United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

J.L., Appellant 

and 

U.S. POSTAL SERVICE, POST OFFICE, 

Charlotte, NC, Employer 

__________________________________________ 

) 

) 

) 

) 

) 

) 

) 

) 

Docket No. 14-396 

Issued: May 19, 2014 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

COLLEEN DUFFY KIKO, Judge 

MICHAEL E. GROOM, Alternate Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On December 12, 2013 appellant filed a timely appeal from an August 28, 2013 decision 

of the Office of Workers’ Compensation Programs (OWCP). Pursuant to the Federal 

Employees’ Compensation Act1

 (FECA) and 20 C.F.R. §§ 501.2(c) and 501.3, the Board has 

jurisdiction over the merits of this case. 

ISSUES 

The issues are: (1) whether OWCP properly determined that appellant received an 

overpayment of compensation in the amount of $245.57 from May 29 through June 1, 2013; 

(2) whether OWCP properly denied waiver of recovery of the overpayment; and (3) whether 

OWCP properly required repayment of the overpayment by deducting $245.57 from appellant’s 

compensation benefits. 

 1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

On August 12, 2010 appellant, then a 47-year-old rural carrier, filed an occupational 

disease claim (Form CA-2) alleging that she sustained right shoulder impingement syndrome in 

the performance of duty. On August 17, 2010 OWCP accepted her claim for right rotator cuff 

syndrome/impingement. Appellant stopped work on August 31, 2010. On February 22, 2011 

she returned to a modified-duty assignment working 2 hours per day, or a total of 10 hours per 

week. Appellant’s effective weekly base pay rate for compensation was $1,116.88 per week and 

the modified rural carrier position’s pay rate was $283.53 per week. 

On November 22, 2011, based upon a second opinion evaluation, OWCP determined that 

appellant should be placed on an informal loss of wage-earning capacity and be paid each 28-day 

period for her loss of six hours of wages per day. It determined that appellant’s weekly pay rate 

when her disability began was $1,116.00; the current pay rate for her position and step when 

injured was $1,116.88; and her current earning capacity was $283.53 per week. OWCP advised 

appellant: “If you receive an increase in pay over the amount cited above,” that of $283.53 per 

week, “you should notify us of the increase immediately. Failure to do so could cause an 

overpayment of compensation.” OWCP calculated that appellant was earning 25 percent of her 

wage-earning capacity, and that her adjusted wage-earning capacity amount per week was 

$279.22. Her loss in earning capacity per week was calculated as $837.66. Appellant’s 

compensation rate was $558.44 per week and her first check at the new rate totaled $2,233.76. 

On June 1, 2013 OWCP began paying her by direct deposit. 

On December 29, 2012 appellant indicated on a Form EN-1032 that she began work at 

the employing establishment in a modified assignment for 2 hours per day, or 10 hours per week, 

on February 22, 2011. 

In a memorandum of a telephone conversation dated May 29, 2013, a claims examiner 

noted that appellant had advised her that she had returned to work 6 hours per weekday and 2 

hours on Saturdays, or 32 hours per week. The claims examiner told appellant that the 

employing establishment had not advised OWCP of the job offer, but that because it was not a 

permanent offer, it did not require OWCP approval. 

In a report of termination of disability and/or payment (Form CA-3) dated May 30, 2013, 

the employing establishment reported that appellant had accepted a modified job offer increasing 

her work hours from 10 to 32 per week. It included her signature on a form offer of modified 

assignment, dated May 29, 2013. 

In a record of a telephone conversation dated July 19, 2013, the employing establishment 

advised OWCP that appellant’s hours of work were not going to change from 32 hours per week. 

In a wage-earning capacity CA-816 form dated July 24, 2013, OWCP noted that 

appellant had increased the number of work hours to 32 per week as of May 29, 2013. As of that 

date, appellant’s actual weekly earning capacity was $934.08. This represented an 80 percent 

wage-earning capacity. OWCP found her pay rate when injured to be $1,116.88 and the current 

weekly pay rate for the job and step when injured to be $1,167.56. Appellant’s four-week 

entitlement to compensation was $625.00. 
3

On July 25, 2013 OWCP issued a preliminary determination that appellant received a 

$245.57 overpayment of compensation from May 29 to June 1, 2013. The overpayment was 

created as a result of increasing the number of hours she worked per week from 10 to 32 as of 

May 29, 2013, while her compensation remained the same through June 1, 2013. The 

compensation paid to her during the period totaled $334.86, but she was only entitled to $89.29. 

OWCP found that she was without fault in creating the overpayment because the payment of 

June 1, 2013 occurred through electronic funds transfer and that this was the first payment she 

had received electronically. 

