Lawmakers square off with administration over federal worker compensation

That difference can lead injured workers to take home a higher level of pay than many of their colleagues on the job, though, and might give some workers an incentive to not return to work.

It's also higher than almost all state compensation programs.

To fix the discrepancy, and to encourage workers to get back to work, the department is recommending a switch to a uniform rate of 70 percent for all injured workers.

"A single rate would be simpler and more equitable and would provide significant savings to the taxpayers," said Gary Steinberg, the acting director of the Labor Department's workers' compensation office.

Steinberg added that, that and other changes would save more than $500 million over 10 years.

That update, though, "would have a disproportionate impact on workers with dependents," said Rep. Tim Walberg (R-Mich.), the chairman of the Education and Workforce subcommittee on Workforce Protections.

A Government Accountability Office survey released on Wednesday found that the change would reduce the amount of take-home pay by 3 or 4 or percent, since more than 70 percent of beneficiaries have a dependent.

That should lead the department to reconsider its suggestion, said lawmakers on the panel.

The report "seemed to suggest that in many instances, disabled workers would be worse off" under the department's suggestions, said Rep. Joe Courtney (D-Conn.). 

In addition to a change in pay, the Labor Department also wants to allow for vocational rehabilitation as soon as six months after an employee's injury and give an incentive for employers to hire rehabilitated workers.

Congress would need to approve a change to the federal worker compensation program if it wanted to update it.

In 2011, the House passed a bill to reform the system.

That bill would have raised benefits for funerals and disfigurement, adopted program integrity measures and allowed physicians' assistants and advanced nurse practitioners to be eligible medical service providers.

Though it passed the House on a voice vote, that bill died in the Senate last Congress.

Legislators on both sides of the aisle hoped to revive it this year.

"I'm hopeful that in the coming weeks and months, we can build on the bipartisan efforts that took place in the last Congress," Walberg said.

The Labor Department manages the Federal Employees' Compensation Act, which was passed in 1916.