B-222340, B-223101, SEP 22, 1986

B-222340,B-223101: Sep 22, 1986

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WERE CONVERTED FROM A TWO- TO A THREE-SHIFT SCHEDULE RESULTING IN A CHANGE FROM 72-HOUR TO 56 HOUR WORKWEEK. SCHEDULE CHANGE AND PAYMENT OF OVERTIME WERE FOUND TO BE IMPROPER. WAIVER IS DENIED BECAUSE KNOWLEDGE BY FIREFIGHTERS THAT THIRD-SHIFT WOULD NOT BE STAFFED. PAY WOULD INCREASE BY $300 PER PAY PERIOD WAS SUFFICIENT TO DEMONSTRATE THAT FIREFIGHTERS KNEW OR SHOULD HAVE KNOWN PAYMENTS WERE ERRONEOUS. SUPERVISORY FIREFIGHTERS - WAIVER OF COLLECTION OF ERRONEOUS OVERTIME PAYMENTS: THIS DECISION IS IN RESPONSE TO REQUESTS FOR RECONSIDERATION OF TWO DENIALS BY OUR CLAIMS GROUP OF WAIVER OF COLLECTION OF ERRONEOUS PAYMENTS OF OVERTIME COMPENSATION. THE REQUESTS ARE MADE BY TWO SUPERVISORY FIREFIGHTERS FROM THE NAVAL AIR STATION (NAS).

B-222340, B-223101, SEP 22, 1986

DEBT COLLECTIONS - WAIVER - CIVILIAN EMPLOYEES - COMPENSATION OVERPAYMENTS - COLLECTION NOT AGAINST EQUITY AND GOOD CONSCIENCE, ETC. DIGEST: SUPERVISORY FIREFIGHTERS, AT THEIR REQUEST, WERE CONVERTED FROM A TWO- TO A THREE-SHIFT SCHEDULE RESULTING IN A CHANGE FROM 72-HOUR TO 56 HOUR WORKWEEK. HOWEVER, BECAUSE PERSONNEL CEILINGS PREVENTED STAFFING OF THIRD SHIFT, SUPERVISORY FIREFIGHTERS CONTINUED TO WORK SAME 72-HOUR WORKWEEK, EARNING 16 HOURS OF OVERTIME COMPENSATION UNDER TITLE 5 OF UNITED STATES CODE. THIS OVERTIME RESULTED IN $300 PER PAY PERIOD INCREASE IN PAY. SCHEDULE CHANGE AND PAYMENT OF OVERTIME WERE FOUND TO BE IMPROPER. SUPERVISORY FIREFIGHTERS SEEK WAIVER OF COLLECTION UNDER 5 U.S.C. SECTION 5584. WAIVER IS DENIED BECAUSE KNOWLEDGE BY FIREFIGHTERS THAT THIRD-SHIFT WOULD NOT BE STAFFED, WORKWEEK WOULD REMAIN THE SAME, AND PAY WOULD INCREASE BY $300 PER PAY PERIOD WAS SUFFICIENT TO DEMONSTRATE THAT FIREFIGHTERS KNEW OR SHOULD HAVE KNOWN PAYMENTS WERE ERRONEOUS. ADDITIONALLY, UNDER ALL CIRCUMSTANCES PRESENTED, COLLECTION OF ERRONEOUS PAYMENTS WOULD NOT BE AGAINST EQUITY AND GOOD CONSCIENCE.

SUPERVISORY FIREFIGHTERS - WAIVER OF COLLECTION OF ERRONEOUS OVERTIME PAYMENTS:

THIS DECISION IS IN RESPONSE TO REQUESTS FOR RECONSIDERATION OF TWO DENIALS BY OUR CLAIMS GROUP OF WAIVER OF COLLECTION OF ERRONEOUS PAYMENTS OF OVERTIME COMPENSATION. THE REQUESTS ARE MADE BY TWO SUPERVISORY FIREFIGHTERS FROM THE NAVAL AIR STATION (NAS), MEMPHIS, TENNESSEE. SINCE THE FACTS AND CIRCUMSTANCES SURROUNDING THE ERRONEOUS PAYMENTS ARE THE SAME, AND THE ARGUMENTS MADE BY THE EMPLOYEES ARE SUBSTANTIALLY THE SAME, WE WILL DEAL WITH BOTH CASES IN THIS DECISION. FOR THE REASONS SET FORTH BELOW, THE DENIALS OF WAIVER BY OUR CLAIMS GROUP ARE SUSTAINED.

