TITLE IV-LIBERALIZATION OF THE MINIMUM AND MAXIMUM
COMPENSATION FOR EMERGENCY RELIEF WORKERS

Section 401: The provisions of the Employees' Compensation Act were extended in 1934 and at subsequent times to individuals employed by the United States under emergency relief programs. The act, as thus extended, applied only to limited case situations; namely, those arising from traumatic injury, exclusive of disease. The statutory provisions are principally in the act of February 15, 1934 (5 U. S. C. 796). These limited benefit provisions were extended from time to time to other similar groups employed by the United States under similar programs, including enrollees of the Civilian Conservation Corps. While the Federal Employees' Compensation Act was employed for its administrative provisions, the scale of benefits and the over-all or maximum benefit derived under the act, were very limited. The maximum monthly compensation was, ultimately, $50 (originally $25 and then $30), with a further limitation of $4,000 (formerly $3,500) as the maximum aggregate compensation which could be paid in any one case. The monthly maximum compensation of $50 and the over-all limitation of $4,000 per case have been wholly inadequate to provide even the barest minimum security for those individuals who were permanently and totally disabled as the result of traumatic injury due to their employment. In the cases of most persons thus totally disabled, and in death cases, the $4,000 maximum limit has been reached. There remains, as an essential act of justice, the necessity of providing for those remaining individuals who are totally disabled as the result of such work injuries, and for the dependents of the deceased workers who were killed as the result of employment causes, all of whom otherwise will be forced upon public or private charity.

Subsection (a) is designed to afford minimal additional relief against the harsh results of the limitations upon benefits applicable in such cases. The effect of the bill would be to provide a ceiling of $100 per month as the maximum monthly compensation and a minimum of $50 per month as compensation, with elimination of the $4,000 limitation upon aggregate payments only as to cases of permanent total disability and death. The bill would make payment of any benefit or increased benefit operate prospectively only and retain the $4,000 maximum limitation except in cases of permanent total disability and death.

Subsection (b) of section 401 would repeal those provisions of the Emergency Relief Appropriation Acts of 1937 and 1938 which raised, respectively, first to $30 and later to $50, the maximum monthly compensation in such cases and which increased to $4,000 the aggregate compensation maximum, all of which would be superseded by the amendments to the 1934 act, contained in section 401 (a) of the bill, as above explained.

Section 401 (a) would also permit the Administrator, subject to the specified limitations on aggregate compensation and to maximum and minimum compensation per month, to supersede by a new schedule, adapted to changes since made in the Compensation Act, the special compensation schedule promulgated for emergency relief workers under the 1934 act.

Section 402: A legislative oversight occurred in the enactment of the joint resolution of July 25, 1947 (61 Stat. 449, 451), which was an act to terminate emergency and war powers. Certain acts were repealed thereby and among them the act of May 14, 1942, which had established the Women's Army Auxiliary Corps (WAAC). The 1942 act contained a section, section 11, which gave to members of such corps the protection of the Employees' Compensation Act. The members of that corps who sustained injuries, and the dependents of members who were killed as the result of service injuries, had eligibility to benefits under the Employees' Compensation Act until July 1, 1943, when the 1942 act which had established the Women's Army Auxiliary Corps was repealed and the (new) Women's Army Corps (WAC) was created. The act of July 1, 1943 (57 Stat. 371), had repealed all of the 1942 act except section 11 thereof which was permitted to remain in effect because of the existing cases of injured or killed members of the abolished corps (WAAC) in cases which had arisen before the effective date of the 1943 repealer act.

The joint resolution of July 25, 1947, again repealed the 1942 act, all of which, except for section 11, had previously been repealed. The net effect of the 1947 act was thus to repeal only section 11 of the 1942 act, thus casting doubt upon the basis for continuing benefit payments in the few remaining and pending injury and death cases which had arisen during the life of the Women's Army Auxiliary Corps (WAAC).

The provisions of section 402 of the bill are designed to restore section 11 of such 1942 act, so as to remove any doubt that a continuing basis will exist for payment under the Employees' Compensation Act in the few pending cases which remain. Research into the legislative history of the particular part of the joint resolution of July 25, 1947, does not disclose any reason whatsoever for the repeal of such section 11. That it was inadvertent may be easily inferred from the circum

stances.

