United States Department of Labor

Employees’ Compensation Appeals Board

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C.W., Appellant

and

U.S. POSTAL SERVICE, POST OFFICE, 

Tomball, TX, Employer

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Docket No. 19-1653

Issued: March 23, 2021

Appearances: Case Submitted on the Record

Appellant, pro se

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

JANICE B. ASKIN, Judge

PATRICIA H. FITZGERALD, Alternate Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On July 25, 2019 appellant filed a timely appeal from a January 29, 2019 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 appellant received an overpayment of compensation in the 

amount of $13,426.87 for the period August 21, 2016 through June 23, 2018, because she

continued to receive compensation after she returned to work; and (2) whether OWCP properly 

 

1 5 U.S.C. § 8101 et seq.

2 The Board notes that following the January 29, 2019 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

found appellant at fault in the creation of the overpayment, thereby precluding waiver of recovery 

of the overpayment.

FACTUAL HISTORY

On May 20, 2014 appellant, then a 33-year-old rural carrier, filed an occupational disease 

claim (Form CA-2) alleging that on April 19, 2014 she first realized that she sustained an injury 

due to repeated trauma from her work duties. The employing establishment noted that her last 

date of exposure was May 3, 2014. OWCP accepted the claim for conditions including: right knee 

joint effusion; right knee medial meniscus internal derangement; right other muscle, ligament, and 

fascia disorders; right osteochondriitis dissecans; right old anterior cruciate ligament disruption;

and right open hip and thigh wound without complications. It paid appellant wage-loss 

compensation beginning May 3, 2014 and placed appellant on the periodic compensation rolls 

effective July 27, 2014. 

By letter dated August 14, 2014, OWCP advised appellant that she had been placed on the 

periodic rolls, outlined her entitlement to compensation benefits, and advised her of the

responsibility to return to work in connection with the accepted injury. In an attached EN1049 

form, OWCP provided: 

“To minimize the possibility of an overpayment of compensation, NOTIFY THIS 

OFFICE IMMEDIATELY WHEN YOU GO BACK TO WORK. If you receive 

your compensation payments via paper check, the payment shows the period for 

which payment is made. If you have worked for any portion of this period, return 

the payment to this office, even if you have already advised OWCP that you are 

working. 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.)

On March 8 and 22, 2016 appellant accepted modified-job offers working four hours per 

day with a return to work on March 8, 2016 with her hours gradually increasing to six hours on 

May 12, 2016 and then to eight hours per day on August 20, 2016. However, she continued to 

receive wage-loss compensation for two hours per day following her return to work eight hours 

per day during the period August 21, 2016 through June 23, 2018.3

In a December 21, 2018 preliminary overpayment determination, OWCP advised appellant 

that she had been overpaid $13,426.87 for the period August 21, 2016 through June 23, 2018 

because she returned to full-duty work on August 21, 2016, but continued to receive compensation 

for two hours per day through June 23, 2018. It also determined that appellant was at fault in the 

creation of the overpayment because she had accepted payment that she knew or reasonably should 

 

3 The first payment was received by EFT deposit on September 17, 2016 and the second payment was received on 

October 15, 2016.
3

have known to be incorrect. OWCP informed appellant that she had the right to submit evidence 

or argument if she disagreed with its findings. It also informed her that she had a right to a 

prerecoupment hearing before an OWCP hearing representative. Additionally, OWCP instructed 

appellant to complete an enclosed overpayment recovery questionnaire (Form OWCP-20) and 

submit supporting financial documentation.

On January 23, 2019 OWCP received appellant’s overpayment action request form and a 

completed Form OWCP-20. Appellant stated that she continued to attend monthly doctor 

appointments and physical therapy twice a week. She listed monthly income of $2,000.00 and 

assets of $500.00 in a checking account. Appellant’s monthly expenses included $800.00 for rent 

or mortgage, $400.00 for food, $200.00 for clothing, $300.00 for utilities, and $200.00 in 

miscellaneous expenses, resulting in a total of $1,100.00 in monthly expenses. No supporting 

financial documentation was submitted.

By decision dated January 29, 2019, OWCP finalized its preliminary determination that 

appellant received an overpayment of compensation in the amount of $13,426.87 for the period 

August 21, 2016 through June 23, 2018, because she returned to full-duty work on August 21, 

2018, but continued to receive compensation for two hours per day through June 23, 2018. It 

determined that appellant was at fault in the creation of the overpayment, and thereby precluded 

from waiver of recovery of the overpayment. OWCP required recovery of the overpayment in full

within 30 days. 

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.4

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

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

in limited specified instances.5 Section 10.500 of OWCP’s regulations provides that compensation 

for wage loss due to disability is only payable for any periods during which an employee’s workrelated medical condition prevents him or her from earning the wages earned before the workrelated injury.6

ANALYSIS -- ISSUE 1

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

of compensation in the amount of $13,426.87 for the period August 21, 2016 through 

June 23, 2018, because she returned to full-duty work on August 21, 2018, but continued to receive 

compensation for two hours per day through June 23, 2018.

 

4 5 U.S.C. § 8102(a).

5

Id. at § 8116(a).

