UNDER THE FECA
theless Important, effect of giving the States a larger corps of trained personnel
for meeting natural disasters and other emergencies.
In conclusion. I wish to recall to you that. Secretary McNamara believes that
civil defense Is an integral and essential part of our total defense posture. We
all pray that our country will never be attacked. We must recognize, however,
that preparations to protect our people against such an eventuality are part of a
necessary preventive program, and anything to Improve this program is vital to
the national interest.
I ask, therefore, that you support II.11. 500.
STATEMENT OF LION. GEORGE 1'. 'MILLER. A r{EPHESENTATI%E IN Cosonlass FROM TIIE
STATE OF CALIFORNIA
Mr. Chairman and member's of the Select Subcommittee on Labor, I appreciate
very much the privilege of appearing before you today In behalf of my hill fI.R.
2624. This bill, very simply, extends to injured Federal employees the same
right to utilize the services of optometrists that Is now available to non-Federal
employees under the workmen's compensation laws of our States and outlying
territories.
Some of you may not be as familiar with the profession of optometry as I am,
so I wish to take just a few moments to mention a few things of which you may
be unaware.
There are some 17,000 full-time practitioners of optometry In the United States.
They are currently taking care of the visual needs of some 80 million Americans.
To engage in practice they must first take 6 years of training at the college level
and be examined and licensed by the State in which they choose to practice.
Each of the States and the District of Columbia have boards of optometry which
license and regulate the practice of optometry.
There are 11) schools and colleges of optometry and I am proud to report that
2 of them, the School of Optometry at the University of California in Berkeley
and the Los Angeles College of Optometry, are located in my home State. I per-
sonally know members of their faculties and can assure you that they are some of
the finest professional educators of these United States, if not the very best.
The dean of the school at the University of California, Dr. Meredith Morgan, is a
true credit to the profession and to his Nation.
This subcommittee also has before it H.R. 6551, Introduced by my friend the
gentleman from Maryland, which provides for the establishment of a Federal
employee accident prevention program. For years in California there has been a
working agreement between the Northern California Federal Employee Safety
Council and the California Optometric Association to provide Federal employees
of that area with protective and corrective eyewear. This is only part of a much
larger program In eye safety which optometry of California sponsors. For in-
stance, optometrists in California annually screen the vision of junior riflemen
before they receive hunting licenses. This service is provided gratuitously by
members of the California Optometric Association. They train driver license
examiners, who are responsible for passing upon the visual capabilities of all
those who take to the roads and highways of my State. They provide industrial
vision consultants to manufacturers In my State and similar consultants for the
schools and the playgrounds.
Optometry is one of the most safety minded of all professions. The U.S.
Chamber of Commerce recently gave the American Optometric Association its
highest award for that association's membership participation in the field of
traffic safety.
I was privileged, along with many other of my colleagues in the House of
Representatives, to cosponsor the American Optometric Association's bill of 1043
calling upon the President to issue annually a proclamation for the observance
of "Save Your Vision Week" the first week of each Mareb.
Optometry Is the profession which has done the most to enable the world's
population to see and to bring the light of understanding through perceptlon Into
the lives of us all. it does seem strange to me that they can do all these things
for employees in the name of safety yet when the same employees are Injured
they are denied payment to their claims for vision service under the Federal
Employees Compensation Act. It is more than strange. It is unfair to both the
employees and these fine practitioners, and the act should be corrected.
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Mr. Chairman, I respectfully request that your subcommittee amend the act
to incorporate the provisions of my bill so that Federal employees may select the
optometrist for vision service as do all other employees in California. For the
information of your staff and subcommittee members I am leaving with the clerk
section 3209.3 of the labor code, relating to workmen's compensation, wherein the
term physician is defined as including optometrists.
Thank you for your courtesy and the opportunity to present this statement for
H.R. 2624.
(The matter referred to follows :)
PHYSICIAN DEFINED-WORKMEN'S COMPENSATION INCLUDES OPTOMETRISTS
In section 3209.3 of the labor code, relating to workmen's compensation, phy-
sician is defined as including optometrists. This section reads :
"3209.3 Physician includes physicians and surgeons, optometrists, dentists,
chiropodists, and osteopathic and chiropractic practitioners licensed by California,
state law and within the scope of their practice as defined by California state
law.
"(Added by Stats. 1945, Ch. 629; amended by Stats. 1947, Ch. 620; Stats. 1949,
Ch. 644.) "
DISABILITY BENEFITS-UNEMPLOYMENT COMPENSATION CLAIMS CAN BE
.SUPPORTED BY OPTOMETRISTS' CERTIFICATES
Section 2708 of the unemployment insurance code, relating to the payment of
unemployment compensation disability benefits, provides that claims for such
benefits must be supported by the certificate of a physician as defined by section
3209.3 of the labor code acting within the scope of his practice as defined by
California State law.
[From the "How To" series, California Optometric Association, Jan. 15, 1959]
How To HANDLE CLAIMS--STATE COMPENSATION INSURANCE FUND (WORKMEN'S
COMPENSATION)
1. Eligibility for replacement of broken eye glasses:
A. Workman must have broken or damaged his glasses coincident with
an injury incurred on. the job. This injury must have been severe enough
for him to have visited a physician.
B. There is no stipulated amount of time lost from work where glasses are
covered but the worker must have seen a physician first.
2. This compensation will cover only the replacement of components of the
glasses broken in the accident.
3. Refractions are not covered regardless of the age of the prescription, desires
of the worker, etc., with the following one exception : If the physician who first
saw the patient recommends a refraction because of possible changes in refrac-
tion as a direct result of the injury, such as injury to the eye or orbit, then and
only then, will a refraction be covered.- (This recommendation of the physician
must be included in his report to the State compensation insurance fund.)
4. Whether or not the visual examination has been recommended by the physi-
cian first contracted, in the event that there is an injury to the eye or orbit and
the visual examination reveals a marked change in refraction or other visual
functions such as correctible acuity, binocular balance, etc., a complete report
should be made of the condition including wherever possible a report of the pa-
tient's visual status prior to the accident. In this report explain the relationship
between the injury and the visual changes.
5. Procedure on billing :
A. Your statement should include the following :
(1) Employee's (patient's name and address).
(2) Employer's name and address.
(3) Date of injury.
(4) Name of physician first contracted after injury.
B. Fees should be itemized as to lenses, frames, etc. The charge should
be expressed as one fee for each part. (Do not separate your fees for serv-
ices and your fees for materials-lab costs.)
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54 IIIPIIOVEMENT OF BENEFITS tNDER THE FECA
6. Should the patient desire a visual examination by an optometrist, even
though not recommended by a physician, he must assume the financial obligation
for the examinatlon. The amount charged to the insurance fund must be only
the replacement cost of the lenses, or lens, or frames broken in the accident.
Should the patient desire a more expensive frame than the one broken he must
pay the difference. 'W'here the lenses or frames which are to be replaced are un-
usual as to their cost, an explanatory note should be included with your state-
ment. (Such as, compensated lenses, cataract lenses, myodisc, etc.)
STATEMENT OT IIOR. CARLTON R. SICKLES, A RF,1UESENTATIVE IN CONGRESS FROM
THE STATE OF MARYLAND
fir. Chairman. I appreciate this opportunity- to file a statement on behalf of
H.R. 6554 and II.R. 3326, two bills I have introduced which would amend the
Federal Employees' Compensation Act.
I would like to comment 1ir~t on MR. 0551. The importance of consideration
of new approaches to safety in the Federal Government f c demonstrated by
the September 19G-1 report on Federal work injuries sustained during 1963
which stated:
"The summary of civilian Federal employee work injury experience during
calendar year 1963 shows no measurable overall improvement. Frequency
of disabling injuries was the same as for 1962, while severity and cost rates
advanced a significant 13 percent. The total of 190 employees fatally injured Is
51 more than that for the year before. Catastrophic loss or unprecedented
occurrences marred the records of many departments and agencies.
"Altogether there were 100,594 cases reported for 1963, up 3.4 percent from
1962; with 2.8 million days of chargeable disability; and $37.6 million total
direct cost. The total direct cost is the highest ever recorded, and in large part
is a direct reflection of the fact that the severity rate rose from 458 to a level of
522 chargeable days lost per million man-hours of work exposure."
When we add the untold cost in human suffering to the fact that the financial
liability incurred each year represents only a portion of the actual safety cost
of the Federal Government, we realize that the situation deserves our immediate
attention.
In the last 7 years-
More than 1,200 Federal workers died from job injuries.
Nearly 300.000 sustained disabling injuries.
Over 18.5 million man-days of potential production were lost.
Costs to the Federal Government amounted to $114 billion.
This Is not to say that nothing Is being done to promote safety in the
Government today. The President, on February 16, 1963, launched Mission
Safety-70 to achieve a 30-prcrcent reduction In injuries to employees of Federal
agencies, by 1070. Many agencies have shown a continuing and substantial
reduction in their frequency and severity accident rates. In 1901. the Veterans'
Administration and the Department of the Army achieved their lowest frequency
and severity accident rates In the past quarter of a century. as did the Depart-
ment of Treasury. Department of State. and the Department of the Interior.
In 1961, the Department of the Air Force achieved the lowest severity rate since
it was established in 1947. There are examples of other agencies, such as the
General Services Administration which has come a long way from the frequency
rate of 21.2 in 11145 to a new low of 7 in 1061. However, in 1962 and 1963, even
the splendid examples of safety consciousness lost some luster as the rates of
their agencies began to creep upward again.
One rain never be complacent because we must continue to strive for perfec-
tion. We must continue to reduce the accident rate and safety costs of the
Government.
Frankly, I am just a little distressed at the apparent lack of interest shown by
some administration officials in H.R. 6334. Enactment of H.R. 0554 would
complement the efforts of the President In Mission Safety-70.
At the present time, there are no minimum standards for safety applicable
throughout the Government, and no central feral (mint of responsibility for
safety. There is great vnriatinn in agency safety programs and in agency
safety results. Recent reports indicate that fhc safety performance of Govern-
ment has lagged behind that of safety-conscious private firms. Because of
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IMPROVEMENT OF BENEFITS UNDER THE FE A 00
the limitations of present law, there is no labor representation on the existing
Federal Safety Council. To improve the safety record of the Federal Govern,
ment, H.R. 6554 would-
1. Require the head of each Federal agency to establish a safety program
in conformity with the standards, programs, and regulations prescribed by
the Secretary of Labor;
2. Give the Secretary of Labor authority to develop, promulgate, and
promote minimum safety standards for Federal employees ;
3. Provide for surveys and investigations of injury cases which would
provide useful data for individual agencies to use in controlling injuries
to their employees;
4. Provide a means for coordinating and collecting the information and
data developed by each Federal agency and making it available for all to
use thus preventing duplication of effort ;
5. Provide an advisory staff of technicians for those agencies wishing
to improve their safety efforts and upgrade the safety "know-how" of those
responsible for the safety of Federal employees ;
6. Establish a Federal Safety Advisory Committee which would include
representatives from both labor and management ; and
7. Establish a Federal Safety Council similar to the Council set up under
Executive Order 10990.
In summary, the Government must lead, not Jag, in the development of ade-
quate safety standards and programs. I urge enactment of H.R. 6554 to accom-
plish this objective.
Now I'd like to comment on H.R. 3826 which amends the Federal Employees
Compensation Act permitting injured employees to use the services of podiatrists.
Many enlightened States glow have compensation laws permitting the employee
to have a podiatrist treat a work-related injury. Most of the current health
insurance programs provide payments for the services of podiatrists. The
current Federal law frequently results in a situation whereby podiatrists can
treat an injury not connected with the employees work while treatment of a
similar injury sustained during working hours is not covered. I hope the Con-
gress will correct this defect in the existing law.
STATEMENT OF HON. KEN W. I)YAL, A R7:PRESENTATIVE- IN CONGREss FROM THE
STATE or CALIFORNIA
Mr. Chairman, I appreciate the opportunity of submitting this brief statement
regarding my bill, H.R. 9648, to provide additional benefits under the Federal
Employees' Compensation Act for certain disabled former employees of the
Civilian Conservation Corps, and for other purposes. I requested the legislative
counsel of the House of Representatives to draft this bill to increase the compen-
sation and attendant benefits of those unfortunate emergency relief employees
who sustained permanent and total physical disabilities during the performance
of their work. While the cases may be few in number, I feel they are deserving
and the introduction of FI.R. 9648 was intended to call attention to needed addi-
tional benefits for those under the emergency relief programs.
My specific attention was called to the need for increased compensations by
a former employee of the CCC who sustained an injury and as a result is a para-
plegic. Ile is currently receiving a compensation rate of $150 per month and
an attendant rate of $125 per month. These are the highest benefits paid to
former CCC employees, but out of approximately 30 cases, only 2 are receiving
these amounts. In the case of the paraplegic, it is obvious the benefits are in-
adequate. Also, other emergency relief personnel-those who were employed
by the Civil Works Administration and Works Progress Administration-are
receiving very meager benefits.
I am frank to admit I do not know the total number of cases which might be
affected under the provisions of H.R. 9648. I believe there are approximately
100 nonfatal cases. However, while the Select Subcommittee on Labor is con-
sidering in general, amendments to- the Federal Employees' Compensation Act, I
am hopeful consideration can be given to the former emergency relief personnel
who are experiencing great financial difficulty in their endeavor to pay the rent,
buy the groceries, employ attendants, and purchase a few of the actual necessi-
ties to take care of themselves. - - -
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56 IMPROVEMENT OF BENEFITS UNDER THE FECA
The present Job Corps is not unlike the Civilian Conservation Corps In that
the CCC provided employment for our youth. Under present law, disability
cases resulting from injuries sustained by employees of the Job Corps are com-
puted at considerably higher rates.
Of course, the cost of such measure, If enacted, is Important but I do not feel
It should be the controlling factor. I am confident an equitable solution can be
resolved by the subcommittee, and I thank you for your attention.
STATEMENT OF Itos. ChARIX8 I'. FARNSLEY, A RF,I?RESENTATIYE IN CONGRESS FROM
T11F STATE OF KENTUCKY
On August. 3, 1905. I Introduced S.R. 10225 to correct a serious inequity. The
purpose of my bill is to reduce the hardship that results from an unreasonably
long delay In the payment of a valid claim to a Federal employee who becomes
disabled in the line of duty or to the employee's survivors If death results from
the injuries. II.R. 10225 proposes the payment of compound Interest at no
annual rate of G percent on accrued unpaid benefits. Computation of the interest
would start 90 days after it valid claim was filed. I believe that this period of
time should be sufficiently long for the processing of most claims and at the
Ea1me time it is short enough that individuals and families suffering the loss of
Income probably would not be destitute. Many of them, I feel, could tide them-
selves over a 90-day period by borrowing, using savings, and buying on credit.
Beyond this time period, however, the lack of any Income to replace the wage
loss can have serious consequences. The interest, of course, would cease after
accumulated benefits were paid out to the beneficiary.
The experience of a constituent of mine points up clearly the need for H.R.
10225. The situation Is rather involved but, in brief, this year my constituent
received a check that representeit years of accrued Federal employees'
compensation benefits. She had filed for death benefits in 1912 when her husband,
who had worked for Lite Works Progress Administration, died. Her claim was
denied at that time and was not honored until she reopened Lite ease 20 years
Is ter.
I assure you that the lump-sum pavlnent that my constituent received this
year does not erase the injustice she suffered through the years. She was so
destitute that she has been on old-age awlstanee. Also,iltecash site now receives
to cover the benefits of past years does not have the purchasing lower it had in
the years the benefits were earned. For example, today prices are more Limit
50 percent higher than average consumer prices were in the period 1913 -1O. a
period in which my constituent should have been receiving monthly benefit eheek4.
I ask, therefore, that you give your support to II.R.1022 1.
STATEMENT OF LION. CRAIG IIOSSIEII, A I(EeRESFNTATIYE IN CONGRESS FROM TILE,
OF CAT.IFORs IA
STATE
,air. Chntrman, this bill offers lung-needed, dettnitive legislation which will
establish once and fur all whether it iueniber of the uniformed services. who is
employed as a civilian by (lie Federal Government, earning a salary for such
work, and receiving retired or retainer pny. is entitled to retired or retainer
pay, as well as disability compensation under the Federal Employees' Colmien-
Ftation Act, if he suffers an injury in the service of the Federal Government.
This question has been presented several bale 4 to the Comptroller General of
the United Stairs who has consistently ruled that compensation may not, under
the statute. be paid concurrently with retired pay.
This creates an inequity and is a gross Injustice. A retired military than can
draw his retired pay and his civilian t;alnrv until he is injured In his civilian
employment. Then he loses his salary front that position and. also, is called
upon to elect whether he will accept disability compensation or his retired pay.
I call your attention to 11w Inconsistency of the entire situation.
If a retlrecl member of Lite uniformed services is permitted, under statutes.
to take a Federal jot) and earn salary whilestill receiving his retired or retainer
pay, why then is he not entitled to compensation during his period of disability
from an Injury sustained in the civilian job without being required to waive
his retired pay?
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IMPROVEMENT OF BENEFITS UNDER THE FECA 57
On July 12, 1957, the U.S. Court of Claims, decided in favor of plaintiff, Albert
Mulholland, who was drawing Navy retainer pay and was injured in the course
of his Federal employment. He was entitled to compensation under the pro-
visions of the Federal Employees' Compensation Act, but, until the decision by
the Court of Claims, Mulholland was required to waive his retainer pay be-
cause of the ruling of the Comptroller General. Following the court's decision,
the Comptroller General changed his tune and ruled that there is a difference
between "retired pay" and "retainer pay." stating that a person receiving
"retainer pay" also may receive disability compensation. Ile further pointed
out that "retainer pay" was given because the man had status in a Reserve
and was holding himself in readiness to serve when called upon. However,
according to hi,5 ruling, a person receiving retired pay was in a different situation
and was not allowed to receive concurrently that pay and disability compensation
because the retired pay was not."for services actually preformed."
I call your attention now to section 7 of the Federal Employees' Compen-
sation Act which provides that an employee who is in receipt of compensation
under the provisions thereof "* * * shall not receive from the United States any
salary, pay, dr remuneration whatsoever except in return for services actually
performed, and except in pensions for service in the Army or Navy of the United
States * * *."
We have considered the decision of the Court of Claims on the- case of Mul-
holland v. United States (139 Ct. Cl. 507). Now take a look at the decision in
the case of Taaves v. United States (146 Ct. 01. 500). Tawes was seeking retired
pay as a retired Naval Reserve officer together with disability compensation.
The court therein held, citing its opinion in Tanner v. United States (129 Ct. Cl.
792), that the plaintiff's disability compensation was "pay incident to such
civilian employment" within the meaning of section 1(b) of the act of July 1,
1947, as amended, 10 United States Code 371(b), and that, therefore, plaintiff
was entitled to. receive both disability compensation and "pay and allowances"
under the law relating to Reserve components of the Armed Forces. Tawes'
retired pay was renamed by the court and became "pay and allowances." Thus
the court permitted drawing of both disability compensation pay and retainer
pay for Mulholland as a fleet reservist and for Tawes as a member retired under
the laws relating to reservists.
Let's look at the decision of the Court of Claims on June 7, 1063, on the claim
of the Pstate of Charlie Steelman v. United States (No. 24-60),
Steelman enlisted in the Regular Navy on February 27, 1908. On July 7, 1922,
be was transferred to the Fleet Naval Reserve and drew retainer pay until
December 1, 1937, at which time he was placed on the retired list of the Regular
Navy with retired pay. Later he was recalled to active duty with active duty
pay and was returned to an inactive status on the retired list of the Regular
Navy on October 30, 1944, with retired pay .
Following his return to the Regular Navy retired. list, Steelman was em-
ployed by the Internal Revenue Service and drew his retired pay and civilian
pay until February 27, 1951. He was injured on July 28, 1950, in the course of
his civilian employment. Starting February 27, 1951, he was paid disability
compensation under the Federal Employees' Compensation Act, in lieu of his
retired pay as a Regular Navy retired enlisted man, pursuant to his election-
an election which, in my judgment, he should not have had to make. Ile filed
claims with the Comptroller General in 1955 and 1959 for retired pay, in addition
to his disability compensation. They were denied, and Steel man's estate petitioned
the Court of Claims on January 20, 1960, claiming that he was entitled to both
his disability compensation and his Regular Navy retired pay under the pro-
visions of the Naval Reserve Act of 1938.
The Court of Claims decision stated that (1) because the plaintiff (Steelman)
was retired and drawing retired pay as a Regular enlisted man of the Regular
Navy, section 4 of the Naval Reserve Act of 1938 has no application in his case ;
(2) for the same reason, title III of the act of June 29, 1948, which applies to
Reserve retirement has no application in his case; and (3) for the Court of
Claims to hold that the exception in section 7 applies to Regulars retired with
30 years of service would be to usurp a function of Congress. Therefore, the
court barred the plaintiff from recovering retired pay as a Regular with 30 years'
service while receiving disability compensation under the Federal Employees
Act.
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58 IMPROVEMENT OF BENEFITS UNDER THE FECA
Your attention now Is directed to the following portion of the dissenting
opinion on this claim of Judge Whitaker, in which Chief Judge Jones joined:
?* * * The majority opinion says that a man may receive compensation for
services being perforated at the same time as he is receiving (disability) com-
pensation, and he may receive a pension at the vatic time he is receiving (dis-
ability) compensation, but it says that he cannot receive retired pay and com-
pensation at the same time. Why Congress should have permitted a man to
receive a pension and denied him the right to receive retired pay, I do not
know. * * * Section 7 does not require that the services be performed while
receiving compensation. It merely says 'except fur services actually performed.'
I cannot escape the conclusion that retired pay is for services actually per-
formed. I cannot ascribe to Congress to allow it person to draw pension and to
deprive him of retired pay.
"* * * Plaintiff (Steelman) was recalled to duty on March 20. 192, during
World War IL He was subject to such recall by virtue of the provisions of law
which provide that the Secretary of the Navy is authorized in time of war, or
when a national emergency exists, to call any enlisted man on the retired list
into active service for such duty as he may be able to perform. While so em-
ployed, such enlisted men shall receive the pay and allowances authorized by
section 115 of title 37. (Mar. 3, 1016, ch. 83, 38 Stat, 941; Aug. 29, 1916,
eh. 417, 30 Stat.:;91,)
"Therefore, a part of the consideration for the payment to Steelman for retired
pay was this obligation to render further naval service when called upon in time
of war. It would seem, therefore, that a mail drawing retired pay and a man
drawing retainer pray are in practically the same category. It would seem to me
that the proposed decision of the majority is in conflict with that part of the
decision in the Mulholland case, which bases the plaintiff's right to recover on the
ground that the payment of retainer pay was In part consideration of the man's
holding himself in readiness to return to active duty when called upon."
These examples show without doubt the need for definitive legislation, such
as set forth in MR. 314. 1 direct your attention to statements made by former
Director William McCauley. Bureau of Employees' Compensation, at hearings
before the Subcutunlittee on Safely and Compensation, early in 1900, when II.R.
1190. as well as my bill, II.R. 811, which is similar to H.R. 314, were considered.
At that time Mr, McCauley referred to the fact that possibly decisions of the
Court of t1aims on cases before it might solve the problem, but if they did not
then legislation would he necessary to correct the inequity which I have pointed
out. Ile further stated that the Bureau was paying compensation and "leaving
it up to the branch of the armed services that is paying the other benefit to decide
whether they will pay or not."
Therefore. I point out again, as I did In 1900, that the problem actually falls
at the door of the military services which. under the ruling of the Comptroller
General, take the attitude that a man, although entitled to civilian pay and
retired pay, Is not entitled to disability pasty as a civilian employee and concur-
rently to his retired or retainer pay. This Is tie' loophole that must be sealed
through legislation. It Is the only way to settle this matter and once and for all
establish a law that will do away with the gross injustice and Inequity that exist
under the interpretation of the wording of subsection (a) of section 7 of the
Federal Employees' Compensation Act.
I respectfully request favorable action on II.R. 314 without further delay and
call your attention to the. fact that I have had similar legislation before tho
House Education and Labor Committee each Congress beginning with the 80th.
STATEMENT OF 110N. HAROLD R. COLI.IF:ti, A IIEPHEsF:>TATIvE IN CONGREss FROM
THE STATE OF ILLL'OIs
Mr. CIIAimr rAN. The Intent of II.I. 4478 is to amend the Federal Employees'
Compensation Act by removing certain Inequities in rates of payments to sur-
vivors of Government employees who died from work-related injuries or diseases
or were killed in the performance of their ofilcial duties.
In general, the bill intends to change three Inequities. It will for educational
purposes (1) provide for continuance of compensation payable to a surviving
child from age 18 to age 21 if such child continues his education as a full-time
student; (2) remove the monthly maximum survivorship annuity benefit of $5127)
which is no longer realistic, and (3) provide certain cost-of-living adjustments if
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59
Annual price index studies reveal such living costs to have risen 3 percent or
more and. to make comparable such increases.
In respect to surviving children (1) the bill would continue benefits to unmar-
ried children after age 18 so they may pursue advanced educational programs.
Many students graduate at age 17 from high school and desire to complete a
4-year college course thereafter. At present, compensation benefits to unmar-
ried children terminate at age 18. It is socially and economically desirable that
.such children be financially able to complete their advanced educational plans
rather than having them terminate by the unfortunate work-related death of
their supporting parent. The bill would remedy this aspect and remove the
inequity created when the Civil Service Retirement Act was amended to continue
-$50 monthly survivorship benefits to dependent children from age 18 to age 21
who qualify as full-time students.
Secondarily, the bill will remove the $525 maximum survivorship annuity
benefit established in 1949 which is no longer realistic due to increased Govern-
ment salaries and high cost of living. Present survivors of Government
employees are penalized by the $525 maximum benefit because Government wages
have increased 80 percent between 1949 and 1904 and there has been a 31 -percent
rise in the Consumer Price Index. The intent of the Federal Employees' Cona-
pensation-Act was to permitGovernment employees injured on the job and sur-
vivors of Government employees killed in line of duty or who dies from work-
related injuries or diseases to receive up to 75 percent of the gross monthly sal-
ary. The 1949 established maximum of $525 monthly now prevents making the
75 percent benefit possible because of salary increases in Government service
,creating an inequity for employees who now sustain work-related injuries and
diseases and for survivors of Government employees killed in line of duty com-
pared with benefits to survivors of employees killed when salaries and cost of
living were low. There is no doubt that survivors of Government employees
who dies from work-related injuries or diseases and particularly survivors of
those employees who are killed in line of duty should reap greater: rewards than
:survivors of Government employees who dies from natural causes.
Concerning cost-of-living adjustments (3) the bill authorizes an Increase in
previous awards on a basis related to increases in cost of living. The compen-
sation awards would be periodically adjusted based on Consumers Price Index
'changes of 3 percent or more annually as determined by the Secretary of Labor.
This aspect of the bill would benefit survivors by insuring that annuities would
keep pace with any skyrocketing cost of living and permit widows and dependent
children to maintain a standard of living comparable with the standard estab-
lished by the deceased.
For the reasons which I have outlined, I strongly urge that the committee take
prompt and favorable action on H.R. 4478 concerning this much-needed
amendment.
Mr. O'I-IARA. Our next witness will be Mr. Jerome J. Keating, who
is president of the National Association of Letter Carriers of the
United States of America, who is accompanied by the vice president
of that organization, Mr. James Rademacher.
Welcome, gentlemen; I am very happy to see you here because of the
long and pleasant association T have enjoyed with both of you.
Mr. Keating will possibly remember that our first contacts here in
Washington involved the amendments made to the Federal Employees'
Compensation Act in the 86th Congress when he gave us very valuable
assistance in understanding the provisions of this act. I know he
gave very valuable assistance to me in doing so.
Mr. Rademacher, I am proud to state, is a former president of
Branch 1 of the National Association of Letter Carriers in Detroit.
His presence here in Washington is much appreciated by letter carriers,
but missed by us somewhat in Detroit because we enjoyed having him
-out there. Gentlemen, ifyou would care to present your testimony I
know that 'we would be very interested in hearing it.
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60 IMPROVEMENT OF BENEFITS UNDER TUE FECA
STATEMENT OF JEROME J, IDEATING, PRESIDENT, NATIONAL
ASSOCIATION OF LETTER CARRIERS; ACCOMPANIED BY JAMES H.
RADEMACHER, VICE PRESIDENT
_ltr. li lu-i a. Thant. you, .Ifr. Chairman.
I am happy to have the opportunity of working with you and the
committee on further amendments to the Compensation Act. Ifr.
Rademacher and I are the heads of the National Association of Letter
Carriers. We have 115,000 members located in all of the 50 States, the
District of Columbia, and Puerto Rico.
The Federal Employees' Compensation Act was the first supple-
mental benefit program enacted on behalf of Federal employees. It
was enacted in 1916. Our or*anization was formed in 1889.
The National Association orLetter Carriers supported the creation
of the Compensation Bureau in 1916, or rather Conunission, as it was
called, and we have actively participated in securing all of the amend-
ments to the act since that time.
We are much concerned with the bills pending before the commit-
tee, and feel that the provisions of several of the pending bills deserve
the consideration of this committee at this time.
The representatives of the Department of Labor, in testifying before
the committee, requested that the "equitable and long-range proposal
to perfect workmen's compensation protection for Federal employees"
should await the findings of the President's Cabinet Committee, which
is due to report on December 1, 1965.
W c do not believe that. this is either necessary or desirable. We
were, requested to testify before that committee, but only on retire-
ment. We did not have a chance to testify on compensation, nor was
there any evidence that compensation was being considered.
There was no representative of the Bureau in evidence at the hear-
ings, nor were. there any questions or comments relative to workmen's
compensation.
Furthermore, one would indeed have to be a blind optimist to believe
that compensation legislation will be acted upon before adjournment
of this session.
Congress is moving toward adjournment, and new legislation not
yet out of committee in either house stands little chance of fr`.nal enact-
ment 11111ess it is enter enc y legislation.
The report. of the cabinet Committee will be available on December
1, 1965, and can be fully considered before final action on pending leg-
islat ion.
Consequently, it is our intention to recommend the enactment of
`'equitable anti long-range proposals."
We want to congratulate the able chairman of this hearing, James
O'Ilara, for the file bill he has introduced, and Congressman William
Ilatltaway for the good hill he has introduced. Both bills contain im-
portant and necessary amendments.
With reference to II.R. lOS6 r. introduced by :dir. O'IIara, we can
support this bill in its entirety. The amendments to section 5. relating
to a more equitable adjustment of scheduled disabilities, should be
enacted.
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IMPROVEMENT OF BENEFITS UNDER THE T'ECA 61
The section providing for hearings before the Bureau is important
and would make it possible for more complete development of neces-
sary evidence.
We have found the officials of the Bureau to be fair and just; we have
found the members of the Appeals Board to be considerate and just.
The Bureau is one of the better agencies in Government, but those
ivho administer the act are bound by precedent. I do not believe that
judicial review would serve to assist individuals in securing better ad-
justments-judicial procedure is slow and costly. It would, however,
serve as a means of correcting bad precedents. It is in keeping with
procedures in other compensation- programs and has served well in
those areas.
We are in favor of the provisions in Congressman Hathaway's bill,
H.R. 10721, to adjust the maximum and minimum, compensation, and
appreciate the fact that the bill provides increases. for those currently
on the rolls.
However, we do not believe that the increases in compensation should
be based solely on the Consumer Price Index, nor do, we believe that
the offset for increases made under previous acts should be included.
The Consumer Price Index merely measures the increases of certain
products included in the market basket selected by the Bureau of
Labor Statistics. It does not adequately measure changes in standard
of living; it does not include increases in income taxes. It does not
include income tax at all.. It is merely for the purpose of measuring
price changes. _
In considering Federal salaries,, we use a basis of comparability
with salaries in outside industry. The retirement bill recently enacted
by Congress goes beyond the Consumer Price Index figures and goes
at least part way to comparability. The people on compensation
are entitled to similar consideration.
The provisions in the Hathaway bill providing an increased age
for dependent children and the restrictions on this section are just
and adequate.
One of the grave problems in administering the Compensation Act
is the length of time it takes to get the payment to the injured indi-
vidual. On the average, it takes 49 days to get the compensation
claim to the Bureau; and it takes an average of 79 days before the
inaaured employee receives his first payment.
It has long 'been a source of wonderment to me how many of these
people maintain themselves while waiting for the payment. The fault
is not one of the Bureau's essentially-but certainly it is one of the
Government's.
On occasions the appropriations are not sufficient to, permit enough
employees in the Bureau to promptly adjudicate claims. Too many
officials in various departments and bureaus are not sufficiently ac-
quainted with the act to promptly submit claims.
It is not regarded as a serious problem in some areas and men are
left in the hospital for long periods without reports being filled out..
Doctors often do not furnish complete information. Claiirs have
been delayed in securing payroll records, and :the journey is often as
torturous as the "Pilgrim's Progress."
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66 IMPROVEMENT OF BENEFITS L"NDER THE FECA
The bill introduced by Congressman Dante Fascell,II.R. 5288, would
correct this situation. Under the provisions of the Fasc.ell bill, the
employee would remain on the payroll until the claim was adjudicated,
and any overpayment would be withheld from his compensation
payments.
I do not believe in this discussion that you had here this morning
that there would be any great problem of those whose claims were
not allowed.
In practically all of the cases the em 11o -cc would continue in the
employment. of the Government and the cc
would be able to
charge payment that was made.
It could be charged against his future salary or against. his annual
leave or even against sick leave. I think that could be taken care
of very well in the legislation. The only possibility of loss would
be is i#somebodyv left the service orsornethiitg of that sort, but I think
that it would be. minute and certainly not nearly as much a problem
as that these individuals are confronted with when they have to go
long periods without. any pay.
The Fascell bill also provides that, the employee shall continue to
earn annual and sick leave while on compensation. I see no reason
to deny the earning of sick and annual leave to an employee while on
compensation. The employee who is on compensation is merely an
employee who was disc led in his service to the Government, and
he should not. lane discriminated against.
There is one other bill that was referred to the Committee on Post
Office, and Civil Service which, in my opinion. should be before this
committee. This bill is II.R. 24OO by Congressman Arnold Olsen of
Montana.
This bill creates a "presumption that certain impairments of health
caused by hypertension or heart disease of a Federal or District of
C`olallallliai employee is incurred in the line of duty."
The bill states "in line of duty for purposes o? certain retirement
and disability compensation laws or systems".
Now, certainly it. should be before the Compensation Bureau. It
is not necessaryvin the case of retirement, but it is necessary in the
case of compensation, and I would like to have this included with my
testlnaonY.
Mr. O'IIAR.a. Could you please leave that with us and we will have
it entered in the record. I have asked counsel to check with counsel
of the Post Office and Civil Service Committee to see about referral
of that, bill to this committee.
(The bill referred to follows:)
tILR. 2400. 89th Coal.. 1st sess.l
A BILL To create a presumption that certain Impairment of health caused by hlipertension
or heart disease of a Federal or District of Columbia employee Is Incurred In ne of duty
for purposes of certain retirement and disability- compensation laws or systems
Be it enacted by the Senate and House of Reprrmentatives of the United States
of rimcrica in Congress assembled, That notwltlistaudtng any provision of law
or regulation to the contrary, any condition of impairment of health occurring
on or after the date of enactment of this Art. and caused by hypertension or
heart disease resulting In total or partial disability or death of any employee
of the Federal Government or of the government of the District of Columbia
shall, for the purposes of any Federal or District of Columbia law or system
to which such employee is subject and which provides disability or death
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IMPROVEMENT OF BENEFITS UNDER THE FECA 63
compensation or retirement benefits, be held and considered to have been
incurred in the course of his employment, subject to the following conditions:
(1) That such employee shall have passed an appropriate physical examina-
tion immediately prior to his entry into such employment or within six months
after the date of enactment of this Act, whichever is later ; and
(2) That it is not established by competent evidence that such condition of
impairment of health was not incurred in the course of his employment.
(Mr. Olsen subsequently submitted the following statement to the
subcommittee:)
STATEMENT OF HON. ARNOLD OLSEN, A REPRESENTATIVE IN CONGRESS FROM TSE
" STATE OF MONTANA
Mr. Chairman and members of the committee, I have introduced a, bill in the
House of Representatives, H.R. 2460, which has been referred to, the House Com-
mittee on Post Office and Civil Service, but it is also a proper subject for con-
sideration by your committee. The bill refers to heart disease as an occupational
ailment. The title pretty well sums up the subject matter of the bill ; it. reads:
"To create a presumption that certain impairment of health caused by hyperten-
sion ar heart disease of a Federal or District of Columbia employee is: incurred
in line of duty for purposes of certain retirement and disability compensation
laws or systems."
The bill requires that the employee shall have passed an, appropriate phys-
ical examination prior to entry into employment, and the presumption is that
this examination would be of sufficient detail to determine whether or not there
was a heart ailment present. When a Federal employee is~ found to have a heart
ailment, it would be presumbd that this came about because of mental or physical
tensions in his work. If there is reason to believe that such is not the case,
then the Bureau of Employees' Compensation can secure competent evidence to
refute the conclusion that the impairment was incurred. in the course of his
employment and, if substantial evidence is presented, compensation can then
be denied.
I believe it is more important to have this provision apply to compensation for
injury than it is to retirement.
One of the facts that is little known when It comes to the ]Federal Employees'
Compensation Act is that the Compensation Aet provides benefits for those who
suffer from disease caused by their employment, as well as those who suffer
physical injury. Government administrators nationwide are not too familiar
with this fact and many times employees who should be receiving compensation
because of a heart attack do not have such claims established because they are
told by their supervisors that the Compensation Act pays only for injury incurred
on duty. In, addition to this, it is often difficult to develop the causative factor
because the doctors who examine the 'employee are reluctant to make an abso-
lute statement: that the heart attack came about because of the tensions and hard
physical labor or exposure to. which the employee was subjected in his work.
We find that employees such as letter carrier's who are exposed to the ele-
ments and perform hard physical work have a high rate of heart diseaso-=much
higher than that indicated by the benefit, payments made by the Bureau of
Employees' Compensation.
The average employee, when told by the doctor that his heart condition de-
veloped as a result of strain, either mental or physical, assumes that such a rep
port has been made to the Government and that he will receive compensation.
Actually, this is not always a fact and, in order to receive compensation, the
employee has to go to ensiderable lengths to, establish the facts relative, to con-
ditions surrounding his employment and to secure positive statements from the
doctor, As the law is presently constituted, I believe that these employees are
frequently denied benefits they should have.
The proposal I am offering in my bill would certainly provide ample latitude
where skilled administrators, supported by doctors skilled in the Compensation
Act, could properly review all heart cases and, if there were evidence of the
fact that the case was not due to employment, there would be ample latitude
to deny the claim.
I believe this would correct an injustice that has long existed. I think it
would be reflected as an honest decision by the Government to assume its respon-
sibility and I hope that your committee will consider the provisions of H.R.
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L PROVEMENT OF BENEFITS UNDER THE FECA
2460 and take favorable action to Include these provisions in the recommenda?
tions you make for amendments to the Compensation for Injury Act.
Mr. Ky... TINti. It seems to me that the jurisdiction should be in this
committee on this particular bill.
The bill further requires that such eat ployyee shall have passed an
appropriate physical examination iinnnedtately prior to his entry into
such employment.
It also provides that, if competent evidence is presented that such
condition of impairment was not incurred in the course of his enmploy-
ment, the compensation can be denied.
`Ijhis legislation is necessary because of the numerous roadblocks
presently existing when attempts are made to establish compensation
claims inhere heart attacks occur.
One, of the roadblocks is caused by the reluctance of doctors to make
absolute statements on causative factors. Men in the medical profes-
sion are prone to equivocate when it conics to putting things on
pa )er.
Mf.ntiy who have excellent cases for compensation fail to receive com-
peusatina benefits because of the lacl, of knowledge on the part of
Government, supervisors when it comes to illness due to occupational
hazards. To many of them, compensation is due only in case of
broken bones.
I have a letter here from a letter carrier in Waterloo, Iowa, which
I think proves the case: the man was finally awarded compensation,
but only after 11 years liad passed.
The ofticials at the frost office told him he was not ontitled to com-
j)ensation. Fortunately for him the officers of NSLC branch knew
etier.
He relates the story leading up to and after the attack as follows:
During the pay period which ended March 27, 1964, 1 worked a total of 100
hours.
That's 50 hours a week.
This was due largely to the damp early spring weather which necessitated
)many carriers to use sick leave. On Friday. March 27. I was assigned to
route 60. This particular foot route is In a new section of town and is all
open area with no sidewalks.
There was over an inch of newly fallen wet snow on the ground and the going
was exceptionally- rough as there was also an extra heavy. volume of mail that
day. As I carried the mail that day, I could feel a tightening on both sides of
my neck and a shortness of breath.
After finishing the foot route, I was assigned to parcel post and then night
coilections. I worked a total of 12 hours and 13 minutes that day.
Saturday. March 29, 1 was assigned to parcel post fur routes 15 and 30. These
routes are primarily business routes where parcel post must be delivered before
noon on Saturdays.
Parcels for these business houses are heavier than normal and delivery was
again harder because of the wet slick snow. While on the route I had a severe
coughing spell which lasted from 8 to 10 minutes and I had to stop the truck.
:1 passerby stopped to inquire if I was OK-if I had only known then what
I know now. A short time later I became involved in a minor accident with
the truck. I wag quite concerned and upset because I have had previous minor
accidents and feared that I might lose my Government license. When I retired
that Saturday evening, I was exhausted. hotb physically and mentally.
Laster Sunday, March 29, 1 awoke coughing at 6:30. 1 had the same tight-
ness on both sides of my neck as I had while delivering mail 2 days previous.
The tightness was now in my arms also. My cough continued and the pain
increased until Dr. Hartman was called and he promptly ordered me to the
hospital where my heart attack was diagnosed.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 65
Dr. Hartman feels that any or all of the above factors could have caused my
heart attack. He also believes that stress caused by my truck accident could
have caused the attack. Less than 3 years ago I had a physical before entering
Post Office and was found in good health. Such extensive damage to my heart
could only be suffered since the time of that checkup.
Branch 512, Waterloo, Iowa, and myself, contend that heart disease of letter
carriers, especially under rigorous conditions, is an occupational disease and
request that I receive fair and just compensation under the Federal Employees'
Compensation Act.
I was not capable of making out report at the time of my attack. During my,
6-week stay in the hospital, Dr. Hartman would permit no visitors outside of my
immediate family. He wanted nothing discussed which would bring tension and
possibly affect my condition.
After my release from the hospital I consulted the Letter Carriers Union and
they agreed that my heart attack definitely was a result of my carrier duties and
that I should apply for Federal employees' compensation.
This, of course, I think, indicates one reason why some of the delays
occur, where a person is in the hospital. They have a severe injury
and are not able to complete the necessary papers.
I had a case related to me just the other day where a fellow was in
an automobile accident. He was taken to the hospital and he was there
12 days and the officials in the post office did not send him the forms,
and he wasn't able to fill them out, anyway.
All of these things add up to the delay, but the difficulty for the
family still persists even if the delay is duo to being tied up in the
hospital.
The proposal contained in the Olsen bill would require the Bureau
to establish the fact that the illness was not due to the employee's oc-
cupation. We believe that this proposal is a fair one and would pro-
vide more justice than is provided under present regulations.
There are several important problems relating to the compensation
law that are not covered by any bills pending before the committee.
We believe that the committee should give consideration to includ-
ing artificial limbs, glasses, hearing aids, and any other similar aids
that are required to bring a person to an adequate physical capacity.
If an employee wearing an artificial limb is injured in an accident,
and the limb is destroyed, the loss is not compensable. We believe
that these items should be paid for when destroyed in an accident.
We also believe that agencies should be compelled to reemploy
employees when they recover from a disability. At the present time,
employees who have recovered in whole or in part are often refused
reemployment, even in cases where. jobs are available in the depart-
ment or agency.
I must commend the Bureau of Employees' Compensation because
they make every effort to place those people and the fault, where it
does lie, lies in the individual agency rather than in the work of the
Bureau.
Finally, we endorse the provisions of the Sickles bill, H.R. 6554.
This is a bill to provide an accident prevention program. This is a
positive and constructive approach, as compared to present safety
programs.
Present programs place departments and agencies on a competitive
basis. The agencies frequently keep employees on the, job when they
should not be working, in order to establish a good safety record.
The safety record, of course, depends on numbers of days lost..
We should be more interested in safety than in safety records.
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1MPROVE:SMI;NT OF BENEFITS UNDER THE FECA
Mr. ('hairnian and members of the committee, we want to express
our aplneciat ion to you for giving us this opportiuiity to appear and
testi fv on behalf of the much needed improvements in the compensa-
t ion for injury lawn.
:llr. 01Ltc:~. 'T'hank you very much, Mr. Keating. Mr. Rade-
macher, do you have anything to add to Mr. KeatirIg's statement?
Mr. RADENIACIIEH. I believe, .11r. Chairman, that the very able presi-
dent of the letter carriers has stated the position of our organization
very well. I would just like to mention something that is very timely.
A committee that the Post Office I)epaetwent has set up between man-
agement and [lie unions to discuss sick leave has brought out very
forcefully at a recent. meeting that one of the reasons why the Post
Office I)epartroeut*s sick leave has been so extensively used is because
of the fact that employees are using sick leave rather than wait for
many weeks, as President Keating has described here, and also as
Congressman Fascell has stated, for their BEC check. It is only
natural that if a person does have sick leave and even annual leave
he is going to use this rather than to wait many weeks for payment
of his claim.
One of the problems is the Post (Wive I3epa.rtment's problem. We
feel that. the claim form ought to go directly from the employee to
the postmaster and to the I3I C, but it is routed through regions, and
in discussing these matters with officials at the BEC, who have, been
extremely helpful and sympathetic, eve must. agree with them that theyy,
can't process a claim that they don't have and so perhaps a lot of
redtape could be eliminated if the probleni was exposed and explored.
Just one other thing to substantiate Mr. Keatutg's claim concern-
ing other benefits, such as artificial limbs, and glasses, and so on.
I have just answered correspondence from a small town it,
Alabama-Roanoke, .1la.-where a letter carrier was inspected by his
postmaster, and the counted Q1SS (logs and this carrier had com-
plained-he had written in to me complaining-that he has gotten
accustomed now to warding off clogs, and they are using this dog
repellant and all these things, but he said who is going to replace the
glasses that have been broken twice when dogs have chased him and
he has fallen and the glasses have fallen off and been broken.
I certainly concur in what 'Mr. Keating has stated in this regard, that:
certainly it, isn't the employee's fault when his glasses fall and are
broken as a result, of a clog bite, and I certainly concur that the BEC
ought to be plying for such things as this.
I want to just conclude by stating that I appreciate your kind
remarks concerning our officers and also compliment all those that
are here this morning after such a rugged day and night on the
I Io i ise floor.
Mr. O'ITart_s. I think that if anyone ought to be, complimented it is
you gentlemen whom I saw in the gallery yesterday, seemingly, I think
it is safe to say, more interested in the proceedings titan some of those
on the floor.
I am pleas-zed that we adopted those four resolutions at least, although
I would have wanted to go on and take up the other three, too.
T'ou have presented some very stimulating and interesting sug-
gestions with respect to sonic of the problems of the act. 'I'bis problem
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IMPROVEMENT OF BENEFITS UNDER THE FECA
of heart disease is really a very difficult one. It is extremely difficult
f or an employee to prove work connection in a heart disease case.
On the other hand, it would be equally difficult for the Government
to prove non.connectioll. It is always difficult to prove a negative,
that is, to prove that it wasn't work-connected, and I am wondering,
and I hope the counsel will perhaps attempt to ascertain, if we couldn't
do something in between those two positions in this act, that is, set
some criteria, give the Bureau of Employees Compensation some
criteria to use, some reasonable criteria to use that would be fair to the
employee and to the Government in determining work connection.
? I don't think there is enough known about it, but I don't think it is
safe to assume that everybody who has a heart attack has that attack
related to his employment, nor is it safe to assume that nobody's heart
attack is related to his employment.
I don't know just how we go about doing that. With respect to your
suggestion about the procedures used by the Post Office Department,
I shall ask the chairman if he will send a letter to the new Post-
master General with respect to their procedures in handling these
matters, and the committee, I can assure you, will interest itself in the
expeditious handling of these claims by the Department.
(Chairman Holland's letter and the Post Office Department's reply
areas follows:)
SEPTEMBER 15, 1965.
Hon. LAWRENCE F. O'BRIEN,
Postmaster General,
Washington, D.C.
DEAR MR. POSTMASTER GENERAL: In the course of hearings now in progress
before my subcommittee, representatives of Federal employees' organizations
have testified to the effect that procedures now in force in the Post Office De-
partment result in serious delays in the receipt of claims by the Bureau of Em:
ployees' Compensation, and therefore, in the receipt by injured employees of
the compensation to which they are entitled.
To make the record complete, I would appreciate it if you could provide me
with a detailed list in writing of the steps involved in the processing of com-
pensation cases in your Department. It is our hope to close the hearing record
on this legislation by September 24, and it would be very helpful to have that
information by that time.
With best personal regards,
Sincerely,
ELMER J. HOLLAND,
Chairman, Select Subcommittee on Labor.
POST OFFICE DEPARTMENT,
ASSISTANT POSTMASTER GENERAL,
BUREAU OF PERSONNEL,
Washington, D.C., October 5, 1865.
Hon. ELMER J. HOLLAND,
Chairman, Select Subcommittee on Labor, Commit tee on Education and Labor,
House of Representatives, Washington, D.C.
DEAR CONGRESSMAN : This is in further reply to your letter of September 15,
requesting a detailed list of the steps involved in the processing of Bureau of
Employees' Compensation cases.
Our procedures are as follows :
1. At the time of injury, or at most, within 48 hours, the employee or some-
,one on his behalf completes form CA-1, employee's notice of injury or occupa-
tional disease. This completed form is submitted to the employee's immediate
.supervisor.
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6S IMPROVEMENT OF BEXEFJTi; T-NDER THE FECA
2. Form CA-2, official supervisor's report of injury, is prepared immediately
for every injury which is likely to result in any medical charge against the
compensation fund or in any disability for work beyond the day, or which ap-
pears likely to require prolonged treatment or result in future disability or re-
sult in any permanent disability.
3. If the employee has received medical treatment for the Injury and upon
medical advice is instructed to remain off duty, be flies form CA-4, claim for
compensation on account of Injury, and CA-A, application for augmented com-
pensation for disahillty. with his employing office. These forms are submitted
to Bureau of Employees' Compensation, Department of Labor, after 14 days ab-
sence without pay, In accordance with the regulations of the Department of
Labor. If the employee returns to duty In less than 14 days, form CA-I, and
CA-iA are submitted to the Department of Labor immediately upon return to
duty.
The Federal Employees' Compensation Act requires these forms to be sub-
mitted after expiration of 18 days from the day pay stops. However, in an
effort to speed up the process, the Post Office Department has entered into an
agreement with the Department of Labor, to permit the Department to submit
the forms after 14 days.
To assure prompt submission of claims to the Bureau of Employees' Compen-
sation in order that payment of claims will be expedited, we have Instituted a
new procedure. The Department's new procedure provides that the installation
head forward the executed form CA-4 directly to the Bureau of Employees'
Compensation rather than through the postal data center. This has saved ap-
proximately 1 week's time In processing.
I hope this information will be helpful to you.
Sincerely yours,
RICHARD J. MURPHY,
Assistant Postmaster General.
Obviously the Bureau of Employees' compensation, as fr. Pade-
macher pointed out, can't act on claims it hasn't received et. It is
more than a little distressing if they are lying in somebody's' in-basket
in the Post Office I)epartnient- (luring a period when the employee and
his family are suffering. I think that this is something the Depart-
ment can correct and ought. to correct and we will try to hell) them
correct that situation. I am glad you mention that in your testimony.
The Sickles bill providing for an accident prevention program is one
I think it would certainly be wise to consider seriously. Certainly we
ought to have as effective an accident. prevention program as we pos-
sibly can. Not only does it. make sense in cost terms, but it makes
sense in relation to the interest. of the employee.
It is much better to lit, Healthy and working than disabled and draw-
ing compensation, no matter flow good a compensation system you
have.
Another problem that. 3fr. Keating and I wrestled with about 5 or
6 years ago is this rehabilitation question. We weren't able to do any-
thing with it at that time, and I would hope that things have changed
a lit tie
-bit.
t.
Mr.IiiE.1TL c. Yes.
Mr. O'Ifmi.i. It just makes sense to me that if an employee is par-
tially disabled, but still able to work, every effort should be made to
get this fellow back on a job that he. can perform because it is so much
better for him, and for the Government and for everybody concerned.
You will recall we ran into some difficulty with some other orga-
nizations when we tried to do that.
Mr. P_v)is~i.~carFat. Yes.
3fr. O'II.~r,A. I am going to explore that situation and see if we
can't do something about. that this time in providing some sort of
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additional assistance to partially disabled employees in. regaining
employment with the Federal Government.
Mr. KEATING. There has been talk about a retraining program.
That has never been adequately developed where it is necessary, but
certainly where there are 21/2 million jobs in Government it seems un-
fair because a man is impaired to some extent that he can't find work
and, of course, in some instances where with complete, recovery they
are not allowed to work.
Mr. O'HARA. I think that is really ridiculous. We will explore
that quietly for a while and see if we can't do something about it.
We may be in touch with you about it later.
Mr. Hathaway?
Mr. HATHAWAY. Mr. Keating and Mr. Rademacher, we certainly
appreciate your testimony and constructive suggestions. At the hear-
ing last week in regard to your objection which you cited on page 3
of your testimony, using the Consumer Price Index for raising the
compensation payable to those who are already receiving compensation
when this goes into effect, we asked the counsel for the Department of
Labor to supply us with cost figures to see just how much additional
cost there would be simply to pay those employees the going rate when
this is put into effect.
In view of the fact that we are not affecting any employers insurance
rate, as you would be under State laws, we thought this would probably
be an equitable provision and it would, of course, eliminate the con-
sumer price index.
I presume that you would go along with that. Do you have any
comments on that?
Mr. KEATING. It seems to me that in connection with compensation
it should bear a relationship to pay and it should bear a continuing
relationship to pay.
Where a man is disabled, if Congress doesn't take action, he doesn't
have his compensation adjusted, and I don't think the Consumer Price.
Index is adequate. What you propose is good, but I think it ought to,
be explored a little bit more and see if you can't just have some sort of
a comparable tie-in where it would be directly related to Federal pay.
After all, that is what they are suffering the loss of, and if there is a
continuing disability the fact that they were disabled 10 years ago
shouldn't mean that they ought to get less than a man who is disabled
today.
Mr. HATHAWAY. Correct.
Mr. RADEMACIIER. I believe, Mr. Chairman, there is a glaring in-
equity in that section of the law. I believe you will find it is true that
those who are suffering long injuries are being denied a benefit which
is being paid to a person who is fortunate enough to go back and then
suffer a recurrence and come back at the higher pay, but the person who
has been out all this time and can't go back has to suffer the less pay.
Mr. HATHAWAY. Right.
Mr. RADEMACIIER. It is an inequity definitely.
Mr. HATHAWAY. That is exactly what we had in mind when we asked
those questions. You commented on Congressman Fascell's bill which
seems designed to correct some inequities. Just sitting here thinking
about it, wouldn't it be better to, rather than give the employee full
compensation, compensate him to the maximum he would be compen-
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0 IMPROVEMENT OF BENEFITS U DER THE FECA
sated for if his adjudication came at the instant of his injury; in other
words, give him say, two-thirds of his pay.
Then in the event it turns out he was not entitled to it he won't have
as much to pay back.
Mr. KLrT w. It would result in less difficult adjustment certainly
if it was?] aced on that basis.
Mr. ITHAWAY. And in regard to Con essman Olsen's bill, I agree
with the chairman that perhaps we should have medical testimony be-
fore us before we make any judgment on that because it is a very com-
plicated field that I frankly know very little about.
Mr. KEATINo. One of our big prolems in that. area is the fact that
we have many small units in the Post Office Department. Of course,
we have many post offices and we have a post office where there are 6
or 10 people working.
They go along for years and years without an injury, so when one
does occur they don't know what to do.
They don't know anything about the Coinpenssation Act. and if a
fellow has a. heart attack, they say that is illness. The fact that there is
an occupational factor involved is very little understood in many areas
and for that reason I think more people who are entitled to conipen-
sation or should be entitled to compensation because of a heart, failure
don't even have a claim presented.
I think that we have, to have a. little more education. Of course, it
is in the postal manual, but there are an awful lot of other things in
the postal nianual and the person in the small installation doesn't keep
up on compensation.
Waterloo, Iowa, is a pretty good installation, but the officials weren't
up on occupational ailments: so we thought that the Olsen approach
Would place the responsibility upon diem to present other testimony.
If the man has, by self-abuse, brought on the condition or if he had
a previous existing condition, it ought, to be reasonably easy to estab-
lisha.
It is easier to establish than than to establish the occupational factor.
11r. HATHAWAY. Yes. Are employees required to take periodic
physical examinations?
Sir. KEATt G. No. just an entrance.
N1r. HATHAWAY. So there are no records.
Mr. IiE.%Tixn. 'No, They have other records. In the larger offices
there are medical units, and employees report to the medical unit if they
are ill and, of course, a record is kept. on that.
They are not very thorough but they are records. If a person is
suffering some particular disease it will probably show up on his card.
That program is limited.
Mr. IT.vriiAtw_ Y. Of course, your suggestion with respect to provid-
ing new glasses and artificial hubs I think is a coniniendable one and
certainly one that. we shall consider.