In a Shadrick2

 documentation memorandum dated July 30, 2013, OWCP determined that 

appellant’s weekly pay as of the date of injury was $1,116.88; her total current weekly pay for 

the position she held at the date of injury was $1,167.56; and her total actual or constructed 

earnings per week was $938.08. 

In an August 28, 2013 decision, OWCP finalized the overpayment in the amount of 

$245.57, for which appellant was found not at fault. The overpayment occurred because she was 

paid compensation based on an informal wage-earning capacity determination of 10 hours of 

work per week when she actually worked 32 hours per week from May 29 to June 1, 2013. 

While OWCP found appellant without fault, it did not waive the overpayment, as she did not 

respond to the preliminary decision or establish that recovery would defeat the purpose of FECA 

or be against equity and good conscience. It determined that the debt would be collected by 

withholding the sum of $245.57 from her continuing compensation payment beginning 

September 21, 2013. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8102(a) of FECA provides that the United States shall pay compensation for the 

disability or death of an employee resulting from personal injury sustained while in the 

performance of duty.3 FECA, however, also places limitations on an employee’s right to receive 

compensation benefits. Section 8116 provides that, while an employee is receiving benefits, he 

or she may not receive salary, pay or remuneration of any type from the United States, except in 

limited circumstances.4

 OWCP’s regulations further state that compensation for wage loss due 

to disability is available only for the period where an employee’s work-related medical condition 

prevents him or her from earning the wages earned before the work-related injury.5

 A claimant 

is not entitled to receive temporary total disability and actual earnings for the same period.6

 

 2 Albert C. Shadrick, 5 ECAB 376 (1953). 

3

 5 U.S.C. § 8102(a). 

4 Id. at § 8116(a). 

5

 20 C.F.R. § 10.500(a). 

6 See Daniel Renard, 51 ECAB 466, 469 (2000). 
4

OWCP’s procedures provide that an overpayment in compensation is created when a claimant 

returns to work and has earnings but continues to receive wage-loss compensation.7

ANALYSIS -- ISSUE 1 

On February 22, 2011 appellant returned to work in a modified-duty assignment working 

10 hours per week, or 2 hours per day. In a letter dated November 22, 2011, OWCP determined 

that she should be placed on an informal loss of wage-earning capacity and be paid each 28-day 

period for her loss of six hours of wages per day. The letter stated, “If you receive an increase in 

pay over the amount cited above,” that of $283.53 per week, “you should notify us of the 

increase immediately. Failure to do so could cause an overpayment of compensation.” 

On May 30, 2013 the employing establishment reported that appellant had accepted a 

modified-job offer increasing her work hours from 10 to 32 per week. On July 25, 2013 OWCP 

made a preliminary determination that appellant received a $245.57 overpayment of 

compensation from May 29 to June 1, 2013 as a result of increasing the number of hours she 

worked per week from 10 to 32 as of May 29, 2013, while her compensation remained the same 

through June 1, 2013. Appellant was paid $334.86 for the period May 29 to June 1, 2013, but as 

her actual hours worked increased during the period, she was only entitled to compensation 

benefits of $89.29, which created an overpayment of $245.57. 

When an employee has earnings from employment, she is not entitled to receive 

temporary total disability benefits and actual earnings for the same time period.8

 Under such 

circumstances, OWCP offsets actual earnings pursuant to the Shadrick formula.9

 If a reduction 

of benefits based upon actual earnings is not accompanied by a determination that the actual 

earnings fairly and reasonably represent wage-earning capacity, an informal reduction of benefits 

utilizing the Shadrick formula is proper rather than a formal loss of wage-earning capacity 

determination.10 OWCP made an informal determination of the amount owed based on her 

actual earnings using the Shadrick formula. The Board finds that OWCP properly applied the 

Shadrick formula to compute appellant’s entitlement to compensation for the period in question. 

Consequently, the Board finds that OWCP properly determined that from May 29 to 

June 1, 2013 appellant received a $245.57 overpayment because she was paid compensation 

under an informal wage-earning capacity based on 10 hours of work per week while she actually 

worked a 32-hours-per-week schedule. Appellant did not dispute that she received the 

overpayment in question or the amount. OWCP explained how the overpayment occurred and 

provided this information to her with the preliminary notice of overpayment. The Board finds 

that it properly determined the fact and amount of the overpayment for the period May 29 to 

June 1, 2013. 

 7 See L.S., 59 ECAB 350, 353-54 (2008); Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial 

Overpayment Actions, Chapter 6.200.2(a) (September 2010). 

