United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

B.K., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Los Angeles, CA, Employer

__________________________________________

)

)

)

)

)

)

)

)

Docket No. 17-1562

Issued: October 27, 2017

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

PATRICIA H. FITZGERALD, Deputy Chief Judge

COLLEEN DUFFY KIKO, Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On July 10, 2017 appellant filed a timely appeal from a June 27, 2017 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 OWCP properly determined that appellant received an

overpayment of compensation in the amount of $957.87 for the period April 20 to 30, 2016; and 

(2) whether OWCP properly determined that appellant was at fault in the creation of the 

overpayment of compensation, thereby precluding waiver of recovery of the overpayment.

 

1

5 U.S.C. § 8101 et seq.
2

FACTUAL HISTORY

On December 2, 2014 appellant, then a 45-year-old city letter carrier, filed an 

occupational disease claim (Form CA-2) alleging that he sustained injuries to his feet, including 

bilateral plantar fasciitis, due to the performance of his work duties over a period of time. He 

indicated that he first became aware of his claimed condition on October 7, 2014 and first 

realized on the same date that it was caused or aggravated by his federal employment. Appellant 

stopped work on October 7, 2014 and began performing modified duty on January 31, 2015. 

OWCP accepted appellant’s claim for bilateral plantar fasciitis, and he received wageloss compensation on the daily rolls beginning January 31, 2015 for intermittent periods of work 

stoppage. 

Appellant stopped work on December 4, 2015 and, on that date, he underwent OWCPapproved plantar fasciectomy of his right foot.

Appellant received wage-loss compensation on the periodic rolls effective 

January 10, 2016. In conjunction with being placed on the periodic rolls, OWCP informed 

appellant that he needed to report immediately any return to work in order to minimize the 

possibility of an overpayment of compensation.

On April 6, 2016 appellant telephoned an OWCP official and advised him that he would 

be returning to work for the employing establishment on April 9, 2016. The record reflects that 

appellant actually returned to work on April 20, 2016.

In an August 12, 2016 letter, OWCP advised appellant of its preliminary determination 

that he received an overpayment of compensation in the amount of $957.87 for the period 

April 20 to 30, 2016 because he received total disability compensation for that period despite 

returning to work on April 20, 2016.2 It also made a preliminary determination that he was at 

fault in the creation of the overpayment because he accepted a payment which he knew or 

reasonably should have known to be incorrect. OWCP advised appellant that he could submit 

evidence challenging the fact, amount, or finding of fault, and request waiver of recovery of the 

overpayment. It informed him that he could submit additional evidence in writing or at a 

prerecoupment hearing, but that a prerecoupment hearing must be requested within 30 days of

the date of the written notice of overpayment. OWCP requested that appellant complete and 

return an enclosed financial information questionnaire (Form OWCP-20) within 30 days even if 

he was not requesting waiver of recovery of the overpayment. 

By letter dated August 21, 2016, appellant requested a prerecoupment hearing by 

telephone with a representative of OWCP’s Branch of Hearings and Review.

 

2 The record reflects that on April 30, 2016 appellant received, through direct electronic deposit into his bank

account, $2,856.68 in wage-loss compensation covering the period April 3 to 30, 2016. OWCP provided a 

worksheet showing that the portion of the deposit covering the period April 20 to 30, 2016 was $957.87.
3

Appellant submitted a financial information questionnaire (Form OWCP-20), signed on 

August 21, 2016, in which he discussed his monthly income, monthly expenses, and assets.3 He 

also submitted financial documents in support of the questionnaire. Appellant requested waiver 

of the $957.87 overpayment noting that he had timely reported his return to work to OWCP. 

During the telephonic prerecoupment hearing held on April 20, 2017, appellant indicated 

that he felt he was without fault in the creation of the $957.87 overpayment because he 

telephoned and notified OWCP about his return to work. He advised that the financial 

information questionnaire he completed was basically still accurate. Appellant was provided 30 

days to report any changes to his financial situation, but he did not submit a response within the 

allotted period.

In a June 27, 2017 decision, OWCP’s hearing representative finalized the overpayment of 

compensation in the amount of $957.87 for the period April 20 to 30, 2016 because he received 

total disability compensation for that period despite returning to work on April 20, 2016. He 

further found that appellant was at fault in the creation of the overpayment because he accepted a 

payment which he knew or reasonably should have known to be incorrect. The hearing 

representative discussed the financial information submitted by appellant and determined that the 

$957.87 overpayment was due in full.