'I'hnnI you very much.
Mr. TE vrING. That has been tap and I know one time that I argued a
case before the appeals board in behalf of the glasses and they went
along with the precedent, so the precedent. is pretty thoroughly estab-
lished within the Bureau, and I think it would takes legislation. But
if it person has a very expensive pair of glasses or he has an artificial
leg it is smashed in an accident, certainly lie should not be compelled
to pay that loss.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 71
In many cases without glasses the fellow can't see. They are j ust as
much a part of his seeing as his eyes. The eyes aren't efficient or
effective and he can't work without the glasses.
If they are smashed up I think the Government ought to pay for
replacing those glasses.
Mr. RADEMACI-irm. Mr. Chairman, I had a case in New York City
where a letter carrier was accosted by a person who was suffering a
mental breakdown and he came up to him without any provocation
and knocked the plate from his mouth. The man had to pay $160 and
after many long months of arguing the point with the Post Office De-
partment we won, not through the BEC, of course.
We won on the fact that the supervisor was neglectful in not taking
action to assist that mentally deranged employee. He knew of the
condition. That's the only way we won. Hero is another example of
a man doing his job through no fault of his own and being charged
$160 fora broken plate.
This points up the seriousness of this. problem.
Mr. O'HARa. I think it is very serious.
Mr. HATh AWAY. Just one more question.
I have had some experience under State laws. One of the complaints
made by workmen is that their cost of legal fees is sometimes
prohibitive.
Has this been the case? Have you had any complaint?
Mr. KEATING. There is no legal appeal on the compensation. The
decision of the Bureau of Employees Compensation is final and actually
occasionally somebody hires an attorney to try to establish a claim.
'They do pay certain legal fees and the Bureau tries to maintain
them on a reasonable basis where they are responsible for such fees,
but there are very little legal fees involved in the Compensation Act,
very seldom that they become involved.
Mr. RADEMACHER. I have seen situations, Mr. Chairman, where the
BEC would recommend an attorney and his fee would be 30 percent.
You people being lawyers, you would have to judge whether that is
reasonable.
Mr. O'HAItA. That. is higher than the typical State limitation. As
attorneys we would be reluctant to say that any attorney's fees were
too high, but that is high.
Mr. KEATING. The legal fees are involved when there are third-party
cases, when they sue somebody else, and it is in the interest of the
Government as well as in the interest of the individual.
The Government recovers their payment to the individual in those
third-party cases.
Mr. IATHAWAY. This third-party procedure only the Government
could institute; isn't that correct? It could institute proceedings in
the name of the individual employee?
Mr. KEATING. No, the individual employee can institute, but the
BEC claims part of the settlement if the defendant pays; him compen-
sation. The Bureau claims reimbursement of what is paid.
They have a prior claim to any settlement that he secures.
Mr. RADEMACHEIt. The employee must initiate the action, you are
correct. lie must initiate it and if he refuses he loses the compensation
benefit.
Mr. HATHAWAY. The employee.
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72 IMPROVEMENT OF BENEFITS UNDER THE FECA
1fr. IlADEM+r.%cIEErt. The BEC orders him to sue so they can regain
what. they have Maid.
_Air. TlATtr.tw.Lv. If the Government is lax and doesn't bring the
claian does the employee have any right, to bring the claim?
fr. Ilaair: r.ac arr:rz..\Iany employees sue. NIr-. Hathaway. Zany env
plo ?ees sue on their own and then after they receive settlement they
had out. it comes right back to the Government..
1[r. II.aTrr.'WWAY. Ill our State law we have a provision where if you
notify the employer that you are going to sue and if lie doesn't. do any-
thing in :l0 days you can ro ahead on your own and sue.
I not ice, that a similar provision is not in this law.
Mr. KE.VTrxrr. Mere time employee often goes ahead on his own and
then the Bureau enters the picture and in some cases if there is evi-
dence that there is a good third-party china the Bureau instructs them
to sue.
Mr. TL 'ruAw-,,Y, Thaat is all. Thankyou.
_llr. O`II:ura. Thank you very much, gentlemen.
I wish to state for the record that I think your members interests
are being well protected in dais area. by international officers and I
know that you will make a. constructive contribution to whatever
legislation comes out of this committee as you have in the past.
I thank you.
:1Tr. KEATING. Thank you.
A.Tr. RADF,MACHFrt. Thank you.
'.NSr. O'II.ui;a. Our nest, witness will be _Mr. John A.'vTeCart, who is
operations director of the Government Employes' Council, AFT--CIO,
of Washington, P.C.
11Ir.:ifcCart, welcome back before our committee.
STATEMENT OF JOHN A. McCART, OPERATIONS DIRECTOR, GOVERN-
MENT EMPLOYES' COUNCIL, AFL-CIO, WASHINGTON, D.C.
Mr. MCC.anT. Thank you, Mr. Chairman.
1Ir. O'IL RA. You are a rather frequent visitor and it is always a
pleasure to have you because your testimony is always enlightening
and well presented.
.l Ir. 1IcCART. Thank you.
IIr. Chairman, my name is John A. eCart. I am the c,peratioms
director of the Government Employes' Council, AFL-CIO. The
council represents 31 unions with members in the wage board, postal.
and classified services of the Federal Government.
We have. presented to the subcommittee., --1[r. Chairman, copies of
our formal statement. If it meetq with your approval I would like
to request that this be included as a part of the record in text and that
I be able t o proceed to summarize some of the more important features
of the statement.
lfr. Without ob]jection, your statement will be entered into
the record at this point. You may proceed in whatever manner you
wish.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 73
(Statement referred to follows:)
STATEMENT Os' THE GOVERNMENT EMPLOYES' COUNCIL, AFL-CIO
Mr. Chairman and members of the subcommittee, The Government Employes'
Council and its 31 affiliated APT-010 unions representing employees in the
classified, postal and wage board services of the Federal Government desires to
extend its gratitude to you and your colleagues for arranging this hearing on
desirable changes in the Government's program for its employees who experience
on-the-job injuries and the prevention of additional accidents, which result in
compensation claims.
The last revision of the Federal Employees' Compensation Act occurred in
1960. Five years have elapsed. It is most appropriate that Congress undertake
a comprehensive review of the statute to determine its applicability to the cur-
rent needs of employees covered by the compensation statute and the Federal Gov-
ernment as the employer.
We propose to comment first on II.R. 10721, the bill offered by Representative
William D. Hathaway to improve benefits with respect to maximum and mini-
mum payments, benefit increases geared to the Consumer Price Index for those
now on the compensation rolls and continuation of benefits for surviving children
through the post high school years. The council appreciates Congressman Hatha-
way's sponsorship of these proposals.
While these are highly desirable improvements, they represent interim ad-
justments. Department of Labor spokesmen have advised the subcommittee that
more substantial changes in the FECA must be deferred until the President's
Cabinet Committee on Federal Staff Retirement Systems makes its report. Bence,
we feel it appropriate to comment on some of the other bills involving the Com-
pensation Act, which are pending before the subcommittee.
It is fitting to note also that the Council was invited to offer its views to the
President's Committee in July of this year. However, we were informed that
our comments should be confined to changes we believe are needed in the Civil
Service Retirement Act. We were unaware prior to this hearing that the Presi-
dent's Committee was considering FECA also.
Representative Hathaway's bill offers needed updating of the compensation
program.
In 1949, Congress fixed the maximum compensation payment available to in-
jured Federal workers at $525 a month. At that time, the $525 figure was
adequate to cover more than 99 percent of all Federal employees. A disabled
Federal employee receives two-thirds of his monthly pay. If he has dependents,
compensation payments may attain three-fourths of his salary. But in no case
can they exceed $525. Thus, today, less than 86 percent of the workers are
covered.
From 1949 to the present, maximum salaries of Federal employees have ad-
vanced from $10,330 to $24,500. Yet the maximum compensation is limited to
$6,300 annually.
II.R. 10721 increases the present limitation to $685 a month. The Council
believes this change is fully justified in the light of a basic principle of compensa-
tion-to restore to an injured Worker a reasonable portion of his income.
The bill adjusts from $420 to $546 the portion of an individual's base pay
available for determining the additional benefit he may obtain because of depend-
ents. Why that figure should not be under the same fundamental principle as
is used to compute the basic compensation benefit is not clear. We advocate that
this dollar limitation be discontinued, and that the augmented benefit be figured
on three-fourths of the employee's base pay. However, the proposal in the bill
represents the minimum step which should be taken,
Another feature of II.R. 1072'7. Increases from $1.80 to $210 the minimum com-
pensation available to Federal employees incapacitated by on-the-job injuries.
It is unnecessary to emphasize the sheer inability of compensation recipients: to
even subsist on $180 monthly or $2,160 a year. Official administration sources
have designated $3,000 as the line between poverty and economic existence.
From this standpoint, the adjustment to $210 is modest, indeed.
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IMPROVEMENT OF BENEFITS UNDER THE FECA
The economic plight of bcneficlarh's now on the compensation rolls is serious.
There has been no adjustment since $cptemds'r 191;0. Even that amendment
to FECA was applicable only to injuries which occurred prior to January 1, 1958.
11.11. 10721 provides that these benefits be recomputed on the basis of annual
average consumer price index changes since the awards were made minus any
increases granted by Congress. This action represents simple justice to in-
jured Federal eniploy'eea and their survivors. many of whore are wholly depend-
ent upon compensation payments as their only source of Income I need not
recite in detail the financial difficulties faced by the numerous citizens exist lug
on fixed incomes geared to earnings many years ago. Comtx'nsation beneficiaries
can certainly be counted in this number.
As a matter of fact, the time Is appropriate for Congress to consider a per-
manent method of adjusting compensation benefits for those cases already
adjudicated) so that the recipients will be able to maintain a decent standard of
living. Adoption of such a formula would enable these disabled workers and
their families Lo plan their future income to meet the ever-increasing costs of
necessities. It will also eliminate the necessity of iuc'rmtueal action by Congress
every 4 years. Relating the adjustment in conII)'msatIon to the pay changes of
active employees merits consideration by the subcommittee.
Out- of the most deslralate praaisfons of II.R. 10721 extends to age 23 the age
at which surviving depxndents may continue to receive compensation payments.
Present law Malls these benefits to age IS. With the increasing number of boys
and girls continmhng their education Into college. I8 is somewhat unrealistic.
In audit bit, loss of hcnctii;s tit that. link(- may discourage or make it {ntlsttisible
for chililron of Ihew disabled Federal employees to fully utilize their poten-
liat by higher education.
Generally. the Federal tktvcrmuenI has recognized this principle fu recent:
enactments fly extending beyond IN the ago limits for benefits for surviving
ebildroii under veterans' service, income tax, social security, civil service retire-
ment. raid the health iusuranee program available to employees of the Federal
Governwent.
Nov. )It-. Chairman, the Council desires to address itself to the proposals ad-
vanced by Kcprc ittative James G. O'Hara. the ranking majority member of
the rnbconnmittee, in his MR. IOSul3. We are most grateful to Congressman
O'Hara for his longstanding interest in the compensation law and his introduc-
tion of that hill.
The provision for a hearing on corulnerrsafion claims while they are under
adjudication by the Bureau of Employees' Compensation is most desirable.
Under the existing statute, a hearing is available to an employee only if he
appeals tit the board of appeals. And such hoaringa are conducted only in
Washington. As a consequence, many appellants throughout the country are
physically unable to present theft cases. For others it Is impossible for them
to afford the time and expense Involved in traveling from their homes to
Washington_ Acceptance of this provision would enable the Bureau of Em-
ployees' Compensation to secure necessary Information at firsthand, and should
reduce the ttcressity for employees carrying their claims to the appeal stage.
Our Information Indicates that a similar hearing process is common throughout
the SLitte cumix'nsatiun systems.
II.R. ]0865 remedies an inconsistency In the present FECA. An individual
who incurs it total or partial loss of a member of his body only Is entitled only
to a scheduled award for a specific number of weeks as described in the act. His
claim Is fully satisfied. There Is no compensation for permanent loss of wage-
earning capacity. If, on the other hand, he suffers a total or partial loss of a
member and other parts of his body are affected, he can be compensated in-
definitely for loss of wage-earning capacity, but not a scheduled award for the
member.
Ilepresentalive O'Hara's proposal corrects this deficiency by enabling the
employee to secure comltensntioi for loss of wage-earning ability In either case.
We believe the revision is highly meritorious.
The bill removes another conflicting provision by providing a lump-son pay-
ment to a widow or depe'ndt'nt widower beneficiary upon remarriage. The
language is designed to eliminate the present discrepancy, which permits such
individuals to continue receiving compensation benefits upon the death of the
legal spouse by simply omitting the formal marriage procedure and continuing
to live Avith another spouse.
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75'
Finally, H.R. 10865 introduces into the Federal compensation system the
concept of judicial review. Under section 37 of the present law, the decision of
the Secretary of Labor on claims is final and binding. I:I.R. 10865 permits claim-
ants to seek a review in the Federal district court upon meeting specified
conditions.
The Council is convinced such a procedure would prove more costly and more
time consuming to Federal employees without insuring greater justice. That
is not to say that the unions associated with the GEC find all the decisions of
the Bureau of Employees' Compensation and the board of appeals acceptable.
In general, however, we find the FECA is fairly administered. While we quarrel
occasionally with specific findings, these cases usually hinge on medical evidence
or factual establishment of causal relationship.
Another bill under consideration by the subcommittee warrants early, favor-
able action. I refer to Representative Carlton R. Sickles' H.R. 6554.
The fundamental purpose of the measure is twofold : (1) To vest in the Depart-
mnent of Labor authority to develop and enforce the application of safety stand-
ards by Federal agencies; (2) to provide a statutory basis for the participation
of employee unions in developing the Federal Government's safety program.
During the past 20 years, considerable improvement has been achieved in the
safety record of the Federal Government. But the prevention of accidents and
injuries and consequent reduction in the suffering and cost involved must be a
never-ending quest for the ideal.
President Johnson's Inauguration of Mission "Safety-70" on February 16,
1965, Is an evidence of his personal concern about the suffering and cost involved
in injuries to Federal employees. The Government Employes' Council and the
AFL-CIO have endorsed this program. We commend the President for his
initiative in developing this plan to reduce accidents by 30 percent in the next
5 years.
But the fact is that in each of the 8 years from 1956 to 1963 alone the fre-
quency rate of injuries in private industry has been considerably below the Fed-
eral Establishment. Moreover, the reduction in the frequency rate has been
much less in the Federal Government than in the private sector.
While the Federal Government's performance in the field of severity rates is
generally better than industry, progress in reducing this rate is much more
substantial in private firms than in Federal-agencies.
In its report for 1963-the latest material available-the Bureau of Em-
ployees' Compensation made this significant comment.:
"'The summary of civilian Federal employee work injury- experience during
calendar year 1963 shows no measurable overall improvement. Frequency of
disabling injuries was the same as for 1962, while severity- and cost rates ad-
vanced a significant 13 percent."
The introductory remarks to the report then note that the total direct
cost of injuries "is the highest ever recorded"-137.6 million. This, of course,
does not include indirect expenses, such as damage to -machinery and equipment,
and the value of lost production time. - -
In comparison with' 1962, the total number of cases handled by the Bureau,
the number of nonfatal disabling injuries and the number of lost days chargeable
to on-the-job accidents for 1963 all increased over the previous year. -
Deaths of Federal workers attributable to job-relatted injuries in 1963-reached
the second highest point in 8 years. Fatal injuries wore experienced by 100
employes in that year.
With the exception of general language in section 33(c) of the Compensation
Act, there is no specific statutory charter governing the activities of the Sec-
retary of Labor In the Federal safety field. And there is no general statute
describing objectives for Federal agencies in developing their safety programs.
II.R. 6551 remedies this situation by outlining the responsibilities 'of the Sec-
retary of Labor and Federal agencies in providing minimum safety standards
and safe working conditions.
It reconstitutes the Federal Safety Council and authorizes union membership
on it and a Federal Safety Advisory Committee to assist the Secretary of Labor
in attaining the objectives of the bill. -
During the President's Conference on Occupational Safety in March 1962, Mr.
L. B. Worthington, president of the United States Steel Corp., made this pertinent
comment : -
"Certainly the very nature and importance of ;safety suggest a mutual interest
on the 'part of business, labor, and Government in the effectiveness of injury
prevention ,programs."
55-030-165---16
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We concur completer with this view.
II.It. Gout is not a panacea for all the safety problems existing in Federal
agencies. However, we feel strongly that it provides the mechanism for achiev-
ing a much more satisfactory rate of progress in reducing worker Injuries, ma-
terial and property losses, and the large expenditures involved. It offers a highly
effective tool in President Johnson's Mission "S fety-70" eanalxaign to reduce
substantially the suffering and loss of money resulting from job-related accidents.
Other desirable iniprovc.nu'nts In the FECA are embodied in II.It. 5204 intro-
duced by ltep. Dante B. Faseell. The Council appreciates Congressman Fascell's
reintroduction of a measure to alleviate financial hardship to employes while
awaiting compensation benefits after injury and to accumulate annual and sick
leave during periods of disability.
An individual who presents a compensation claim for adjudication Is not en-
titled to his regular salary or compensation benefits until his claim is priwesscil.
Ile may use leave during the waiting period, but his normal salary is discon-
tinued, In addition, the employee may not receive compensation for the first
3 days of temporary ilisrabllity unless the disability continues for more than 3
weeks or becomes permaneaat.
A Federal employee who Is paid compensation benefits is not entitled to earn
sick and annual leave during the period he Is on the rolls of the Bureau of
Compensation.
Moth of these inequities are corrected by Mr. Fasceil's bill.
Despite spec ss:ftii efforts of the Bureau of Employees' Compensation to speed
adjudication of claims, the average period between Injury and the date the
claim is deceived by the Bureau of Employees' Compensation is now 49 days.
In many cases the time between submission of the claim and completion of the
Bureau's consideration 1R precisely the period when the individual is experiencing
considerable financial strain. tilt. 5285 authorizes the claimant to continue
receiving his regular pay while the case is under consideration. We believe this
basic principle Is a desirable and justified improvement in the Compensation Act.
The existing Annual and Sick Leave Act permits Federal workers to continue
earning these two types of leave while away from work using their leave. How-
ever, an individual who is on a leave-without-taay status and is also receiving
compensation payments may not earn annual or sick leave. Obviously, an
employee who is unable to work because of an injury Incurred on the job should
not suffer a reduction in his working couditlons because of an occurrence beyond
his control. The present laws are Inconsistent in their treatment of Federal em-
ployees. An individual who has no leave available and must rely solely on pay-
ments under FECA Is penalized. The Council concurs fully with Congressman
Fascell's view that it is inequitable to apply a different rule on earned leave
to the worker who has been injured on the job.
Mr, Chairman, the Government Employes' Council Is convinced that with
the bills pending in the subcovimtttt:e there exist the roots of a comprehensive
revision of the Compensation Act. For years, that statute has been viewed as
one of the model laws throughout the entire world for individuals who suffer
the misfortune of on-the-job Injuries. We believe It is a landmark in Federal
personnel policy of which we can all be proud. But to maintain that position,
it Is essential that the act be thoroughly reviewed and revised. We urge that
the subcommittee take favorable action at an early date on the bills we have
discussed.
Mr. McC:tir.'t'. To you and your colleagues, Mr. Chairman, we want
to express our appreciation for arranging these hearings. We are
aware. of the continued interest you have taken in the Federal Em-
ployees' Compensation Act and particularly the prodigious work that
you did on the 1OGO amendments.
I propose to base. nay presentation on four hills, 1fr. Chairman, and
then make a, few extemporaneous remarks about some others.
First, with respect, to th e, bill introduced by Congressman Hathaway,
TT.P.. 10721, we are grateful to him for presenting that measure.
Tt came as sonewhat, of a surprise at the hearing last. week to learn
that f lie Department of Labor spokesmen feel that any comprehensive
action on compensation must be deferred until next %-car, and we were
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IMPROVEMENT OF BENEFITS UNDER THE FECA 77
equally surprised to learn that the President's Cabinet Committee on
Federal Retirement Systems has this matter under study.
We were not aware of this. Our council was asked to testify before
this President's Committee in July, which we did, and we were told
that our comments should be confined to the retirement program.
Nevertheless, since the administration feels that a comprehensive
review of the compensation statute is in order, we feel free to direct
our comments to various aspects of the existing law.
The first important feature of Congressman Hathaway's bill is the
increase in the present maximum from $525 to $685 a month.
The current maximum was fixed in 1949. At that time it covered
some 99 percent of all the employees who could be, affected. Today,
because of salary increases, that percentage has declined to 86 percent.
Meanwhile, the salaries of Federal employees, justifiably, have doubled
and yyet the maximum remains the same.
We feel, therefore, that this proposal in II.R. 10721 is fully justified.
On the other end of the scale we have the increase in the minimum
advocated in Congressman Hathaway's bill, increasing the minimum
from $180 to $210 a month; $180 a month yields $2,160 a year. The
proposal in Air. Hathaway's bill would increase that minimum to
$2,520 a year. When we understand that the poverty line has been
drawn at $3,000 a year, Mr. Chairman, the effort to increase this mini-
mum is modest indeed and so we heartily endorse it.
With respect to the economic plight of the current beneficiaries of
cornpensat on, those who have been injured and have received awards,
I don't think it is necessary for me to engage in extended statistics.
The last time the act was improved in this respect was in 1960 and the
increase in the awards at that time related only back to 1958. It is
rather clear that these folks are in deep need of some financial help.
In that connection then the relation of the current awards to the rise
in the Consumer Price Index is fully justified.
however, we seriously suggest to the subcommittee that they give
consideration to eliminating this need for a piecemeal approach to
increasing these benefits for those already on the compensation rolls
by relating these awards to the pay of active employees in some
fashion. We propose some formula so that these adjustments can be
made automatically without having to resort continually to changes
in the law.
The provision increasing the maximum age at which dependents can
be eligible for compensation benefits to 23 we heartily endorse. Let
me simply say that this matter has been recognized in other Federal
laws with respect to dependents.
I cite veteran's benefits, income tax law, social security law, civil
service retirement, and health benefit programs. All of them permit
dependent children to continue to receive benefits beyond age 18 if they
arc in school.
Mr. Chairman, I would like to address a, few comments to the bill you
have introduced, IL R. 10865. We support the provision
you have ad
vanced for hearings by the Bureau of Employees' Compensation.
These, of course, would be available at the request of the employee,
not mandatory.. We feel that this would enable the Bureau to secure
a better basis in fact for making its decisions.
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78 Ib3PROVEA1ENT OF BENEFITS UNDER THE FECA
As a matter of fact, the only place that it hearing is available now
is at the Board of Appeals level and all of these liearings are conducted
in Washington.
Obviously many appellants find it physically and economically im-
possible to trtivel to Wasliitigtoii. hence the, records may be deficient
because they are not able to present factual material.
This proposal would bring it closer to the scene and we feel would
improve the compensation system.
The. provision in your bill, Air. Chairman, for eliminating the incon-
sistency between the employes who suffers a total or partial loss of a
limb without any related conipensable injury and the employee who
suffers the total or partial loss of limb wiill related compeusable
injuries to other parts of his body deserves very serious consideration.
It is somewhat complex, but I think the intent. is to provide uiii-
forinity in the treatment. of these two types of injuries and, therefore,
we concur with your proposal.
As to the matter of judicial review, Mr. Chairman, T think in theory
this is a very desirable idea. A fine raise can be made for it as a matter
of providing individuals with legal rights.
From the piacticttl standpoint-, however, we believe that the benefit
that you would derive theoretically might- very well be offset. by the
time.and expense involved to the clainiant in securing a final adjudica-
tion of his claim.
That is not to say that we are completely satisfied with all the de-
cisions of the Bureau of Employees` Compensation or all of the deci-
sions of the Board of Appeals, but. we feel that they are being adininis
terecl fairly. Any quarrel we have is a matter of evidence, a matter of
fart., or a matter of medical opinion. So Nye hesitate to suggest that
you move immediately tip a, judicial review.
One of the other bills that our council feels is quite. im ortant., Mr.
Chairtnan, is Congressman Sickles' bill H.R. 6554. 1e have en-
dorsed similar legislation over a. number of years. Let, me preface
my comment, in this connection by telling you that we and the
AFL -CIO have, endorsed President. Johnson s "Mission Safety-70,:' it
program designed to re-duce by 30 percent. t.lie accidents in Federal
service by 1070, but. having said that, we must. emphasize that this
kind of Iegislal ion is still essential.
This desire to attain perfection in eliminating accidents must. be
continuous. The simple fact is in the Federal service that- improve-
ment. has not. been (lie loci desirable. In the 8 years, from 1056 to
1963, the frequency rate of injuries in private industry has been con-
siderably below that. in the. Federal agencies.
The reduction of the frequency- rate in the two sectors has been
favorable to private industry. -hen we. consider severity rates, the
Federal Government- has hack a better record on the basis of numbers
alone, but. again, the. rate of reduction of severity rates has been
better in private industry than in the Federal Government.
The last report that. is available by the Bureau of Employees'
Compensation is for calendar 1963 and I would like to just read
this brief excerpt.:
The summnry of civilian Federal employee work injury ezpcrienee during
calendar year 1963 shows no measurable overall improvement.
Frequency of disabling injuries was the sine for 1962, while severity and
cost rates advanced a significant 13 percent.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 79
And the report continues by noting that the $37.6 billion spent
under the Compensation Act was the highest ever recorded.
Well, it is in this light, Mr. Chairman, that we ask your favorable
?consideration of II.R. 6554, not that we want to cast criticism at any-
one, but that the Government's record can be improved. We feel
that H.R. 6554 will really assist the program that President Johnson
has inaugurated of "Mission Safety-70."
It will do it in two ways :
First, by outlining clearly the responsibilities of the Department
of Labor and the other agencies in the field of accident prevention
and the development of safety standards.
Second, it will reconstitute the Federal Safety Council and will
establish a Federal Safety Advisory Committee with union member-
ship on, both groups, so that the know-how of the employee organiza-
tions will be available to the Department in carrying out this im-
portant function.
I don't think it is necessary for me to emphasize that on the union
-side many of the international organizations-Mr. Keating's experi-
ence here is one case in point-have had tremendous experience in
the matter of safety and accident prevention over a long number of
.years.
The present law does not permit statutory membership by em-
ployees on the Federal Safety Council and it is these two points that
II.R. 6554 is designed to remedy.
In 1962 Mr. L. B. Worthington, president of United States Steel
Corp., made this comment at the President's Conference on. Occupa-
tional Safety : "Certainly the very nature and importance of safety
suggest a mutual interest on the part of business, labor, and Govern-
ment in the effectiveness of injury prevention programs."
We concur completely and it is in this light that we suggest your
favorable reaction to H.R. 6554.
The Council endorses also Mr. Fascell's bill, H.R. 5288. Despite the
fact that the Bureau of Employees' Compensation exerts strenuous
efforts to reduce the amount of time required to process claims and
despite the fact that they have made substantial progress, the fact
remains that the time elapsing between the injury of an employee
and the return of his claim by the Bureau of Employees' Compen-
sation averages 48 or 49 days.
I was very much interested, Mr. Chairman, in your remarks relative
to improving this situation in the Post Office Department. I think
this is highly commendable and I would suggest that, after acquiring
all the evidence available, any comment the committee makes on this
score will be most helpful to the agencies in advising their field com-
ponents that Congress is concerned about this matter of delay. It
occurs at the field level, at the local installation level.
Mr. Faseel l's bill, of course, would remedy this situation. I think the
details of recovery by the Federal. Government in cases where that
is necessary can be worked out if there. is agreement on the principle
,of not having these employees go without any income during this
waiting period.
The matter of employees earning leave while they are receiving
-compensation I think is rather clear and certainly the basic intent
of a compensation law is to make employees as whole as possible when
they have been injured through no fault of their own.
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80 IMPROVEMYNT OF BENEFITS UNDER THE FECA
II.P. 24CO, Congressman Olsen's bill, we commend to your serious
consideration. Admittedly, this is a very JA cult and complex field,
but I drink we can all recognize that from the medical standpoint
there is a growing recognition that job stress, job tension, and even
physical accidents such its Mr. Keating has recited can contribute
to serious heart seizures and hypertension. From this standpoint we
don't want to miss any opportunity of making the Compensation Act
operate as it was originally Intended as a, libera1 statute.
The suggestion that has been offered for replacing employees glasses,
teeth, limbs, certainly is good. We endorse it. While the doctor may
indicate that an employee has recovered sufficiently to return to duty
on a light-duty basis, we find all too often that lie is told by his
agency "we have no light duty available" and it is a question of "or
else.."
Our Federal Government, not this year, not last year, not the year
before, but. for the past decade, has embarked on a program of"eni-
ploying the physically handicapped and certainly there is no better
place to practice the policy than in the Government service itself. We
must make certain not only that these employees with job-related iii-
juries are not denied employment for themselves, but that their skills
are not lost to the Federal Government.
'frith these suggest ions, Mr. Chairman, we again waist to commend
you and your colleagues for your serious consideration of this impor-
tant statute. Since it, was revised 5 years ago, we feel the time has
now arrived for a comprehensive review and comprehensive amend-
ments to the Compensation Act.
Thank yoti.
Mr. O'lIABa. Thank you, Mr. IIcCart. With respect to your coin-
nients dealing with time subject of judicial review of final decisions
of the Secretary in compensation cases it is my thought that the ju-
dicial review provision would not- be exercised very often and it would
be exercised only under two circumstances, since we follow the sub-
stantial evidence rule.
Mr. MCGART. Yes, that is right.
Mr. O'II.iia:t. It. wouldn't he a. rehearing really of the claim. One
situation in which it is confetti (plated in my bill that this would be
used would be where, it. was felt ltv the claimant and by others in-
terested in his claim that the. decision had been arbitrary.
I don't thiiik that happens very often, if ever, under our present
Compensation Act, but nevertheless this provides a safeguard against
an arbitrary decision on the basis of facts. The second circumstance
under which it might be used would be a circumstance in which an
interpretation of a provision was given by the Secretary that. the
claimant and others interested in the claim night feel was contrary
to the. intent of Congress, so that we could get that intent question
cleared up in the legislation.
And no one would have to use. it. It would be an additional pro-
cedure available to claimants and for that reason I really can't tuider-
stand why there should be any opposition to it on the part of pe~ons
representing Federal etnliloyees.
'fir. 'tfcCART. As you may be aware, Mr. Cliairinan, this is a pro-
posal that. has been offered over the last decade at least. Not having
a legal background myself I find a little difficulty in understanding the
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IMPROVEMENT OF BENEFITS UNDER THE FECA 81
substantial evidence principle, but I think from the legal standpoint
a very fine case can be made for the judicial review process.
I think there are two things that we have to consider. How is the
present system working? Is there denial of people's rights under the
law in the light of facts and legalities?
Two, what is the alternative if equity is not being given in the cases
considered by the Board of Appeals and we propose to a review by
the courts?
We have been talking now about the delay in processing claims. I
am told that under the State compensation acts cases are in process in
the courts for months on end before an appellant can secure a decision.
Furthermore, if the delay involved is not going to provide greater
justice-I am not saying that it won't but if it doesn't, then. the em-
ployee can suffer a serious financial impact because the attorney's
fees, of course, would have to be paid. I think our position is basically
that we have confidence in the present system.
We disagree with findings, in specific cases, don't misunderstand
us, but we have confidence in the present system and we don't see that
the advantage offered by the judicial review improves substantially
the situation that we have now under the Compensation Act.
Mr. O'IdARA. Well, let's put this a different way.
The claimant would face the same question a litigant always faces
and he decides it in cooperation with whomever is counseling him; that
is, are his chances on appeal worth the effort involved in making the
appeal? Ile has to make that decision. if he is not fully satisfied with
the original decision of the Bureau when he decides if he is going to go
to the Appeals Board.
Mr. MCGART. That is right.
Mr. O'IIAaA. And he would have to make that decision under my
proposal a second time if he went to the Appeals Board and still was
not satisfied, that is a problem that all attorneys are accustomed to
facing is the game worth the candle? Are the chances of prevailing
on appeal worth the effort and difficulty involved?
Without going into the subject extensively, but referring back to
my conversation with Mr. Keating and Mr. Rademacher, having to do
with the rehabilitation and reemployment of partially disabled em-
ployees, I would gather from your remarks that you, too, feel this is an
important area that the Congress might look into with the idea of im-
proving the present practice in that regard.
Mr. MCCART. Mr. Chairman, my interest in that matter stems origi-
nally from my knowledge of the 'Civil Service Retirement Act and
what happened to disability annuitants. I have very strong feelings
about the inadequacy of the Federal Government's program in retain-
ing disabled Federal workers rather than see then go off the rolls.
What I have said with respect to retirement applies equally with
respect to the Federal Employees' Compensation Act. From the hu-
manitari.an standpoint there is no reason that the Federal Government
should not do its level best to see that these employees are rehabilitated.
From the standpoint of economics it is good for the Federal Gov-
ernment because they retain the skills that they have invested in these
employees over a number of years.
Mr. O'ITARA. Right. I think it makes a great, deal of sense and I
would suggest, as I "suggested to Mr. Keating, that we may be in touch
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IMPROVEMENT OF BENEFITS UNDER THE FECA
with you later with respect to how we can do this best after we explore
the problem a little further.
r. McC.rter. I think the emphasis and perhaps the experience that
the Federal Government has already acquired under its retraining pro-
grams in the private sector might be beneficial.
llr. t)'IL~n.. Yes.: I think so, too.
Mr. Pucinski?
Mr. Puci.-sict. Mr. McCart. I don't, see anywhere in your statement
any reference to the possibility of taking this ceiling off altogether.
There has been some discussion on that point.
Perhaps I missed it..
Mr. Mc('.irtT. I t seated it very lightly, Mr. Pucinski. I dealt with it
in relation to the augmented compensation on page -We advocate
that this dollar limitation be discontinued and that the augmented
benefit be figured on tliree-fourths of the employee's base pay."
I did propose it there, but I certainly see no reason why that. com-
ment shouldn't. apply equally to the basic compensation award because
from (lie standpoint. of cost. it. is minimal. I'roni the standpoint of riot
having to deal with this maximum piecemneal, I certainly think it
would be much better to elinninair' the veiling altogether.
I was trying to devise a formula short of outright repeal of tire- pres-
ent. maximums, but it- is very difficult, so I would advocate the discon-
t.inuanc_e.
Mr. PUciNxsiii. As you know, the administration, the Bureau of the
Budget., is staying with that $G85 figure. Would you have any idea
what the additional cost would be- if we were to remove the limi-
tation?
Mr.MCC.1RT. No, I don't, but. $085 would bring it up into the super
grades. There are 4,001) or 5,000 at most in the super grades. The rate
of injury among those executives is somewhat rare and so I wouldn't
think that the cost would present any great difficulty,
:fir. Pt-cixsitr. I think you made a good point. on the judicial review
and it is my hopm that the author of t1e bill will not press that, point.
In one of our other committees we have had a considerable discus-
sion and there is a great effort being made to amend the Davis-Bacon
Act to provide judicial review there in wage determinations.
Mr. MCCART. Yes.
Mr. PucINsisi. And I can see the siucerit= ? of the gentleman from
Michigan in trying to put this in because obviously he is trying to
give the employee the greatest degree of protection. This is com-
mendable, but with judicial review there is a growing tendency to
rely heavily on judicial review to the extent that the backlog iii the
courts is becoming a very serious problem. I believe your point. of the
long delays is a very meritorious one.
We can only look and see what happens in the. NLRB where we ap-
ply judicial review and how the action of the Board, whatever efforts
they make to move along determinations, can become frustrated in the
legal delays that are built. into the system.
I think this is certainly something the committee wants to consider.
I want to congratulate my colleag is from Michigan for introducing
this aspect because it- is obvious his intention is to give the employee the
greatest degree of protection. Perhaps we can find a Cnmpromtse in
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IMPROVEMENT OF BENEFITS UNDER THE FECA 00
nailing down exactly what it is, that the Congress intends on these
laws.
I think that there is a great danger in this country in the impor
tance being assumed by these regulatory agencies. They are the
fourth branch of government today. There is no question that they
are creating a serious problem for this country. I am not surprised
that there are pressures for judicial review of their findings because
their findings frequently in my judgment are capricious and arbi-
trary, certainly way off the path of what the Congress intended. I
have often felt, and, I wondered. if you would have any comment on
this, Mr. McCart, that we can eliminate a great deal of this arbitrary
rulemaking power by the administrators of these agencies by being
more careful here in Congress in spelling out more precisely in the
legislation and in our reports exactly what is it that we intend and
what are the criteria.
I am disturbed about legislation that goes through my committee
and other committees of Congress, to a lesser degree. We often pass a
broad guideline bill and then we say the administrator shall promul-
gate the appropriate rules and regulations for the enforcement of this.
act.
Well, this is where the trouble begins. I think that the Congress
should do that. I think that the Congress ought to spell out as pre-
cisely as it can the rules to be followed so that we leave to the admin-
istrator the responsibility of administering the very concepts that the
legislative branch of Government has created.
What would your comment be on that, sir?
Mr. MOCART. Mr. Pucinski, the comments you have just made re-
mind me of the administrative theory that. is currently popular in per-
sonnel circles and that is administrative flexibility. It runs directly
counter to what you have j ust described.
Certainly the good administration of any law depends, it seems to,
me, on two things:
First, how well the law is written, and, secondly, how well the law
is administered. Much can be done by capable administrators.
I am not speaking now about the regulatory commissions and bodies.
I am talking about those that work under the aegis of department or
agency heads. Much depends on the attitude and the desire of the
administrator of the agency, particularly where he has review groups
under his jurisdiction.
In the Federal service I think our basic attitude has been that we
prefer to exhaust all of the administrative machinery available.
Our unions have, not hestitated to move to the courts where that has
been indicated, but we do so only when we feel that the existing ma-
chinery is completely inadequate to solve the problem. For this reason
we would be reluctant to establish an additional judicial mechanism
unless we find that employees generally or a majority of them are not
receiving fair and just consideration of their claims.
Mr. PUOTNsKI. I am for administrative flexibility, once the Congress
defines its intentions. The only difficulty with that, and I feel sorry
for most of the people who work for the Federal Government, is that
in the Government there is very little room for the luxury of being
wrong.
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!$i PMI'ROVEMENT OF BENEFITS UNDER THE FECA
We are all human, and we are all obviously going to err, and I would
hate like heck to count. tip all the times I have been wrong.
I have been wrong many, many times. But the average Federal
administrator and all of his subordinates are afraid to make "a, decision
often because they are afraid if they are wrong it. is going to militate
against their promotion or some advancement.
Mr. MCCART. As it consequence of the situation you have just de-
scribed, the unions in the Federal service often insist that laws be
drawn tightly.
I can remember the pay acts that were enacted in the past- 10 years
as a prime example, page after page of specific regulation because they
had notbeen administered wall in the first. instance.
Mr. PUCINSKI. Thank you very much, MIr. deCart.
Mr. O'Il' . Mr. Buie?
Mr. Qua . I have no questions, Mir. Chairnialn.
llr. Q'II.sit_s. Mr. IIatluaway
Mr. ILSTIIAIVA . I want. to thank qyou very much for your compre-
hensive statement and slate to you tdiat I agree with your statement
on page 4 that. if we can devise some permanent method of adjusting
compensation so that. Ave don't. have to continuously go back it would
be advisable, and perhaps we can work out something where rather
than having a ceiling we would have a fixed percentage and that would
also apply to those wino are now receiving compensation.
Mir, IICCART. Yes.
Mr. ILSTIIAw:Ly. With respect to your criticism of MIr. O'Ilara's
suggestion for appeal, it. seems to me that it. is necessary to have some
court review so that- we can establish a body of law with respect to this
act made by competent. judges and not simply leave it up to the last
review board that we have presently in the act..
I realize that there are expenses of litigation that the normal em-
ployee does not want to incur and perhaps we could make some adjust-
ment for that in our appeal procedure.
Mr. MCCART. You will recall that. part. of Mr. O'Ilara's bill provides
for a hearing procedure at the Bureau level, something that has been
absent until now.
Mr.IIATIIAWAY. Correct.
11r. MCCART. We would hope that this would permit a much better
method of --atlnering factual evidence and even medical evidence on
the scene which would result in improving the decisions that the Bu-
reau makes.
In addition, I am not exactly certain as to whether the Compensa-
tion Appeals Board recognizes precedent as such{ but I recall that in
the past. G or 8 years they have published their opinions and I am sure
that this is for reason of citation.
I am it little bit confused between the Compensation Appeals Board
and the Civil Service Commission Appeals Board. My recollection is
that. the Compensation Appeals Board does accept references to similar
cases with similar facts and similar findings, so that. it would seem to
me that the question of precedent- is applicable in the Compensation
Appeals Board now,
However, my comment. on the. hearing at the Bureau level leads me
to this conclusion : if the basis for the change to the judicial review
is justifiable criticism of the present procedure, it might be well to let
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IMPROVEMENT OF BENEFITS UNDER THE FECA 85
the hearing at the Bureau level operate for a year or two to see how
that ;works in developing decisions by the Bureau and the Board and
then determine whether the legal review is still warranted.
Mr. HATHAWAY. Except, of course, the threat of legal review makes
the review board a little more conscientious in its application of the
law.
Mr. MCCART. I recognize that, Mr. Iathaway. You are correct.
Mr. PuciNsKi. Will you yield?
Mr. HATHAWAY. Certainly.
Mr. PUCINSKI. Isn't the converse very often true, though? It
relieves them of a difficult decision because it can be reviewed by the
courts?
Mr. MCCART. Yes, that is certainly correct. I would imagine,
though, that the situation described by Mr. Hathaway is more prev-
alent. It reminds me of these matters that are brought to the atten-
tion of members of the executive branch by Members of Congress.
These receive prompt and preferred treatment because there is an-
other branch of Government involved, so that your comment is well
taken.
On the other hand, it might be that the appellants or their representa-
tives too might not have the incentive that they would have to pre-
sent the case to its full extent at the board level, realizing that there
was always another level of appeal. Thus it can be considered both
ways.
Mr. HATHAWAY. Thank you very much.
Mr. O'}IARA. Thank you very much, Mr. McCart, for your interest-
ing and helpful statement.
Mr. MCCART. Thank you, Mr. Chairman.
Mr. O'HARA. Our last witness will be Mr. Lawrence Smedley, who
is assistant director, Department of Social Security, AFL-CIO, Wash-
ington, D.C.
Mr. Smedley, we are very pleased to have you with us and I am sure
that you will be helpful.. You may proceed in any manner that you
wish.
STATEMENT OF LAWRENCE SMEDLEY, ASSISTANT DIRECTOR, DE-
PARTMENT OF SOCIAL SECURITY, AFL-CIO, WASHINGTON, D.C.
Mr. SMEDLEY. Thank you, Mr. Chairman. May I say first that the
AFL-CIO is deeply appreciative of the opportunity to appear here
today to testify in behalf of H.R. 10721, introduced by Congressman
Hathaway to revise the benefit structure of the Federal Employees'
Compensation Act.
The AFL-CIO believes that H.R. 10721 will do much to update
the, benefit structure of the Federal Employees' Compensation Act to
bring it in line with the economic and social changes that have occurred
in the last 16 years.
We urge favorable action.
I will submit a statement for the record, Mr. Chairman, and I will
try to summarize the main points of that statement because T know
that the members of the committee have pressing work and I under-
stand today they are particularly feeling overworked after last night's
session.
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86 IMPROVEMENT OF BENEFITS UNDER TIIE FECA
Mr. OIIARA. I would say that is a fair assessment of the situation,
Mr. Smedley. I thank you, and without. objection your written state-
ment submitted to the committee will be entered in the record at. this
point and you may proceed to summarize and make whatever addi-
tional comments you wish.
(Stat.ement. referred to follows:)
STATEMENT OF LAWRENCE T. S3iiat.sy. ASSISTANT IIIR#CTOR, DEPARTMENT OF
SOCIAL SEculu?a}. AFT,-CIO
Mr. Chairman, my name is Lawrence Smedley. I am assistant director, Dc-
1wrtment of Social Security, AFI-CIO and I am appearing here today on behalf
of that organization.
The American Federation of Labor and Congress of Industrial Organizations
Is deeply appreciative of the opportunity to tcsclify in support of II.R. 10731, a
bill to revise the benefit structure of the Federal Employees Compensation Act.
The oldest workmen's compensation syswin in the united States is the one that
covers civilian employees of the Federal Government. After the 1910 revisions,
the Federal Employees Compensation Act was considered one of the most ad-
vanced workmen's compensation laws in the world. Unfortunately, there has
not been a major revision since that time. In this era of rapid change, there is
little that is not obsolete in a decade. The AFT.-CIO believes that H.R. 10721
does much to update this act to bring it in line with the economic and social
changers that have occurred during the last 1G years. We urgo its enactment
and it is hoped the following comments will be helpful In appraising the objec-
tives of the bill.
Section 201. Section G(a) (1).-When a disabled employee has one or more
dependents, his basic compensation of two-thirds of wages is augmented by an
additional 81/. percent of his monthly salary. The proposed amendment increases
the amount of an employee's basic pay which may he considered in computing
this additional compensation from $420 to $540 per month. The percentage in-
crease in this maximum amount is less than the increase in the Consumer Price
Index since the last time this figure was revised. This change simply means
some injured Federal employees with dependents could receive additional
supplementation up to a maximum of $10-50 a month. The small additional
relief afforded disabled workers with dependents by this change would cost
little but would mean a great deal to these workers involved.
.Section 202. Section 6(c).-The proposed amendment increases the minimum
compensation paid per month in cases of total disability from $180 to $210 per
month and maximum compensation for disahilit:v from $52.; to $G.4:, per month.
Except for those whose average monthly wage is less than $210 per month, the
proposed increase places a floor below which benefits to the totally disabled
cannot fall. To the totally disabled employee this is certainly less than adequate
to underwrite an adequate standard of maintenance.
Monthly pay Is the basis for computing compensation for disability under the
Federal Employees Compensation Act. The fairest way to achieve equity In
the benefit structure Is to revise benefit levels to conform with the increase in
wage levels. The existing maximum for disability was established in 1049.
Since that time. there have been unparalleled changes in the economy. The
earnings of Federal employees have Increased 80 percent and the Consumer
Price Index roughly 31 percent. The time Is long overdue to bring the benefit
structure of the act in line with these changes
This is a modest revision since it reflects only changes in the cost of living. To
for disability about 31 percent. Thus. the proposed increase would simply
bring the maximum benefit in line with the cost-of-ilving Increase since 1949.
This is a modest revision since it refleetss only changes: in the cost of living. To
adjust benefit amounts in accordance with the cost of living renders the
welfare of Injured workers static while the rest of society advances. A fairer
method would be to raise benefits In accordance with the increase in wage levels
since the last adjustment.
The maximum in the Federal Employees Compensation Act. was designed so
as to insure that the overwhelming majority of Federal employees could re-
ceive 75 percent of wages if occupationally Injured in Federal service. A new
maximum is imperative In view of the pronounced changes In the employment
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pattern of the Federal Government. There has been a substantial decrease in
the proportion employed in the lower grades and a growth in the higher grades.
In 1939, 31 percent of all Classification Act employees were in grades 1 and 2;
57 percent were in the first four grades. By July 1963, only 3 percent were in
grades 1 and 2 and 33 percent in grades 1 through 4. Over the same period,
the proportion of employees in grade 12 or above rose from about 4 to 17
percent. The growth in demands for Government services and the changing char-
acter of the economy has created a demand for new kinds of workers and
higher salaries. The growing complexity of our economy and our Government
services insures that not only will this trend continue but that it will likely
accelerate.
The proposed maximum would permit all employees in step 8, GS-11 or step
3, GS-12 and above to receive the 75-percent maximum of 'basic monthly com-
pensation specified in the act. Approximately 17 percent of Federal classified
employees are in salary grades 12 through 18 and, even under the new maxi-
mum, about all of these employees would be denied full advantage of the bene-
fit formulas stated in the law.
The Congress should enact the new maximum with a view toward the fu-
ture. If adopted, the new maximum should stand for some time. The present
maximum was enacted in 1949 and although we hope that revisions will oc-
cur before the lapse of another 16 years, it is reasonable to expect the new
maximum to continue unchanged for a significant length of time.
Amendment to section 203. Section 10(k).-Section 10 deals with compen-
sation for death resulting from an injury. In determining present minimum
death benefits, the law assumes that a worker shall be considered to be earn-
ing not less than $240 a month. When interpreted to benefits for a widow,
this simply means that the minimum allowance is $108 a month. The proposed
amendment will place the minimum benefit for a widow at $126 a month.
The amendment raises the maximum compensation that can be received in
death cases from $525 to $685 per month. This simply adjust the maximum
benefit to bring it in line with the cost-of-living increase since enactment of
the present maximum. The comments made concerning the increase in the
maximum benefit for disability apply here-the obvious modesty of an increase
that only adjusts for the cost ?of living.
Section 201.. Section 10(c).-This amendment continues benefits in survivor
cases to unmarried children after age 18 up to the age of 23 when enrolled in
a program of education or training. This proposed change is in keeping with
the educational developments that have occurred in our society-the ever-
increasing need for education and training to cope with the complex demands
of our modern economy. This provision corrects an obvious injustice. The
restriction of benefits to age 18 creates a barrier that effectively prevents sur-
viving children from achieving the kind of educational attainments essential
to successful competition in the economic marketplace. It effectively makes
second-class educational citizens of the children of occupationally killed work-
ers by depriving the family unit of benefits at the time they are most needed-
when the children should begin their most expensive and vital education.
Amendment to section 30.1.-Under the Federal Employees Compensation
Act the amount of compensation paid for disability and death is computed
,on the basis of the monthly pay received by an injured employee at the time
of injury. As a result, compensation payments to beneficiaries on account of
injuries sustained in prior years fail to reflect the sharp rise in pay and living
costs in recent years and are substantially less than benefits paid on present
wage levels. The proposed amendment corrects the injustices created by the
changing value of the dollar by adjusting past benefits by the Consumer Price
Index. It is written in terms of human understanding. Congress, over the
years, has rightly improved benefits for :social security beneficiaries. It should
do no less for the occupationally injured and their dependents.
The victims of an industrial society are particularly entitled to share in the
economic gains of that society. As previously stated, wages are the most ac-
curate measure of a worker's standard of living and benefit increases should
be related to that measure. However, this bill is to be commended for its hu-
mane intent to adjust benefits for those who sustained 'injuries in prior years
to reflect the rise in living costs 'since that time.
In addition to our support of II.R. 10721, there are a number of bills referred
to this committee which we 'support-none of which are in direct conflict with
H.R. 10721 but which contain desirable supplementary features.
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ILR. 5288
H.R. 5288 permits a worker who has filed a claim for workmen's compensation
to receive any accumulated salary, pay, or remuneration he is entitled to until his
claim is processed. These payments are recovered from the compensation beue-
fits when the payments begin,
This provision Is an attempt to avoid the hardship worked upon claimants
and their families who may be deprived of income for extended periods before
the compensatiou clnini is resolved. Au injured worker with a family to support
and house and car pn mentx to snake should not be required to endure this hard-
ship when the obvious and fair remedy provided by this bill is available.
11.11. 5299 also permits an occututtionally Injured employee who returns to
work to receive credit for annual and sick leave during the period of his dis-
ability. A worker on annual or sick leave can earn leave credits when away
from the job. It seems only fair to accord injured employees equal treatment.
This provision would help injured workers at the Lime they need it the most.
11.0, 10905
II.R. IOSG5 attempts to rectify the problem of loss of wage-earning capacity
when an Injury does not result In a major Imlatirment. At the present time, an
injured worker can he compensated for loss of wage-earning capacity in addition
to the scheduled loss only when there is a total and permanent loss or loss of use
of a major bodily niemixr. The economic injustice that this can cause is best
illustrated by an actual esntnhle.
An accountant who loses a hand may suffer no loss of earning capacity. A
watchmaker who suffers a patrial loss of use of it hand incurs a severe wage loss
and is physically and vocationally hnndicapixcl. Under existing provisions of
the law, the accountant would receive at much larger amount of compensation.
ILII, IOGSS would rectify Ibis problem by permitting payment for loss of earning
capacity in siluntlons of the kind illustrated by the watchmaker.
II.R_ 1OGSi, also provides for the payment of 2 years' compensation in a lump
suns to a widow upon remarriage. There is a precedent provision In the Loo_
shoremen's and Harbor Workers' Compensation Ant. It would be n very Inex-
pensive item and would remove an impediment to remarriage and would remove
the unintended inducement now In the act for more informal arrangements.
ILR. G354 would amend section 33 of the Federal Employees Compensation
Act so as to provide for the establishment of a Federal employee accident
program.
The need for a new safety program In the Federal Government Is demonstrated
by the fact that the 109.622 work injuries reported by civilian Federal employees
in fiscal 1964 established an 18-year record high-10.6 percent higher than the
average of 99,138 cases for the base period of 1957-59. Scheduled awards for
permanent injuries Increased 8 percent, rising from 1,822 to a total of 1,t1GO, and
the number of deaths increased from 351 to M. Though white-collar and
clerical-type occupations account for the bulk of the 2.5 million civilian Federal
employees, there are 1100,000 blue-collar workers whose duties encompass many
inherently high-risk operations.
There is no central safety authority or minimum safety standards applicable
throughout the Federal Government at the percent time. Agency safety pro-
grams and safety results show great variation. Surveys have indicated that
the safety performance of the Federal Government lags that of safety-conscious
private firms. In addition, there Is no labor representation on the existing Fed-
eral Safety Council. The ILll. GG5 f embodies many proposals for improving
safety in the Federal Government. However, we would like to single out for
special commendation the requirement that the head of each Federal agency
establish a safety program in conformity with standards prescribed by the
Secretary of Labor, and the establishment of a Federal Safety Advisory Com-
mittee which would Include representatives from both labor and management.
The Congress of the United States was a pioneer in workmen's compensation,
having passed the first worknien?s compeusatioii law In the Nation. This legisla-
tion served as a model and stimulant for similar action by the States. Injured
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IMPROVEMENT OF BENEFITS UNDER THE FE CA
workers and their families owe an eternal debt to those farsighted Members of
Congress who passed this early legislation.
The major revision of the Federal Employees Compensation Act that took place
in 1949 made it an outstanding workmen's compensation statute. Unfortunately,
there has been no major revision of the act for 16 years-a period of time when
economic and social progress has been unparalleled in human history. What
was outstanding social legislation is no longer so by the more enlightened stand-
ards of the future.
We urge the committee to report favorably on I3.1 . 10721 and many of the
supplementary features of other workmen's compensation bills before this com-
mittee so that Federal employees and their families can once again receive work-
men's compensation protection commensurate with the economic and social ad-
vances of our society.
Mr. S1viEDLEY. Thank you, Mr. Chairman.
The proposed bill, H.R. 10721, increases the maximum compensa-
tion for total disability from $525 to $685 per month. This maximum
was established in 1949. As I understand, Federal employees salaries
have increased about 80 percent and the cost of living about 31 per-
cent, so this increase in the maximum benefit simply roughly approxi-
mates the increase in the consumer price index since 1949, so in a
sense this is a very, very modest revision since it reflects only the cost
of living and we feel that to adjust benefits in accordance with the
cost of living tends to render the welfare of injured workers static
while the rest of society advances.
We think a much fairer method would be to revise benefits in accord-
ance with the rise in the wage levels since the last revision. The bill
also increases the amount of an employee's basic pay which may be
considered in computing the additional compensation when he has
dependents from $420 to ;546 per month.
In other words, the employee is entitled to an 81/3-percent augmenta-
tion of his basic compensation of two-third when he has dependents.
Actually, in terms of the actual amount of money that a worker
can receive it means that a Federal employee with dependents would
receive up to $10.50 additional per month, so this is a very modest in-
crease, wouldn't cost much, and certainly could be of immense benefit to
disabled workers with dependents.
The bill also raises compensation in death cases in the same manner
as in total disability cases from $525 to $685 per month. I need not
comment here since the comments that apply to total disability apply
equally as well to death benefits.
The bill also would permit the continuation of benefits in survivor
cases to unmarried children after 18 up to age 23 when enrolled in a
program of education and training.
This change just basically keeps in tune with the educational de-
velopments that have occurred in our society in recent years. There
is an ever-increasing need for higher education to compete with the
complex demands of our society.
I think this provision corrects an obvious injustice where actually
the age 18 restriction on benefits in effect creates an arbitrary barrier
for the surviving children to receive the kind of educational attain-
ments necessary to compete in the economic marketplace.
In a sense it may effectively make second-class citizens of children
of occupationally killed workers by depriving them of benefits and
the family unit of benefits at the time they need it most, at the time
they are going to begin the most expensive and the most important
education.
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9U0 IMPROVEMENT OF BENEFITS UNDER THE FECA
The bill also corrects the injustices created by the changing value
of the dollar by adjusting benefits of past beneficiaries to the change
in the Consumer Price Index since they started to receive those benefits.
As previously stated, we feel it would be much fairer to adjust this
benefit. by the increase in wage levels since the time they started to
receive these benefits because, after all, I think the victims of an in-
dustrial society are particularly entitled to share in economic gains
of that society.
However, we wish to commend the bill for its humane intent to
adjust the benefits of these past. beneficiaries.
In addition to ILR. 10721, there are a number of bills before this
committee we would like to specifically single out for our support.
These are 11.11. 5288 by Congrecsinan Fascell, II.Ii. 108G5 intro-
duced by Congressman Ohara. and II.1t. 6;55I introduced by Con-
gressman Sickles.
