United States Department of Labor

Employees’ Compensation Appeals Board

__________________________________________

A.J., Appellant

and

DEPARTMENT OF VETERANS AFFAIRS, VA

MEDICAL CENTER, Battle Creek, MI, 

Employer

__________________________________________

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Docket No. 22-0820

Issued: May 9, 2023

Appearances: Case Submitted on the Record

Alan J. Shapiro, Esq., for the appellant1

Office of Solicitor, for the Director

DECISION AND ORDER

Before:

PATRICIA H. FITZGERALD, Deputy Chief Judge

JANICE B. ASKIN, Judge

VALERIE D. EVANS-HARRELL, Alternate Judge

JURISDICTION

On May 2, 2022 appellant, through counsel, filed a timely appeal from a February 25, 2022 

merit decision of the Office of Workers’ Compensation Programs (OWCP). 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.

1

In all cases in which a representative has been authorized in a matter before the Board, no claim for a fee for legal 

or other service performed on appeal before the Board is valid unless approved by the Board. 20 C.F.R. § 501.9(e). 

No contract for a stipulated fee or on a contingent fee basis will be approved by the Board. Id. An attorney or 

representative’s collection of a fee without the Board’s approval may constitute a misdemeanor, subject to fine or 

imprisonment for up to one year or both. Id.; see also 18 U.S.C. § 292. Demands for payment of fees to a 

representative, prior to approval by the Board, may be reported to appropriate authorities for investigation.

2

5 U.S.C. § 8101 et seq.
2

ISSUES

The issues are: (1) whether OWCP properly determined that appellant forfeited her 

entitlement to compensation for the period October 27, 2019 through May 17, 2021, as she 

knowingly failed to report her employment activities and earnings, pursuant to 5 U.S.C. 

§ 8106(b)(2); (2) whether OWCP properly determined that appellant received an overpayment of 

compensation in the amount of $38,344.37 for the period October 27, 2019 through May 17, 2021 

as she forfeited her entitlement to compensation for that period; and (3) whether OWCP properly 

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

of the overpayment.

FACTUAL HISTORY

On September 6, 2019 appellant, then a 36-year-old advanced medical support assistant, 

filed a traumatic injury claim (Form CA-1) alleging that on September 5, 2019 she sustained a left 

knee injury when she fell on her left hand and knee after the treadmill she was jogging on came to 

an abrupt stop while in the performance of duty. OWCP accepted the claim for left shoulder and 

arm strain, left knee contusion, left shoulder and arm injury of unspecified nerve, left leg strain,

left shoulder complete rotator cuff tear or rupture, left shoulder impingement syndrome, and 

aggravation of cervical disc disorder at C5-6 with radiculopathy. On February 6, 2020 appellant 

underwent OWCP-authorized left shoulder trans arthroscopic surgery, subacromial 

decompression, and rotator cuff repair. On November 7 and 27, December 9 and 18, 2019,

January 6, February 16, March 2, 16, and 30, April 12, 26, and May 11, 2020, appellant filed 

claims for wage-loss compensation (Form CA-7) for leave without pay for continuous dates of 

total and partial disability during the period October 27, 2019 through May 9, 2020. Each Form 

CA-7 included a section for the injured worker to certify any employment earnings/activity. The 

forms requested information regarding any and all earnings from employment; including any 

employment for which a salary, wages, income, sales commissions, or payment of any kind was 

received during the period(s) claimed. This was to include self-employment, odd jobs, 

involvement in business enterprises, as well as service with the military. The forms explicitly 

advised that fraudulently concealing employment, or failing to report income, may result in 

forfeiture of compensation benefits and/or criminal prosecution. The CA-7 forms then provided 

boxes for the employee to mark “Yes” or “No,” and spaces for the name and address of the 

business, the dates worked, and the type of work. The forms also contained certification clauses 

as to the truthfulness of the statements made under penalty of criminal prosecution for false or 

misleading statements. On her CA-7 forms, appellant marked the “No” boxes.

OWCP paid appellant wage-loss compensation on the supplemental rolls from October 19, 

2019 through April 25, 2020; on the periodic rolls from April 26, 2020 through April 24, 2021;

and on the supplemental rolls as of April 25, 2021. 

In a report of contact dated May 12, 2021, the employing establishment noted that it was 

rumored that appellant was working at a private sector hospital. It further noted that it 

subsequently received a May 7, 2021 email that confirmed her employment with a private sector 

hospital. 
3

On May 13, 2021 the employing establishment requested that OWCP terminate appellant’s 

wage-loss compensation, investigate her claim for fraud, and determine whether her compensation 

should be forfeited and whether she received an overpayment of compensation and was at fault in 

the creation of the overpayment based on her failure to report her concurrent employment at a 

private sector hospital. 

