452 Procedures Governing Administrative Salary Offsets

452.1 Determination and Collection of Debt

452.11 Establishment of Accounts Receivable

Depending upon the circumstances of a particular case, the determination of a debt subject to collection under this subchapter may be made by an official in the field or at the Eagan Accounting Service Center (ASC), as follows:

  1. Payroll-related debts discovered in the field must be submitted to the Eagan ASC on PS Form 2240, Pay, Leave, or Other Hours Adjustment Request.
  2. Other debts must be reported to the manager of the Financial Processing Branch on PS Form 1902, Justification for Billing Accounts Receivable.
  3. Regardless of the amount, Eagan ASC must create a receivable for each debt and forward an invoice to the postmaster or installation head at the facility where the debtor is employed.
  4. When Eagan ASC creates a receivable for a debt, it must ensure that the employee’s records are flagged so that the final salary or lump-sum leave payment for that employee is not made until the debt is paid.
452.12 Collection by Postmaster or Installation Head

Each postmaster or installation head is responsible for collecting, in accordance with these regulations, any debt owed to the Postal Service by an employee under his or her supervision. Postmasters or installation heads may delegate their responsibilities under these regulations.

452.2 Voluntary Repayment Procedures

452.21 General

The procedures in this section are intended to facilitate the informal resolution of employee-owed debts. In most cases, these procedures should be followed before initiating the statutorily mandated salary offset procedures in 452.3. However, if the postmaster or installation head determines that expeditious action is necessary, the procedures in 452.3 may be initiated immediately.

452.22 Notice to Employee

When the postmaster or installation head receives an invoice reflecting an employee-owed debt from the Eagan ASC, he or she must give the employee a copy of the invoice and written notice of the Postal Service’s determination of the existence, nature, and amount of the debt (see Exhibit 452.22, Sample Letter of Debt Determination — Nonbargaining). The letter must inform the employee that he or she may pursue one or more of the following options, as appropriate, in order to avoid involuntary salary offsets:

 

In accordance with the procedures set forth in...

The employee may:

452.231

Request copies of all Postal Service records relating to his or her particular debt.

452.232

Arrange to pay the entire debt.

452.233

Agree to voluntary salary offsets of 15 percent or more of disposable pay.

452.234

Propose an alternative offset schedule.

452.235

Ask the Postal Service to reconsider its determination of the existence or amount of the debt.

Exhibit 452.22

Sample Letter of Debt Determination — Nonbargaining

USPS logo


The term disposable pay refers to that part of an employee’s salary remaining after all required deductions (normal retirement contributions, FICA and Medicare insurance taxes, federal income tax, state and local income taxes, and employee-paid federal health insurance premiums) are made.

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Exhibit 452.22 (p. 2)

Sample Letter of Debt Determination — Nonbargaining (Enclosure)


The term severe financial hardship refers to an employee’s inability to meet the essential material needs of the employee and his or her spouse and dependents because of offsets against pay. These essential material needs are food, housing, clothing, transportation, medical care, and any exceptional expenses.

Exhibit 452.22 (p. 3)

Sample Letter of Debt Determination — Nonbargaining (Enclosure)

452.23 Employee Response to Notice
452.231 Request for Copies of Postal Records

If an employee would like copies of records relating to a postal debt, he or she must notify the postmaster or installation head in writing within 10 calendar days of receiving notice of the Postal Service’s determination of a debt. The postmaster or installation head is responsible for requesting copies of the pertinent records by telephone, if necessary, from the Eagan ASC and/or appropriate postal facility, and for providing the employee with copies of these records within 5 calendar days of receiving the employee’s written request. Until collection of the debt is completed, the postmaster or installation head must keep a copy of all records provided to the employee at this stage.

452.232 Payment in Full

An employee who acknowledges the validity of the Postal Service’s claim and wishes to repay the entire debt voluntarily should be instructed to remit to the postmaster or installation head, for transmittal to the Eagan ASC, a check or money order for the full amount due, with the employee’s Social Security number on its face. The employee should submit the check or money order no later than 15 calendar days from the date the employee receives the notice of the Postal Service’s determination of a debt if he or she does not request copies of postal records relating to the debt, or within 15 calendar days from the date the employee receives any requested records.

452.233 Consent to Salary Offsets

If an employee acknowledges the validity of the Postal Service’s claim and would like to repay the debt voluntarily through offsets of 15 percent or more of his or her disposable pay, the employee and the postmaster or installation head should complete the appropriate sections of PS Form 3239, Payroll Deduction Authorization to Liquidate Postal Service Indebtedness. This form must be completed no later than 15 calendar days from the date the employee receives the notice of the Postal Service’s determination of a debt if he or she does not request copies of postal records relating to the debt, or within 15 calendar days from the date the employee receives any requested records.

