United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

R.O., Appellant 

and 

DEPARTMENT OF JUSTICE, BUREAU OF 

PRISIONS, Atlanta, GA, Employer 

__________________________________________ 

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Docket No. 16-0186 

Issued: July 21, 2016 

Appearances: Case Submitted on the Record

Appellant, pro se 

Office of Solicitor, for the Director 

DECISION AND ORDER 

Before: 

CHRISTOPHER J. GODFREY, Chief Judge 

ALEC J. KOROMILAS, Alternate Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On November 12, 2015 appellant filed a timely appeal from a November 2, 2015 merit 

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.2

ISSUES 

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

overpayment of compensation in the amount of $8,405.72 from April 23 through July 25, 2015 

because he returned to work, but continued to receive compensation for total disability; and 

(2) whether appellant is at fault in creating the overpayment and thus not entitled to waiver of 

recovery. 

 1

 5 U.S.C. § 8101 et seq. 

2

 Appellant timely requested oral argument before the Board. By order dated April 13, 2016, the Board, after 

exercising its discretion, denied his request for oral argument. Order Denying Request for Oral Argument, Docket 

No. 16-0186 (issued April 13, 2016). 
2

FACTUAL HISTORY 

On March 13, 2013 appellant, then a 34-year-old correctional officer, filed a traumatic 

injury claim (Form CA-1) alleging that on that date he injured his right knee in the performance 

of duty. OWCP accepted the claim for a sprain of the lateral collateral ligament of the right 

knee, a pathologic fracture of other specified parts of the right femur, a tear of the right medial 

meniscus, a right neoplasm of uncertain behavior of the right connective and other soft tissue, 

and chondromalacia patellae of the right knee. Appellant stopped work on March 14, 2014. 

In a May 13, 2014 letter, OWCP informed appellant that, in order to avoid an 

overpayment of compensation, he should immediately notify it of a return to work. It further 

advised him to return any check or direct deposit that covered a period in which he earned 

wages. 

OWCP paid appellant compensation for total disability beginning April 28, 2014. On 

November 17, 2014 he underwent a right tibial subchondroplasty. 

OWCP referred appellant on August 29, 2014 for vocational rehabilitation. 

On February 9, 2015 appellant underwent surgery for an osteochondral lesion on the 

lateral femoral trochlea of the right knee. 

By letter dated April 22, 2015, the employing establishment advised appellant that it had 

a temporary position for him within his restrictions. Appellant accepted the positon and returned 

to work effective April 23, 2015. 

On May 2, 2015 OWCP paid appellant compensation for total disability from April 5 to 

May 2, 2015 by electronic funds transfer. It continued to pay him compensation on the periodic 

rolls until July 25, 2015. 

An OWCP rehabilitation specialist, on June 16, 2015, noted that the rehabilitation 

counselor indicated that appellant’s physician had released him to sedentary employment. The 

specialist changed to plan development from interrupt status and approved vocational testing. 

Appellant underwent vocational resting on June 30, 2015. 

On August 5, 2015 the rehabilitation counselor advised the OWCP rehabilitation 

specialist that the employing establishment confirmed that appellant had returned to work on 

April 23, 2015 as a telephone monitor. 

OWCP, by letter dated August 17, 2015, notified appellant of its preliminary 

determination that he received an overpayment of compensation in the amount of $8,405.72 

because he returned to work on April 23, 2015, but continued to receive wage-loss compensation 

until July 25, 2015. It calculated the overpayment by dividing the net compensation paid each 

compensation period, $2,503.83 by the 28 days in each period to find a daily total of $89.42. 

OWCP multiplied $89.42 by 94, the number of days in the period of the overpayment, to find a 

total overpayment of $8,405.72. It further advised appellant of its preliminary determination that 

he was at fault in the creation of the overpayment. It requested that he complete the enclosed 

overpayment recovery questionnaire and submit supporting financial documents. Additionally, 
3

OWCP notified appellant that, within 30 days of the date of the letter, he could request a 

telephone conference, a final decision based on the written evidence, or a prerecoupment 

hearing. 

The rehabilitation counselor, in a report dated August 28, 2015, indicated that on 

August 6, 2015 appellant verified by telephone that he resumed work on April 23, 2015. 

Appellant did not inform her of his return to work because it was not to his usual position. 