On May 18, 2021 appellant informed OWCP that she was an on-call employee at a private 

sector hospital. 

In a compensation termination sheet dated May 18, 2021, OWCP calculated that appellant 

was underpaid in the amount of $1,915.24 for the period April 25 through May 17, 2021. 

Additionally, it determined that she was not entitled to further wage-loss compensation after that 

date as she had returned to full-time employment with no wage loss. 

By letter dated May 18, 2021, OWCP requested that the Social Security Administration 

provide a listing of appellant’s employers and yearly wages for the period September 5, 2019 

through May 18, 2021.

On May 25, 2021 OWCP received W-2 Wage and Tax statements for 2019 and 2020 and 

payroll records for the period September 22, 2019 through July 24, 2021 from appellant’s private 

sector employer.

On June 22, 2021 appellant signed a Form EN-1032 indicating that she was employed as 

an on-call, after-hours staffing coordinator with a private sector hospital through the date of her

Form EN-1032. She reported monthly income of $900.00.

On July 27, 2021 OWCP notified appellant of its preliminary overpayment determination 

that she received an overpayment of compensation in the amount of $21,787.39 because she 

received FECA compensation payments concurrent with earnings from a private sector hospital

for the period October 27, 2019 through May 17, 2021. It further advised her of its preliminary 

determination that she was at fault in the creation of the overpayment. OWCP also forwarded an 

overpayment action request form and an overpayment recovery questionnaire (Form OWCP-20) 

and requested that appellant submit supporting financial documentation, including income tax 

returns, bank account statements, bills and cancelled checks, pay slips, and any other records to 

support her reported income and expenses. Additionally, it notified her that, within 30 days of the 

date of the letter, she could request a final decision based on the written evidence, or a 

prerecoupment hearing. 

In an August 24, 2021 overpayment action request form, appellant requested a 

prerecoupment hearing before a representative of OWCP’s Branch of Hearings and Review. She

requested waiver of recovery of the overpayment, contending that she was unaware that she was 

required to report her employment with a private sector hospital, and that repayment of the 

overpayment would cause major financial hardship. Appellantsubmitted a Form OWCP-20 listing 

her monthly income as $3,300.00 and monthly expenses as $3,256.00. She noted that she had no 

assets. Appellant did not submit any supporting financial documentation. 

On August 31, 2021 OWCP commenced payment of wage-loss compensation based on its 

determination of her loss of wage-earning capacity. 
4

By decision dated September 8, 2021, OWCP finalized its preliminary overpayment 

determination that appellant received an overpayment of compensation in the amount of 

$21,787.39 for the period October 27, 2019 through May 17, 2021. It found that she was at fault 

in the creation of the overpayment, thereby precluding waiver of recovery of the overpayment. 

OWCP required recovery of the overpayment at the rate of 25 percent of wage-loss compensation 

every 28 days from appellant’s continuing compensation payments commencing May 18, 2021. 

By decision dated September 29, 2021, OWCP vacated the September 8, 2021 

overpayment decision, finding that appellant had filed a timely request for a prerecoupment 

hearing before an OWCP hearing representative regarding the July 27, 2021 preliminary 

overpayment determination.

On October 10, 2021 appellant returned to full-time modified-duty work at the employing 

establishment. 

Following a preliminary review, by decision dated December 3, 2021, an OWCP hearing 

representative reversed the July 27, 2021 preliminary overpayment determination. The hearing 

representative found that, no overpayment was created as appellant was a full-time employee of 

the employing establishment, therefore, her private sector dissimilar earnings were not to be 

included in her OWCP pay rate, nor were they to be used to reduce compensation based on actual 

earnings. OWCP improperly included her private sector employment earnings to determine her 

weekly pay rate for FECA compensation and used her actual earnings to reduce her compensation.

Appellant’s private sector earnings could, however, be used to establish her ability to work full 

time. Office’s hearing representative further found that OWCP improperly began recovery of the 

overpayment prior to the issuance of a final overpayment decision and, thus, she was entitled to 

wage-loss compensation. The hearing representative remanded the case to OWCP to determine 

appellant’s wage-earning capacity, and whether she forfeited her entitlement to compensation

because she knowingly failed to report her earnings from outside employment for the period 

October 27, 2019 through May 17, 2021. 

