Public Employee Retirement vs. Workers Compensation

Posted on Legal

Introduction

Federal public employee disability retirement is for federal employees who suffer from a medical condition that impacts their ability to work.  While it is in the best interest of both employees and the federal government for employees to remain employed in their current grade or pay level – as long as they can provide useful and efficient service without endangering themselves or others – the federal government allows employees who are unable to work to retire under a disability retirement program. Federal employee disability retirement should be considered a last option to be used only when attempts have been made to preserve an individual’s employment, but those attempts have failed.

The federal government offers workers compensation through its own insurance program for federal employees. Under workers’ compensation law, benefits are available to a worker who is hurt on the job, and no proof of fault needs to be made. All that needs to be established is that the injury occurred on the job and is connected somehow with the work the employee performed.

Definitions & Restrictions

Public Employee Disability Retirement

Public Employee Disability Retirement is a benefit that is part of the total employment package an individual receives when they become a federal employee. Federal employees who were hired before 1984 are likely part of the CSRS (Civil Service Retirement System), while FERS (Federal Employees Retirement System) became mandatory for new federal workers in 1984.

According to 5 U.S.C. § 8337(a); 5 C.F.R. § 831.1203(a), to be eligible for a disability retirement annuity under FERS or CSRS, a Federal employee must establish that:

  • He has completed a minimum of 18 months of federal service (for FERS employees) or five years for CSRS employees;
  • While employed in a position subject to FERS or CSRS, the employee becomes disabled because of a medical condition,  resulting in a deficiency in performance, conduct, or attendance, or, absent such deficiency, the medical condition must be incompatible with either useful and efficient service or retention in the position;
  • The disabling medical condition is expected to continue for at least one year from the date the application is filed; and
  • Accommodation of the disabling medical condition in the employee’s former position or in an existing vacant position must be unable to be accomplished by the agency.

Workers Compensation

Workers’ Compensation is an insurance program that provides compensation in the form of wages and medical care for employees who are injured while in the course and scope of their employment. The exact rate will be determined by the workers’ compensation department of the federal government or each individual state, wage replacement is usually two-thirds of the worker’s average wage, with a fixed maximum amount. Workers’ compensation benefits are not taxed.

If an employee sustains a permanent injury on the job, and can no longer perform the duties of that job, he may also be eligible for long-term or lump-sum workers’ compensation benefits. The amount of these benefits will be determined based upon the nature and extent of the injuries. Permanently disabled employees may also apply for Social Security Disability.

Filing and Payment Procedures

Public Employee Disability Retirement

If you are applying for disability retirement, you must complete SF 3107, Application for Immediate Retirement, and SF 3112, Documentation In Support of Disability Retirement. The employing agency will help with the completion of these forms and will forward the completed forms to the Office of Personnel Management (OPM).

One does not need to be separated from service in order to file for federal disability retirement.  However, if a federal employee is separated from service, that employee has only up to one year to file for federal disability retirement benefits.  If the employee does not file within one year of being separated from service, the right to apply for such benefits is lost.

If a separation of service occurs, it is best to attempt to negotiate with the Agency to have the separation characterized as one based upon a medical reason either explicitly or implicitly, including a reference to the medical condition that caused the separation.

Workers’ Compensation

Federal workers who are injured on the job should notify their supervisor as soon as possible, and seek appropriate medical attention, if necessary. They will need to file an injury/illness report using the DOC form CD 137and submit it to the Bureau Safety Manager/Coordinator within seven calendar days. They are also required to file the appropriate forms – a CA-1 claim form for a work-related traumatic injury, and a CA-2 claim form for a work-related occupational illness. The filing of workers’ compensation case can be done with or without the help of an attorney, and most injured workers receive workers’ compensation benefits within days of the injury.

Under workers’ compensation, an injured employee receives non-taxable income on a weekly or bi-weekly basis that is equal to about two-thirds of their average wage. They are also entitled to medical care for their injury, compensation for a permanent injury, and reimbursement for job retraining if necessary.  Workers’ compensation benefits are also available to survivors of those who are killed on the job.

Other Factors

Public Employee Disability Retirement

Public employee retirement does not restrict the federal employee from pursuing another career in a different occupation. The statutes and regulations governing disability retirement annuity payments allow for an individual to become employed in another job as long as the new job:

  1. Is substantially different from the previous job which the employee is now unable to perform
  2. Pays no more than 80% of what the prior Federaljob currently pays

Workers Compensation

Most workers who are injured on the job will be covered under their employer’s workers’ compensation insurance. In exchange for monetary benefits, workers’ compensation law requires injured employees to give up the right to bring a fault based personal injury lawsuit against their employer, although under very specific circumstances they might still be able to file such a claim.

State & Regional Influences/Factors

Public Employee Disability Retirement

Most states also offer a disability retirement plan for their employees, with requirements and benefits varying from state to state. Federal employees are eligible for federal public employee retirement benefits, not those offered to employees of the state in which they live.

Workers’ Compensation

Workers compensation is an insurance policy administered by the workers’ compensation boards of individual states. Workers’ compensation laws differ from state to state, and policies, procedures, and benefits also vary according to the state in which the employee works. Federal employees are eligible to apply for Federal workers’ compensation, not their individual state’s plan.

Key Differences 

Public Employee Disability Retirement

Unlike federal worker’s compensation (OWCP) causality is not an issue in federal disability retirement law. To be eligible for federal disability retirement benefits, you don’t need to have an on-the-job injury, or suffer from an occupational disease or illness.

Workers Compensation

Federal workers are covered by federal workers’ compensation insurance, not their state’s plan. State workers’ compensation laws cover most employees, although some classes may be excluded, including independent contractors, business owners, casual workers, volunteers, employees in private homes, farmers and farmhands, maritime and railroad employees, and those who work for employers with fewer than three to five employees.

Conclusion

Federal employees may be eligible for public employee retirement if they become disabled to a medical condition that does not have to be work-related. They can receive federal employee disability benefits and even pursue another career, as long as the job duties are substantially different from the ones they performed in their federal job.

Most workers who are injured on the job are covered under their employer’s workers’ compensation insurance. They do not need to prove negligence and will most likely file a claim with the workers’ compensation board in their state, or the federal government if they are a federal employee.