On September 29, 2015 appellant requested a telephone conference. He challenged fact 

and amount of overpayment as well as the finding of fault. Appellant related that he was still on 

light duty which was “[t]he same status I was on when receiving benefits from OWCP.” He 

provided information regarding his income and expenses. 

By letter dated October 21, 2015, OWCP informed appellant that it had scheduled a 

telephone conference for 1:30 p.m. on November 2, 2015. It asked that he notify it immediately 

if he could not participate in the conference at that time. OWCP telephoned appellant twice on 

November 2, 2015 at the scheduled time, but he did not answer. 

In a decision dated November 2, 2015, OWCP found that appellant received an 

overpayment of compensation in the amount of $8,405.72 for the period April 23 to July 25, 

2015 because he returned to work, but continued to receive wage-loss compensation. It 

determined that he was at fault in the creation of the overpayment and requested that he submit 

$250.00 each month as repayment. 

On appeal appellant contends that he informed the rehabilitation counselor that he was 

resuming work. He also maintains that he was entitled to receive continued compensation 

because he was working light duty. Finally, appellant alleges that the amount of the 

overpayment is incorrect. 

LEGAL PRECEDENT -- ISSUE 1 

Section 8102 of the 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 from earning the wages earned before the work-related injury.”5

 3

 5 U.S.C. § 8102. 

4 Id. at § 8116(a). 

5

 20 C.F.R. § 10.500. 
4

ANALYSIS -- ISSUE 1 

OWCP paid appellant compensation for total disability beginning April 28, 2014 due to 

his March 13, 2014 employment injury. Appellant returned to work on April 23, 2015 in a 

limited-duty position with no wage loss, but received compensation for total disability from 

OWCP until July 25, 2015. A claimant is not entitled to receive total disability compensation 

and actual earnings for the same period.6 Appellant, consequently, received an overpayment of 

compensation for the period April 23 through July 25, 2015. 

On appeal appellant generally challenges the amount of the overpayment. OWCP 

calculated the overpayment of compensation by dividing the net compensation it paid appellant 

each period by 28, the days in the period, to find a daily compensation rate of $89.42, which it 

multiplied by the 94 days in the period of the overpayment to find a total overpayment of 

$8,405.72. It explained how the overpayment occurred and provided the information to 

appellant with the preliminary determination of overpayment. The Board finds that OWCP 

properly determined that he received an overpayment of compensation in the amount of 

$8,405.72 for the period April 23 through July 25, 2015. 

LEGAL PRECEDENT -- ISSUE 2 

Section 8129(b) of FECA7 provides that “[a]djustment or recovery by the United States 

may not be made when incorrect payment has been made to an individual who is without fault 

and when adjustment or recovery would defeat the purpose of this subchapter or would be 

against equity and good conscience.” Section 10.433 of OWCP’s implementing regulations8

provides that in determining whether a claimant is at fault, it will consider all pertinent 

circumstances. An individual is with fault in the creation of an overpayment who: 

“(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 to be 

incorrect.” 

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

direct deposition may not be at fault the first time incorrect funds are deposited into his account, 

as the acceptance of the resulting overpayment lacks the requisite knowledge.9

 The Board has 

 6 See M.M., Docket No. 15-0265 (issued May 27, 2015); Danny E. Haley, 56 ECAB 393 (2005); Federal (FECA) 

Procedure Manual, Part 6 -- Debt Management, Initial Overpayment Actions, Chapter 6.200.2(a) (May 2004). 

7

 5 U.S.C. § 8129(b). 

8

 20 C.F.R. § 10.433. 

9 See Tammy Craven, 57 ECAB 689 (2006). 
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also held in cases involving a series of incorrect payments, where the requisite knowledge is 

established by a letter or telephone call from OWCP or simply with the passage of time and a 

greater opportunity for discovery, the claimant will be at fault for accepting the payments 

subsequently deposited.10 Previous cases have held that receiving one or two erroneous direct 

deposit payments does not necessarily create the requisite knowledge to find that a claimant was 

at fault in the creation of the overpayment.11 The Board has found fault in cases where incorrect 

payments were made over longer periods of time or for substantially greater amounts than 

previously received.12

ANALYSIS -- ISSUE 2 

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

he accepted payments that he knew or should have known were incorrect. The Board finds, 

however, that it failed to establish that he knew or should have known that the initial payment he 

received after he resumed work on April 23, 2015 was erroneous. As discussed, in cases where a 

claimant receives compensation through direct deposit, OWCP must establish that at the time a 

claimant received the direct deposit in question that he knew or should have known that the 

payment was incorrect.13 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 

account since the acceptance of the overpayment, at the time of receipt of the direct deposit, 

lacks the requisite knowledge.14 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 lacks the requisite knowledge at the time of the first incorrect payment.15 