On remand, OWCPon January 19, 2022 reimbursed appellant $1,979.48 that was deducted 

from her continuing compensation paymentsfor the period October 19, 2019 through September 4, 

2021 to recover the $21,787.39 overpayment. 

By decision dated January 19, 2022, OWCP determined that appellant forfeited her 

entitlement to compensation for the period October 27, 2019 through May 17, 2021, pursuant to 

section 8106(b)(2) of FECA,

3 because she knowingly failed to report earnings and employment on 

CA-7 forms covering this period. It foundthat she was employed at a private sector hospital during 

the relevant period and noted that the wording of the CA-7 forms advised her of the need to report 

earnings from such employment.4

3

Id. at § 8106(b)(2).

4

In a March 7, 2022 letter, appellant’s private sector employer indicated that her on-call staffing coordinator 

position would be eliminated, effective March 13, 2022. 
5

On January 25, 2022 OWCP notified appellant of its preliminary overpayment 

determination that she received an overpayment of compensation in the amount of $38,344.37

because she forfeited her compensation for the period October 27, 2019 through May 17, 2021. It 

further advised her of its preliminary determination that she was at fault in the creation of the 

overpayment. OWCP again forwarded an overpayment action request form and a Form OWCP20, and requested that appellant submit supporting financial documentation, including income tax 

returns, bank account statements, bills and cancelled checks, pay slips, and other records to support 

her reported income and expenses. Additionally, it notified her that, within 30 days of the date of 

the letter, she could request a final decision based on the written evidence, or a prerecoupment 

hearing. No response was received. 

On January 26, 2022 appellant, through counsel, requested a telephonic hearing before a 

representative of OWCP’s Branch of Hearing and Review regarding the January 19, 2022 

forfeiture decision. 

By decision dated February 25, 2022, OWCP finalized its January 25, 2022 preliminary 

overpayment determination, finding that appellant received an overpayment of compensation in 

the amount of $38,344.37 for the period October 27, 2019 through May 17, 2021 and that she was 

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

overpayment. It required recovery of the overpayment in full within 30 days. 

LEGAL PRECEDENT -- ISSUE 1

Section 8106(b) of FECA provides that an employee who fails to make an affidavit or 

report when required or knowingly omits or understates any part of his or her earnings, forfeits his 

or her right to compensation with respect to any period for which the a ffidavit or report was 

required.5 An employee, however, can only be subjected to the forfeiture provision of 5 U.S.C. 

§ 8106 if he or she knowingly failed to report employment or earnings. It is not enough to merely 

establish that there were unreported earnings.6 OWCP’s procedures recognize that, forfeiture is a 

penalty,7 and, as a penalty provision, it must be narrowly construed. 8 The term “knowingly” is 

defined within OWCP’s regulations as with knowledge, consciously, willfully, or intentionally. 9

OWCP’s regulations define earnings from employment or self-employment as: (1) gross 

earnings or wages before any deductions and includes the value of subsistence, quarters, 

reimbursed expenses and any other goods or services received in kind as remuneration; or (2) a 

reasonable estimate of the cost to have someone else perform the duties of an individual who 

5

Supra note 2 at § 8106(b).

6 T.G., Docket No. 19-0051 (issued August 20, 2019); P.H., Docket No. 17-1362 (issued March 13, 2018).

7 Federal (FECA) Procedure Manual, Part 2 -- Claims, Forfeiture, Chapter 2.1402.8 (May 2012). See also M.G., 

Docket No. 20-0735 (issued October 23, 2020); T.P., Docket No. 17-0717 (issued April 11, 2018); ChristineP. 

Burgess, 43 ECAB 449 (1992).

8 Christine P. Burgess, id.

9

20 C.F.R. § 10.5(n); R.A., Docket No. 18-0406 (issued January 28, 2019); I.S., Docket No. 17-0897 (issued 

April 9, 2018); Anthony A. Nobile, 44 ECAB 268 (1992).
6

accepts no remuneration.10 Neither lack of profits nor the characterization of the duties as a hobby

removes an unremunerated individual’s responsibility to report the estimated cost to have someone 

else perform his or her duties.11

ANALYSIS -- ISSUE 1

The Board finds that OWCP properly determined that appellant forfeited her entitlement 

to compensation for the period October 27, 2019 through May 9, 2020 as she knowingly failed to 

report her employment activities and earnings, pursuant to 5 U.S.C. § 8106(b)(2).