BACKGROUND

PRIOR TO JUNE 29, 1982, BOTH EMPLOYEES INVOLVED HERE WERE SUPERVISORY FIREFIGHTERS AT NAS MEMPHIS AND WERE CONSIDERED TO BE NONEXEMPT UNDER THE FAIR LABOR STANDARDS ACT, AS AMENDED, 29 U.S.C. SECTIONS 201 ET SEQ. (1982) (FLSA). AS NONEXEMPT EMPLOYEES UNDER FLSA, THEY WERE ENTITLED TO HAVE THEIR OVERTIME COMPENSATION CALCULATED UNDER BOTH THE PROVISIONS OF THE FLSA AND TITLE 5 OF THE U.S.C. AND TO BE PAID UNDER THE METHOD THAT PAID THEM THE GREATER TOTAL BENEFIT. THEIR STATUS UNDER THE FLSA WAS REEVALUATED AND, EFFECTIVE JUNE 29, 1982, THEY WERE RULED TO BE EXEMPT UNDER THE FLSA. AS EXEMPT EMPLOYEES UNDER FLSA, THEY WOULD NO LONGER BE ELIGIBLE TO RECEIVE OVERTIME COMPENSATION CALCULATED UNDER FLSA; THEY WOULD BE ENTITLED ONLY TO SUCH OVERTIME COMPENSATION AS THEY MIGHT EARN UNDER THE PROVISIONS OF TITLE 5.

AS A RESULT OF THE LOSS OF ELIGIBILITY FOR FLSA OVERTIME, THE EMPLOYEES' GROSS EARNINGS WERE REDUCED BY APPROXIMATELY $100 PER PAY PERIOD. ADDITIONALLY, A PAY INVERSION WAS CREATED IN THAT THESE SUPERVISORY FIREFIGHTERS WERE PLACED IN THE POSITION OF POSSIBLY EARNING LESS THAN SOME OF THEIR SENIOR, LOWER-GRADED, BUT FLSA NONEXEMPT SUBORDINATES.

ONE OF THE APPELLANTS CONTACTED THE DEPUTY PERSONNEL OFFICER TO DISCUSS THE LOSS OF INCOME AND THE CONCOMITANT PAY INVERSION. WHILE THE RECORD IS NOT AS CLEAR AS IT COULD BE CONCERNING THE SEQUENCE OF SUBSEQUENT EVENTS AND THE EXACT LEVELS OF PARTICIPATION BY VARIOUS PARTIES, IT WAS DECIDED THAT THE FIREFIGHTERS' PAY PROBLEMS COULD BE SOLVED BY CHANGING THE TOURS- OF-DUTY FROM 72 HOURS PER WEEK TO 56 HOURS PER WEEK. THIS WAS THE SAME TOUR-OF-DUTY AS WAS OBSERVED BY THE FIRE CHIEF. THE CHANGE WAS ACCOMPLISHED BY CREATING A THIRD SHIFT FOR THE SUPERVISORY FIREFIGHTERS, EVEN THOUGH THE NONSUPERVISORY FIREFIGHTERS WERE TO REMAIN IN A TWO-SHIFT ALIGNMENT. ALTHOUGH A THIRD SHIFT WAS CREATED, THIS SHIFT WAS NEVER STAFFED BECAUSE OF PERSONNEL CEILING LIMITATIONS, AND THE APPELLANTS CONTINUED TO WORK THE SAME HOURS THEY HAD WORKED BEFORE, 72 HOURS PER WEEK.

