United States Department of Labor 

Employees’ Compensation Appeals Board 

__________________________________________ 

W.L., Appellant 

and 

DEPARTMENT OF VETERANS AFFAIRS, 

VETERANS HEALTH ADMINISTRATION, 

BILOXI VETERANS AFFAIRS MEDICAL 

CENTER, Biloxi, MS, Employer 

__________________________________________ 

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Docket No. 16-0037 

Issued: June 23, 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 

PATRICIA H. FITZGERALD, Deputy Chief Judge 

COLLEEN DUFFY KIKO, Judge 

JURISDICTION 

On October 9, 2015 appellant filed a timely appeal from a September 30, 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. 

ISSUES 

The issues are: (1) whether appellant received an overpayment of compensation in the 

amount of $1,221.84 during the period September 29 through October 18, 2014; (2) whether 

OWCP properly found appellant at fault in creating the overpayment thereby precluding waiver 

of recovery of the overpayment; and (3) whether OWCP properly recovered the overpayment 

from appellant’s schedule award payments. 

 1

 5 U.S.C. § 8101 et seq. 
2

FACTUAL HISTORY 

On May 22, 2014 appellant, then a 56-year-old nursing assistant, filed a traumatic injury 

claim (Form CA-1) alleging that she injured her right shoulder on May 9, 2014 while she was 

moving a patient to a lift position. OWCP accepted the claim for right shoulder sprain and paid 

wage-loss compensation and medical benefits. Appellant underwent authorized right shoulder 

arthroscopic rotator cuff repair on July 31, 2014 and began receiving compensation for 

temporary total disability. 

In a September 11, 2014 letter, OWCP notified appellant that she would be placed on the 

periodic rolls, effective August 24, 2014. To minimize the possibility of an overpayment of 

compensation, appellant was instructed to notify OWCP immediately when she returned to work. 

OWCP noted that if she received her compensation payments via paper check, the payment 

would reflect the period for which payment is made. If appellant worked for any portion of that 

period, she was to return the payment to OWCP, even if she had already informed OWCP that 

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

and amount of payment appeared on the statement from her financial institution. Appellant was 

expected to monitor her EFT deposits carefully, at least every two weeks. If she worked for any 

portion of the period for which a deposit was made, she was to advise OWCP immediately so 

that an overpayment would not occur. 

On August 22, 2014 appellant submitted the direct deposit form (Form SF-1199A) and 

provided relevant bank information.2

On September 29, 2014 the employing establishment submitted a work status report 

indicating that on September 29, 2014 appellant had returned to work full time in a modifiedduty position. It noted, however, that she would not receive night differential or Sunday 

premium pay in this position, although she had received it in her date-of-injury position. OWCP 

continued to pay appellant total disability on the periodic rolls through October 18, 2014. 

In an October 20, 2014 worksheet, OWCP indicated that for the full period of 

September 21 through October 18, 2014, appellant received wage-loss compensation of 

$1,954.77. 

By letter dated October 20, 2014, OWCP advised appellant of a preliminary 

determination that an overpayment of $1,396.27 for the period September 29 through 

October 18, 2014, as she had returned to full duty on September 29, 2014. It found that for the 

full period from September 21 through October 18, 2014, a period of 28 days, appellant received 

$1,954.77.3

 However, as she returned to work on September 29, 2014, she was only eligible for 

$558.50 for the period September 21 through 28, 2014, causing an overpayment of compensation 

 2

 Although there is evidence in the record of the request for payment by EFT, the payments to appellant at issue 

herein were made by paper check. 

3

 On October 30, 2014 OWCP verified that a check was issued on October 18, 2014 for the period September 21 

through October 18, 2014 in the amount of $1,954.77. 
3

for the period September 29 through October 18, 2014 (a period of 20 days) in the amount of 

$1,396.27. 

OWCP found that appellant was at fault in creating the overpayment as she knew or 

should have known that she could not receive wage-loss compensation after returning to fulltime work. It informed her that she had a right to a prerecoupment hearing before an OWCP 

hearing representative. Appellant was also advised to complete the enclosed Form OWCP-20 

questionnaire and submit supporting financial documents, as this was necessary information on 

the issues of waiver and recovery of the overpayment. 

On November 7, 2014 appellant requested a prerecoupment hearing before OWCP’s 

Branch of Hearings and Review and submitted supporting financial information. In a 

November 11, 2014 letter, she indicated that she had submitted her return to work form timely 

and that there should have been no reason why she was overpaid. Appellant indicated that she 

had updated her address and submitted the direct deposit forms, yet OWCP mailed her check to 

the wrong address and she did not receive her payment on time. She also reiterated that she was 

told she would receive compensation for the hours of night shift she was unable to work due to 

her injury. 

