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Audit Reports

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Report Number:
Report Type:
Audit Reports
Category: Human Resources

Workers’ Compensation Program Update


Postal Service employees who sustain a work-related injury or occupational disease are covered by the Federal Employees’ Compensation Act (FECA). These benefits include wage-loss compensation, medical and rehabilitation services, and death benefit payments to surviving dependents. The Department of Labor’s (DOL) Office of Workers’ Compensation Program has the exclusive authority to administer, implement, and enforce FECA, including paying claims on behalf of injured employees. The Postal Service manages efforts to return injured employees to work through its Injury Compensation Program. During chargeback year (CBY) 2022 (July 1, 2021, through June 30, 2022) the Postal Service reimbursed $1.31 billion to DOL for its compensation claim costs, including administrative fees.

What We Did

Our objective was to evaluate management’s initiatives to reduce workers’ compensation costs and examine good practices for controlling workers’ compensation activity. We reviewed workers’ compensation data from fiscal year (FY) 2017 through FY 2022 and visited five districts based on management’s implemented cost containment initiatives.

What We Found

Despite postal management’s actions to reduce their workers’ compensation costs, they are limited by law in pursuing certain cost containment options used in private industry. Between CBY 2017 and CBY 2022, their workers’ compensation cost per workhour was between 31 percent and 41 percent higher than private industry. Management implemented initiatives to reduce and contain workers’ compensation costs, use the Employee Compensation Operations & Management Portal, and reduce the number of employees on the periodic rolls.

However, opportunities exist for management to further improve their Injury Compensation Program by increasing their use of available technology. Specifically, management could streamline and automate time-consuming processes. If the Postal Service was allowed to adopt practices used by private industry to control workers’ compensation costs, we estimated it could have potentially saved more than $692.9 million during CBY 2021 and CBY 2022.


We recommended management (1) use the information in this report to develop a briefing summary for the Postmaster General and the Deputy Postmaster General to consider pursuing legislative changes needed to further reduce workers’ compensation costs; (2) evaluate opportunities and identify barriers to streamline and automate the routinely performed manual processes of calculating comparable pay and researching rural carrier workhours; and (3) reiterate guidance to all Occupational Health Claims field offices for tracking newly submitted claims.

Report Recommendations

# Recommendation Status Value Management Response OIG Response USPS Proposed Resolution

Use the information in this report to develop a briefing summary for the Postmaster General and the Deputy Postmaster General/Chief Human Resource Officer to consider the possibility of pursuing legislative changes needed to further reduce workers' compensation costs.

Closed $692,899,097 Agree

Evaluate opportunities and identify barriers to streamline and automate the routinely performed manual processes of calculating comparable pay and researching rural carrier workhours associated with the Injury Compensation Program.

Closed $0 Agree

Reiterate guidance to all Occupational Health Claims field offices to use the Safety Health Management Tool to track submitted claims.

Closed $0 Agree