None of these bills, may I add, is in conflict lvithr 11.11. 1021, but.
would be of considerable supplementation in areas that the Federal
Employees' Compensation Act could be improved.
II.R. 5288 permits disabled workers to receive their regular pay
until they receive their (list coruperasati~ara benefit. I understand there
are some technical problems here in regard to the question of liability,
but I think we have to renmenmber, too, that there are lots of workers
where there is no question of liability as to L'ompensation-in other
words, it might be a question of partial disability: Is lie 15 percent
disabled, 20 percent disabled, or 40 percent disabled? So, this worker
will receive compensation in time.
It is a question of deteriiiining the amount of disability, so there
would be no problem of recovering overpnvinents in these cases.
I think, as the. president of the Letter + 'arriers has pointed out, in
the other cases the overwhelming majority of employees will return
to their work and the overpayments could be deducted from salaries,
so I think the administrative problems here could be ironed out.
We also urge favorable action on the bill introduced by the chair-
man, Congressman O'Ifara, ILR. 10S65. We particularly urge favor-
able action on the provision with regard to compensating for loss of
wage earning capacity in those cases where there is less than major
impairment.
As I understand it now under the act, the worker receives a schedule
loss for a major inipairnient.. Then if he suffers a loss of wage earn-
ing capacity, he also receives compensat ion for that.
Now, as Y understand it. under your bill, Mr. Chairman. you might
have a man, for example, who is a watchmaker who would have rather
what is a minor disability in a sense that a couple of fingers were
injured. This effectively prevents this individual from going back to
his occupation. Ile receives a small schedule loss, but he cannot ever
generally serve in the skill that he spent maybe a lifetime in, so he is
not only physically handicapped, he is vocationally lhandicapped, and
the chairman's bill corrects this economic injustice.
There is one provision, however, of the chairman's bill which we do
not support and that is the question of judicial review.
There may be differences as to decisions of the appeals board. There
is certainly some. But these are the kinds of reasonable differences
that one should expect in adversary proceedings and the cost and
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,delay that inight arise from judicial review provided by the bill would
probably outweigh the benefits in tended by that review.
We also urge favorable action on H.R. 6554 introduced by Con-
gressman Sickles which would amend section 33 of the act to provide
for a comprehensive safety progTam.
At the present time there is no central safety authority or minimum
safety standards applicable throughout the Federal Government.
There were 109,000 work injuries reported by civilian Federal employ-
ees in fiscal 1964. This established an 18-year record..
We urge enactment of this bill because, after all, no compensation
act, no matter how generous, can compare with a healthy productive
worker supporting a family.
In conclusion, I would say there has been no major revision since
1949. The 1949 revision did make the Federal Employees' Compen-
sation Act one of the outstanding workmen's compensation acts in the
-country.
There has been no major revision for 15 years in a period of time
when I think economic and social progress has been unparalleled in
human history, and so what was outstanding social legislation for one
period is no longer so by the more enlightened standards of the future.
We urge the committee to report favorably H.R. 10721 and many
of the other supplementary -features of other workmen's compensation
'bills before this committee so that Federal employees and their fami-
lies can once again receive workmen's compensation protection com-
mensurate with the economic and social advances of our society.
Thank you.
Mr. O11A1,A. Thank you very much, Mr. Smedley. One thin,, that
has been made very clear in your testimony and that of Mr. McG%art is
that the Federal Employees' Compensation Appeals Board must be
doing a pretty good ]'ob, and I will ask counsel to send the members of
the Board copies of the hearings when we are all through and directing
their attention to these statements. We ought to recommend them for
-awards of merit.
I think they are fine gentlemen and I am pleased to know that they
are doing that well.
Mr. SMFDLEY. I, of course, rely pretty much upon the opinions
of the Government employee unions here who are closer to the workers
and they feel that, while the Bureau of Employees' Compensation
Board is not perfect, it does under the circumstances a reasonably
good job, and the day that they don't, that they can be sure that the
`Government employees unions will be in here supporting legislation
of the kind that you have introduced.
Mr. O'HAPA. I think they could be greatly aided really by a hearing
procedure, shaping the record that is before them. As I understand
'their procedure, while they hear appeals, their appeals are not on the
record, that is, they don't hear witnesses or adduce any additional or
new evidence in the appeals procedure, so I would say the most im-
portant procedural change in my bill is that providing a hearing pro-
cedure at the request of the employee, because it would, I think, tend
to provide a record both for the Bureau and for the Appeals Board
that would be more reliable and fuller and better in terms of how you
conduct your appeal procedure. -
I thank you very much for your testimony.
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92 INNPROVEME'T OF BENEFITS UNDER THE FECA
Mr. Qui . 'Ir. Chairman?
Mr. O'IL ii . Yes.
Mr. Ciao. I would like to ask a question on this because I can't
understand why you, \h'. Smedley, or Mr. M1eCart either, do not like to
have judicial review, I can well understand this in private employ-
ment because the employee and the unions don't want, the employer to
be able to appeal the case, and this is understandable because evi-
dently they feel that the employee usually has the greatest sympathy
felt. towarc'i him and he wouldn't be. using this as much as the employer
would, but here, as I understand in looking at the bill, it is only the
claimant that can bring this to the court.
The individual doesn't have to if he doesn't want to. He can accept
what. they do, but then if he feels that this wasn't the kind of decision
that ought to have been given, it says that. lie may take this to the
U.S. district court..
Why do you want to deny an individual this right that Mr. O'Hara,
is providing him under thishill ?
Mr. SarFnr.r:r. Well, I `would say, in the first place, you must re-
member this is a rather abrupt departure from past procedure that
has worked quite well from the viewpoint of the people most closely
involved.
In the second place, if the, procedure of judicial review were to
operate as the chairman stated his bill would operate, I think per-
haps there would not. be so much objection to it.
\Vliat generally has happened in many cases-it has happened in
the social security disability progl am--once it gets to court, and we
have tremendous legal talents available in the United States today,
you tend to bog down the system with a considerable amount of liti-
gation and really if you are interested in an administrative system,
once litigation becomes operative to the point that it. tends to bog down
the system the administration suffers, and though a few workers will
gain by the appeals decision, many others might suffer by the poor
administration that results.
This has happened, in our opinion, in a number of States. I think
that Mr. McCart made some points on the need for some modifications
in the appals procedure of the Employees' Compensation Appeals
Board. I would agree with this, but I think at this time a rapid de-
parturo from past procedure that. has worked pretty well might lead
to things that we do not intend to lead to, and once you have entered
this area, you are never going to turn back.
:fir. Qc'ru. I always thought.I was a conservative.
Mr. O'ILtr.%. I will say that I share the gentleman's mystification.
Mr. QUIE.Mr. Chairman, as long as I am asking the questions, let
me ask another question.
Mr. Smedley, I don't fully understand on page 2, which is on a
different subject, and that is on the bottom ,where you say in the second
sentence of your last paragraph:
If adopted, the new maximum should stand for some time.
Do you mean it, would likely stand for some time, or do you believe
it really ought to?
Mr. S %i:rDLEY. No; would be likely to stand, because the last re-
vision of this act, the revision of maximum benefits, took place in
1949.
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IMPROVEMENT OF BENEFITS UNDER THE FECA
It has been 16 years. What I am pointing out here is when the
members adopt a new maximum they ought to have their eye toward
the future, that this maximum will undoubtedly stand while I don't
think another 16 years, but a sufficient length of time, and during that
period of time because of the nature of Government employment, need
for higher skills, scientists, and mathematicians and statisticians, a
larger and larger percentage of the Government employees are going
into the higher grades and may go beyond the maximum, and so I am
asking that you set your eye on the future when you set this maximum
in order to protect the people in this situation.
Mr. Qum, Would you have any objection to taking the maximum
off?
Mr. SnMEDLEpY. No; I would have no objection to taking the maxi-
mum off; no.
? Mr. Quin. Because I personally feel that we don't need a maximum.
Mr. SMEDLEY. In the Federal Government with the maximum you
have had in the past and smaller number of employees in the top
grades, I think this new maximum would cover up to step 3 in GS-12,
and you have in your classified schedule 17 percent of your employees
in GS-12 and above, so you could take off the maximum and cover
pretty much everybody without. great additional cost that you might
have in another compensation system.
Mr. QuiE. Thank you.
Mr. O'HARA. Mr. Pucinski.
Mr. PucINsni. Mr. Smedley, I think you testified on a very impor-
tant point on this question of compensating an employee who suffers a
loss of ability to continue his normal employment.
This is a problem that we find not only at the Federal level, but I
think we find this also in social security and some other areas.
I am very much interested in that. I am glad that II.R. 10865 at-
tempts to correct this injustice. How would you see this working in
other areas than the Government employees?
Do you think that we could look forward to seeing similar changes
ultimately in the social security structure? If a man is a carpenter
and could no longer serve as a carpenter and becomes a janitor, he
should have some compensation for the fact that he lost ability to
practice his normal craft or trade.
Mr. SMEDLEY. I think in time we will probably go along these lines.
As you know, with respect to the Social Security Disability Act, be-
cause of the stringent requirements, there has long been advocacy of
this kind of approach and the Social Security Administration in the
administration of that program did modify their determinations for
those individuals who had spent all of their life in hard manual labor.
It has come to a limited extent even in the social security program,
as I previously mentioned, that an employee who has worked all his
life in hard manual labor, and has the kind of eighth-grade education
where he is not apt to be able to be retrained for another skill, if his
disability prevents him from working in his former kind of work, they
will give him his disability amendment.
It has been recognized to a very limited extent. I think the time
will come, and I think they have it in a number of social security acts
in a number of foreign countries. I think the time will come, but I do
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tl ink perhalis a number of itnlu?ovements in the Social Security Act
ill other areas should take place first.
All'. I'rc1Nsl:t. Perhaps it. would he a good idea to start this in this
I+'ederal bill. I said here. the other day at the hearing,, that we have to
view this bill in a larger perspective than just. what it does to Federal
employees.
There is no question that the standards and the concepts that we
write into the Federal art sooner or later are going to find their way
to the bargaining (able in negotiations, sooner or hater are going to
lincl their way in [lie form of aauenchnwrtis to the Social Security Act,
rind sooner or later %%-ill find their way into aniendnients in Mate legis-
latures to State workmen's compensation acts, so that perhaps this
is a good beginning.
Maybe this would lw the place to start and see how it works out at the
Federal level. I was particularly interested in Your analogy between
[ho accountant and the waatclunaker, and in my judgment the present
doctrine is perhaps one of the most cruel doctrines that we have on
the books today.
I know of any number of people who have suffered a disability and
dins could not carry on their normal job who have been reduced to a
anuch inferior grade of employee. Only upon showing that, they can't
do even that kind of work are alter eligibe to receive compensation.
I think this is cruel. itihunian, unfair, and perhaps we ought to start
in this Federal act to correct that concept and then see it go down range
iii all the other agencies. I don't know of anytlaiatg that creates a.
greater injustice to [lie working math than this present doctrine in this
law, and the social security law and also in many of the workmen's
compensation laws.
Mr. Satia,ir;a. I agree entirely with Congressman Pucinski and I
would like to see the Federal Govu?nmeirt set an example for the
States.
Mr. Pucitisi.i. 't'hank you very much.
Mr. O'ILva v. 1Ir. I Laathaway .
Mr. HATHAWAY. Mr. Smedley. thank you very much for your very
comprehensive statement. The only question I have is also on judicial
review.
I want to bet your position straight. It is your position that judi-
cial review would be superiltious, or that it would actually be
detrimental?
Mr. SMrEDLFY. I think that we at this time would probably feel in
the long run the judicial review would be detrimental as a whole to
Federal employees.
Mr. II.%THHAWAl. And you base that on the fact that cases would
tend to bog down and so forth?
Mr. SMEDLFY. Costs would be increased. I think delays would
creep into the system. I think it would be harder to administer and
I think these problems would outweigh the gains.
Individuals might gain by Judicial review, but as an overall picture
for all Federal employees. I think judicial review would probably act
to the detriment of the system.
Mr. II.iTFI:\w.vr. As n practical matter wouldn't it only be used in
questions of law where the review board had not applied the law
properly ?
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IMPROVEMENT OF BENEFITS UNDER THE FECA 95
Mr. SMEDLEY. Yes; if there is substantial evidence the courts would
have to accept the findings of fact and they would only decide ques-
tions of law, but this is true in a number of States and true in the
Social Security Act in regard to the disability amendment and when
it gets to court it doesn't always work that way.
I am concerned by the fact if you want an administrative system
you can't bog down the courts with all these decisions, and they are
ending up making all the decisions and it makes the system difficult
to effectively administer.
Mr. IIATHAwAY. That depends, too, on how complicated the law is.
Many State laws are much more complicated than the Federal. law.
Mr. S1vIEDi.EY. Yes. This would not present the problems in maiiy
other areas that it does in the area of workmen's compensation because
workmen's compensation is probably the most litigious area of social
insurance, there is no question about it, so this kind of judicial review
causes more problems in workmen's compensation where it wouldn't in
other instances, in other areas of legislation.
Mr. HATHAWAY. You are basing it on the States' experiences?
Mr. SAIEDLrY. Yes; there has been a tremendous amount of litiga-
tion in the States.
Mr. HATHAWAY. Where the laws are to the best of my knowledge
more complicated than the Federal law.
Mr. SMIEDLEY. Some are; some aren't. Some States have appeals,
of course, on fact and law. The courts hear de novo; a lot of States
just on law, as what pretty much was described in Congressman
O'Hara's bill.
Mr. HATHAWAY. Of course, the former case would be unwieldy. I
mean if you had ,,t de novo hearing.
Mr. SMEDLEY. De novo would be very difficult.
Mr. HATHAWAY. It would be ridiculous in this instance.
Mr. SMEDLEY. Yes. So often what happens is, every. though it is on
law supposedly, you end up pretty much de novo actually in the court.
I am sure that it is Congressman O'IIara's intent not to do this, but
theoretically you tend to end up hearing de novo in many instances.
Mr. ITATrinwAY. Thank you.
Mr. PUCINSKI. One question, Mr. Chairman.
Just so I understand you correctly, Mr. Smedley, are you suggesting
that we give consideration to some concept of providing a compensa-
tion or at least a partial compensation, on the difference in the earning
capacity of the work who is disabled, but not totally and permanently
disabled? Is that what you are suggesting?
Mr. SMEDLJ:Y. Yes, right. There are a few States ghat have this. I
understand, Congressman Pucinski, in the Federal law they do com-
pensate for loss of earning capacity of major impairment.
If the man has a major impa-irment and suffers a wage loss a per-
centage of what he loses is given to him to compensate for loss of earn-
ing capacity, but the problem being that if you have an accountant who
loses a hand, he is entitled to a loss of earning capacity, but he doesn't
suffer any because the accounting skill is readily usable even though he
has lost a hand.
However, if a man is a watchmaker or a musician, for example, in a
symphony orchestra, damage to a couple of fingers severely handi-
caps him occupationally. He is not going back to his former occupa-
tion.
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96 IMPROVEMENT OF BENEFITS UNDER THE FECA
So, the loss of earning capacity is not provided in the Federal act
in these kinds of cases. I understand that Congressman O'IIara's
bill would correct this injustice.
Mr. PuciNsia. You are supporting a concept of making up in some
way for that loss in earning capacity
Mr. SMI:nun-, Yes, absolutely, 1 would advocate this for all work-
men's compensation laws.
Mr. I'ue1N Kr. Thank you very much.
Mr. O'ILut . Thank you very much, Mr. Smedley.
Mr. SMEDLEY, Thank you very much, Mr, Chairman.
Mr. O'1LUM The committee will resume these hearings tomorrow
morning in this room at. which time we will hear testiuaony from rep-
resentatives of the American Federation of Government'Emtaloyees,
the National Federation of Federal Employees, the United Federa-
tion of Postal Clerks, the National Postal Union, the National Associ-
ation of Postal Supervisors, (lie National Association of Special
Delivery Messengers, the American Podiatry lssociation, and the
American Oplonietric Association, and I might add that all of these
witnesses will be asked to submit their statements for the record and
keep their oral presentations brief.
Mr, I'aCIXSKr, Fine minutes,
Mr. O'IIAu . Yes.
\;rc will have 40 or we won't get through.
At. (his point the Select. Subcommittee on Laabor will stand adjourned
until 10 o'clock tomorrow morning in this room.
(Whereupon, at 12:07 p.m., the hearing was recessed to reconvene
at 10 a.m. on Wednesday, September 15, 1965.)
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IMPROVEMENT OF BENEFITS UNDER THE FEDERAL
EMPLOYEES' COMPENSATION ACT
WEDNESDAY, SEPTEMBER 15, 1965
HOUSE Or REPRESENTATIVES,
SELECT SUBCOMMITTEE ON LABOR
Or TIIE COMMITTEE ON EDUCATION AND LABOR,
Waslzvngton, D.C.
The subcommittee met at 10 a.m., pursuant to recess, in. room 2261,
Rayburn House Office Building, IIon. James G. O'Hara presiding.
Present : Representatives O'Hara, Daniels, Gibbons, Hathaway,
Quie, and Gurney.
Also present : Jim Harrison, assistant staff director; Michael J.
Bernstein, minority counsel; and Susan M. Parry, clerk.
Mr. IIATIIAWAY. The Select Subcommittee on Labor is now in
session.
We have approximately an hour and in view: of that fact we will
have to confine each witness to about a 3-minute statement.
Rather than ask questions at the end of each statement, I think it
would be better if all the witnesses testify and then, if there is time
remaining, the members of the committee will question the witnesses
afterward.
Our first witness is Mr. John F. Griner, president of the American
Federation of Government Employees, AFL-CIO, Washington.
Mr. Griner.
STATEMENT OF JOHN F. GRINER, PRESIDENT, AMERICAN FED-
ERATION OFGOVERNMENT EMPLOYEES, AFL-CIO; ACCOMPANIED
BY W. J. VOSS
Mr. GRINER. Mr. Chairman and members of the committee, for the
benefit of the record I am John F. Griner, national president of the
American Federation of Government Employees, and to my left is
Dr. W. J. Voss, our director of research.
Mr. Chairman, I am just going to point out some of the highlights,
as requested, in my statement, and I wish to file the statement if I may.
Mr. HATHAWAY. Without objection the statement will be entered in
the record.
(Statement referred to follows:)
STATEMENT OF JOHN F. 'GRINER, NATIONAL PRESIDENT, AMERICAN FEDERATION
or GOVERNMENT EMPLOYEES
The bill ILR. 10721 is approved by the American Federation of Government
Employees for the critically needed improvements to the Federal Employees Com-
pensation Act which It would provide. It should be enacted without delay, be-
cause the changes it would bring about involve several basic provisions of the
act.
97
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98 IMPROVEMENT OF BENEFITS UNDER THE FECA
The sponsor of this bill, Representative Hathaway, Is performing a valuable
service by proposing amendment,; of the law which is of vital importance to the
Federal employee who is injured on the jcb.
There are several other bills pending which 1 commend to the attention of this
subcommittee and at a later point in my statement I will direct attention to.
those measures which I believe merit theapproval of the House.
I wish to emphasize the need for early action on these bills. The Lime to act
is now. It would he a serious mistake to wait until the Cabinet Committee on.
Federal Staff Retirement Systems has developed its findings and formulated its
recommendations. It would be early in the next session of Congress before these
recommendations are transmitted to Congress. They will no doubt deal with
basic principles and with long-range ntotiificaUon of the compensation program.
.Such suggested changes will require more than casual study before they can
receive consideration as spevitc legislative proposals. Even if they were ready
when the second session of the S0th Congress gets underway next year, it is
unlikely that legislation would he enacted to amend a law which had been
amended during the preceding se,slon.
11.11. 10721 would effect changes which are in the order of interim correction.
of existing tuaximunl and minimum payments which, if delayed, mean only con-
Iinning hardship to many employees now on the compx'nzaUun roll or who will
be unfortunate enough to be irmeluded in that roll during the next year.
The maximmo dollar limit of $525 a month, or $6,300 amtually, has been in
effect for 16 years during which Government earnings have nearly doubled and
the Consumer Price Index has advanced more than 32 percent. Whether the
need for the amendment,.,; proposed in ILIl. 107211 is to bring certain benefits into
proportion with current earnings or to reflect cluinges in living costs it is no
less urgent. The bill would raise this maxitntun of $52.; to $685 monthly, or
$8,220 annually, which is more nearly a reasonable proportion of a salary in
the upper grade ranges.
The bill would also increase from $420 to $516 the limit on that part of basic
compensation for disability on which the augmentation for dependents may be
computed. It would also raise the present minimum, payment front 9180 to $210
a month. All these' dollar amounts are to be Increased on a modest scale, which
emphasizes the urgency for their adoption.
In addition to these dollar changes, the bill proposes the raising of the age
limit at which compensation payments for a dependent child must he terminated.
At present they would cease at 18 years. The bill would increase this age to
2-3 years, which is both reasonable and realistic, since It would allow continuance
of such payments until a child dependent has finished his college education.
Monthly payments for dicnhillty or death already awarded under the Federal
Employees Compensation Act at the time 11.R. 10721 is enacted would be fn-
creased by the annual average percentage changes in the Consumer Price Index
which have occurred since the year in which the award was made. We must
object to the further provision that the Increase sn provided would be reduced
on a percentage basis by any increase heretofore authorized by Congress. The
last increase authorized for previously adjudicated compensation awards ap-
pliecl to awards for injuries which occurred prior to January 1, 1tti8. Since that
lime there have been five salary increases for classified employees and seven
wage increases for the majority of the Government's blue-collar employees.
The hill 11.11. 4478, introduced by Representative Collier. has one outstanding
feature, namely, the proposal to remove the Ifmitation of $525 as the monthly
payment in uses in which death results from a commendable injury. This is a
commendable proposal and consideration should be given to raising the limit
beyond the $6,97) provided in the Hathaway hill or removing any restriction
and simply flying the payment as two-thirds or three-fourths of salary or wage
at the time of injury.
The ('oilier bill also provided for increasing compensation payments If the
Consumer Price Index has advanced 3 percent from 1062 and by the percentage
which occurs in any year thereafter. This provision conforms to that which
was made in the retirement increase formula by H.R. 9169 recently enacted.
This bill also would raise the age limit of 1.9 at which payments to a dependent
child presently end to the age of 21. The limit should be raised to 23 years. as
provided in the Hathaway bill.
II.R.:i25.S. sponsored by Representative Falwell. provides two desirable changes
in existing law. One would permit an injured employee to remain on the payroll
unlit his claim for compensation has been approved. The other change would
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entitle him to annual and sick leave during a period in which he was receiving
compensation payments. We approve these proposals but suggest amending the
Leave Acts rather than the Compensation Act.
We suggest that the subcommittee give serious consideration to adoption of
a mandatory provision for returning an injured employee to active-duty status
as soon as he is able to perform any productive duties in keeping with his injury.
This would restore the employee to maximum earning capacity as soon as
practicable. At present the employing agency can refuse to return him to active-
duty status on the ground that he is unable to do the work he was doing at the
time of injury. The agency should be required to return him to any job, he
can do.
The bill H.R. 10865, introduced by Representative O'Hara, contains several
worthwhile amendments to the Compensation Act. However, section 3 should
be modified to permit payments to a dependent child to continue until age 23,
as in the Hathaway bill. While review by a U.S. district court of administrative
decisions made pursuant to the Compensation Act may seem desirable, there is no
certainty that a court that is not fully informed concerning the act will neces-
sarily dispense justice to a greater degree than the Bureau of Employees Com-
pensation. It is a proposal which should receive extensive examination before
approval.
It should not be overlooked that providing for a court review also will add to
the expense to which an injured employee will be put. In many cases it will
mean travel for a considerable distance plus attorney's fees and court costs. The
decision still must be made on the same set of facts.
The American Federation of Government Employees indorses the bill H.R. 6554
introduced by Representative Sickles. The Federal employee accident prevention
program is sorely needed. The Federal Safety Council now established by Execu-
tive Order 10900 has an advisory function, but the urgent need is for a program
which will include positive sanctions which can compel compliance with safety
standards established for all Federal agencies to observe,
Another desirable amendment to the Compensation Act is to provide for the
replacement of appliances needed to compensate for an injury or to improve the
injured person's condition. At present an employee supplied with such items as
eyeglasses or artificial limbs may receive only the initial appliance. If it is
damaged or broken, the law does not permit its replacement at Government
expense.
As already stated, Mr. Chairman, the changes in the Compensation Act which
have been proposed, particularly in the Hathaway bill, should be approved as
quickly as possible. They are long overdue and their adoption will go a long
way toward updating dollar limitations written into the law 16 years ago.
Thank you, Mr. Chairman, for the opportunity to present this statement.
Mr. GRINER. Mr. Chairman, I find that there have been a number of
bills that have been introduced regarding this matter, and most of the
bills contain some good points.
I don't think any one bill would take care of the entire subject
matter.
First, we are definitely opposed to laying over until next year any
part of this problem to be decided later based upon recommendations
of the President's Cabinet Committee. We believe now is the time
to make any changes that are necessary in this bill, and. Nye think there
are a number of changes necessary.
Based on past experience, gentlemen, we find it is rather difficult in
lny year to get Congress to enact amendments to a piece of legislation
in which amendments to the same have been enacted the year before.
Among the things we would like to see changed in this bill, Mr.
Chairman, is that there be no limitation as to the amount of money
that may be payable. I believe under Mr. O'IIara's bill the limitation
would be, $685, which is three-fourths of some $11,511 and, of course,
that is only in grade 11.
We think that the people who are occupying positions above the
grade 11 should have the same right to three-fourths of their earnings
Ua.s a person below it.
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11 IMPROVEMENT OF BENEFITS UNDER THE FECA
Another thing we would like to see is the limitation for children
raised to 23 years. We find this; that (lie averaoe child starts to
school between the a?e of 6 and 7. He finishes his Aiooling about the
time he is the age of 19. and if lie goes to college he is about 23 years
old before he fiiiislies college. Certainly these people should be pro-
tected until they do finish college and have an opportunity to compete
with their fellow workers' children.
We have also found a number of cases in which an individual's leave,
both sick and annual, has run out prior to the time that his claim is
al proved, leaving him with nothing to go on.
Relieve it varies 80 days on an average from the. time a person is
hurt or injured until his claim is approved. Taking into consideration
the fact that this legislation applies to the man who just enters service
of the Federal Government as well as the man who might have 35
years, and the fact that the man who has just entered service would
not have time to accumulate sufficient. leave to carry him over until he
can have some income from the Bureau, we believe that leave should
be advanced to him during the time that it takes to take care of his
claim.
We believe the enactment of Mr. Sickles' bill, H.R. 0554, would, let
us say, cut down on the number of injuries that we have in the Gov-
ernment, because at the present. time. our safety laws or regulations
within the Government are very loose.
No one has the. authority to police them, The Government can only
recommend.
Gentlemen, I believe those are the highlights of my statement. Some
question has been raised, for instance, about whether or not. the courts
should be allowed to review these cases. 1 Te don't want to see the
right to review taken away from the BEG.
On the other hand, we think that if there is a question of law in-
volved, surely an individual should hive a right to go to the courts and
have the law defined by the proper authority.
Of course., in the definition of the law the, facts must be shown. I
believe that is all, lr. Chairman, other than one other thin-, and that is
the fact that under our present regulations or law I don't know just
now which it is-the employee who night. be injured is supplied with
such items as eyeglasses or artificial limbs, but that is only the. initial
appliance.
I think provisions should be made that in cases of a change of those
appliances, which occur so often, the compensation board should take
care of such changes. In other words, that should be a matter of ex-
pense that is chargeable to a man's claim.
I want, to thank this committee for the opportunity of appearing
before it. This is a very important piece of legislation. It is some-
thing that affects or could affect. the lives and the welfare of each and
every individual that is now employed by this Federal Government.
Thank you again, sir.
Mr. HATHAWAY. Thank you very much, Mr. Griner. I appreciate
your cutting your testimony down to within almost the time limit.
As I mentioned earlier, we will question the witnesses after we have
finished with all of them.
Thank you.
llr. GrINER. May I ask this, Mfr. Ilatlnaway l
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Mr. HATHAWAY. Certainly.
Mr. GRINER. I probably won't be here, but Mr. Voss will be here in
my place and understands my testimony. Would you favor me in
questioning him in case you have any questions regarding my testi-
m Mr. ITATIIAwAY. Certainly. We would be glad to.
Mr. GRINER. Thank you very much.
(Mr. O'Ilara entered the room..)
Mr. O'IIARA. Our next witness will be Mr. Nathan Wolkomir, who
is president of the National Federation of Federal Employees.
Mr. Wolkomir, you have heard the conditions under which we must
operate today. We would appreciate your briefly making the main
points that you wish to make before us.
Without objection, your statement will be entered in the record in
full.
STATEMENT OF NATHAN WOLKOMIR, PRESIDENT, NATIONAL FED-
ERATION OF FEDERAL EMPLOYEES; ACCOMPANIED BY BEN
MARTIN, ASSISTANT TO THE PRESIDENT
Mr. WoLKoMIR. Thank you very much, Mr. Chairman. I think
you will find that my full statement is very short. I timed it. It takes
exactly 3 minutes.
Mr. O'IIARA. Please proceed.
Mr. WOLKOMIR. If you don't mind I will stick to the prepared state-
ment. Most of the material you notice is merely something that we
added as an attachment which will not be read, and I will appreciate
the subcommittee looking through the attachments at a later date.
For the record, I am Nathan T. Wolkomir, president of the National
Federation of Federal Employees. To my right is the president's as-
sistant, particularly on legislation, Mr. Ben Martin.
Our organization has members in almost all Federal departments
and agencies in this country and also at various U.S. installations
overseas.
Mr. Chairman, I want to express the support of the National Fed-
eration of Federal Employees for the purposes and objectives of H.R.
10721 and the very deep and long-term interest of our organization in
the Federal Employees' Compensation Act.
This act was originally passed by the Congress in 1916, in the Ad-
ministration of President Woodrow Wilson. Just a year later, the
National Federation of Federal Employees was formed and at the
very beginning of our organization career we recognized the need for
liberalization and improvement of the act which had so recently been
adopted.
It is significant that this pioneer piece of employee legislation-
which, for example, antedated the Federal retirement law by some
4 years and the basic Classification Act of 1923 by 7 years-has failed
so signally to keep pace with the very urgent needs of changing times
and conditions.
Whereas the retirement, classification, pay, and many other laws
have been repeatedly amended to keep them at ].east reasonably abreast
of changing times and needs, the Federal Employees' Compensation
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U IMPROVEMENT OF BENEFITS UNDER THE FECA
Act has been to a very considerable and deplorable de-arce neglected
and allowed to lag not merely by years but actually by lecades.
Thus, we find that when the act was passed in 1916, the maximum
Monthly payment for total disability was 506.67. It was not. until
I92T, 11 years later, that this maximuni was raised to $116.65.
Twenty-tWO years elapsed before the maximum Was increased to
`'+525-and there it has remained until the present time.
Air. ('hairm;tn, while we support the purposes and objectives of II.1.
I0791, and are encouraged by the interest and support it has received,
we would he derelict 11 We did not point out that its provisions re-
tna.in inadequate. in the light of present-day costs.
Thus, the dollar maximum of $095 a month obviously falls short
of what is required under present-day conditions, as are the provi-
siou, for augmentation in the ease of dependents.
The liotitations continue to be unrealistic in the light of high living
costs, which continue to grow from month to month. We therefore
take the position Ihat (lie ceiling is far too low in the case of service-
connected total disability or death.
'restinionti has been submitted to this subconunittee showing what
this means in the light of the world in which we live. For example,
many civilian employees today are working under conditions of great
lunzard, and some actually under hostile fire.
Regardless of their present salaries and family obligations, total
disability would find them and their dependents, even under the terns
of' t ltc present proposed legislation, inadequately compensated for total
disability or death.
Moreover, wherever they live and work, Federal employees inevi-
tt,bly are I7os~ibin victims of service-connected disabilities. The lira
nations prevailing ill the present aet and in the proposed legislation
thus are, in varying degrees, out of touch with the realities of life
and costs in the 1960's.
'l'ime provision of 11.11. 10721 toadjlist pre%-ions compensation awards
of persons already on the rolls on a basis consistent with increases
in the Consumer Price Index is praiseworthy as in the provision ex-
teancling benefits of surviving children from age 1S to 23 if the child
is still attending school.
The NFFE recognizes that II.II. 1()721 is essentially an interim
measure to provide immediately and urgently needed upward revision
and liberalization of the Federal Employees' 'Compensation Act and
an effort to alleviate some of the hardship and some of the lag result-
inr from failure to amend the law since 1919.
As such, we strongly urge its prompt enactment. However, there
also is a long-range need for a thoroughgoing overhaul of the act and
we t?; ill await with great interest reconnnencntions on this subject by
t lie Cabinet Culnntittee on Federal Staff Retirement Systenis.
This legislation should not wait on the report, however, for later
sessions of Congress could adjust predictable lags outlined by the Cab-
inet Committee.
In cot inertlon with the pending legislation, I desire to invite (he
attex;tion of the subcommittee to certain proposed amendments to the
Federal Employees' Compensation Act contained in sections 1, 2, 5,
au([ ti of ILII. lttx6., and II.P. 288.
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IMPROVEMENT OF BENEFITS UNDER THE FE CA 103
We believe that these provisions merit the subcommi.ttee's favorable
consideration in conjunction with H.R. 10721 and strongly urge that
these provisions be included in the bill to be reported.
With regard to II.R. 10865, section 1 is designed to authorize pay-
ment of compensation based on loss of earning capacity whether or not
disability also involves other impairments of the body.
Section 2 would authorize payment of a lump sum to a widow or
widower upon remarriage, thereby avoiding possible criticism of the.
Government for condoning extra-marital. relations.
Section 5 would guarantee, a hearing before the Bureau of Em-
ployees' Compensation, and section 6 would afford a claimant the
right of appeal to the U.S. courts from. a decision of the Bureau.
And we emphasize that NFFE believes that it is vital to provide the
right of jurisdictional review and I cannot emphasize this too much
based on our experiences.
H.R. 5288 proposes, in section 1, to continue payment of salary to
an injured-on-duty employee until his claim-has been approved by the
Bureau of Employees' Compensation. This provision, in our vie-w, is
a highly desirable one and essential in order to avoid hardship due
to delay in the Bureau in the adjudication and approval of the claim.
In this connection, I ain including in my testimony herewith text
of a resolution touching directly on this point which was adopted by
the 1964 Biennial National Convention of the NFFE.
That resolution, introduced by NFFE Local No. 687, San Ber'-
iiadino, Calif., reads as follows:
Whereas unfortunate Federal civilian employees who are injured while at
their jobs often must await adjudication of their claims and undergo many
months of financial hardship to themselves and their families ; and
Whereas these same civilian employees are often without recourse or alterna-
tive to exhausting sick and annual leave balances awaiting such adjudication ;
and
Whereas these unfortunate civilian employees are often forced to the brink
of bankruptcy to add to their physical miseries, after exhausting sick leave
and annual leave, while not being eligible for unemployment benefits. by reason
of their job incurred injury ; and
Whereas investigation and adjudication often require many months: Therefore
be it
Resolved, That the National Office of the NFFE discuss this problem area
with appropriate officials of the Department of Labor to determine the use
of, and solution for, this serious problem.
Mr. Chairman, section 2 of II.R. 5288 also is very necessary since
under present law an employee unable to work because of injury due to
no fault on his part, cannot be credited with annual or sick leave cover-
ing the period of his absence due to the injury, which leave the em-
ployee would have earned had he not been injured on duty,
Because of the many cases which involve this type of a situation, to
the obvious and unfair detriment of the employee, our national. con-
vention-also adopted a resolution on that subject.
The resolution, introduced by NFFE Local 331, Belleville, Ill., is as
follows :
Whereas Federal. employees injured on the job, receive initial emergency treat-
ment on the base where employed; and
Whereas they are required to obtain subsequent treatment for the same in-
jury from a civilian doctor on leave status, if visit is during working hours : Be it
Resolved, That the National Federation of Federal Employees urge enact-
ment of legislation that would permit injured Federal employees to secure treat-
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104 IMPROVEMENT OF BENEFITS UNDER THE FECA
ment, subsequent to initial treatment, during regular tour of duty when proven
necessary, without charge to leave.
In connection with the foregoing, to illustrate the point, I am attach-
ing to my testimony a sample letter which we have had with the
Department of the Army which typifies and exemplifies the need for
legislative action on leave.
Mr. Chairman, in concluding my testimony, I wish to again cite
our support for MR. 10721, to emphasize the merit of its proposals
with the understanding that they represent a stop-gap approach pend-
ing a more thorough overhaul and updating of the act, and to urge a
favorable report, with the inclusion particularly of those features
of II.R.108G5 and H.R. 5288 to -which I leave alluded.
The NFFE wishes also again to express its appreciation to the sub-
committee and to all Members of the Congress who have taken a. con-
structive and forward-looking position with respect to this very
important. matter.
(Information referred to follows:)
Miss 1'I- RGARET A. II.ANNoN,
Member, Local No. 1051,
Allentolcn, N.J.
DEAR MISS IIANNON: I have received a formal decision requested from the
Department of the Army, which I mentioned in my letter to you of August 3,
1965, on the question of charging to sick leave for your absence while taking
treatment for an injury which occurred while you were in the performance of
your duties.
Enclosed is a copy of letter, August 10, 1005, from the Director of Civilian
Personnel, Department of the Army.
For your Information, my letter to the Department concluded:
"Although we appreciate the language of the regulation, it seems to me that
the employee's absence was, In fact, 'forced' and she had no alternative but to
comply with the instructions of the Bureau of Employment Compensation."
however, the Department Is unable to construe the regulations in your favor,
notwithstanding my efforts. In this connection, I have been orally advised
that the regulation for ninny years has been adhered to without exception.
Moreover, since the regulation Is not inconsistent with civil service laws and
regulation, regretfully I Hill obliged to tell you that it would be useless to pursue
the matter further.
Fraternally,
DEPARTMENT OF TIIE AB,MF,
OFFICE OF TIIE DEPUTY CnIEF OF STAFF FOB PERSONNEL,
Washington, D.C., August 10, 1965.
Mr. N. T. WoLSOMni,
President, National Federation of Federal Employees,
Washington, D.C.
DEAR Mn. WoL%oMIR: This will reply to your letter of August 3, 1005, In behalf
of Miss Margaret A. Hannon, a civilian employee of Fort Dlx, N.J.
In her letter dated July 20, 1965, Miss Hannon stated that she was Injured
during employment in January 106#. On several occasions since that time she
has been directed by the Department of Labor to report to a L.S. hospital at
Stapleton. Staten Island, N.Y., for physical checkup in connection with adjudi-
cation of her claim for injury compensation. Her absence from duty for this
Purpose has been charged to sick leave. It is her belief that such absence
should be excused without charge to leave or loss of pay.
In this regard the Department's regulations provide that an employee injured
in the performance of his duties will he considered In a duty status for the time
required to obtain emergency treatment to the extent that It falls within his
prescribed hours of work on the day of injury. Absence from duty beyond the
date of Injury Is chargeable to sick leave, annual leave, or leave without pay, as
appropriate.
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Under the circumstances present in Miss Hannon's case, charging her absence
to sick leave was consistent with the Department's regulations: It is regretted
that a more favorable reply may not be made.
Sincerely,
D. S. RUBENSTEIN
(For C. P. Mullaly, Director of Civilian Personnel).
Chief, Procedures and Regulations Division, Directorate of Civilian Personnel,
Department of the Army, Washington, D.C.
DEAR MR. MEYER: Reference recent telephone conversation with Mrs. Evelyn
G. Streng regarding a complaint of a member of the National Federation of
Federal Employees at Fort Dix against the charging to sick leave her absence
while taking treatment for an injury which occurred while in the performance
of her duties.
Our inquiry was prompted by a letter of July 20, 1965 (copy enclosed). Fol-
lowing our conversation of July 23 with Mrs. Streng, we advised Miss Margaret
A. Hannon, in pertinent part, as follows :
"Under the leave regulations, civilian personnel, Department of the Army, an
employee injured in performance of her duties is entitled to pay without charge
to leave for the time required to obtain emergency treatment. Upon discussion
today with an official of the Department, I am advised that the term "emergency
treatment" is restricted to the day on which the emergency occurred. For your
information, I enclose a copy of CPR L1, 3and call your particular attention to
subparagraph h(6)."
In reply we received a letter of July 30, 1965 (copy also enclosed). Because of
the involuntary nature of Miss Hannon's visits to the hospital, may I ask further
consideration of this complaint.
Although we appreciate the language of the regulation, it seems to me that the
employee's absence was, in fact, "forced" and she had no alternative but to com-
ply with the instructions of the Bureau of Employment Compensation.
I am hopeful that you can so construe the regulations as to permit the absence
of Miss Hannon to be recorded as administrative or excused leave.
Sincerely,
N. T. WOLICOIoIIR, President.
ALLENTOWN, N.J., July 30, 1965.
Re National Federation of Federal Employees Local No. 1051, Fort Dix, N.J.
NATIONAL FEDERATION OF FEDERAL EMPLOYEES,
Washington, D.C.
(Attention of Mr. Nathan T. Wolkomir, president).
DEAR MR. WOLICOMIR: I am in receipt of your letter dated July 23, 1965 (copy
attached), but it appears that the question that I had requested has been evaded.
The problem is "simple" and the answer should be "simple."
Question. Inasmuch as I have been directed by correspondence to make several
visits to the hospital without voluntarily requesting them (in other words:,
"ora,~x ed" by the Department of Labor, New York), I consider that this leave
shon'Id be charged to excused leave, and not charged to sick leave as has been
done in this case.
Request reply or advice.
Very sincerely,
MISS MARGARET A. HANNON.
ALLENTOWN, N.J., July 20, 1965.
Re National Federation of Federal Employees, Local No. 1051, Fort Dix, N.J.
Tim NATIONAL FEDERATION 5 FEE DERAL EMPLOYEES,
Washington, D.C.
(Attention of Mr. Nathan T. Wolkomir, president).
DEAR MR. WoLICoMIE : I am a member of the National Federation of Federal
Employees, Port Dix, N.J., for a number of years.
Mr. Wolkomir, since you are the president of the organization, I feel as though
I would rather take this matter up with you personally by explaining in detail
the problem that I am now confronted with as follows :
In January 1954, I was injured at the office where I am employed by an em-
ployee and the case has never been cleared up. Naturally, the U.S. Department
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106 IMPROVEMENT OF BENEFITS UNDER THE FECA
of Labor became involved. At the request of the L.S. Department of Labor I
was asked to report to a t`.8. hospital at Stapleton, Staten Island, N.Y., for a
physical checkup. This I have done on two occasions and next week I have to
make another trip.
The problem that I am up against now is regards the charging of leave for
this time that I have to make for these trips. In the office where I work, the
administrative assistant checked with the civilian personnel oire ? nd was told
that this leave should be charges to sick leave for me and not administrative.
Since this seems unfair to me and I did not request to go, I am humbly asking
if you will have someone in your office look into this matter for me: that is, the
U.S. Civil Service Commission Regulations, Washington, D.C., surely has the
correct answer, certainly I do not believe that I have received the right answer.
May I have a reply as soon as possible and would also appreciate a copy of
the civilian personnel regulation governing this rule.
11fr. \VOLKoarIR. 'T'hank you very much.
dir. O'11ARA. Thank you very much, Mr. Wolkomir.
For those irtenrlx'rs of the committee who have arrived since your
testimony began, I would like to restate that we are asking each wit-
ness, because of the full committee meeting at. 11, to keep his state-
ment short, and we are reserving questions of members until all the
witnesses scheduled today have had an opportunity to summarize their
statements.
Thank you very much, Mr. Woikomir.
M1ir. Wor.ronIIR. Thank you, sir.
dir. O'IIARA. I think I indicated that your statement will be entered
in full, in the record with attachments.
stir. W'oi.Komin. Yes, sir.
Thank you very much, gentlemen.
Mr. OtIL L%. Ur. Pat rick J. - ilan, leRislat ive. director, United Federation of Postal C'lerks, AFT-CIO, will be our next witness.
;fir. ti ihiti, we wish to apologize to you also for the procedure we
are forced to follow today, but- lice building trades department of your
organization would be very disap oinled in us if we did not, since I
understand t-he sit-us picketing bill is coining before all executive ses-
sion of the full committee at 11 and we have to conclude before then.
Please proceed, .dlr. Nilan.
STATEMENT OF PATRICK J. MILAN, LEGISLATIVE DIRECTOR,
UNITED FEDERATION OF POSTAL CLERKS, AFL-CIO; ACCOM-
PANIED BY JOSEPH F. THOMAS, DIRECTOR OF ORGANIZATION
Mr. Chairman and members of the subconmiittee, we
certainty want. to cooperate with the, committee because. we understand
you have plenty of work up here on the Hill and it is not our desire to
hold you up on other business.
I am not, going to read the entire sUttenaent since the chairman has
indicates that it will be included in the record.
;It'. O'II:eti.e. Without objection, it will be included in the record
at this point.
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(Statement referred to follows:)
S, AFL-CIO, PATRICK J.
STATEMENT Or UNITED FEDI OF POSTAL
DIRECTOR
Mr. Chairman and members of the committee, for the record, I am Patrick J.
Nilan, national legislative director of the United Federation of Postal Clerks,
AFL-CIO, with headquarters at 817 1.4th Street, NW., Washington, D.C. I am
accompanied this morning by Joseph F. Thomas, our director of organization.
We are the exclusive national bargaining representatives for the 245,000
clerical employees in the postal establishment under the terms of our national
agreement with the Post Office Department.
As one of the oldest groups of organized employees in Government-clerks were
first organized in 1890-I can assure you that our members are vitally inter-
ested in the efforts of this committee to upgrade obsolete provisions of the
Federal Employees' Compensation Act. We would like to express our appre-
ciation to the chairman and members of the committee for scheduling these
hearings.
This interest dates back to the beginning of such concepts when in 1916 we
supported the Kern-McGillicuddy Federal Workmen's Compensation law-
climaxing a 7-year fight to bring Federal employees for the first time under the
protection of compensation laws already enjoyed by private employees in many
States.
It is interesting to note that our legislative director at that time-then on ex-
tended leave of absence-was fired by the Post Office Department shortly there-
after for his vigorous. advocacy of legislative reforms. Fortunately, things
have changed a, great deal since then.
But change, as previous witnesses before this committee have shown, has been
slow, in catching up with the times as far as workmen's compensation is con-
eerned, and particularly for compensation of Federal employees.
Back in 1916; the maximum payments allowable under the new law were
$60.67 per month. Today that maximum has risen to $525-hut even that figure,
`dating from 1949, is far below what today's equity demands.
This committee already has heard considerable evidence that the existing rates
fail substantially to carry out the intent of the basic law to provide up. to 75
percent of basic compensation for the totally disabled.
You have before you Representative William Hathaway's bill, H .R. 10721,
adjusting maximum and minimum compensation, and also the bill, H.R. 10865,
sponsored by the distinguished chairman of this committee, Representative James
O'Hara. Both of these measures contain basic: provisions, which we heartily en-
dorse-and we are grateful for their thoughtful and constructive approaches.
We do have reservations about gearing compensation increases solely to the
very limited Consumer Price Index as proposed in H.R. 10721 which by itself
would fall to provide a measure close to the general principles of comparability
now guiding the whole Federal pay structure. And we have doubts about the
value of the judicial review concept (as proposed by H.R. 10865:)-doubts which
have been clearly stated by previous witnesses on both counts.
To save time, however, I do not propose to cover again areas of discussion
which previous witnesses have presented or to burden you with a repetition of
facts and figures -already well established by others and by the findings of the
Government's own experts in the Civil Service Commission and the Labor De-
partment, and to which we add general endorsement.
Instead we will concentrate on several procedural details of particular con-
cern to our members.
Before leaving the subject of rate revision I wish, if I may, to stress one point
which has not, so far as I know, been covered ; namely, the strong feeling among
our own members that some thought be given to a more proportionate flexibility
in upgrading compensation.
For example : employees on compensation ought to receive as a matter of
equity upward FLEA adjustments based on automatic in-step increases they
would normally have received as a consequence of automatic raises or general
salary increases by law during regular employment. We feel that employees dis-
abled or prevented from carrying on their normal duties through no fault of
their own should not be deprived of routine career upgradings of income to
which they would otherwise be entitled.
55-030--65--8
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IMPROVEMENT OF BENEFITS UNDER THE FECA
On another score altogether, our members have voiced an overwhelmingly
itmanin?ous conviction as recently as our last national convention at Miami, Fla.,
in August 1904, At that time, they called urgently for revisions of law to protect
injured employees eligible for FECA benefits against the disastrous losses being
sustained as a result of delays In ndjudicatiag their claims.
Our convention conceived that the Governmeiii might create a new classifica-
tion such as "injury leave" as a supplement to annual or sick leave-once these
benefits have been used up during the waiting period.
These waiting periods, running nearly 3 months on the average, Impose an in-
tolerable burden on families whose very existence depends on the regular receipt
of their wages. As a matter of fact, the loss of even a week or 2 weeks' Income
to a family man earning only $5,000 or $C,000 a year can lie catastrophic.
Loyal Government servants ought not to be required to hang suspended in an
economic limbo or to forego their FECA benefits altogether-as some have done-
relying solely on sick leave-just because the bureaucratic process of handling
claims, for whatever variety of reasons, cannot move at a faster pace than
Ulysses' Odyssey.
Happily, Representative Dante 13. Fascell has recognized this costly procedural
shortcoming and has offered corrective legislation in I1.I1. 5288, which we prayer-
fully hope will be made an integral part of any revisions recommended by this
committee.
Specifically, we urge that any employee who has been granted an FECA award
and who then returns to Federal employment be granted annual and sick leave
credits for the period he was an the FECA rolls. And, we also urge that an
employee be allowed to continue to receive his regular pay between the time of
injury and the receipt of his first compensation check under provisions permitting
the Government to recover any excess through an equitable system of withhold-
ing sums from the subsequent compensation.
Perhaps it is beyond the competence of this committee or any committee to
devise guidelines that will insure a faster handling of settlement and Initial
payment, but at least the provisions suggested by Representative Fascelt's bill
would help make the existing slack tolerable.
Our convention last year also adopted a resolution urging the creation of an
Impartial board of licensed physicians to review claims of employees, regardless
of the disease, caused in whole or in part by employment, such as hypertension,
heart disease, and mental disorders.
Most of you are aware, I am sure, of the present difficulties in relating heart
attacks to employment. I am told that only one out of three such cases, on the
average, is presently allowed. Doctors are notoriously equivocal about causative
factors and Government supervisors are not expert enough in judging the true
range of occupational hazard.
A bill by Ilepresenlalivc Arnold Olsen of Montana, H.R. 2400, is currently
pending before the House Post Office Committee on this subject. It would
create a presumption that certain Impairments of health caused by hypertension
or heart disease are Incurred in line of duty. The presumed impairment would
not be valid without it required physical examination immediately prior to
employment. It seems to us that the substance of that bill might well be cap-
tured by this committee and Included in legislative proposals by this committee.
We would further suggest the following recommendations which represent a
distillation of many ideas advanced from the field by our members over a period
of years :
Payment of salary to injured personnel should be continued in those
instances of delay arising from the failure of a supervisor to make a proper
report of injuries validly brought to his attention,
Safety officers In particular should be penalized for delaying injury or
accident reports, particularly when this lag Is motivated by Its possible
effect on the safety record.
Employees recovering from service-conneetetj Injury should be guaranteed
light duty assignments, when appropriate, while recovering. Too many are
currently dropped from the rolls on grounds that no such jobs are available.
Payments should be allowed for repair or replacement of prosthetic de-
vices such as artificial limbs or hearing aids which the Government supplies
in the first place and for glasses under the same circumstances.
Mr. Chairman and members of the committee, we appreciate your kindness
and patience in giving the United Federation of Postal Clerks an oppor-
tunity to be heard on a subject which is close to the hearts of many of our inem-
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IMPROVEMENT OF BENEFITS UNDER THE FECA
bers and their families. we are grateful to those members of congress whose
interest and concern is mirrored here today in the pending legislation. And we
are hopeful that this body and the Congress will act speedily to, update a law
which has deep roots in our culture and which has been regarded throughout
the work as a model of humanity in establishing protection against the innate
risks of labor for the men and women whose devotion has made our Nation
great.
Mr. NILAN. Thank you, Mr. Chairman.
I would like to introduce the gentleman accompanying me this morn-
ing, Mr. Joseph F. Thomas, our director of organization.
As I believe most of the committee members know, we are the exclu-
sive representatives for the 245,000 clerical employees in the postal
service and we are speaking on their behalf before the committee today.
It is interesting to notice that when our organization originally sup-
ported the first compensation act in 1916, one of my predecessors, our
legislative director at that time, Mr. Flaherty, was subsequently fired
by the Post Office Department for his representations before the Con-
gress on behalf of this legislation.
I am very pleased I don't have to worry about that today as legisla-
tive director of our organization.
Mr. Chairman, I do want to just comment briefly on page 3 in regard
to one of the recommendations we want to make which we feel is most
important, and I don't believe it has been mentioned to date in other
testimony.
For example, employees on compensation in our opinion ought to
receive, as a matter of equity, upward FECA adjustments based upon
automatic indepth increases they would normally have received as a
consequence of automatic raises or general salary increases by law Bur-
in > regular employment.
We feel that disabled employees prevented from carrying on their
normal duties through no fault of their own should not be deprived of
routine career upgradings of income to which they would otherwise be
entitled.
In other words, we feel the committee might consider recommending
some procedure whereby employees that are on disability would per-
haps have their compensation rate adjusted based on the normal pro-
gression of salary they would have received had they been actively
employed in the Government service.
Some of the other items have already been covered. I will just men-
tion them for the record.
We, of course, are very interested that our people have their annual
or sick leave restored when they return to duty. We do feel this is
something, again, that they should not be penalized for as far as a lack
of annual or sick leave as a result of injuries.
We, of course, would also suggest the committee consider very seri-
ously H.R. 5288 by Representative Dante B. Fascell and also the bill
by Congressman Arnold Olsen, II.R. 2460, which our organization also
supports and recommends for your consideration.
Mr. Chairman, we do have a number of other items in here, but
knowing that the committee will consider them in their deliberations
I would like to conclude by just stating that we appreciate the kind-
ness and patience of the committee and the chairman in giving the
United Federation of Postal Clerks an opportunity to be heard on a
subject which is very close to the hearts of many of our members and
their families.
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lfl IMPROVEMENT OF BENEFITS 1'NDER THPE FECA
We are very grateful to those Members of C'ongress.s whose interest.
and concern is mirrored here today in the pending legislation, and we
are hopeful that this body, and the Congress will act s seedily to Up-
date a law which has deep roots in our culture and which has been re-
garded throughout the world as a model of humanity in establishing
protection against. the innate risks of labor for the nien and women
whose devotion has madeour Nation great.
Thank you, If r. Chairman, and members of the colllnlitteo for the
opportunity for .llr. Thomas and myself to appear before you this
morn ing.
1Ir. o'ILui.. Thank you very much, llr. Milan, and you, too, .11r.
Thomas. If you have tune to wait we may have an opportunity to ask
some questions,
_llr. \ILA:t. Thank you very much, dir. Chairman.
Hr. O'ILtri;/. our next witness will be MIr. S:itlney A. Goodinati, the
president, and Mr. David'Silvergleid, the secretary-treasurer, of the
National Postal Union.
STATEMENTS OF SIDNEY A. GOODMAN, PRESIDENT, AND DAVID
SILVERGLEID, SECRETARY-TREASURER, NATIONAL POSTAL
UNION
Mi'. ILvF;i{Gt,Pa-). TIinaIc von, Mi', Cliali'maa.
I am David Silver gleid,, secretary-treasut'ei'. _llr. Goocinian is on
vacation and he won't be here this morning. 1 was asked to limit nay-
-self to a 3-minute oral presentation and I will try to keep it even with-
in that.
_NIr. o'Il:tilt:~, 1Ir. Silrergleid. without objection, your full state-
ment will be entered at this point in the re. ard.
(Statement referred to follows:)
STATEMENT OF SIDNEV A. GOODMAN. PRESIDENT, NATIONAL POST,1r, I 'riIO\
lfr. Chairman and members of the subcommittee, my name is Sidney A. Good-
man, and I am privileged to serve as president of National Postal Union, lo-
cated at 509 14th Street NW., Washington. D.C. I am accompanied here by
our secretary-treasurer, David Silvergleid. We represent over 13,000 postal
employees, organized in excess of 507 local affiliates in 50 States, including
Alaska, Hawaii, Puerto Rico. and the District of Columbia,.
We are grateful. Mr. Chairman. for your action in scheduling these hearings
on H.R. 10721, a bill to amend the Federal I?;uaployces' Compensation Aet to
improve Its benefits, and for other purixases. 1Ve sincerely appreciate this op-
portunity to submit our opinions on this vital and important subject.
In his statement of September 8, 1006, before this subcommittee. Solicitor of
Labor Charles Donahue requested Immediate consideration of H.R. 10T21, al-
though he pointed out, "as to an equitable and long-range proposal to perfect
workmen's compensation protection for Federal employees, we are awaiting
the finding of the President's Cabinet Committer on Federal SwIT Retirement
Systems which is making a collateral study of the ComIxaasation Act." Inas-
much as it has become routine for administration spokesmen during the 1st
session of the 80th Congress, to advocate deferment of proposals within the
scope of the studies of this Cabinet Committee, it would appear that some
urgency- exists with relation to current workmen's compensation benefits.
