United States Department of Labor 

Employees’ Compensation Appeals Board 

____________________________________________

M.L., Appellant 

and 

U.S. POSTAL SERVICE, PROCESSING & 

DISTRIBUTION CENTER, West Sacramento, CA, 

Employer 

____________________________________________ 

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Docket No. 15-1683 

Issued: June 20, 2016 

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 

ALEC J. KOROMILAS, Alternate Judge 

VALERIE D. EVANS-HARRELL, Alternate Judge 

JURISDICTION 

On August 3, 2015 appellant filed a timely appeal from a May 26, 2015 merit decision of 

the Office of Workers’ Compensation Programs (OWCP).1

 Pursuant to the Federal Employees’ 

Compensation Act2

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

the merits of this case.3

 1

 On August 3, 2015 appellant submitted a timely request for oral argument in connection with OWCP’s May 26, 

2015 decision. By order issued on February 10, 2016, the Board denied appellant’s request for oral argument 

because he offered no reason in support of his request. Order Denying Request For Oral Argument, Docket No. 15-

1683 (issued February 10, 2016). 

2

 5 U.S.C. § 8101 et seq. 

3

 Appellant submitted new evidence with his appeal. The Board, however, has no jurisdiction to review evidence 

on appeal which was not before OWCP at the time of its final decision. See 20 C.F.R. § 501.2(c)(1). 
2

ISSUES 

The issues are: (1) whether appellant received a $3,482.53 overpayment of compensation 

for the period January 8 to February 7, 2015; and (2) whether OWCP properly found appellant at 

fault in the creation of the overpayment and, therefore, not entitled to waiver of recovery. 

On appeal appellant contends that his scheduled return to work was delayed and his leave 

was extended because he had undergone another surgery. 

FACTUAL HISTORY 

On September 17, 2013 appellant, then a 46-year-old mail handler, filed a traumatic 

injury claim (Form CA-1) alleging that he sustained a left shoulder rotator cuff injury when his 

shoulder popped on that day as he was picking up a package. He stopped work on the date of 

injury. 

OWCP initially denied the claim, but on January 7, 2014 it accepted appellant’s claim for 

a left shoulder strain. It advised him that, to avoid an overpayment of compensation, he was to 

immediately notify it of his return to work. OWCP further advised appellant that he was 

required to return any check to OWCP which included a period during which he worked. 

On June 2, 2014 appellant underwent authorized left shoulder arthroscopy superior 

glenoid labral posterior section repair, acromioplasty, Mumford procedure, debridement of an 

articular-sided cuff tear, and open biceps tenodesis for a superior and posterior glenoid labral 

tears, partial thickness cuff tear, perilabral cyst impingement, and acromioclavicular arthritis. 

Appellant received wage-loss compensation beginning June 2, 2014. On June 12, 2014 

appellant elected to receive his compensation payments through direct deposit.4

 

On December 5, 2014 appellant underwent authorized left shoulder arthroscopic lysis of 

subacromial and subdeltoid adhesions. 

In a January 5, 2015 report, Dr. Richard D. Tortosa, a Board-certified orthopedic 

surgeon, advised that appellant was unable to return to work until approximately 

January 8, 2015. On February 5, 2015 he released appellant to return to work with no 

restrictions on that date. 

OWCP issued an electronic compensation payment on January 10, 2015 in the net 

amount of $3,055.65, covering the period December 14, 2014 to January 10, 2015. It issued 

another electronic compensation payment on February 7, 2015 in the net amount of $3,009.51, 

covering the period January 11 to February 7, 2015. 

On February 26, 2015 the employing establishment informed OWCP that appellant had 

returned to work on January 7, 2015. On March 3, 2015 it confirmed that he had returned to full-

 4

 The record reflects that appellant began receiving wage-loss compensation beginning June 2, 2014 and that he 

was placed on the periodic compensation rolls beginning June 29, 2014. 
3

time light-duty work with no wage loss on January 8, 2015. The employing establishment noted 

that appellant had been released to full-time full-duty work on February 5, 2015. 

By letter dated March 4, 2015, OWCP made a preliminary determination that appellant 

received an overpayment of compensation in the amount of $3,482.53 from January 8 to 

February 5, 2015 because he continued to receive disability compensation after his return to 

work. It calculated the overpayment by noting that during the 31-day period from January 8 to 

February 7, 2015 appellant received gross compensation in the amount of $3,810.77 based on a 

daily gross compensation rate of $122.93. OWCP then subtracted $254.77 for health benefits, 

$19.60 for basic life insurance, and $53.87 for optional life insurance for the same period to 

calculate a total net overpayment of $3,482.53. It found that appellant was with fault in the 

creation of the overpayment because he was aware or should have been reasonably aware that he 

was not entitled to receive wage-loss compensation benefits after returning to full-time work. 

OWCP requested that he complete an overpayment recovery questionnaire (Form OWCP-20) 

and submit supporting financial documents. Additionally, it 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. An overpayment worksheet dated March 4, 

2015 determined that appellant was overpaid during the period January 8 to February 7, 2015 for 

a total of $3,482.53. 