UNDER THE NEW SCHEDULE OF A 56-HOUR WORKWEEK AND 16 HOURS OF OVERTIME FOR THE 72-HOUR TOUR-OF-DUTY, THE SUPERVISORY FIREFIGHTERS EARNED OVERTIME COMPENSATION UNDER THE PROVISIONS OF TITLE 5. THIS OVERTIME COMPENSATION RESULTED IN AN INCREASE IN PAY FOR EACH OF THE APPELLANTS HERE OF APPROXIMATELY $300 PER PAY PERIOD ABOVE WHAT THEY HAD BEEN EARNING WHEN THEY WERE RECEIVING FLSA OVERTIME COMPENSATION. THIS TOUR-OF-DUTY CHANGE WAS ACCOMPLISHED BY MEMORANDUM OF AUGUST 20, 1982, WHICH ALSO MADE THIS TOUR-OF-DUTY CHANGE RETROACTIVE TO JULY 11, 1982. THE RECORD ALSO CONTAINS A MEMORANDUM OF SEPTEMBER 8, 1982, FROM THE SUPERVISORY FIREFIGHTERS INVOLVED, INCLUDING BOTH APPELLANTS HERE, REQUESTING THE CHANGE IN THEIR TOURS-OF-DUTY.

THIS TOUR-OF-DUTY PATTERN CONTINUED UNTIL THE SPRING OF 1983 WHEN A NEW FIRE CHIEF WAS APPOINTED AND A COMMAND INSPECTION OF NAS MEMPHIS WAS HELD. BOTH THE NEW CHIEF AND THE FIRE CHIEF INSPECTING THE FIREFIGHTING OPERATION BELIEVED THAT THE THREE-SHIFT ARRANGEMENT WAS INAPPROPRIATE. THEY BOTH STATED THAT SUCH AN ARRANGEMENT WAS USED ONLY IN LARGER, CONSOLIDATED NAVAL FIRE DEPARTMENTS AND THAT A TWO-SHIFT PATTERN WAS THE STANDARD ORGANIZATION THROUGHOUT THE DEPARTMENT OF DEFENSE (DOD). AS A RESULT OF THESE CRITICISMS AND A DOD HOTLINE COMPLAINT ABOUT OVERTIME ABUSE AT NAS MEMPHIS, AN INFORMAL INVESTIGATING BOARD WAS CONVENED TO THOROUGHLY EXAMINE THE ENTIRE MATTER. THE REPORT OF THAT INVESTIGATION IS PART OF THE RECORD HERE. ADDITIONALLY, EFFECTIVE MAY 1, 1983, THE APPELLANTS RETURNED TO A 72 HOUR SCHEDULED WORKWEEK.

THE REPORT OF THIS INVESTIGATION FOUND THAT THE CREATION OF WHAT IT CHARACTERIZED AS A "BOGUS" THIRD SHIFT WITH THE CONCOMITANT INCREASED OVERTIME WAS IMPROPER. THE REPORT ALSO STATES THAT THE APPELLANTS:

"*** RECEIVED A 'WINDFALL SALARY' (A SALARY IN EXCESS OF PREVIOUS SALARY) FOR WORKING THE SAME WORKWEEK AS BEFORE THE REALIGNMENT, AND FAILED TO QUESTION THE PROPRIETY OF THIS SITUATION."

THE APPELLANTS WERE FOUND TO HAVE BEEN OVERPAID IN THE AMOUNTS OF $8,240.72 AND $8,207.61. THEY REQUESTED WAIVER OF COLLECTION OF THESE OVERPAYMENTS. THE NAVY RECOMMENDED THAT THE WAIVER REQUESTS BE DENIED. OUR CLAIMS GROUP, BY A LETTER OF DECEMBER 16, 1985, DENIED WAIVER, ON THE GROUNDS THAT THE SUPERVISORY FIREFIGHTERS INVOLVED KNEW THAT THEY WERE NO LONGER ELIGIBLE FOR FLSA OVERTIME, AND KNEW THAT EVEN THOUGH THEIR TOUR-OF -DUTY HAD BEEN CHANGED ON PAPER, THEY CONTINUED TO WORK THE SAME HOURS, YET THEY STILL ACCEPTED THIS SALARY WINDFALL WITHOUT QUESTION. OUR CLAIMS GROUP ALSO HELD THAT UNDER THE CIRCUMSTANCES COLLECTION WOULD NOT BE AGAINST EQUITY AND GOOD CONSCIENCE.