A prerecoupment hearing was held by telephone on July 14, 2015. Appellant was 

provided with an overpayment recovery questionnaire and asked to submit supporting 

documentation. On August 13, 2015 OWCP received an updated overpayment recovery 

questionnaire with supporting documentation. 

In the September 30, 2015 decision, the hearing representative affirmed the fact of 

overpayment, but reduced the amount of overpayment to account for the loss of night differential 

and Sunday premium pay that appellant had been earning in her date-of-injury position but 

which she no longer earned in her new full-time limited-duty position on September 29, 2014.4

 

He recomputed appellant’s entitlement to partial disability compensation by utilizing the 

Shadrick formula5 and determined that appellant was entitled to $174.42 of the $1,396.26 

compensation she had received from September 29 to October 18, 2014.6 The difference 

between $1,396.26 and $174.42 reduced the amount of overpayment to $1,221.84. The hearing 

representative finalized an overpayment of $1,221.84 for the period September 29 through 

 4

 The employing establishment verified that appellant earned a base salary of $32,683.00 and had earned 

$2,002.02 in night differential and $1,959.10 in Sunday premium pay for the year prior to the date disability began. 

OWCP calculated that the pay rate, effective May 15, 2014, the date disability began, was $32,683.00 (base pay) 

plus $1,959.10 for Sunday premium and $2,002.02 for night differential, for a total of $36,644.12 or $704.69 per 

week. Appellant earned $628.52 per week ($32,683.00/52 weeks) from September 29 to October 18, 2014 with a 

weekly pay rate of $704.69 when disability began and a current pay rate of $704.69 a week for the current date-ofinjury position. In an October 22, 2014 letter, the employing establishment official indicated that appellant’s new 

limited-duty work hours were from 6:00 a.m. to 2:30 p.m., Monday through Friday, and did not include night 

differential or Sunday premium. 

5

 The method for determining loss of wage-earning capacity is set out in the case of Albert C. Shadrick, 5 ECAB 

376 (1953). See also Federal (FECA) Procedure Manual, Part 2 -- Claims, Determining Wage-Earning Capacity

Based on Actual Earnings, Chapter 2.815.4.b (Shadrick formula codified at 20 C.F.R. § 10.403). 

6

 The hearing representative dropped one cent in his calculation from the original overpayment. 
4

October 18, 2014. In addition, appellant was found to be at fault as she had accepted 

compensation payments to which she knew or reasonably should have known she was not 

entitled. 

The hearing representative reviewed appellant’s updated overpayment recovery 

questionnaire and determined that the overpayment could be recovered by deducting $900.00 

from appellant’s schedule award payment covering the period October 18 to November 14, 2015 

and the remaining balance from the schedule award payment covering the period November 15 

to December 10, 2015.7

 

LEGAL PRECEDENT -- ISSUE 1 

Section 8102 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.8 

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.9

 Section 10.500 of OWCP regulations provide that compensation for 

wage loss due to disability is available only for any periods during which an employee’s workrelated medical condition prevents him or her from earning the wages earned before the workrelated injury.10 

ANALYSIS -- ISSUE 1 

The record establishes that appellant returned to full-time limited-duty work on 

September 29, 2014. She continued to receive wage-loss compensation until October 18, 2014. 

By check dated October 18, 2014, appellant received compensation for the period September 21 

through October 18, 2014 (a 28-day period) in the amount of $1,954.77.11 She was entitled to 

eight days of compensation for that period or $558.50 creating an overpayment of $1,396.26.12 

In addition, the hearing representative properly determined the amount of compensation to which 

she would have been entitled, under the Shadrick formula, for night differential and Sunday 

 7

 OWCP granted appellant a schedule award on August 26, 2015 of five percent permanent impairment of the 

right upper extremity. The period of the award was from August 23 through December 10, 2015. 

8

 5 U.S.C. § 8102(a). 

9 Id. at § 8116(a); see Danny E. Haley, 56 ECAB 393 (2005). 

10 20 C.F.R. § 10.500. 

11 See supra note 5. 

12 The Board will accept the calculations made by the hearing representative which reduce by one cent the amount 

of compensation appellant actually received for the period September 29 to October 18, 2014 ($1,396.27 as found in 

the preliminary overpayment determination versus $1,396.26 as found by the hearing representative). 
5

premium pay in the amount of $174.42 for that period.13 The Board finds that OWCP properly 

found an overpayment in the amount of $1,221.84 ($1,396.26 - $174.42 = $1,221.84). Appellant 

has not disputed the fact or amount of the overpayment. 

