United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

B.W., Appellant

and

DEPARTMENT OF JUSTICE, FEDERAL 

BUREAU OF PRISONS, Pollock, LA, Employer

__________________________________________

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Docket No. 19-0239

Issued: September 18, 2020

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

ALEC J. KOROMILAS, Chief Judge

PATRICIA H. FITZGERALD, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On November 13, 2018 appellant filed a timely appeal from an October 16, 2018 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 Appellant timely requested an oral argument before the Board pursuant to 20 C.F.R. § 501.5(b). By order dated 

July 15, 2020, the Board exercised its discretion and denied the request for oral argument as the matter could be 

adequately addressed based on a review of the evidence of record. Order Denying Request for Oral Argument, Docket 

No. 19-0239 (issued July 15, 2020).

2 5 U.S.C. § 8101 et seq.

3 The Board notes that, following the October 16, 2018 decision, OWCP received additional evidence. However, 

the Board’s Rules of Procedure provides: “The Board’s review of a case is limited to the evidence in the case record 

that was before OWCP at the time of its final decision. Evidence not before OWCP will not be considered by the 

Board for the first time on appeal.” 20 C.F.R. § 501.2(c)(1). Thus, the Board is precluded from reviewing this 

additional evidence for the first time on appeal. Id. 
2

ISSUES

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

amount of $81,160.62 for the period July 24, 2016 through April 28, 2018 because he continued 

to receive wage-loss compensation after he returned to work; and (2) whether OWCP properly 

found that he was at fault in the creation of the overpayment, thereby precluding waiver of recovery 

of the overpayment. 

FACTUAL HISTORY

On May 11, 2012 appellant, then a 45-year-old laundry machine operator supervisor, filed 

a traumatic injury claim (Form CA-1) alleging that on May 8, 2012 he experienced pain between 

his shoulder blades when tugging on laundry cart stuck in the doorway while in the performance 

of duty. He stopped work on May 9, 2012. OWCP accepted the claim for neck sprain; sprain of 

the right shoulder and upper arm, rotator cuff; and right brachial neuritis or radiculitis not otherwise 

specified.4 It paid appellant wage-loss compensation for total disability on the supplemental rolls 

as of July 1, 2012 and on the periodic rolls as of July 29, 2012.

Appellant returned to full-time modified-duty work on September 5, 2013, but stopped 

work again. On May 28, 2014 he underwent a right shoulder subacromial decompression with 

partial acromioplasty. OWCP paid appellant wage-loss compensation on the supplemental rolls 

beginning that date.

In an October 9, 2014 letter, OWCP advised appellant that he would be receiving wageloss compensation on the periodic rolls beginning October 19, 2014 and outlined his entitlement 

to compensation benefits and his responsibility to return to work in connection with her accepted 

injuries. In an attached Form EN1049, it further provided: “[t]o minimize the possibility of an 

overpayment of compensation, NOTIFY THIS OFFICE IMMEDIATELY WHEN YOU GO 

BACK TO WORK.... 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.)

In a Form EN1032 dated May 17, 2017, appellant advised that he had returned to “[l]ight

office work” on August 12, 2016 at the employing establishment.

On May 21, 2018 OWCP requested that the employing establishment address whether 

appellant had resumed work and, if so, provide the date of his return, the hours worked each day, 

and his rate of pay.

 

4 OWCP previously accepted that appellant sustained a lumbar sprain under File No. xxxxxx398. It has 

administratively combined that claim with the present claim, assigned File No. xxxxxx993, with File No. xxxxxx398

serving as the master file. 
3

In a May 23, 2018 response, the employing establishment advised that appellant had 

resumed work full time for 40 hours per week on July 24, 2016 while also receiving compensation 

from OWCP. 