Appellant did not respond to the preliminary overpayment determination. In a May 26, 

2015 decision, OWCP finalized the preliminary overpayment determination, finding that 

appellant had received an overpayment of compensation in the amount of $3,482.53 from 

January 8 through February 5, 2015. It further found that he was at fault because he knowingly 

accepted wage-loss compensation to which he was not entitled. OWCP directed that appellant 

forward payment for the full amount or to contact it to make other repayment arrangements. 

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.5

 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.”6

 

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.7

 OWCP regulations provide that compensation for wage loss due to 

 5 Supra note 2 at § 8102(a). 

6 Id. at § 8129(a). 

7 Id. at § 8116(a); R.H., Docket No. 09-1981 (issued June 11, 2010). 
4

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.8 

A claimant is not entitled to receive temporary total disability and actual earnings for the 

same period.9

 OWCP procedures provide that an overpayment in compensation is created when 

a claimant returns to work, but continues to receive wage-loss compensation.10

ANALYSIS -- ISSUE 1 

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

of $3,482.53 for the period January 8 to February 7, 2015. OWCP accepted appellant’s claim 

and paid appropriate wage-loss compensation benefits. Appellant returned to full-time light-duty 

work on January 8, 2015. As of that date, he was no longer entitled to wage-loss compensation 

benefits.11 After appellant returned to work, OWCP made automatic payments of compensation 

in the net amount of $3,055.65 on January 10, 2015 and $3,009.51 on February 7, 2015. The 

payments were made by direct deposit covering the period December 14, 2014 to 

February 7, 2015. 

OWCP calculated that for the 31-day period from January 8 to February 7, 2015, 

appellant received an overpayment of compensation in the amount of $3,810.77, based on a daily 

gross compensation rate of $122.93 less deductions for health benefits of $254.77, basic life 

insurance of $19.60, and optional life insurance of $53.87, for a net compensation of $3,482.53. 

The Board has reviewed OWCP’s calculations and finds that it properly determined that 

appellant received an overpayment of compensation in the amount of $3,482.53. 

The Board notes that OWCP’s March 4, 2015 preliminary determination and May 26, 

2015 decision revealed that the overpayment period ended on February 5, 2015. The 

calculations provided, however, used February 7, 2015, in accordance with appellant’s 

compensation history. Accordingly, the Board will affirm OWCP’s May 26, 2015 decision on 

the issues of fact and amount of overpayment, but will modify the period of the overpayment to 

January 8 to February 7, 2015. 

LEGAL PRECEDENT -- ISSUE 2 

Under OWCP regulations, waiver of the recovery of an overpayment may be considered 

only if the individual to whom it was made was not at fault in accepting or creating the 

overpayment.12 The fact that the overpayment was the result of error by OWCP or another 

 8

 20 C.F.R. § 10.500. 

9 See R.W., Docket No. 13-1285 (issued November 13, 2013). 

10 See Danny E. Haley, 56 ECAB 393 (2005); Federal (FECA) Procedure Manual, Part 6 -- Debt Management, 

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

11 Supra notes 9 and 10. 

12 Supra note 8 at § 10.433(a). 
5

government agency does not by itself relieve the individual who received the overpayment of 

liability for repayment if the individual also was at fault for receiving the overpayment.13 Each 

recipient of compensation benefits is responsible for taking all reasonable measures to ensure 

that payments he or she received from OWCP are proper. The recipient must show good faith 

and exercise a high degree of care in reporting events that may affect entitlement to or the 

amount of benefits. A recipient who has done any of the following will be found to be at fault 

with respect to creating an overpayment: (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 to be incorrect (this provision applies only to the overpaid 

individual).14

The Board has found the claimant to be at fault in cases where he or she is receiving 

compensation checks through direct deposit involving a series of payments over several months 

with clear knowledge that the payments were incorrect.15 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.16

ANALYSIS -- ISSUE 2 

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

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

finds that he was without fault with regard to OWCP’s first direct deposit following his return to 

work, but he was at fault in creating the overpayment resulting from the second such deposit. 

OWCP records indicate that on January 10, 2015 appellant received a net direct deposit 

payment of $3,055.65 for the period December 14, 2014 to January 10, 2015, and that on 

February 7, 2015 he received a net direct deposit payment of $3,009.51 for the period January 11 

to February 7, 2015. As explained, since appellant returned to work without wage loss on 

January 8, 2015, he was not entitled to all of these payments. OWCP calculated that these 

payments resulted in an overpayment of $3,482.53 for the period January 8 to February 7, 2015. 

It found appellant at fault in creating the overpayment as he was aware or should have been 

aware that he was not entitled to wage-loss compensation after his return to full-time work. 

