United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

M.B., Appellant 

and 

DEPARTMENT OF HOMELAND SECURITY, 

EMERGENCY PREPAREDNESS & 

RESPONSE, Alexandria, VA, Employer 

__________________________________________ 

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Docket No. 15-0694 

Issued: July 13, 2015 

Appearances: Case Submitted on the Record

Alan J. Shapiro, for the appellant 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

ALEC J. KOROMILAS, Alternate Judge 

JAMES A. HAYNES, Alternate Judge 

JURISDICTION 

On February 11, 2015 appellant, through counsel, filed a timely appeal from an Office of 

Workers’ Compensation Programs’ (OWCP) decision dated November 19, 2014. 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 appellant received a $16,225.71 overpayment of 

compensation for the period September 9, 2013 through March 8, 2014; and (2) whether she was 

at fault in the creation of the $16,225.71 overpayment and, therefore, ineligible for waiver of 

recovery. 

 1

 5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY 

On May 22, 2012 appellant, then a 51-year-old supervisory human services specialist, 

sustained a right knee injury when she slipped and fell on water in the ladies bathroom. By 

decision dated July 20, 2012, OWCP accepted the claim for right knee tear of the medial 

meniscus. Appellant stopped work on the date of injury and did not return. She received 

continuation of pay from May 23 to July 6, 2012. Beginning July 7, 2012 and continuing, 

appellant filed claim for compensation forms (CA-7) for leave without pay. OWCP paid her 

compensation for temporary total disability by direct deposit and placed her on the periodic rolls 

effective August 26, 2012.2 

By letter dated October 17, 2012, OWCP advised appellant that she had been placed on 

periodic rolls and outlined her entitlement to compensation benefits and her responsibility to 

return to work in connection with the accepted injury. Appellant’s weekly pay rate was 

calculated at $1,125.21. In an attached EN1049, OWCP provided: 

“In order to avoid an overpayment of compensation, NOTIFY THIS OFFICE 

IMMEDIATELY WHEN YOU GO BACK TO WORK.... If you receive your 

compensation payments via paper check, the payment shows the period for which 

payment is made. If you have worked for any portion of this period, return the 

payment to this office, even if you have already advised OWCP that you are 

working. For payments sent by electronic funds transfer (EFT), a notification of 

the date and amount of payment appears on the statement from your financial 

institution. You are expected to monitor your EFT deposits carefully, at least 

every two weeks. If you have worked for any portion of the period for which a 

deposit was made, advise OWCP immediately so that the overpayment can be 

collected.” (Emphasis in the original.) 

On February 6 and March 28, 2013 OWCP informed appellant that federal regulations 

required her to make an affidavit of any earnings and employment during the previous year and 

that a Form CA-1032 was enclosed for that purpose. It notified her that she had to completely 

answer all questions on the Form CA-1032 and return the statement within 30 days or her 

benefits would be suspended. 

By letter dated July 31, 2013, the employing establishment informed OWCP that a job 

offer had been extended to appellant which she accepted. Her return to work date was noted as 

August 12, 2013. In an August 8, 2013 e-mail correspondence, the employing establishment 

noted that appellant was unable to return to work on August 12, 2013 due to an appearance in 

court. Appellant’s new start date was identified as August 26, 2013. 

In a January 17, 2014 e-mail correspondence, OWCP claims examiner requested the 

employing establishment provide information regarding appellant’s present work status. 

On February 11, 2014 OWCP requested appellant submit a Form CA-1032 and return the 

statement within 30 days or her benefits would be suspended. 

 2

 On October 1, 2012 appellant underwent right knee surgery. 
3

In e-mail correspondence dated February 27, 2014, the employing establishment 

informed OWCP that appellant resumed full-time employment beginning September 9, 2013. It 

further noted that she worked intermittently since her medical release to return to work, taking 

large blocks of leave without pay after returning to duty. 