PS Form 3239, Payroll Deduction Authorization to Liquidate Postal Service Indebtedness, is available on the Postal Service PolicyNet website:

The direct URL for the form is http://blue.usps.gov/formmgmt/forms/LiveCycle/psform3239_072009_lc.pdf.

452.234 Request for Consideration of Alternative Offset Schedule

If the employee acknowledges the debt, but contends that the proposed deductions of 15 percent of disposable pay would be too severe, he or she may propose an alternative offset schedule.

  1. Proposal. The employee’s proposed offset schedule must be submitted in writing to the postmaster or installation head, along with a written statement and supporting documentation, stating the employee’s reasons for believing that the deductions proposed by the Postal Service would result in a “severe financial hardship,” as defined in 451.5h. The proposal must include (1) the amount to be paid each pay period, (2) the number of pay periods it would take to repay the debt under the employee’s proposal, and (3) the date the first payment would be made. The supporting documents must also show the following information relating to the employee and his or her spouse and dependents, for the 1–year period preceding the Postal Service’s notice and the repayment period proposed by the employee’s alternative offset schedule: (1) total family income, assets, and liabilities; (2) number of dependents; and (3) total expenses for food, housing, clothing, transportation, medical care, and any exceptional expenses. The employee should be instructed to provide all information in his or her possession relating to the debt and to his or her financial ability to repay it so that the postmaster or installation head may make an informed decision on an employee’s proposed alternative offset plan.
  2. Time Frame. The employee’s proposed alternative offset schedule and written submissions must be received by the postmaster or installation head no later than 15 calendar days from the date the employee receives the notice of the Postal Service’s determination of a debt if he or she does not request copies of postal records relating to the debt, or within 15 calendar days from the date the employee receives any requested records.
  3. Consideration. Based upon the material submitted by the employee and postal records relating to the debt, the postmaster or installation head must consider (1) the extent to which the assets of the employee and his or her spouse and dependents are available to meet their essential material expenses and to repay the postal debt, (2) whether the essential material expenses have been minimized as much as possible, and (3) the extent to which the employee and his or her spouse and dependents can borrow to finance their essential expenses and to repay the postal debt. An employee’s alternative offset schedule should be approved only if it provides for installment payments that bear a reasonable relationship to the size of the debt and the employee’s ability to pay. Generally, an alternative offset schedule should provide for installment payments of no less than 10 percent of disposable pay per pay period, and for a repayment period of 26 pay periods or less.
452.235 Request for Reconsideration of Debt

If an employee wishes to request reconsideration of the Postal Service’s determination of the existence or amount of a debt, he or she may proceed as follows:

  1. Request. The employee’s request for reconsideration must be submitted in writing to the postmaster or installation head, along with a written statement and supporting documentation indicating why the employee believes he or she is not so indebted. Since the postmaster or installation head will use the material provided by the employee, along with postal records relating to the debt, in deciding whether the Postal Service’s determination of the debt should be revised, employees should be instructed to provide all information in their possession relating to the debt so that the postmaster or installation head may make an informed determination.
  2. Time Frame. The employee’s written submission must be received by the postmaster or installation head no later than 15 calendar days from the date the employee receives the notice of the Postal Service’s determination of a debt if he or she does not request copies of postal records relating to the debt, or within 15 calendar days from the date the employee receives any requested records.
452.24 Action Following Reconsideration of Debt and/or Offset Schedule
452.241 Consideration and Response

After reviewing an employee’s proposed alternative offset schedule and/or request that the Postal Service reconsider its determination of the existence or amount of a debt, the postmaster or installation head, within 15 calendar days of receiving the employee’s proposal or request, must notify the employee in writing of the determination and take any necessary follow–up action as outlined in 452.242 and 452.243.