In a May 24, 2018 manual adjustment form, OWCP noted that appellant had returned to 

full-time work on July 24, 2016, but had been paid wage-loss compensation through 

April 28, 2018. It noted that he received a net payment of $20,984.64 from July 24, 2016 through

January 7, 2017; $3,464.36 from January 8 through February 4, 2017; $3,476.07 from February 5 

through March 4, 2017; $39,009.96 from March 5, 2017 through January 6, 2018; $3,508.46 from

January 7 through February 3, 2018; $3,518.21 from February 4 through March 3, 2018; and

$7,198.42 from March 4 through April 28, 2018. The payments resulted in a total overpayment 

of compensation in the amount of $81,160.62. 

On August 23, 2018 OWCP advised appellant of its preliminary determination that he had 

received an overpayment of compensation in the amount of $81,160.62 for the period June 24, 

2016 through April 28, 2018 because he returned to full-time employment on June 24, 2016, but 

received wage-loss compensation for total disability through April 28, 2018. It further notified 

him of its preliminary finding that he was at fault in the creation of the overpayment because he 

accepted a payment that he knew or reasonably should have known, was incorrect. Additionally, 

OWCP informed appellant that, within 30 days, he could request a telephonic conference, a final 

decision based on the written evidence, or a prerecoupment hearing. It requested that he complete 

an enclosed overpayment recovery questionnaire (Form OWCP-20) and submit supporting 

financial documentation. 

In an overpayment action request form dated August 31, 2018, appellant requested waiver 

of recovery of the overpayment. He maintained that he had informed OWCP by telephone on two 

occasions that he had resumed work. Appellant related that he believed that the continued 

payments that he had received were for a schedule award. In an accompanying OWCP-20, he 

advised that he had $31,971.93 in funds, monthly income of $3,476.00, and monthly expenses of 

$2,848.00.

By decision dated October 16, 2018, OWCP finalized its preliminary determination that 

appellant had received an overpayment of compensation in the amount of $81,160.62 for the period 

July 24, 2016 through April 28, 2018 as he returned to work on July 24, 2016, but received 

compensation benefits for total disability through April 28, 2018. It determined that he was at 

fault in the creation of the overpayment because he accepted compensation payments which he 

knew or should have known were incorrect. OWCP found that appellant should forward 

$81,160.62 within 30 days to repay the overpayment of compensation. 

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, that when an 

overpayment has been made to an individual under this subchapter because of an error of fact or 

 

5 5 U.S.C. § 8102(a).
4

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(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.7 OWCP’s procedures provide that an overpayment of compensation is created when a 

claimant returns to work, but continues to receive wage-loss compensation.8

ANALYSIS -- ISSUE 1

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

$81,160.62 for the period July 24, 2016 through April 28, 2018 because he continued to receive 

wage-loss compensation for total disability after he returned to work.

Appellant resumed full-time employment on July 24, 2016. OWCP, however, continued 

to pay him wage-loss compensation for total disability following his return to work, which resulted 

in an overpayment of compensation. Appellant was not entitled to receive temporary total 

disability benefits and actual earnings for the same time period.9

In determining the amount of overpayment, OWCP calculated the net amount of disability 

compensation that appellant had received from July 24, 2016 through April 28, 2018. Thus, the 

Board finds that he received an overpayment of compensation in the amount of $81,160.62 during 

the above-noted period.10

LEGAL PRECEDENT -- ISSUE 2

Section 8129(b) of FECA provides as follows 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.11 No waiver of recovery of an overpayment is possible if the 

claimant is at fault in the creation of the overpayment.12

 

6

Id. at § 8129(a).

7

Id. at § 8116(a).

8 K.K., Docket No. 19-0978 (issued October 21, 2019); B.H., Docket No. 09-0292 (issued September 1, 2009); 

Federal (FECA) Procedure Manual, Part 6 -- Debt Management, Initial Determinations in an Overpayment, Chapter 

6.300.4(g) (September 2018).

9 L.T., Docket No. 19-1389 (issued March 27, 2020); S.N., Docket No. 19-1018 (issued November 12, 2019).

10 See R.Q., Docket No. 18-0964 (issued October 8, 2019).

11 5 U.S.C. § 8129(b).

