Division of Federal Employees' Compensation (DFEC)

Part 2

Part 2 - Vocational Rehabilitation Program Overview

Paragraph and Subject


RCHB Trans. No.

Table of Contents



1. Mission of OWCP DFEC Vocational Rehabilitation



2. Program Characteristics



3. Return to Work Hierarchy



4. Qualifying for Vocational Rehabilitation



5. Mandatory Participation



6. Rehabilitation Services



7. Provision of Substantial Services



8. Entitlement to Compensation while in Vocational Rehabilitation



9. Roles and Responsibilities in the DFEC Rehabilitation Process



10. Emphasis on Timeliness and Concurrent Actions



11. OWCP Forms



Exhibit 1: Vocational Rehabilitation Timeliness Standards, Status Criteria and DFEC Program Requirements




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1. Mission of OWCP DFEC Vocational Rehabilitation. The Mission of the Office of Workers Compensation Program, Division of Federal Employees Compensation (OWCP/DFEC) Vocational Rehabilitation Program is to assist claimants/injured workers (IWs) covered by the Federal Employees Compensation Act (FECA) to return to gainful employment. The FECA authorizes funding for vocational rehabilitation services with the primary goal of reemployment, as soon as feasibly possible, to a job consistent with the physical and vocational abilities (and with a salary as close as possible) to the date of injury job, minimizing wage loss.

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2. Program Characteristics. The most common work-related disabilities of IWs receiving vocational rehabilitation services under the FECA are musculoskeletal in nature, including back injuries and injuries of the upper and lower extremities. Other disabilities or injuries may include, not exclusively, skin disorders, heart and lung disease, vision and hearing impairments, and diagnosed psychiatric conditions.

A small percentage of cases involve catastrophic injuries such as spinal cord and traumatic brain injuries.

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3. Return to Work Hierarchy. Consistent with a general approach to workers' compensation job placement, DFEC encourages the following return to work hierarchy in order of priority. This approach is based on a sequence of return to work possibilities which should be considered in order to affect the most efficient and successful return to work. All possibilities must be considered in light of the documented, accepted disability(ies) and restrictions from the claims examiner as well as physical and vocational abilities.

  1. Return to work with same employer/same job
  2. Return to work with same employer/modified job
  3. Return to work with same employer/different job
  4. Return to work with new employer/similar job
  5. Return to work with new employer/different job
  6. Formal training or education (followed by a return to work with a same or new employer)

Vocational evaluation, testing, and periods of short-term training may be utilized during any phase, as appropriate and authorized, to facilitate the return to work.

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4. Qualifying for Vocational Rehabilitation. To qualify for full vocational rehabilitation services under the FECA, an IW must have sustained a permanent disability due to a work-related injury or illness; be receiving, or eligible for, compensation benefits; and, due to the work-related condition, be prevented from performing the usual and customary job duties.

New work injury cases and cases involving a recurrence of a prior injury are usually first referred to a contracted DFEC Field Nurse, who attempts to resolve medical issues and arrange for a safe return to work with the previous employer. If the Field Nurse's efforts do not result in a return to work, the case may be referred for vocational rehabilitation services.

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5. Mandatory Participation. Vocational rehabilitation participation under the FECA is mandatory. Once it is determined by the attending physician and Claims Examiner (CE) that the IW is medically able to work, he/she is required to seek and accept medically and vocationally suitable work and to undergo vocational rehabilitation, if directed. An IW who refuses suitable employment within the meaning of the FECA is not entitled to compensation, and one who refuses to undergo vocational rehabilitation may have benefits reduced or suspended.

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6. Rehabilitation Services. Under the FECA, both medical and vocational rehabilitation services can be funded in the return to work effort, as appropriate.

a. Medical Rehabilitation Services. Medical rehabilitation services may include, not exclusively: Functional Capacity Evaluations (FCE), work hardening, or any other program aimed at producing or increasing work tolerance limitations or clarifying work release; speech therapy, orthotics, prosthetics, assistive technology or devices that would increase the IW's employability; substance abuse treatment and/or psychiatric pain management counseling if chronic pain or substance abuse prevents an IW from participating in a rehabilitation plan or returning to work; housing and vehicle modifications; and coordination of care in cases of catastrophic injury.

b. Vocational Rehabilitation Services. Active vocational rehabilitation services are based on stable and well-defined work tolerance limitations which may or may not have been established during a period of medical rehabilitation. These services may include, not exclusively: counseling and guidance; selective placement assistance (i.e. with the employing agency (EA)/previous Federal employer); transferrable skills analyses; vocational testing; labor market surveys; pre-vocational and short-term training; job placement assistance and follow-up support; and Assisted Reemployment incentive. Long-term training may be considered, but only in exceptional circumstances.