452.242 Reconsideration of Debt

If the employee challenged the existence or amount of the debt, the postmaster or installation head takes one of the following actions:

  1. Notifies the employee in writing that (1) he or she is indebted to the Postal Service for the amount set forth in its letter and (2) to prevent the initiation of involuntary offset proceedings, he or she must make arrangements to repay the debt in accordance with the procedures specified in 452.25.
  2. Notifies the employee in writing that (1) he or she is indebted to the Postal Service for a revised amount and (2) he or she may, within 10 calendar days of receiving the Postal Service’s determination upon reconsideration, propose in writing to the postmaster or installation head an alternative offset schedule based on the new figure in accordance with the requirements set forth in 452.234a. In accordance with the requirements set forth in 452.234c, and within 5 calendar days of receiving this proposed alternative offset schedule, the postmaster or installation head must notify the employee in writing whether or not it is acceptable. If the postmaster or installation head rejects the employee’s alternative offset schedule, the employee must be advised in writing that, to prevent the initiation of involuntary offset proceedings, he or she must make arrangements to repay the debt in accordance with the procedures specified in 452.25.
  3. Notifies the employee in writing that he or she is not indebted to the Postal Service for any amount. The postmaster or installation head must immediately notify the Eagan ASC to eliminate the receivable and remove the flag from the employee’s records.
452.243 Consideration of Alternative Offset Schedule

If an alternative offset schedule was proposed, the postmaster or installation head takes one of the following actions:

  1. Notifies the employee in writing that (1) the Postal Service’s proposed offset schedule would not result in a severe financial hardship for the employee and his or her spouse and dependents, and accordingly the alternative offset schedule proposed by the employee is not acceptable, and (2) to prevent the initiation of involuntary offset proceedings, he or she must make arrangements to repay the debt in accordance with the procedures specified in 452.25.
  2. Notifies the employee in writing that (1) the employee has demonstrated that the Postal Service’s proposed offset schedule would result in a severe financial hardship, and accordingly the alternative offset schedule proposed by the employee (or some variation of it) is acceptable, and that (2) the employee must complete appropriate sections of PS Form 3239. The postmaster or installation head implements the change by completing PS Form 3239.
452.25 Voluntary Repayment Following Reconsideration
452.251 Payment in Full

If an employee, upon receiving notice of the Postal Service’s determination upon reconsideration, acknowledges the validity of the Postal Service’s claim and would like to repay the entire debt voluntarily, he or she should be instructed to remit to the postmaster or installation head, for transmittal to the Eagan ASC, a check or money order for the full amount due, with the employee’s Social Security number on its face. The employee must submit payment within 15 calendar days of receiving notice of the Postal Service’s determination upon reconsideration.

452.252 Consent to Salary Offsets

If an employee, upon receiving the Postal Service’s determination on reconsideration, acknowledges the validity of the Postal Service’s claim and would like to repay the debt voluntarily through offsets of 15 percent or more of his or her disposable pay, the employee and the postmaster or installation head should complete the appropriate sections of PS Form 3239. This form must be completed no later than 15 calendar days from the date the employee receives notice of the Postal Service’s determination upon reconsideration.

452.26 Failure to Resolve or Repay Debt

If an employee, after receiving notice of the Postal Service’s determination of a debt, or after receiving notice of the Postal Service’s determination upon reconsideration, fails, within the applicable time periods, to resolve a debt or to make satisfactory arrangements to repay it, the postmaster or installation head must initiate the statutory collection procedures in 452.3.

452.3 Statutory Offset Procedures

452.31 Authority

Under section 5 of the Debt Collection Act, 5 U.S.C. 5514(a) (1982), the Postal Service may, after providing certain procedural rights, offset an employee’s salary in order to satisfy any debt due the Postal Service. Generally, up to 15 percent of an individual’s “disposable pay” (or the alternative amount determined for a bargaining unit employee as provided in 462.42) may be deducted in monthly installments or at “officially established pay intervals.” A greater percentage may be deducted with the written consent of the individual debtor. If the individual’s employment ends before the full debt is collected, deduction may be made from subsequent payments of any nature due the employee.

452.32 Notifying the Employee
452.321 Notice

At least 30 calendar days before making an administrative offset under this authority, the postmaster or installation head must provide an employee–debtor with (a) two copies of a Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act, containing the information in 452.322, and (b) a copy of the procedures that govern hearings under the Debt Collection Act set forth at 39 CFR Part 961 (see Exhibit 452.322).

452.322 Contents

The notice (see Exhibit 452.322, Sample Notice of Involuntary Administrative Salary Offsets) required by 452.321 must notify the employee of the following:

  1. The name, work address, and telephone number of the postmaster or installation head issuing the notice.
  2. The Postal Service’s determination of the existence and amount of the debt.
  3. The nature of the debt.
  4. The Postal Service’s intention to collect the amount due by offsetting 15 percent of the employee’s “disposable pay” (or the alternative amount determined for a bargaining unit employee as provided in 462.42) each pay period.
  5. The estimated amount, starting date (generally 30 days from the date the employee receives the notice, see Exhibit 452.322), frequency, and duration of the intended deductions.
  6. The procedural rights available to the employee, as well as the appropriate method for requesting them. These rights include an opportunity to:
    1. Obtain copies of Postal Service records relating to the debt.
    2. Avoid the need for involuntary offsets by paying the debt in full.