A payroll computer printout listed that appellant continued to receive wage-loss 

compensation from September 9, 2013 through March 8, 2014. 

By letter dated March 12, 2014, OWCP made a preliminary determination that appellant 

received an overpayment of compensation in the amount of $16,225.71 from September 9, 2013 

to March 8, 2014 because she continued to receive disability compensation after her return to 

full-time work. It further found that she was at fault in creating the overpayment because she 

accepted payments that she knew or reasonably should have known that she was not entitled to 

after returning to work for a period of six months without notifying OWCP. An OWCP 

memorandum and fiscal worksheet noted that appellant was on periodic rolls and received gross 

compensation every 28 calendar days in the amount of $3,098.00. Appellant’s weekly pay rate 

was noted as $1,125.21 at the 2/3 compensation rate with deductions for health benefits 

insurance and basic life insurance. Thus, OWCP found that she received an overpayment of 

$16,255.71 from wage-loss compensation for total disability while working with no loss of 

wages for a period of 181 days. It informed appellant of her review rights and instructed her to 

complete an enclosed overpayment recovery questionnaire form (OWCP-20) and submit 

supporting documentation. 

On March 18, 2014 appellant contested the overpayment and finding of fault and 

requested a prerecoupment hearing before the Branch of Hearings and Review. 

At the September 10, 2014 hearing, appellant was represented by counsel. She asserted 

that she was unaware that she was receiving an overpayment and believed that it occurred 

through no fault of her own and requested a waiver, but did not assert that she disagreed with the 

amount of the overpayment. Appellant testified that, after she resumed her employment, she 

missed a substantial amount of time due to physical therapy and medical appointments. She 

reported that she took four hours for each appointment, three to four times weekly and would 

immediately submit her physician’s certificates to her supervisor the following day. Appellant 

further stated that she made approximately $1,800.00 biweekly before the injury and never 

received the full amount after returning to work. Because she never received a full paycheck 

from her employing establishment, she believed that the remainder was being provided to her 

from FECA compensation benefits for leave without pay. 

Appellant further testified that she did not submit any Form CA-7’s, nor did her 

employing establishment instruct her to do so. She noted that she contacted the Department of 

Labor by telephone to advise that she had returned to work. Appellant argued that she could not 

payback the $16,255.71 because she had already spent it on her daily living expenses and it 

would cause her a financial hardship. She stated that the house she was renting burned down 

approximately one year ago, she was not insured, and currently in the process of purchasing a 

vehicle. 
4

Appellant was advised that the overpayment recovery questionnaire was not received and 

the record would be held open for 30 days. No other evidence was provided and she did not 

submit the overpayment recovery questionnaire with supporting financial documentation. 

By decision dated November 19, 2014, OWCP finalized the preliminary determination 

finding that appellant was overpaid in the amount of $16,255.71 from September 9, 2013 to 

March 8, 2014 because she continued to receive disability compensation after her return to fulltime work. It found that she was at fault in the creation of the overpayment and thus, not entitled 

to waiver of recovery. Recovery was directed by submitting a check for the full amount of the 

overpayment. 

LEGAL PRECEDENT -- ISSUE 1 

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

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

duty.3

Section 8116 of FECA defines the limitations on the right to receive compensation 

benefits. This section of FECA provides that, while an employee is receiving compensation, 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 state in pertinent part: Compensation for wage loss 

due to disability is available only for any periods during which 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. OWCP procedures provide that an overpayment in compensation is created when a 

claimant returns to work but continues to receive wage-loss compensation.6

ANALYSIS -- ISSUE 1 

The Board finds that appellant received an overpayment of compensation in the amount 

of $16,225.71 for a period between September 9, 2013 to March 8, 2014 because she continued 

to receive disability compensation after she returned to full-time work. On August 26, 2012 

appellant was placed on periodic rolls and received wage-loss compensation from that date for 

total disability. The record indicates that she returned to work eight hours per day at the 

employing establishment on September 9, 2013. Appellant then continued to receive 

compensation through March 8, 2014 although, she is not entitled to receive compensation for 