We endorse the provisions of If-R. 10;21 as fully justified and warranted, al-
though it Is our considered opinion they fall far short of what is necessary.
The Federal Enipdoyees' Compensation Act is so Infrequently reevaluated and
overhauled, It would appear that Improvements should he projected to include
pending and anticipated changes in the economy.
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IMPROVEMENT OF BENEFITS UNDER THE t A
-
Ave fully subscribe to the proposed increases in the maximum and e
dollar limits for injured employees, dependents, and survivors. We sup-
a
port the provision that previous compensation awards be increased on basis
which is consistent with increases in the Consumer Price Index. We also be-
lievo the extension of benefits for surviving children from age 18 until age
'23 if the child is still attending school, is long overdue.
We would like to call to the attention of the subcomittee II.R. 5288, intro-
duced by Congressman Dante !B. Fasceli, Democrat, of Florida, and request
consideration be given to adding its provisions as an amendment to H.R.
10721.
I-I.R. 5288 recognizes that under present procedures, an injured Federal
worker remains without salary while disabled, until his claim is processed.
Therefore, it provides that the injured Federal. employee could continue to
receive his regular pay, with any differences subsequently adjusted by withhold-
ing portions of the compensation payments in such a manner as may be equitable
-to: the employee and the Government. It has been our experience that injured
postal employees frequently must resort to credit unions, banks, or welfare
funds to tide them over until such time as they receive their first compensation
payments.
A further provision in H.R. 5288 would allow an employee injured on the
job to be credited with annual and sick leave for the period he is on the com-
pensation rolls. Under present procedures, an injured Federal employee does
not earn annual and sick leave credits unless he is performing actual service.
In many cases where the employee has already used up his annual leave, he
must either pay it back in cash or in deductions from future credits.
We wish to thank the subcommittee for this opportunity to, present our views.
Mr. SILVERGLEID. Thank .yon, Mr. O'IIara. I must admit I was a
bit surprised in reading the statement of the administration spokes-
men to find that they were particularly advocating the provisions of
ILR. 10721, introduced by Congressman Hathaway, in view of their
attitude during the entire 1st session of the 89th Congress.
We support the provisions of II.R. 10721. We believe they are
justified and they are warranted. However, we also have developed in
our union a full-fledged program on workmen's compensation.
Anylthin.g that takes 17 or more years to redevelop or amend in
any form certainly requires a considerable adjustment.
As Congressman Daniels is well aware, the administration's attitude
has been up until now to defer action on all fringe benefits dealing
with retirement, health benefits, life insurance, workmen's componsa-
t:ion, until the President's Cabinet Committee on Retirement Systems
reports.
That is why I was a bit surprised to find that the, administration is
pushing hard for this particular measure. I feel that they consider
it urgent and, of course, we are all for it.
However, we do believe very strongly that while we cannot at this
point present our comprehensive program, we must urge serious con-
sideration of the bill introduced by Congressman Fascell, H.R. 5288.
I was president of a - postal employees welfare group for 15 years
back in Brooklyn, N.Y., and I can assure the. members of this con-
inittee that, the most pressing, problems injured employees had was
knowing where they could get a couple of weeks pay to live on before
the compensation bureau processed their claim.s.
We used to advance them $100 every 2 weeks with the understanding
that this money. would be refunded as soon as they received their first
compensation. checks.
1 think it is important that these, lower paid people be given imme-
diate consideration as long as there appears to bean element of urgency
about II.R. 10721.
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112 IMPROVEMENT OF BENEFITS UNDER THE FECA
I believe also very si rongly that, as has been pointed out here, con-
sideration for earning of altnual and sick leave while an employee is
injured Should be given by this commit tee.
Tao frequently it nian )pas alreadv used his annual or sick leave, and
llte Government, says to hini in effa'et. "you must- pay it back because
you haven't earned it inasnnicli as roll lost it while you were away
injured on duty,"
This, I believe, is not fair and certainly consideration ought. to be
given to restore that, privilege.
llr. O'Hara, 1 am going to conclude now, thanking the committee
for this privilege of presenting our opinion, and I ant very hopeful
that there will e. some action during this session of the Congress.
11Ir. O'Ilztlla. Thank you,MTr. Silvergleid. I might just acid that
we hope to go beyond. or at. least. I hope to go beyond, the provisions
of Mfr. Hathaway's bill. I think Ir. Hathaway hopes that we will,
too.
\Ir. Sii.vl;iw ixln, Thank you.
l-Tr. O'II AII.t. And not. just stop there.
.lfr. SILv'ERGLEID. Thank you very much.
lfr. O'II:twA. If you could remain, we may have some questions when
we complete tale list of witnesses.
i1-Tr. Sii.vta;ae.FrI). Thank you.
Mr. O'IIAil.l. air. Ilan iel Jaspan, legislative representative, National
Association of Postal Su (iervisors will be the next, witness.
~IIr. Jaspan, did you submit a statement for use here?
STATEMENT OF DANIEL YASPAN, LEGISLATIVE REPRESENTATIVE,
NATIONAL ASSOCIATION OF POSTAL SUPERVISORS
1Tr. JA sl3.tx. Yes, sir.
Afr. O'II.1n.t. Without. objection, your statement will be entered in
full at this point in the record.
(Statement referred to follows:)
STATEMENT OF DANIEL JASPAN, LEGISLATIVE RF,PRESENTATrVE, NATIONAL
AssoclATIO:IT OF POSTAL SUPERVISORS
Mr. Chairman and members at the Select Subcommittee on Labor, Rouse of
Representatives, my name Is Daniel Jaspan. I am the legislative representative
of the National Association of Postal Supervisors, composed of more than 28,500
supervisors in the postal Held service. Our members are employed in post
offices, post office vehicle Installations, railway and highway post offices located
in all of the 50 States and in Guam, Puerto Rico, and the Virgin Islands.
I appreciate the opportunity to testify in support of II.R. 10721, a bill to pro-
vide improvements in the Federal Employees' Compensation Act. In our opinion,
the increase in the monthly rate of compensation for disability from the present
$ 525 to $085 is a step in the right direction. However, we believe that a dollar
ceiling Is not Lite right answer. We respectfully suggest that the dollar amount
be deleted from the bill and just the percentage figure be retained.
Regardless of the employee's Income In the Federal service, a 25-percent loss
of pay is penally enough for being Injured on duty. If one of our level-17 mem-
bers, earning $20,70x; per year were injured on duty, his income would be reduced
to slightly more than that of a level-7 employee earning $8,100 per year. In
addition to the physical suffering, he and his family would have even a more
tangible suffering due to the loss of income. Even without the dollar limita-
tion. Hot- 75-percent ceiling would reduce his income to approximately an income
of n level-14 employee.
Because salaries have increased considerably since the $525 ceiling was im-
posed, we believe that this subcommittee should give special consideration to
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IMPROVEMENT OF BENEFITS UNDER THE FECA 11
th. e elimination of the dollar ceiling before reporting the bill. When we con-
sider that the $525 ceiling was placed in effect in 1949, we realize that the pro-
posed $685 ceiling is much too little in view of the substantial salary increases
since that date.
In view of the present thinking that an income of $3,000 per year is just above
a starvation income, we also respectfully suggest that the minimum compensa-,
tion be increased from $180 per month to no less than $250 per month. Even
this amount would be bare subsistence.
We commend Mr. Hathaway for the provision for extending compensation
payments on account of a child, or to a child, to permit him to continue his
education or training until age 23. We recommend, however, that the committee
eliminate the age ceiling completely and continue the compensation payments as
long as the child is a qualified student. We base our request on the fact that for
income tax purposes a child is continued as a dependent child as long as he is
a full-time student at an educational institution which maintains a regular
faculty and curriculum and has a body of students in attendance.
We are in agreement with the provision for increasing the monthly pay for
disability or death based on the annual average percentage change in the con-
sumer price index. This is a necessary improvement and is in line with other
adjustments.
There is a provision in II.R. 10865, introduced by Mr. O'Hara, which we
believe should be considered at this time. In the first section of his proposed
bill he would strike out "solely" and add "and regardless of whether the dis-
ability also involved other impairment of the body."
We have had a recent case illustrating the unfairness of the present law. One
of our members was injured on duty in 1951. He suffered a leg injury and was
given a scheduled award based on a 30-percent loss of the use of his leg.
The injury gradually became worse and, upon a recent examination, the con-
clusion was reached that the leg injury was about 40 percent but that the dis-
ability now involves part of his back. Because of this finding he has been asked
to return almost $4,000 to the Government because the leg injury is not the
"sole" injury resulting from. his disability.
It can be seen very easily that this Is an unfair condition. There is no doubt
that his leg injury has worsened with the years, but because of the possibile
involvement of his back in the injury, which could easily be a direct result of
the original injury, he has been asked to return this money. The adoption of
this section of H.R. 10865 would eliminate such gross inequities as occur in the
present laws on account of this regulation. We hope that the subcommittee will
take immediate action on this proposed change.
We thank the members of this committee for taking the time to hold these
hearings, and for permitting us to express our opinions and suggestions.
Mr. JASPAN. Mr. Chairman, my name is Daniel Jaspan. Of course,
I will keep my presentation short as you requested.
I am the legislative representative of the National Association of
Postal Supervisors, representing more than 28,500 postal supervisors
in the postal field service.
We are very much interested in the enactment of II.R. 1.0721 or any
bill to liberalize the present compensation act.
We do hope, though, that you will take into consideration the elim-
ination of the dollar ceiling, even though this bill is a step in the right
direction in increasing the dollar ceiling.
I give you an example of what would happen to some of our mem-
bers. Our highest level supervisor is level 17; with the dollar limita-
tion his earnings would be reduced to that of a level 7, and even with-
out the dollar limitation would be reduced to that of a level 14.
Each of those is quite a comedown considering that he was in-
jured in carrying out his duties. This is especially true since the $525
ceiling was put into the law in 1949, and there is quite a little differ-
ence between $525 and $685.
We are very happy to see the limitation lifted on the age of a child
receiving compensation. We do suggest that the committee look into
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IMPROVEMENT OF BENEFITS UNDER THE FECA
doing the same as they do under the income tax laws, whereby a stu-
dent is considered a child as long as he is in an institution of higher
learning, rather than having an age limit of 23.
We hope that. will be taken into consideration.
Even moo important, %Ir Chairman is your bill, II.P. l09(i5. The
first, section would strike out the word "solely" and add "and regard-
less of whether the disability also involved other impairment of the
body."
We just had a case last week where one of our members was in-
jured in 1951. Ile had a leg injury, was declared 311-percent disabled,
and he was receiving a schedule award. Now the leg injury becanir
worse. It is between -lit and 50 percent. But his back is involved,
and he must pay back $4,000 that lie, already= received because his in-
jury became worse, and your amendment would take care of that kind
of treatment.
We sincerely hope (Intl. you will consider that before the reporting
out of it bill. That is very important to our members because most
injuries do deteriorate over the yeah, especially if it is an arm or
leg injury.
11'ith that, Mr. Chairman, all we can say is we hope you will act
as fast as possible in reporting out a favorable bill.
`Ir. (YII.uiA, Tinu)k you very much for your testimony, Mr. Jaspan.
If you can remain I think we may want to ask a few quest ions.
Mr., ,TAsrAN. Thank you.
Mr. O`IL1R.t. Our next witness will be Dr. Seward \ vtnan, who is
the executive director of the American Pocliatrv Association,
I)r. Nyman, will you please favor us with your testimony and
follow the rules that wve have laid down for either wituesses?
Without objection your statement, will be entered in fall at this
point.
STATEMENT ny I)R. SEWARD P. LAYMAN. ExECUTIVE DIRECTOR, AMERICAN PODIATRY
ASSOCIATION
Mr. Chairman and members of the committee, I am Seward P. Nyman. D.S.C.,
a doctor of podiatry and executive director or the American Podiatry Associa-
tion.
This bill is to amend the Federal Employees' Compensation Act so as to per-
mit injured employees entitled to receive medical services under such act to
utilize the services of podiatrists. This bill would be In keeping with the intent
of the act which is to provide benefits likely to cure or to give relief or to reduce
the degree or the period of disnbility or to aid in lessening the amount of monthly
compensation.
Many significant advances have been made in medical science since the Con-
gress approved the Federal Employees' Compensation Act In 1916 and unfortu-
nately the Improvements in the net have not kept pace with this progress. The
States now provide care for work-connected injuries and these programs permit
the employee to have a podiatrist treat him. Also, over half the is'opie in the
United States, including Federal employees, have some form of health insurance
and most of these programs also provide for the services of podiatrists.
The act refers to "scope of their practice as defined by State law." This
wording recognizes that scope of practice is determined by State law rather
than the act or any other Federal statute. Therefore. since the act is designed
to provide medic-at and surgical services and podiatrists are licensed in every
jurisdiction to provide medical and surgical services, the act should be amended
to include the podiatrist.
It is of interest that State legislnturew, attorneys general, and insurance com-
missioners have consistently designated the podiatrist as a "physician" for
workmen's compensation, use of drugs, scope of practice, health insurance, and
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IMPROVEMENT OF BENEFITS UNDER THE FECA 115
school accident programs. In 1901 the Bureau of Retirement and Insurance of
the Civil service commission approved the podiatrist as a "physician" and
"doctor" for the Government-wide service and indemnity benefit plans under
the Federal Employees' Health Benefit Act of 1959. The doctor of medicine,
doctor of osteopathy, and doctor of dental surgery are included in this definition.
Obviously, it is most difficult for Federal employees to rationalize how the
podiatrist can treat an injury not connected with the employee's work when the
treatment of a similar injury which would be connected with his work is not
covered. This seems all the more inconsistent when the services of medical doc-
tors, osteopaths and dentists at present are included under the Federal Em-
ployees' Compensation Act.
Since the early days of World War II commissioned podiatrists have been
serving in various branches of the armed services. Within the past 31/2 years
the number of podiatrists serving in the Army has doubled. The Veterans' Ad-
ministration new employs 73 podiatrists and additional VA hospitals have
expressed the need or desire for these services. Recent surveys indicate that
podiatric care is being provided in over 3,000 hospitals, clinics, and nursing
homes.
On two occasions during the past 10 years Federal employees have requested
the Employee's :C'ompensation Appeals Board to reconsider the decision of the
Bureau which had, not recognized the services of podiatrists under the act. In
both cases the determination as to whether a podiatrist was, considered a phy-
sician within the meaning of the act was not dealt with. It was rather the
opinion of the Appeals Board that the treatment of these Federal employees
was no. authorized.
It is recognized that in most metropolitan areas the Bureau has designated
certain Federal health facilities and except in emergencies, no doctor in private
practice may treat injuries of Federal employees. It is, however, in small com-
inunities where no health facility has been designated that the problem of
recognizing the services of podiatrists is present. Many cases are on file which
clearly indicate that Federal employees have received treatment of their injuries
by podiatrists in private practice since they normally would seek these services.
In each case these services, have not been compensated due to the interpretation
of the word "physician" as used in the act. I do not think that the Congress
intended this act to be a means of imposing distinctions between different
practitioners of - the healing arts. The determination of who is qualified to,
practice the various branches of medical science was wisely left to the legis-
latures of the States.
Podiatrists are today an important part of the health. team and their role in
meeting the health needs of the Nation is established and recognized.
It definitely would be in the public interest to amend the act so that in appro-
priate cases the services of the 8,000 podiatrists in private practice would be
made available to- Federal employees.
Mr. Chairman, I appreciate the opportunity to appear before you in support
of H.R. 3826 and at this time I will he glad to answer any questions which you
or members of the subcommittee may have.
STATEMENT OF DR. SEWARD NYMAN, EXECUTIVE DIRECTOR,
AMERICAN PODIATRY ASSOCIATION'
Dr. NYMAN. Thank you, Mr. Chairman. -
lam Dr. Seward Nyman and lam executive director of the Ameri-
can Podiatry Association, and I am here to provide some brief remarks
on II.R. 3826, which would amend the Federal Employees' Compen-
sation Act so as to permit injured employees entitled to receive medical
services under such act to utilize the services of podiatrists. -
Many significant advances have been made in medical science since
the Congress approved the Federal Employees' Compensation Act of
1916 and, unfortunately, the improvements in the act have not kept
pace with this progress.
The States now provide care for work-connected injuries and these
programs permit the employee to have a podiatrist treat him. Also,
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116 IMPROVEMENT OF BENEFITS UNDER THE FECA
over half the people in the Fluted States, including Federal employees,
have some. form of health insurance and most of these programs also
provide for the services of podiatrists.
The act refers to "scope of their practice as defused by State law."
This wording recognizes that scope of practice is determined by
State law rather than an act or any other Federal statute.
Therefore, since the net is designed to provide medical services
and podiatrists are licensed in every jurisdiction to provide medical
and surgical services, the act should be amended to include the po-
d iatrists.
It is of interest that State legislatures, attorneys general, and
insurance commissioners have consistently designated the podiatrists
as physicians for workmens compensation, use of crags, scope of
practice, health insurance, and school accident programs.
In 1061 the Bureau of Retirement and Insurance of the Civil
Service Commission approved the podiatrists as a physician and
doctor for the Govermnent-wide service and indemnity benefit plans
under the Federal Emplo ~ees' Health Benefits Act of 1959.
The doctor of medicine, doctor of osteopathy, and doctor of dental
surgery are included in this definition. Obviously it is most difficult
for Federal employees to rationalize how the podiatrists can treat.
an injury not, connected with the employee's work when the treatment
of a similar injury which would be connected with his work is not
covered.
This seems all the more inconsistent when the services of medical
doctors, osteopaths, and dentists at present. are included under the
Federal Employees' Compensation Act.
Mr. Chairman, on two occasions during the past 10 years Federal
employees have requested the Employees' Compensation Appeals
Board to reconsider the decision of the Bureau which had not recog-
nized the services of podiatrists under the ar_t.
In both cases the determination as to whether a podiatrist was
considered a physician within the meaning of the act was not dealt
with. It was rather the opinion of the Appeals Board that the
treatment of these Federal employees was not authorized.
It is recognized that in most. metropolitan areas the Bureau has
designated certain Federal health facilities and except in major situa-
tions no doctor in private practice may `tread injuries of Federal
employees.
Tt is. however, in small communities where no health facility has
been designated that, the problem of recognizing the services of po-
diatrists is present.
Many cases are on file which clearly indicate that Federal employees
have received treatment of their iniuries by podiatrists in his private
practice since they normally would seek these, services.
In each case these services have not been compensated due to the
interpretation of the word "physician" as used in the act.
I do not think that the Congress intended this net, to be a means
of imposing distinctions, between different practitioners of the heal-
ing arts.
The determination of who is qualified to practice the carious
branches of medical science was wisely left to the legislatures of the
States.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 117
Podiatrists today are an important part of the health team and their
role in meeting the health needs of the Nation is established and
recognized.
This definitely would be in the public interest to amend the act so
that in appropriate cases the services of the 8,000 podiatrists in private
practice would be made available to Federal employees.
Mr. Chairman, I appreciate the opportunity to appear before you in
support of 11.11. 3826.
Mr. O'HARA. Thank you very much, Dr. Nyman. I am sure the
committee will give serious consideration to your suggestion. I think
perhaps we ought to review that entire section to which you referred.
Thank you.
Mr. NYMAN. Thank you.
Mr. O'HARA. Our last witness today will be Dr. Eugene McCrary,
President, American Optometric Association.
Dr. McCrary?
STATEMENT OF DR. V. EUGENE MCCRARY, PRESIDENT OF THE
AMERICAN OPTOMETRIC ASSOCIATION
Dr. MCCiIIAItY. Thank you, Mr. Chairman. I will, as you requested,
file the statement.
Mr. O'HARA. Without objection your statement will be entered in
the record in full at this point.
(Statement referred to, follows:)
STATEMENT BY V. EUGENE MCCRAIGY, O.D., PRESIDENT, AMERICAN OPTOMETRIC
ASSOCIATION
Mr. Chairman and members of the select subcommittee, my name is V. Eugene
McCrary. I practice my profession at 4500 Beechwood Road, college Park,
Md. I am president of the American Optometric Association, which represents
the profession of optometry in all of the 50 States and the District of Columbia.
Seventeen thousand practicing optometrists in the United States provide more
than 75 percent of the vision services rendered to the American public, including
those in Government service, both civilian and military.
While we are interested in all of the bills begin considered by your, committee,
our primary interest is in II.R. 2624, introduced by Congressman George P.
Miller of California. The purpose of this bill is to accord Government workers
entitled to vision care under the Federal employees compensation laws the
freedom to choose an optometrist if he or she so desires.
Some 15 years ago, under the leadership of Congressman Doughton of North
Carolina, chairman of the House Ways and Means Committee, Congress amended
title X of the social security law so as to accord the beneficiaries of the aid-to-
the-blind program the freedom to have their eyes' examined by either an
optometrist or a physician skilled in diseases of the eye. One of the results
of this farsighted amendment was the subnormal vision clinic established by
the Industrial Home for the Blind in Brooklyn, N.Y. Since then, similar clinics
have been established in various parts of the country. Among the better
known is the Lighthouse for the Blind in Chicago, 111.
One of the beneficiaries of the first clinic, Peter J. Salmon, spoke to the awards
luncheon at our annual meeting in New York City slightly more than a year ago.
I am going to take ?the liberty of reading excepts from the transcript made on that
occasion. At the beginning, he ran his fingers over his manuscript and said :
"The method I am using right now in addressing these few remarks to you is
the one used by totally blind persons throughout the world. It is, braille. I read
braille with my fingers for some 40 years, and then something wonderful
happened to me-I became the first legally blind person to benefit from the use
of optical aids-so much so that I was able to discontinue using my braille and
to read everything with my sight, even to looking up a name and number in the
telephone book."
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118 IMPROVEMENT OF BENEFITS UNDER THE FECA
The remainder of his remarks were read from a manuscript typed with an
ordinary typewriter, and now I quote again
"The thrill I exlx?rieneed was not only because of what the low-vision service
hits meant to tile. but more because there are now some 30 clinics, In the United
States modeled after the first one pioneered by the Industrial Home for the
Blind.
".1s you know, we look to the optometrist to carry on his painstaking, exact, and.
I must say, very fruitful service on behalf of these persons who are classified as
blind but who have some remaining sight. The original statistics which we
announced, of being able to help approximately 70 percent of those who are
treated through this service, has held and thousands of blind persons have bene-
fited through this service.
"Optometry has played the key role in this development, and your thoughtful-
ness in presenting this award to me today gives me the opportunity to thank
you publicly for having the vision and technical knowledge. as well as the
ingenuity, to develop the best use of remaining sight for these legally blind
pet-sons. We have been willing, with your cooperation, to overcome the skeliti-
cisin which existed back In 19.,3 when This program was first announced. and
the years that. have elapsed have proved the worth of Lids very meaningful
.service so that today it has become a part of the on-going reliabiltation proees<
in a number of agencies for the blind and In teaching universities as well as
hospitals.
`It has profoundly affected blind persons economically, socially, and, indeed.
spiritually: spiritually because it has given them for (lie flrst tltua? an opportunity
to be doubly sure of the extent to which their remaining sight e?an be used, and
because of your dedicated skill and painstaking examination, real progress has
been made in a field that hitherto was Considered it closed book.
"It is wit Ii this in mind that I Can express to you thanks to all of those who
helped us in the early days of the low-vision service at the IIIB,"
With a record like this, we feel fully justified in recommending to Congress
that Federal employees who sustain eye Injuries which are covered by the Federal
Employee% Compensation Act should be free to avail thetu.-elves of op11mCtric
services If they so desire.
It was in 1960 that Congress amended the veterans law so as to accord vet-
erans entitled to outpatient vision care the privilege of going to an optometrist
if they so desired. In the Social Security Amenchnents of 19G3, this Congres-
again provided freedom of choice to the beneficiaries wherever vision services
are specifically mauled in the bill.
On July 1 of this year New York State, one of the last Sts!ttes to do So.
amended its work pen's tntnpensntlon law to expressly make available to em-
ployees Injured In that Slate the services of optometrists.
['aliforuia is another large State which for years has afforded its injured
employees the right to seek optometric servlce?s when problems that affect their
vision are involved. There are large numbers of Federal employees In both of
these Jurisdictions working alongside of State employees. There is no reason
why optometrists services should be available to one and not the other.
These are not the only Jurisdictions by any means. Miter States expressly
mention optometry in their Compensation laws. Some States authorize replar-
ing eyeglasses but do not specify who should prescribe them. And in still
others, the term "remedial care" Is used and construed to Include optotiaetric
services.
State legislatures, attorneys general, and Insurance commissioners, however.
consistently designate the optometrist. its a physician for purposes of workmen's
compensation. Only the Federal employee cannot avail himself of this service.
We would like to believe that, no Federal employee would ever need com-
pensation under the act because of sound safety prevention 1)r-,,-rani, such as
proposed by our Maryland Representative at Large. Congressman Carlton It.
Siekles. The American Optometric Association enthusiastically endorses the
type of safety services listed in tits bill, 11,11. G57rl. Out- members would like
to participate in making its objectives a reality.
The American Olatomc?trie Asochtlion. representing a profc-.'on ,serving SO
million Americans. devotes much of its effirrls to safety programs. With your
permission. I would like to leave with you a collection of Ixasters, booklets, and
other materials on both industrial and highway vision for your further
information.
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IMPROVEME ' TM#M
The 88th Congress authorized Federal funds for the improvement of our
schools and colleges of optometry and also provided loans for optometry students.
It hardly seems consistent to foster and support optometric education and then
to deprive Government employees under the Federal Workman's Compensation
Law the right to avail themselves of optometric services.
This amendment will not involve any additional expense to the Federal
Government. In fact, it will probably effect savings, particularly in those
.cases where the skill of our profession is utilized to improve the visual capa-
bilities of Federal employees who sustain eye injuries.
It is often stated that the gift of sight is one of God's greatest gifts. Certainly,
any Federal employee whose vision is impaired in line of duty so as to bring him
within the benefits of the Federal Employees' Compensation Act ought to be
.accorded the freedom to choose an optometrist to improve his vision if he so
desires.
Before closing. I want to express my personal appreciation and that of our
membership for the recognition which Congress has accorded us during the past
20 years. It was in 1045 that Congress passed the Optometry Corps bill to pro-
vide commissions for optometrists in the Army. Today, there are close to 500
optometrists on active duty with commission status in the Army, Navy, and Air
Force. Their ranks range from ensign to captain in the Navy, and second
lieutenant to colonel in the Army. The Surgeons General of each of the three
services has a civilian optometric consultant. Two of them are past presidents
of our association and the third is a member of our board of trustees. I, myself,
hold a commission as an optometrist in the Naval Reserve Medical Service Corps.
Your attention is greatly appreciated, and I will be pleased to answer any ques-
tions you would like to propose.
Dr. MCCRARY. Thank you.
My name is Dr. V. Eugene McCrary and I am here today represent-
ing the American Optometric Association. While we are interested in
all of the bills being considered by your committee, our primary in-
terest is in II.R. 2624, which was introduced by Congressman George
Miller of California.
The purpose of this bill is to accord Government workers entitled to
vision care under the Federal employees' compensation laws the free-
dom to choose an optometrist if he or she so desires and I would like
to just quote directly from the proposed bill :
The term "physician" includes surgeons, optometrists, and osteopathic prac-
titioners within the scope of their practice as defined by State law.
The term "medical, and hospital services and supplies" includes services and
supplies by optometrists, osteopathic practitioners, and hospitals within the scope
of their practice as defined by State law.
We recommend to Congress that Federal employees who sustain eye
injuries which are covered by the Federal Employees' Compensation
Act should be free to avail themselves of optometric services if they so
desire.
State legislatures, and attorneys general, and insurance commission-
ers, however, have consistently designated the optometrist as a physi-
cian for the purpose of the Workmen's Compensation Act.
Only the Federal employee as it stands today cannot avail them-
selves of this service. We would like to believe also that no Federal
employee would over need compensation under the act because of
sound safety prevention programs, such as introduced by our Mary-
land Representative at Large, Congressman Carlton Sickles.
The American Optometric Association also enthusiastically endorses
the type of safety services listed in his bill, H.R. 6554, and our members
would like to participate in making its objectives a reality.
The American Optometric Association represents a profession serv-
ing 80 million Americans and we devote much of our time and effort
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120 IMPROVEMENT OF BENEFITS UNDER TFIE FECA
to safety programs, and at this point I would like to comment on my
concept of where we fit into this program,
Ti. seems to ine that there are four basic phases involved in the ad-
ministration of this act. There are four considerations. One would
be the preventive phase, which is the one that Congressman Sickle's
bill would help to foster, the idea of preventing accidents in the first
place and laying a great deal of stress on prevention. Then, of course,
the second phase is the occurrence of accidents, in terms of sequence.
Then there is the treatment- phase which is primarily the physician's
function, and then fourth is the rehabilitation phase, which is the desire
to restore this employee to as high a functional level of ability as pos-
sible, so that he can become a productive worker once again, and Ave feel
that the optometric servic es should be available.
We have a role to play in the preventive phase, particularly in
terms of preventing industrial accidents and this type of thing, and
in terms of vision, as it. affects accident proneness---.and the fourth
phase, the rehabilitative phase=, in helping this employee to get back
to a good level of functional efficiency, so we feel that we do have a
role to play and something to offer in this matter.
I appreciate very much the opportunity to appear before your com-
mittee. I realize that you are pressed for time. I just want to ex press
nay appreciation and that of my colleagues for the privilege of ap-
pearing before your committee and would be very happy to try to
answer any quest ions that you or the commit tee may have.
Mr. O'IIARt. Thank yoit very much, Doctor McCrary. If you could
stay right where you are and if the other witnesses who have testified
this morning could step forward and take seats at the witness table
I will ask my colleagues if they have any questions to direct to any of
you or to all of You en bane.
Mr. Qt it.-. I titid it interesting that the optometrists are in favor of
farsighted amendments. It reminds me of the State legislature
where the dentists didn't. like their dental bill because there wasn't
enough teeth in it.
Mr. Cxtr>aso:xs.Mr. Chairman, T think all of that should be stricken
from the record.
1Ir. M.IRTI-N. air. Chairman, I regret that Ifr. "rolkonair was obliged
to at tend another hearing and I ain here in hiis stead.
Mr. Quai:. I would like to ask one question, this one serious.
Mr. O'IL:nias. Proceed. We liked your last question, though. See
if you can match it.
Mr. Quip. I List want to ask, Mr. Nilan, on page 3 of your testi-
mony you say thiat you have doubts about the bill. You note the. use
of t.ho Consiuiier Price Index and the judicial review concept in Mr.
O'IIaL,a's bill and you leave it with that, by saying that these doubts
have been clearly stated by previous witnesses on both counts.
I think that the use of the Consumer Price Index as proposed in
MR. 10721 was clearly stated by previous witnesses to be inadequate,
but I don't think the same is true with judicial review. After listen-
ing to the testimony I came to the conclusion it. was a good idea and
-%-oil can see that it wasn'A, very clearly stated to convince me.
I wish you would write me a letter or a statement giving your views
on it,, because. I think as a person looks into this in this context that
judicial review is a very good idea, and I strongly support. Mr.
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O'Hara's bill on it, so because I feel that you have given good testi-
mony to other committees of this Congress and respect it, I would
appreciate it if you would go into a little more depth on this for me,
Mr. NILAN. Mr. Chairman, I would be happy to submit a supple-
mentary statement going into more detail on this.
Mr. O'I-IARA. I wonder if you could do that.
Mr. NILAN. I could just comment in response at the moment. You
notice we suggest doubts. We feel, just picking one example, that the
judicial review gets involved in additional cost and expenses as far as
our people are concerned in being represented before such a judicial
review.
We would like to believe that it can be accomplished a lot more
simply without that. The present review system has been very fair
and reasonable in our opinion.
Understand, we are not opposed to this principle, but we do have
some doubts as to whether it would perhaps accomplish what it is in-
tended to. I would be happy to submit an additional statement.
(Information to be furnished follows:)
UNITED FEDERATION Or POSTAL CLERKS, AFL-CIO,
Chairman, Select Committee on Labor, Committee on Education and Labor of
the U.S. House of Representatives, Washington, D.C.
MY DEAR CONGRESSMAN : On September 15, 1965, I appeared before your Select
Committee on Labor which was considering Il.11. 1.0721, and related bills to
amend the Federal Employees' Compensation Act. During my presentation sev-
eral members of the committee indicated an interest in a more detailed position
statement concerning our testimony and some doubts we suggested as to poten-
tial benefits of the judicial review concept as proposed in II.II.. 1.0865.
We agreed to submit an additional statement on behalf of our organization,
and as concerned with the judicial review concept in response to requests by
members of the committee, as soon as possible.
However, please accept my apologies for the delay in writing you in this re-
gard. Because of other legislative commitments and travel Outside of Washing-
ton on union affairs this letter necessarily has been delayed until now.
I would like to reiterate our original position in our testimony on September
15, 1905, that we are not opposing the judicial review concept as such, but rather
suggested that the committee study the disadvantages, as well as the advantages
to employees of establishing judicial review of employee compensation decisions,
as I am sure the committee will do, before recommending legislative action.
It has been suggested that an agency serving the public through adminis-
trative boards of review should not, ordinarily, be placed in an adversary posi-
tion, much less becoming involved as an opposing litigant, with respect to cl.ai.m-
ants, which could follow from establishing judicial review of compensation
appeal board decisions. This consideration is based on the premise, that no :mat-
ter show carefully one guards against it, the philosophy of judicial review would
filter down through existing administrative adjudication processes to the dis-
advantage of the individual claimant.
It may further be argued that since one purpose of a judicial review would be
to make a final disposition of points at issue, any existing liberality of procedure
in reopening or reconsidering claims would be impaired. Another consideration
which necessarily must be recognized in judicial review of administration actions
is that rigid procedures would be established as a 'result of judicial decisions
which the Secretary of Labor and the administrators of the Federal Employees'
Compensation Act would inevitably be forced to accept and follow in future con-
sideration of employee compensation claims and appeals.
Also, a new area of uncertainty could be created by the introduction of judi-
cial review of employee compensation decisions with the possibility always exist-
ing that the courts may overturn or strike down regulations or instructions
affecting literally thousands of compensation cases with consequent large-scale
damage to the best interests of claimants.
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In addition, the consideration of additional expense to an employee utilizing
(lie judicial review for appeal of a compensation decision could be considerable
and such a court, in considering compensation cases, could find itself confronted
with a tremendous workload and subsatuent extended delays in rendering deci-
sions within reasonable periods of time.
Finally. unless the judicial review concept would also have access to expert
medical counsel for analyzing and interprolbig medical findings such at court
might be severely limited in its ability to effectively consider and evaluate claims
with equity and jus=tice to both the claimant and the (;overnment.
We appreciate this nppnrttinily to submit these additional thoughts for con-
sideration by the committee, and as mentioned In my opening statement. It is
these considerations which prompt us to question the desirability of judicial
review.
8iueerely yours,
t'.LTRICK .1. \itax, Lcgixlutirc Director.
Mr. Quit,. If a person has been turned flown he would like to have
some different faces to appeal to. Thank you, ilr. Cliairnuut.
Mr. O'IIABA. I eeriailily want to state itiY appreciation for the wav
the gentleman froth Minnesota has been going on this issue. I couldnt
add anything to it. `'hit( is bipartisanslult, you see.
Dr. \ ral,~ti, I might add, MIr. Chairman, that I also happen to collie
front the great State of Minnesota so I ant very pleased to cooperate
with the. gentleinan front; fnnesota.
Mr. O`IIURA. You have a real good one there.
Mr. DAN1EI,s. Mr. ('1toiI'll ntn
Mr. O'I I:1It:1. Mr. Daniels,
Mr. DANUU.s. With respect to the professional witnesses who ap-
peared here this morning on behalf of the podiatry association and
the optometrists, I would like to direct niy question to both of you
gentlemen.
Are qy_ou licensed in each of the 50 States of the Union ?
Dr. 1yYMAPv. Congressman Daniels, speaking for podiatrists we are
licensed in every State. to provide a medical and surgical service.
Mr. DAsIELs.And in each State you are roiisidered or classified in
the role of a physician in that you may not only diagnose, but also
prescribe ?
Dr. Nr3r. N That is right..
Ir. DA_tiIEI-s. Is that. t rue n your case also?
Dr. :~IcC'i av. Speaking for optometrists, Mr. Daniels, optom-
etrists are licensed in all 50 States and the District of Colunibia.
The last law which was enacted I believe was the District of Columbia
bill in 1924, so there is statutory regulation for the practice of the
profession.
Mr. DA I:EI.s. Has any reason ever been given by the Government
as to why you may not treat an injured person for his injury that, is
related to your field of activity?
Dr. Mc_Cininy. NNo reason except that the word "o itommetry`-" did not
appear in the statute and that by administrative directive we were
excluded from inclusion.
Mr. DANIELS. Just for the record, could you give this committee the
necessary requirements or basic requirements in your education in
order to qualify to be licensed?
Dr. McCr.ARY. To practice optometry?
:dir. DA`-1F.L4. In both cases.
Dr. McCltaRRY. Yes, sir; I will be very happy to. In the present
curriculum in the schools and colleges of opt onset ry, we have both a
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IMPROVEMENT 0
5- and a 6-year program at college level in operation at the present
time.
Ali of our schools are in the process of moving to a 6-year level at
the college level. We have 10 schools of optometry in the United
States, several of them associated with very great universities. Ohio
.State University and the University of California. have colleges of
optometry which are training institutions for our profession.
The minimum requirement to matriculate, to enter a school of
optometry, is 2 years college level. Most of our graduates are enter-
ing with a bachelor's degree and then are completing the 4-year opto-
metric curriculum, so that we are speaking at college level of about a
total of a minimum of 5 years and now in most instances 6 years, and
in the very near future the standard is going to be 6 years of education
at the college level.
Mr. DANIELS. Upon the completion of your college work, is there
a requirement in each of the 50 States as well as the District of
Columbia that you submit to an examination and be licensed by the
State?
Dr. MCCRARY. Yes, sir ; there certainly is. I had the privilege. of
serving on the Maryland Board of Examiners on Optometry two
terms under appointment by Governor Tawes. We, do have in every
:State and in the District of Columbia an examining board which
requires a new graduate to take examinations in order to determine
his proficiency- and to obtain a State license in order to practice, and
the board in most States has some power to do the follow-Lipwork
that is necessary in. terms of. infractions of the law, that sort of
thing.
(The following letter was submitted for the record:)
SEPTEMBER 16, 1965.
Hen. ELMER J. HOLLAND,
House of Representatives,
Washington, D.C.
'DEAR CONGRESSMAN HOLLAND : During hearings yesterday on H.R. 2624 Repre-
sentative Daniels asked about the profession of optometry and the education
needed to practice the profession. The following information is furnished in
.answer to his question:
The optometrist, doctor of optometry (O.D.), is a person specifically educated,
trained and licensed in all 50 States and the District of Columbia to examine
the eyes and related structures to determine the presence of vision problems,
eye disease, or other abnormalities. He prescribes and adapts lenses and other
optical aids and may use visual training when indicated to preserve or restore
maximum efficiency of vision.
Optometry is a distinct profession, separate from medicine, because the vast
majority of refractive errors and anomalies of vision' occur in healthy. eyes.
Ophthalmologists and oculists, who are licensed physicians, specialize in : the
medical and surgical care of the eyes and may prescribe, drugs and other
treatments.
At the present time there are about 17,000 optometrists in full-time practice
in the United States, an average of 1 per 11,400 population. While ophthalmolo-
gists also provide optometric services, the number of medical doctors trained
in this specialty is only about one-sixth as large as the number of optometrists,
and they must carry the burden for surgery and treatment of diseases of the
eye.
Recent advances in the field of optometry have been so numerous hnd extensive.
that the regulation 5 years of college-level training has been stretched to its limit
in order to incorporate these advances. Seven of the ten schools and colleges
of optometry In the United States have already increased their programs to 6
years of university training beyond high school and the other three have an-
nounced plans to go from 5 to 6 years within the next year.
55-A 30-f 5--9
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of BENEFITS UNDER TIE FECA
These programs represent 2 years of prvoptometry university education and
4
years In profcssi.omil courses leading to the doctor of optometry degree, which
degree is grautecl by all schools and colleges of optometry. Course subjects typi-
cally include geometric, physical, physiological, mechanical, and ophthalmic
optics; general and ocular anatomy; general and ocular physiology; general and
ocular pathology, physiology ; bacteriology; theoretical and clinical optometry
orthopties and visual training: and industrial and occupational vision,
To become a Iicrnsed optometrist today it is necessary to pass a rigorous
State board examination in the State or States where one wishes to practice.
Sm'h examinations are open only to graduates of the 10 schools of optolnerty, all
of which are ac""redited by the American Optometric Association's Council on
t)pt.otnetric I-ALicit tion, the olilcial accredithig agency recognized by the -National
Commission on Accrediting. The license of an optometrist moat be renewed
annually. In a number of `)lutes renewal of a license is dependent upon the
optometrist completing a stipulated number of hours of postgraduate education.
Over half of the students now enrolled in optometry schools completed more
than 2 years of college before matriculation and approximately one-third earned
bachelor's degrees before entcring opt unmet ry schools.
The two booklets with this letter, -What Is An Optometrist?" and "Four Byes
and Opinou'try" provides further Information about the profession for those
that are interested. In addition. I am sending one each of ?,OA's kits of mate-
rial, on motorists' vision and occupational vision, which illustrate the profes-
sion's great interest in accident prevention and worker efficiency.
It was a pleasure to appear before your subcommittee yesterday. I look for-
ward to learning that the members have acted favorably upon 11.11. 2624 as intro-
dueecl by Cougressanaan George P. Miller.
If you believe there is a need for additional information, please do not hesitate
to contact our Washington office. The telephone number in ST 3-4010 and it Is
located at 102017thi Street NW,
Thanks for your Interest in the profession of optometry and your concern for
the visual welfare of our Federal employees.
Sincerely yours,
V. EuoFxs McCa-ear, O.D., President.
lie. D. xrr;l.~. Dr. \ytuan, would you care to respond to the same
question ?
I)r. The. training program for podiatrists is standardized
at 6 tears in all our colleges with ?2 years of prepodiatry courses fol-
lowe l 1iv it -t-rear, degree-conferring coupe,
All our colleges are accredited be' our Council on Education which
is recognized by the Office of Education, Department of Health, Edu-
cation, and Welfare, as the national accredit ing body for podiatrists.
MIr. J).c rrrr What are the State requirements?
Dr. NY3Yax. The State requirements are that one must have grad-
uated from one of our accredited colleges in order to take any one of
the 50 St ate. boards or here in the District of Columbia.
Mi'. D:ti~ n:LS. In other words, each State makes it mandatory to pass
a State board examination before you can qualify for a. license.
Dr. NYMAN. Yes, sir.
Mfr. DANIELB. As well as the District of Columbia?
Dr. i1'T3fAx. Yes, sir.
Mfr. DANIELS. 't'hank you.
Mr. O'IIARA. Mr. Hathaway.
Mr. ILATIIAwAr. Mr. Quie and Mr. Daniels have. preempted my
questions. I am concerned with both matters and will appreciate the
statement of MIr. Nil an with respect. to judicial review and I appreciate
the answers given by representatives of the podiatrists and optoan-
etrists.
Mr. O'ILvt:,, If I may ask, during the statement made by Dr. Mc-
C'rarv with respect to tote role of the optometrist under the Federal
Eniployees' Compensation Act, he divided the phases of the act into
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IMPROVEMENT OF BENEFITS UNDER THE FECA 125,
four and suggested the optometrists' role was in the field of prevention
and also in the field of rehabilitation and he excluded the optometric
role from the field of actual treatment of a traumatic eye injury.
I wondered if the podiatrists, accepting Dr. McCrary's analysis of'
the law, would agree with the optometrists with respect to their role?
Dr. NYMAN. Yes ; we would feel it is quite similar in these various
parts of the program, not only in treatment, but prevention, safety
programs, and so forth.
Mr. O'HARA. With respect to the judicial review question, I have
noticed that some employees' organizations have endorsed my pro-
posal, while others have either been silent or expressed opposition, or
at least concern. I think we are going to have to really look into that
question and analyze it thoroughly.
Obviously I favor judicial review or it wouldn't have been in the
bill. I am willing to reexamine it, but I suspect my conclusions will
be the same as it was the first time.
I notice there seems to be a good deal. of agreement on this question
of the schedule injury, as to making uniform the treatment of a sched-
ule injury involving the loss or loss of use of a limb, whether or not
there is other bodily injury accompanying it.
Directing this to the employees organizations representatives, are
there any of you that find any disagreement with the provisions of ray
bill that propose to do that ?
(Witnesses shook their heads.)
Mr. O'IIARA. Well., gentlemen we are due downstairs in the other
hearing in 5 minutes and I want to really thank you for putting up
with our rather summary proceedings today and I apologize to you
again for not giving you an opportunity to express yourself as fully as
I know you are capable of doing.
I do assure you, however, that your positions will be given careful
consideration by the subcommittee.
Thank you very much.
Dr. McCRARY. Thank you Mr. Chairman.
Mr. O'HARA. The Select Sbcommittee on Labor of the House Com-
mittee on Education and Labor will stand in adjournment at the call
of the Chair.
(Whereupon, at 10:57 a.m., the hearing was recessed, subject to
call.)
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IMPROVEMENT OF BENEFITS UNDER THE FEDERAL
EMPLOYEES' COMPENSATION ACT
THURSDAY, SEPTEMBER 16, 1965
HOUSE OF REPRESENTATIVES,
SELECT SUBCOMMITTEE ON LABOR
OF TIIE COMMITTEE ON EDUCATION AND LABOR,
Washington, D.C.
The subcommittee met at 9 a.m., pursuant ,to recess, in room 2261,
Rayburn House Office Building, IIon. James IT. Scl:ieuer presiding.
Present: Representatives Scheuer, Daniels, and Gibbons.
Staff present: Jim Harrison, staff director; Michael J. Bernstein,
minority counsel; and Susan M. Parry, clerk.
Mr. Scjinuxi. The comniitt.ee will, come to order.
This is a hearing of the Select Subcommittee, on Labor concerning
the amendments embodied in H.R. 1.0721, introduced by Congressman
Hathaway on behalf of the administration, and H.R. 10865, intro-
duced by Congressman O'Hara.
The first witness will be Mr. Samuel 1-Iorovitz. Mr. Horovitz,
would you identify yourself and then proceed with your testimony?
You can give your statement in full if you wish or, if you wish, your
statement will. be printed in full in the record and you can summarize
your remarks orally, at your discretion.
(Statement referred to follows:)
STATEMENT BY SAMUEL B. HOROVITZ, WORKMEN'S COMPENSATION SPECIALIST AND
The obvious intent of this bill is to do the following :
(1) Increase the weekly payments to Federal employees under the Federal
Employees' Compensation Act (as amended). (Sees. 201, 202, and 203.)
(2) In death cases, to allow orphaned children who are students actually being
educated or trained, on a full-time basis, to continue to receive the benefits as
a child of the deceased until 23 years of age, instead of 18 years. (Sees. 204 and
205.)
(3) To give the Secretary of Labor additional power to determine the nature
and extent of proofs and evidence required to establish an old or new case. (See.
200).
(4) Hereafter benefits are to increase in accordance with the cost of living, for
the older cases by providing for automatic increases according to the annual
change in the Consumer Price Index published by the Bureau of Labor Statistics.
(See. 301.)
(5) To limit these increases to Federal employees and not to extend them to
military personnel, etc., but to extend them to employees of the government of
the District of Columbia, other than pensionable members of the police and fire
department. (Sec. 401.)
(6) To allow such increases according to the Consumer Price Index, but not to
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. t l? BENEFITS UNDER THE FECA
(7) These Increases generally are not to be retroactive, but are to apply to
such contimuiaig or future paynielits (on old or new injuries) as are due from the
date of cuaetuwnt. (See-103.)
.Honey increases
Throughout the country. notably under Stale workmen's compensation acts,
as well as under Federal acts, the weekly payments generally have been too low
to provide for subsistence of the injured worker and his family.
The present payments consisting of a nasiinum of $Z2,,5 per month and a mini-
mum of $150 per month (unless the employee's monthly payment is less) was put
into effect on October 14, 19-19, and there has been no increase since.
It is self-evident that a maximum to the employer of $3i monthly (or $121.15
weekly) in 19-10 is clearly inadequate 16 years later. The same applies to pay-
inputs to dependents (maximum, $420 monthly, raised to $346 monthly).
Whether the niaximuut to dependents should be increased merely to $546, and
for the employee himself to $x;85 is for your Select Subcommittee on Labor to
say. Personally, I think it is inequitable for a high wage employee of the Gov-
ernment, receiving (for example) $16,000 per year, to receive a maximum of $685
per month, or about $S,'200 per year, which is only about one-half of his wages
when the statute (see. 2) uses the measurement of two-thirds of his wages, but
Ihis $Gh5 per month will be the most any injured employee can obtain (see see.
Get. All employee whose pay today is $60 weekly, even with this new amend-
ment, will continue to he paid $10 weekly only. This amendment helps merely
the, highly paid worker.
Labor leaders nationwide have long been requesting a straight two-thirds of
felt wages, and I would suggest that the only maximum which should be put
on the Federal Etuployces' Compensation Act Is that wages in excess of $25,000
per year shall not be considered In computing tie two-thirds due the injured
employee.
Educational benefits-to age 2.3
The provision to help-siudeuts and trainees is obviously a just one, and fol-
lows the adminlstralion's clear Intent to help students and trainees hereafter.
Personally, I would not limit educational help to `23 years of age, because some
of these parentless children may want to become doctors or enter other pro-
fessions, where the average age of finishing is nearer 25 to 26 years of age. I
would make the age limit 26 instead of 23. but certainly feel that the administra-
tion is modest in being satisfied with all increase from 18 to a maximum of 23
years of age.
1lrlroactrritil
The provision of section 403 to allow future payments as they become due and
give the benefits of the increases, even for old injuries on or after the enactment
of this new arnaendntent. Is crrtain]v a fair one.
Ili my own practice (covering 43 years as a workmen's compensation Trial at-
torney. I also have been assistant professor of law. and as a lecturer on work-
men's compensatlon throughout the world). I have been appalled by the number
of cases coming to my attention in which the employee is receiving for less than
subsistence, because the compensation payable in 1965 remains the sane as his
early injury, for example, in 19 40 when $22 a week was the maximum. To
illustrale: the .Massachusetts workmen's compensation rate at the present time
is $53 per week, plus $G for each child and $G for the wife. ]sigh wage men
with ninny children, therefore, can receive $fS0 to $100 per week. However, my
olf]ce I IIorovitz. Petkun. Rothschild, Locke & KistinI has numerous cases where
the injury goes back 15 or more years ago when the weekly rate was very low.
and in some no provision was then made for the wife and children, and the poor
eng4oyee is receiving $30 per week or less, and cannot po_ ibhy support his wife
:iaol children. and has to have help from local charities. In short. the taxpayers
arc' called upon to support an enililoyee, instead of the industry in which lie was
injured.
11 ixcrlluru?otts
\'l of tLc 1-151 of the lirurisinns of idle hill H.R. 10721 are, in my opinion, needed
:cod f think ('ougressman Ilalhaway and the administration ought to be con-
gratulaaled on filing such a modest bill; although, personally, I would recommend
even higher monthly payments and a longer period for those parentless students
whose future education will probably run to 26 years of age.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 129
II.R. 10865
This bill, filed by Congressman O'Hara, concerns an entirely different matter.
Briefly, it provides for the following :
(1) It clarifies a matter relating to disfigurement. (Sec. (a), p. 1.)
(2) It provides, in effect, that after the period for which the employee has
received scheduled compensation if he still remains totally or partially disabled,
he shall continue to get further periodic disability compensation payments. (Sec.
(b), pp. 1 and 2.)
(3) It gives a widow (or a dependent widower) who remarries, 2 years of
compensation and stops all further compensation payments. (See see. 2.)
(4) It gives a minor time until he reaches his majority before he is bound by
the clause that he has to file a claim within 60 days, and it widens the group of
latent disabilities which justify a late claim. (See secc. 3. )
(5) It permits the Secretary of Labor to make regulations governing hearings
to be held.
(6) It provides, in effect, that if an employee's claim is denied hereafter. by
the Federal Bureau, he shall have a right to a hearing, and at the hearing evi-
dence may be introduced, and the decision shall be based on the evidence adduced
at the hearing. (See sec. 5.)
(7) It also provides that if the employee finally loses out, there may be a
review in the U.S. district court which cannot change the facts if they are
supported by substantial evidence, but presumably the court on appeal has the
right to reverse any rulings of law. However, the Secretary can have the case
remanded right after it is entered in court, to take additional evidence, and then
modify or affirm his findings, and both sides can then appeal from the lower
court, on questions of law, to higher courts, as in other civil actions. (See
sec. 6.)
(8) These amendments, if enacted, will be rdtroactive in some respects and
not in others. (See sec. 7.)
VIEWS OF ATTORNEY SAMUEL B. IIOROVITZ
Permitting formal hearings for first time in Federal employees' cases
Every workmen's compensation act in the United States, except this Federal
employees' act, provides for a formal hearing, with both sides allowed to pro-
duce witnesses, held before an impartial commissioner or hearing officer (or, in
a few States before a judge) in the first instance. In most jurisdictions (except
the Longshore Act), if a claimant loses below, he can have a review before 3 to 5
impartial commissioners, both on questions of fact and of law.
Beyond that, he can appeal to the courts, usually on questions of law only.
Such procedure is considered essential to "due process of law" both under State
nand Federal constitutions.
However, for nearly 50 years, employees of the Federal Government who
receive injuries while in 'the performance of their duties, have been considered
as inferior citizens, so far as having the right to a hearing and to use the courts.
Up to now, in nearly every case, the so-called hearing consists of papers (forms
of various kinds) being filled out and mailed to the Bureau. Medical reports
must (where needed) be sent to the Bureau, and some official, acting in the name
of the Secretary of Labor, then hands down a decision, and if he rules that pay-
ments should be made, they are made. Twenty years ago, if that official signed
a decision denying payments, there was no appeal to any higher body.
As a result of proltests, most of them asking for formal hearings and court
appeals, a compromise was reached. On July 16, 1946, an Employees' Compen-
sation Appeals Board was established, in Washington. Most, employees have
since found that they were unable to pay the expense to go to Washington, or
even to hire attorneys, Furthermore, there was no provision in the Bureau for
taking testimony, and the E2nployees' Compensation Appeals Board decided the
case on the same record sent to them by the officials of the Bureau. Originally,
all the officials were localted in Washington, but during the last few years, the
work has been decentralized, and there are 10 regional offices throughout the
United States-but the local regional official is still final, unless the Appeals
Board in Washington reverses him on the facts or on the law.
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30 IMPROVEMENT OF BENEFITS UNDER THE FECA
Why formal hearings and court appratx arc provided In this bill
Inuring the last fete years, the Employees' Compensation Appeals Board has.
In substance, affirmed at least W percent of all [he decisions below. Their rid-
ings on the facts and on the law are final, and the employee has no right to go to
any court, according to rulings made by the Bureau of Workmen's Compensation
handling Federal cases.
There are State workmen's compensation nets in all of the 50 States. There is
also a Federal Longshore Act. As indicated above, under each one of these acts,
an employee who has been denied compensation has [lie right to have a full
hearing before an impartial hearing officer who liar no relation to and who is in
no way tied up with either the Insurer (or fund which does the paying) or the
employer Involved, or with the employee. Most States also provide that if the
impartial hearing officer denies payments, the employee or dependent can appeal
to a reviewing board of three or more impartial persons. If the employee loses
ia.ain, he can go before the court, and in most States the courts are bound by
questions of fact if supported by subst:ti[tiaal evidence, but no court is bound by
any ruling on the law made below.
After 50 years of experience, It is clear that the courts have been far more
liberal on law questions than have the industrial conunlssions or hearing officers,
and the courts have reversed the indusirhel vommisslous time and time again and
have liberalized the law. See "Workmen's Compensation : Half Century Judicial
Developments." In the December 1961 issue of the Nebraska Law Review (vol.
41. No. 1. lap. 1 -100). by Samuel B. Ilorovitz.
In short, employees of private emlloyers have been given due process of law
to twit: (lie right to an impartial hearing, and the right to the use of the courts.
For years, there have been criticism of the Federal act for Federal employees
because of the lack of an impartial open hearing with the right to produce wit-
nesses and Inter to appeal to the courts. See "Horovit?r, on Workmen's Compen-
sation," page 177, note 1).
Bureau attorneys (under the Federal Employees' Compensation Act) used to
china that It was perfectly constitilt ionicI and legal to give inferior procedural
rights to Federal employees. because the gloving of Federal comiivn.sntinn was it
"gift" for which the employee paid nothing. At that time, in 1916, when the net
first was inaugurated, the Federal Government could not be sued for negligence
or otherwise, either by its employers, his kin, or by other "third parties." "The
King could do no wrong," and therefore it was thought perfectly proper not to
give the injured employees an impartial hearing or any procedure except merely
a paper one. Hence so-called informal trials, by written reports and other docu-
mentary evidence became the sole procedure. .\s far hack as 194-1, when my
textbook., "IIorovitz on Workmen's Compensation." was issued, it stated that.
.? * * this should he changed by Congress to allow formal evidence at the
employee's request and to allow appeal." Horovitz. supra. page 177. note 0.
