Obligation To Repay Portion of Lump-Sum Leave Payment

B-200327: Nov 13, 1980

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An advanced decision was requested on the question of whether a Federal employee could be relieved of his legal obligation to refund a portion of his lump-sum leave payment when the employee (1) is separated from Government employment, (2) receives a lump-sum payment for unused accumulated and accrued annual leave at the time of separation, and (3) then secures reemployment with the Government before the end of the period covered by the lump-sum leave payment. The employee was involuntarily separated from Government service. He received a lump-sum payment for his hours of unused accumulated and accrued annual leave and a holiday, which he had at the time of his separation. The individual was appointed to a new position with another Federal agency prior to the expiration of the period covered by the lump-sum annual leave payment. This agency calculated that he was obligated to refund a portion of the lump-sum leave payment. The employee objected to repayment inasmuch as he was not at fault with respect to the overpayments. He requested that the claim against him be waived. This request was denied, as the waiver would improperly endorse double pay for the employee. The employee then questioned the wisdom of his new agency hiring him prior to the expiration period. When an employee who received lump-sum payment for leave is reemployed, he should repay that part of the lump-sum payment which is to be refunded, and this should be a condition precedent to reemployment. The accrued leave should be recredited to the individual in return for the repayment he makes. The lump-sum leave payment, in this case, was correct and legal when made. There was nothing illegal or improper about the employee's acceptance of a new position with another agency prior to the expiration date of the lump-sum leave payment. The regulations merely required that he refund that portion of the lump-sum payment. The gross amount of compensation representing the unexpired leave must be collected from the employee. Any questions concerning the tax consequences of the collection would be matters for determination by the revenue authorities. The employee should have been recredited with 45 hours of annual leave at the time of his reemployment, as his annual leave was forfeited through administrative error.