 3

 5 U.S.C. § 8102. 

4 Id. at § 8116(a). 

5

 20 C.F.R. § 10.500. 

6 B.H., Docket No. 09-292 (issued September 1, 2009); Federal (FECA) Procedure Manual, Part 6 -- Debt 

Management, Initial Overpayment Actions, Chapter 6.200.2(a) (May 2004). 
5

total disability after she has returned to work.7 The Board finds that appellant received an 

overpayment of compensation.8

The record shows that OWCP calculated that, between September 9, 2013 to March 8, 

2014, appellant received $16,225.71 in disability compensation, but she was not entitled to any 

compensation during this period. 

OWCP explained how the overpayment occurred and provided this to appellant with the 

preliminary notice of overpayment. There is no evidence that the overpayment did not occur as 

found by OWCP. Appellant did not dispute the calculation of her overpayment. The Board 

finds that OWCP correctly determined that she received an overpayment in the amount of 

$16,255.71 from September 9, 2013 to March 8, 2014. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(b) of FECA9 provides that an overpayment of compensation shall be 

recovered by OWCP unless incorrect payment has been made to an individual who is without 

fault and when adjustment or recovery would defeat the purpose of FECA or would be against 

equity and good conscience.10 Thus, OWCP may not waive the overpayment of compensation 

unless appellant was without fault.11 Adjustment or recovery must, therefore, be made when an 

incorrect payment has been made to an individual who is with fault.12 

On the issue of fault, section 10.433 of OWCP’s regulations provide that an individual 

will be found at fault if he or she has done any of the following: 

“(1) Made an incorrect statement as to a material fact which he or she knew or 

should have known to be incorrect; or 

“(2) Failed to provide information which he or she knew or should have known to 

be material; or 

“(3) Accepted a payment which he or she knew or should have known was 

incorrect....”13 

With respect to whether an individual is without fault, section 10.433(b) of OWCP’s 

regulations provide that whether or not OWCP determines that an individual was at fault with 

 7 Supra notes 5 and 6. See also M.A., Docket No. 13-2137 (issued March 11, 2014). 

8 R.W., Docket No. 13-1108 (issued September 10, 2013). 

9

 5 U.S.C. § 8129(b). 

10 Michael H. Wacks, 45 ECAB 791, 795 (1994). 

11 Norman F. Bligh, 41 ECAB 230 (1989). 

12 Diana L. Booth, 52 ECAB 370, 373 (2001); William G. Norton, Jr., 45 ECAB 630, 639 (1994). 

13 20 C.F.R. § 10.433(a). 
6

respect to the creation of an overpayment depends on the circumstances surrounding the 

overpayment. The degree of care expected may vary with the complexity of those circumstances 

and the individual’s capacity to realize that he or she is being overpaid.14

ANALYSIS -- ISSUE 2 

OWCP determined that appellant was at fault in the creation of the overpayment because 

she accepted payments that she knew or should have known to be incorrect. The Board finds, 

however, that OWCP failed to establish that, at the time she accepted the first incorrect payment 

of compensation, she knew or should have known it was incorrect.15

The Board has held that an employee who receives payments from OWCP in the form of 

a direct deposit may not be at fault for the first incorrect deposit into his or her account since the 

acceptance of the overpayment, at the time of receipt of the direct deposit, lacks the requisite 

knowledge.16 Because fault is defined by what the claimant knew or should have known at the 

time of acceptance, one of the consequences of electronic fund transfers is that the claimant may 

lack the requisite knowledge at the time of the first incorrect payment.17 It is not appropriate, to 

find that a claimant has accepted an overpayment via direct deposit until a reasonable person 

would have been aware that the questionable payment had occurred. This awareness can be 

established through documentation such as a bank statement or notification from OWCP or 

where a reasonable period of time has passed during which a claimant could have reviewed 

independent confirmation of the incorrect payment.18

The record establishes that, for the overpayment period September 9, 2013 to March 8, 

2014, appellant received compensation by direct deposit. Appellant received a partial 

overpayment of $1,171.01 for the 28-day pay period between September 9 and 21, 2014. 