There are stronger reasons for doing this In lilt,:,. The Federal Government
has now permitted itself to be sued and has passed the Federal Tort Claims
Act. The Federal Employees' Compensation Act, however, takes away the right
of the employee and his next of kin, dependents. and spouse (even though legally
"(hird parties") to sue for any injury he receives "while in the performance of
his duty" for his employer, the Government. See section 7(h). Today, the
Federal employee as well as his kin. etc.. loses valuable common law rights and
all rights of every kind to sue the Government. The moment he becomes a Fed-
eral employee he and his kin must take exclusively the niggardly weekly amounts
(with nothing for pnin and suffering) specified In the Federal Employees' Com-
pensation Act.
Therefore, the part of H.R. 10LSt',, which provides for hearings with evidence
taken, and later court appeals, is excellent ; but It does not state or make clear
in section . of this bill, whether the Secretary of Labor can appoint the very man
who denied the award to then become the bearing officer. This obviously would
he unfair, as the hearing officer should certainly be an impartial, disinterested
person, not connected with the Bureau or the person who made the original denial
of coin pelisri 11 rill.
An appeal on law questions to the U.S. district court Is proper. But section 6
(p. 5) of the bill permits the Secretary of Labor Land In this ease, it really means
the moon in the Bureau who denied the claim) to take back the file and order
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additional evidence. It means that after the employee has hired a lawyer, and
gone to court. the Bureau, or whoever decided the case, can take the case back,
cause great delays, make changes in the decision, without paying the court costs
or the claimant's lawyer. This may be corrected in part by a provision (which
is found in many of the State worknien',s compensation acts) to the effect that if
the employee eventually wins his case in whole or in part, the court shall add to
the award the reasonable costs of attorneys and the other expenses involved.
This is also doneby the Federal courts in appeals in longshore cases.
I recommend that Congress direct the Secretary to arrange (1) for impartial
hearing officers in the 10 regional offices, and that these regional officers be in no
way connected with the Bureau ; (2) that the hearings procedure shall be similar
to that provided by State industrial commissions, and under the longshore. act,
that is, the hearings shall be de novo :(based solely on the evidence produced at
this hearing), with the employee presenting his side, and the Bureau presenting
its side.
.Schedule compensation, supplemented
The amendment relating to further compensation after the employee has' re-
ceived his ,scheduled compensation and is still disabled (sec. 5a) is an excellent
one. It follows a ruling made by the U.S. 'Supreme Court, and it is discussed at
length in my article, "Workmen's Compensation: Half Century of Judicial De-
velopments," on pages 94-1138. See Alaska Industrial Board v. Chugach Electric
Association (356 U.S. 320 (1958) ). See also Van Doi-pot v. Haven-Busch Co.
(350 Mich. 135, 85 N.W. 2d 97 (1957)).
In short, there is no reason why, if a man has lost his arm or leg, or the use of
another part of his body, and at the end of the,period, specified for such a loss, he
is still totally and permanently disabled, he should be thrown on charity. In-
dtlstry destroyed his earning capacity, and industry, not charity, should carry
the financial burden.
Remarriage amendment
The provision to give a widow or dependent widower 24 months of compensa-
tion, on remarriage, is common throughout workmen's compensation acts in the
United States. Many widows have failed to remarry because theywould lose
all of their compensation, and continue to live with "boy friends," or do other
things which have resulted in bad side effects. Allowing 2 years' compensation, in
my opinion,'is the minimum that should be given, as the Government saves a great
,deal of money by the remarriage.
CONCLUSION
In short then, H.R. 10865 is an excellent bill, but the matter of who shall
-conduct the hearings and thus provide for an impartial hearing, shouldbe
spelled out more clearly. In addition, it is not.clear whether the bill intends
to do away with the Employees'. Compensation Appeals Board. It is essential
to have impartial hearing officers to hear the case de novo, if it has been turned
down by the Bureau. The Bureau can be considered in the same light as a
private insurance company, to wit : it simply decides whether it will pay in the
first 'instance, and if it pays there is no need for any further action, and, the
hiring of lawyers.
If, however, it denies an award, then the employee should have the right to
an impartial, independent hearing; and it can be provided that the Employees'
Compensation Appeals Board or a similar tribunal, should travel to the various
regional. offices and act as a reviewing board both on the facts and the law,
before the ease goes to the courts. This is what happens in nearly all of the 50
States' workmen's compensation acts. Or local appeals boards can be set up in
each of the 10 regions. If the present Appeals, Board is kept, .it will necessitate
exteusi.ve trfcvel. Employees should not be compelled to go to Washington (as
they cannot afford to do, so) to argue.their reviews; and it would be much better
to have the Employees' Compensation Appeals Board (if not abolished) come
to the various regions if there are appeals from the impartial hearing officers.
If and when this is done, Federal employees for the first time in nearly 50
years will begin to receive due process of law.
Respectfully submitted.
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STATEMENT OF SAMUEL B. HOROVITZ, FORMER WORKMEN'S COM-
PENSATION ATTORNEY, MASSACHUSETTS FEDERATION OF
LABOR, AND COFOUNDER OF THE AMERICAN TRIAL LAWYERS
ASSOCIATION
1Ir. ITonrnrrrz. Gent.leinen, 1 am glad to be Isere at the request of
the IIonorable Elmer J. Rolland, the chairman of the Select Subcom-
mittee on Labor, and to try to help the 2i/ million Federal employees
who now coupe under what, is known as the Federal Employees' Com-
pensation Act.
Two of your members have filed bills to help fhem. Congressman
IIathaway has filed a bill to try to help them in the amount of money
that they receive, to see that. if they are injured they get. enough so they
can live, not comfortably, but on subsistence.
Congressman O'Ilara has filed what. to me is an equally important,
if not more important, bill to sec that they do get. tine money to give
them justice, to see that they get a hearing if they are denied money
improperly.
I will take tip the two bills. The easier one, of course, is Congress-
mau h athaways bill. At one time the Federal Employees' Compen-
sation Act, way back in 1916, used to be regarded as quite a model.
It was quite an act when it started. I ill) acquainted with it be-
cause I spent, the last 43 years of my life exclusively in workmen's
compensation. I have written 1:5 books on (lie subject, mostly for a.
large organization on inally called XACCA, a bar association, now
railed the American Trial Ta wyen, Association with 20,000 members
in it, and m3? specialty has been worktuen'scompennsation.
I have been for 33 years the attorney for tlie. Massachusetts Federa-
tion of labor in wor61en's compensation. I am that old that I was
attorney for President Green of the AFT, in workmen's compensation-
T spent my life on it. I was fortunate to hear the unions talk.
ITnions generally suspect lawyers. They think that lawyers mix into
compensation when they shouldn't be there. I am going to address
myself to that sublcct.. 'T'hat is some were a little bit afraid of this
judicial review business, though I have explained it to them since and
they are in favor of what I ani going to tell you.
I have always felt that the 1016 act that you passed for Federal eau-
ployees was a very fair a act. At that time it was ahead of any act
in the, country because you not only gave a man two-thirds of his
wages, but you added a~little over R percent so between him and his
wife and children if he was married he got 75 ][nerceant of his wages.
There is no Mate in the l "Ilion in 1916 that had the courage to go up
to 75 percent.
fr.:ScIIEu-m.. Excuse me. how did that compare with comparable
statutes abroad, in England or in (lie. Scandinavian countries?
11r. ITonovprr. I have lectured abroad. I have lectured in 17 coun-
tries abroad. I just got back from lecturing in nine countries in
Africa. This has been my lifework. There, of course, money is
entirely different. If Federal employees got as high as $20,000 as you
get here, they would just be amazed.
Their standard of just is much lower.
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It is no longer a gift. to them. Today it is not fair to say that you
are doing a favor to the Federal employees. They work for You
like they work for private employers and there are ?21,4 million.
'T'herefore, No. 1, Volt should see that they get- subsistence. You
know plenty of em[rlovees of the Federal (ioverttntent who are getting
$16,000 a year. I tatket.hat- figure because yottr act says two thirds and
then np t o T 5 percent if they Bret married.
The highest any human being can get under your present act now
is $7,000, $7,020-585 dines 12.
The appropriation is to increase theta to $156 a week. It isn't a
tremendous increase, to S8,220. That is the maximum. You say two-
thirds u[i to 75 [wrc?ent, but not exceeding $000-and-some-odd, even in
this hill, so that (lie than who gets $16,000 a year is only going to get
50 percent, under this brtutdnew bill, and, therefore, I suggest You go
one step further.
Have it straight two-thirds. Wily put. a limitation on it? Why
not it straight two-thirds? If a man had gotten $18,000 a year. a
paraplegic, working for the Government:, why shouldn't lie get. $12,000
a =ear, a straight two-thirds, and if lie is married give him the addi-
tional amount. Bring pine up to 75 percent..
Massachusetts too Bring gone to 100 percent. of worker's wages-100
percent of wages. Unfortunately, we have had a limit of $53 for a
singlo tmtn and 46 for the wife and $6 for each child not exceeding
the ntaxiniuni amount, so it doesn't do the high wage man any good,
but }}iercentagewise we are higher than that.
There is one state that gives $150. Arizona gives $150 plus some-
thing for his wife and children. I say the. time has come when you
should go even beyond Mr. Ilathaway's bill and give a straight two
thirds without limitation.
He has made a couple of other suggestions which I think tare ex-
cellent, one being educational benefit s_ When a man is killed or the
wife is killed they pay the children a certain amount of money, but
stop it at 18 Years of age, and that is universal throughout the
united States.
Ile has come up with it good idea. These children are entitled to
an education and he says give it to them up to 23. Well, I think that
is very helpful, but nipliose that child wants to be a doctor or a
la.wvyer. You don't get tltrouah in the United States now at 23.
It is nearer 26. Arid I think if you are going to make the change
yon should make it. not from 18 to 23, but from 18 to 26. This helps
only those. who are truly students or in training and are truly working
full time, so my suggestion is to go a step beyond him and make it 26.
11,11Y limit theta just to an ordinary college education? If you
are going to do things do it and let.'s do it right, because it has taken
since 1949.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 135
That was the last time you upped the money, and it may take
another 16 years till you up it again, so why not make it now? In
my opinion it should be 26 years of age.
I will jump to the more important bill, the bill that caused me
to come here at my own expense at the request of your committee:
to speak.
I have always been interested in Federal employees' cases. I hate
to give statistics. I suppose statistically I can prove I am the worst
lawyer in the United States because no lawyer that I know of has
lost 3,300 workmen's compensation cases in his lifetime, but statistically
I am supposedly the best lawyer.
No lawyer has won 6,700 cases. I have actually tried 10,000 cases,
many of them under your act. I have tried more than any human
being so far as I know, and we stopped trying Federal eftsesa t1tlzs
get
ber of years ago, because if a man is injured-I want to
clear-in private employment and the insurance company wont pay
him, then we can ask for a hearing, before an impartial tribunal,
usually known as the industrial accidentboard.
I don't care what they call them. That exists in 44 States. If
that industrial tribunal turns us down, we can go to the courts on
questions of 1aw.
Now, Mr. O'Hara's State has a trial before a single commission,
as we call them, then an appeal to three commissioners on review,
and then to the courts, but the courts on questions of law.
When it comes to cases before your Bureau of Workmen's Compen-
sation-this is going to amaze some of you-but this is the truth and
I hope the chairman will be here and he will tell you it is the truth-
heaven forbid, if he a week ago was injured, badly injured, what
would he do?
He would get hold of his chief and his chief would file ,a report
with the Bureau. It would take an average of 79 days before they
would give him his money if he had a clear case. If an investi-
gator went out and found that the case was a clear case it would take
79 days and he would get his money.
Suppose they turned him down. Suppose they said, "No, we are
not satisfied," and they turned him down.
Could he then go before an impartial tribunal? No. There has
never been any provision. The Bureau was final. I came down here
many years ago to protest that we wanted to have a hearing be-
fore an impartial tribunal, and I will tellyou why.
Because I found that every time I had a case :involving heart dis-
ease, cancer, multiple sclerosis, meningitis, encephalitis, leukemia,
traumatic epilepsy, or arthritis-I am going to give you my book,
"Nebraska Review," page 44? showing that we have established every
one of those diseases as having been precipitated, aggravated, or in
some way connected before State industrial commissions.
But with your people we were unable to establish that, because all
we could do was send in our doctor's report. Then they would have
their doctor, and I am telling you gentlemen in the old days, and I
have lived through it, doctors don't agree on heart disease or cancer
or anything.
Mr. SCIlEuxil. I think we can -take judicial notice of the fact that no
doctors anywhere agree on anything ever.
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136 IMPROVEMENT OF BENEFITS UNDER THE FECA
Hr. I Iimovrif. So they would have their doctor examine the elaim-
nut and he would say no relationship. I would take hint to three doc-
tors who would {ay there was.
Disallowed. henry ('abet. Lodge and I were close friends and I
rnnte down to Washing(on to try' to change it, to try to go front them
to an impartial bureau. We have a compensation act.
Consider the Bnieau like an. insurance company'. They turn you
(town all right. Let's have an mpartial tribunal. We linally hind to
compromise for out appeals board. h4`hett the appeatls hoard Sias in Ilse
Social Security IJepartinert we got sometivltere.
We had it fellow by the name of IIeur'v Iler who became chairman.
Anal he revered the Bureau below .it) percent of the time, Your rec-
ordswill show it.
But. then it was taken back in the Labor I)epartancnt, so that now a
man turned down gnus to the appeals board, appointed by the same
Labor I )el>artntent. and,gentlemen,tape my word for it.
I have reach the eases, for yea is. In .)t) percent of (lie cases they fol-
low tile. board below. 11'hy'? If you were in their cii'cuiirtstances von
might do the saute tiling. The only thing they have before iltetn, ten-
Heinen, is the record that is made below, the record made by the Bu-
reau, their invest ig*ator's report, and when I say 90 percent. I art
conservative.
In 10 percent of the eases they do rever-e them, and, gentlenen, T
will say this for the record: von will final in the 10 percent of those
eases ati great many are cases where some Senator is interested and has
gone to see theist and pointed out the error of their ways, error of the
Bare tn, or my ute?n orgaua izat ion, the AFf-('10.
If soiuebotly important collies up, (lucre is a chance that you may get
a reversal.
Mr.IJ.~atst~-. How about at ('ongre:.sniait?
Mr. IIorcnvrrz. Yes; if lie is all important (_'ongressnian there is a
chance.
I ]late to say this, but it is so, yes. They are luunan, too, you know.
'I'licy Want to keep their jobs. 'T`herefore, gentlemen, it is absolutely
essential for the first, tithe in history that you establish an impartial
hearing.
Let the Bureau continue as it does. It is like an insurance com-
pany. Let theta pass on the case. If they pay on the case, well and
good. You don't want a lawyer in (lie case unless they turn a ratan
down. Now, they have 110,000 people injured every year, 100,000 out
of 21/2 million. They say they only turn down 3 percent. I think I
can show you it is nearer 15 percent. but oven 3 percent is over 3,000
people who are turned down.
Those people are entitled to a hearing. Heaven forbid, if you be-
came a paraplegic and they turned you down, wouldn't you want a
hearing., 'wouldn't. you want an impart ial t ribunal?
I therefore suggest that this bill which says there should be a hear-
ingg, but leaves it to the Secretary of Labor, be changed to an impartial
tribunal.
I don't. -vant someone in (lie same department. Would you feel you
are getting a fair trial if you had somebody in the same department?
Mr. DAy IEa s. You recommend then a hearing examiner?
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IMPROVEMENT OF BENEFITS UNDER THE FECA 137
Mr. HOROVITZ. Yes, sir; and not within the same department, abso-
lutely an impartial person. Then if you want to have a review by
your appeals board, that is going to be expensive because now the
cases are heard in 10 different districts.
They are not heard in Washington. They will have to travel
around. You can either have an impartial appeals board travel
around or have an appeals board in each of the 10 districts if you want
to have an appeal, but you then must go to the courts, and I will tell
you why, and if Mr. Larson is here I think he will agree with me. The
courts are the ones who decide the law questions. I don't want the
courts to decide any questions of fact the impartial man has decided.
That's the end of it. But on questions of law we have to have the
courts. And I have written an article and I have shown here that
the courts have been far more liberal on the meaning of workmen's
compensation over the last 50 years than industrial commissions, in-
cluding the State ones.
Mr. GIBBoNS. Are you going to leave that?
Mr. I1oRovrrz. I will leave that. I will mark the page.
Mr. SCUIEUER. Without objection, let us direct the stenographer to
print in the record under excerpts of Mr. Samuel Horovitz' article
from the Nebraska Law Review the date of issue and the specific pages
that he mentioned. Will you mark them clearly in the article?
Mr. HOROVITZ. Yes.
Mr. SCII:EUER. And then these pages shall be reprinted after your
testimony.
Mr. HoRovrrz. I then requested that we have a real hearing before
an impartial and court appeal,
Mr. SCI.[EUER. Would you like that note to appear?
Mr.IloroVITZ. Yes.
Mr. SCrtrUER. All right.
Mr. Hollovrrz. I will give the committee both of these articles. I
shall also give him something about our organization of 20,000 lawyers
and it may be in the property of the committee when you are through.
Thank you very much.
(Information to be furnished follows:)
INJURY AND DEATH UNDER WoitaMEN'S COMPENSATION LAWS
(By Samuel B. Horovitz)
"The Federal act (for EIRA, WPA, etc., workers) is the one used for regular
Federal employees, and the Commission provides no formal hearings (decisions
are made usually upon ex parte written reports) and absolutely no right of ap-
peal. As the Government is the employer, the. Commission assumes that formal
hearings may be denied, and that it can refuse to be subject to all court
proceedings."'
o As the U.S. Employees' Compensation Commission (even though its chief attorney is
able and liberal), is often hundreds or even thousands of miles away from the injured
employee, who cannot even If near the New York commission, bring his witnesses to a
hearing or have counsel do anything but write letters, the whole procedure is highly
unsatisfactory, in the opinion of the author. Informal trial by official reports and other
documentary evidence tinder this act of Sept. 7, 1916, is the rule of the Commission, and,
if constitutional (see Dahn v. Davis, 258 U.S. 421 (1922) ), should be changed by Congress
to allow formal evidence at the employee's request, and to allow appeals.
Hearings before State boards are more in accord with the modern social and legal
viewpoint.
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138 IMPROVEMENT OF BENEFITS UNDER THE FECA
[From Nebraska Law Review, Vol. 41, No. 1, December 1961]
EXCERPTS FROM WORKMEN'S COMPENSATION : IIAI.F CENTURY OF JUDICIAL
DEVELOPMENTS
(By Samuel B. Ilorovitz)
Courts recognize that in close or borderline cases it Is better to put the loss
on the employer for the insurer), and hence on the ultimate consumer of the
product or services, than upon the injured employee or his family who rarely can
pay and who must therefore pa4s It on to charity. Since one of the purposes
of workmen's compensation is to keep workers from becoming public charges,"
a reasonable, liberal, practical common-sense construction is preferable to a har-
row one." These acts are for the giving of compensation; they are not for its
denial."
? k ! # i
Fortunately, the modern weight of reason and the current weight of authority
permits awards for injuries from fulls onto level floors, due to nonindustrial
disease or unexplained enu,es.13 These courts do not distinguish between falls
onto the level fluor and falls onto boxes two inches above the floor or into ma-
chinery--all falls are compensable where the injury results from contact with the
floor or other objects."'
11 Baltimore Steel Co. Y. Burch, 18T lid. 209, 213, 49 A. 2d 542. 544 (1946) (it was the
Intention to relieve workers from the hazards of industrial employment and to protect
the public from the care and expense resulting from human derelicts due to accidents" In
Industry).
12 Clark v. village of Ileminr'ford . 147 Neb. 1044, 1050, 26 N.W. 2d 15, 22 (1047)
("liberally construed and Its benefcient purposes not to be thwarted by technical refine-
ment or interpretation") ; accord, O'Leary Y. Brown-Pacific-Maxon, Inc., 340 U.S. 504,
509 (1951) (Minton, J., dissenting) ("common-sense. everyday, realistic view") ; Brook-
haven Steam Laundry v. Watts, 214 Miss. 560, 589, 55 So. 2d 381. 386 (1951) (`liberal
and sensible interpretation") ; Schechter v. State Ins. Fund. 0 N.Y. 2d 500. 510, 160
N.E. 2d 901, 903, 905. 190 S.F.S. 1150, 600 (1959) ("common-sense viewpoint" of the average
man) : In rc Jensen. 03 Wyo. 58, 100, 178 P. 2d 897, 900 (1047) ("to be reasonably and
liberally construed").
" Everett, Book Review, 62 L.Q. Rev. 300, 301 ("[C]ertainly the higher tribunals both
In England and In America seemed to have lived up to the dictum 'that this is an Act for
the giving and not the withholding of compensa(ion. ").
ITS Employers Slut. Llab. Ins. co. 'v. Industrial Ace- Comm'n, 41 Cal. 2d 070. 263 P. 2d 4
1953) (Idiopathic seizure, fell on concrete floor, head injury-coin pensable. Modern trend
recognized(; Savage v. St. Aedeo's Church, 122 Coml. 343, 189 Att. 509 (19371 (no differ-
ence for floor falls-turns out that there was hazard from the fact that the accident
happened- painter found on flour : it would make no difference If cause of fall was fainting
spell or heart attack) ; Proteetu Awning Shutter Co. v. Cline, 154 Fla. 30. 16 So. 2d 342
(1944)1 (fell on concrete floor due to idiopathic heart disease, fractured skull. Excellent
discussion of purposes of compensation act, and the desire to spread the cost to con-
sumers-If deceased had fallen onto a piece of machinery, an award would hardly be
questioned the fact that he chanced to fall on the floor and lost his life should not preclude
an award) ; American :lint. L)ab. Ins. Co. v. King, 88 Ga. App. 176, 76 S.E. 2d 81 (1053)
("blacked out"-court said no difference between falling on the floor or against ma-
chines-- even If exertion did not produce the stroke found in puddle of blood on floor In
water-house, died of subarachnoltl hemorrhage) ; A. C. Lawrence Leather Co. v. Barnhill,
249 Ky. 437, 61 S.W. 2d 1 (1933)' (dizzy, fell on premises near driveway broke leg--
compensable) ; Pollock v. Studebaker Corp., 97 N.E. 2d 631 (Ind. App 191j1) (contrary
view "not favored by a majority of recent cases"--but superseded In Pollock v. Studebaker
Corp., 230 Ind. 622. 105 N.E. 21 513 (195")--as a question of fact, as industrial board
had found against the worker- -dissent said It was a question of law, and decision below
was correct on law) ; Burroughs Adding Mach. Co. v. Debn, 110 Ind. App. 483. 39 N.E. 2d
499 (19421; (on public street on duty-had he been sitting on a chair at home when the
attack occurred he probably would not have been Injured) - Barlau v. Minneapolis-'Moline
Power Implement Co., 214 Minn. 5134, 9 N.W. 2d 6 (1943) ; American Gen. Ins. Co. v.
Barrett, 300 S.W. 2d 358 (Tex. Civ. App. 1957) ("blacked out" fell on hard pavement of
gravel and shell, fractured skull-fall on hard surface, was a hazard to which he was
exposed by the employment) General Ins. Corp. v. Wickersham, 235 S.W. 2d 215. (Tex. Clv.
App. 1951) ; Wilson v, Chattert,'u. [1946]] 1 K .B. 300 (C.A.) (a leading case, overruling
an earlier Contra case, Lander Y. British United Shoe 'Much. Co., 20 B.%.C.C. 411 (19331
as "bad law") ; Wright & Greig. Ltd. v. M'Kendry, 11 B.W.C.C. 402 (1918) (in fit, fell
on concrete floor of store-not risk common to humanity, but was specially connected with
the worker's employment. as lie bad to workon a hard floors.
1T9 See cases in notes 172 and 175, supra.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 139
On this reasoning the modern courts properly have upheld awards involving
cancer,)" heart disease,ib' multiple sclerosis, 1".1 meningitis,18' encephalitis,)"" leu-
kelnia,18l traumatic epilepsy 1S8 and arthritis."'
A half century has passed since the earliest acts received their first judicial
interpretations. The early legislatures held the hope that payments, though small
at the start, would subsequently be made sufficient for subsistence and would
keep up with the rising cost of living. In most jurisdictions. this hope has been
tragically unrealized."
But the history of judicial decision has been an entirely different one. The
early courts construed the acts with caution and erroneously inserted into work-
men's compensation cases inapplicable common-law doctrines in disguised
garb 381 But step by step these courts uncovered their own errors and righted
182 Boyd v. Young, 193 Tenn. 272, 246 S.W.2d 10 (1951) .(cancer, lifting box, sharp
pain in base of neck hospitalized; cancer later found in nick) ; see review in 10 NACCA
L.J. 60 (1952) and list of recent cancer cases. For cancer cases, see Locke, Problems
Arising inthe Trial of a Cancer Case, in Naw ENGLAND NACCA BAR ASSOCIATION, WINTER
SEMINAR. DECEMBER 1959, at 138 (1960).
183 Madden's Case, 222 Mass. 487, 111 N.10 379 (1916).; Harding Glass Co. v. Albertson,
208 Ark. 866, 187 S.W.2d 96.1 (1945) (heat prostration hastened heart disease,and.con-
tributed to death eight months later) ; see Petkun, Problems Arising in a Heart Disease
Case, ill NEW ENGLAND NA'CCA BAR ASSOCIATION, WINTER SEMINAR, DECEMBER-1959, at
159 Too).
I&I1VVllechanics Universal Joint Div. v. Industrial Conim'n, 21 111. 2d 535, 173 N.E.2d .4179
(1961) (multiple sclerosis, compensable, though there is limited medical knowledge of this
disease),; Stella v. Mancuso, 7 App, Div. 2d 673, 179 N.Y.S.2d' 1.69 (3d Dep't 1958) (mul-
tiple selerosisi precipitated by trauma)
1B6 (Ailham v. Department of Labor & Indus., 14 Wash. 2d 359, 128 P.2d 6.45 (1'942)
(meningitis related to a fall).
186 Hazlik v. Interstate Power Co., 67 S.D. 128, 289 N.W. 589 (1040) (encephalitis after
unusual exertion, exposure and exhaustion helping to restore company's service).
187 lit re Crowley, 13.0 Me. 1, 153 Atl. 184 (1931) (carbon monoxide poisoning leading
to leukemia).
ati8 White v. Louisiana W. Ry., 18 La. App 544 135 So. 255 (1931) (epilepsy)
185 Sporcic v. Swift & Co., 149 Neb. 246, 30 N.*.2d 291 (1948) (traumatic arthritis)
Enkel v. Northwest Airlines, 221. Minn. 532., 22 N.W.2d 635 (1946) (long list of cases oi;
aggravation or acceleration of arthritic conditions given).
883 "Implicit in the law and explicit in the decisions Is the principle that industry should
take care of its own casualties. Yet even with the best that under the law can be done
for this plaintiff, the discrepancy between what lie will have gained and what he has lost
Is rather shocking." Fitts v. American Mut. Liab. Ins. Co., 133 F. Supp. 93'7, 941 (E.D.
Tenn. 1955) (compensation rate mere fraction of the wage; must fight ill health and
poverty the rest of his life). In this case the employee's hospital bill was $2,369.92 to
1955. In 1960 the maximum- weekly payment in Tennessee reached thirty-four dollars;
with medical compensation stopping at $1,800 and all compensation at $12,500.
"[I]t is high time that the legislatures investigate the fate of the families in which the
breadwinner has suffered a permanent disability .
[T]ho law relating to the structure and level of benefits: shows the distressing signs
of legislative lethargy and patching and re patching "' Riesenfeld, Basic Problems
in the. Administration of. Workmen's Compensation, 8 NA?C'CA L.J. 21, 32-33 -(1951):
As long a o as 1954 Max D. Kossoris of the U.S. Dep't-of Labor warned : "There is a:
need today for stronger public concern with the Inadequacies of workmen's compensation
legislation and administration. In spite of the tremendous forward strides in other social
and economic areas our compensation legislation and administration on the whole lag
far behind." Kossoris, Workmen's Coniponsation in the United States, U.S. BUREAU or
LABOR STANDARDS, DSP'T OF LABOR, BULL. No. 1.149, (19514).
Hawaii has made some strides forward because a courageous administrator dared to
become a. politician for a time and fight the lobbyists. U.S. BUREAU or LABOR STANDARDS,
DEP'T OF LABOR, BULL. No. 186, at 12 (Rev. 1959). --
'Ceilings and limitations on the benefits have caused "compensation payments to fall
so sadly behind the rise in wages and living costs" that it "has brought the whole system
into disrepute." iRiesenfeld, Contemporary Trends in Compensation for Industrial Aoci-
dents Here and Abroad, 42 CALIF. L. Rav. o31 (1954). Accord, Pollack, A Policy Decision
for Workmen's -Compensation, 372 INS. L.J. 14 (1954) (since 1940, benefits have become
even less adequate, especially where the need is greatest); Somers & Somers, Workmen's
Compensation-Unfulnlled Promise, 7 IND. & LAB. REL. REV: 33; (1953).
38m "[C]la;re must be exercised lest long judicial habit In tort cases- allows judicial
thought in compensation cases to be too much influenced by a discarded. or modified factor
of decision." - Hanson V. Robitshek-Schneider Co., 209 Minn. 596, 598, 297 N.W. 19,. 21
(1941). Accord, Beran's Case, 336 Mass. 342, 145 N.E. 2d 726 (1957) (compensation
allowed for a stray bullet; overruling an old case) ; Cunning v. City of Hopkins, 258
Minn.. 306, 1031 N.W. 2d' 876 (1960) (defense of horseplay has no place in workmen's
compensation cases).
One of the greatest changes has occured in the reversal of many aggressor-assault cases
where common-law doctrines appeared in disguised garb to- mislead the early courts. See
cases cited in notes 8, 93, 97-102, and 111 supra.
55-030-65---lo
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140 I SPROVEMMENT OF BENEFITS UNDER TIIE FECA
their decisions.' They rejeeted the doctrine that their mistakes were forever
einbahiied in the law because of the doctrine of legislative acquiescence by silence.
It was aptly stated that: "We reject as both itn-Christian and legally unsound
the hopeless doctrine that this court Is shackled anti helpless to re-deem itself
from its own original sin, however or by whomever long condoned." ~
The history of judicial developments in the field of workmen's coui)xnxation
is a history of growth, of commendable imagination, and of improvement In the
administration of justic' for the victims of Industrial accidents, 2 million of
whom look annually to the courts for understanding and help. The spirit of lib-
eral and broad interpretation Is now engrained lathe warp and woof of work-
men's compensation, its clearly shown by the above review of the words "personal
injury by accident arising out of and In the course of employment" and the addi-
tional Important: word "disability."
Judicial developments have given hope to those who desire to improve the lot
of industry's casualties the injured) workers.
Mr. Sciii uEIt. Thank you very much for coaling, Mr. Ilorovitz.
We appreciate the (title nod effort that You have made to come here.
Mr. D.\xn is. I have no questions.
Mr. Guise: s, Off the. record.
(Discussion off the record).
Mr. SCIIEU'ER. On the. record.
Thanks ever so much.
Mr. Scurujst. Mr. Arthur Larson, please. We are very honored
to have you with its this morning, :1Ir. Larson. Let, the record show
that. Mr. Larson was former Under Secretary of Labor turd the head of
the U .S. Information Agency.
Please proceed, Mr. Larson.
lire, e.g.. State Cuntpenantlun his. I"unil v. Industrial Ace. Commit, 38 Cal. 2d 6'.;9
242 1. 2d 311 (1952). 9 '.DACCA L.J. 64 (1952). See also Pacific Employers Ins. Co. V.
Industrial .\ec. Comm'n. 20 Cal. 2d 280. 158 P. 2d 9 (1945) (a horseplay case overruling
thirty year old decision). See 22 N, CCA L.J. 175 (1858).
axe Van Durpel v. hlaven-Busch Co., 350 Mich. 135, 147, 85 N.W. 2d 97, 103 (1957).
Recalling Justice Cardoza's views concerning Hare decls(s, the court stated: [w]hen it
rule, after It has been duly tested by experience. has been found to be Inconsistent with
the sense of justice or with the social welfare, there should be less hesitation in frank
avowal and full abandotnuent." Ill. at 151, 85 N.W. 2d at 105.
*aT Dean Roscoe Pound, former Editor-In-Chief of the NACCA LAW JOURNAL, In V Jcats-
raDnEveE 345 (1959) concludes: "But, on the whole, most of the courts have increasingly
come to appreciate the purpose and spirit of the [workmen's compensation) act . . . In
Its Interpretation and application"
Prof. Itiesenfeld In Contnnporary Trench in Compensation for Industrial Accidents Here
and Abroad, 42 'CALIF. L. biro. 531, 552 (1954), states: "All In all It can be said that
American courts In a liberal spirit have steadily extended the scope of protection under
workmen's compensation."
In recent years courts have openly encouraged Injured claimants to be represented In
contested eases by experts In workmen's compensation : Miner v. Industrial Comm'n, 11:;
Utah 88, 202 1'. 2d 557 (1949), 3 NACCA L.J. 188 (1949). "From our experience in a
number of recent cases, we are convinced that applicants would fare better in contested
cases It they were timely Informed by the Commission that while It was not necessary fur
them to employ counsel, such assistance In the presentation of their case might be desir-
able." Id. at 92. 202 P. 2d at 559. And when attorneys fees are chargeable to Insurers,
these courts have allowed reasonable and substantial fees: see Neylon v. Ford Motor Cu.,
27 N.J. Super. 511, 99 A. 2d 004 (App. Div. 1953). 13 NACCA L.J. 05 (1952) ($2,850
fee upheld although only $200.43 compensation awarded to injured worker).
Industrial commissions also are granting substantial as well as reasonable fees: see
Anderson v. Bituminous Cas. Corp.. No. 1-035. Claim No. >?r-97588, Fla. Sept. 30, 1957
($7,500 fee of claimant's attorney charged to insurer). And in a recent hard fought case
which Involved a payment of over $I00,000 to a paraplegic, the attorney for the claimant
was awarded $20,0[)0. Maryland Cas. Co. Y. Marsha, 108 So. 2d 055 (FIR. 1958):
(mem.) (author's Information on fees from claimant's attorney, by letter dated Aug. 14,
1961).
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IMPROVEMENT OF BENEFITS UNDER THE FECA 141
ST'ATEMENT' OF ARTHUR LARSON, FORMER UNDER SECRETARY
OF LABOR AND HEAD OF THE U.St INFORMATION AGENCY
Mr. LARSON. I want to express my gratitude for this opportunity to
comment on the proposed amendments to the FECA.
I have no prepared statement. With your permission I thought I
would run down the list of suggested changes and comment briefly
on them, taking up each one of the bills that was sent to me as pending,
and making at least a very small comment.
In H.R. 10721 the first item is the raising of the maximum benefit.
I am definitely in favor of that. I think I would only go a bit further
and say that in the particular case of the Federal Employees' Com-
pensation Act, because of its unique character, it would be perfectly
? justifiable to remove the maximum limit altogether.
Mr. SCIIEUER. You mean the dollar limitation, not the percentage
limitation?
Mr. LArsoN. Not the percentage, no.
Mr. SCnEUFR. Would you stick to the two-thirds, or would you go
to the 100 percent as Mr. Horovitz suggested?
Mr. LARSON. I hadn't heard that suggestion. I came in just a few
minutes ago. However, the percentage of average wage that is usually
adopted is somewhere between 60 and 75 percent. I think two-thirds
is the commonest. I would certainly not go to 100 percent for a ntun-
ber of reasons. No, I don't think that I would change the percentage
figure, but the maximum, the fixed dollar maximum .is a source of most
of the difficulty with compensation acts because it obviously doesn't
rise automatically as wages and costs-of-living figures rise.
In the particular case of the Federal Employees' Compensation Act,
it strikes me that you do not have the distinctive reason why a fixed
dollar maximum was thought necessary in compensation acts in the
first place.
I think I can best illustrate this by something that happened, I
believe, in Arizona. Generally, of course, the theory of workmen's
compensation is that the injured workman automatically should re-
ceive something related to his previous earning level, and the arbitrary
figure of two-thirds or something of that sort isadopted.
The minute you impose a fixed dollar maximum you disturb and
distort that relationship. But I think a moment's thought will show
that, if you have people earning millions of dollars and they are
covered by the act as they are in many acts, it might be thought neces-
sary here and there to do something about the fact that you might
have some rather startling looking compensation benefits.
This, I believe, actually happened. I am trusting my memory now,
but I seem to recall a case out in Arizona at a time when they had no
maximum at all.
Mr. DANIELS. The idea primarily was to take care of the poor work-
man and a man that was receiving a high salary wasn't considered to
bein the same category or classification as the ordinary workingman,
Mr. LARSON. That is correct.
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142 IMPROVEMENT OF BENEFITS UNDER THE FECA
Mr. D, xFF:I,s. So that was the reason for the dollar limitation
:iir. LARSON. Yes, sir; but, of course, in modern acts the corporate
executive and many others are apt to be covered. So I think in con-
nection with private employment you do need some kind of a maxi-
mnm. What happened in this instance was that a little movie starlet
making, I think, '6,00O a week, fell off a horse in Arizona. Without a
l im itation she would be entitled to' -1,000 a week.
I understand that Federal salaries have been going up from time to
time. I3ut. I don t think we are at x+0,000 a week yet.
Mr. ScuEumt. It gives you something to shoot for.
Mr. I,ARsox. This type of problem cant very well exist under a sys-
Icici where the levels of wage and compensation are fairly systematic
and orderly and don't have these extremes. So with that side com-
ment that one might just cro a step further and remove the unaxinunu
altoiretlter I would certainly approve of this feature of the amendment.
I am simply following `TI.IL 10721 down. I next find the provi-
sion which would hermit the continuance of dependent benefits.
Mr. Sei1EUER. I'`xcuse me, llr. I,ar`on. Do I understand you would
remove the dollar limitation and just leave it the flat Lwo-thirds per-
Centage limitation?
Mr. L-ARSON. Yes.
fir. Scut:v-Ett. Thank you.
Mr. DANIELS. One further point oil that question.
Do you have any recommendations to make with respect tip total
and permanent disability
-llr. LARSON. In what respect
Mr. DAMEL,s.As to how much can be paid. You stated previously
that you recommend t;ti2is or a maximum of 75 percent.
Ilowv about an employee who is totally and permanently disabled?
Mr. Ltnsox. I would not disturb the general pattern of the act in
tl-;tt respect. Ile gets benefits for life and I don't think that needs
any particular change. As to the provision permitting benefits to
children who are still attending school after the age of 18, that. I think
is an excellent change, a very important and desirable one. I would-
only go a bit, further here too. I would say that the age ought to be,
up to 25 rather than 23. faybe that is just because I have had a son
and son-in-law just graduate from law school and they don't do that
nowadays at the age of 2 I think that 25 is certainly a much more
realistic figure in view of the amount. of professional training, grad-
uate work, and soon that takes place these clays.
There are some other tiny things in this that I didn't quite under-
stand.
fir. GIBBONS. May I interrupt there?
Mr. LARSON. Yes.
,Air. Grnnoxs. I think this shows the wisdom of combining the Ed-
ucation and Labor Committees. The education side of this commit-
tee is working on the problem that you have just discussed and I think
that this Congress will turn out some legislation that will help in the
education.
I think it is appropriate to put in the record here because I know
people are interested in education now and we will provide in other
legislation what. you have advocated, maybe not as direct a benefit, but
ways and means by which people who really want a college education
can get it.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 14
Mr. SCIIEUER. I think it is fair to say that within a short period
of time we will have a complex of benefits available, either loans or
grants, that will enable any student in good standing at a college or
university to finance his tuition and living expenses through comple-
tion of his B.A. degree and his graduate work and if the benefits were
in the form of a loan to pay back such a. loan over a period of perhaps
10 years at an interest rate that would be zero until a year or so after.
he finished school and then perhaps not more than 3 percent.
We haven't quite arrived at that point yet, but I th ink Mr. Gibbons
would agree with me--
Mr. GIBBONS. Next few weeks.
Mr. SCIIEUER (Continuing). Before very long any qualified student
maintaining a satisfactory average---
Mr. GIBBONS. We are sorry it is too late to help you.
Mr. ScirrEuER (continuing). Will be able to finish his university
Mr. LARSON. I am feeling pretty good just as it is. I might point
out one very small thing-perhaps there is an explanation for this,
but in the same paragraph there is a reference to unmarried students
in the second half and no such reference in the first half.
I don't know whether this was intentional or not.
Mr. DANIEL S. What bill are you referring to?
Mr. LARSON. This is 10721, section 204. The section speaks of any
child without reference to whether he is married or not, whereas in
the second part, which is the retroactive part, it applies only to a
child if he is unmarried. The relevance of marriage in this conn.ec-
tion could be debated. I would suggest a solution perhaps something
like this, which is what we have adopted in the Council of State
Government's draft, that the provision applies to it married student
only if receiving substantially full support
If a person gets married there is a kind of presumption I suppose
that he has assumed his place as a responsible and self-supporting
person, but that isn't-, necessarily the case or realistic these days.
This is anninor matter. It is perfectly all right the way it is, but
I thought I would point it out just in case it was inadvertent rather
than intentional.
The other main feature of 10721 is the increase in past awards for
increases in the consumer price index, which I think is a very good
move.
As I read the change it applies only to past awards. It doesn't
= seem by its terms to be an ongoing adjustment. Again, I am not
quite sure whether that was intentional, but, it struck me that the
principle here involved of a kind of a sliding scale constantly relat-
ing or adjusting benefits to chainmes in the consumer price index
might be something that could be built in for future benefits as well
as past benefits.
TI.R. 4478 also deals with this problem and has a little feature
which might be considered, which. I don't think is present in this
one, and that is that it applies only if there is a change of as much
as 3 percent.
I think it might, be a desirable addition, because you don't want
to have to tinker with benefits on small percentage points.
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Every- so often when the change aniounts to enough to go to the
bother of making the adjustment, and you can pick a figure like 3
percent, alien I think it would be a good thing to have..
Mr. DANIELS. aSo the record may be clear on that point, Mr. Larsen,
your recommendation is that where the Consumer Price liulez in-
creases by :, percent or inure it (ben would be reflected in the previous
award of in the future awards!
Mr. T.:it;sox. Yes. I don't really want on illy own motion to suggest
3 percent. I notice that another bill had selected this figure and I
think the principle of making tile adjustment only when some sub-
stantial ident ifiec change has takrai place is certainly correct.
Thc, exact. amount I haven't studied. This is generally comparable
in principle to sometliiii we did in the Council of State lloverniiient's
draft. We reroinniended a sliding scale dollar maximum tied in
average earnings in the State, but in order to prevent this constant
adjustment for very small amounts we broke the figure I think at a
change of ,3 in tite average wage and at that point it would be
adjusted appropriately.
Ili TT.R. 10815. the first proposed amendment has to do with the
revision of the treatilielit of schedule injuries. I []link it can be-
sannmed up by saying (hat lit effect it does away with the principle of
the exclusiveness of schedule benefits or schedule benefit recoveries.
T think this is a reasonable proposal. I would approve of it. It
reaches its result iii two principal ways. First of all, the proposal re-
moves the limit atioll of definition of schedule injury to injuries that
safest only that member, by removing the word "solely" in the first
part Isere.
1 think that is a wise change. _ks matter, now stand, taking the pro-
vision at its fare value, if you had au arm neatly and cleanly severed
yon Would come under [lie schedule provision and you would get the
schedule amount. If you had an arm severed with shooting pains
and other involvements this would not be sclieduleinjury.
This is a distinction that is hard to justify, and for many reasons
that I think are quite self-evident, I think that change is clearly
defensible.
Then the amendment goes on to provide in effect that if there is
actual disability remaining after the period of Elie schedule disability
has expire(], benefits will be paid for the actual disability. This is now
done only- as to the more severe injuries and disabilities.
The amendment ivonlrl do it as to all disabilities, This I think too
is justifiable. For example, suppose a man has a schedule injury
now-let's say he is a violinist and lie loses several finger,, of his left
hand. He is gets in-- on in years and is in no posit ion to learn a new
profession. He will collect the appropriate number of weeks or dol-
lars for the loss of his fin; ers. but when he is through lie is just as dis-
abled as he was before and the question is: now what do you do with
hini.
Now he has a, provable factual disability, and it. seems to me that it.
is quite appropriate under the purpose of tlie compensation act to
pay the benefits for actual disability! when, in fact, it is there,
The next. thing I find in IT.R. 10865 is a provision for lump-sum
payment to widows on remarriage, which is it very good provision.
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I hadn't realized it wasn't already in. here. This is becoming a
fairly familiar provision. It is in our Council draft and I would
strongly support that.
The reason is that a widow drawing dependency benefits confronted
with a decision whether to remarry or not may just be helped along
to make : a decision to remarry if she gets this. little. wedding present
from the system.
It will save money so far as the compensation system itself is con-
cerned because she is taken off the dependency rolls on becoming
married.
Now, continuing with H.11. 10865, section 3, there is a desirable
change which takes out the words "due to radiation or other causes"
in dealing with the statute of limitations.
This present provision as it now stands was a partial attempt to
deal. with a grave injustice in quite a few compensation acts. The,
problem of latent injury, including radiation injury, which is not
discovered or even perhaps discoverable until after the statute of
limitations has run.
The only trouble with the present provision is no reason to limit to
latent injuries or toradiation injuries.
This is one of the most common and one of the most tragic injustices
but this is not the only one.
I first became acquainted with this problem when I was practicing
in Milwaukee and had a case involving a young lady about 18 years
old who acquired tuberculosis in a tuberculosis sanitarium., but no-
body seemed to know it was tuberculosis for some reason. No doctor
ever told her it was tuberculosis. She became disabled, and the insur-
ance company thereupon contended that her claim was barred be-
cause more than, I think it was, 2 years had elapsed since she first
acquired this disease-in. spite of the fact that she didn't know what
she had and the doctor didn't know what she had.
She was supposed to be barred. The court, however, did not sus-
tain this opinion. The court adopted what is now the accepted correct
rule on. this subject, which is that the statute of limitations should
never run until the claimant knows or reasonably ought to know the
nature of his disease and its relation to his employment.
The amendrtnent-would.simply adopt that general rule withoutthis
unnecessary reference to latent or radiation diseases.
The other part of section 3, as to the statute's not running against
minors until majority or until a guardian is appointed or legal repre
sentative is a desirable provision.
I come to the portion of H.P. 10865 which deals with judicial review
of decisions under the system. There are two ways you could ap-
proach this : one theoretical, one practical.
The theoretical. approach wouldbe to say that judicial review under
compensation systems generally is routine. In fact, this is the only
system in which you don't have judicial review, because of its unique
character. You could. also say that judicial review is a desirable
change because you are dealing with a legal system-, a statute, and you
could argue that you ought to have a judicial tribunal as the last au-
thority on the system.
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The practical approach would be to make careful factual analysis
of the decisions of the present Appeals Board and see whether they
are satisfactory or not.
I would tliinic that. the second approach would be the more profitable
in this case. I think if this kind of change is to be considered seriously,
and it has been considered from time to time over the years, in all
fairness to the present administration of tin' system one should make
a careful analysis of the quality of the decisions that are emerging
from the system before changing it.
I haven't done this With the thoroughness that I would want to
apply to it if I were going to make this kind of change. I was quite
familiar with the decisions of the Board when I was at the Labor
Deprtment, and I have the familiarity with thciu in time meantime
win-a- goes with the Let tliat I have to read all workmen's compensa-
tion cases that come out every year in order to prepare an annual
supplement to my two-vOlmne treatise, and this means something like
1,300 eases a year now. But I don't. think that qualities me to pass
judgment on the standard of performance that is going on as to
deciding cases.
My impression is that the Appeals Board for sonic years now has
been doing a very good job by almost any standard. 'If that is the
case, then I don`t think I would change the system because of any
theoretical arguments about. the desirability of judicial revieNv.
Judicial review will have one undesirable effect which is simply to
protract and prolong the process of disposing of the cases.
If it would add sonietliiug substaiiitiel to the quality of the decisions,
Him is another question, but I personally ani not. pirpared at this
moment to saav that I know it would.
I lima sure everybody is familiar with the curious reason why you
hive, this problem before you; that is to say, the theory of the present
system is that, unlike private compensation, work.tnen's compensation
for Federal employees is not a quid pro quo for the giving up of a
common law rate to recover damages for personal injury.
That right never did exist because of the iauuiunity of the sovereign.
Under the State acts it has been held repeatedly such as in 11f urnier*S
case in llassaehusetts, 319 Mass. 411, G N.E. 0d 19R (1948), that it
would be unconstitutional not. to have judicial review.
You couldn't take away a man's common law rights to sue his em-
ployeranti give hits in it, place a right under a statutory system with
ani administrative procedure and not some.wliere along the line let hini
vindicate his legal rights.
So. he has to have judicial review in order to make the whole system
constitutional. This is not so of the Federal system and was so held
in Calderon v. Toilet. 187 Fed. 3d 514. That is why the Federal Em-
ployees' Compensation Act has this unique system.
I would say no more than that, that before, a change of t.liis gravity
is undertaken, it. seems to me one should be armed with the most ex-
haustive analysis of the character and the quality of the decision-
making that has been going on.
I might touch briefly on some of the other amendments that have
been proposed. I1iy very good friend. Congressman Dante Fascell,
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IMPROVEMENT OF BENEFITS UNDER THE FECA 14
has introduced an amendment here, II.R. 5288, under which as soon.
as a claim is filed the claimant would be entitled to continue to draw
his salary or compensation until the disposition of the case.
On principle I think this would be a, very doubtful procedure. If
you wanted to push it to the extreme it would come to this : That every
time anybody had an accident of any kind, an automobile accident or
a fall in the bathtub or anything else, there would be, nothing to stop
him from filing a compensation claim and continuing to draw his.
salary until the case had run its course.
Then you would have the problem of getting the money back again
if it turned out it was not a valid claim. This sort of thing doesn't.
happen. now because it wouldn't be worth any one's while to do it.
But I think it is very questionable in principle to assume that every
claim is meritorious until the opposite is proved.
You might cite present statistics, but they wouldn't mean much be-
cause it doesn't show you the kind of flood of claims you might get if
this procedure were installed.
II.R. 596 adds all civil defense workers to the Federal act.
This, too, I would question.
Mr. SCIIEUER. Off the record.
(Discussion off the record.)
Mr. LARSEN. I would like to add this one thing. I would not.
approve of sweeping all civil defense workers under the Federal
Employees' Compensation Act. It would be a fiction. They are not
employees of the Federal Government and to put them into the maxi-
mum could raise all kinds of complications.
In summary I then find myself in strong accord with the increas
ing of the benefits, the change of the schedule provision, and so on.
I have reservations about the installation of judicial review unless
a factual case is made out for the review indicating that it would
improve the quality of the decisions.
Mr. SCH:EUER. Thank you very, very much for your most stimulat-
ing testimony.
Mr. DANIEr,s. It has been brought out by some witnesses that the
present appeals board is not really an independent board and there-
fore it is recommended that we have the judicial review.
Do you care to make any comment on that?
Mr. LARSEN. Yes. I think in practice it is independent. In the
organization chart, of course, it is within the Labor Department. In
fact, at least in my experience, it has operated independently.
Nobody ever attempted to influence its decisions. It was, at least
iu my time, composed entirely of very competent lawyers. Mr.
Schwartz, whom I know, and who was brought here while I was here,.
is in that category, and we have had some of the best people in the
country on the board.
In practice it is independent, whatever the theoretical relation to.
the Secretary of Labor may be.
Mr. DANIELS. Thank you, sir, so much.
Mr. SCHEUEn. The committee is adjourned until further call by the
Chair.
(Whereupon, at 1.0:30 a.rn., the hearing was recessed, subject to
call.)
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148 IMPROVEMENT OF BENEFITS UNDER THE FECA
(Tile following material was submitted for the record:)
STATEMENT OF ROSS A. MESSES. LEGISLATIVE REPRESENTATIVE OF TIIE NATIONAL
ASSOCIATION OF POST (J FILE & GENERAL SUVICES MAINTENANCE EMIPLOYEFs
Thank you, Mr. Chairman, and members of the committee, for the opportunity
to appear before you today. I ant Ross A. -Messer, legislative representative of
the National Association of Post Otte & General Services Maintenance Em-
ployees, with headquarters at 72x`1 Ninth Street, NW., Washington, D.C.
This association Is the national exclusive relresentative with the Post Office
Department for all maintenance employees in the postal Held service, under a
national election held in 1062.
This association has also formal recognition willt the General Services All-
ministration, representing maintenance employees In [he Public Buildings
Services, GSA. This association has locals in the 50 States, Puerto Rico, Virgin
islands, autl the District of Columbia.
It is a pleasure for me to have this opportunity to testify before the Select
Subcotumittee on Labor en the proposed amendments to the Federal Employees'
Compensation Act. We wish to extend our thanks to you, Mr. Chairman, for
scheduling hearings on this all important subject, and to Congressman Hathaway
for the introduction of II.R. 10721, setting forth the administration's proposed
amendments to the Federal Employees' Compensation Act.
It has been several years since the Federal Employees' Compensation Act was
amended. Due to the changing times, the Increase in the cost of living and the
rise in Federal salaries, it Is time for a look at the provisions of the Federal
Employees' Compensation Act.
This association strongly endorses the provisions of II.R. 10721. to liberalize
certain provisions of the Federal Employees' Compensation Act. We strongly
endorse -
1. Increasing the limit for computing augmented compensation fur
dependents from $420 to $546;
2. An increase in the maximum monthly compensation to $G53 from the
present $.;r3 and a new minimum of $210 from $180, unless the employee's
monthly pay is less than the newly established minimum: in which case, his
monthly rate of compensation for total disability would equal his full
monthly pay;
:i. In survivorship cases. the extension of benefits for educational purposes
to unmarried children up to age 23, to permit their continued education or
training on a full-time basis : and
.1. Increased benefits for present beneficiaries of the act commensurate
with the rise in the cost of living since the year the benefits were awarded,
offset by any increase authorized by Congress since the date of the award.
We fully realize that the special presidential panel studying the retirement
systems of the Federal Government Is considering the provisions of the Fed .... I
hotployees' Compensation Act and Its connection with the retirement system. At
the present time. employees receiving disability compensation under this act.
receive 75 percent of their [)lisp pity if they have dependents. If they have Ito
dependents. they receive GG% percent of base pay.
Considerable discussions have taken place In the Government relative to the
extensive use of sick leave by employees in sore agencies. In averaging out the
amount of sick leave used by the employees, It Is our understanding that sick
leave used for any purpose, including on-the-job injuries, is included in the
average. This makes a higher rate of sick leave usage.
Under the present provisions of the Federal Employees' Compensation Act. it
is advantageous to the employee to use his sick leave instead of compensation.
due to the difference in pay, 23 percent for an employe with dependents and
one-third for employees without dependents.
It Is our belief that :Illy employee injured in the line of duty who is off duty
rIn to the injury for inure abaci ; days. should be placed Iurder the Federal
Employees' Compensation Act. retroactive to the first day of his injury and tint
he should be paid full tiny until he has sufficiently recovered to return to his
former position.
Mr. Chairman, it Is realized that this is in change ?n an esiubttshed law which
has been in existence for many years. However, it Is our belief that any
employee injured in the line of duty Is entitled to full compensation, the snare
tiny that lit' would draw if he were on the job, during the entire period of
recovery.
I wish to again thank you, air. Chairman, for the opportunity to appear before
you and your committee Iuerubcrs today.
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STATEMENT OF FLOYD E. HUFFMAN, PRESIDENT NATIONAL RURAL LETTER CARRIERS'
ASSOCIATION
Mr. Chairman, members of the committee, I am Floyd E. Huffman of the
National Rural Letter Carriers' Association, an organization with a membership
of 42,000 representing the regular, substitute, and retired rural carriers of the
Nation.
May I first express the appreciation of this association to this committee for
scheduling public hearings on proposals to improve the Federal Employees' Com-
pensation Act. It has been 5 years since any changes have been made and a
much longer period since any major revisions have been adopted.
This hearing is late in this session of Congress, and, although it appears unlikely
that bills on compensation would be enacted priorto adjournment, we appreciate
the fact that the views and opinions of interested parties will be made available
for consideration. We are advised that the President's Cabinet Committee is
studying an "equitable and long-range proposal to perfect workmen's compen-
sation protection for Federal employees."
It would appear that the recommendations of the Cabinet Committee would
be available to Congress before final enactment of new legislation in this area.
There is no question but that improvements are both needed and desirable.
We commend Representative William D. Hathaway for the introduction of H.R.
10721 which would increase compensation payments to those now on the compen-
sation rolls in line with the increase in the consumer price index, continue bene-
fits for surviving children who are furthering their education to age 23 and
improve the maximum and minimum limitations of present law. We endorse
this bill because it does provide for decided improvements in the act. We do not
believe, however, that this fully meets the present day need for objective changes.
Many proposals have already been placed before the committee for considera-
tion. The minimum which would be provided under H.R. 10721 still falls. far
short, in our -opinion, of guaranteeing an adequate compensation benefit pay-
ment to an injured worker. It is also felt that the maximum benefit should be
increased to more nearly conform to the higher salary schedules which have
been enacted since the present formula was adopted.
We would also recommend- that the provisions of Iii.R. 10865, introduced by
Representative James G. O'Hara be carefully considered. The recommended
change in this bill providing for a hearing on compensation claims while they
are under adjudication by BEG would greatly improve the opportunity for all
facts to be properly presented for consideration. It would likely eliminate many
subsequent appeals. The additional provision of this bill, which would permit
an injured employee to receive compensation for permanent loss of wage-earning
capacity should also be carefully considered. There is an inconsistency in the
,resent act.
