Printing - FECA-PT2 - National Association of Letter Carriers

Exhibits
1. Sample Letter to Claimant --
Refusal of Employment 12/93 94-05
2. Sample Letter to Claimant
Advising That Compensation is Being
Reduced Based on Actual Earnings 12/93 94-05
12/95 96-07
3. Sample Letter to Employing Agency
Authorizing Payment of Relocation
Expenses 12/93 94-05
2-0814-1 Purpose and Scope
1. Purpose and Scope. This chapter explains the procedures for determining entitlement to
compensation after reemployment and for determining wage-earning capacity (WEC) where
reemployment is not possible. Procedures are also explained for terminating compensation for failure to
accept suitable work.
2-0814-2 Introduction
2. Introduction. Section 8106 of the Federal Employees' Compensation Act (FECA) provides for a
reduction in compensation to reflect a loss of wage-earning capacity (LWEC) when the disability for work
is partial. The employee's actual earnings may be used to calculate reduced compensation if these
earnings are found to fairly and reasonably reflect his or her earning capacity. When they do not, the
employee's WEC is determined on the basis of factors described at Section 8115 of the FECA.
The method of computing compensation for wage loss due to partial disability is set forth in the FECA at
Section 8106(a):
If the disability is partial, the United States shall pay the employee during the disability monthly
monetary compensation equal to 66 2/3 percent of the difference between his monthly pay and his
monthly wage-earning capacity....
In the case of Albert Shadrick, 5 ECAB 376, issued March 23, 1953, the Employees' Compensation
Appeals Board established a principle to eliminate economic factors such as inflation or recession
when computing the amount of monetary compensation due for partial disability. According to this
rule, the injured worker would be paid compensation based on the difference between the pay
which had been determined to be his or her post-injury WEC, and the contemporaneous pay of the
date of injury job. OWCP established the "Shadrick Formula" (see FECA PM 2-900.16) as the
method of computing compensation when determining an injured worker's WEC.
Finally, the FECA at Section 8106 provides for the imposition of certain penalties against workers
who refuse offers of suitable work, or who abandon suitable work without good cause.
2-0814-3 Policy
FECA-PT2 Printed: 06/08/2010 431