Following this initial overpayment, she was improperly paid wage-loss compensation for six 

more 28-day pay periods between September 22, 2013 and March 8, 2014. The funds were 

directly deposited into appellant’s account and amounted to an overpayment of $15,084.70. On 

March 12, 2014 OWCP issued a preliminary determination of the total $16,255.71 overpayment. 

It found that appellant knew or should have been aware that she was not entitled to the entire 

payment because she had returned to work and she was not entitled to compensation because she 

had returned to work. 

The Board finds that appellant was without fault for the initial direct deposit of the 

$1,171.01 overpaid amount into her account. While appellant accepted the overpayment by 

gaining control of the funds deposited into her account pursuant to her authorization, the 

evidence does not show that she knew that she would receive an incorrect payment on that day. 

 14 Id. at § 10.433(b). 

15 J.S., Docket No. 12-1707 (issued June 10, 2013). 

16 See Tammy Craven, 57 ECAB 589 (2006); see also George A. Hirsch, 47 ECAB 520 (1996). 

17 Id. 

18 See K.H., Docket No. 06-191 (issued October 30, 2006). 
7

A finding of no fault does not mean, however, that the claimant may keep the initial 

payment. It requires only that OWCP must consider eligibility for waiver for this period, and the 

case must be remanded for OWCP to make that determination. 

Following the initial direct deposit, appellant received six more payments for the period 

September 22, 2013 through March 8, 2014 that are also part of the overpayment. She has 

acknowledged her return to work on September 9, 2013. After the initial overpayment deposit 

on September 21, 2013, she was issued the next full 28-day compensation payment on 

October 19, 2013 and received the last deposit on March 8, 2014. The funds were directly 

deposited into appellant’s account and the six disbursements amounted to an overpayment of 

$15,084.70. In cases involving a series of incorrect payments, where the requisite knowledge is 

established by documentation from OWCP or simply with the passage of time and opportunity 

for discovery, the claimant will be at fault for accepting the payments subsequently deposited.19 

At the prerecoupment hearing, appellant argued that she informed OWCP via telephone 

that she had returned to work. OWCP telephone notes of record do not establish that this 

telephone call was made. Moreover, even though it may have been negligent in making 

incorrect payments, this does not excuse a claimant from accepting payments appellant knew or 

should have known to be incorrect.20 

On October 17, 2012 OWCP advised appellant, “In order to avoid an overpayment of 

compensation, NOTIFY THIS OFFICE IMMEDIATELY WHEN YOU GO BACK TO 

WORK.... If you have worked for any portion of this period return the payment to this office, 

even if you have already advised OWCP that you are working. Otherwise, an overpayment of 

compensation may result. For payments sent by EFT, a notification of the date and amount of 

payment appears on the statement from your financial institution. You are expected to monitor 

your EFT deposits carefully, at least every 2 weeks. If you have worked for any portion of the 

period for which a deposit was made, advise OWCP immediately so that the overpayment can be 

collected.” By the time of the second payment issued on October 19, 2013, appellant knew or 

should have known that she was no longer entitled to compensation. She had returned to work 

on September 9, 2013, and could have taken further steps to prevent issuance of further 

payments. Accordingly, the Board will affirm the finding of fault for the remaining 

September 22, 2013 through March 8, 2014 period of overpayment. 

Appellant also stated that although she resumed full-time work on September 9, 2013, 

she missed time because of physical therapy and medical appointments for which she would 

submit physician’s certificates. She stated that she never filed a Form CA-7 after resuming fulltime work. Appellant argued, however, that because she never received a full paycheck, she 

believed that OWCP was continuing FECA benefits to cover her leave without pay. 