Appellant has acknowledged on her June 22, 2021 Form CA-1032 that she was employed 

as an on-call, after-hours staffing coordinator with a monthly income of $900.00 at a private sector 

hospital from July 2012 and continuing. OWCP also received her W-2 Wage and Tax statements 

for 2019 and 2020 and payroll records for the period September 22, 2019 through July 24, 2021 

indicating that she had earnings from a private sector hospital. The evidence of record establishes 

that appellant had earnings and employment outside of her federal employment during the period 

October 27, 2019 through May 9, 2020. Appellant, however, omitted these earnings and 

employment activities on the CA-7 forms datedNovember 7 and 27 and December 9 and 18, 2019,

January 6, February 16, March 2, 16, and 30, April 12 and 26, and May 11, 2020, covering the 

period October 27, 2019 through May 9, 2020.

As noted above, an employee can only be subjected to the forfeiture penalty provision of 

5 U.S.C. § 8106(b) if he or she knowingly failed to report employment or earnings, and the term 

knowingly is defined within OWCP’s regulations as with knowledge, consciously, willfully, or 

intentionally.12

The explicit language of the CA-7 forms advised appellant that she should report her 

employment activities on the forms. Appellant’s signing of the strongly-worded certification 

clauses on the CA-7 forms further shows that she was aware of the materiality of her failure to 

report her employment. As the CA-7 forms signed by her informed her that she must report 

employment, this evidence is persuasive evidence that she knowingly failed to report earnings and 

employment information.13

Under these circumstances, the Board concludes that appellant “knowingly” omitted her 

earnings under section 8106(b)(2) of FECA by failing to report her employment activities and 

earnings in self-employment on the applicable CA-7 forms covering the period October 27, 2019 

through May 9, 2020. Accordingly, the Board finds that OWCP properly determined that she 

forfeited her right to compensation for the period October 27, 2019 through May 9, 2020. 

10 Id. at § 10.5(g).

11 Id.

12 See supra notes 6 through 10.

13 K.B., Docket No. 21-0604 (issued January 14, 2022); T.G., Docket No. 16-1379 (issued August 4, 2017); K.Z., 

Docket No. 12-0784 (issued August 27, 2012).
7

The Board further finds, however, that OWCP improperly determined that appellant 

forfeited her right to compensation for the period May 10, 2020 through May 17, 2021. 

The case record does not contain CA-7 forms requiring the reporting of 

earnings/employment activity covering the period May 10, 2020 through May 17, 2021. As the 

case record does not establish that appellant made omissions or misrepresentations on CA-7 forms 

regarding earnings/employment activities for the period May 10, 2020 through May 17, 2021, the 

Board finds that OWCP improperly found forfeiture of entitlement to compensation for that 

period.14

LEGAL PRECEDENT -- ISSUE 2

Under 5 U.S.C. § 8106(b), compensation forfeited under this subsection, if already paid, 

shall be recovered under section 8129 of this title, unless recovery is waived under that section. 15

Section 10.529 of OWCP’s implementing regulations provides as follows:

“(a) If an employee knowingly omits or understates any earnings or work activity 

in making a report, he or she shall forfeit the right to compensation with respect to 

any period for which the report was required. A false or evasive statement, 

omission, concealment or misrepresentation with respect to employment activity or 

earnings in a report may also subject an employee to criminal prosecution.

“(b) Where the right to compensation is forfeited, OWCP shall recover any 

compensation already paid for the period of forfeiture pursuant to 5 U.S.C. § 8129 

and other relevant statues.”

16

ANALYSIS -- ISSUE 2

The Board finds that appellant received an overpayment of compensation for the period 

October 27, 2019 through May 9, 2020, resulting from her forfeiture.

As found above, appellant forfeited her right to compensation for the period October 27,

2019 through May 9, 2020. As noted above, OWCP may declare an overpayment of compensation 

for any compensation already paid for the period of a forfeiture of compensation. 17 If a claimant 

has any employment, including self-employment or involvement in a business enterprise, during 

a period covered by a Form CA-7, which he or she fails to report, a claimant is not entitled to 

compensation for any portion of the period covered by the report, even though he or she may not 

14 See K.W., Docket No. 22-1088 (issued December 7, 2022); K.B., id.

15 20 C.F.R. § 10.5(n); R.A., Docket No. 18-0406 (issued January 28, 2019); I.S., Docket No. 17-0897 (issued 

April 9, 2018); Anthony A. Nobile, 44 ECAB 268 (1992).

