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Railroad workers require special consideration when analyzing their employment and earnings in personal injury cases. Railroad workers injured on the job due to any amount of employer negligence can sue the employer under the Federal Employers’ Liability Act (FELA). Medical expenses and wage replacement for illness and unemployment are covered by illness and unemployment insurance administered under the Railroad Unemployment Insurance Act (RUIA). Whether injured on the job or in a non-industrial accident, railroad workers may seek disability benefits through the Railroad Retirement Board (RRB) Tier 1 annuity program, which is similar to and a replacement for the Social Security Disability and Retirement program. Railroad workers also contribute to and earn retirement benefits from the program’s Tier 2 annuity program, a defined benefit plan based on years of service earnings as a railroad worker. All these programs are unique to railroad workers and must be considered when performing a vocational evaluation and when calculating economic damages.
Federal Employers’ Liability Act
In 1908, Congress enacted FELA in response to the harsh working conditions railroad workers faced. FELA provides legal protection for railroad employees by making railroad carriers liable for an employee’s work-related injury or death.
FELA allows employees to sue for damages, forcing railroads to create safer workplaces and equipment. Under FELA, negligence must be due to the railroad itself, its officers or agents, or defective equipment. Damages may be diminished depending on the employee’s contribution to the negligence, but FELA abolishes the defense that the employee assumed risk when they chose to be employed by the railroad and imposes a three-year statute of limitations.
FELA covers employees whose duties further interstate or foreign commerce or substantially affect it. Covered carriers are railroads engaging in commerce between states, territories, districts, and foreign nations. In the event of a fatal injury, eligible beneficiaries include the employee’s surviving spouse and children, or dependent parents if there are no surviving spouse or children.
As with state workers’ compensation programs, injured employees may recover lost wages and medical expenses. Unlike state workers’ compensation programs, which are no-fault programs with scheduled benefits, FELA is a fault-based system. Injured workers must prove railroad negligence but can recover a broader range of damages, including non-economic damages such as pain and suffering. FELA does not provide temporary partial disability, temporary total disability, or permanent disability benefits on a scheduled basis like workers’ compensation.
Railroad Unemployment Insurance Act
In 1938, RUIA created a separate, nationally administered unemployment insurance program specifically for railroad workers, since they were excluded from the Social Security Act of 1935. RUIA is entirely funded by employers via payroll taxes. It is administered by the RRB and provides qualified employees with partial wage replacement during periods of unemployment or sickness, including conditions related to pregnancy or childbirth.
To qualify for RUIA benefits, an employee must meet specific earnings thresholds, adjusted annually. Eligibility is determined by earnings in the previous calendar year, known as the base year. A new benefit year begins every July 1. First-year employees must have worked at least five months for eligibility, and employees with ten or more years of service who do not meet earnings thresholds may qualify under alternative rules. Railroad workers who voluntarily quit or retire, participate in an illegal strike, refuse suitable work, or are discharged for misconduct are not eligible for benefits.
Benefits are paid biweekly with a seven-day waiting period at the beginning of a claim. Benefits are payable after four consecutive days of unemployment. For unemployment due to a strike according to the Railway Labor Act, no benefits are payable for the first 14 days, but benefits may be paid for subsequent periods. The duration of normal RUIA benefits is 26 weeks per benefit year, not to exceed the worker’s earnings in the base year. Employees with ten or more years of service may qualify for up to 65 additional days of extended benefits and may be eligible for accelerated benefits. Under RUIA, the RRB also operates a free employment placement service to help railroad workers who cannot return to their previous job find new positions, either with a railroad or in another industry.
If the employee receives RUIA sickness benefits and later recovers damages for the same injury through an FELA claim, the RRB is entitled to reimbursement. RUIA benefits are also subject to offsets. RUIA benefits will be reduced if the employee is receiving other retirement, disability, or survivor benefits from the RRB or other payors, such as Social Security, certain military pensions, police or firefighter pensions, or other workers’ compensation payments.