8 Supra note 6. 

9 Supra note 2 at 376, 384; 20 C.F.R. § 10.403. 

10 Id.; see also D.C., Docket No. 09-1460 (issued April 19, 2010). 
5

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(a) of FECA11 provides that, where an overpayment of compensation has 

been made because of an error of fact or law, adjustments shall be made by decreasing later 

payments to which an individual is entitled.12 The only exception to this requirement is found in 

section 8129(b) of FECA, which provides that adjustments or recovery may not be made when 

incorrect payments have been made to an individual who is without fault and when such 

adjustment or recovery would defeat the purpose of FECA or would be against equity and good 

conscience.13

Thus, a finding that appellant was without fault is not sufficient, in and of itself, for 

OWCP to waive the overpayment.14 OWCP must exercise its discretion to determine whether 

recovery of the overpayment would defeat the purpose of FECA or would be against equity and 

good conscience, pursuant to the guidelines provided in sections 10.434 and 10.437 of the 

implementing federal regulations.15

Section 10.438 of FECA’s implementing regulations provide that the individual who 

received the overpayment is responsible for providing information about income, expenses and 

assets as specified by OWCP. This information is needed to determine whether or not recovery 

of an overpayment would defeat the purpose of FECA or be against equity and good conscience. 

Failure to submit the requested information within 30 days of the request shall result in the denial 

of waiver and no further request for waiver shall be considered until the requested information is 

furnished.16

As the only limitation on OWCP’s authority is reasonableness, abuse of discretion is 

generally shown through proof of manifest error, clearly unreasonable exercise of judgment or 

actions taken which are contrary to both logic and probable deductions from known facts.17

ANALYSIS -- ISSUE 2 

OWCP advised appellant by July 25, 2013 notice of its preliminary determination of the 

$245.57 overpayment and that she was not at fault. It advised her to submit information 

regarding her income, assets, and expenses by completing a questionnaire and providing 

supporting documentation. However, appellant did not provide any financial information or 

documentation before OWCP finalized its decision on August 28, 2013. In the absence of the 

 11 5 U.S.C. § 8129(a). 

12 Id.

13 Id. at § 8129(b). 

14 James Lloyd Otte, 48 ECAB 334, 338 (1997); see William J. Murphy, 40 ECAB 569, 571 (1989). 

15 20 C.F.R. §§ 10.434 and 10.437. 

16 Id. at § 10.438; Linda Hilton, 52 ECAB 476, 479 (2001). 

17 Daniel J. Perea, 42 ECAB 214, 221 (1990). 
6

information requested, OWCP could not determine whether or not recovery of the overpayment 

would defeat the purpose of FECA or be against equity and good conscience. Therefore, 

OWCP’s denial of waiver of recovery was proper and not an abuse of discretion.18

LEGAL PRECEDENT -- ISSUE 3 

Section 10.441 of Title 20 of the Code of Federal Regulations provide that, if an 

overpayment of compensation has been made to one entitled to future payments, proper 

adjustment shall be made by decreasing subsequent payments of compensation, taking into 

account the probable extent of future payments, the rate of compensation, the financial 

circumstances of the individual and any other relevant factors, so as to minimize any hardship.19 

When an individual fails to provide request information on income, expenses and assets, OWCP 

should follow minimum collection guidelines, which state in general that government claims 

should be collected in full and that, if an installment plan is accepted, the installments should be 

large enough to collect the debt promptly.20

ANALYSIS -- ISSUE 3 

The record supports that, in requiring repayment of the overpayment by deducting 

$245.57 from appellant’s continuing compensation payments beginning on September 21, 2013, 

OWCP took into consideration the factors set forth in section 10.441 and found that this method 

of recovery would minimize any resulting hardship on appellant. By this method of recovery, 

OWCP estimated that the overpayment would be absorbed by October 19, 2013. The Board 

notes that appellant failed to provide information on income, expenses and assets, and that 

OWCP followed minimum collection guidelines by requiring installments large enough to 

collect the debt promptly. Thus, OWCP properly and promptly required repayment of the 

overpayment by deducting $245.57 from appellant’s continuing compensation benefits. 

CONCLUSION 

The Board finds that OWCP properly found that an overpayment of $245.57 was created. 

The Board finds that it properly denied waiver of recovery. The Board further finds that OWCP 

properly required repayment of the overpayment by deducting $245.57 from appellant’s 

continuing compensation. 

 18 See 20 C.F.R. §§ 10.434 and 10.437. 

19 Id. at § 10.441. 

20 Gail M. Roe, 47 ECAB 268, 276 (1995). 
7

ORDER 

IT IS HEREBY ORDERED THAT the decision of the Office of Workers’ 

Compensation Programs dated August 28, 2013 is affirmed. 

Issued: May 19, 2014 

Washington, DC 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board 

 

 Michael E. Groom, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board