16 Id. at § 10.529; see also G.G., Docket No. 14-1848 (issued August 4, 2016).

17 Id.
8

have had earnings during a portion of that period.18 The Board, accordingly, finds that fact of the 

overpayment has been established.19 

With regard to the period of the overpayment, in its February 25, 2022 decision, OWCP 

finalized the overpayment for the period October 27, 2019 through May 17, 2021. However, as 

found above, it properly determined that appellant forfeited her right to compensation for the 

period October 27, 2019 through May 9, 2020, but improperly determined that she forfeited her 

right to compensation for the period May 10, 2020 through May 17, 2021. The period of the 

overpayment is, therefore, modified to October 27, 2019 through May 9, 2020.

Based on the foregoing, the Board further finds that the case is not in posture for decision 

with regard to the amount of the overpayment. The case must, therefore, be remanded for OWCP 

to properly calculate the amount of the overpayment of compensation.20 Following this and other 

such further development as deemed necessary, OWCP shall issue a de novo decision.

LEGAL PRECEDENT -- ISSUE 3

Section 8129(b) of FECA provides that, “[a]djustment 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.”

21

Section 10.433 of OWCP’s implementing regulations provides that, in determining 

whether a claimant is at fault, it will consider all pertinent circumstances. An individual is at 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.”

22

To determine if an individual was at fault with respect to the creation of an overpayment, 

OWCP examines the circumstances surrounding the overpayment. The degree of care expected 

18 See id.

19 See J.N., Docket No. 13-1761 (issued July 1, 2014).

20 See A.R., Docket No. 22-0750 (issued September 28, 2022). 

21 5 U.S.C. § 8129; see A.S., Docket No. 17-0606 (issued December 21, 2017); LindaE. Padilla, 45 ECAB 

768 (1994).

22 20 C.F.R. § 10.433(a); see also K.F., Docket No. 19-1016 (issued February 14, 2020); Sinclair L. Taylor, 52 

ECAB 227 (2001).
9

may vary with the complexity of those circumstances and the individual’s capacity to realize that 

he or she is being overpaid.23

ANALYSIS -- ISSUE 3

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

of the overpayment for the period October 27, 2019 through May 9, 2020, thereby precluding 

waiver of recovery of the overpayment.

The record establishes that appellant forfeited her entitlement to compensation benefits 

because she had unreported employment earnings during the period October 27, 2019 through 

May 9, 2020 and knowingly failed to furnish this material information to OWCP. The CA-7 forms 

on which she omitted her earnings with a private sector hospital, included a strongly-worded

certification clause which explicitly advised that failure to report employment earnings/activity 

may result in forfeiture of compensation benefits and/or criminal prosecution. By signing these

forms, appellant is deemed to have acknowledged her duty to report her employment 

earnings/activity during the period of question. She, however, did not report her earnings from the 

private sector hospital and, thus, failed to furnish information, which she knew or should have 

known to be material to OWCP.24 The Board, thus, finds that appellant is at fault in the creation 

of the overpayment and is, thereby, precluded from waiver of recovery.

CONCLUSION

The Board finds that OWCP properly determined that appellant forfeited her entitlement 

to compensation for the period October 27, 2019 through May 9, 2020 as she knowingly failed to 

report her employment activities and earnings, pursuant to 5 U.S.C. § 8106(b)(2). The Board 

further finds, however, that OWCP improperly determined that she forfeited her right to 

compensation for the period May 10, 2020 through May 17, 2021. The Board also finds that 

appellant received an overpayment of compensation for the period October 27, 2019 through 

May 9, 2020, resulting from her forfeiture. However, the case is not in posture for decision with 

regard to the amount of the overpayment. The Board additionally finds that OWCP properly 

determined that appellant was at fault in the creation of the overpayment for the period October 27, 

2019 through May 9, 2020, thereby precluding waiver of recovery of the overpayment.

23 Id. at § 10.433(b); J.C., Docket No. 19-0911 (issued March 25, 2021); Duane C. Rawlings, 55 ECAB 366 (2004).

24 See G.Z., Docket No. 16-0892 (issued May 19, 2017).
10

ORDER

IT IS HEREBY ORDERED THAT the February 25, 2022 decision of the Office of 

Workers’ Compensation Programs is reversed in part, affirmed in part, and set aside in part. The 

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

Issued: May 9, 2023

Washington, DC

Patricia H. Fitzgerald, Deputy Chief Judge

Employees’ Compensation Appeals Board

Janice B. Askin, Judge

Employees’ Compensation Appeals Board

Valerie D. Evans-Harrell, Alternate Judge

Employees’ Compensation Appeals Board