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7. Provision of Substantial Services. Under the FECA, IW's are usually considered successfully rehabilitated if they return to an appropriate occupation consistent with their physical and vocational abilities, after receiving substantial services which include professional counseling and guidance, placement assistance, training, medical rehabilitation, or any combination thereof. The IW's case record, including reports written and provided by the DFEC certified Rehabilitation Counselor (RC) must demonstrate and fully document the substantial services provided.

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8. Entitlement to Compensation while in Vocational Rehabilitation. The FECA provides for wage loss compensation, schedule awards, medical benefits and vocational rehabilitation. If determined eligible, wage loss compensation is paid at the rate of 66.6% of the IW's previous salary if the IW has no dependents and at 75% of the salary if one or more dependents are claimed.

a. An IW participating in, and cooperating with, an approved Vocational Rehabilitation Program is generally entitled to receive compensation for temporary total disability, less any earnings received from employment.

b. IWs participating in vocational rehabilitation may also be eligible to receive "Maintenance" payments up to the respective statutory limits for extra expenses that are incurred during the course of rehabilitation, such as transportation, lunch, room and board, babysitting or day care. The maximum FECA Maintenance allowance is $46.15 per week for workers who incur additional expenses.

c. The FECA also provides for payment on the basis of partial disability for a loss of wage-earning capacity (LWEC). This means an IW will not be penalized for accepting a lower paying position due to his or her disability. The determination of wage-earning potential, or capacity, is critical in the vocational rehabilitation process as it directly impacts the level at which FECA compensation is paid to the IW over the long term.

(1) The RC is asked to determine the claimant's ability to earn wages in the open labor market. This information can be compared to the current salary for the date of injury job so that a determination can be made on whether the claimant has experienced a loss of wage-earning capacity. If the IW obtains a job with a salary lower than that of the date of injury job, he/she will receive compensation from DFEC to supplement the difference in salary.

(2) If reemployment with the original Federal employer is not possible, rehabilitation plans should maximize the IW's wage-earning capacity, thus minimizing wage loss in the reemployment process. Placement plans based on transferrable skills or short-term training plans which increase wage-earning potential are strongly encouraged.

(3) Wage-earning capacity determinations usually form the basis for reduction of compensation at the completion of vocational rehabilitation services, whether the IW has obtained employment or not.

(4) The RC will be asked to provide wage-earning capacity information to the Rehabilitation Specialist (RS) prior to closure of the vocational rehabilitation case. The Claims Examiner (CE) will ultimately determine whether any LWEC exists based on the information submitted. The LWEC may be calculated based on actual earnings, if the IW is employed, or on a constructed earning capacity, if not employed. See Part 10 (Case Closure) for further information.

d. Retirement Benefits – Office of Personnel Management (OPM). The DFEC is a return to work program and not a retirement program; however, if eligible, the IW may have a right under the law to choose retirement benefits from the Office of Personnel Management (OPM) in lieu of DFEC compensation benefits. An IW may not simultaneously receive both vocational rehabilitation services and retirement benefits from OPM.

The retirement process, however, may not be used to avoid the obligation to participate in vocational rehabilitation. As such, the IW is required to participate fully in rehabilitation or be subject to the sanction process until the election of OPM retirement benefits is confirmed by the CE. RCs should follow the direction of the RS in these situations and assume that provision of vocational rehabilitation services should continue until directed otherwise. If in doubt, the RC should contact the RS to discuss how to proceed. The RC should also encourage the IW to contact the CE or EA for questions related to retirement election.

e. IW Questions about Claims/Benefits. The IW may have questions concerning his/her claim or entitlement to benefits during the vocational rehabilitation process. The RC should always instruct the IW to direct those questions to the CE, who is ultimately responsible for the management of the case.

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9. Roles and Responsibilities in the DFEC Rehabilitation Process. The Vocational Rehabilitation process is collaborative. Communication between all participants is essential to reaching the goals and objectives established in the return to work (RTW) effort.