IN THEIR APPEAL OF THE DENIALS OF WAIVER THE APPELLANTS ARGUE THAT IT WAS NOT FAIR THAT THEY LOST THEIR ENTITLEMENT TO FLSA OVERTIME BECAUSE THEY WERE SUPERVISORS. THEY CONTEND THEY WORKED THE SAME HOURS AS THEIR SUBORDINATES; THEREFORE, THEY SHOULD GET THE SAME PAY. THEY ALSO CONTEND THAT THEY RELIED ON THE PERSONNEL OFFICE TO DETERMINE THE PROPRIETY OF THEIR SCHEDULE, AND THAT THEIR INQUIRIES TO THE PERSONNEL OFFICE BROUGHT ASSURANCES THAT THEIR WORK SCHEDULES WERE PROPER.

OPINION

UNDER 5 U.S.C. SECTION 5584 (1982), THE COMPTROLLER GENERAL MAY WAIVE COLLECTION OF ERRONEOUS PAYMENTS OF PAY AND ALLOWANCES IF THE COLLECTION OF THESE PAYMENTS WOULD BE AGAINST EQUITY AND GOOD CONSCIENCE AND NOT IN THE BEST INTERESTS OF THE UNITED STATES. HOWEVER, THIS WAIVER AUTHORITY MAY NOT BE EXERCISED IF THE COMPTROLLER GENERAL FINDS THAT THERE IS ANY INDICATION OF FRAUD, MISREPRESENTATION, FAULT, OR LACK OF GOOD FAITH ON THE PART OF THE PERSON SEEKING THE WAIVER.

IN THE CONTEXT OF THIS WAIVER AUTHORITY, "FAULT" EXISTS IF THE EMPLOYEE KNEW OR SHOULD HAVE KNOWN THAT AN ERROR EXISTED AND SHOULD HAVE TAKEN ACTION TO CORRECT THAT ERROR. LAWRENCE D. MORDEROSIAN, B-156482, FEBRUARY 19, 1986. WHETHER FAULT EXISTS CAN ONLY BE DETERMINED BY A CAREFUL ANALYSIS OF ALL OF THE FACTS AND CIRCUMSTANCES OF EACH PARTICULAR CASE. NATIONAL TREASURY EMPLOYEES UNION, 58 COMP.GEN. 721 (1979).

THE APPELLANTS CONTEND THAT THEY RELIED ON THE PERSONNEL OFFICE TO SEE THAT THEIR PAY WAS PROPERLY SET, AND THAT THEY WERE NOT PAYROLL TECHNICIANS. IT IS TRUE THAT THE CALCULATION OF A FEDERAL FIREFIGHTER'S PAY CAN BE COMPLICATED. HOWEVER, THIS CASE DOES NOT INVOLVE A MINOR ERROR IN EACH CHECK. THE APPELLANTS' GROSS PAY UNDER THE THREE-SHIFT SCHEDULE WAS $300 MORE EACH PAY PERIOD THAN IT HAD BEEN WHEN THEY WERE ON A TWO- SHIFT SCHEDULE AND RECEIVING FLSA OVERTIME. ADDITIONALLY, THEIR ACTUAL WORK SCHEDULE NEVER CHANGED. THROUGHOUT THE PERIOD THEY WORKED A 72-HOUR WORKWEEK. THE LARGE PAY INCREASE FOR NO CHANGE IN THEIR WORK SCHEDULE IS ENOUGH FOR US TO HOLD THAT THE APPELLANTS KNEW OR SHOULD HAVE KNOWN THAT THEIR PAY WAS IMPROPERLY SET. THESE TWO FACTORS ALSO LEAD US INESCAPABLY TO THE CONCLUSION THAT IT IS NOT AGAINST EQUITY AND GOOD CONSCIENCE TO DENY WAIVER AND REQUIRE REPAYMENT. THEREFORE, THE DENIAL OF WAIVER BY OUR CLAIMS GROUP IS SUSTAINED.

WE NOTE IN THE RECORD THAT THE NAVY APPARENTLY INTENDS TO COLLECT THESE ERRONEOUS PAYMENTS THROUGH SALARY OFFSET. IF THAT METHOD IS USED, THE PROCEDURES SET OUT IN 5 U.S.C. SECTION 5514 (1982) AND 5 C.F.R. PART 550, SUBPART K (1986), MUST BE FOLLOWED.