Entitlement to Service Credit by Erroneously Appointed Employee

B-191977(JAB): Published: Mar 9, 1981. Publicly Released: Mar 9, 1981.

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Clarification was requested of a decision in which GAO held that, when it is discovered that an employee has been erroneously appointed, he is entitled to his unpaid compensation and to credit for good faith service for the purposes of accrual of annual leave and payment of lump-sum annual leave. This would be true unless the appointment was made in violation of an absolute statutory prohibition or the employee was guilty of fraud or deliberately misrepresented or falsified a material matter. When an employee served under a voidable appointment, GAO held that he was entitled to earned compensation and all employee benefits including service credit. The case in question was the first GAO decision in which GAO discarded the void/voidable test and intended that the decision would apply to all erroneous appointments except those previously noted. When an individual's appointment is prohibited either by statute or an appropriation act, GAO does not believe that the employee should receive unpaid compensation or service credit. GAO is presently considering whether to continue to apply the de facto rule in cases of erroneous promotions. Under the decision in question, GAO would allow unpaid compensation, including lump-sum leave payments, regardless of whether an individual was separated, so long as there was no statutory bar, fraud, or material representation involved. GAO is concerned with the inconsistency which will result if the Office of Personnel Management does not allow service credit for other purposes for those same individuals.

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