Exhibit 452.322

Sample Notice of Involuntary Administrative Salary Offsets

 

 

USPS logo

NOTICE OF INVOLUNTARY ADMINISTRATIVE
SALARY OFFSETS UNDER THE DEBT COLLECTION ACT

[__date__]

[__name__]

[__street__]

[__city, state, ZIP__]

[__name of debtor ]:

On [__date of previous letter__], you were notified by letter of our determination that you owe the Postal Service $[__amount__]. As we noted in our earlier letter, this debt is based on [__briefly describe how debt arose__].

Our records indicate that you have not acted to repay this debt. Accordingly, this letter provides notice of the Postal Service’s intention to collect this debt by deducting 15 percent of your “disposable pay”1 each pay period (or, for a bargaining unit employee, 20 percent of gross pay each pay period, whichever amount is lower when the salary offset is started). In your case, this will amount to deductions of approximately $[__amount__] from each paycheck beginning on [__date deductions are scheduled to begin-generally 30 days from the date the employee receives this notice__]. These deductions will continue until the debt is collected; we estimate that this should take approximately [number of] pay periods.

If you feel our determination of the existence or amount of this debt is incorrect, or if you believe the deductions set forth above would impose a “severe financial hardship”2 on you and your spouse and dependents, you may take one or more of the measures detailed in the enclosed Statement of Debtor’s Rights and Responsibilities. Unless you have a sound basis for contesting the Postal Service’s determinations concerning this matter, you should make arrangements immediately to repay this debt.

[__signature ]

[__name ]

[__title of installation head__]

[__work address__]

[__telephone number w/area code ]

Enclosures

Statement of Debtor’s Rights and Responsibilities

Rules of Procedure Governing Hearings Under the Debt Collection Act

 

1. The term disposable pay refers to that part of an employee’s salary remaining after all required deductions (normal retirement contributions, FICA and Medicare insurance taxes, federal income tax, state and local income taxes, and employee-paid federal health insurance premiums) are made.

2. The term severe financial hardship refers to an employee’s inability to meet the material needs of the employee and his or her spouse and dependents because of offsets against pay. These essential material needs are food, housing, clothing, transportation, medical care, and any exceptional expenses.

 

 

 

Exhibit 452.322 (p. 2)

Sample Notice of Involuntary Administrative Salary Offsets

 

Statement of Debtor’s Rights and Responsibilities

1. Request for Records. At any time after receiving this notice of the Postal Service’s intention to collect a debt through involuntary salary offsets and before a requested hearing is held, you may request copies of any postal records that you have not previously received, by contacting, in writing, [__name of appropriate official__] at [__address__]. You will receive any requested records within 5 calendar days of the date your request is received by the Postal Service.

2. Payment in Full. If you acknowledge the validity of the Postal Service’s claim and wish to repay the entire debt, you may, at any time after receiving this notice of the Postal Service’s intention to collect a debt through involuntary offsets, submit a check or money order, with your Social Security number on its face, for the full amount due, to [__name of appropriate official__ ] at [__address__].

3. Consent to Offsets. If you acknowledge the validity of the Postal Service’s claim and would like to consent to offsets of 15 percent or more of your disposable pay (or, for a bargaining unit employee, 20 percent of gross pay, whichever amount is lower when the salary offset is started), you should contact [__name of appropriate official__] at [__address__] and complete PS Form 3239, Payroll Deduction Authorization to Liquidate Postal Service Indebtedness. You may agree to salary offsets in the amount proposed by the Postal Service, or some greater amount, at any time after you receive notice of the Postal Service’s intention to collect a debt through involuntary salary offsets.

4. Alternative Offset Schedule. If you acknowledge the debt, but believe that the proposed deductions of 15 percent of disposable pay (or, for a bargaining unit employee, 20 percent of gross pay, whichever amount is lower when the salary offset is started), would impose a “severe financial hardship”1 on your family, you may propose an alternative offset schedule.