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

direct deposit is not at fault the first time incorrect funds are deposited into his or her account, as 

 13 Id. at § 10.435(a). 

14 Supra note 12; see Sinclair L. Taylor, 52 ECAB 227 (2001); see also 20 C.F.R. § 10.430. 

15 See Karen K. Dixon, 56 ECAB 145 (2004). 

16 Tammy Craven, 57 ECAB 689 (2006). 
6

the acceptance of the resulting overpayment lacks the requisite knowledge.17 Previous cases 

have held that receiving an erroneous direct deposit payment immediately following the 

employee’s return to work does not necessarily create the requisite knowledge to find that a 

claimant was at fault in the creation of the overpayment.18 However, 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.19 The Board has noted that an employee’s failure to 

return an overpayment is immaterial to the issue of whether he was at fault in its creation.20

The Board finds that appellant was without fault regarding the first direct deposit 

payment which he received on January 10, 2015 in the amount of $3,055.65, covering the period 

December 14, 2014 to January 10, 2015. While appellant accepted the overpayment by gaining 

control of the funds deposited into his account pursuant to his authorization, he did not know that 

he would receive an incorrect payment on that day. Unlike the situation in which a claimant 

receives a physical check and is aware of the amount of the payment before depositing it into his 

account, he was not on notice of the amount of the payment until after it was deposited 

electronically into his account.21 OWCP has not presented sufficient evidence to establish that 

appellant accepted a payment at the time of deposit which he knew or should have known to be 

incorrect.22 Appellant had no reason to suspect at the time of the January 10, 2015 deposit that 

OWCP had issued an incorrect payment since this was the first payment made. Thus, the Board 

finds that he was not at fault in creating that portion of the overpayment received on 

January 10, 2015. A finding that appellant was not at fault with respect to the January 10, 2015 

direct deposit payment does not establish that he was entitled to waiver of recovery of that 

portion of the overpayment and therefore the case shall be returned to OWCP. On return of the 

case record, OWCP should properly consider the issue of waiver of this portion of the 

overpayment.23

The Board finds, however, that appellant was at fault in the creation of the overpayment 

resulting from the February 7, 2015 direct deposit. In a January 7, 2014 letter, appellant was 

notified that, to avoid an overpayment of compensation, he must immediately notify OWCP of 

his return to work. Appellant was required to return any check to OWCP which included a 

period during which he worked. After his receipt of the first direct deposit following his return 

to work, he was on notice that OWCP was making payments to him in error. Appellant knew or 

should have known that he was not entitled to the benefit of subsequent direct deposits. When he 

 17 Id. 

18 V.S., Docket No. 13-1278 (issued October 23, 2013); W.P., 59 ECAB 514 (2008). 

19 W.P., id. 

20 Id. (that appellant spent the money or had more than ample opportunity to return it before the preliminary 

finding of fault is immaterial to whether he was at fault in creating the overpayment). 

21 W.P., supra note 18. 

22 V.A., Docket No. 12-637 (issued August 27, 2012). 

23 See D.B., Docket No. 14-397 (issued June 3, 2014); M.F., Docket No. 12-456 (issued November 13, 2012); 

supra note 16. 
7

received the second deposit on February 7, 2015 in the amount of $3,009.51 for the period 

January 11 to February 7, 2015, he had been back at work since January 8, 2015 and would have 

had no expectation of that compensation. In light of OWCP’s clear mandate to provide 

notification of a return to work and to return any payment received, which included a period 

during which appellant worked, a reasonable person would have known that an overpayment had 

occurred. Appellant had the benefit of reviewing bank statements reflecting his receipt of this 

additional compensation payment. The Board finds that he knew or should have known that the 

February 7, 2015 deposit covering the period January 11 to February 7, 2015 was in error.24 

Appellant had an obligation to return payments that he knew or should have known were 

incorrect.25 Therefore, he was at fault in creating this portion of the overpayment and is not 

entitled to waiver of recovery of the overpayment.26

CONCLUSION 

The Board finds appellant received a $3,482.53 overpayment of compensation for the 

period January 8 to February 7, 2015. The Board finds that OWCP’s finding of fault for the 

portion of the $3,482.53 overpayment for the period December 14, 2014 to January 10, 2015 is 

reversed and the case is remanded to OWCP to determine whether waiver of the recovery of the 

overpayment is warranted. The Board finds, however, that OWCP properly found that appellant 

was at fault for the remaining portion of the $3,482.53 overpayment for the period January 11 to 

February 7, 2015 and, therefore, ineligible for waiver of the recovery. 

 24 Neill D. Dewald, 57 ECAB 451 (2006). 

25 Id.

26 The Board does not have jurisdiction to review the recovery of the overpayment. The Board’s jurisdiction is 

limited to reviewing those cases where OWCP seeks recovery from continuing compensation under FECA. See 20 

C.F.R. § 10.441(a); L.D., 59 ECAB 673 (2008). 
8

ORDER 

IT IS HEREBY ORDERED THAT the May 26, 2015 decision of the Office of 

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

case is remanded for further proceedings consistent with this decision of the Board. 

Issued: June 20, 2016 

Washington, DC 

 

 Patricia H. Fitzgerald, Deputy 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