6 20 C.F.R. § 10.500(a).
4

While appellant initially returned to part-time work, her work hours were increased from 

six hours to eight hours on August 20, 2016. However, OWCP continued to pay her wage loss for 

two hours of wage-loss from August 21, 2016 through June 23, 2018. Appellant was not entitled 

to receive two hours of wage-loss compensation after she had returned to an eight-hour workday.7 

Thus, an overpayment of compensation was created.

OWCP calculated appellant’s net compensation paid for the period August 21, 2016 

through June 23, 2018 as $13,426.87. The Board finds that she received an overpayment of 

compensation in the amount of $13,426.87 for the period August 21, 2016 through June 23, 2018.

LEGAL PRECEDENT -- ISSUE 2

Section 8129(b) 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 FECA or would be against equity and good conscience.8 

A claimant who is at fault in the creation of the overpayment is not entitled to waiver.9 On the 

issue of fault, 20 C.F.R. § 10.433(a) 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.

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

a direct 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.10 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.11 Previous cases have held that receiving one erroneous direct 

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

fault in the creation of the overpayment.12

 

7 See notes 4 to 5.

8 5 U.S.C. § 8129(b).

9 See B.R., Docket No. 18-0339 (issued January 24, 2019); K.E., Docket No. 18-0687 (issued October 25, 2018); 

Gregg B. Manston, 45 ECAB 344, 354 (1994); Robert W. O Brien, 36 ECAB 541, 547 (1985).

10 A.B., Docket No. 18-0922 (issued January 3, 2019); Tammy Craven, 57 ECAB 689 (2006).

11 S.D., Docket No. 17-0309 (issued August 7, 2018).

12 D.B., Docket No. 15-0258 (issued February 1, 2016); W.P., 59 ECAB 514 (2008).
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ANALYSIS -- ISSUE 2

The Board finds that appellant was not at fault in the creation of the overpayment for the 

period August 21 through September 17, 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, he 

or she 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 might 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. 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. 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. 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.14

The record establishes that appellant received compensation by direct deposit for the period 

August 21, 2016 through June 23, 2018. The evidence of record does not establish that, on the 

date of the first direct deposit of compensation following the termination of her compensation, 

September 17, 2016, appellant knew or should have known that she was accepting a direct deposit 

to which she was not entitled. The record does not contain any documentation or other evidence 

to demonstrate that appellant had knowledge at the time of the September 17, 2016 direct deposit 

covering the initial period August 21 to September 17, 2016 that the payment was incorrect or that 

a reasonable period of time passed during which she could have reviewed bank statements or been 

informed of the incorrect payment. Thus, the Board finds that when the initial direct deposit was 

made, appellant had no knowledge that this direct deposit was incorrect. Appellant, therefore, 

cannot be found to be at fault in the acceptance of the initial September 17, 2016 direct deposit. 

The case must therefore be remanded for OWCP to determine whether she is entitled to waiver of 

the recovery of the overpayment for the first incorrect compensation payment made on 

September 17, 2016.

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

remaining period of the overpayment of compensation for the period September 18, 2016 through 

June 23, 2018 and, is thereby precluded from waiver of recovery of the overpayment for this 

remaining period. 

By the time OWCP issued the next compensation payment on October 15, 2016 appellant 

should have known that she was no longer entitled to compensation, as she had returned to full-

 

13 K.K., Docket No 19-0978 (issued October 21, 2019); C.K., Docket No. 12-0746 (issued May 1, 2012).

14 See K.K., id.; K.H., Docket No. 06-0191 (issued October 30, 2006).
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time work on August 21, 2016 and the requisite period of time had passed for her review of her 

bank statements. Therefore, the Board finds that appellant was at fault in the creation of the 

remaining period of the overpayment for the period September 18, 2016 through June 23, 2018 as 

she knew or should have known at the time of the second incorrect payment that she was no longer 

entitled to wage-loss compensation for two hours per day. Appellant had the obligation to return 

all payments she received after that.15 The Board, therefore, finds that she was at fault in the 

creation of the remaining period of the overpayment.

On appeal appellant asserts that she was not at fault in the creation of the overpayment as 

she did not know that she was receiving FECA wage-loss compensation that she was not entitled. 

As explained above, she knew or should have known by the direct deposit on October 15, 2016 

that she was no longer entitled to FECA wage-loss compensation for two hours of wage-loss 

compensation per day.

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

of the overpayment for the initial direct deposit made on September 17, 2016. The Board will set 

aside the January 23, 2019 decision regarding the issue of fault as to the initial September 17, 2016

direct deposit and will remand the case for OWCP to determine whether appellant is entitled to 

waiver of recovery for that period of overpayment.

CONCLUSION

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

$13,426.87 for the period August 21, 2016 through June 23, 2018 because she continued to receive 

compensation after she returned to work. The Board further finds that she was not at fault in the 

creation of the overpayment for the period August 21 through September 17, 2016, but was at fault 

in the creation of the overpayment of compensation for the period September 18, 2016 through 

June 23, 2018.

 

15 K.K., supra note 13; Sinclair L. Taylor, 52 ECAB 442 (2001).
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ORDER

IT IS HEREBY ORDERED THAT the January 23, 2019 decision of the Office of 

Workers’ Compensation Programs is affirmed in part and set aside in part. The case is remanded 

for further proceedings consistent with this decision of the Board.

Issued: March 23, 2021

Washington, DC

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Patricia H. Fitzgerald, Alternate Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board