COMMITTEE AMENDMENTS

The committee amendments set forth in the first part of this report consist largely of minor verbal changes for the purpose of clarity which in the main are self-explanatory. Any significant change has been commented upon in the foregoing analysis, save the addition of two new sections to the bill numbered 208 at page 29 and 305 at page 36. 1. The committee has added section 208, which would amend section 23 of the act in order to give the Administrator authority to give recognition to authorized attorneys or other representatives of the claimant and to provide for approval of fees. There is no provision at present in the. Employees' Compensation Act relative to representation or the approval of representatives' fees. Such a provision is necessary for the protection of claimants and will be found in other comparable legislation. In fact, provision governing representatives' fees will be found in certain extensions of the Employees' Compensation Act to other groups although it is absent in the basic act. Similar provisions also will be found in the Social Security Act and in the Longshoremen's and Harbor Workers' Compensation Act.

The new section 23 is divided into three subsections designated respectively "(a)," "(b)," and "(c)." Subsection (a) contains the

present language in section 23 of the act modified slightly for clarity and removal of any doubt as to the classes of physicians whose fees are not to be determined. Subsection (b) will provide for the fixing of attorneys' fees as above commented upon. Subsection (c) is intended to require obedience to orders, processes, etc., issued or required in the administration of the act and to provide a sanction for disobedience of a lawful order or process or for misconduct or contumacy at or near any proceeding under the act.

2. The committee has further added section 305 to the bill, which would designate the present provisions of section 33 of the act as subsections (a) and (b) and would add a new subsection (c), authorizing safety promotion by agency heads and the establishment of an advisory safety council.

It is the committee's view that even greater and more effective results can be achieved in the matter of safety and accident prevention than is accomplished by the Agency at present under the limited authority it has in the act, by drawing more closely together the various safety programs carried out within government. It is necessary that all departments and agencies of government have and maintain their own safety organizations fitted to their particular needs. But this is not enough. Much valuable experience accumulates in the Bureau of Employees' Compensation of the Federal Security Agency by reason of the workmen's compensation reports and claims it receives. This is vital resource material which leads directly to causes of accidents, and patterns of risks. Experience can be gleaned from this material much broader in scope than that from the contacts of any local or agency safety organization. Moreover, such Bureau is in the unique position of being able to spot-check the injury reports themselves and to pick out potential causes of injury long in advance of locally recognized patterns of risk, because of the broader scope of the Bureau's work.

The committee believes that such Bureau can accomplish the most effective results if its resources should be fully exploited and if it should be given the staff and assistance necessary to do a thorough job. With this as a worth-while goal to achieve, the committee proposes that authority be given to the President to establish by Executive order a safety council composed of representatives of all Government departments and agencies. Such council would serve as an advisory body to the Administrator and thus bring to him, individually and collectively, their own experiences and recommendations which, when added to the wealth of resource material and Government-wide experience of the Bureau in the matter of causes of accidents, should result in more effective employment of the statutory provisions of the Federal Employees' Compensation Act dealing with safety and accident prevention.

The committee's first concern is the reduction of the toll of human suffering and death through elimination of preventable causes. Its second concern is in saving compensation costs. Private industry learned many years ago that safety and accident prevention programs give large returns both in terms of suffering avoided and reduced operating and compensation costs. That such programs afford larger financial returns than their cost is attested to by the universality with which they are accepted. This committee is of the view that the Government could not only recoup the cost of an effectively inte

grated safety program, but the over-all savings in costs may well cover, in addition, the increased compensation costs.

CONCLUSION

The committee realizes that legislative authorization for the liberalization and modernization of the Federal Employees' Compensation Act-long overdue and important though it be-must depend upon adequate administrative machinery so as to assure, on the one hand, fair and equitable treatment of the employee and his dependents, with prompt determination of his claim at either the initial or appeal stage, and, on the other, adequate protection of the Government against payment of improper claims. This, of course, requires adequate and competent staffing, so as to permit more effective development and adjudication of claims. Recognition of these facts is especially important in connection with the present amendments, which will add substantially to the responsibilities of the Agency in implementing and administering the statutory changes.