a. Your proposed alternative offset schedule must be submitted to [__name of appropriate official__] at [__address__], along with a written statement, and supporting documentation, stating your reasons for believing the deductions proposed by the Postal Service would result in a “severe financial hardship.” Your proposal must include (1) the amount to be paid each pay period, (2) the number of pay periods it would take to repay the debt, and (3) the date the first payment would be made. In addition, the supporting documents must show, for you and your spouse and dependents, for the 1-year period preceding the Postal Service’s notice and for your proposed repayment period, (1) your total family income, assets, and liabilities; (2) number of dependents; and (3) total expenses for food, housing, clothing, transportation, medical care, and any exceptional expenses. You should be careful to provide all information in your possession relating to this debt so that the Postal Service may make an informed decision on your request for an alternative offset schedule. You may submit your proposed alternative repayment schedule at any time after receiving this notice of the Postal Service’s intention to collect an outstanding debt through salary offsets.

b. Based upon the material you submit and postal records relating to the debt, the Postal Service will consider (1) the extent to which your assets and those of your spouse and dependents are available to meet your family’s essential material expenses and to repay the postal debt, (2) whether your essential material expenses have been minimized as much as possible, and (3) the extent to which you and your spouse and dependents can borrow to finance your essential expenses and to repay the debt. An alternative offset schedule will be approved only if it provides for installment payments that bear a reasonable relationship to the size of the debt and your ability to pay. Generally, an alternative offset schedule should provide for installment payments of no less than 10 percent of disposable pay per pay period, and for a repayment period of 26 pay periods or less.

c. You will be notified of the Postal Service’s decision regarding your proposed repayment schedule within 15 calendar days of the date it is received.

 

1. The term severe financial hardship refers to an employee’s inability to meet the material needs of the employee and his or her spouse and dependents because of offsets against pay. These essential material needs are food, housing, clothing, transportation, medical care, and any exceptional expenses.

Exhibit 452.322 (p. 3)

Sample Notice of Involuntary Administrative Salary Offsets

 

5. Petition for a Hearing. To request a hearing on the Postal Service’s determination of the existence or amount of the debt, or on the Postal Service’s proposed involuntary offset schedule, you must file a written petition for a hearing in accordance with the requirements of 39 CFR 961.4. (A copy of Part 961 of 39 CFR. is enclosed.) Your hearing petition must be filed with the RECORDER, JUDICIAL OFFICER DEPT, US POSTAL SERVICE, 2101 WILSON BLVD, STE 600, ARLINGTON VA 22201-3078, on or before the fifteenth calendar day following your receipt of this notice. A timely request for a hearing will stay the commencement of the collection of the debt.

    Note: While you may request a hearing and pursue one of the other available options, your hearing petition must be filed within the required time period. If questions relating to this debt are resolved before the hearing is held, your petition may be withdrawn.

6. Failure to Act. If you do not exercise any of the rights set forth above, the Postal Service will proceed with its plans to initiate the proposed offsets 30 days from the date you receive this notice.

 

Exhibit 452.322 (p. 4)

Sample Notice of Involuntary Administrative Salary Offsets

 

39 CFR PART 961–RULES OF PRACTICE IN PROCEEDINGS UNDER SECTION 5 OF THE DEBT COLLECTION ACT

Section

961.1 Authority for rules.

961.2 Scope of rules.

961.3 Definitions.

961.4 Employee petition for a hearing.

961.5 Effect of filing a petition.

961.6 Filing, docketing, and serving documents; computation of time; representation of parties.

961.7 Answer to petition.

961.8 Hearing Official authority and responsibilities.

961.9 Opportunity for oral hearing.

961.10 Effect of Hearing Official’s decision; motion for reconsideration.

961.11 Consequences for failure to comply with rules.

961.12 Ex parte communications.

Authority: 39 U.S.C. 204, 401; 5 U.S.C. 5514.

Sec. 961.1 Authority for rules. These rules are issued by the Judicial Officer pursuant to authority delegated by the

Postmaster General.

Sec. 961.2 Scope of rules. The rules in this part apply to the hearing provided by section 5 of the Debt Collection Act of 1982, as amended, 5 U.S.C. 5514, challenging the Postal Service’s determination of the existence or amount of an employee debt to the Postal Service, or of the terms of the employee’s debt repayment schedule. In addition, these rules apply to a hearing under section 5 of the Debt Collection Act when an Administrative Law Judge or an Administrative Judge in the Judicial Officer Department is designated as the Hearing Official for a creditor Federal agency other than the Postal Service pursuant to an agreement between the Postal Service and that agency. In such cases, all references to Postal Service within these rules shall be construed to refer to the creditor Federal agency involved.

Sec. 961.3 Definitions.

As used in this part:

(a) Employee refers to a current employee of the Postal Service who is alleged to be indebted to the Postal Service; or to an employee of another Federal agency who is alleged to be indebted to that other creditor Federal agency and whose hearing under section 5 of the Debt Collection Act is being conducted under these rules.