Retirement and Disability Benefit Programs
Railroad workers’ retirement and disability benefits are administered by the RRB. Unlike most private-sector workers who participate in Social Security, railroad employees have their own federal retirement system. This system has a two-tier structure. Tier 1 is analogous to the Social Security program for railroad workers. Tier 2 is an additional defined benefit plan analogous to a traditional company pension.
Tier 1 Component
Tier 1 retirement and disability benefits are paid from an annuity funded by employee and employer payroll taxes. The tax rates are equivalent to Social Security tax rates at 6.2% each for employers and employees. Benefits are paid using the same Social Security formulas and are coordinated with and reduced by any Social Security benefits received. While Social Security retirement benefits may be reduced if claimed before full retirement age of 67, railroad workers may receive full unreduced benefits as early as age 60 with 30 or more years of service. Unlike Social Security, which pays disability benefits only for total disability (inability to perform any substantial gainful activity), the RRB also provides occupational disability benefits. These are available to railroad workers who can no longer perform their specific railroad job, even if they could work in another occupation.
Tier 2 Component
Tier 2 retirement benefits are paid from an annuity funded by employee and employer payroll taxes. Employees contribute 4.9% and employers contribute 13.1% of railroad earnings towards Tier 2 funding. Monthly benefits at retirement are calculated using a defined benefit formula equal to 0.7% of average monthly railroad earnings for the highest 60 months of service, times the years of railroad service. Tier 2 benefits are not reduced by Tier 1 or Social Security benefits and are taxed as ordinary pension income. Full retirement age is 62 for Tier 2 benefits.
Work Life Expectancy
Given the RRB retirement structure, railroad employees have incentives to remain in the industry and retire by age 62. Railroad workers generally have longer years of service in the railroad industry but lower work life expectancies than the national average. Worklife patterns of railroad workers show their work life expectancy is a function of years of service in the industry, and they spend up to a decade less in the labor force than the national average.
Key Takeaways for Evaluating Railroad Worker Economic Damages
Railroad workers are covered by a unique combination of federal programs that differ from those applicable to most other employees. FELA provides a fault-based remedy for work-related injuries, while RUIA offers employer-funded wage replacement for periods of unemployment and sickness. In addition, the RRB two-tier retirement and disability system creates industry-specific work life patterns. All these programs must be considered when evaluating lost earnings, future employability, and economic damages in personal injury or wrongful death cases involving railroad employees. Understanding these differences helps ensure that economic and vocational assessments appropriately reflect the unique employment environment of railroad workers.
References
Ciecka, James E., and Gary R. Skoog, “Worklife Expectancies of Railroad Workers Based on the Twenty-Seventh Actuarial Valuation Using Competing Risks/Multiple Decrement Theory and the Markov Railroad Model,” Journal of Forensic Economics 29, no. 1 (September 2020).
Federal Employers’ Liability Act, 45 U.S.C. §§ 51–60, 1908.
Railroad Retirement Act, 45 U.S.C. § 231 et seq., 1937, as amended.
Railroad Unemployment Insurance Act, 45 U.S.C. ch. 11., 1938.
Skoog, Gary R., et al. “The Markov Model of Labor Force Activity 2012-17: Extended Tables of Central Tendency, Shape, Percentile Points, and Bootstrap Standard Errors,” Journal of Forensic Economics, 28, no. 1 (2019): 15–108.
US Railroad Retirement Board, “Benefit Rate Table, 2025–2026,” https://www.rrb.gov/sites/default/files/2025-11/maxben.pdf.
——, “Employee Guide to Railroad Retirement Benefits,” https://www.rrb.gov/sites/default/files/2025-02/G-508_February-2025.pdf.
——, “General Information (Retirement),” https://www.rrb.gov/Benefits/Retirement/GeneralInfoRetirement.
——, “Railroad Job Vacancy List,” https://rrb.gov/Resources/Jobs, accessed May 13, 2026.
——, “Railroad Unemployment and Sickness Benefits 2025,” https://www.rrb.gov/sites/default/files/2025-06/2025-UB-9_web.pdf.
——, “Tier I and Tier II,” https://rrb.gov/resources/retirement-benefits, accessed May 13, 2026.
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