The Board finds that this argument without merit. Prior to being placed on periodic rolls, 

appellant filed CA-7 forms, claim for compensation for leave without pay. She was placed on 

periodic rolls beginning August 26, 2012. OWCP’s strongly worded letter dated October 17, 

 19 See J.W., Docket No. 10-1271 (issued February 3, 2011); id. 

20 See Russell E. Wageneck, 46 ECAB 653 (1995). 
8

2012 informed her that she was not entitled to wage-loss compensation if she returned to work. 

This, together with multiple CA-1032 forms sent to appellant, establishes that she should have 

known that she was not entitled to accept wage-loss compensation for total disability for any 

period after she returned to work.21 Furthermore, appellant testified that she did not file any 

CA-7 forms for lost time after returning to work. Appellant was aware of the process for filing 

CA-7 forms for leave without pay, as she had previously filed them, but did not do so to support 

her argument that she thought she was entitled to the payments. She submitted no evidence that 

she was entitled to wage-loss compensation or any other monetary benefits from OWCP that 

could reasonably lead her to believe that the compensation checks accepted were for a correct 

amount.22

For these reasons, the Board finds that appellant was at fault in that portion of the 

$16,255.71 overpayment created by the six payments from September 22, 2013 through 

March 8, 2014, which total $15,084.70. Appellant accepted payments she knew or should have 

known to be incorrect.23 Recovery by OWCP of the $15,084.70 overpayment of compensation 

may not be waived.24

The Board further finds that this case is not in posture for decision regarding the issue of 

waiver of recovery of the overpayment for the initial direct deposit on September 21, 2013. The 

Board will set aside the November 19, 2014 decision regarding the issue of fault as to the initial 

September 21, 2013 direct deposit and will remand the case for OWCP to determine whether 

appellant is entitled to waiver of recovery for the overpayment of compensation covering the 

period September 9 through 21, 2013.25

CONCLUSION 

The Board finds that OWCP properly determined that appellant received an overpayment 

of compensation in the amount of $16,255.71 for the period September 9, 2013 through 

March 8, 2014. The Board further finds that she was without fault for the period of the 

overpayment from September 9 through 21, 2013, but at fault for the overpayment from 

September 22, 2013 through March 8, 2014. The November 19, 2014 decision is set aside in 

 21 Supra note 8. 

22 B.B., Docket No. 12-275 (issued June 21, 2012); Linda E. Padilla, 45 ECAB 768 (1994). 

23 Supra note 15. 

24 At the prerecoupment hearing, appellant argued that repayment of the full amount would cause her a financial 

hardship. However, the method of recovery of the overpayment is not within the Board’s jurisdiction. 

Lorenzo Rodriguez, 51 ECAB 295 (2000); 20 C.F.R. § 10.441. With respect to recovery of the overpayment, the 

Board’s jurisdiction is limited to those cases where OWCP seeks recovery from continuing compensation benefits 

under FECA. L.D., Docket No. 08-678 (issued August 7, 2008). Moreover, no waiver of an overpayment is 

possible if the claimant is at fault in creating the overpayment. L.J., 59 ECAB 264 (2007). As OWCP did not direct 

recovery of the overpayment from continuing compensation payments, the Board does not have jurisdiction over the 

recovery of the overpayment. See Desiderio Martinez, 55 ECAB 245 (2004). 

25 D.W., Docket No. 14-229 (issued April 17, 2014). 
9

part and remanded to OWCP for consideration of waiver of recovery of the overpayment for the 

period September 9 through 21, 2013. 

ORDER 

IT IS HEREBY ORDERED THAT the November 19, 2014 decision of the Office of 

Workers’ Compensation Programs is affirmed, in part and set aside in part. The case is 

remanded for further action consistent with this decision of the Board. 

Issued: July 13, 2015 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 James A. Haynes, Alternate Judge 

 Employees’ Compensation Appeals Board