(b) General Counsel refers to the General Counsel of the Postal Service, and includes a designated representative.

(c) Hearing Official refers to an Administrative Law Judge qualified to hear cases under the Administrative Procedure Act, an Administrative Judge appointed under the Contract Disputes Act of 1978, or other qualified person not under the control or supervision of the Postmaster General, who is designated by the Judicial Officer to conduct the hearing under section 5 of the Debt Collection Act of 1982, as amended, 5 U.S.C. 5514.

(d) Judicial Officer refers to the Judicial Officer, Associate Judicial Officer, or Acting Judicial Officer of the United States Postal Service.

(e) Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act refers to the formal written notice required by section 5 of the Debt Collection Act, including the provision of notice of the procedures under this Part, before involuntary collection deductions can be taken from an employee’s salary.

(f) Postmaster/Installation Head refers to the Postal Service official who is authorized under the Postal Service Employee and Labor Relations Manual to make the initial determination of employee indebtedness and to issue the “Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act.”

(g) Recorder refers to the Recorder, Judicial Officer Department, U.S. Postal Service, located at 2101 Wilson Blvd., Suite 600, Arlington, VA 22201-3078. The Recorder’s telephone number is (703) 812-1900, and the fax number is (703) 812-1901.

 

Exhibit 452.322 (p. 5)

Sample Notice of Involuntary Administrative Salary Offsets

 

Sec. 961.4 Employee Petition for a hearing.

(a) If an employee desires a hearing, prescribed by section 5 of the Debt Collection Act, to challenge the Postal Service’s determination of the existence or amount of a debt, or to challenge the involuntary repayment terms proposed by the Postal Service, the employee must file a written, signed petition with the Recorder, on or before the fifteenth (15th) calendar day following the employee’s receipt of the Postal Service’s “Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act.” The Hearing Official, in his or her discretion may waive this deadline upon a demonstration of good cause. In the event that the Postal Service initiated involuntary administrative salary offsets without having issued a Notice as required by the Debt Collection Act, the Hearing Official, in his or her discretion, may retain authority to resolve the debt assessment as if a Notice had been issued, and may order the Postal Service to return any improperly offset money.

(b) The hearing petition shall include the following:

(1) The words, “Petition for Hearing Under the Debt Collection Act,” prominently captioned at the top of the first page;

(2) The name of the employee, the employee’s work address, home address, work telephone number, home telephone number, and email address, if any, or other address and telephone number at which the employee may be contacted during business hours;

(3) A statement of the date on which the employee received the “Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act,” and a copy of the Notice;

(4) A statement indicating whether the employee challenges: (i) the existence of the debt identified in the Notice of Involuntary Administrative Salary Offsets; (ii) the amount of the debt identified in the Notice; and/or (iii) the involuntary repayment terms identified by the Postal Service in the Notice. For each challenge, the employee‘s petition shall indicate the basis of the employee‘s disagreement. The employee should identify and explain the facts, evidence, and legal arguments which support his or her position;

(5) Copies of all records in the employee’s possession which relate to the debt; and

(6) If an employee contends that the Postal Service’s proposed offset schedule would result in a severe financial hardship on the employee, his or her spouse, and dependents, the employee shall identify an alternative offset schedule. As directed by the Hearing Official, the employee shall provide a statement and supporting documents indicating the employee’s financial status. This statement should address total income from all sources; assets; liabilities; number of dependents; and expenses for food, housing, clothing, transportation, medical care, and exceptional expenses, if any.

(c) The employee shall file with the Recorder any additional information directed by the Hearing Official.

Sec. 961.5 Effect of filing a petition. Upon receipt and docketing of the employee’s petition for a hearing, further collection activity by the Postal Service must cease, as required by section 5 of the Debt Collection Act until the petition is resolved by the Hearing Official.

Sec. 961.6 Filing, docketing, and serving documents; computation of time; representation of parties.

(a) Filing. All documents relating to the Debt Collection Act hearing proceedings must be filed by the employee or the General Counsel’s designee with the Recorder. (Normal Recorder office business hours are between 8:45 a.m. and 4:45 p.m., Eastern Time.) Unless otherwise directed by the Hearing Official, the party filing a document shall send a copy thereof to the opposing party.

(b) Docketing. The Recorder will maintain a record of Debt Collection Act proceedings and will assign a docket number to each such case. After notification of the docket number, the employee and the Postal Service’s representative should refer to it on any further filings regarding the petition.