We would also ask consideration of tile provision of II.R. 10865 which urovides
a 2-year, lump-sum payment to a survivor beneficiary upon remarriage. It is
desirable that some change in law be made to correct the problem which presently
exists which is preventing marriage in many cases.
Mr. Chairman, we would also ask that II.R.:5288 be considered by this com-
:nittee. This bill, introduced by Representative Dante B. Fascell would correct a
present serious failing in the present act. Injured workers today frequently ex-
perience lengthy delays in processing and final determination of his claim. Dur-
ing this period he frequently uses all sick and annual leave and then goes on
leave without pay. This works a severe hardship on the- employee and his family.
By using leave the employee is preventing loss of current income, which is
frequently necessary to meet current financial obligations. The use of sick
leave, however, to cover required absence from duty due to a compensable in-
jury results in the employee liquidating a valuable protection which might be
badly needed at some later period of illness. The provisions of H.R. .5288 would
allow an injured employee to continue to receive his regular pay between the time
of his injury and the time he receives his first compensation payment. The bill
would provide for recovery of any amounts due the Government under a with-
holding procedure equitable to the employee and the Government. This bill
would constitute a major improvement in the act and we do strongly urge that
its provisions be incorporated in any bill drafted and reported by this committee.
Mr. Chairman, this association urges that the committee reports favorably
II.B. 10721 and we trust that the meritorious provisions of some of the other bills
pending before the committee may be made a part of that bill. -
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150 IMPROVEMENT OF BENEFITS UNDER TUE FECA
In closing, may I again express our appreciation for the opportunity It) sub-
mit this statement in regard to the bills pending before the committee to amend
the Federal Employees' Compensation Act.
STATEMENT OF EVERETT G. GIBSON. PRESnJF,NT OF THE NATIONAL FEDERATION OF
POST OFFICE MOTOR VEHICLE EM I'LO1EE$, AFIs-CIE),
Mr. Chairman and members of the subcommittee. my name is Everett G.
Gibson. I ani president. of the National Federation of Post Office Motor Vehicle
Employees. We are affiliated with the American Federation of Labor and Con-
gress of Industrial Organizations, and the Government Employees Council, AFL-
CIO. with offices at 412 Fifth Street NW., Washington, D.C.
We have national exclusive recognition under Executive Order 101388. and are
the sole bargaining representatives for all motor vehicle employees under the
terms of the national agreement (POD 33) with the Post Office Department
Our membership consists of garagemen, antoniotlve mechanics, technical niecli-
auic:s, vehicle and tractor-trailer operators of the rank-and-file employees. We
also have locals with formal recognition for all \MVS supervisors of both the
oiaintenanco and operation divisions of our service. Our personnel maintain
the maintenance of all Government-owned vehicles used by the Post Office De-
partment, and haul all bulk mails from terminals, airports, and post offices.
Mr. Chairman and members. we appreciate this opportunity to express one
views on 11.13. 10721 Introduced by Congressman William D. Hathaway, and 11-R.
10565 Introduced by Congressman O'Hara that would amend the Federal Em-
ployee's Compensation Act. Our national convention has adopted resolutions
that would provide a comprehensive review of the Federal Employees' Compen-
sation Act, which would meet the needs of our membership.
We wholeheartedly endorse II.R. 10721 which will liberalize certain provisions
of the Federal inployees' Compensation Act that will improve benefits with
respect to maxinmum and minimum payment. benefit increases geared to the con-
sumer price index for those now on the compensation rolls.
II.R. 10721 would increase the limit for computing augmented compensation for
dependents from the present $420 to $546. would Increase the Iniixlmam monthly
compensation from the present $325 to $U133: and a new minimum of $210 from
the present $180, unless the employee's par (monthly) Is less than the newly
established minimum. In which case his monthly rate of compensation for total
disability would equal his full monthly pay. In survivorship eases, the extension
of benefits for educational purposes to unmarried children up to age 23. to
Hermit continued education or training on a full-time basis; increased benefits
for present beneficiaries of the act commensurate with the rise in the cost of
living since the year the benefits were awarded, offset by any increase authorized
by Congress since the date of the award.
We also endorse H.R..52 S Introduced by Congressman Dante B. Faseell, that
would alleviate financial hardship to employees while awaiting compensation
benefits after injury and to accumulate annual and sick leave during periods of
disability.
fir. Chairman and members of the committee. I want to thank you for allow-
ing me to appear before you on this most important legislation and we urge
that the subcommittee take favorable action at an early date on all bills that
will meet the needs of employees covered by the Federal Employees' Compensa-
tion Act.
STATEMENT OF HAROLD MSCAVOY. NATIONAL Pivw' 1l'm T, POST OFFICE ,1lAtt. HAND-
LERS, WATCHMEN, MESSENGERS & (1ROL`P LEADERS, AFL-CIO
'Mr. Chairman and members of the select subcommittee on labor, for the record
my name is Harold fcAvoy. I ant national president of the Post Office. Mail
Handlers, Watchmen, Mfessengerq & Group Leaders. \V' are inenibers of the
AFL-CIO and the Government Employees' Council.
Our national organization would like to go on record as fully endorsing IT.R.
10721 and H.R. 5285. Both of these hills, if enacted into law. would be a
giant step in the right direction. H.R. 10721 and II,R. 528.S would amend the
Federal Employees' Compensation Art. The increase in compensation from
8525 to $650. and the minimum from $11d) to S210 would be a tremendous help
for our people on all injuries.
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IMPROVEMENT OF BE D'
in your considerations, all postal employees will be grateful if the benefits
received would be in line with the cost of living.
The benefits to complete the education of children of survivors to age 23, with
benefits stopping at age 23, or the completion of their education is fully endorsed
by our national organization.
In closing this statement, I wish to go on record for speedy and favorable
consideration to the worthy pieces of legislation before your committee, H.R.
1.0721 and H.R. 5288, and to add "thank you" for the privilege of appearing
before you whereas I was able to give you and the members of your committee
the thinking of our national organization.
WOODROw WILSON' cseoor. OF PUBLIC AND
INTERNATIONAL AFFAIRS, PRINCETON UNIVERSITY,
Princeton, N.J., September 13, 1965.
Hon. ELMER J. IIOLLANo,
Chairman, Select Subcommittee on Labor, Rayburn House Office Building,
Washington, D.C.
DEAR CONGRESSMAN HOLLAND : I appreciate your letter of September 1 sending
me a copy of H.R. 10721 for comment.
It seems to me a meritorious bill deserving the support of your subcommittee
and of the Congress.
I believe, however, that the bill would be greatly improved if the increase of
compensation for present beneficiaries, provided in title III, section 301, were
related to changes in the index of weekly wages rather than the Consumer Price
Index. It is clearly the intent of the original law that compensation benefits be
related to the injured worker's wage level. I presume that it is the intention
of H.R. 10721 that this relationship be maintained rather than eroded by the
passage of time. However, adjustments .based on the Consumer Price Index will
not maintain the desired relationship. Since wage increases tend to outrun
price increases, the injured worker would be put to still further disadvantage
compared to the more fortunate majority of labor.
Section 301 also appears to have an ambiguity. It seems to pr. ovide that all
current recipients of compensation will have their monthly payments increased
by the annual average percentage change in the Consumer Price Index since the
year in which the award was first made. Thus,, if the annual average change
over the past 6 years was, for example, 2 percent, and the change during the last
year was also 2 percent, a worker who first received an award e) years ago would
receive the same increase as -a worker who received an award only last year,
although there hadbeen a price increase of over 12 percent since the first award
in one case and only 2 percent since the award in the other case. I doubt that
this is the intentiali ofthe author. The wording of the bill may need some clari-
fication. We have, of course, not seen the last of price increases or wage in-
creases. Would it not, therefore, be well to make provision for automatic adjust-
ments to take care of such changes in the future as well as in the past?
With all good wishes to you,_
Faithfully,
HERMAN hI. SOMERS,
Professor of Politics and Public Affairs.
NATIONAL SOCIETY OF- PROFESSIONAL ENGINEERS
Washington, D.C., September 17, 1965.
110I1. ELMER J. HOLLAND,
Chairman, Select Subcommittee- on Labor, Committee on Education and Labor,-
U.S. House of Representatives, Washington, D.C.
DEAR MR. HOLLAND : Thank you for your letter of September 7. inviting the
society to present its views on amendments proposed to the Federal Employees'
Compensation Act. As an organization with many of its 64,000 members em-
ployed by the Federal Government, the National Society of Professional Engi-
neers has for a number of years maintained an interest in questions of policy and
legislation affecting the interests of engineers in Government.
The society stro.gly supports H.R. 10721, which proposes several needed
amendments to thel4'edera1 Employees' Compensation Act, and believes that you
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J IMPROVEMENT OF BENEFITS CINDER THE FECA
.and the other members oP your sutreomnriltr a are to he coniulended for the prompt
attention given it. The society has one suggestion which we feel would improve
somewhat Hie administration's reconuneuded aniendinents.
or iurrticnlar interest to engineers enrployed by the Federal Government is the
provision of 11:R. 10721, which would increase the maximum monthly benefit
authorized. currently set at $."5?:r, Since the career patterns of engineers nor-
mally extend into the upper grades, they are likely to be affected by the present
limitation, which we believe to be clearly inadequate.
However, the society questions hot Ii the necessity and equity of imposing ally
absolute dollar limitation on maximal benefits, as proposed by H.R. 10721.
From the small minority of employees involved, it does not appear possible that
the Government could save enough to justify such discrimination. It is generally-
true that financial ohligaItons rise in more or less direct proportion to income,
and It would not nplear rvinitable to impose a greater burden of readjustment
upon 7 percent of eatployet-m afta-red. than upon the other 9:1 percent Who would
receive time full allowance of 75 iereeat of baste monthly compensation.
An addilianal consideration stems from the certainly- that tills diseriiuinntory
limitation will affect a greater proportion of disabled Individuals its time goes
on. thus requiring additional legislation every few years. Although it. has been
stated that this is Intended as an ' tnterlm" measure, it must be pointed out that
"tenilx>rarr" legishttion Is frequently longer lived than originally intended.
With these thoughts in mini- the society urges that your subcommittee take
prompt action on 11,11. 10721, and that it remove the dollar ilarllation on Maxi-
mum monthly benefits.
Thank you again for your consideration of our views on this subject.
Very truly yours,
PAUL.. II. Roaatxs, T'.E., l;.t-ccutirc Director.
STATEMENT OF MICHAEL J. C:t't.LEN, PHESIU#NT, THE NATIONAL ASSOCIATION OF
SPECIAL IiELIv#mY \I#SSF.NGERS
Mr. Chairman and members of the sub ctnunittee. by way of identification. I am
Michael J. Cullen, president. of the National Association of Special Delivery
Messengers. We are affiliated with the American Federation of Labor-Congress
of Industrial Relations and have been accorded national exclusive recognition
for the employees of our craft by the Post Office Department under Executive
Order 109SS.
We welcome this opportunity to present the views of our membership on H.R.
10721 and related bills which are before this committee for consideration. Wo
fully support the provisions of 11.11, 10271 to increase the augmented compensa-
tion limit, to increase the maximum and minimum compensation and the amend-
ment to the base for computing the death benefit under the Federal Employees
Compensation Act.
We also endorse the proposed change In paragraph C of section 10 of the act to
provide more liberal education benefits for surviving children.
We also support the provisions of title III of II.R. 10271 which would raise
compensation payments for disability or death by the increase In BLI figures
since the date of the award, less any adjustment previously authorized by
Congress.
We subscribe to the intent and purpose of MR. 5298 which would continue the
pay of an Injured employee until such time as he receives his compensation
checks. Under the present system, it takes several weeks to process a claim.
An injured employee is without income for at least 4 weeks and in many cases
for much longer periods of time . The provision of this bill to accrue sick and
annual leave for an injured employee. who returns to work, is also a noteworthy
one. We solicit your favorable consiration of these two very Important matters.
We also favor the provisions of 1T.11. 1755.1 to provide for the establishment of a
Federal employee accident prevention program.
Mr. Chairman and members of the committee, we deeply appreciate the Inter-
cat and concern that you have demonstrated for the welfare of the postal and
Federal employers,. We thank you for the privilege of being able to express our
views to you on these vital subjects.
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IMPROVEMENT OF BENEFITS UNDER THE FE
Congressman ELMER J. HOLLAND,
House of Representatives,
Washington, D.C.
DEAR MR. HOLLAND : I strongly urge you to vote for the passage of H.R. 2624,
the optometry amendment.
Generalities may be misconstrued, and in order to avoid this, please consider
voting for this bill.
Thank you.
Sincerely yours,
MOREY X. POwELL, O.D.-
AMERICAN OPTOMETRIC ASSOCIATION,
St. Louis, Mo., September 30, 1965
Hon. ELMER J. HOLLAND,
U.S. House of Representatives,
House O;flSee Building,
Washington, D.C.
DEAR CONGRESSMAN IIOLLAND : I am writing to you concerning H.R. 2624 to
urge your support of the optometric amendment that has been suggested. It is
extremely important that the legislative intent of the bill be made clear.
Your consideration of the request is requested most respectfully.
Sincerely,
MELVIN D. WOLFBE:RG, O.D.
PENNSYLVANIA OPTOMETRIC ASSOCIATION,
Hershey, Pa., September 29, 1965.
Congressman ELMER J. HOLLAND,
Chairman, Education and Labor Subcommittee,
House of Representa?tives, Washington, D.C.
DEAR CONGRESSMAN HOLLAND : On behalf of the Pennsylvania Optometric As-
sociation I would urge favorable reporting of H.R. 2624 along with optometry's
amendments.
Too many times in the past we find officials administrating differently than
the legislative intent. We feel that being specific about optometric care will
alleviate these problems and thus ultimately give better visual care to the public.
Sincerely,
RAY L. KiNCiE, O.D., President.
THE WESTERN PENNSYLVANIA. OPTOMETRIC SOCIETY, INC.,
MoKees Rocks, Pa., September 29, 1965.
ELMER J. HOLLAND,
U.S. House of Representatives,
Washington, D.C.
DEAR MR. HOLLAND : Thank you for your letter of September 16, 1965, and for
your consideration of testimony of Dr. Eugene McCrary in behalf of H.R. 2624.
We believe that inclusion,of the freedom to select optometric service will repre
sent a significant improvement-at no cost-to the Federal Employees' Com-
pensation. Act.
We respectfully urge your support toward the reporting out and enactment
of this legislation.
Sincerely yours,
[Telegram]
DiLLSBURG, PA? September 29,1965.
Hon. ELMER J. HOLLAND,
Chairman, Education and Labor Subcommittee,
House of Representatives, Washington, D.C.
DEAR CONGRESSMAN HOLLAND : I am taking this opportunity to. write you in
regard to H.R. 2624. I ask that you vote favorably for this bill along with the
amendments to include optometry. As vice president for legislative affairs of
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the Pennsylvania Optometric Association, I have often seen legislative intent
go unheeded because It was not spelled out In the bill. For this reason I would
urge that you favor specifically adding optometry's amendments to this legis-
lation to Ultimately insure the freedom of choice of practitioners for all people.
Sincerely yours,
ALVix LEV[N, O.D?
Vice President, State Lcpislatire Affairs of the Pennsylvania Optometric
Association.
Re MR. 2G24.
lion. EL.MMER J. HOLLAND,
House of Representatives,
Washington, D.C.
IIF.AR Sis: As a member of the Select Subcommittee on Labor, I would ap-
preciate your help and support of the action on ILR. 2621, This act as it now
stands shows discrimination and amending MR. 21623 will give freedom of choice
to the Federal employee.
I am asking for your support to bell) advance my profession. Thank you.
Respectfully yours,
1le.inrII.I.E, I'A...''eptcmbcr 11, 1965.
The Honorable ELNrER J. IIoLLAND,
House of Rrpresrntafires, /louse t)fee Building,
lVasliington, D.C.
DEAR REPRESENTATIVE HOLLAND: III your position as chairman of the important
Select Subcuuunittce on Labor, Committee on Educutiou and Labor, and a fellow
Pennsylvanian. I would like to urge your serious consideration of 11.l1. 38`26.
As our Congressman, representing the Commonwealth of Pennsylvania. I know
that you are aware that Federal employees way receive podiatry treatment, by
podiatrists. under the two Government-wide health benefit plans.
It app ears to me that it Is incongruous that a Federal employee may avail
himself of podiatry services to correct a foot Injury which occurs after working
hours, and yet this same Federal employee is not covered if the accident happens
on the job.
11.11. 3820 will amend the Federal Employees' Compensation Act to allow 111e
employee a free choice of doctors in situations described in the above paragraph.
Again I respectfully request your favorable consideration of H.R. 3826.
Very truly yours,
JOHN C. PANKRATz, D.S.C.
lion. WILLIAM D. HATHAWAY,
House of Representatives,
Washington, D.C.
MY Dz a Ma. HATHAWAY: This letter concerns your measure I3.R. 10721 which
would amend the Federal Employees' Compensation Act. It particularly is in
regard to section 201 as found on page 3 with regard to the definition of an edu-
cational or training institution at lines 12 and 13.
Most respectfully I would urge you to consider utilizing the definition of an
educational Institution as defined In the recent social security amendments con-
tained in Public Law 89-97 which states :
"An educational Institution is defined under section 202(d) (8) (C) as follows:
"(C) An 'educational Institution:' is (1) a school or college or university oper-
ated or directly supported by the United States. or by any State or local govern-
ment or political subdivision thereof, or (11) a .school or college or university which
has been approved by a State or accredited by a State-recognized or nationally
recognized accrediting agency or body, or (iii) a nonaceredited school or college
or university whose credits are accepted, on transfer, by not less than three insti-
tutions which are so accredited, for credit on the same basis as if transferred
from an institution so accredited."
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IMPROVEMENT OF BENEFITS UNDER THE FECA -159
This would be in lieu of the administrative authority which the bill, as intro-
duced, would repose in the Secretary of Labor. The definition in Public Law
89-97 is a good workable definition that is already developing administrative
authority.
If it is possible and timely I would like your permission to file a statement to
this effect in the record of the hearings on II.R.10721.
R. A. FULTON,
Executive Director and General Counsel.
HOD. CHARLES DONAHUE,
Solicitor of Labor,
U.S. Department of Labor, Washington, D.C.
Ms DEAR MR. DONAHUE : This letter concerns your most pertinent testimony
on September 8, 1965, before the House Select Subcommittee in support of H.R.
10721.
Enclosed is a carbon copy of my letter of September 27, 1965, to Congressman
Hathaway concerning our views on the definition of an educational institution
in the measure.
From your testimony it is obvious that you are familiar with the definition of
an educational institution as contained in the Social Security amendments of
Public Law 89-97 and you refer to them in your testimony on page 6. 1 feel it
appropriate that you have for your files our recommendation to Congressman
Hathaway.
So often people are prone to think solely in terms of a "college education"
rather than all types of postsecondary education. I notice the last sentence of
the first paragraph of your testimony on page 6 refers only to "college."
H.R. 10721 is a most worthy measure and I feel that the quality business
schools would like to lend their support to it. I feel that support wouldbe even
stronger if the measure were to be amended to include the statutory definition
of an educational institution as outlined in section 202(d) (8) (C) of Public Law
89-97.
Ir there is other information which you may desire about quality private busi-
ness schools, please do not hesitate to have a member of your staff contact me.
Sincerely,
R. A. FULTON,
Emectuive Director and General Counsel.
Hon. ELMER J. HOLLAND,
Chairman, Subcommittee on Labor,
Washington, D.C.
DEAR CONGRESSMAN HOLLAND : I am one of those 6,800-plus forgotten men who
are receiving total disability compensation from the Bureau of Employees' Com-
pensation due to injuries while under civil service in the Internal Revenue
Service.
I was operated on in 1953-have been receiving total disability compensation
since 1955. I had a bad ruptured disk in my back, also lost control of my left
leg.
When the Weir-Prouty bill was signed into law in August of 1960, we received
a small increase. Since that time the cost of living has gone up at least 10
percent, so we feel we should be considered for an increase in compensation.
The regular and retired civil service group have had several increases since
1960-also the military and the social security group are being considered for
another increase which they should have.
That is the reason I say we seem to be the forgotten men.
I wonder if there is a bill in the House now or if one will be introduced soon
to give those of us who are receiving compensation through BEC an increase
this year.
I will be 70 years old in'September. I would appreciate hearing from you at
your convenience.
Very truly yours,
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156 IMPROVEMENT OF BENEFITS U DF I! THE FECA
(Excerpts from "Workmen's Compensation and Reltabilitalieu
Law," suggested Slane legislation, council of Stale Governments, pro-
vided by Dr. ,Ar(hur Larson.)
WORKMEN'S COMPENSATION AND JtE1IAtIILITATIOX LAW
(From suggested State legislation of the Council of State Governments)
N'oxr;woxaa
Each( year a volume of "Suggested State Legislation" Is developed and ap-
proved by the Committee of State Officials on Suggested State Legislation of the
Council of State (lovernntentss. Members of the eotmnittee -State ler stators,
attorneys general or their deputies, members of commissions on interstate co-
operation, uniform law commissioners, legislative service agency personnel, and
other State official--meet annually to consider propxrsais from individual State
otlieialq, organizations of state officials. State agencies, legislative committe"..,
and professional and public service associations. When approved by the com-
mittee as being of interest dto the States. proposals appear in "Suggested State
Legislation." While generally cast in the form of legislation, proposals constitute
suggestions posed for consideration, rather than recommendations,
This entire act has been drafted overa period of 4 years by a special Advisory
Committee on Workmen's Compensation. under the chairmanship of Arthur Lar-
son, of the Duke University School of Law. This group, consisting of members
from State and Federal agencies, law schools, industry, labor. and the medical
profession, but acting in their private capacities. met with a Subcommittee on
Workmen's Compensation of the Committee of State O ielnis on Suggest Pit State
Legislation on an average of 2 or 3 days every 3 or I months. As Is true with
all legislation including suggested legislation the draft net represents eompro-
miser. Necessarily. individual members of the drafting group have reservations
about certain provisions. 'Nevertheless. the act as a whole represents the con-
sensus of its drafters and is presented as a proposal which merits the earnest
consideration of the States.
The Committee of State Officials on Suggested State Legislation and the Coan-
cit of State Governments are grateful to the advisory committee. Its members
rave unstintingly of their time and talents over a long period of time. Their
product-a comprehensive, integral draft act in an area of major interest to the
States -represents a great public service.
ItxEV-ARE CRUMMY),
E,recutfre Director, Council of State Gore) ninc-nts.
Arthur Larson (chairman), School of Law. Duke University
C. E. Carothers (1963-G1). Ford 3lotor Andrew Kalinykow, Association of Cas-
Co. rafts C Surety Co.
Samuel D. Estep. Law School, Cni- John V. Keaney. member (14(rl), In-
versity of Michigan slosh riot Accident Commission, Maine
Clinton Fair (191304(,3), American Fed- Andre Maisonpierre (1963--64). liner-
eration of Latbor-Congress of Indus- 14-an Mutual Insurance Alliance
trial Organizations George E. Morrison, Chamber of Com-
Thomas L. Franklin, director, Division merce of the United States
of Workmen's Compensation, New Arthur W. Motley, Director. Bureau of
Jersey Labor Standard,,, U.S. Department of
Ralph E. Gintz, director (1:)61), Indus- Labor
trial Commission. Wisconsin. Donald L. Ream. Bureau of Labor
Spencer H. Givens. director, Division of Standards. U.S. Department of Labor.
Workmen's Compensation, 3lissouri. .James J. livid. member, Industrial Com-
7ames L. Hill, Ford Motor Co. nti sion, VLourh Carolina
B. Dixon Ilollaand. M.D. (1960--G2). LawrenceSnu'dtey (10163-CA). American
American Hospitat Assrx'ittlon (for- Federation of Labor-Congress of In-
nerly with American Medical Assn- ditstrial Organizations
elation) Oscar Smith. U.S. Atomic Energy Com-
h enry F. IIowe, M.D. (19tH-G4), Amer- mission
ican Medical .s-swiation Ashley St. Clair (formerly with Liberty
Russell 11. Ilubbard. Jr.. (leneral Elec- Mutual Insurance Co.)
trio Co.
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IMPROVEMENT OF BENEFITS UNDER THE
(By Arthur Larson)
It may be helpful to make several general observations at the outset which
apply to the draft as a whole. The committee which prepared the draft had
several main purposes by which it was guided at every point where a major
choice between conflicting or competing provisions was analyzed.
The first objective was completeness. This means that a good workmen's
compensation act should be complete as to coverage of employers and employees,
as to kinds of injuries and diseases covered, as to work-connected circumstances
under which liability arises, and as to range and duration of benefits supplied.
Departures from this concept of completeness are tolerable only when overpow-
ering administrative considerations or considerations of public policy require
an exception. The reason for the importance of completeness in a workmen's
compensation act is that this class of legislation has been entrusted with one
segment of the total job of protecting workers against wage loss. The Federal
Social Security Act has assumed the main task of handling old-age retirement,
as well as survivorship and total permanent disability without respect to indus-
trial origin. The unemployment compensation system is designed to take care
of economically caused wage loss. But as to industrial injury and death, the
basic responsibility has been placed upon the workmen's compensation acts, and
to the extent that these acts fail to provide complete coverage or protection,
there is a strong possibility that that protection is not provided at all by any
public system. At best, the cases missed by an adequate compensation coverage
are perhaps picked up by public assistance, with the result that the public ulti-
mately pays the bill anyway, and the protection is afforded in much less digni-
fied and less satisfactory form. For example, the draft's provision of benefits
for life to a totally permanently disabled worker is more generous than the pro-
visions of anany States; but the draft's allowances for the least serious injuries-
such as those causing less than 1 week's disability which normally give rise to
no social problems-are less generous than In some States. Similarly, the draft's
provisions of dependency benefits to widows for life or until remarriage are more
generous than the corresponding provisions of many acts; but the draft also
initiates a new type of provision under which a person (other than wife or minor
child) will not be deemed dependent if his dependency is the result of failure to
make reasonable efforts to secure suitable employment. Other illustrations of
this kind will appear in the section-by-section analysis which, it is hoped, will
indicate that the draftsmen have been just as concerned to avoid the frittering
away of the compensation dollar in ways which serve no valid compensation pur-
pose as they have been to insure the full carrying out of objectives of the com-
pensation and rehabilitation system.
The second major purpose was to achieve efficiency. That is, the idea was to
get the maxim.unn achievement of the important purposes of workmen's com-
pensation out of the compensation dollar, with a minimum of expenditure of
that dollar on matters not centrally related to the purpose of workmen's conm-
pensation.
The third major purpose was to emphasize that rehabilitation is a normal and
essential. function of the workmen's compensation system. This affects the com-
pensation process from the moment of injury, and involves the handling of medi-
cal services, the entire process of administration, and various special provisions
about benefits and services.
The fourth general objective was to minimize litigation by putting to rest as
many known controversies as can be best handled by a deliberate choice of statu-
tory language. If tinder a particular type of provision, litigation has arisen in
several States because of uncertainty about the meaning of the provision, an
attempt has been made here to answer the question one way or another, so that
the same litigation need not be repeated in other States. In addition, where
particular words and phrases have acquired a large body of interpretative case
law, they have been disturbed as little as possible, so as to avoid the necessity
of creating a fresh body of decisional law to interpret some new and unfamiliar
phrase.
The fifth purpose has been to call attention of all States to certain provisions
that may be expected to anticipate problems not now covered by most statutes.
In a number of. instances, one or two States may have found it necessary to
devise a somewhat novel provision to deal with a specific problem, and, although
the sane problem can be expected to arise in other States, these other States may
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nut as yet have been under the necessity of dealing with the same problem. In
such cases, a great deal of injustice, hardship, and unnecessary litigation can
lie avoided by profiting by the exIs'rleuce of the State which has already dealt
with the question. and putting in the provision in advance.
In short, the object of the suggested workmen's compensation and reliabilita-
lion law is to bring to the attention of all the States the best provisions and the
hest experience of all other Slates, with the addition of a sustained and intensive
analytical treatment by a group of experts, who, where necessary, made modifica-
tions, innnovations, and adaptations that seemed essential to achieve the major
purposes just described and to relate the parts of the draft into a consistent
whole.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 159
Suggested Legislation
[Title should conform to state requirements. The following
is a suggestion: "An Act to provide for workmen's compensation
and rehabilitation."]
1 Section 1. Liability for Compensation. (a) Every employer sub-
2 ject to this act shall be liable for compensation for injury or death
3 without regard to fault as a cause of the injury or death.
4 (b) A contractor who subcontracts all or any part of a contract
5 and his carrier shall be liable for the payment of compensation to
6 the employees of the subcontractor unless the subcontractor pri-
7 marily liable for the payment of such compensation has secured the
8 payment of compensation as provided for in this act. Any contrac-
9 tor or his carrier who shall become liable for such compensation
10 may recover the amount of such compensation paid and necessary
11 expenses from the subcontractor primarily liable therefor. A per-
12 son who contracts with another (1) to have work performed con-
13 sisting of (a) the removal, excavation or drilling of soil, rock or
14 minerals, or (b) the cutting or removal of timber from land, or (2)
15 to have work performed of a kind which is a regular or recurrent
16 part of the work of the trade, business, occupation or profession of
17 such person, shall for the purposes of this section be deemed a
18 contractor, and such other person a subcontractor. This subsection
19 shall not apply to the owner or lessee of land principally used for
20 agriculture who contracts for removal of timber from such land.
21 (c) Liability for compensation shall not apply where injury to the
22 employee was occasioned solely by his intoxication or by his willful
23 intention to injure or kill himself or another.
1 Section 2. Definitions. As used in this act unless the context
2 otherwise requires:
3 (a) "Injury" means any harmful change in the human organism
4 arising out of and in the course of employment, including damage to
5 or loss of a prosthetic appliance, but does not include any communi-
6 cable disease unless the risk of contracting such disease is increased
7 by the nature of the employment.
8 (b) "Death" means death resulting from an injury.
/9 (c) "Carrier" means any insurer, or legal representative there-
10 of, authorized to insure the liabilities of employers under this act
11 and includes a self-insurer.
12 (d) "Self-insurer" is an employer who has been authorized under
13 the provisions of this act to carry his own liability to his employees
14 covered by this act.
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15 (e) "Agency" means the [name of state administrative agency] .
16 (f) "Director" means the director of the [name of state admin-
17 istrative agency] .
18 (g) "Board" means the I Workmen's Compensation Appeals
19 Board).
20 (h) "Disability" means, except for purposes of subsection (c) of
21 Section 16 relating to schedule losses, a decrease of wage earning
22 capacity due to injury. Wage earning capacity prior to injury shall
23 be the average weekly wage as calculated under Section 19. Wage
24 earning capacity after the injury shall be presumed to be actual
25 earnings after the injury. This presumption may be overcome by
26 showing that these earnings after injury do not fairly and reason-
27 ably represent wage earning capacity, and in such cases, wage earn-
28 ing capacity shall be determined in the light of all factors and cir-
29 cumstances in the case which may affect the injured worker's capa-
30 city to earn wages.
31 (i) "Income benefits" means payments made under the provisions
32 of this act to the injured worker or his dependents in case of death,
33 excluding medical and related benefits.
34 (j) "Medical and related benefits" means payments made for
35 medical, hospital, burial an. v..,~ services as provided in this act
36 other than income benefits.
37 (k) "Compensation" means all payments made under the provi-
38 sions of this act, representing the sum of income benefits and medi-
39 cal and related benefits.
40 (1) "Medical services" means medical, surgical, dental, hospital,
41 nursing and medical rehabilitation services.
42 (m) "Person" means any individual, partnership, firm, associa-
43 tion, trust, corporation, [state compensation insurance fund] , or
44 legal representative thereof.
45 (n) "Wages" means, in addition to money payments for services
46 rendered, the reasonable value of board, rent, housing, lodging, fuel
47 or similar advantage received from the employer, and gratuities
48 received in the course of employment from others than the employer.
49 (o) "Agriculture" means the operation of farm premises, Includ-
50 ing the planting, cultivating, producing, growing and harvesting of
51 agricultural or horticultural commodities thereon, the raising of
52 livestock and poultry thereon, and any work performed as an incident
53 to or in conjunction with such farm operations. It shall not include
54 the processing, packing, drying, storing, or canning of such com-
55 modities for market, or making cheese or butter or other dairy
56 products for market.
57 (p) "United States," when used in a geographic sense, means the
58 several states, the District of Columbia, the Commonwealth of Puerto
59 Rico, the Canal Zone and the Territories of the United States.
60 (q) "Alien" means a person who is not a citizen, a national or a
61 resident of the United States or Canada. Any person not a citizen or
62 national of the United States who relinquishes or is about to relin-
63 quish his residence In the United States shall be regarded as an alien.
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64 (r) "Beneficiary" means any person who is entitled to income
65 benefits or medical and related benefits under this act.
66 (s) "Actually dependent" means dependent in fact upon the em-
67 ployee, and refers only to a person who received more than half of
68 his support from the employee and whose dependency is not the re-
69 sult of failure to make reasonable efforts to secure suitable employ-
70 ment. When used as a noun, the word "dependent" mean] any per-
71 son entitled to death benefits under Section 18, or any person for
72 whom added benefits for disability are provided under Section 16.
73 (t) As used in Sections 16 and 18.
74 (1) "Wife" or "widow" means only the employee's wife liv-
75 ing with or actually dependent upon him at the time of his injury or
76 death, or living apart for justifiable cause or by reason of his
77 desertion.
78 (2) "Widower" means only the deceased employee's husband
79 living with and actually dependent upon her.
80 (3) "Child" means a child under 18 years of age; or a child
81 18 years of age or over and physically or mentally incapable of self-
82 support; or any child 18 years of age or over who is actually de-
83 pendent; or any child between 18 and 25 years of age who is enrolled
84 as a full-time student in any accredited educational institution. The
85 term "child" includes a posthumous child, a child legally adopted or
86 for whom adoption proceedings are pending at the time of death, an
87 actually dependent child in relation to whom the deceased employee
88 stood in the place. of a parent for at least one year prior to the time
89 of death, an actually dependent stepchild or an actually dependent
90 acknowledged illegitimate child. "Child" does not include a mar-
91 ried child unless receiving substantially entire support from the
92 employee. "Grandchild" means a child, as above defined, of a child,
93 as above defined, except that as to the latter child, the limitations as
94 to age in the above definition do not apply.
95 (4) "Brother" or "sister" means a brother or sister under
96 18 years of age, or 18 years of age or over and physically or men-
97 tally incapable of self-support, or 18 years of age or over and actu-
98 ally dependent. The terms "brother" and "sister" include step-
99 brothers and stepsisters, half brothers and half sisters, and brothers
100 and sisters by adoption; but the terms do not include married broth-
101 ers or married sisters unless receiving substantially entire support
102 from the employee.
103 (5) "Parent" means a mother or father, a stepparent, a parent
104 by adoption, a parent-in-law, and any person who for more than one
105 year immediately prior to the death of the employee stood in the
106 place of a parent to him, if actually dependent in each case.
107 (6) All questions of relationship and dependency shall initial-
108 ly be determined as of time of injury for purposes of income bene-
109 fits for injury, and as of the time of death for purposes of income
110 benefits for death.
1 ' Section 3. Coverage of Employers. The following shall constitute
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162 IMPROVEMENT OF BENEFITS TINDER THE FECA
2 employers subject to the provisions of this act:
3 (a) Every person that has in the state one or more employees sub-
4 ject to this act,
5 (b) The state, any agency thereof, and each county, city,.town,
6 township, incorporated village, school district, sewer district,
7 drainage district, public or quasi-public corporation, or any other
8 political subdivision of the state that has one or more employees
9 subject to this act.
1 Section 4. Coverage of Employees. The following shall constitute
2 employees subject to the provisions of this act, except as exempted
3 under Section 5-
4 (a) Every person, including a minor, whether lawfully or unlaw-
5 fully employed, in the service of an employer under any contract of
6 hire or apprenticeship, express or implied, and all helpers and as-
7 sistants of employees whether paid by the employer or employee, if
8 employed with the knowledge, actual or constructive, of the employer.
9 (b) Every executive officer of a corporation.
10 (c) Every person in the service of the state or of any political sub-
11 division or agency thereof, under any contract of hire, express or im-
12 plied, and every official or officer thereof, whether elected or ap-
13 pointed, while performing his official duties. Every person who is a
14 member of a volunteer fire or police department shall be deemed,
15 for the purpose of this act, to be in the employment of the political
16 subdivision of the state where the department is organized. Every
17 person who is a regularly enrolled volunteer member or trainee of
18 the civil defense corps of this state as established under the [State
19 Civil Defense Act) shall be deemed, for the purposes of this act, to
20 be in the employment of the state.
21 (d) Every person performing service in the course of the trade,
22 business, profession or occupation of an employer at the time of the
23 injury, provided such person in relation to this service does not
24 maintain a separate business, does not hold himself out to and ren-
25 der service to the public and is not himself an employer subject to
26 this act.
27 (e) Subject to the proviso in subsection (d) of this section, every
28 person regularly selling or distributing newspapers on the street or
29 to customers at their homes or places of business. For the purposes
30 of this act such a person shall be deemed an employee of any inde-
31 pendent news agency for whom he is selling or distributing newspa-
32 pers, or, in the absence of such independent agency, of each pub-
33 lisher whose newspapers he sells or distributes,
1 Section 5. Exemptions. The following employees are exempt
2 from the coverage of this act:
3 (a) Any person employed as a domestic servant in a private home
4 by an employer who has less than two employees regularly employed
5 40 or more hours a week in such employment.
6 (b) Any person employed, for not exceeding 10 consecutive work
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7 days, to do maintenance, repair, remodelling, or similar work in or
8 about the private home of the employer, or, if the employer has no
9 other employees subject to this act, in or about the premises where
10 such employer carries on his trade, business or profession.
11 (c) Any person performing services in return for aid or suste-
12 nance only, received from any religious or charitable organization.
13 (d) Any person for whom a rule of liability for injury or death is
14 provided by the laws of the United States.
15 (e) Any person employed in agriculture by an employer who has
16 in service less than three employees in such employment.
17 (f) Any person employed by a religious or charitable organiza-
18 tion having less than four' employees.
1 Section 6. Voluntary Coverage. (a) An employer who has in his
2 employment any employee exempted under Section 5 may elect to be
3 subject to this act. Such election on the part of the employer shall
4 be made by the employers securing the payment of compensation to
5 such exempted employees in accordance with Section 47. Any em-
6 ployee, otherwise exempted under Section 5, of such employer shall
7 be deemed to have elected to come under this act, if, at the time of
8 the injury for which liability is claimed, such employer has in force
9 an election to be subject to this act with respect to the employment
10 in which such employee was injured and such employee has not,
11 either upon entering into the employment or within five days after
12 the filing of an election by the employer, given to such employer and
13 to the Director notice in writing that he elects not to be subject to
14 this act.
15 (b) Such employer, within five days after securing the payment
16 of compensation in accordance with Section 46, shall give the Direc-
17 tor written notice of his election to be subject to this act. Such em-
18 ployer shall post and keep posted on the premises where any em-
19 ployee or employees, otherwise exempted under Section 5 works,
20 printed notices furnished by the Director stating his acceptance of
21 this act. Failure to give the notices required by this paragraph shall
22 not void or impair the employer's election to be subject to or relieve
23 him of any liability under this act.
24 (c) Any employer who has complied with subsection (b) of this sec-
25 tion may withdraw his acceptance of this act by filing written notice
26 with the Director of the withdrawal of his acceptance. Such with-
27 drawal shall become effective 60 days after the filing of such notice
28 or on the date of the termination of the security for payment of com-
29 pensation, whichever last occurs. The employer shall theretofore
30 post notice of such withdrawal where the affected employee or em-
31 ployees work or shall otherwise notify such employees of such with-
32 drawal.
1 Section 7. Extraterritorial Coverage. (a) If an employee, while
2 working outside the territorial, limits of this state, suffers an injury
3 on account of which he, or in the event of his death, his dependents,
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4 would have been entitled to the benefits provided by this act had such
5 injury occurred within this state, such employee, or in the event of
6 his death resulting from such injury, his dependents, shall be entitled
7 to the benefits provided by this act, provided that at the time of such
8 injury
9 (1) his employment is principally localized in this state, or
10 (2) he is working under a contract of hire made in this stare
11 in employment not principally localized in any state, or
12 (3) he is working under a contract of hire made in this state
13 in employment principally localized in another state whose workmen's
14 compensation law is not applicable to his employer, or
15 (4) he is working under a contract of hire made in this state
16 for employment outside the United States and Canada.
17 (b) The payment or award of benefits under the workmen's com-
18 pensation law of another state, territory, province or foreign nation
19 to an employee or his dependents otherwise entitled on account of
20 such injury or death to the benefits of this act shall not be a bar to
21 a claim for benefits under this act; provided that claim under this
22 act is filed within (two years) after such injury or death. If com-
23 pensation is paid or awarded under this act:
24 (1) The medical and related benefits furnished or paid for by
25 the employer under such-other workmen's compensation law on ac-
26 count of such injury or death shall be credited against the medical
27 and related benefits to which the employee would have been entitled
28 under this act had claim been made solely under this act;
29 (2) The total amount of all income benefits paid or awarded
30 the employee under such other workmen's compensation law shall
31 be credited against the total amount of income benefits which would
32 have been due the employee under this act, had claim been made
33 solely under this act;
34 (3) The total amount of death benefits paid or awarded under
35 such other workmen's compensation law shall be credited against
36 the total amount of death benefits due under this act;
37 (c) If an employee is entitled to the benefits of this act by reason
38 of an injury sustained in this state in employment by an employer
39 who is domiciled in another state and who has not secured the pay-
40 ment of compensation as required by this act, the employer or his
41 carrier may file with the Director a certificate, issuedby the com-
42 mission or agency of such other state having jurisdiction over work-
43 men's compensation claims, certifying that such employer has
44 secured the payment of compensation under the workmen's compen-
45 sation law of such other state and that with respect to said injury
46 such employee is entitled to the benefits provided under such law.
47 In such event:
48 (1) The filing of such certificate shall constitute an appoint-
49 meat by such employer or his carrier of the Director as his agent
50 for acceptance of the service of process in any proceeding brought
51 by such employee or his dependents to enforce his or their rights
52 under this act on account of such injury;
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53 (2) The Director shall send to such employer or carrier, by
54 registered or certified mail to the address shown on such certificate,
55 a true copy of any notice of claim or other process served on the Di-
56 rector by the employee or his dependents in any proceeding brought
57 to enforce his or their rights under this act;
58 (3) (i) If such employer is a qualified self-insurer under the
59 workmen's compensation law of such other state, such employer
60 shall, upon submission of evidence, satisfactory to the Director, of
61 his ability to meet his liability to such employee under this act, be
62 deemed to be a qualified self-insurer under this act;
63 (ii) If such employer's liability under the workmen's com-
64 pensation law of such other state is insured, such employer's carrier,
65 as to such employee or his dependents only, shall be deemed to be an
66 insurer authorized to write insurance under and be subject to this act;
67 Provided however, that unless its contract with said employer requires
68 it to pay an amount equivalent to the compensation benefits provided
69 by this act, its liability for income benefits or medical and related
70 benefits shall not exceed the amounts of such benefits for which such
71 insurer would have been liable under the workmen's compensation
72 law of such other state;
73 (4) If the total amount for which such employer's insurance is
74 liable under (3) above is less than the total of the compensation bene-
75 fits to which such employee is entitled under this act, the Director
76 may, if he deems it necessary, require the employer to file security,
77 satisfactory to the Director, to secure the payment of benefits due
78 such employee or his dependents under this act, and
79 (5) Upon compliance with the preceding requirements of this
80 subsection (c), such employer, as to such employee only, shall be
81 deemed to have secured the payment of compensation under this act.
82 (d) As used in this section:
83 (1) "United States" includes only the states of the United
84 States and the District of Columbia;
85 (2) "State" includes any state of the United States, the Dis-
86 trict of Columbia, or any Province of Canada;
87 (3) "Carrier" includes any insurance company licensed to
88 write workmen's compensation insurance in any state of the United
89 States or any state or provincial fund which insures employers
90 against their liabilities under a workmen's compensation law;
91 (4) A person's employment is principally localized in this or
92 another state when (1) his employer has a place of business in this
93 or such other state and he regularly works at or from such place of
94 business, or (2) if clause (1) foregoing is not applicable, he is domi-
95 ciled and spends a substantial part of his working time in thQ service
96 of his employer in this or such other state;
97 (5) An employee whose duties require him to travel regularly
98 in the service of his employer in this and one or.more other states
99 may, by written agreement with his employer, provide that his em-
100 ployment is principally localized in this or another such state, and,
101 unless such other state refuses jurisdiction, such agreement
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102 shall be given effect under this act;
103 (6) "Workmen's compensation law" includes "occupational
104 disease law."
1 Section 8. Inmates of Public Institutions.' For purposes of this
2 section, the term "inmate" includes any person confined against his
3 will in a public institution, whether the institution is a penal institu-
4 tion or not. The term does not apply to students in schools for the
5 deaf and blind or other similar institutions; it does apply to inmates
6 of state mental institutions, homes for the feeble minded, reforma-
7 tories, state prisons, county and local jails and the like. If an inmate,
8 in the performance of his work in connection with the maintenance of
9 the institution, or with any industry maintained therein, or with any
10 highway or public works activity outside the Institution, is injured so
11 as to incapacitate him permanently or materially reduce his earning
12 power, he may, upon being released from such institution either upon
13 parole or upon final discharge, be awarded and paid compensation
14 under the provisions of this act. If death results from such injury,
15 death benefits shall be awarded and paid to the dependents of the
16 inmate. The time limit for filing a claim under this section shall
17 date from the death or from the time of parole or final discharge or
18 from the time specified in subsection (a) of Section 26, whichever is
19 later. If any person who has been awarded compensation under the
20 provisions of this section shall be recommitted to an institution
21 covered by this section, such compensation shall immediately cease,
22 but may be resumed upon subsequent parole or discharge. Payment
23 shall be made from the appropriation for the operation of the par-
24 ticular industry or activity, but if there is no such appropriation,
25 payment shall be made from the general fund of the state.
1 Section 9. Presumption. In any claim for compensation, where
2 the employee has been killed, or is physically or mentally unable to
3 testify, and where there is unrebutted prima facie evidence that in-
4 dicates that the injury arose in the course of employment, it shall be
5 presumed, in the absence of substantial evidence to the contrary,
6 that the injury arose out of the employment, that sufficient notice of
7 the injury has been given, and that the injury or death was not oc-
8 casioned solely by the employee's intoxication or by his willful in-
9 tention to injure or kill himself or another.
1. There was not complete agreement among the members of the
Committee on Suggested State Legislation concerning the inclusion of
this section. Those who opposed its inclusion felt that injury suffered
in the course of work done in a public institution was suffered not in the
course of working for hire, but in a course of therapy or rehabilita-
tion.
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1 Section 10. Exclusiveness of Liability. (a) If an employer secures
2 payment of compensation as required by this act, the liability of such
3 employer under this act shall be exclusive and in place of all other
4 liability of such employer to the employee, his legal representative,
5 husband or wife, parents, dependents, next of kin, and anyone other-
6 wise entitled to recover damages from such employer at law or in
7 admiralty on account of such injury or death. For purposes of this
8 section, the term "employer" shall include a "contractor" covered
9 by subsectidn (b) of Section 1, whether or not the subcontractor has
10 in fact, secured the payment of compensation. The liability of an
11 employer to another person who may be liable for or who has paid
12 damages on account of injury or death of an employee.of such em-
13 ployer arising out of and in the course of employment and caused by
14 a breach of any duty or obligation owed by such employer to such
15 other shall be limited to the amount of compensation and other bene-
16 fits for which such employer is liable under this act on account of
17 such injury or death, unless such other and the employer by written
18 contract have agreed to share liability in a different manner. The
19 exemption from liability given an employer by this section shall also
20 extend to such employer's carrier and to all employees, officers or
21 directors of such employer or carrier, provided the exemption from
22 liability given an employee, officer or director of an employer or
23 carrier shall not apply in any case where the injury or death is
24 proximately caused by the willful and unprovoked physical aggres-
25 sion of such employee, officer or director.
26 (b) If an employer fails to secure payment of compensation as re-
27 quired by this act, an injured employee, or his legal representative
28 in case death results from the injury, may claim compensation un-
29 der this act and in addition may maintain an action at law or in ad-
30 miralty for damages on account of such injury or death, provided
31 that the amount of compensation shall be credited against the amount
32 received in such action, and provided that, if the amount of compen-
33 sation is larger than the amount of damages received, the amount of
34 damages less the employee's legal fees and expenses shall be credit-
35 ed against the amount of compensation. In such action the defendant
36 may not plead as a defense that the injury was caused by the negli-
37 gence of a fellow servant, that the employee assumed the risks of
38 his employment, or that the injury was due to the contributory neg-
39 ligence of the employee.
1 Section 11. Third Party Liability. (a) The right to income and
2 other benefits under this act, whether for disability or death, shall
3 not be affected by the fact that the injury or death is caused under
4 circumstances creating a legal liability in some person (other than
5 the employer or another person exempt from liability under Section
6 10 of this act) to pay damages therefor, such person so liable being
7 hereinafter referred to as the third party. The respective rights
8 and interests of the injured employee, or, in case of his death, his
9 dependents and [any person entitled to sue therefor], and of the
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go011s LBWA46R000600010001-4
10 employer or person, association, corporation or carrier liable for
11 the payment of compensation benefits under this act, hereinafter
12 called "the carrier," in respect to the cause of action and the
13 damages recovered shall be as provided by this section.
14 (b) The injured employee or, in event of his death, his dependents,
15 shall be entitled to receive the income and other benefits provided
16 by this act and to enforce by appropriate proceedings his or their
17 rights against the third party, provided that action against the third
18 party must be commenced not later than [ six months] after the
19 carrier accepts liability for the payment of compensation or makes
20 such payment pursuant to an award under this act, except as here-
21 inafter provided. In such case the carrier shall have a lien on the
22 proceeds of any recovery from the third party whether by judgment,
23 settlement or otherwise, after the deduction of reasonable and neces-
24 sary expenditures, including attorneys' fees, incurred in effecting
25 such recovery, to the extent of the total amount of compensation paid,
26 and to such extent such recovery shall be deemed to be for the bene-
27 fit of the carrier. Any balance remaining after payment of necessary
28 expenses and satisfaction of the carrier's lien shall be applied as a
29 credit against future compensation benefits for the same injury or
30 death and shall be distributed as provided in subsection (g) of this
31 section. Notice of the commencement of such action shall be given
32 within 30 days thereafter to the Director, the employer and carrier
33 upon a form prescribed by the Director.
34 (c) If, prior to the expiration of the six months period referred to
35 In subsection (b), or within 60 days prior to the expiration of the
36 time in which such action may be brought, the injured employee, or,
37 in event of his death, [the person entitled to sue therefor] shall not
38 have commenced action against or settled with the third party, the
39 right of action of the injured employee, or, in event of his death,
40 [the person entitled to sue therefor] shall pass by assignment to the
41 carrier; Provided, that such assignment shall not occur less than 20
42 days after the carrier has notified the injured employee or, in the
43 event of his death, [the person entitled to sue therefor] in writing,
44 by personal service or by registered or certified mail that failure
45 to commence such action will operate as an assignment of the cause
46 of action to the carrier, Prior to the expiration of 90 days after such
47 assignment, the carrier shall give the Director, the injured employee,
48 or, in event of his death, his dependents and [the person entitled to
49 sue therefor] notice, upon a form prescribed by the Director, that
50 action has been or will be commenced against the third party. Fail-
51 ure to give such notice, or to commence such action at least 30 days
2. The language in this section should in each state be modified to
fit (1) in reference to an action for injury, the state statute of limita-
tions applicable thereto and (2) in reference to an action for death, the
death statute, including limitations, of that state.
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52 prior to the expiration of the time within which such action may be
53 brought, as fixed by (state statute of limitations], shall operate as
54 a reassignment of such right of action to the injured employee, or,
55 in event of his death, [to the person entitled to sue therefor], and
56 the rights and obligations of the parties shall be as provided by sub-
57 section (b) of this section.
58 If the carrier as such assignee recovers in an action (1) for injury,
59 an amount in excess of the sum of the total of compensation paid or
60 provided the injured employee and the reasonable expenses, includ-
61 ing attorneys' fees, incurred in making such recovery, or (2) for
62 death, an amount on behalf of the dependents of the employee in ex-
63 cess of the sum of the income benefits paid such dependents, and
64 the reasonable expenses, including attorneys' fees, incurred in mak-
65 ing such recovery, such excess shall be applied as a credit against
66 future compensation benefits for the same injury or death and shall
67 be distributed in accordance with subsection (g) of this section.
68 (d) If the persons entitled to share in the proceeds of an action
69 brought under subsections (b) or (c) for death of the employee include
70 any person who was not a dependent of the deceased employee, such
71 person's share of any recovery made in such action, less a rateable
72 share of the reasonable expenses incurred in making such recovery,
73 shall be paid to such person or to the personal representative of the
74 deceased.
75 (e) The injured employee, or, in event of his death, his dependents,
76 and the carrier may, by agreement approved by the Director, or in
77 event of a settlement made during actual trial of the action against
78 the third party, approved by the judge. presiding at such trial, pro-
79 vide for a distribution of the proceeds of any recovery in such ac-
80 tion different from that prescribed by subsection (b) or (c) of this
81 section.
82 (f) If the third party, with notice or knowledge of the carrier's
83 lien, and the employee, or, in the event of his death, (the person
84 entitled to sue therefor] make a compromise settlement without
85 the written consent of the carrier for an amount less than the total
86 of the compensation to which he or they are entitled under this act
87 because of such injury or death, such settlement shall be invalid as
88 against the carrier, which shall be entitled to maintain an action
89 against the third party to recover the amount of compensation for
90 which the carrier is liable under this act, less the amount actually
91 inuring to the benefit of the carrier from the proceeds of such set-
92 tlement.
93 At the trial of such action the fact of such settlement shall be
94 prima facie evidence that the injury was proximately caused by a
95 breach of duty owed to the employee or a warranty given by the third
96 party.
97 The carrier shall not unreasonably refuse to approve a proposed
98 compromise settlement with the third party. The injured' employee
99 or his dependents may make written application to the Director for
100 a finding that a proposed compromise settlement with the third party
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IMPROVEMENT OF BENEFITS UNDER THE FECA
101 is reasonable and fair to all parties. If the Director, after such in-
102 quiry as he deems necessary, and after hearing If demanded by
103 either the carrier, the injured employee or his dependents, finds the
104 proposed settlement reasonable and fair, it shall be deemed to have
105 been approved by the carrier.
106 (g) When there remains a balance of $5,000 or more of the amount
107 recovered from a third party by the beneficiary or carrier after pay-
108 ment of necessary expenses, and satisfaction of the carrier's lien
109 and payment of the share of any person not a beneficiary under the
110 act which is applicable as a credit against future compensation bene-
111 fits for the same injury or death under either subsection (b) or sub-
112 section (c) of this section, the entire balance shall in the first in-
113 stance be paid to the carrier by the third party. The present value
114 of all amounts estimated by the Director to be thereafter payable as
115 compensation, such present value to be computed in accordance with
116 a schedule prepared by the Director, shall be held by the carrier as
117 a fund to pay such future compensation as it becomes due, and to pay
118 any sum finally remaining in excess thereof to the beneficiaries.
119 As soon as the Director has fixed the amount to be held by the
120 carrier in such fund, or determined that no future compensation will
121 be due, any excess of the third parry recovery over the total amount
122 necessary for payment of necessary expenses, satisfaction of the
123 carrier's lien, and payment of the share of any person not a bene-
124 ficiary under this act and creation of such fund, if any, shall be paid
125 forthwith to the beneficiary, but shall continue to constitute a credit
126 against future compensation benefits for the same injury or death as
127 to any compensation liability that may exist after such fund has been
128 exhausted.
129 (h) If death results from the injury and if the employee leaves no
130 dependents entitled to benefits under this act, the carrier shall have
131 a right of action against the third parry for any amounts paid into
132 the Special Fund established by Section 55, for reasonable funeral
133 expenses and medical benefits actually paid by the carrier, and such
134 cause of action shall be in addition to any cause of action of the legal
135 representative of the deceased. Such right may be enforced in action
136 at law brought against the third party within two years after the death
137 of the employee.
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1 Section 12. Medical Services, Appliances and Supplies. (a) For
2 any injury covered by this act, the employee shall be entitled to all
3 medical services, appliances and supplies which are required by the
4 nature of his injury and which will relieve pain and promote and
5 hasten his restoration to health and employment. The employer
6 shall furnish such services, appliances and supplies and necessary
7 replacements or repairs of such appliances unless the need for such
8 replacements or repairs is due to lack of proper care by the em-
9 ployee. In addition to the income benefits otherwise payable, the em-
10 ployee, who is entitled to income benefits, shall be paid an additional.
11 sum as for a medical benefit of not more than $50 weekly, as may be
12 deemed necessary, when the service of an attendant is necessary
13 constantly to be used by reason of the employee's being totally blind
14 or having lost both hands or both feet or the use thereof or being
15 paralyzed and unable to walk, or by reason of other disability result-
16 ing from the injury actually rendering him so helpless as to require
17 constant attendance. The Director shall have authority to determine
18 the necessity, character and sufficiency of any medical services
19 furnished or to be furnished and shall have authority to order a
20 change of physician, hospital or rehabilitation facility when in his
21 judgment such change is desirable or necessary.