The DFEC Vocational Rehabilitation Program is comprised of a National Office Rehabilitation Consultant, Rehabilitation Specialists located in each of the 12 District Offices, DFEC certified contractual Rehabilitation Counselors working one-on-one with IWs in the field and the Claims Examiners. Along with the IW, other important partners in the rehabilitation process may include the contracted DFEC Field Nurses, previous Federal employing agencies, new employers and service providers. A brief outline of the various roles is provided here.

a. National Office Rehabilitation Consultant (NORC). The NORC serves as the National Coordinator for the DFEC's Vocational Rehabilitation Program and is responsible for overseeing all aspects of the Vocational Rehabilitation Program.

b. Rehabilitation Specialist (RS). The RS manages the Vocational Rehabilitation Program in a given geographical area and is the primary contact for the RCs. The RS's responsibilities include, but are not limited to:

(1) Coordinating the assignment of RCs for vocational rehabilitation cases and facilitating referrals and the rehabilitation process

(2) Directing and providing guidance to RCs according to DFEC policies and procedures (approving rehabilitation, authorizing rehabilitation services, etc.)

(3) Reviewing RC reports for completeness and timeliness prior to authorizing payment of bills, and approving and facilitating bill payment for RC and vendor services

(4) Monitoring and evaluating RC's performance to ensure quality provision of services in correlation with contract specifications (issuing warnings for contractual violations, etc.)

(5) Communicating with CEs regarding the status of vocational rehabilitation cases and serving as a resource for information on rehabilitation issues (providing suggestions and solutions for RTW barriers, etc.)

(6) Serving as the district's expert regarding vocational rehabilitation policy and services (to include development of working relationships with employers to facilitate RTW process, facilitation of RTW incentives and special projects, etc.)

c. Rehabilitation Counselor (RC). The RC is a vocational rehabilitation counselor certified by DFEC and tasked with working directly with IWs in the field to facilitate rehabilitation services and RTW. The RC should provide rehabilitation services in adherence to the standards in the Rehabilitation Counselor Agreement with DFEC and submit reports and bills according to OWCP regulations and on the schedule specified by the RS.

Note – The RC must maintain confidentiality of all information provided by the DFEC and may be decertified for violation of this standard. See Part 14 of this handbook for further guidance.

The RC's responsibilities include, but are not limited to:

(1) Coordinating any necessary medical rehabilitation services

(2) Working with the DFEC Field Nurse during any dual tracking periods

(3) Evaluating the IW's vocational abilities and transferable skills, providing counseling and guidance, and arranging for vocational testing and training if needed

(4) Conducting labor market surveys and recommending potential suitable and available occupational titles as the potential for rehabilitation goals and/or earning capacity

(5) Developing and facilitating individual vocational rehabilitation plans, as approved by the RS, in a timely manner consistent with DFEC guidelines, policies and procedures

(6) Facilitating employment placement with previous employer (EA) and/or new employers

(7) Assisting the IW with job-readiness and job-seeking skills such as resume building and interview techniques

(8) Assisting with identification of potential employers, job search and job placement (including development of working relationships with employers to facilitate the RTW process)

(9) Arranging for specialized ergonomic job modifications, assistive technology evaluations and assisting with accommodation issues

(10) Making problem-solving recommendations to the RS and CE in relation to any barriers impacting the RTW effort and serving as a resource to the IW, employers and DFEC staff on issues related to employment of persons with disabilities

d. Claims Examiner (CE). The DFEC CE maintains authority and responsibility over all case management actions in FECA workers' compensation cases. The CE's responsibilities include, but are not limited to:

(1) Determining benefit eligibility, developing, approving and/or denying compensation payments and benefit rate adjustments

(2) Authorizing medical services and directing second opinion or impartial referee medical examinations

(3) Evaluating medical determinations in cases

(4) Referring appropriate cases to the RS for rehabilitation services

(5) Responding to requests from the RS or RC

(6) Reviewing rehabilitation plans and evaluating job offers for suitability, as per FECA guidelines

(7) Advising the RS and RC of any changes in the medical or factual evidence which might alter any current course of action

(8) Issuing warning letters to the IW if non-cooperation occurs

(9) Issuing notices of proposed actions and formal decisions pertaining to a IW's entitlement to compensation

e. Injured Worker (IW). The most important party in the reemployment process is the IW. All case management and vocational rehabilitation interventions focus on facilitating the IW's recovery and RTW following a work injury. The IW's responsibilities include, but are not limited to:

(1) Actively participating in, and cooperating with, the vocational rehabilitation process

(2) Initiating activity and taking as much responsibility for his/her own rehabilitation as possible

(3) Seeking and accepting appropriate and suitable employment once deemed able to RTW

f. Previous Employer/Employing Agency (EA). The previous Federal employer/EA has a vested interest in returning the IW to work as soon as possible, so partnering with the EA throughout the RTW process is important to a successful outcome. The EA's responsibilities include, but are not limited to:

(1) Submitting completed DFEC program required documents and forms in a timely manner

(2) Effectively communicating the purpose of the Federal Employee's Compensation Act to the IW and conveying from the onset that medical recovery and RTW are the ultimate goals

(3) Maintaining contact with the IW and addressing the IW's concerns about personnel issues such as retirement or health insurance benefits that may be affected by a RTW

(4) Reemploying IWs who have recovered either fully or partially from an employment-related injury or illness, and who can perform the duties of the original job or its equivalent within one year from the job injury (see 5 U.S.C. 8151)

(5) Offering light or modified duty to IWs who cannot resume the full duties of their date of injury job

(6) Cooperating with the RC in the reemployment process, to include collaborating to identify possible work accommodations or alternate positions within the agency or department (allowing access to the IW's work site if needed)

g. New Employers. Private-industry or public employers may consider, interview and offer jobs to DFEC IWs during the job search and placement process. DFEC staff and RCs are available to assist with facilitation of the process and to provide support, as needed, with accommodations or other issues related to the employment of a worker with a disability. Not exclusively, new employers may partner with DFEC by:

(1) Considering and providing offers of suitable, available employment to qualified DFEC IWs and offering salary and benefits comparable to those of other employees in the same position

(2) If entering into a DFEC Assisted Reemployment or On-the-Job Training Agreement, following policies and procedures of these programs (including providing the RC access to the work site and information, as needed, to monitor the IW's progress and completing Agreement forms and any other needed documentation or evaluations, as required)

(3) Working in good faith with the IW and RC, as appropriate, to address accommodations issues, transition-to-work challenges or other barriers as needed to facilitate successful employment

(4) At the discretion of the New Employer, building and maintaining a partnership with the RC, RS or DFEC staff which may facilitate a system for referral and recruitment for available positions

h. OWCP Certified Field Nurse (FN). Nurse intervention is an integral part of the overall disability management of a claim. RCs may sometimes work with contracted DFEC FNs on "dual-tracked" or other rehabilitation cases. The FN is a contracted registered nurse who assists in the management of disability claims in a number of ways. FN services are a valuable tool for assisting in the IW's recovery process by coordinating medical care, facilitating a safe and timely RTW, and aiding the CE in moving a disability case towards resolution.

The nurses responsibilities include such activities as: working with medical providers to develop appropriate treatment plans and coordinating recommended and approved medical care; assessing the IW's response to ongoing medical treatment and providing recommendations to facilitate recovery and RTW; collaborating with the EA to identify light duty work accommodations and/or barriers to RTW efforts in a timely manner; and making recommendations for vocational rehabilitation. See the DFEC Field Nurse Handbook, available on the DFEC website, for a complete outline of FN responsibilities.

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10. Emphasis on Timeliness and Concurrent Actions. Earlier intervention in workers' compensation vocational rehabilitation efforts increases the likelihood of a successful return to work. As such, DFEC expects and supports expeditious handling of cases referred to the RC at every stage of the rehabilitation process.

a. OWCP/DFEC has multiple goals focused on the return-to-work effort, including the POWER initiative. On July 19, 2010, the President established a 4-year Protecting Our Workers and Ensuring Reemployment (POWER) Initiative, covering fiscal years 2011 through 2014. The POWER Initiative extends prior workplace safety and health efforts of the Federal Government by setting more aggressive performance targets, encouraging the collection and analysis of data on the causes and consequences of frequent or severe injury and illness, and prioritizing safety and health management programs that have proven effective in the past. One of the seven goals in the POWER initiative is speeding employees' return to work in cases of serious injury or illness. The DFEC measures this goal by tracking return to work rates within a 2-year period. DFEC's website provides more detailed information on this initiative.

b. Success in reducing the time it takes an injured worker to return to work and in accomplishing specific DFEC goals, like POWER, relies on the work that the RC accomplishes and the team-work between the RS, RC, IW, and other participants in the rehabilitation process.

c. DFEC vocational rehabilitation services can be provided for various reasons and can occur at any point in the life of a case, not only at discreet pre-defined stages.