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 his duty.4 Section 8129(a) of FECA provides, in pertinent part:

“When an overpayment has been made to an individual under this subchapter 

because of an error of fact or law, adjustment shall be made under regulations 

prescribed by the Secretary of Labor by decreasing later payments to which an 

individual is entitled.”

5

Section 8116(a) of FECA provides that, while an employee is receiving compensation or 

if he or she has been paid a lump sum in commutation of installment payments until the 

expiration of the period during which the installment payments would have continued, the 

employee may not receive salary, pay, or remuneration of any type from the United States, 

except in limited specified instances.6

 

3 Appellant indicated that he had $2,248.00 in monthly income, $4,214.00 in monthly expenses, and $32,893.79 

in assets.

4

Supra note 1 at § 8102(a).

5

Id. at § 8129(a).

6

Id. at § 8116(a).
4

ANALYSIS -- ISSUE 1

The Board finds that appellant received a $957.87 overpayment of compensation for the 

period April 20 to 30, 2016. Appellant received wage-loss compensation during this period 

despite the fact that he returned to work on April 20, 2016.7 He was not entitled to receive both a 

salary and wage-loss compensation for temporary total disability for the period April 20 

to 30, 2016.

8

 Accordingly, the Board finds that appellant received a $957.87 overpayment of 

compensation.

LEGAL PRECEDENT -- ISSUE 2

Section 8129(b) of FECA provides that 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 this subchapter or would be against 

equity and good conscience.9 Section 10.433(a) of OWCP’s implementing regulations 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.”

10

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

a direct electronic deposit may not be at fault the first time incorrect funds are deposited into his 

or her account, as the acceptance of the resulting overpayment lacks the requisite knowledge.11 

The Board has 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.12 Previous cases have held that receiving one erroneous direct 

 

7

Supra note 2.

8

See supra note 6.

9

5 U.S.C. § 8129(b).

10 20 C.F.R. § 10.433(a).

11 See Tammy Craven, 57 ECAB 689 (2006).

12 Id.
5

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

at fault in the creation of the overpayment.13

ANALYSIS -- ISSUE 2 

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

he accepted a payment that he knew or reasonably should have known to be incorrect. The 

Board finds, however, that OWCP failed to establish that, at the time he accepted the initial (and 

sole) payment of compensation following his return to work, appellant knew or reasonably 

should have known the payment was incorrect. 

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 

or she knew or should have known that the payment was incorrect.14 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.15 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.16 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.17 It is not appropriate, 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.18

Appellant received FECA wage-loss compensation by direct deposit every 28 days. The 

evidence of record does not establish that, as of the first direct deposit of compensation after he 

returned to work on April 20, 2016, he knew or should have known that he was accepting a 

direct deposit to which he was not entitled. There is no documentation or other evidence to 

demonstrate that appellant had clear knowledge at the time he received a direct deposit from 

OWCP on April 30, 2016, covering the period April 3 to 30, 2016, that a portion of the payment 

was incorrect, or that a reasonable period of time passed during which he could have reviewed 

bank statements or been informed of the incorrect payment. Therefore, he is not at fault in the 

 

13 V.S., Docket No. 13-1278 (issued October 23, 2013).

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

15 See Tammy Craven, supra note 11; see also George A. Hirsch, 47 ECAB 520 (1996).

16 Id.

17 Id.; see also K.D., Docket No. 13-451 (issued April 12, 2013).

18 See K.H., Docket No. 06-191 (issued October 30, 2006).
6

acceptance of the direct deposit covering the period of the overpayment from April 20

to 30, 2016.

19

The Board will reverse OWCP’s June 27, 2017 finding of fault, and remand the case for 

consideration of whether appellant is entitled to waiver of recovery of the overpayment.

CONCLUSION

The Board finds that OWCP properly determined that appellant received a $957.87 

overpayment of compensation for the period April 20 to 30, 2016. The Board further finds that 

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

compensation. The case shall be remanded for consideration of waiver of recovery of the 

overpayment.

ORDER

IT IS HEREBY ORDERED THAT the June 27, 2017 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and reversed in part, and the case is 

remanded for further action consistent with this decision.

Issued: October 27, 2017

Washington, DC

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Colleen Duffy Kiko, Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board

 

19 See supra notes 14 through 18.