Overpayment of Environmental Differentials

A decision was requested as to whether prevailing rate employees who had been restored to higher grades as a result of an appeal were liable for reimbursement of environmental differential payments made while they were in the lower grade positions which did not include built-in differentials. Where the employees were restored to their former positions because they were improperly downgraded, they are not entitled to the higher grade pay plus the differentials of the lower grade since the differentials, paid in accordance with Federal Personnel Manual Supplement 532-1, are not payable to employees whose pay rates include built-in differentials. If it is determined that the employees were overpaid because the wages of the lower grades plus the environmental differential were in excess of the wages in the higher grade, the employees are indebted to the Government for such overpayments although such overpayments would be subject to waiver.