LEGAL PRECEDENT -- ISSUE 2 

5 U.S.C. § 8129(b) provides: adjustment 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 FECA or would be against equity and good 

conscience.14 A claimant who is at fault in creating the overpayment is not entitled to waiver.15 

On the issue of fault, 20 C.F.R. § 10.433 provides 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; (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. 

ANALYSIS -- ISSUE 2 

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

accepted a payment she knew or should have known to be incorrect. Appellant returned to work 

in a full-time, limited-duty capacity on September 29, 2014. She received a compensation 

payment by paper check on October 31, 2014 for the period September 21 through October 18, 

2014 for temporary total disability after returning to work on September 29, 2014. Although 

appellant acknowledged receipt of this check, it was not returned to OWCP. Section 10.433(b) 

of OWCP’s regulations provide that whether or not OWCP determines that an individual was 

without fault with respect to the creation of the overpayment depends on the circumstances 

surrounding the overpayment. The degree of care expected could vary with the complexity of 

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

Board has also noted that in applying the tests to determine fault, OWCP should apply a 

reasonable person test.16

The Board finds that appellant was at fault in the creation of the overpayment. When 

appellant returned to full-time, limited-duty capacity on September 29, 2014, she knew that she 

was no longer entitled to compensation benefits for total disability. Appellant was informed of 

her responsibilities to avoid overpayments in OWCP’s September 11, 2014 letter, which notified 

her that she was being placed on the periodic rolls, effective August 24, 2014. 

The paper check that appellant received on October 31, 2014 clearly noted the period for 

which the compensation was being paid. Even though OWCP may have been negligent in 

continuing to issue appellant a check for wage-loss compensation after appellant had timely 

 13 Supra note 7. 

14 5 U.S.C. § 8129(b). 

15 See Robert W. O Brien, 36 ECAB 541, 547 (1985). 

16 C.D., Docket No. 12-193 (issued August 2, 2013). 
6

notified OWCP of her return to work, this does not excuse her acceptance of such check which 

she knew or should have known was incorrect, especially since OWCP’s preliminary 

determination had been issued prior to appellant’s receipt of and cashing of the check.17 While 

appellant claimed that her checks were always late and she knew she was entitled to some of the 

money for loss of night differential and Sunday premium pay, those factors do not absolve 

appellant from the responsibility of returning any payment to which she was not entitled after her 

return to work. For these reasons, OWCP properly found appellant at fault in the creation of the 

$1,221.84 overpayment, thereby precluding waiver of recovery of the overpayment.18 

LEGAL PRECEDENT -- ISSUE 3 

OWCP’s implementing regulations provide that, if an overpayment of compensation has 

been made to an individual entitled to further payments and no refund is made, OWCP shall 

decrease later 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 

ANALYSIS -- ISSUE 3 

The Board finds that OWCP appropriately took into consideration the financial 

information submitted by appellant, as well as the factors set forth in section 10.441(a) of its 

regulations, when requiring recovery of the $1,221.84 overpayment by deducting payments from 

her future schedule award.20 It appropriately required repayment by deducting $900.00 from the 

$2,114.07 schedule award payment covering the period October 18 to November 14, 2015, and 

the remaining balance from the $2,114.07 schedule award payment covering the period 

November 15 to December 10, 2015. 

CONCLUSION 

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

of compensation during the period September 29 to October 18, 2014 in the amount of $1,221.84 

and that she was at fault in creating the overpayment of compensation, thereby precluding waiver 

of recovery of the overpayment. The Board also finds that OWCP properly recovered the 

overpayment from appellant’s schedule award payments. 

 17 See Robert W. O Brien, 36 ECAB 541, 547 (1985). 

18 5 U.S.C. § 8129(b); L.J., 59 ECAB 264 (2007). 

19 20 C.F.R. § 10.441(a). 

20 Supra note 15. 
7

ORDER 

IT IS HEREBY ORDERED THAT the September 30, 2015 decision of the Office of 

Workers’ Compensation Programs is affirmed. 

Issued: June 23, 2016 

Washington, DC 

 

 Christopher J. Godfrey, Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Patricia H. Fitzgerald, Deputy Chief Judge 

 Employees’ Compensation Appeals Board 

 

 Colleen Duffy Kiko, Judge 

 Employees’ Compensation Appeals Board