The modification of the benefit provisions of the Compensation Act, as proposed by the bill, as amended, by the committee, will increase the annual cost of such benefits and will also necessitate an increase in the cost of administration, both in the transitional period incident to the review of the outstanding cases and thereafter. A survey of cost estimates indicates a probable annual amount of some $7,500,000 for increased compensation benefits. The proposed new benefits of necessity call for equipping the administrative agency with a fully adequate staff for field investigation and supervision of claim procedure, as well as for employing all the resources available to the Agency to best advantage in the prevention of accidents in the employments covered.

The committee strongly recommends that the appropriate committee dealing with the fiscal affairs of the Agency consider the financial gain which the Government could accomplish by providing for an adequate staff for the administration of the Compensation Act. The committee feels that the Agency has not anywhere near sufficient personnel to enable it to give that measure of protection to the interests of the United States which under a workmen's compensation law an ordinary private employer or insurer would insist upon to protect himself from improper claims. The processes under the act are highly informal, with no hearings provided at the level of adjudication. The Agency must of necessity rely largely upon the written word, without opportunity for cross-examination, in the cases coming before it. The only means of protecting the Government's interests is that afforded by a small and wholly inadequate staff of investigators and claims adjudicators. The increased benefits under the bill necessarily will impose greater responsibilities for correct and just decisions to the employee and Government alike. These responsibilities can be met. in this instance only by providing for the necessary skilled personnel. This is one of the fields of Government activity in which adequate staffing will actually accomplish a saving in over-all costs through better investigation of claims and prompt termination of benefits through closer supervision of cases by the claims adjudicators. A misjudgment of evidence by an overburdened claims examiner resulting in the allowance of a single claim, or a failure to obtain adequate

evidentiary basis for terminating payments in a single case, could easily cost the Government many times that examiner's salary for that year. Stated differently, the saving to the Government would be much more than proportional to salaries paid for an increase in such staff to the optimal point at which attention can be given to each case to the extent that particular case requires, and all cases needing field inquiry can receive that investigation which they require. Anything short of such adequacy is the falsest kind of

economy.

In addition, it is estimated that retrospective coverage for major injuries under the schedule added by section 104 of the bill, as recommended by the committee, would involve an expenditure of an additional $8,000,000 spread over a period of 6 years.

During the consideration of this bill it was brought to the committee's attention that frequently in the case of payments made to persons not residing in the United States, the United States Government checks were being sold in the black market at several times the legal rate of exchange. It is the belief of the committee that this problem (of payments under the compensation act to persons in foreign countries) is but a small part of a much larger problem and should be dealt with by general legislation aimed at preventing the exploitation of United States currency in black markets of foreign countries which are suffering from inflated domestic currency.

To the extent that cases are adequately supervised and investigated and causes of accidents ferreted out and eliminated, the over-all cost of benefit payments should be noticeably reduced. The committee notes with considerable satisfaction a sharp decline shown in recent reports of accident frequency and severity rates. The machinery for the administration of the act should be strengthened to continue this downward trend and enable the agency to establish safety standards and procedures. Current trends, if sustained by adequate and prudent administration, may well reflect the possibility of providing Government employees with increased benefits without much if any appreciable or real additional cost to the Government. This would come about through greater emphasis on accident prevention and through increased awareness on the part of Federal establishments of the tremendous human and financial losses from preventable causes. The Government, therefore, should pass along to the injured workers, in the form of more adequate benefits, some of the savings which are in no small measure due to the cooperation and efficiency of the employees themselves in their effort to eliminate hazardous conditions.

CHANGES IN EXISTING LAW

In compliance with paragraph 2a of rule XIII of the Rules of the House of Representatives, changes in existing law made by the bill, as introduced, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics. existing law in which no change is proposed is shown in roman):

FEDERAL EMPLOYEES COMPENSATION ACT

SEC. 2. That [during] with respect to the first three days of temporary disability the employee shall not be entitled to compensation except as provided in section 9[.] [No compensation shall at any time be paid for such period.], unless such