Use of Compensatory Time To Refund Excess Annual Leave

With respect to a proposal agreed to in labor negotiations, the Department of Labor (DOL) requested an advance decision to determine whether an employee may use compensatory time to refund excess annual leave taken through administrative error, if compensatory time had been available at the time the excess annual leave was taken. Legislation provides that an employee in this situation may elect to refund the amount received for the days of excess leave by lump-sum or installment payments or to have the excess leave carried forward as a charge against later-accruing annual leave, unless repayment is waived under this legislation. DOL believed that this legislation limited its authority to permit the use of compensatory time to liquidate excess leave charges. A review of the legislative history of legislation concerned with the repayment of excess leave charges indicated that its purpose was to permit an employee the option of repaying an overcharge. However, nothing in the legislative history deals with the use of compensatory time as a mode of repaying excess leave credited to employees through administrative error. This legislation is classified as remedial legislation and is to be broadly interpreted to achieve its purpose. Although compensatory time and annual leave are authorized by different statutes and are governed by different regulations, in many respects they are equivalent in their use. In a previous decision, it was held that with an employee's consent, his annual leave balance could be reduced by the amount of compensatory time erroneously granted and used. Although the situation in this case is reversed, the same principle may be applied. Thus, allowing excess annual leave to be charged against compensatory time as proposed comports with the intent of the law, and the proposal may be implemented.