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B-165663, OCT. 7, 1969

B-165663 Oct 07, 1969
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ERRONEOUSLY PLACED IN STEP 2 RATHER THAN STEP 3 OF GRADE UPON PROMOTION BUT IN SUBSEQUENT CORRECTION OF IMPROPER STEP PLACEMENT LIFE INSURANCE DEDUCTION WAS INADVERTENTLY REDUCED RESULTING IN UNPAID PREMIUM OF $192. MAY HAVE OVERPAYMENT WAIVED UNDER PUB. WHEN GROSS AMOUNT DUE EMPLOYEE IS PAID IN PROPER AMOUNT BUT THERE HAS BEEN FAILURE TO WITHHOLD PROPER DEDUCTIONS IN ACCORDANCE WITH BENEFIT PROGRAM ESTABLISHED BY CONGRESS AND EMPLOYEE RECEIVED OVERPAYMENT OF NET PAY. CASE IS BEING TRANSMITTED TO CLAIMS FOR APPROPRIATE WAIVER ACTION. TO WAIVE THE CLAIM OF THE GOVERNMENT AGAINST AN EMPLOYEE OF THE SMALL BUSINESS ADMINISTRATION (SBA) WHO FAILED TO HAVE PROPER LIFE INSURANCE DEDUCTIONS WITHHELD FROM HIS SALARY.

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B-165663, OCT. 7, 1969

DEBT COLLECTIONS--WAIVER--CIVILIAN EMPLOYEES--COMPENSATION OVERPAYMENTS- WITHHOLDING DEDUCTIONS INSUFFICIENT SMALL BUSINESS ADMINISTRATION EMPLOYEE, ERRONEOUSLY PLACED IN STEP 2 RATHER THAN STEP 3 OF GRADE UPON PROMOTION BUT IN SUBSEQUENT CORRECTION OF IMPROPER STEP PLACEMENT LIFE INSURANCE DEDUCTION WAS INADVERTENTLY REDUCED RESULTING IN UNPAID PREMIUM OF $192, MAY HAVE OVERPAYMENT WAIVED UNDER PUB. L. 90-616 FOR, WHEN GROSS AMOUNT DUE EMPLOYEE IS PAID IN PROPER AMOUNT BUT THERE HAS BEEN FAILURE TO WITHHOLD PROPER DEDUCTIONS IN ACCORDANCE WITH BENEFIT PROGRAM ESTABLISHED BY CONGRESS AND EMPLOYEE RECEIVED OVERPAYMENT OF NET PAY, SUCH ERRONEOUS PAYMENT APPROPRIATELY MAY BE CONSIDERED FOR WAIVER. SINCE CLAIMS DIVISION HAS BEEN DELEGATED RESPONSIBILITY OF EXERCISING WAIVER AUTHORITY UNDER STATUTE, CASE IS BEING TRANSMITTED TO CLAIMS FOR APPROPRIATE WAIVER ACTION.

TO MR. SANDOVAL:

WE REFER TO YOUR LETTER OF AUGUST 22, 1969, REQUESTING ADVICE WHETHER IT WOULD BE PROPER UNDER PUBLIC LAW 90-616, APPROVED OCTOBER 21, 1968, TO WAIVE THE CLAIM OF THE GOVERNMENT AGAINST AN EMPLOYEE OF THE SMALL BUSINESS ADMINISTRATION (SBA) WHO FAILED TO HAVE PROPER LIFE INSURANCE DEDUCTIONS WITHHELD FROM HIS SALARY. THE PERTINENT FACTS ARE SET FORTH IN YOUR LETTER AS FOLLOWS: ,MR. JOHN A. MAY, JR., AN EMPLOYEE OF THE SMALL BUSINESS ADMINISTRATION IN OUR MIDDLE ATLANTIC AREA OFFICE, APPLIED FOR $10,000 OPTIONAL LIFE INSURANCE AND AUTHORIZED THE DEDUCTION FOR ADDITIONAL PREMIUMS FROM HIS PAY. HIS PAYROLL CHANGE SLIP FOR THE PERIOD ENDING MARCH 9, 1968, REFLECTED THE INCREASE IN HIS LIFE INSURANCE DEDUCTION FROM $3.50 TO $10.40 AND CLEARLY STATED DEDUCTION CHANGE- AND - FEGLI INCREASE BY PUBLIC LAW 90-206.- "A MONTH EARLIER (FEBRUARY 1968), MR. MAY RECEIVED A PROMOTION AND ERRONEOUSLY WAS PLACED IN GS-13, STEP 2, WHEREAS HE SHOULD HAVE BEEN IN GS-13, STEP 3. IN SUBSEQUENTLY CORRECTING THE IMPROPER STEP PLACEMENT, THE LIFE INSURANCE DEDUCTION WAS INADVERTENTLY REDUCED FROM $10.40 TO $4.68 INSTEAD OF INCREASING THIS DEDUCTION TO $10.68. THE PAYROLL CHANGE SLIP FURNISHED HIM ON THIS CORRECTION (FOR THE PAY PERIOD ENDING MARCH 23, 1968) OF HIS STEP 2 TO STEP 3 REFLECTED A REDUCED LIFE INSURANCE DEDUCTION AMOUNT BUT THE PAYROLL CHANGE SLIP CLEARLY STATED -OTHER SALARY CHANGE- AND -NORMAL PAY.- THIS PAYROLL CHANGE SLIP DID NOT STATE -DEDUCTION CHANGE.- "INADEQUATE DEDUCTIONS, THEREFORE, RESULTED FOR OPTIONAL LIFE INSURANCE FOR THE PERIOD MARCH 10, 1968, THROUGH MARCH 23, 1969. THE UNPAID PREMIUM FOR THE PERIOD IS $162.'