22 (b) (1) The employer shall maintain a list of physicians (to be
23 known as the Panel of Physicians) who are reasonably accessible to
24 the employees. The employer shall post this list in a place or places
25 easily accessible to his employees.
26 (2) The employee shall have the right to accept the services
27 of a physician selected by his employer or to select a physician from
28 the Panel of Physicians. The employee shall have the right to make
29 an alternative choice of physician from such Pariel if he is not satis-
30 fied with the physician first selected. If due to the nature of the in-
31 jury or its occurrence away from the employer's place of business,
32 the employer or the employee is unable to make a selection as out-
33 lined above, the selection requirements of this paragraph shall not
34 apply as long as the inability to make a selection persists. The
35 physician selected under this paragraph may arrange for any con-
36 sultation, referral, extraordinary or other specialized medical serv-
37 ices as the nature of the injury shall require. The employer shall
38 not be responsible for the charges for medical services furnished
39 or ordered by any physician or other person selected by the em-
40 ployee in disregard of the provisions of this paragraph nor for com-
41 pensation for any aggravation of the employee's injury attributable
42 to improper treatment by such physician or other person.
43 (3) The Director may order necessary changes in a Panel of
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7( IMPROVEMENT OF BENEFITS UNDER THE FECA
Physicians if he finds that it fails to contain a sufficient number of
physicians who are conveniently available to or in the community in
which the medical service is required and who are qualified to per-
form services necessary to meet the particular needs of employees
of the employer. The Director may suspend or remove a physician
from a Panel of Physicians under rules and regulations adopted by
the Director.
(4) If the employer has knowledge of an injury to an employee
and the necessity for treatment and shall fail to maintain the Panel
of Physicians, or permit an employee to make choice of his physician
from such Panel, the injured employee may select a physician to ren-
der service at the expense of the employer. No claim for such medi-
cal treatment shall be valid and enforceable against such employer,
unless within 10 days following the first treatment the physician giv-
ing such treatment furnish the employer and the Director a report of
such injury and treatment on a form prescribed by the Director. The
Director may, however, excuse the failure to furnish such report
within 10 days when he finds it to be in the interest of justice to do
so, and may, upon application by a party in interest, make an award
for the reasonable value of such medical treatment so obtained by
the employee.
(5) All physicians attending injured employees shall comply
with all the rules and regulations adopted by the Director, and shall
make such reports as may be required by him at any and such times
as required by him upon the condition or treatment of any injured
employee, or upon any other matters concerning cases in which they
are employed. Generally all medical information relevant to the
particular injury shall, on demand, be made available to the employ-
er, employee, carrier and the Director. No such relevant informa-
tion developed in connection with treatment or examination for which
compensation is sought shall be considered a privileged communica-
tion. When a physician willfully fails to make any report required
of him under this section the Director may in his discretion order
the forfeiture of his right to all or part of payments due for services
rendered in connection with the particular case and may suspend or
remove the physician from one or more Panels of Physicians.
(6) If the employee unreasonably refuses to submit to medical
examination or treatment, the Director shall, by order, suspend the
payment of further compensation and his right to further proceedings
during such time as such refusal continues.
(7) Whenever the Director deems It necessary, in order to
assist him in resolving any issue of medical fact or opinion he shall
cause such employee to be examined by a physician or physicians
selected by the Director from the panel provided In paragraph (2) of
subsection (d) and obtain from such physician or physicians a report
upon the condition or matter which Is the subject of inquiry. The
Director shall have the power, in his discretion, to charge the cost
of such examination to the carrier, or to pay it from the Workmen's
Compensation Administration Fund provided by Section 63. The cost
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IMPROVEMENT OF BENEFITS N
93 of such examination shall include the payment.to the employee of all
94 necessary and reasonable expenses incident to such examination,
95 such as transportation and loss of wages.
96 (8) All fees and other charges for such medical services shall
97 not be higher than such charges as prevail in the same community
98 for similar services to injured persons and shall be subject to regu-
99 lation by the Director.
100 (c) The Director, after consultation with the [official name of
101 state medical society or association] shall appoint a Medical Direc-
102 tor [who shall devote full time to the duties of his office] . The
103 Medical Director shall be'Executive Secretary of the Medical Advi-
104 sory Committee and shall perform the following functions for which
105 he shall be responsible to the Director:
106 (1) Institute administrative procedures that will enable the
107 Director to evaluate medical care in order to effect optimal medical
108 treatment and rehabilitation in workmen's compensation cases.
109 (2) Inquire into instances where the medical treatment or the
110 rehabilitation provided in workmen's compensation cases appears to
Ill be deficient and to recommend corrective action when indicated.
112 (3) Advise on the disposition of complaints of a physician's
113 failure to furnish adequate medical care as required by this act or
114 by rules and regulations adopted by the Director, the disposition of
115 complaints concerning other aspects of the medical management of
116 a workmen's compensation case or the failure to render required
117 reports and the disposition of complaints of upreasonable interfer-
118 ence with the medical management of a workmen's compensation
119 case.
120 (4) Gather data and maintain records necessary to fulfill the
121 Medical Director's responsibilities.
122 (5) Conduct studies and prepare and issue reports on the medi-
123 cal and rehabilitative aspects of workmen's compensation cases.
124 (6) Expedite the submission and processing of medical reports
125 necessary to the processing of claims.
126 (7) Develop procedures to achieve impartiality in medical
127 testimony in workmen's compensation cases.
128 (8) Keep physicians currently informed of this act and of rules
129 and regulations thereunder adopted by the Director and of their
130 responsibilities thereunder.
131 (9) Undertake such other functions as may be delegated to him
132 by the Director.
133 (d) The Director shall appoint a Medical Advisory Committee of
134 [ ] members after consultation with the [official name of state
135 medical society or association] . The Director shall assign to the
136 Medical Advisory Committee such powers and duties as he deems
137 necessary, including the following:
138 (1) Advise with the Director as to rules and regulations under
139 which the Director may remove a physician from an employer's
140 Panel of Physicians.
141 (2) Advise the Director with respect to the constitution of im-
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IMPROVEMENT OF BENEFITS UNDER THE FECA
142 partial medical panels from among whose members the Director
143 shall select a physician to make a report to him whenever, in his
144 opinion, an Independent medical opinion is necessary.
145 (3) Advise on the gathering of statistics, the maintaining of
146 records and the rendering of reports under this act and under rules
147 and regulations adopted by the Director.
148 (4) Assist in keeping physicians currently informed of this act
149 and of rules and regulations adopted by the Director and of their re-
150 sponsibilities thereunder,
151 (5) Advise and assist in the achievement of impartiality in
152 medical testimony in workmen's compensation cases.
153 (6) Encourage the expansion and Improvement of existing re-
154 habilitation facilities and the development of additional facilities to
155 insure optimal rehabilitation in workmen's compensation cases.
156 (7) Recommend improvement in the methods of measuring
157 physical impairment in workmen's compensation cases.
158 (8) Recommend improvements in this act and in rules and
159 regulations adopted by the Director and in their administration to
160 Insure optimal medical care and rehabilitation.
1 Section 13, Rehabilitation. (a) One of the primary purposes of
2 this act shall be restoration of the injured employee to gainful em-
3 ployment. To this end there is hereby created a Rehabilitation Panel
4 which shall be composed of the Director, the Medical Director, and
5 specialists in medical and vocational rehabilitation to be appointed
6 by the Director.
7 (b) The Panel shall continuously study the problems of rehabilita-
8 tion, both physical and vocational, and shall investigate and maintain
9 a directory of all rehabilitation facilities, both private and public.
10 The Director in consultation with the Panel, shall. approve as quali-
11 fied such facilities, institutions and physicians as are capable of
12 rendering competent rehabilitation service to seriously injured em-
13 ployees. No facility or institution shall be considered as qualified
14 unless it is specifically equipped to provide rehabilitation services
15 for persons suffering either from some specialized type of disability
16 or general type of disability within the field of occupational injury
17 and is staffed with trained and qualified personnel, and with respect
18 to physical rehabilitation, unless it is supervised by a physician
19 qualified to render such service. No physician shall be considered
20 qualified unless he has had the experience and training specified by
21 the Director.
22 (c) An employee who has suffered an injury covered by this act
23 shall be entitled to prompt medical rehabilitation services. When
24 as a result of the injury he is unable to perform work for which he
25 has previous training or experience, he shall be entitled to such vo-
26 cational rehabilitation services, including retraining and job place-
27 meet, as may be reasonably necessary to restore him to suitable
28 employment. If such services are not voluntarily offered and accept-
29 ed, the Director on his own motion, or upon application of the employee
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IMPROVEMENT OF BENEFITS UNDER THE
30 or carrier, after affording the parties an opportunity to be heard by
31 the Panel, may refer the employee to a qualified physician or facility
32 for evaluation of the practicability of, need for, and kind of service,
33 treatment or training necessary and appropriate to render him fit
34 for a remunerative occupation. Upon receipt of such report, and
35 after affording the parties an opportunity to be heard by the Panel,
36 the Director, in consultation with the Panel, may order that the serv-
37 ices and treatment recommended in the report, or such other re-
38 habilitation treatment or service he may deem necessary, be pro-
39 vided at the expense of the employer. Vocational rehabilitation train-
40 ing, treatment or service shall not extend for a period of more than
41 [26] weeks except in unusual cases when by special order of the
42 Director, after hearing, the period may be extended for an additional
43 [ ] weeks.
44 (d) Where rehabilitation requires residence at or near the facility
45 or institution, away from the employee's customary residence,
46 reasonable cost of his board, lodging or travel shall be paid for by
47 the employer.
48 (e) Refusal to accept rehabilitation pursuant to an order of the
49 Director shall result in loss of compensation for each week of the
50 period of refusal.
51 (f) The Director and the Rehabilitation Panel shall cooperate on a
52 reciprocal basis with the vocational rehabilitation section of the
53 [ Department of Education] and the employment service of the [ Divi-
54 sion of Employment Security] .
1 Section 14. Burial Expense. If death results from the injury, the
2 employer shall pay the cost of burying in an amount not to exceed
3 [$ ] to any person who performed such service or incurred
4 the liability for the service, whether or not the employee leaves de-
5 pendents within the meaning of this act. Any such person is hereby
6 authorized to file a petition with the Director for the fixing of the
amount of the service and for an order requiring the employer to pay
8 the cost of the service. If death occurs while the employee is away
9 from his usual place of business or residence, the employer will be
10 liable for the reasonable cost of transportation of the body to the
11 employee's place of residence within the United States or Canada.
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1 Section 15. Waitin Period. No income benefits shall be allowed
2 for the first seven (7) days of the disability; Provided, however, that
3 in case the injury results in disability of more than twenty-eight (28)
4 days, income benefits shall be allowed from the date of the disability.
5 The day on which the injury occurred shall be included in computing
6 this waiting period unless the employee has been paid full wages for
7 that day.
I Section 16. Income Benefits for Disability. Income benefits for
2 disability s all be paid to the employee as follows, subject to the
3 maximum and minimum limits specified in Section 17,
4 (a) Total Disabili : For total disability, 55 per cent of his
5 average weekly wage during such disability, and 2-1/2 per cent of
6 his average weekly wage for each dependent, up to a maximum of
7 five (5), specified in subsection (t) of Section 2, except a wife living
8 apart from her husband for justifiable cause or by reason of his
9 desertion unless such wife is actually dependent on the employee.3
10 (b) Partial Disability: For partial disability, 55 per cent of his
11 decrease in wage-earning capacity during the continuance thereof,
12 and 2-1/2 per cent of his average weekly wage for each dependent,
13 up to a maximum of five (5), specified in subsection (t) of Section 2,
14 except a wife living apart from her husband for justifiable cause or
15 by reason of his desertion unless such wife is actually dependent on
16 the employee,
17 (c) Scheduled Income Benefits: For total permanent bodily loss
18 or losses herein scheduled, after and in addition to the income bene-
19 fits payable during the period of recovery, scheduled income bene-
20 fits in the amount of 55 per cent of the average weekly wage as
21 follows:
22
23
24
25
26
BODILY LOSS
WEEKS OF DISABILITY4
(1)
Arm
(240
- 3601
(2)
Leg
(160
- 240]
(3)
Hand
(216
- 3241
(4)
Foot
(112
- 168 ]
3. An alternative formula would be 66-2/3 per cent with no addition
for dependents.
4. The -numbers of weeks in which scheduled income benefits are
payable are based on 400 and 600 weeks respectively for the whole man
and the American Medical Association's evaluation of the relationship of
total loss or impairment of the particular member to the whole man.
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27 (5) Thumb [86 - 130]
28 (6) Index Finger [54 - 811
29 (7) Middle Finger [43 - 65]
30 (8) Ring Finger [22 - 32]
31 (9) Little Finger [11 - 16]
32 (10) Great Toe [20 - 301
33 (11) Second Toe [10 - 20]
34 (12) Third Toe [5 - 15]
35 (13) Fourth Toe [5 - 8]
36 (14) Fifth Toe [5]
37 (15) Total loss of binaural hearing [156 - 208]
38 (16) Total loss of vision of one eye [100 - 150]
39 (17) Total loss of bilateral vision [520 - 750]
40 (18) Total loss, or total loss of use, of
41 both hands, both arms, both feet or both legs [520 - 750]
42 (19) Phalanges: For loss of distal phalanx, one half of the in-
43 come benefits for loss of the entire digit. For loss of more than
44 the distal phalanx of a digit, the same as loss of the entire digit.
45 (20) Amputated arm or leg: For an arm or leg amputated to
46 a point no greater than one-third the distance from the wrist to the
47 elbow joint or from the ankle to the knee joint scheduled income
48 benefits shall be the same as those for the loss of the hand or foot.
49 (21) Two or more digits: For loss of two or more digits, or
50 one or more phalanges of two or more digits, of a hand or foot,
51 scheduled income benefits may be proportioned to the loss of use of
52 the hand or foot occasioned thereby, but shall not exceed the
53 scheduled income benefits for loss of a hand or foot.
54 (22) Total loss of use: Scheduled income benefits for perma-
55 nent total loss of use of a member shall be the same as for loss of
56 the member.
57 (23) Partial loss or partial loss of use: Scheduled income bene-
58 fits for permanent partial loss of use of a member shall be for a
59 period proportionate to the period benefits are payable for total loss
60 or total loss of use of the member as such partial loss bears to
61 total loss.
62 (24) Loss of hearing or partial loss of bilateral vision:
63 Scheduled income benefits for partial loss of vision in one or both
64 eyes, or total loss of hearing in one ear, or partial loss of hearing
65 in one or both ears shall be for a period proportionate to the period
66 benefits are payable for total bilateral loss of vision or total binaural
67 loss of hearing as such partial loss bears to total loss. The provi-
68 sions of paragraphs (4) through (8) inclusive of subsection (e) of this
69 section shall apply to scheduled losses of hearing.
70 (25) In any case in which there shall be a loss or loss of use of
71 more than one member or parts of more than one member set forth
72 in paragraphs (1) to (24) of this subsection, scheduled income bene-
73 fits shall be for the loss or loss of use of each such member or part
74 thereof, with the periods of benefits to run consecutively, except that
75 where the injury affects only two or more digits of the same hand or
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76 foot, paragraph (20) of this subsection shall apply.
77 (26) Other losses: Proper and equitable scheduled income
78 benefits shall be paid for serious permanent disfigurement of face,
79 head, neck or other area normally exposed and for loss or loss of
80 function of a major member or organ when such disfigurement or
81 loss is of a kind likely to handicap the employee in securing or hold-
82 ing employment, not to exceed 100 weeks, inaddition to other sched-
83 uled income benefits payable under this section. However where
84 scheduled income benefits are paid or payable for a particular mem-
85 ber or organ, no additional benefits shall be made under this para-
86 graph,
87 (27) In any case of total or partial loss of use of a member or
88 organ, of hearing or vision, or In any case of disfigurement, deter-
89 mination of the period for which scheduled income benefits are pay-
90 able shall not be made until the maximum of healing and of restora-
91 tion of function has been attained.
92 (d) Scheduled Income Benefits: Scheduled income losses for bodily
93 loss or losses, or loss of use, partial or total, shall be exclusive and
94 in lieu of all income benefits payable after and in addition to the in-
95 come benefits payable during the period of recovery except as other-
96 wise provided in subsection (e) of this section.
97 (e) Major Member Losses: For total loss, or total and permanent
98 loss of use, of an arm, hand, leg, both feet, or total loss of vision of
99 both eyes, whether or not the injury also involves other impairments
100 of the body, income benefits for such major member loss shall be
101 for the period specified for such loss or loss of use in subsection
102 (c), and with respect to any subsequent period of actual disability,
103 income benefits shall be payable as provided in subsection (a) or (b)
104 of this section, as long as the major member loss continues as a
105 total loss and as long as actual disability as defined in subsection
106 (h) of Section 2 continues.
107 (f) Scheduled Income Benefits for Occupational Deafness: Occupa-
108 tional deafness means permanent partial or permanent total loss of
109 hearing of one or both ears caused by prolonged exposure to harm-
110 ful noise in employment. The following provisions shall apply ex-
111 clusively to loss of hearing compensable under this subsection:
112 (1) No claim for scheduled income benefits shall be filed un-
113 til the lapse of six full consecutive calendar months after the ter-
114 mination of exposure to harmful noise in employment. The time
115 limitation for the filing of claims for occupational deafness shall
116 not begin to run earlier than the day following the termination date
117 of such six months' period. The time for filing claim as provided
118 under this paragraph shall be applicable not only in respect of the
119 last employer, but also in respect of any prior employer who may
120 have liability to pay compensation for the occupational deafness.
121 (2) No employer shall be liable for the payment of scheduled
122 income benefits for occupational deafness unless the employee
123 claiming benefits shall have worked for such employer in employ-
124 ment exposing the employee to harmful noise for a total period of at
125 least ninety (90) days.
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126 (3) An employer, otherwise liable under this subsection, whose
127 employment has contributed to any extent to an employee's occupa-
128 tional deafness shall be liable for the full extent of the deafness of
129 the employee, unless such employer shall establish by competent
130 evidence (including the results of a professionally controlled hearing
131 test) the extent of the employee's deafness as it existed prior to ex-
132 posure to harmful noise in the employer's employment. Upon such
133 showing the employer shall be liable to the employee only for the
134 proportion of the deafness attributable to employment by him. An
135 employer liable to the employee for the full extent of the employee's
136 occupational deafness may implead, in a compensation proceeding on
137 the employee's claim, any prior employer or employers in whose
138 employment the employee had been exposed to harmful noise, and if
139 it should be found that the impleaded employer would have been liable
140 to the employee under this subsection, had the employee proceeded
141 against him, under the claim being adjudicated, the employer held
142 liable shall be entitled to an award against the impleaded employer.
143 The impleading of an employer shall be accomplished by notice on a
144 form prescribed by the Director. Such notice shall be sent to the
145 impleaded employer and to the Director. An award may be made in
146 favor of the employer liable to the employee, and against the im-
147 pleaded employer or employers, which award may be enforced in the
148 same manner as awards to employees. The impleaded employer or
149 employers shall bear equal shares with the employer of the employ-
150 er's liability to the employee, unless the evidence warrants a differ-
151 ent apportionment.
152 (4) Losses of hearing due to industrial noise for compensation
153 purposes shall be confined to the frequencies of 500, 1000, and 2000
154 cycles per second. Loss of hearing ability for frequency tones above
155 2000 cycles per second are not to be considered as constituting dis-
156 ability for hearing.
157 (5) The per cent of hearing loss, for purposes of the determin-
158 ation of compensation claims for occupational deafness, shall be cal-
159 culated as the average, in decibels, of the thresholds of hearing for
160 the frequencies of 500, 1000, and 2000 cycles per second. Pure tone
161 air conduction audiometric instruments, approved by nationally
162 recognized authorities in this field, shall be used for measuring
163 hearing loss. If the losses of hearing average 15 decibels or less
164 in the three frequencies, such losses of hearing shall not then con-
165 stitute any compensable hearing disability. If the losses of hearing
166 average 82 decibels or more in the three frequencies, then the same
167 shall constitute and be a total or 100 per cent compensable hearing
168 loss.
169 (6) In measuring hearing impairment, the lowest measured
170 losses in each of the three frequencies shall be added together and
171 divided by three to determine the average decibel loss. For every
172 decibel of loss exceeding 15 decibels an allowance of one and one-
173 half (1-1/2) per cent shall be made up to the maximum of one hundred
174 (100) per cent which is reached at 82 decibels.
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175 (7) In determining the binaural percentage of loss, the per-
176 centage of impairment in the better ear shall be multiplied by five
177 (5). The resulting figure shall be added to the percentage of impair-
178 ment in the poorer ear and the sum of the two divided by six (6).
179 The final percentage shall represent the binaural hearing impairment.
180 (8) Before determining the percentage of hearing impairment,
181 in order to allow for the average amount of hearing loss from nonoc-
182 cupational causes found in the population at any given age, there shall
183 be deducted from the total average decibel loss, one-half (1/2) decibel
184 for each year of the employee's age over 40 at the time of last expo-
185 sure to industrial noise.
186 (9) No consideration shall be given to the question of whether
187 or not the ability of an employee to understand speech is improved
188 by the use of a hearing aid.
189 (g) The period of any scheduled income benefits payable under
190 this section on account of any injury shall be reduced by the period
191 of income benefits paid or payable under such schedule on account of
192 a prior injury if scheduled income benefits in both cases are for dis-
193 ability of the same member or function, or different parts of the same
194 member or function, and the scheduled income benefits payable on
195 account of the subsequent disability in whole or in part would dupli-
196 sate the scheduled income benefits payable on account of the pre-
197 existing disability.
198 (h) When an employee, who has sustained disability compensable
199 under subsection (c), and who has filed a valid claim in his lifetime,
200 dies from causes other than the injury before the expiration of the
201 compensable period specified, the income benefits specified and un-
202 paid at the individual's death, whether or not accrued or due at his
203 death, shall be paid, under an award made before or after such death,
204 for the period specified in this subsection, to and for the benefit of
205 the persons within the classes at the time of death and in the pro-
206 portions and upon the conditions specified in this subsection and in
207 the order named.
208 (1) To the widow or wholly actually dependent widower, if there
209 is no child under the age of 18 or incapable of self-support; or
210 (2) If there are both such a widow or widower and such a child
211 or children one-half to such widow or widower and the other half to
212 such child or children; or
213 (3) If there is no such widow or widower but such a child or
214 children, then to such child or children; or
215 (4) If there is no survivor In the above classes, then the parent
216 or parents wholly or partly actually dependent for support upon the
217 decedent, or to other wholly or partly actually dependent relatives
218 listed in paragraph (7) of subsection (a) of Section 18 or to both, in
219 such proportions as the Director may provide by regulation.
1 Section P. Weekly Maximum and Minimum Income Benefits for
2 Disability, (a) The minimum weekly income benefits for total dis-
3 ability shall not be less than 20 per cent (computed to the next higher
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4 multiple of $1.00) and the maximum weekly income benefit for dis-
5 ability shall not exceed 66-2/3 per cent (computed to the next higher
6 multiple of $1.00) of the average weekly wage of the state as defined
7 herein. In any event, income benefits shall not exceed the average
8 weekly wage of the injured employee.
9 (b) For the purpose of this act the average weekly wage in the
10 state shall be determined by the Director as follows: On or before
11 June 1 of each year, the total wages reported on contribution reports
12 to the [agency administering Employment Security Act or Unemploy-
13 ment Compensation Insurance Act] for the preceding calendar year
14 shall be divided by the average monthly number of insured workers
15 (determined by dividing the total insured workers reported for the
16 preceding year by 12). The average annual wage thus obtained shall
17 be divided by 52 and the average weekly wage thus determined round-
18 , ed to the nearest cent. The average weekly wage as so determined
19 shall be applicable for the full period during which income benefits
20 are payable, when the date of occurrence of injury or of disablement
21 in the case of disease falls within the calendar year commencing
22 January 1 following the June 1 determination.
23 (c) The minimum or the maximum weekly income benefits shall
24 not be changed for any calendar year unless the computation herein
25 provided results in an increase or decrease of two dollars ($2.00) or
26 more, raised to the next even dollar in the level of the minimum or
27 the maximum weekly income benefits.
1 Section 18. Income Benefits for Death. If the injury causes death,
2 income benefits shall be payable in the amount and to or for the
3 benefit of the persons following, subject to the maximum limits
4 specified in subsections (c) and (d) of this section:
5 (a) Benefit Amounts for Particular Classes of Dependents.
6 (1) If there is a widow or widower and no children of the de-
7 ceased, as defined in Section 2, to such widow or widower 50 per
8 cent of the average weekly wage of the deceased, during widowhood
9 or widowerhood.
10 (2) To the widow or widower, if there is a child or children
11 living with the widow or widower, 45 per cent of the average weekly
12 wage of the deceased, or 40 per cent, if such child is not or such
13 children are not living with a widow or widower, and in addition
14 thereto, 15 per cent for each child. Where there are more than two
15 such children, the indemnity benefits payable on account of such
16 children shall be divided among such children, share and share alike.
17 (3) Two years indemnity benefits in one lump sum shall be
18 payable to a widow or widower upon remarriage.
19 (4) To the children, if there is no widow or widower, 35 per
20 cent of such wage for one child, and 15 per cent for each additional
21 child, divided among such children share and share alike.
22 (5) The income benefits payable on account of any child under
23 this section shall cease when he dies, marries, or reaches the age
24 of eighteen, or when a child over such age ceases to be physically or
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25 mentally incapable of self-support, or if actually dependent ceases
26 to be actually dependent, or, if enrolled as a full-time student in any
27 accredited educational institution, ceases to be so enrolled or reaches
28 the age of 25, A child who originally qualified as a dependent by vir-
29 tue of being less than 18 years of age may, upon reaching age 18, con-
30 tinue to qualify if he satisfies the tests of being physically or mental-
31 ly incapable of self-support, actual dependency, or enrollment in an
32 educational institution.
33 (6) To each parent, if actually dependent, 25 per cent.
34 (7) To the brothers, sisters, grandparents, and grandchildren,
35 if actually dependent, 25 per cent to each such dependent. If there
36 should be more than one of such dependents, the total income bene-
37 fits payable on account of such dependents shall be divided share and
38 share alike.
39 (8) The income benefits of each beneficiary under paragraphs
40 (6) and (7) above-shall be paid until he, if a parent or grandparent,
41 dies, marries, or ceases to be actually dependent, or, if a brother,
42 sister, or grandchild, dies, marries, or reaches the age of eighteen
43 or if over that age ceases to be physically or mentally incapable of
44 self-support, or ceases to be actually dependent.
45 (9) A person ceases to be actually dependent when his income
46 from all sources exclusive of workmen's compensation income bene-
47 fits is such that, if it had existed at the time as of which the original
48 determination of -actual dependency was made, it would not have sup-
49 ported a finding of dependency. In any event, if the present annual
50 income of an actual dependent person including workmen's compen-
51 sation income benefits at any time exceeds the total annual support
52 received by the person from the deceased employee, the workmen's
53 compensation benefits shall be reduced so that the total annual in-
54 come is no greater than such amount of annual support received from
55 the deceased employee. In all cases, a person found to be actually
56 dependent shall be presumed to be no longer actually dependent three
57 years after each time as of which the person was found to be actually
58 dependent. This-presumption may be overcome by proof of continued
59 actual dependency as defined in this subsection and subsection (s) of
60 Section 2.
61 (b) Change in Dependents. Upon the cessation of income benefits
62 under this section to or on account of any person, the income bene-
63 fits of the remaining persons entitled to income benefits for the un-
64 expired part of the period during which their income benefits are
65 payable shall be that which such persons would have received if they
66 had been the only persons entitled to income benefits at the time of
67 the decedent's death.
68 (c) Maximum Income Benefits for Death. For the purposes of this
69 section, the average weekly wage of the employee shall be taken as
70 not more than the average weekly wage of the state as determined in
71 Section 17. In no case shall the aggregate weekly income benefits
72 payable to all beneficiaries under this section exceed the maximum
73 income benefits that was or would have been payable for total dis-
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74 ability to the deceased.
75 (d) Maximum Total Payment. The maximum weekly income bene-
76 fits payable for all beneficiaries in case of death shall not exceed 75
77 per cent of the average weekly wage of the deceased as calculated
78 under Section 19, subject to the maximum limits in subsection (c)
79 above. The maximum aggregate limitation shall not operate in case
80 of payment of two years' income benefits to the widow or widower
81 upon remarriage, as provided under subsection (a) (3) of this sec-
82 tion, to prevent the immediate recalculation and payments of bene-
83 fits to the remaining beneficiaries as provided under subsection (b)
84 of this section, but the weekly income benefits as recalculated to
85 such remaining beneficiaries shall not exceed the weekly benefit that
86 was or would have been payable for total disability to the deceased.
87 The classes of beneficiaries specified in paragraphs (1), (2) and (4)
88 of subsection (a) shall have priority over all other beneficiaries in
89 the apportionment of income benefits. If the provisions of this sub-
90 section should prevent payment to other beneficiaries of the income
91 benefits to the full extent otherwise provided for by this section, the
92 gross remaining amount of income benefits payable to such other
93 beneficiaries shall be apportioned by class, proportionate to the in-
94 terest of each class in the remaining amount. Parents shall be con-
95 sidered to be in one class and those specified in paragraph (6) in
96 another class.
1 Section 19. Determination of Average Weekly Wage. Except as
2 otherwise provided in this act, the average weekly wage of the injured
3 employee at the time of the injury shall be taken as the basis upon
4 which to compute compensation and shall be determined as follows:
5 (a) If at the time of the injury the wages are fixed by the week,
6 the amount so-fixed shall be the average weekly wage;
7 (b) If at the time of the injury the wages are fixed by the month,
8 the average weekly wage shall be the monthly wage so fixed multi-
9 plied by twelve and divided by fifty-two;
10 (c) If at the time of the injury the wages are fixed by the year, the
11 average weekly wage shall be the yearly wage so fixed divided by
12 fifty-two;
13 (d) (1) If at the time of the injury the wages are fixed by the day,
14 hour, or by the output of the employee, the average weekly wage shall
15 be the wage most favorable to the employee computed by dividing by
16 thirteen the wages (not including overtime or premium pay) of said
17 employee earned in the employ of the employer in the first, second,
18 third, or fourth period of thirteen consecutive calendar weeks in the
19 fifty-two weeks immediately preceding the injury.
20 (2) If the employee has been in the employ of the employer
21 less than thirteen calendar weeks immediately preceding the injury,
22 his average weekly wage shall be computed under the foregoing
23 paragraph, taking the wages (not including overtime or premium pay)
24 for such purpose to be the amount he would have earned had he been
25 so employed by the employer the full thirteen calendar weeks im-
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184 IMPROVEMENT OF BENEFITS UNDER THE FECA
26 mediately preceding the injury and had worked, when work was avail-
27 able to other employees in a similar occupation.
28 (e) If at the time of the injury the hourly wage has not been fixed
29 or can not be ascertained, the wage for the purpose of calculating
30 compensation shall be taken to be the usual wage for similar services
31 where such services are rendered by paid employees.
32 (f) In occupations which are exclusively seasonal and therefore
33 cannot be carried on throughout the year, the average weekly wage
34 shall be taken to be one-fiftieth of the total wages which the employee
35 has earned from all occupations during the twelve calendar months
36 immediately preceding the injury.
37 (g) In the case of volunteer firemen, police, and civil defense mem-
38 bers or trainees, the income benefits shall be based on the average
39 weekly wage in their regular employment.
40 (h) If the employee was a minor, apprentice or trainee when in-
41 jured, and it is established that under normal conditions his wages
42 should be expected to increase during the period of disability, that
43 fact may be considered in computing his average weekly wage.
44 (i) When the employee is working under concurrent contracts with
45 two or more employers and the defendant employer has knowledge of
46 such employment prior to the injury, his wages from all such em-
47 ployers shall be considered as if earned from the employer liable
48 for compensation.
1 Section 20. Payment for Second Injuries from Special Fund.5
2 (a) If an employee who has a permanent physical impairment from
3 any cause or origin incurs a subsequent disability by injury arising
4 out of and in the course of his employment resulting in compensation
5 liability for disability that is substantially greater by reason of the
6 combined effects of the preexisting impairment and subsequent injury
7 or by reason of the aggravation of the preexisting impairment than
8 that which would have resulted from the subsequent injury alone, the
9 employer or his insurance carrier shall in the first instance pay all
10 awards of compensation provided by this act, but such employer or
11 his insurance carrier shall be reimbursed from the Special Fund
12 created by Section 55 for all compensation payments subsequent to
13 those payable for the first one hundred and four (104) weeks of dis-
14 ability.
15 (b) If the subsequent injury of such an employee shall result in
16 the death of the employee and it shall be determined that the death
17 would not have occurred except for such preexisting permanent phy-
18 sical impairment, the employer or his insurance carrier shall in the
19 first instance pay the compensation prescribed by this act, but he or
20 his insurance carrier shall be reimbursed from the Special Fund
5. The Special Fund referred to here is the second or subsequent
injury fund that all but four states have established.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 185
21 created by Section 55 for all compensation payable in excess of one
22 hundred and four (104) weeks.
23 (c) In order tQ qualify under this section for reimbursement from
24 the Special Fund, the employer must establish by written records
25 that the employer had knowledge of the permanent physical impair-
26 ment at the time that the employee was hired, or at the time the em-
27 ployee was retained in employment after the employer acquired such
28 knowledge.
29 (d) As used in this section, "permanent physical impairment"
30 means any permanent condition, whether congenital or due to injury
31 or disease, of such seriousness as to constitute a hindrance or ob-
32 stacle to obtaining employment or to obtaining reemployment if the
33 employee should become unemployed. No condition shall be con-
34 sidered a "permanent physical impairment" unless it is one of the
35 following conditions:
36 (1) Epilepsy
37 (2) Diabetes
38 (3) Cardiac disease
39 (4) Arthritis
40 (5) Amputated foot, leg, arm or hand
41 (6) Loss of sight of one or both eyes or a partial loss of un-
42 corrected vision of more than 75 per cent bilaterally
43 (7) Residual disability from poliomyelitis
44 (8) Cerebral palsy
45 (9) Multiple sclerosis
46 (10) Parkinson's disease
47 (11) Cerebral vascular accident
48 (12) Tuberculosis
49 (13) Silicosis
50 (14) Psychoneurotic disability following treatment in a recog-
51 nized medical or mental institution
52 (15) Haemophilia
53 (16) Chronic osteomyelitis
54 (17) Ankylosis of joints
55 (18) Hyperinsulism
56 (19) Muscular dystrophies
57 (20) Arteriosclerosis
58 (21) Thrombophlebitis
59 (22) Varicose veins
60 (23) Heavy metal poisoning
61 (24) Ionizing radiation injury
62 (25) Compressed air sequelae
63 (26) Ruptured intervertebral disk
64 or unless it would support a rating of disability of 200 weeks or more
65 if evaluated according to standards applied in compensation claims.
66 (e) The Special Fund shall not be bound as to any question of law
67 or fact by reason of an award or an adjudication to which it was not
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68 a party or in relation to which it was not notified at least three weeks
69 prior to the award or adjudication, that it might be subject to liability
70 for the injury or death.
71 (f) An employer or carrier shall notify the Director and the Di-
72 rector of the Special Fund of any possible claim against the Special
73 Fund as soon as practicable, but in no event later than one hundred
74 weeks after the injury or death.
I Section 21. Benefit Adjustment.6 When the maximum weekly in-
2 come benefit rate is changed as provided for in Section 17, any
3 person who has been totally and continuously disabled for over two
4 years, or any widow or widower who is receiving payments for in-
5 come benefits under this act in amounts per week less than the new
6 maximum for total disability or death shall receive weekly from the
7 carrier, without application, an additional amount calculated in ac-
8 cordance with the provisions of this section. The carrier shall be
9 entitled to reimbursement from the Special Fund created by Section
10 55 for the additional amount so paid.
11 (a) In any case where a totally disabled person, or a widow or
12 widower is presently receiving the maximum weekly income benefit
13 applicable at the time such award was made, the supplemental al-
14 lowance shall be an amount which, when added to such award, will
15 equal the new maximum weekly benefit,
16 (b) In any case where a totally disabled person, or a widow or
17 widower is presently receiving less than the maximum weekly in-
18 come benefit rate applicable at the time such award was made, the
19 supplemental allowance shall be an amount equal to the difference
20 between the amount the claimant is presently receiving and a per-
21 centage of the new maximum determined by multiplying it by a frac-
22 tion, the numerator of which is his present award and the denomina-
23 tor of which is the maximum weekly rate applicable at the time such
24 award was made.
6. Because of the unavailability of data on the cost of providing the
increased benefits to persons on the rolls at the time of enactment of this
section; the timing and financing of this provision as to this group must
be adjusted in the light of results of studies in individual states.
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1 Section 22. Record of Injury or Death. Every employer shall
2 keep a record of each injury to any of his employees as reported to
3 him or of which he otherwise has knowledge. Such record shall in-
4 clude a description of the injury, a statement of any time during
5 which the injured person was unable to work because of the injury,
6 a description of the manner in which the injury occurred, and such
7 other 'information relating to the injury or its occurrence as the Di-
8 rector may by regulation require. These records shall be available
9 for inspection by the Director or by any .governmental agency at
10 such reasonable times and under such conditions as the Director
11 may prescribe. Upon willful failure or refusal of the employer to
12 keep the record required under this section, the Director may as-
13 sess against such employer a civil penalty not exceeding [ $500] ,
14 which penalty shall be paid into the Special Fund established under
15 Section 55.7
1 Section 23. Report of Injury or Death. (a) Within 15 days after
2 the employer has notice or knowledge of the occurrence of a death
3 or any injury which constitutes a permanent impairment, or which
4 renders the injured person unable to perform a regularly estab-
5 lished job at his place of employment during the full period of his
6 regular shift on any calendar day subsequent to the day of injury, a
7 report thereof shall be made in writing by the employer to the Di-
8 rector, upon a form approved by the Director for that purpose, set-
9 ting forth (1) the name, address, and business of the employer; (2)
10 the name, address, and occupation of the employee; (3) the nature
11 of the injury and a description of the manner in which it occurred;
12 (4) the year, month, day and hour when, and the particular locality
13 where injury or death occurred; and (5) such other information as
14 the Director may prescribe by regulation. In addition, within the
15 same period, except where claim has been filed under subsection
16 (e) of Section 26, if the case involves death or more than seven
17 days' disability, the employer shall notify the Director in writing
18 whetherl payment shall be made without an award or controverted.
19 If the right to compensation is controverted, the grounds shall be
20 stated, but the stating of such grounds shall not prevent the later
7. The American Association of State Compensation Insurance
Funds comments that it would be preferable if the Director were not
vested with this quasi-penal authority. The determination of penalty
should rest with the civil courts, with the Director authorized to initi-
ate the action.
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188 IMPROVEMENT OF BENEFITS UNDER TI3E FECA
21 assertion of other defenses. For other injuries not resulting in dis-
22 ability but which require medical treatment by a physician beyond
23 ordinary first-aid, monthly summary reports may be required on a
24 form prescribed by the Director.
25 (b) The mailing to the Director of any such written report as re-
26 quited in subsection (a) of this section within the time prescribed,
27 shall be a compliance with this section.
28 (c) Whenever an employer willfully fails to file or refuses to file
29 report of injury or death as required in subsection (a) of this sec-
30 tion, the Director may assess a penalty not exceeding [$5001 , which
31 penalty Shall be paid into the Special Fund, established under Sec-
32 tion 55.
33 (d) Where the employer has knowledge of any injury or death and
34 willfully fails or refuses to file the report of injury as required in
35 subsection (a) of this section, the limitations prescribed in Section
36 26 shall not begin to run against the claim of any person entitled to
37 compensation until such report shall have been furnished as re-
38 quired by this section.
39 (e) All reports submitted to the Director under this section shall
40 be confidential and not admissible in evidence in any administra-
41 tive or judicial proceedings. Such reports may be made available
42 to other state or federal agencies for study and informational pur-
43 poses under such limitations as may be prescribed by the Direc-
44 tor, but they shall not be used as evidence of any admission against
45 interest for purposes of adjudication, litigation or determination of
46 claims, whether administrative or judicial.
1 Section 24. Method and Time of Payment of Compensation. (a)
2 Compensation under this act shall be paid promptly, and directly to
3 the person entitled thereto, without an award, except where the
4 right to compensation is controvefted by the employer.
5 (b) The first installment of income benefits shall become due on
6 the fifteenth day after the employer has notice or knowledge of the
7 employee's disability or death due to injury, on which date all-in-
8 come benefits then due shall be paid. Thereafter, income benefits
9 shall be paid in bi-weekly installments, except where the Director
10 determines that payment in installments should be made at some
11 other period.
12 (c) Upon making the first payment of income benefits, and upon
13 stopping or changing of such benefits for any cause other than final
14 payment under subsection (c) of Section 27 the employer shall
7. The American Association of State Compensation Insurance
Funds comments that It would be preferable if the Director were not
vested with this quasi-penal authority. The determination of penalty
should rest with the civil courts, with the Director authorized to
initiate the action.
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15 immediately notify the Director, in accordance with a form pre-
16 scribed by the Director, that the payment of income benefits has be-
17 gun or has been stopped or changed.
18 (d) If payments have been made without an award, and the em-
19 ployer then elects to controvert, the notice of controversy shall be
20 filed with the Director within 15 days of the due date of the first
21 omitted payment under this election.
22 (e) If, after the payment of compensation without an award, the
23 employer elects to controvert the right to compensation, the pay-
24 ment of compensation shall not be considered a binding determina-
25 tion'of the obligations of the employer as to future compensation
26 payments. The acceptance of compensation by the employee or his
27 dependents shall not be considered a binding determination of their
28 rights under this act.
29 (f) The Director (1) may, upon his own initiative at any time in a
30 case in which payments are being made without an award, and (2)
31 shall, upon receipt of information from any person claiming to be
32 entitled to compensation, from the employer, or otherwise that the
33 right to compensation is controverted, or that payment of compen-
34 sation has been opposed, stopped or changed, whether or not claim
35 has been filed, promptly make such inquiry as circumstances re-
36 quire, cause such medical examinations to be made, hold such hear-
37 ings, make such determinations or awards, and take such further
38 action as he considers will properly protect the rights of all parties.
1 Section 25. Notice of Injury or Death. (a) Notice of injury or
2 death shall be given to the employer within 30 days after the date of
3 such injury or death, or within 30 days after the employee or his
4 dependents know the nature of the injury and its relationship to the
5 employment.
6 (b) Such notice shall be in writing, shall contain the name and
7 address of the employee and a statement of the time, place, nature
8 and cause of the injury or death, and shall be signed by the employ-
9 ee or by some person on his behalf, or, in case of death by any per-
10 son claiming to be entitled to compensation for such death, or by a
11 person on his behalf.
12 (c) Notice shall be given to the employer by delivering it to him
13 or his representative or by sending it by mail addressed to him or
14 such agent at the last known place of business of either. Such no-
15 tice may be given to the employer, partner, superior, foreman,
16 agent, or officer of the employer.
17 (d) Failure to give such notice shall not bar any claim under this
18 act (1) if the employer (or his representative as identified in sub-
19 section (c) above) or the carrier had knowledge of the injury or
20 death, or (2) if the Director excuses such failure on the ground that
21 for some satisfactory reason such notice could not be given or that
22 the employer or carrier has not been prejudiced by failure to re-
23 ceive such notice, or (3) unless objection to such failure is raised
24 in the answer as filed with the Director in accordance with subsec-
25 tion (e) of Section 26.
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1 Section 26. Time Limitation for Filing of Claims. (a) The right
2 to compensation for disability shall be barred unless a claim there-
3 for is filed within one year after the injury or last payment of corn-
4 pensation. The right to income benefits for death shall be barred
5 unless a claim therefor is filed within one year after the death or
6 within one year after the dependents know or by exercise of reason-
7 able diligence should know the possible relationship of the death to
8 the employment. However, in cases in which the nature of the in-
9 jury or disease or its relationship to the employment is not known
10 to the employee the time for filing claim shall not begin to run until
11 (1) the employee knows or by exercise of reasonable diligence should
12 know of the existence of the injury and its possible relationship to
13 his employment and (2) sustains disability or incurs a scheduled
14 physical loss under subsection (c) of Section 16, (except paragraph
15 (24)).
16 (b) Notwithstanding the provisions of subsection (a), failure to
17 file a claim within the period prescribed in such subsection shall
18 not be a bar to such right unless objection to such failure is raised
19 in the answer to the claim filed under subsection (e) of this section.
20 (c) If a person who is entitled to compensation under this act is
21 incompetent or a minor, the time for filing claim under subsection
22 (a) shall not begin to run so long as such person has no guardian or
23 other authorized representative, but shall run from the date of ap-
24 pointment of such guardian or other representative, or in the case
25 of a minor, if no guardian is appointed before he becomes twenty-
26 one years of age, from the date he becomes twenty-one years of age.
27 (d) Where recovery is denied to any person, in a suit brought at
28 law or in admiralty to recover damages in respect of injury or
29 death, on the ground that such person was an employee and that the
30 defendant was an employer within the meaning of this act, the limi-
31 tation of time prescribed in subsection (a) of this section shall not
32 begin to run earlier than from the date of final termination of such
33 action.
34 (e) Upon the filing with him of a claim, demand, or application of
35 any kind by a person seeking determination of his rights under this
36 act, the Director shall transmit a copy thereof to the other party
37 with notice to respond thereto by answer. The Director shall pre-
38 pare an appropriate form or forms by which to enable the other
39 party to answer. The other party shall respond by answer (in
40 duplicate) within 20 days after receiving such notices or within such
41 extension of that time as the Director may allow. If answer is not
42 filed, the Director or his hearing officer shall proceed to determine
43 the rights following the procedure in subsection (f) of Section 24.
1 Section 27. Payment of Compensation. (a) If the right to com-
2 pensation has not been controverted and any amount of compensa-
3 tion payable to the beneficiary without an award is not paid within
4 14 days after it becomes due, as provided in subsection (b) of Sec-
5 tion 24, there shall be added to such unpaid compensation an amount
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6 equal to [ 10] per cent thereof, which shall be paid to the benefici-
7 ary at the same time as, but in addition to, such amount due, and
8 without regard to any limitation otherwise applicable upon the
9 amount of the compensation, unless such nonpayment is excused by
10 the Director after a showing by the employer that owing to condi-
11 tions over which he had no control such compensation could not be
12 paid within the period prescribed for the payment.
13 (b) If any amount of compensation payable under the terms of an
14 award is not paid within 30 days after it shall become payable under
15 the terms of the award, there shall be added to such unpaid amount
16 an amount equal to [ 20] per cent thereof, which shall be paid to the
17 beneficiary at the same time as, but in addition to, such compensa-
18 tion unless review of the order making such award is had, as pro-
19 vided in Section 34, or unless such nonpayment is excused by the
20 Director after a showing by the employer that owing to conditions
21 over which he has not control such compensation could not be paid
22 within the period prescribed for the payment. If review is had, in-
23 terest at the rate of [5] per cent shall be added to the award from
24 the date of the original award of the Director or hearing officer.8
25 (c) Within 16 days after the final payment of income benefits has
26 been made, the employer shall send to the Director a notice, in ac-
27 cordance with a form prescribed by the Director, stating that such
28 final payment has been made, the total amount of income benefits
29 paid, the name of the employee, and of any other person to whom in-
30 come benefits have been paid, the date of the injury or death, the
31 dates on which income benefits have been paid, and the period
32 covered by the payment. If the employer fails to notify, the Direc-
33 tor within such time, the Director may assess against such employ-
34 er a civil penalty in an amount not to exceed [ $500] which shall be
35 paid into the Special Fund, established under Section 55.9
36 (d) Whenever the Director deems it advisable or necessary to
37 protect a beneficiary, he may require an employer who has not
38 secured the payment of compensation to his employees as required
39 by this act to make a deposit of money with the [State Treasurer]
40 to secure the prompt and convenient payment of compensation pay-
41 able under an award or modified award. Payments therefrom upon
8. On this subsection, the American Association of State Compen-
sation Insurance Funds comments that unnecessary delay should be
penalized by assessment of a civil penalty, but it should not redound to
the pecuniary advantage of the employee. Such a procedure is psycho-
logically wrong. It generates antagonisms, avarice, animosity and
needless litigation.
9. The American Association of State Compensation Insurance
Funds comments that it would be preferable if the Director were not
vested with this quasi-penal authority. The determination of penalty
should rest with the civil courts, with the Director authorized to
initiate the action.
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42 any such award shall be made upon order of the Director.
43 (e) Whenever the Director determines after a hearing that it is in
44 the interest of the rehabilitation of the injured worker in accordance
45 with regulations established by the Director, and it is recommended
46 by the rehabilitation panel, the liability for income benefits under
47 this act, or any part thereof, may be discharged by the payment of a
48 lump sum equal to the present value of future income benefits com-
49 muted, computed at [3) per cent true discount compounded annual-
50 ly. The probability of the beneficiary's death before the expiration
51 of the period during which he is entitled to income benefits sl0all be
52 determined in accordance with the United States Life Table,1 and
53 the probability of the re-marriage of a widow shall %e determined in
54 accordance with the American Re-Marriage Table.' The proba-
55 bility of the happening of any other contingency affecting the amount
56 of duration of the income benefits shall be disregarded.
57 (f) Unless otherwise intended or agreed upon when the employer
58 pays wages in whole or part during an injured employee's disability,
59 he shall be entitled to a credit not to exceed the amount of income
60 benefits due for the same period when such wages are paid except
61 for scheduled benefits paid under subsection (c) of Section 16 to
62 which this subsection shall not apply.
1 Section 28. Minors or Incompetents. (a) If a guardian or legal
2 representative has been appointed for a person who is incompetent
3 or a minor, payment of income benefits under this act shall be made
4 to the guardian or legal representative.
5 (b) If no guardian or legal representative has been appointed, and
6 notwithstanding any provision of law to the contrary, the income
7 benefits payable to a minor or incompetent person may, upon ap-
8 proval of the Director, after hearing, be paid by the employer in
9 whole or in such part as the Director may determine for and on
10 behalf of such minor or incompetent directly to the person caring
11 for, supporting, or having custody of such minor or incompetent
12 without requiring the appointment of a guardian or other legal repre-
13 sentative. The Director may petition a court of competent jurisdic-
14 tion for appointment of a guardian or other representative to re-
15 ceive income benefits payable to, or to represent in compensation
16 proceedings, any person who is incompetent or a minor under this
17 act. 11
18 (c) The Director may require of any guardian or other legal rep-
19 resentative or of any person to whom income benefits may be paid
20 under this provision, an accounting of the disposition of the funds
10. Prior to the enactment of legislation, a check should be made to
determine the availability of more recent data.
11. The American Association of State Compensation Insurance
Funds suggests that this procedure might more appropriately be vested
in the Director or the Appeals Board.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 193
21 received by the person under this act for and on behalf of such mi-
22 nor or incompetent.
23 (d) Nothing in this act shall be deemed to preclude the payment
24 of income benefits directly to a minor or incompetent with the ap-
25 proval of the Director.
26 (e) The payment of income benefits by the employer in accord-
27 ance with the order of the Director shall discharge the employer
28 from all further obligation as to such income benefits.
1 Section 29. Recording and Reporting of Payments. Every carrier
2 shall keep a record of all payments of compensation made under the
3 provisions of this act, and of the time and manner of making such
4 payments.
1 Section 30. Invalid Agreements. (a) No agreement by an employ-
2 ee to pay any portion of premium paid by his employer or to con-
3 tribute to a benefit fund or department maintained by such employer
4 for the purpose of providing compensation as required by this act
5 shall be valid, and any employer who makes a deduction for such
6 purpose from the pay of any employee entitled to the benefits of this
7 act shall be guilty of a [misdemeanor] and upon conviction thereof
8 shall be punished by a fine of not more than [$1,000] .
9 (b) No agreement by an employee to waive his right to compen-
10 sation under this act shall be valid.
1 Section 31. Assignment and Exemption from Claims of Creditors.
2 No assignment, release, or commutation of income benefits due or
3 payable under this act, except as provided by this act, shall be valid,
4 and such income benefits shall be exempt from all claims of credi-
5 tors, or other debts and from levy, execution, and attachment or
6 other remedy for recovery or collection of a debt, which exemption
7 may not be waived.
1 Section 32. Compensation a Lien Against Assets.12 In case of
2 insolvency or bankruptcy, every liability for compensation under
3 this act shall constitute a first lien upon all the property of the em-
4 ployer liable therefor, paramount to all other claims or liens except
5 for wages and taxes, and such liens shall be enforced by order of
6 the court.
1 Section 33. Hearing Procedure. (a) Upon application of a party
2 in interest, or when ordered by the Director of his hearing officer,
12. As proposed, comments the American Association of State
Compensation Insurance Funds, this seems to be a needless provision,
and possibly a harmful one where the employer is insured. It should be
limited to unlawfully uninsured employers.
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194 IMPROVEMENT OF BENEFITS UNDER THE FECA
3 and when issues in a case cannot be resolved by pre-hearing con-
4 ferences or otherwise, a hearing shall be held for determining the
5 questions at issue. All parties in interest shall be given at least 10
6 days notice of the hearing and of the issues to be heard, served per-
7 sonally or by mail. Following the presentation of the evidence, the
8 Director or his hearing officer shall determine the questions at is-
9 sue and file the decision thereon in the office of the (appropriate
10 state agency] within 30 days unless the time for filing the decision
11 is extended by the Director. At the time of such filing, a certified
12 copy of the decision shall be sent by certified mail to all interested
13 parties at the last known address of each. The decision of the Di-
14 rector or his hearing officer shall be made in the form of a compen-
15 sation order, appropriately titled to show its purpose and containing
16 a report of the case, findings of fact, and conclusions of law, and
17 other explanation of the action taken. A compensation order shall
18 be final unless a timely appeal to the Workmen's Compensation Ap-
19 peals Board is filed by a party in interest under Section 34.
20 (b) The Director must adopt rules and regulations of practice and
21 procedure consistent with this act for the hearing, disposition and
22 adjudication of cases, the text of which shall be published and readi-
23 ly available. Such rules shall include provision for procedures in
24 the nature of conferences in order to dispose of cases informally,
25 or to expedite claim adjudication, narrow issues, and simplify the
26 methods of proof at hearings.
27 (c) In making an inquiry or conducting a hearing the Director or
28 his hearing officer shall not be bound by common law or statutory
29 rules of evidence or by technical or formal rules of procedures,
30 except as provided by this act, but may make such inquiry or con-
31 duct such hearing in such manner as best to ascertain the rights of
32 the parties.
33 (d) All hearings before the Director or his hearing officer shall
34 be open to the public. The Director shall by regulation provide for
35 the preparation of a record of each hearing.
36 (e) All powers, authority, and duties of the Director in respect to
37 adjudications and hearings shall apply to a bearing officer.
38 (f) The authority of the Director or hearing officer or their duly
39 authorized representatives to determine controverted claims for
40 compensation shall include the right to enter premises at any rea-
41 sonable time where an injury or death has occurred, and to make
42 such examination of any tool, appliance, process, machinery, or
43 environmental or other condition as may be relevant to a determin-
44 ation of the cause and circumstances of such injury or death.
1 Section 34. Appeals to the Board. A party in interest may appeal
2 a compensation order to the Workmen's Compensation Appeals
3 Board within 20 days from the date of mailing of the compensation
4 order, If the Board, after a request by any parry, determines that a
5 hearing is necessary, it shall schedule a hearing and give at least 10
6 days notice to all interested parties of the date of such hearing and
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7 the issues to be heard. The Board shall have power to review the
8 findings of fact, conclusions of law and exercise of discretion by the
9 Director or his hearing officer in hearing, determining or otherwise
10 handling of any compensation case and may affirm, reverse or modi-
11 fy any compensation case upon review or remand such a case to the
12 Director for further proceedings and action.
13 The proceedings before the Board shall be on the record made be-
14 fore the Director or his hearing officer and no new or additional
15 evidence shall be received in respect of the appeal. If the Board
16 determines that the case has been improperly, incompletely, or
17 otherwise insufficiently developed on hearing by the Director or his
18 hearing officer, the case may be remanded for proceedings and ap-
19 propriate action with or without the Board's relinquishing jurisdic-
20 tion of the case.
21 The Board shall make a decision disposing of the issues presented
22 by the appeal and file a decision in its office within [601 days of
23 completion of submission of the case to the Board. Upon such filing,
24 the Board shall send a certified copy of the decision by certified
25 mail to all interested parties at the last known address of each. The
26 decision of the Board shall be made in the form of an order, sup-
27 ported by a written opinion or statement setting forth the reasons
28 for the action taken and including necessary findings of fact and
29 conclusions of law.
30 The decision of the Board shall be final and conclusive as to all
31 matters adjudicated by the Board upon the expiration of the thirtieth
32 day after copy of the decision has been mailed to the parties, unless
33 prior to that day (1) the Board on its own motion or that of a party
34 in interest, and after notice to all parties in interest, shall signify
35 that it will reconsider the decision, or (2) a party in interest shall
36 seek judicial review of the decision authorized under Section 37.
37 The decision of the Board upon reconsideration of the case shall
38 become final as to all matters considered, upon expiration of the
39 thirtieth day after copy of decision has been mailed to the interested
40 parties unless prior to that day a party in interest shall seek judicial
41 review authorized under Section 37.