(c) Time computation. A filing period under the rules in this Part excludes the day the period begins, and includes the last day of the period unless the last day is a Saturday, Sunday, or legal holiday, in which event the period runs until the close of business on the next business day. Requests for extensions of time shall be made in writing prior to the date on which the submission is due, state the reason for the extension request, represent that the moving party has contacted the opposing party about the request, or made reasonable efforts to do so, and indicate whether the opposing party consents to the extension. Requests for extensions of time submitted after the date on which the submission was due shall explain why the moving party was unable to request an extension prior to the deadline.

Exhibit 452.322 (p. 6)

Sample Notice of Involuntary Administrative Salary Offsets

 

(d) Representation of parties. The representative of the Postal Service, as designated by the General Counsel, shall file a notice of appearance as soon as practicable, but no later than the date for filing the answer. If an employee has a representative, he or she also shall file a notice of appearance as soon as practicable, and further transmissions of documents and other communications by and with the employee shall be made through his or her representative.

Sec. 961.7 Answer to Petition. Within 15 days from the date of receiving the petition, the Postal Service’s representative shall file an answer to the petition, and attach all available relevant records and documents in support of the Postal Service’s debt claim, and/or the administrative salary offset schedule proposed by the Postal Service for collecting any such claim. The answer shall provide a clear and thorough description of the basis for the Postal Service’s determination of the alleged debt, its calculation of the amount of the alleged debt, and/or its proposed offset schedule.

Sec. 961.8 Hearing Official authority and responsibilities. The Hearing Official’s authority includes, but is not limited to, the following:

(a) Ruling on all motions or requests by the parties.

(b) Issuing notices, orders, or memoranda to the parties concerning the hearing proceedings.

(c) Conducting telephone conferences with the parties to expedite the proceedings. The Hearing Official will prepare a Memorandum of Telephone Conference, which shall be transmitted to both parties and which serves as the official record of that conference.

(d) Determining whether an oral hearing shall be conducted, the type of oral hearing to be held, and setting the place, date, and time for such hearing.

(e) Administering oaths or affirmations to witnesses.

(f) Conducting the hearing in a manner to maintain discipline and decorum while assuring that relevant, reliable, and probative evidence is elicited on the issues in dispute, but irrelevant, immaterial, or repetitious evidence is excluded. The Hearing Official in his or her discretion may examine witnesses to ensure that a satisfactory record is developed.

(g) Establishing the record in the case. The weight to be attached to any evidence of record will rest within the discretion of the Hearing Official. Except as the Hearing Official may otherwise order, no proof shall be received in evidence after completion of an oral hearing or, in cases submitted on the written record, after notification by the Hearing Official that the record is closed. The Hearing Official may require either party, with appropriate notice to the other party, to submit additional evidence on any relevant matter.

(h) Granting reasonable time extensions or other relief for good cause shown in the Hearing Official’s sole discretion.

(i) Issuing the final decision. The decision must include the determination of the amount and validity of the alleged debt and, where applicable, the repayment schedule.

Sec. 961.9 Opportunity for oral hearing. An oral hearing shall be conducted in the sole discretion of the Hearing Official. An oral hearing may be conducted in-person, by telephone, by video conference, or other appropriate means as directed by the Hearing Official. When the Hearing Official determines that an oral hearing shall not be conducted, the decision shall be based solely on the written submissions. The Hearing Official shall arrange for the recording and transcription of an oral hearing, which shall serve as the official record of the hearing. In the event of an unexcused absence, the hearing may proceed without the participation of the absent party.

Sec. 961.10 Effect of Hearing Official’s decision; motion for reconsideration.

(a) After the receipt of written submissions or after the conclusion of the hearing and the receipt of post-hearing briefs, if any, the Hearing Official shall issue a written decision, which shall include the findings of fact and conclusions of law relied upon.

(b) The Hearing Official shall send each party a copy of the decision. The Hearing Official’s decision shall be the final administrative determination on the employee’s debt or repayment schedule. No reconsideration of the decision will be allowed unless a motion for reconsideration is filed within 10 days from receipt of the decision and shows good cause for reconsideration. Reconsideration will be allowed only in the discretion of the Hearing Official. A motion for reconsideration by the employee will not operate to stay a collection action authorized by the Hearing Official’s decision.

 

Exhibit 452.322 (p. 7)

Sample Notice of Involuntary Administrative Salary Offsets

 

Sec. 961.11 Consequences for failure to comply with rules.

(a) The Hearing Official may determine that the employee has abandoned the right to a hearing, and that administrative offset may be initiated if the employee files his or her petition late without good cause; or files a withdrawal of the employee’s petition for a hearing.