OUR DECISIONS OF JANUARY 30 AND JUNE 11, 1969 (B-165663), RECOGNIZED THAT UNDER APPROPRIATE CIRCUMSTANCES OVERPAYMENTS TO AN EMPLOYEE RESULTING FROM THE FAILURE BY THE PAYING OFFICE TO WITHHOLD APPROPRIATE RETIREMENT, LIFE INSURANCE, AND HEALTH INSURANCE CONTRIBUTIONS MAY BE WAIVED UNDER THE AUTHORITY OF THAT LAW (PUBLIC LAW 90-616). WHEN THE GROSS PAY DUE AN EMPLOYEE IS PAID IN THE PROPER AMOUNT, BUT THERE HAS BEEN A FAILURE TO WITHHOLD THE PROPER DEDUCTIONS IN ACCORDANCE WITH A BENEFIT PROGRAM ESTABLISHED BY THE CONGRESS THE EMPLOYEE RECEIVES AN OVERPAYMENT OF NET PAY. IN ANOTHER SITUATION THE EMPLOYEE MAY RECEIVE AN OVERPAYMENT OF GROSS AND NET PAY IF THE EMPLOYEE'S PAY IS NOT REDUCED BUT AT THE SAME TIME THE PROPER AMOUNT OF DEDUCTIONS REQUIRED UNDER THE STATUTORY PROGRAMS ARE TRANSMITTED TO THE CIVIL SERVICE COMMISSION. IN SUCH A CASE IT IS CLEAR THAT THE ERRONEOUS PAYMENT TO THE EMPLOYEE COULD BE CONSIDERED FOR WAIVER UNDER PUBLIC LAW 90-616. HAVING REGARD FOR THE BROAD AND BENEFICIAL PURPOSES OF PUBLIC LAW 90 616 OUR DECISIONS HAVE TAKEN THE VIEW, AS INDICATED ABOVE, THAT ERRONEOUS PAYMENTS OF PAY RESULTING FROM A FAILURE TO WITHHOLD DEDUCTIONS IN ACCORDANCE WITH APPLICABLE STATUTORY BENEFIT PROGRAMS, WHETHER IN THE NET OR GROSS AMOUNT OR BOTH, APPROPRIATELY MAY BE CONSIDERED FOR WAIVER UNDER THAT LAW. WE HEREBY AFFIRM THOSE DECISIONS.

THE SPECIFIC CASE OF MR. JOHN A. MAY, JR., REFERRED TO IN YOUR LETTER, IS BEING TRANSMITTED TO OUR CLAIMS DIVISION FOR APPROPRIATE WAIVER ACTION SINCE THAT DIVISION HAS BEEN DELEGATED THE RESPONSIBILITY OF EXERCISING THE WAIVER AUTHORITY UNDER THE STATUTE AND SINCE MR. MAY'S CASE HAS BEEN SENT HERE BY YOUR ADMINISTRATION BECAUSE OF THE DOUBT EXISTING AS TO THE PROPRIETY OF WAIVER. SEE SECTION 202.3/D) OF THE STANDARDS FOR WAIVER, 33 FED. REG. 20002. YOU WILL BE ADVISED OF THE DISPOSITION OF MR. MAY'S REQUEST FOR WAIVER AT A LATER DATE.

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