Whether or not OWCP determines that an individual is at fault with respect to the creation of an 

overpayment depends on the circumstances surrounding the overpayment.16 It is inappropriate, 

however, to make a finding that a claimant has accepted an overpayment via direct deposit until 

such time as a reasonable person would have been aware that this overpayment had occurred. 

This awareness could be established either 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.17 

OWCP paid appellant compensation by electronic funds transfer every 28 days. He 

returned to work on April 23, 2015. On May 2, 2015 OWCP paid appellant compensation for 

 10 Id. 

11 V.S., Docket No. 13-1278 (issued October 23, 2015). 

12 See R.R., Docket No. 15-1395 (issued December 11, 2015). 

13 See C.K., Docket No. 12-746 (issued May 1, 2012). 

14 See Tammy Craven, supra note 9. 

15 Id. 

16 Id.; see also K.D., Docket No. 13-0451 (issued April 12, 2013). 

17 See V.S., supra note 11. 
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the period April 5 through May 2, 2015. There is no documentation or other evidence to 

demonstrate that appellant had clear knowledge at the time he received the May 2, 2015 direct 

deposit that a portion of the payment was incorrect.18 The Board thus finds that appellant was 

not at fault in accepting the initial direct deposit covering the period of the overpayment from 

April 23 to May 2, 2015. 

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 

Thus, by the time of the second payment dated May 30, 2015, covering the period May 3 to 30, 

2015, appellant should have known that he was no longer entitled to disability compensation 

after his return to work with no wage loss on April 23, 2015. Accordingly, the Board will affirm 

the finding of fault for the remaining May 3 to July 25, 2015 period of overpayment. 

On appeal appellant argues that he informed the rehabilitation counselor that he was 

returning to work. The evidence, however, does not support his contention. In an August 28, 

2015 report, the rehabilitation counselor advised that appellant told her on August 6, 2015 that he 

had returned to work and did inform her previously because he did not resume his regular 

employment. 

Appellant also contends that he thought that he could continue to receive compensation 

after he returned to work because he was working limited duty. OWCP, however, clearly 

advised him on May 13, 2014 to notify it of any type of return to work to avoid an overpayment 

of compensation and return any checks or direct deposits received which included a period 

during which he worked, which is sufficient to put a reasonable person on knowledge that he 

should not continue to accept compensation for total disability after a return to employment.20

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

of recovery of the overpayment for the period April 23 to May 2, 2015. The Board will set aside 

the November 2, 2015 decision regarding the issue of fault for this period and remand the case 

for OWCP to determine whether appellant is entitled to wavier of recovery of the overpayment 

covering the period April 23 to May 2, 2015.21

CONCLUSION 

The Board finds that OWCP properly found that appellant received an overpayment of 

compensation in the amount of $8,405.72 from April 23 through July 25, 2015 because he 

returned to work, but continued to receive compensation for total disability. The Board further 

 18 See M.M., supra note 6. 

19 See V.S., supra note 12. 

20 See R.R., supra note 12. 

21 The Board does not have jurisdiction to review the recovery of the overpayment as its jurisdiction is limited to 

reviewing those cases where OWCP seeks recovery from continuing compensation under FECA. See 20 C.F.R. 

§ 10.441(a); Ronald E. Ogden, 56 ECAB 278 (2005). 
7

finds that he was without fault for the period of the overpayment from April 23 to May 2, 2015, 

but at fault for the overpayment from May 3 to July 25, 2015. The case will be remanded for 

OWCP to consider waiver of recovery of the overpayment from April 23 to May 2, 2015. 

ORDER 

IT IS HEREBY ORDERED THAT the November 2, 2015 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and set aside in part and the case is 

remanded for further proceedings consistent with this opinion of the Board. 

Issued: July 21, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Alec J. Koromilas, Alternate Judge 

 Employees’ Compensation Appeals Board 

 

 Valerie D. Evans-Harrell, Alternate Judge 

 Employees’ Compensation Appeals Board