The RC should be cognizant that several steps may be achieved concurrently within each status. For example, the RC may work directly with a DFEC FN in the very early stages of disability. The RC may simultaneously contact the previous Federal employer about the possibilities of a return to work while also taking steps to schedule vocational testing, if appropriate, and completing a Transferrable Skills Analysis. If the IW is participating in training, the RC may also work with the IW on job readiness so that the job search can begin in earnest immediately upon completion of the training program, maximizing usage of the available time for that phase.

d. The RC, unless directed otherwise by the RS, should initiate parallel actions on a case rather than waiting until one action is complete before beginning the next one. While quality of service is extremely important, the time frames given for each rehabilitation phase should be viewed as maximums, not minimums. As a general rule of thumb, once the RC has completed all the useful work that can be done in a given stage of rehabilitation, it should be recommended that the case move into the next stage, regardless of whether time remains of the maximum allowed for that stage. Requests for extensions in calendar time or professional hours should be the exception, not the rule. When exceptions are requested, they should be made only when fully justifiable.

e. The RC should contact the RS to discuss any questions or requests regarding rehabilitation statuses, time frames or professional hours.

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11. OWCP Forms. Mandatory and optional OWCP vocational rehabilitation forms are referenced throughout this handbook. Forms can be accessed on the DFEC's website at: http://www.dol.gov/owcp/dfec/regs/compliance/forms.htm.

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Exhibit 1: Vocational Rehabilitation Timeliness Standards, Status Criteria & DFEC Program Requirements

Rehabilitation Status

Use When:

Avoid When:

Time Limit

Maximum Allowable


Approval Requirements


IW needs approved medical services to prepare for employment

IW does not need medical services to prepare for employment.

6 months.

As approved by RS

As approved by RS

Form OWCP-24

Placement, Previous Employer (PPE) With/Without Other Services

There is hope of placing injured worker (IW) in any positions with the previous employer (EA)

Former employer demonstrates inability or unwillingness to reemploy IW.

30 days from referral; continue to 60 days if EA shows willingness to hire.

30 days, if the EA is actively developing a job offer.

20 hours per PPE period

None; vocational evaluation, testing, job site analysis, transferrable skills analysis, accommodation assessment or short term training, as necessary

Plan Development

PPE fails, EA does not respond, or cannot accommodate. Begin planning & testing when file is received.

PPE succeeds.

90 days from referral, an acceptable plan must be submitted to RS.

60 days, based on written justification from the RC providing the reasons as to why additional time and/or hours are necessary.

25 hours per Planning period

  • Vocational Eval./Testing
  • At least 2 job titles & DOT #s
  • O*Net Job information
  • Estimated starting salary
  • Labor Market Survey
  • Reasonable Availability and suitability statement

Training (including Pre-Vocational, Short-Term and On-the-Job training)

IW needs to develop job skills that enhance employability for target jobs that enhance wage restoration.

IW already has skills to compete for target jobs.

6 months.

18 months, based on written justification that employment with minimal or no loss of wage-earning capacity is likely.

At least ½ hour, and up to 2 hours per month

  • Testing
  • Justification
  • Estimated months & hours to complete the program
  • Forms OWCP-16 & 24

Placement, New Employer (PNE)

PPE fails and IW has skills needed to compete for target jobs.

PPE succeeds.

90 days.

90 days if IW has been cooperative and re-employment is anticipated.

50 hours per PNE period

  • Plan Approval
  • Completion of any applicable Training

Services Interrupted

Case actions will cease for ≤ 6 months.

Case actions will cease for > 6 months.

6 months.

60 days, if renewed case action is possible within the extension period.

1 ½ hours per month

Narrative Justification

Employed Follow-Up

IW accepts position

IW is not employed.

60 days.

60 days, if additional support is needed.

5 hours per month

IW employment

Post Employment Services

IW has adjustment difficulties

Employment is successful.

As needed.

2 years.

As approved by RS

Narrative justification for service extension


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