1 Section 35. Application for Modification. The Director may re-
2 view any compensation case and make a determination upon his own
3 initiative or upon application of any party in interest in accordance
4 with the procedure in respect of hearings, which may,terminate,
5 continue, re-instate, increase, decrease, or otherwise properly af-
6 fect the compensation benefits provided by this act, or in any other
7 respect consistent with this act, modify any previous decision, award,
8 or action, including the making of an award of compensation if the
9 claim had been rejected in whole or in part.
10 A review may be had upon application of a party in interest filed
11 with the Director at any time but not later than within two years
12 after the date of the last payment or furnishing of compensation up-
13 on the following grounds:
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IMPROVEMENT OF BENEFITS UNDER THE FECA
14 (1) Mistake in determination of fact or failure to make mate-
15 rial findings of fact; (2) mistake of law; (3) clerical error or mis-
16 take in mathematical calculations; or (4) newly discovered evidence.
17 A review may be had upon application of a party in interest filed
18 -with the Director at any time but not later than within five years af-
19 ter the date of the last payment or furnishing of compensation upon
20 the following grounds:
21 (1) Change in the nature or extent of the employee's injury,
22 wage-earning capacity, or status of the claimant; or (2) fraud. The
23 Director may review a case at any time in order to correct a mani-
24 fest injustice. In unusual cases in which the nature of the injury,
25 disease, or its relationship to the employment is not known to the
26 employee, the time for filing an application for review shall not be-
27 gin to run until (1) the employee knows, or by exercise of reason-
28 able diligence should know, of the existence of the injury and its
29 possible relationship to his employment; and (2) the employee sus-
30 tains disability or incurs a scheduled physical loss under subsec-
31 tion (c) of Section 16 (except paragraph (24)).
1 Section 36. Authority of the Director and Board for Conducting
2 Hearings. (a) The hearings by the Director or his hearing officer
3 and the hearings by the Board, unless otherwise provided by law,
4 shall be held at such places as the Director and the Board may find
5 most convenient for the parties and most appropriate for ascertain-
6 ing the rights of the parties.
7 (b) The Director and any member of the Board shall have the
8 power to preserve and enforce order during hearings; to issue sub-
9 poenas for, to administer oaths, and to compel the attendance and
10 testimony of a witness, or the production of books, papers, docu-
11 ments, and other evidence, or the taking of depositions before any
12 designated individual competent to administer oaths; to examine
13 witnesses; and to do all things conformable to law which may be
14 necessary to enable them effectively to discharge the duties of their
15 office.
16 (c) If any person in proceedings before the Director or Board
17 disobeys or resists any lawful order or process, or misbehaves
18 during a hearing or so near the place thereof as to obstruct the
19 same, neglects to produce, after having been ordered to do so, any
20 pertinent book, paper, or document, or-refuses to appear after hav-
21 ing been subpoenaed, or upon appearing refuses to take the oath or
22 affirmation as a witness, or after taking the oath or affirmation re-
23 fuses to be examined according to law, the Director or Board shall
24 certify the facts to the ( court] where the offense is com-
25 mitted and the court shall, if the evidence so warrants, punish such
26 person in the same manner and to the same extent as for contempt
27 committed before the court, or commit such person upon the same
28 conditions as if the doing of the forbidden act had occurred with
29 reference to the process of or in the presence of the court.
1 Section 37. judicial Review of Decision by Board. (a) Any party
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IMPROVEMENT OF BENEFITS UNDER THE FECA 197
2 in interest may, within the time limit specified in Section 34, file
3 application for judicial review of such decision with the [interme-
4 diate or final appellate court] .
5 (b) The court shall have power and jurisdiction to review deci-
6 sions filed by the Board under this act on matters of law only and to
7 perform such other judicial functions and to hear such other matters
8 as are provided for by this act. The court may affirm, suspend,
9 remand, modify or set aside, in whole or in part, a decision of the
10 Board or compel administrative action unlawfully withheld or denied.
11 [Appeals from such court may be had as in other civil actions.]
12 (c) Proceedings to set aside a compensation order or decision
13 shall not be instituted otherwise than as provided for by this act.
14 (d) Except as hereinafter provided in this subsection, the taking
15 of an appeal shall operate as a supersedeas as to payment of com-
16 pensation under the award. In proceedings brought to review admin-
17 istrative action in which an award by the hearing officer or Director
18 has been affirmed by the Appeals Board the court may after at least
19 three days' notice to all parties in interest hear an application by
20 the employee for the payment of compensation required under a
21 compensation order or decision pending the outcome of the appeal.
22 If after summary hearing of the parties the court finds that failure
23 to make payments may jeopardize the health or physical well being
24 of the employee or his dependents, the court may in its discretion
25 order payment in whole or in part. Such proceedings shall be given
26 priority over all other cases and such orders shall not be review-
27 able. 1 Section 38. Enforcement of Payment in Default and Penalties.
2 (a) In the event of default in the payment of compensation due under
3 a compensation order or decision the person to whom such compen-
4 sation is payable may, on or after the thirtieth day from the date
5 upon which the compensation became due, and before the lapse of
6 two years from such due date, make application for a supplemen-
7 tary compensation order declaring the amount of compensation in
8 default. Such application shall be filed with the Director who shall
9 forthwith notify the employer and the carrier of the filing of such
10 application with opportunity to be heard in respect thereto. In the
11 absence of an allegation and proof of fraud in the procurement of the
12 compensation order or decision and if the Director determines that
13 payment of compensation is in default, the Director shall make and
14 file a supplementary compensation order declaring the amount of the
13. The American Association of State Compensation Insurance
Funds regards this provision as incomplete in providing no means of
restitution should the ultimate decision be adverse to the employee. It
would prefer that payments be made from a Special Fund and to author-
ize the Director to obtain a restitution if the final decision is adverse to
the injured worker.
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15 compensation in default. In case the payment in default Is an in-
16 stallment of an award of determinable amount, the Director may, in
17 his discretion, declare the entire balance of the award as the amount
18 in default, The applicant or Director may file a certified copy of the
19 supplementary compensation order with the clerk of the (court) for
20 the [county] [district] in which the employer maintains a place of
21 business. If the employer maintains no place of business in this
22 state, he shall be deemed to have appointed the (Secretary of StateJ
23 as his agent for the purpose of acceptance of service of process in
24 all matters under the act or related thereto. In such a case the
25 compensation order may be filed in any [court] of this state, and
26 the [Secretary of State] shall take reasonable steps to give actual
27 notice to the employer.
28 (b) The applicant or Director may thereafter petition the court
29 for entry of judgment upon the supplementary compensation order,
30 serving notice of such petition on the employer and any other per-
31 son in default. If the court finds the supplementary compensation
32 order valid, the court shall enter judgment against the person or
33 persons in default for the amount due under the order. No fees shall
34 be required for the filing of the supplementary compensation order,
35 or for the petition for judgment, or for the entry of judgment or for
36 any enforcement procedure thereupon. No supersedeas shall be
37 granted by any court with respect to a judgment entered under this
38 section,
39 (c) Proceedings to enforce a compensation order or decision
40 shall not be instituted otherwise than as provided by this act.
1 Section 39. Witnesses and Their Fees. No person shall be re-
2 quired to attend as a witness in any administrative proceedings un-
3 der this act at a place more than one hundred miles from his place
4 of residence, and no person shall be required to attend as a witness
5 in such proceedings unless his lawful mileage and fee for one day's
6 attendance shall be first paid or tendered to him. The testimony of
7 any witness may be taken by deposition or interrogatories accord-
8 ing to the rules of practice of the (court] and may be taken before
9 any hearing officer under this act or before any person authorized
10 to take testimony.
1 Section 40. Costs in Taking Appeal. No costs or docket fees
2 shall be imposed upon a claimant under this act in any judicial re-
3 view or other proceedings in any appeal therefrom. On the request
4 of any party seeking judicial relief or on the request of any review-
5 ing court, the Director shall furnish a transcript of testimony or
6 other administrative record or the pleadings or orders filed in the
7 court, and no such party shall be required to print the contents of
8 these documents.
1 Section 41. Costs in Proceeding Brought Without Reasonable
2 Ground. If the hearing authority having jurisdiction of any proceed-
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3 ing under this act, administrative or judicial, determines that such
4 proceeding has been instituted or continued without reasonable
5 ground, the costs of such proceeding including a reasonable attor-
6 ney's fee for necessary services rendered shall be assessed against
7 the party who has so instituted or continued such proceeding.
1 Section 42. Payment b Employer of Fees for Claimant's Legal
2 Services and Witnesses."' (a) If the.employer or carrier declines
3 to pay any compensation on or before the thirtieth day after receiv-
4 ing written notice of demand or claim for compensation, on the
5 ground that there is no liability for compensation within the provi-
6 sions of this act, and the person seeking benefits shall thereafter
7 have utilized the services of an attorney at law in the successful
8 prosecution of his right, claim, or demand before the Director or
9 hearing officer, there shall be awarded, in addition to the award for
10 compensation, a reasonable attorney's fee against the employer or
11 carrier in an amount approved by the Director or hearing officer
12 which shall be paid directly by the employer to the attorney for the
13 claimant in a lump sum after final decision. If the employer or
14 carrier pays or tenders payment of compensation, but controversy
15 relates to the amount of compensation due, and if the award is
14. This section was drafted only with considerable difficulty and
difference of opinion among the drafting group and the Committee on
Suggested State Legislation. It is offered with some misgiving because
it appears to fly in the face of the tradition that each party to an action
is responsible for paying his own legal fees. The section, however,
seeks to ensure that a claimant will receive in its entirety an award to
which he is entitled by statute--a statute which requires that he give up
his common law right to sue his employer for all injuries covered by
its provisions. It is recognized that certain safeguards must be included
to prevent the section's becoming an invitation to litigation. Fees are
subject to approval. If only the amount of the award is controverted, the
size of the fee awarded must be related to the difference between the
amount of compensation and the amount awarded. Further protection is
offered an employer or carrier by his being able to submit the case to
impartial medical opinion. Of course, payment of a claimant's legal fees
by an employer or carrier presupposes the successful prosecution of his
claim by the claimant.
The American Association of State Compensation Insurance Funds
adds that it tends to favor the traditional view that the litigants pay for
services of legal counsel. Any other proposal makes for a fruitful source
of additional litigation. It would be equally logical to provide that the
employer-carrier be reimbursed for the successful defense of an un-
warranted claim. Witness fees and mileage are no more warranted than
attorney fees. By a process of similar reasoning, if these costs are al-
lowed an employee when he prevails, an employer should be able to re-
cover these costs when he prevails.
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16 greater than the amount paid or tendered by the employer or carrier,
17 a reasonable attorney's fee based solely upon the difference between
18 the amount awarded and the amount tendered or paid shall be award-
19 ed in addition to the amount of compensation; Provided, however,
20 that this sentence shall not apply if the controversy relates to degree
21 or length of disability, and if the employer or carrier offers to sub-
22 mit the case for evaluation by impartial medical opinion as provided
23 in paragraph (7) of subsection (b) of Section 12 and offers to tender
24 an amount of compensation based upon the degree or length of dis-
25 ability found by the independent medical report at such time as an
26 evaluation of disability can be made. If the claimant is successful
27 in review proceedings before the Board or court in any such case
28 an award may be made in favor of the claimant and against the em-
29 ployer or carrier for a reasonable attorney's fee for claimant's
30 counsel in accord with the above provisions. In all cases fees for
31 attorneys representing the claimant shall be approved in the manner
32 herein provided. If any proceedings are had before the Board or
33 any court for review of any action, award, order or decision, the
34 Board or court may approve an attorney's fee for the work done be-
35 fore it by the attorney for the claimant. An approved attorney's fee,
36 in cases in which the obligation to pay the fee is upon the claimant,
37 may be made a lien upon the compensation due under an award; and
38 the Director, hearing officer, Board, or court shall fix in the award
39 approving the fee, such lien and manner of payment. The amounts
40 awarded against an employer or carrier as attorney's fee shall not
41 in any respect affect or diminish the compensation payable under
42 this act.
43 (b) In cases where an attorney's fee is awarded against an em-
44 ployer or carrier there may be further assessed against such em-
45 ployer or carrier as costs, fees and mileages for necessary wit-
46 nesses attending the hearing at the instance of claimant. Both the
47 necessity for the witness and the reasonableness of the fees must be
48 approved by the Director or hearing officer.
49 (c) Any person who receives any fees, other consideration, or any
50 gratuity on account of services rendered as a representative of
51 claimant, unless such consideration or gratuity Is approved by the
52 Director, hearing officer, Board, or court, or who makes it a busi-
53 ness to solicit employment for a lawyer or for himself in respect of
54 any claim or award for compensation, shall be guilty of a [misde-
55 meanor] , and upon conviction thereof, for each offense shall be
56 punished by a fine of not more than [$1,000] or by imprisonment
57 for not more than [one year] , or by both such fine and imprisonment.
1 Section 43. Penalty for Misrepresentation. Any person who will-
2 fully makes any false or misleading statement or representation for
3 the purpose of obtaining or defeating any benefit, fee, or allowance
4 under this act shall be guilty of a [misdemeanor] and on conviction
5 thereof shall be punished by a fine of not to exceed [$1,000] or by
6 imprisonment for not more than [one year] , or by both such fine
7 and imprisonment.
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IMPROVEMENT OF BENEFITS UNDER THE FECA 201
1 Section 44. Enforcement of Penalties, Deposits and Assessments.
2 Proceedings to enforce civil penalties and to require deposits as
3 authorized by this act may be instituted by the Director and brought
4 in any court of competent jurisdiction having jurisdiction over the
5 defendant.
1 Section 45. Aliens.15 (a) The compensation payable to an alien
2 as defined in subsection (q) of Section 2 shall be the same in amount
3 as is provided for residents of the United States. Except as other-
4 wise provided by United States treaty, death benefits in the case of
5 a deceased employee leaving dependents who are aliens shall be
6 limited to widow, child and parent of the deceased, if dependent in
7 each case upon the deceased at the time of his death.
8 (b) Unless and until an alien entitled to benefits under this act
9 shall otherwise notify the Director in writing, a duly accredited
10 consular officer of the country in which the alien resides, or the
11 duly authorized representative of such officer, may upon filing no-
12 tice with the Director (who shall transmit a copy thereof to the em-
13 ployer) act in all respects under this act as the agent of the alien.
14 Unless specifically limited in writing by the alien, such officer or
15 his representative may execute such claims, forms, and other pa-
16 pers as may be required under this act, and may receive the com-
17 pensation for the alien. Any fees received for such services shall
18 be subject to approval by the Director. Payment to such officer or
19 his representative of compensation under this act shall constitute
20 a discharge of the obligation of the employer, carrier or other per-
21 son to the alien in respect to such payment. As a condition prece-
22 dent to receiving payment for an alien, the Director may require
23 such officer or his representative to furnish bond in such amount as
24 the Director shall determine payable to the alien or to any fund on
25 the alien's behalf as the Director shall require, conditioned upon the
26 faithful performance of the agency and proper disbursement of funds
27 received for the alien as well as compliance with reporting and fee
28 requirements under this section. Such officer or representative
29 shall file with the Director semiannually, or at such other time or
30 times as the Director may require, a report containing a statement,
31 verified under oath, of all amounts received and disbursed for the
32 account of the alien showing the disposition of the amounts stated to
33 have been disbursed. Failure to make an accounting within 30 days
34 after notice is sent by the Director for such accounting, or within
35 such further time as the Director may allow, shall be deemed a
15. To the American Association of State Compensation Insurance
Funds this section appears inordinately long and complex. In the vast
majority of claims, standard claims adjusting procedures will be ade-
quate. Except for necessary safeguards for determining dependency,
much of the language of this section appears redundant.
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202 IMPROVEMENT OF BENEFITS UNDER THE FECA
sufficient ground for regarding the agency as terminated, in which
event the Director shall take such further action as may be neces-
sary to protect the interests of the alien.
(c) Transcripts of birth, marriage, death or other similar certif-
icates or records, when certified to be correct by a local official
having custody or charge of such records in a foreign country, and
authenticated by proper authority as to the power of such official to
make such certification or by a diplomatic officer or consul of the
United States within the area, and other documents, affidavits, in-
terrogatories, or depositions, when similarly certified and authen-
ticated, shall be admissible in evidence in proceedings under this
act. Evidence of present existence, dependency, relationship, and
of any other fact material to the payment of benefits, when certified
to by a diplomatic officer or consul of the United States and when
supported by his statement showing the basis upon which such cer-
tification was made, shall be admissible in evidence.
(d) (1) The Director shall establish a Fund to be known as the
"Alien Compensation Fund." The moneys in such Fund shall be
deposited in the State Treasury or in any depository authorized to
accept state funds. Withdrawal from such Fund shall be made only
upon the order of the Director or his representative specially au-
thorized for that purpose. The Fund and any account therein as
established by this act shall be subject to audit in the same manner
as other public funds of the state. The Director and his authorized
representative shall give bond in an amount determined by the
[State Treasurer] for the proper discharge of obligations, duties
and disbursements in relation to the Fund and any account thereof
as imposed by this act.
(2) There shall be deposited in the Alien Compensation Fund
all moneys accruing under this act to an alien, or accruing to a citi-
zen or national of the United States residing outside the United
States, but which cannot be paid to him either directly or through
his agent, because (a) of inability of the payer effectively to trans-
mit funds to the payee, (b) of any restriction upon the payeec (other
than that imposed by the United States) or any control exercised
over the payment, either of which would deny to the payee the full
benefit and enjoyment of the payment, (c) impossibility of confirm-
ing payment or (d) a finding that the best interests of the payee
would be served by withholding transmission of the funds to him.
The Director shall exercise his discretion in requiring such a de-
posit, and any award may be modified so as to effectuate this pur-
pose. When determined by the Director to be in the interests of the
payee to do so, the Director may in any case require payment of the
award in a. lump sum by payment into such Fund of the present value
of all future payments of compensation computed at 3 per cent true
discount compounded annually. The probability of the beneficiary's
death before the expiration of the period during which he is entitled
to compensation shall be determined according to the United States
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84 Life Table16 and, in appropriate cases, the probability of remar-
85 riage by the American Re-Marriage Table.10 The probability of any,
86 other contingency affecting payment shall be disregarded. Payment
87 into such Fund shall constitute an acquittance and satisfaction of the
88 obligation of the employer, carrier, or other payer in respect to the
89 object of the particular payment. The Director shall thereafter
90 have authority to pay from the Fund and without interest the amount
91 withheld from the payee, whenever the Director determines that be-
92 cause of changed conditions payment can properly be effected.
93 (e) Whenever by reason of any law of the United States there shall
94 be a prohibition or restriction applicable to the making of remit-
95 tances to aliens or to any other persons whether residing in the
96 United States or in any foreign country, or any seizure of alien enemy
97 property rights, and such prohibition, restriction, or seizure shall
98 apply to the remittance of any money benefits or payments to a per-
99 son who is a beneficiary under this act or who is entitled to payment
100 for services rendered in connection with claims or cases under this
101 act, all such right to benefits and payments shall be terminated, and
102 the alien shall have no property right in such.benefits or payments,
103 during the continuance of such prohibition or restriction. The Di-
104 rector shall by appropriate order or modification of an existing
105 order require the payments which would be thus prohibited or re-
106 stricted to be paid into the Alien Compensation Fund. The Director
107 may in his discretion also require payment into the account of the
108 lump sum value of future compensation or benefits in the manner
109 prescribed in paragraph (2) of subsection (d) of this section. It shall
110 be the duty of the Director to keep fully informed with respect to
111 Executive Orders of the President of the United States, federal regu-
112 lations, licenses and all other documents pertaining to foreign funds
113 and alien property control, and to act immediately to effectuate pay-
114 ments from the Alien Compensation Fund as they would have been
115 made had the restrictions not been imposed, as restrictions may be
116 whclly or partially removed. It shall also be his duty to seek remov-
117 al or relaxing of such restrictions in proper cases by applications to
118 the appropriate officer of the United States, under such licensing or
119 other arrangements as the United States may provide. The Director
120 shall make reasonable effort to locate payees and to remit to them
121 ehe payments which he finds may lawfully be made. Remittances
122 from the account shall be made upon the order of the Director or
123 his representative specially designated for such purpose. No inter-
124 est shall accrue on any amount to be paid from the account. From
125 time to time the Director shall ascertain whether any moneys so de-
126 posited are likely to remain unclaimed, and the moneys so ascer-
127 tained shall be withdrawn from the account and redeposited in the
128 Special Fund established by this act under Section 55 to be used for
129 the purposes of such Fund.
16. Prior to enactment of legislation, a check should be made to
determine the availability of more recent data.
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PART V
INSURANCE
1 Section 46, Security for Payment of Compensation. 17 Every em-
2 ployer shat secure t e payment of compensation under this act:
3 (a) By insuring and keeping insured the payment of such benefits
4 with any organization authorized to insure workmen's compensation
5 in this state, or
6 (b) By furnishing satisfactory proof to the Director of his finan-
7 cial and administrative ability to meet his obligations under this act
8 and by receiving an authorization from the Director to pay such
9 compensation directly.
10 (1) The Director shall, as a condition to such authorization,
11 require such employer to file with the [appropriate state agency] a
12 bond of a surety company authorized to do business in this state or
13 to deposit in a depository designated by the Director, negotiable
14 securities, at the option of the employer, of a kind and in an amount
15 determined by the Director, to secure the performance by the em-
16 ployer of all obligations imposed upon him under this act, for in-
17 juries occurring to his employees during the period of self -insur-
18 ance and subject to such conditions as the Director may by regula-
19 tion prescribe, provided that in no case shall the amount of bond or
20 security required be less than [$100,0001 for any one employer.
21 (2) Authorization of self-insurance shall be evidenced by a
22 "Certificate of Authorization." Such authorization shall be granted
23 for a period of not more than one year. The Director may, for good
24 cause shown and after notice and opportunity of hearing, terminate
25 the authorization of any self-insurer. Failure by a self-insurer to
26 comply with any provision of this act, or of the lawful regulations
27. issued by the Director, or with any lawful order of the Director or
28 a hearing officer, or the failure or insolvency of the surety on his
29 indemnity bond or impairment of financial responsibility of such
30 self-insurer shall be considered good cause for such termination.
31 No termination shall affect the liability of any self-insurer already
32 incurred.
33 (3) The surety on a bond filed by a self-insurer pursuant to
34 paragraph (1) of this subsection may terminate its liability thereon
35 by giving the Director written notice stating when, not less than
36 thirty days thereafter, such termination shall be effective. In case
37 of such termination, the surety shall remain liable, in accordance
38 with the terms of the bond, with respect to injuries to employees of
17. In states having State Funds, appropriate provisions should be
inserted at this point.
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39 the self-insurer prior to the termination of the surety's liability. If
40 the bond is terminated for any reason other than the employer's ter-
41 minating his status as a self-insurer,the employer shall, prior to
42 the date of termination of the surety's liability comply with the re-
43 quirements of paragraph (1) of this subsection.
44 The liability of a surety on a bond filed pursuant to this section
45 shall be released and extinguished and the bond returned to the em-
46 ployer or surety provided (a) such liability is secured by another
47 bond filed or negotiable securities deposited as required by para-
48 graph (1) of this subsection or (b) the employer files with the Direc-
49 tor the policy of insurance specified in paragraph (4) of this sub-
50, section.
51 Securities deposited by an employer pursuant to paragraph (1) of
52 this subsection shall be returned to him upon his written request
53 provided the employer (a) files the bond required by paragraph (1)
54 of this subsection or (b) files with the Director the policy of insur-
55 ance specified in paragraph (4) of this subsection.
56 (4) Any employer may at any time terminate his status as a
57 self-insurer by giving the Director written notice stating when not
58 less than thirty days thereafter such termination shall be effective
59 provided such termination shall not be effective until the employer
60 shall have complied with the requirements of subsection (a) of this
61 section.
62 If an employer who ceases to be a self-insurer files with the Di-
63 rector a policy of insurance in a form approved by the [Insurance
64 Commissioner] and issued by an organization authorized to insure
65 workmen's compensation in this state, and covering the entire lia-
66 bility of such employer for injuries to his employees which occurred
67 during the period of self-insurance, the bond, bonds or securities
68 securing such liability and filed or deposited by the employer pur-
69 suant to paragraph (1) of subsection (b) of this section shall forth-
70 with be returned to him. The policy of insurance shall be non-can-
71 cellable for any cause during the continuance of the liability secured
72 and so covered.
73 (5) The Director may in cases of default by the self-insurer
74 after sending him notice by certified mail of his intention to do so,
75 bring suit upon such bond or collect the interest and principal of any
76 of the securities as they may become due or sell the securities or
7
7
any of them as may be required to pay compensation and discharge
78 the obligation of the self-insurer under this act,and apply the pro-
79 ceeds to the payment of compensation under this act.
1 Section 47. Posting of Notices. The Director may by regulation
2 require that every employer subject to the provisions of this act
3 shall post and keep posted in a conspicuous place or places in and
4 about the place or places of business a typewritten or printed notice,
5 in accordance with a form prescribed by the Director, stating that
6 such employer has secured the payment of compensation in accord-
7 ance with the provisions of this act. Such notice shall contain the
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2Ut IMPROVEMENT OF BENEFITS BINDER THE FECA
8 name and address of the insurance organization, if any, with whom
9 the employer has secured payment of compensation.
1 Section 48. Certificate of Compliance.18 The Director may by
2 regulation require that every employer shall present satisfactory
3 evidence to the Director that he has secured the payment of com-
4 pensation, as provided by Section 46 of this act and regulations
5 thereunder, and on presentation of such evidence shall be issued a
6 certificate of compliance by the Director, stating that the employer
7 has secured payment of compensation.
1 Section 49. Insurance Policies. (a) Every policy or contract for
2 the insurance of compensation herein provided for shall be deemed
3 to be made subject to the provisions of this act and provisions there-
4 of inconsistent with the act shall be deemed to be reformed to con-
5 form with the provisions of this act.
6 (b) An insurer insuring the liability of an employer under this
7 act shall be deemed to be the insurer for all employees of the em-
8 ployer within the protection of this act. However, if specifically
9 authorized by the Director, a separate insurance policy may be is-
10 sued for a specified plant or work location if the liability of such
11 employer under this act to all his other employees is otherwise
12 secured.
13 (c) If the insurer or employer intends to cancel a contract or
14 policy of insurance issued by the insurer under this act within the
15 policy period, he shall give notice to such effect in writing to the
16 Director and to the other party fixing the date on which it is pro-
17 posed that such cancellation be effective. Such notices shall be
18 served personally on or sent by certified mail to the Director and
19 the other party. No such cancellation shall be effective until [ 101
20 days after the mailing of such notice, unless the employer has se-
21 cured insurance with another carrier which would cause double
22 coverage. In such event the cancellation shall be made effective as
23 of the effective date of such other insurance.
24 (d) For the purposes of this act, as between the employee and the
25 insurer, notice or knowledge of the injury on the part of the employ-
26 or, shall be notice or knowledge, as the case may be, of the insurer,
27 jurisdiction of the employer shall be jurisdiction of the insurer, and
28 the insurer shall be bound by and subject to the findings, judgments,
29 awards, decrees, orders and decisions rendered against the em-
30 ployer in the same manner and to the same extent as the employer.
31 (e) Every policy or contract of insurance issued under authority
32 of this act shall be deemed to contain a provision to carry out the
33 provisions of subsection (d) of this section and a provision that in-
18. This section may be omitted if the information is readily avail-
able from other sources.
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34 solvency or bankruptcy of the employer or his estate or discharge
35 therein or both or any default of the employer shall not relieve the
36 carrier from payment of compensation for injury sustained by an
37 employee during the policy period.
38 (f) The insurer shall be directly and primarily liable to any per-
39 son entitled to the benefits of this act. The obligations of the insur-
40 er may be enforced by such person, or for his benefit by any agency
41 authorized by law, whether against the insurer alone or jointly with
42 the employer.
43 (g) As between any such injured employee or his dependents and
44 the insurer no question as to breach of warranty or misrepresenta-
45 tion by the insured shall be raised by the insurer in any proceedings
46 before the [appropriate state agency] or any appeal therefrom.
47 (h) No statement in an application for a policy of workmen's com-
48 pensation insurance shall void such policy as between insurer and
49 employer unless such. statement shall be false and would materially
50 have affected the acceptance of the risk if known by the insurer. In
51 no case shall the holding of such policy void between the insurer and
52 employer affect the insurer's obligation to such employer's employ-
53 ees or their dependents to pay compensation and to discharge other
54 obligations under the act. In such case, the insurer shall have a
55 right of action against the employer for any amounts for which the
56 insurer is liable under the policy of insurance.
1 Section 50. Claims Services and Medical Supervision. Each car-
2 rier shall provide claims services through its own staffed adjusting
3 offices located within the state, or by independent, [ licensed, ] resi-
4 dent adjusters, with power to act for the carrier within the state.
5 The carrier shall provide medical supervision of cases from their
6 insured through medical consultants located within the state or near
7 enough to provide prompt and continuous service.
1 Section 51. Assigned Risk.19 The [Insurance Commissioner] ,
2 after consultation with carriers authorized to issue workmen's
3 compensation policies in this state, shall put into effect a reason-
19. To the American Association of State Compensation Insurance
Funds the concept of an assigned risk plan in a compulsory social insur-
ance system is repugnant. If the corporate insurers, in a state which
has as yet no State Fund, cannot provide a sure market for all employ-
ers, who by law are required to insure their liabilities, then these car-
riers should retire from the compensation business or request the cre-
ation of a State Fund. With the variety of rating plans and safety engi-
neering facilities which are available in today's market, the idea of label-
ing any employer with the stigma of "uninsurable" is inconceivable. It
recommends strongly that this provision be omitted as inappropriate and
unnecessary.
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a.,
4 able system for the equitable apportionment among such carriers of
5 applicants for such policies who are in good faith entitled to but are
6 unable to procure such policies through ordinary methods. Such
7 system shall be so drawn as to guarantee that such an applicant, if
8 not in default on workmen's compensation premiums, shall, follow-
9 ing his application to the assigned risk system and tender of required
10 premium, be covered by workmen's compensation insurance. When
11 any such system has been approved, all such carriers shall sub-
12 scribe thereto and participate therein. Assignment shall be in such
13 manner that, as far as practicable, no carrier shall be assigned a
14 larger proportion of compensation premiums under assigned poli-
15 cies during any calendar year than that which the total of compen-
16 sation premiums written in the state by such carrier during the pre-
17 ceding year bears to the total compensation premiums written in the
18 state by all such carriers during the preceding calendar year.
1 Section 52. Performance of Insurance Organization. If the Direc-
2 for shall find, after due notice and hearing at which the insurance
3 organization shall be entitled to be heard in person or by counsel
4 and present evidence, that such organization has repeatedly failed
5 to comply with its obligations under this act, he may request the
6 [Insurance Commissioner] to suspend or revoke the authorization
7 of such organization to write workmen's compensation insurance
8 under this act. Such suspension or revocation shall not affect the
9 liability of any such organization under policies in force prior to
10 the suspension or revocation.
1 Section 53. Payment Pending Determination of Policy Coverage.
2 Whenever any claim is presented and the claimant's right to com-
3 pensation is not in issue, but the issue of liability is raised as be-
4 tween an employer and a carrier or between two or more employers
5 or carriers, the Director shall order payment of compensation to be
6 made immediately by one or more of such employers or carriers.
7 The Director may order any such employer or carrier to deposit
8 the amount of the award or to give such security therefor as he
9 may deem satisfactory. When the issue is finally resolved, an em-
10 ployer or carrier held not liable shall be reimbursed for any such
11 payments by the employer or carrier held liable and any deposit or
12 security so made shall he returned.
I Section 54. Penalty for Failure to Secure Compensation. (a) Any
2 employer required to secure the payment of compensation under
3 this act who willfully fails to secure the payment of such compensa-
4 tion shall be guilty of a (misdemeanor] and upon conviction thereof
5 shall be punished by a fine of not more than [$1,000] , or by Im-
6 prisonment for not more than [one year] , or by both such fine and
7 imprisonment; and in any case where the employer is a corporation
8 any officer or employee of the corporation who had authority to se-
9 cure payment of compensation on behalf of the corporation and will-
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10 fully failed to do so shall be individually liable to a similar fine and
11 imprisonment; and such officer or employee shall be personally
12 liable jointly and severally with such corporation for any compensa-
13 tion which may accrue under this act in respect to any injury which
14 may occur to any employee of such corporation while it shall so fail
15 to secure the payment of compensation as required by Section 46 of
16 this act. [The fines shall be paid directly by the court to the Direc-
17 tor for deposit in the Uninsured Employers' Fund provided in Sec-
18 tion 56. ]
19 (b) Any employer who knowingly transfers, sells, encumbers, as-
20 signs, or in any manner disposes of, conceals, secretes, or destroys
21 any property or records belonging to such employer, after one of his
22 employees has been injured within the purview of this act, and with
23 intent to avoid the payment of compensation under this act to such
24 employee or his dependents, shall be guilty of a [misdemeanor]
25 and, upon conviction thereof, shall be punished by a fine of not more
26 than [$1,000] or by imprisonment for not more than [one year] , or
27 by both such fine and imprisonment; and in any case where such em-
28 ployer is a corporation, any officer or employee thereof, if know-
29 ingly participating or acquiescing in the act, shall be also individu-
30 ally liable to such penalty of imprisonment as well as joint and
31 severally liable with such corporation for such fine.
32 (c) An employer who has failed to secure payment of compensa-
33 tion for more than twenty days shall pay into the Uninsured Em-
34 ployers' Fund provided in Section 57 as a civil penalty for such
35 failure an amount equal to 1 per centum of his payroll of employees
36 covered by this act for the time during which such failure continued
37 but for not more than three consecutive years. The assessment
38 shall be made by the Director for the year or years immediately
39 preceding the date on which such assessment is made against the
40 employer. The assessment may be collected as a civil penalty in
41 an action brought by the Director against the employer for and on
42 behalf of the Uninsured Employers' Fund. All such assessments
43 shall be deposited in the Uninsured Employers' Fund.
44 (d) This section shall not affect any other liability of the employ-
45 er under this act.
1 Section 55. Special Fund. (a) There is hereby established in the
2 [State Treasury] a Special Fund for the sole purpose of making
3 payments in accordance with the provisions of Section 20, Section
4 21 and this section. The Fund shall be administered by the Direc-
5 tor. The [State Treasurer] shall be the custodian of the Fund and
6 all moneys and securities in the Fund shall be held in trust by the
7 [State Treasurer] and shall not be money or property of the state.
8 (b) The [State Treasurer] is authorized to disburse moneys from
9 the Fund only upon written order of the Director. He shall be re-
10 quired to give bond in an amount to be fixed and with securities ap-
11 proved by the Director conditioned upon the faithful performance of
12 his duty as custodian of the Fund. The premium of the bond shall
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13 be paid out of the Fund,
14 (c) Each carrier shall under regulations prescribed by the Direc-
15 tor make payments to the Fund in an amount equal to that proportion
16 of [175] per cent of the total disbursement made from-the Fund
17 during the preceding calendar year less the amount of the net assets
18 in the Fund as of December 31 of the preceding calendar year, which
19 the total income benefits paid by such carrier bore to the total in-
20 come benefits paid by all carriers during the fiscal year which end-
21 ed within the preceding calendar year. An employer who has ceased
22 to be a self-insurer shall continue to be liable for any assessments
23 into the Fund on account of any income benefits paid by him during
24 such fiscal year.
25 (d) Where there has been default in the payment of compensation
26 due to the insolvency of an insured employer and his carrier or a
27 self-insured employer, payment of any compensation remaining un-
28 paid shall be made from the Special Fund. Such employer and car-
29 rier, or self-insured employer and his surety, if any, shall be liable
30 for payment into the Fund of the amounts paid therefrom by the Di-
31 rector under the authority of this subsection, and for the purposes
32 of enforcing this liability the Director, for the benefit of the Fund,
33 shall be subrogated to all the rights of the person receiving such
34 compensation.
35 (e) The Director shall be charged with the conservation of the
36 assets of the Fund. In furtherance of this purpose, the Attorney
37 General shall appoint a member of his staff to represent the Fund
38 in all proceedings brought to enforce claims against the Fund.
35 [ Alternative (e) The Special Fund Conservation Committee, com-
36 posed of three members appointed by the Director is created within
37 the (appropriate state agency] . One member shall represent the
38 interests of the stock insurance companies, one member, the inter-
39 ests of the mutual insurance companies and the third, the interests
40 of the self-insured employers. The terms of the members shall be
41 six years, and shall be arranged so that the term of one member,
42 and of only one, shall expire on the tenth day of July in each odd-
43 numbered year. Each member shall hold office until his successor
44 is appointed. Any vacancy on the committee shall be filled by ap-
45 pointment by the Director.
46 (1) The committee shall represent the Special Fund estab-
47 lished in this section in all proceedings brought to enforce a claim
48 against the Fund. The committee shall be given notice of all appli-
49 cations, hearings, and proceedings involving the rights of the Fund.
50 (2) Members of the committee shall receive no salary, but
51 shall be reimbursed for reasonable and necessary traveling and
52 other expenses incurred in the discharge of their official duties in
53 amounts approved by the Director.
54 (3) The committee shall have the authority to hire such medi-
55 cal or other experts and to defray the expense thereof and of such
56 witnesses as are necessary to a proper defense of the moneys in
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D
IMPROVEMENT OF
57 the Special Fund. The committee may also employ such employees
58 as may be required and may also employ legal counsel to represent
59 it and to conduct on behalf of the Fund, all suits, actions and pro-
60 ceedings whatsoever involving the Fund.
61 (4) All expenses under this subsection shall be defrayed from
62 the Special Fund.] 20
1 Section 56. Uninsured Employers' Fund.21 (a) There is hereby
2 authorized in the [State Treasury] an Uninsured Employers' Fund
3 for the purpose of making payments in accordance with the provi-
4 sions of subsection (d) of this section. The Fund shall be adminis-
5 tered by the Director. The [State Treasurer] shall be the custo-
6 dian of the Fund and all moneys and securities in the Fund shall be
7 held in trust by the [State Treasurer] and shall not be money or
8 property of the state.
9 (b) The [ State Treasurer] is authorized to disburse moneys from
10 the Fund only upon written order of the Director. He shall be ro-
ll quired to give bond in an amount to be fixed and with securities ap-
12 proved by the Director conditioned upon the faithful performance of
13 his duty as custodian of the Fund. The premium of the bond shall
14 be paid out of the Fund.
15 (c) All amounts collected as fines and penalties under this act
16 except those collected under subsections (a) and (b) of Section 42
17 shall be paid into the Uninsured Employers' Fund. The Fund shall
18 become operative when the amount in the Fund reaches [$ 1 I.
20. This alternative subsection has been included as a suggestion for
enactment by larger states. Commenting, the American Association of
State Compensation Insurance Funds urges that it be amended to provide
for representation from the State Fund in those states where such Funds
exist or may exist in the future. A number of states are now giving seri-
ous consideration to the creation of such Funds to offset the mounting
cost of workmen's compensation insurance. The Association recom-
mends that the language of this subsection be amended to read: "One
member shall represent the corporate insurers; one member, the State
Fund; and the third, the interest of the self-insured employers."
21. Immediate initiation of the Fund may be made possible by legis-
lative appropriation. The American Association of State Compensation
Insurance Funds remarks that from experience in California and other
states which have had some practice in the administration of Special
Fund benefits, it is apparent that considerable specialized claims-ad-
justing skills are required. In those states which have, or may have in
the future, a State Fund, there would be a considerable saving to the
taxpayers if the claims adjusting, cost reserving and benefit disbursing
functions were to be assumed by the State Fund. The cost could be on a
service-fee basis and it would obviate setting up a separate bureau to
administer this relatively small volume of claims.
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19 (d) Once the Uninsured Employers' Fund has become operative,
20 compensation thereafter shall be paid from it when there has been
21 default in the payment of compensation due to the failure of an em-
22 ployer to secure payment of compensation as provided by this act.
23 Such employer shall be liable for payment into the Fund of the
24 amounts authorized to be paid therefrom under the authority of this
25 subsection and for the purposes of enforcing this liability the Direc-
26 tor, for the benefit of the Fund, shall be subrogated to all the rights
27 of the person receiving such compensation.
28 (e) The Director shall be charged with the conservation of the
29 assets of the Fund. In furtherance of this purpose, the Attorney
30 General shall appoint a member of his staff to represent the Fund
31 in all proceedings brought to enforce claims against or on behalf
32 of the Fund.
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PART VI
ADMINISTRATION
1 Section 57. Agency to Administer the Act. (a) This act shall be
2 administered by the Director of the [ state administrative agency] 22
3 who shall devote his entire time to the duties of his office. The
4 Governor shall appoint the Director for a term of nit1e (9) years23
5 [, by and with the advice and consent of the Senate, ] L4 on the basis
6 of administrative ability, education and training, and experience
7 relevant to, the duties of the Director under this act. Upon the ex-
8 piration of his term the Director shall continue to serve until his
9 successor shall have been appointed and qualified. [Before entering
10 upon his duties the Director shall take and subscribe to an oath or
11 affirmation to support the Constitution of the United States and of
12 this state and to faithfully discharge the duties of his office.] Be-
13 cause cumulative experience and continuity in office are essential
14 to the proper administration of a workmen's compensation and re-
15 habilitation law, it is hereby declared to be in the public interest to
16 continue the Director in office during good behavior and as long as
17 efficiency is demonstrated. The Director may be removed by the
18 Governor for cause, prior to the expiration of his term, but shall
19 be furnished a written copy of the charges against him and shall be
20 accorded a public hearing if he requests it. [He shall be paid a
21 salary at the rate of [ $ ] per year.] 5
22 (b) The Director shall appoint such hearing officers and other
23 employees, other than employees and assistants of the Workmen's
24 Compensation Appeals Board, and may establish such branch offices,
25 divisions, sections and advisory committees as he deems necessary
26 to administer the workmen's compensation and rehabilitation law,
27 and such other offices and committees as are provided for by this
28 act. All employees engaged in the administration of the act shall
29 devote their entire time to their duties. [They shall take and sub-
30 scribe to an oath or affirmation to support the Constitution of the
31 United States and of this state, and to discharge faithfully the duties
32 of office or employment.] All hearing officers and other emplo ees
33 shall be employed under the [merit and classification system.] 16
22. Provision is made for identifying the administration agency in
Section 2. Definitions.
23. In some states, constitutional provisions limit the length of terms
of appointive officers.
24. If this provision is included, language should be added to enable
the Governor to make interim appointment to fill vacancy when Senate
is not in session.
25. In states having a general pay act, the Director's salary should
be fixed therein.
26. Insert name of state merit and classification system.
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34 (c) Hearing officers appointed after the effective date of this act
35 must be lawyers licensed to practice in this state. They shall de-
36 vote full time to their duties and shall not engage in the private
37 practice of law.
1 Section 58. Appeals Board.27 (a) There is hereby created a
2 Workm Compensation Appeals Board composed of three2S mem-
3 bers appointed by the Governor [by and with the advice and consent
4 of the Senate] for terms of nine (9) years each, except that the
5 terms of members first appointed shall be for three, six, and nine29
6 years respectively as designated by the Governor at the time of ap-
7 pointments. A member of the Board must be a lawyer licensed to
8 practice in this state.30 The Governor shall designate the chairman
9 of the Board. Each member shall hold office until his successor is
10 appointed and qualified. Because cumulative experience and conti-
11 nuity in office are essential to the proper handling of appeals under
12 a workmen's compensation and rehabilitation law, it is hereby de-
13 clared to be in the public interest to continue Board members in of-
14 fice as long as efficiency is demonstrated. The members shall de-
15 vote full time to their duties as members of the Board and shall not
16 engage in the private practice of law. The Governor may at any
17 time remove any member for cause after furnishing him with a
18 written copy of the charges against him and giving him a public
19 hearing if he requests it. Each member of the Board shall be paid
20 a salary at the rate of not less than the minimum salary of [a judge
21 of a state court of general jurisdiction] .
22 (b) The Board shall have power to decide appeals from compen-
23 sation orders of the Director or his hearing officers and it shall
24 have authority to consider and decide all matters of fact and ques-
25 tions of law properly cognizable under this act.
26 (c) A-decision concurred in by any two members shall constitute
27 a decision of the Board.31
28 (d) A vacancy in the Board, if there remain two members of it,
29 shall not impair the authority of two members to act. I
27. This full-time Board is recommended for states where the volume
of cases is sufficient to justify it. In states where the workload would
not warrant a full-time Board, it may be possible for members of the
Board to be utilized by the state in similar capacities.
28. In larger states the Board should have five or more members
with rotating terms, and otherrelevant subsections should be adjusted
accordingly, including the use of panels where desired.
29. In some states constitutional provisions limit the length of terms
of appointive officers.
30. In states In which judges of courts of general jurisdiction are ap-
pointed, the same procedure for selection should be followed.
31. If a Board has more than three members, appropriate adjustment
should be made.
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30 (e) The chairman of the Board shall employ such employees as
31 may be required to carry out the Board's duties under this act, shall
32 assign the work of the Board to the members thereof and its employ-
33 ees and shall serve as administrative officer of the Board.
34 (f) The Board shall be within the [ state administrative agency]
35 for budgetary and administrative purposes only.
1 Section 59. Authority to Adopt Rules and Regulations. The Direc-
2 tor an Board each shall have authority to adopt reasonable rules
3 and regulations within their respective areas of responsibility, af-
4 ter notice and public hearing, if requested, for effecting the purposes
5 of this. act. All rules and regulations, upon adoption, shall be pub-
6 lished and be made available to the public, and, if not.inco istent
7 with law, shall be binding in the administration of this act.
1 Section 60. Location of Office. The principal office of the Direc-
2 tor and of the Board shall be situated in the City of [ ] ,
1 Section 61. Seal. The Director and the Board shall each provide
2 a seal for the authentication of orders, decisions and records and
3 for such other purposes as required.
1 Section 62. Operating Expenses. The Director shall make such
2 expenditures as may be necessary for the adequate administration
3 of this act by the [state administrative agency] . The chairman of
4 the Board shall make such expenditures as may be necessary to per-
5 form the Board's function under this act. Such expenditures. may
6 include salaries, other personal service, traveling expenses, and
7 cost of subsistence while traveling on official business, office rent,
8 the purchase and rental of books, periodicals, office equipment and
9 supplies, printing and binding, vehicles, cost of membership in offi-
10 cial organizations, attendance at meetings and conventions concern-
11 ed with subject matters cognizable with this act, and all other pur-
12 poses. All expenditures of the [state administrative agency] and of
13 the Board in the administration of this act shall be paid out of the
14 Workmen's Compensation Administration Fund.
1 Section 63. Administration Fund.33 (a) There is hereby estab-
2 lished in the [State Treasury] a Workmen's Compensation Admin-
3 istration Fund out of which all costs of administering the Workmen's
4 Compensation and Rehabilitation Law are to be paid upon lawful ap-
5 propriation.34 There shall be one appropriation for the [ state ad-
? 6 ministrative agency] , and a separate appropriation for the Board.
7 For the purpose of providing for the expense of administering the
32. This section should conform to any administrative procedure re-
quirement the state may have.
33. States having an exclusive state Fund would want to make appro-
priate modifications in this section.
34. In those states where industrial safety or hygiene is a part of
workmen's compensation administration, industrial safety or hygiene
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7 For the purpose of providing for the expense of administering the
8 Workmen's Compensation and Rehabilitation Law each insurance
9 carrier authorized to insure liability under this act shall pay a tax
10 at a rate of [2] 35 per cent of gross direct premiums written dur-
11 ing the preceding calendar year on account of workmen's compensa-
12 tion insurance on risks located in this state after deducting from
13 such gross direct premiums, return premiums, unabsorbed portions
14 of any deposit premiums, policy dividends, savings and other simi-
15 lar returns paid or credited to policyholders. The provisions of
16 Section [insert reference to general premium tax section or
17 sections] insofar as they relate to time and manner of payment and
18 penalties for late payment or non-payment of premium taxes shall
19 be applicable to the tax imposed by this section which shall be in
20 lieu of any other tax or taxes now or hereafter imposed upon such
21 premiums. Any insurance carrier liable to pay a tax upon its pre-
22 miums under this section shall not be liable to pay any other or
23 further tax or taxes upon such premiums under any other law of this
24 state. The tax collected under this section shall be deposited in
25 the [State Treasury] to the credit of the Workmen's Compensation
26 Administration Fund.
27 (b) Balances in the Fund at the end of any appropriation period
28 shall not revert to the general fund or to any other fund, except as
29 provided in this section, but shall continue as a Workmen's Com-
30 pensation Administration Fund balance at the beginning of the next
31 appropriation period. Whenever at the end of a fiscal year the
32 balance in the Fund is in excess of two times the appropriation for
33 the fiscal year just ending, the [State Treasurer] shall so certify
34 to the [Insurance Commissioner] who shall then deposit in the
35 [State Treasury] to the credit of the Special Fund created by Sec-
36 tion 53 of the act, the amount collected from insurance carriers and
37 employers under this section for the ensuing tax year.
38 (c) When an employer is authorized to become a self-insurer the
39 Director shall so notify the [Insurance Commissioner] , giving the
40 effective date of such authorization, whereupon the [Insurance Com-
41 missioner] shall assess. and collect from the employers carrying
42 their own risks [3] 26 per cent of twice the total income benefits
43 paid during the preceding calendar year. All money so collected
44 shall be deposited in the [State Treasury] to the credit of the Work-
45 men's Compensation Administration Fund.
46 (d) If any carrier shall fail or neglect to pay tax imposed herein
47 or shall withdraw from business in this state before the tax shall
48 fall due according to the provisions of this section, the [Insurance
49 Commissioner] shall proceed at once to collect the same, and he is
activities may also be financed from the Workmen's Compensation Ad-
ministration Fund.
35. These figures may be adjusted to conform to the general premi-
um tax of the state, maintaining the relationship between the figures for
insurance companies and self-insurers.
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50 hereby empowered and authorized to employ such legal process as
51 may be necessary for that purpose, and when so collected he shall
52 pay the same into the [State Treasury] to the credit of the Work-
53 men's Compensation Administration Fund. A suit may be brought
54 by the [Insurance Commissioner] in any court of this state having
55 jurisdiction.
1 Section 64. Reports. (a) Each year the Director shall make a
2 report to the Governor and through him to the [state legislature]
3 on the operation of this act, including suggestions and recommenda-
4 tions as to improvements in the law and administration thereof, a
5 detailed statement of receipts and expenditures, and a statistical
6 analysis of industrial injury experience and compensation costs.
7 (b) The Director may prepare and publish such other statistical
8 and informational reports and analyses based upon the reports and
9 records available which, in his opinion, will be useful in increasing
10 public understanding of the purposes, effectiveness, costs, cover-
11 age, and administrative procedures of workmen's compensation and
12 rehabilitation in the state; and in providing basic information re-
13 garding the occurrence and sources of work injuries for the use of
14 public and private agencies engaged in industrial injury prevention
15 activities.
1 Section 65. Cooperation with Other Agencies. The Director shall
2 have the authority to enter into cooperative agreements with the
3 [state labor department] , [state division of vocational rehabilita-
4 tion] , [state division of employment security] , and with other state,
5 federal, or private agencies to facilitate the carrying out of the pur-
6 poses of this act.
1 Section 66. Severability. If any provision of this act be declared
2 to be unconstitutional or the applicability thereof to any person or
3 circumstance be held invalid, the validity of the remainder of the
4 act and the applicability of such provision to other persons and
5 circumstances shall not be affected thereby.
1 Section 67. Laws Repealed. [Use this section to repeal all in-
2 consistent statutory provisions. Where possible such provisions
3 should be cited specifically.]
1 Section 68. Effective Date. [Insert effective date.]
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L.S. DEPARTMENT OF LABOR
EMPLOYEES' COMPENSATION APPE_4I.R BOARD
SUMMARY OF PROCEEDINGS
The Employees' Compensation Appeals Board Is a quasi-judicial appellate body
consisting of three members. It was established by Congress In 1040 with ex-
elusive jurisdiction to consider and decide appeals of Federal employees from
final decisions of the Bureau of Employees' Compensation in claims arising under
the Federal Employees' Compensation Act. The Board is separate and distinct
from the Bureau. The administration of the FEt A is vested in the Bureau,
except in the ease of employees of the Canal Zone Government and the Panama
Canal. Company.` The F'E{ fi is the exclusive remedy for Federal employees for
injury or disease sustained in the performance of duty.
The jurisdiction of the Board extends to questions of fact, as well as law, and
to questions involving the exercise of discretion. Board review is limited to the
ease record upon which the Bureau rendered its decision ; new evidence may not
be submitted to the Board. A decision of the Board is final and not subject to
court review.
Appeal Is a matter of right, If the application for review Is fled within 90 days
from the date of the Bureau's decision (180 days for persons residing outside the
continental United States or Canada). For good cause shown justifying delay,
the Board may accept an application after the 90 (or 140) day period, provided
It is filed within 1 year of the date of the Bureau's decision. The application for
review may he made on a form which the Board has available for this Imrpose.
However, the Board will accept an informal request for appeal provided it
furnishes sufficient information to identify the appellant. Bureau case file num-
ber, date and place of injury, date of the decision to be reviewed, and succinctly
states the ground of the appeal. It is not necessary for an appellant to be
represented before the Board but, if he wishes, he may designate a representative.
Within the discretion of the Board, at any stage of the proceeding, a party in
interest may Inspect the case record in the office of the Board in Washington,
D.C. Arrangements may also be made for inspection in other offices of the U.S.
Department of Labor.
When an appeal is docketed, the Bureau Is furnished with a copy and Is per-
mitted 30 days within which to file with the Board the original record of the case
and Its reply, which usually takes the form of a memorandum in justification of
its decision. Since either the Bureau or appellant may demand oral argument
of the issues on appeal, the Bureau's memorandum states whether oral argument
is, or is not, requested. The appellant then Is furnished with a copy of the
Bureau's memorandum and is given an opportunity to file an answer. If the
Bureau does not request oral argument, the appellant is advised of his right to
request It. If he does not do so within a specified time, the case is submitted to
the Board for decision without a hearing.
If either party requests oral argument, a hearing is scheduled. The Board sets
the issues to he heard and sends notices to the parties at least 10 days in advance
of the hearing. Hearings are held only in Washington, D.C. The hearing pro-
cedure is informal. An appellant may appear in person before the Board, or by
representative.
The failure of an appellant to be present will not prejudice his ease. Oral
argument is first presented by appellant. The Bureau's representative then
makes his presentation, following which appellant Is given an opportunity for
rebuttal. As new evidence may not be introduced, the parties must confine oral
argument to the evidence already in the record or to the legal issues raised.
The only difference in procedure between cases submitted on the record and
"hearing" cases is that in the latter the parties have the opportunity orally to
stress and argue points which are considered significant. Each Board member
personally reads the record, regardless of whether It Is a hearing case or one
submitted on the record. This permits the most careful evaluation of all of the
evidence before a decision Is reached.
I In the case of employees of the Canal Zone Government and Panama Canal Company.
the FECA is administered by the Governor of the Canal Zone. The right of appeal to the
Board from final decisions of the Governor became effective Aug. 30, 1904. Hereinafter.
any refernee to the Bureau Is similarly applicable to the Governor of the Canal Zone.
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IMPROVEMENT OF
In each appeal reviewing the merits of a claim, the Board's decision is ac-
companied by a written opinion setting forth the salient facts, the conclusions,
the law, and the reasoning upon which the Board based its action.
The Federal employee aggrieved by an adverse decision of the Bureau is en-
titled to the highest standards of appellate review. The Board endeavors to
maintain such standards and to achieve through its procedures and practices a
just decision in every appeal.
The processing of most of the cases follows the above pattern. However, many
other actions may develop, such as motions to dismiss the appeal because of
alleged lack of a final decision by the Bureau or contention of other basis for lack
of Board jurisdiction ; motions to remand for a particular purpose, etc., which
may necessitate a variance from the procedure outlined, dependent on the
nature of the motion or allegation. In any event, in each case the Board enters
a formal order disposing of the matter on appeal. The order may affirm or
reverse the decision of the Bureau or may remand the case to the Bureau for
such further proceedings as the Board may direct. The Board also may enter
an order dismissing the appeal for lack of jurisdiction or inherent insufficiency,
or permitting withdrawal of the appeal. A copy of the Board's order is sent
to all parties in interest.
All fees for legal services performed in connection with the appeal require
the approval of the Board. Receipt of any fee or other consideration for such
legal services without approval is a misdemeanor. Application for approval is
submitted by an itemized statement of the extent and character of necessary
work performed before the Board and a fee is approved in an amount which is
considered fair and reasonable. The payment of any fee approved by the Board
becomes the responsibility of the appellant. Disbursements do not require ap-
proval and are a matter of adjustment between attorney and client. Legal
services performed before the Bureau require a separate application to be
submitted to the Bureau for its approval.
The opinions of the Board are comprehensive and constitute a valuable fund of
precedent which serves not only to guide the Bureau in the adjudication of claims
but also as an important source of reference to injured employees, attorneys, and
others concerned with problems of workmen's compensation. Each decision with
opinion is first issued in multilith form. Later the decisions are assembled and
printed in volumes. The volumes are available for reference to anyone who
wishes access to the Board's decisions at many depository libraries, at the
workmen's compensation commission of each State, and at the regional offices of
the Bureau of Employee's Compensation. In addition, there has been a limited
distribution to various university and law libraries throughout the United
States.
Dated, Washington, D.C., July 1965.
Approved For Release 2005/07/13 : CIA-RDP67B00446R000600010001-4