12 C.L., Docket No. 19-0242 (issued August 5, 2019).
5

On the issue of fault, 20 C.F.R. § 10.433(a) provides that an individual is with fault in the 

creation of an overpayment who: (1) made an incorrect statement as to a material fact which the 

individual knew or should have known to be incorrect; (2) failed to furnish information which the 

individual knew or should have known to be material; or (3) with respect to the overpaid individual 

only, accepted a payment which the individual knew or should have been expected to know was 

incorrect.13

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

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

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

The Board finds that OWCP improperly determined that appellant was at fault in the 

creation of the overpayment from July 24 through August 20, 2016. 

In cases where a claimant receives compensation through direct deposit, the Board has held 

that 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.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 EFT is that the claimant lacks the requisite knowledge at the time of the first 

incorrect payment.17

Appellant returned to work on July 24, 2016. OWCP paid him compensation for the period 

July 24 through August 20, 2016 in a direct deposit payment on August 20, 2016. There is no 

documentation to demonstrate that appellant had clear knowledge at the time the bank received 

the August 20, 2016 direct deposit that the payment was incorrect.18 The Board thus finds that he

was without fault in accepting the initial direct deposit covering the period July 24 through 

August 20, 2016.

 

13 20 C.F.R. § 10.433(a).

14 Id. at § 10.433(b).

15 See C.H., Docket No. 19-1470 (issued January 24, 2020); see also Claude T. Green, 42 ECAB 174, 278 (1990).

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

17 Id.

18 See K.E., Docket No. 19-0978 (issued October 25, 2018).
6

The Board further finds that OWCP properly found that he was at fault in the creation of 

the overpayment from August 21, 2016 through April 28, 2018. 

Although OWCP may have been negligent in making incorrect payments, this does not 

excuse a claimant from accepting payments he or she knew or should have known to be incorrect.19 

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, a 

claimant will be at fault for accepting the payments subsequently deposited.20 By the time of the 

second payment, appellant should have known that he was not entitled to the same amount of 

wage-loss compensation as he had received prior to his return to work on July 24, 2016.21

In an EN1049 form dated October 9, 2014, OWCP advised appellant that an overpayment 

would be created if he returned to work, but continued to receive wage-loss compensation. It 

informed him that he should monitor his EFT deposits carefully, and immediately advise OWCP 

if he worked for any portion of the period for which a deposit was made. Therefore, by the time 

appellant received the second direct deposit on September 17, 2016, covering the period August 21 

to September 17, 2016, he knew or should have known that the continued payment was incorrect. 

The Board therefore finds that OWCP properly found that he was at fault in the creation of the 

overpayment from August 21, 2016 through April 28, 2018.

On appeal appellant contends that he was unaware that he was receiving an overpayment 

of compensation. He asserts that he had telephoned OWCP advising of his return to work and had 

also returned a questionnaire indicating that he had resumed work. As explained above, however, 

OWCP clearly informed appellant that he was not entitled to wage-loss compensation for the same 

period that he returned to work. Thus, appellant should have been aware that he was not entitled 

to compensation as of the date of his return to work. The fact that OWCP may have been negligent 

in issuing the payments does not mitigate this finding.22 While appellant contends that he believed 

that the payments were for a schedule award, OWCP has not granted him a schedule award. 

CONCLUSION

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

$81,160.62 for the period July 24, 2016 through April 28, 2018 because he continued to receive 

wage-loss compensation after he returned to work. The Board further finds that he was without 

fault in the creation of the overpayment from July 24 through August 20, 2016, but was at fault in 

the creation of the overpayment for the period August 21, 2016 through April 28, 2018. The case 

will be remanded to OWCP to consider waiver of recovery of the overpayment for the period 

July 24 through August 20, 2016.

 

19 P.B., Docket No. 19-0329 (issued December 31, 2019); see C.G., Docket No. 15-0701 (issued 

December 9, 2015).

20 See L.T., supra note 9.

21 Id.

22 20 C.F.R. § 10.435(a); William E. McCarty, 54 ECAB 525 (2003).
7

ORDER

IT IS HEREBY ORDERED THAT the October 16, 2018 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 decision of the Board.

Issued: September 18, 2020

Washington, DC

Alec J. Koromilas, Chief Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board