(b) The Hearing Official may determine that the administrative offset may not be initiated if the Postal Service fails to file the answer or files the answer late without good cause; or files a withdrawal of the debt determination at issue.

(c) If a party fails to comply with these Rules or the Hearing Official‘s orders, the Hearing Official may take such action as he or she deems reasonable and proper under the circumstances, including dismissing or granting the petition as appropriate.

Sec. 961.12 Ex parte communications. Ex parte communications are not allowed between a party and the Hearing Official or the Official’s staff. Ex parte communication means an oral or written communication, not on the public record, with one party only with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports or procedural matters. A memorandum of any communication between the Hearing Official and a party will be transmitted to both parties.

  1. Consent to salary offsets of 15 percent or more of disposable pay (or the alternative amount determined for a bargaining unit employee as provided in 462.42).
  2. Enter into a written agreement with the Postal Service, under terms agreeable to the postmaster or installation head, to establish an alternative debt repayment schedule.
  3. Obtain a hearing on the Postal Service’s determination concerning the existence or the amount of the debt, or on the terms of the Postal Service’s proposed repayment schedule.
  • The employee must be informed that the timely filing of a petition for a hearing will stay the collection proceedings.
  • 452.33 Procedures Governing the Exercise of Employee Rights
    452.331 Employee Options

    Employees may pursue as many of the options available to them as they wish. It should be noted, however, that an employee’s petition for a hearing on the Postal Service’s determination of the existence or amount of a debt, or on the terms of the Postal Service’s proposed repayment schedule, must be submitted within the time frame specified in 452.336. If, after requesting a hearing, the employee is able to resolve the debt through another available option, his or her hearing petition may be withdrawn.

    452.332 Requests for Postal Records

    If an employee wishes to request copies of any records, the employee and the postmaster or installation head proceed as follows:

    1. Submission. At any time after receiving notice of the Postal Service’s intention to collect a debt through involuntary salary offsets and before any requested hearing is held, a nonbargaining unit employee may request copies of any records he or she did not previously obtain under 452.231, while a bargaining unit employee may request copies of any records the employee or the employee’s union did not previously obtain under 462.21. Requests for copies of postal records relating to an alleged debt must be made in writing and directed to the postmaster or installation head.
    2. Response. The postmaster or installation head should take care to respond expeditiously to records requests so as not to deprive an employee of the benefit of any information that might resolve questions relating to the debt. Once a request is received, the postmaster or installation head must promptly request, as necessary, copies of the pertinent records by telephone from the Eagan ASC or appropriate postal facility and provide the employee, within 5 calendar days of receiving the employee’s request, with copies of all records requested.
    452.333 Payment in Full

    An employee who wishes to pay off an entire debt may remit to the postmaster or installation head for transmittal to the Eagan ASC a check or money order with his or her Social Security number on its face, at any time after receiving written notice of the Postal Service’s intention to collect the debt through involuntary salary offsets.

    452.334 Consent to Salary Offsets

    If an employee acknowledges the validity of the Postal Service’s claim and would like to consent to offsets of 15 percent or more of his or her disposable pay (or the alternative amount determined for a bargaining unit employee as provided in 462.42), the employee and the postmaster or installation head should complete the appropriate sections of PS Form 3239. An employee may consent to salary offsets at any time after he or she receives notice of the Postal Service’s intention to collect the debt through involuntary salary offsets.

    452.335 Alternative Offset Schedule

    If an employee acknowledges the Postal Service’s claim, but contends that the proposed deductions of 15 percent of disposable pay (or the alternative amount determined for a bargaining unit employee as provided in 462.42) would be too severe, he or she may propose an alternative offset schedule and proceed as follows:

    1. Proposal. The employee’s proposed offset schedule must be submitted to the postmaster or installation head, along with a written statement and supporting documentation, stating the employee’s reasons for believing the deductions proposed by the Postal Service would result in a “severe financial hardship” as that term is defined in 451.5h. The proposal must include (1) the amount to be paid each pay period, (2) the number of pay periods it would take to repay the debt under the employee’s proposal, and (3) the date the first payment would be made. The supporting documents must also show the following information relating to the employee and his or her spouse and dependents, for the 1–year period preceding the Postal Service’s notice and the repayment period proposed by the employee’s alternative offset schedule: (1) total family income, assets, and liabilities; (2) number of dependents; and (3) total expenses for food, housing, clothing, transportation, medical care, and any exceptional expenses. The employee should be instructed to provide all information in his or her possession relating to the debt and his or her financial ability to repay it so that the postmaster or installation head may make an informed decision on the employee’s request.
    2. Time Frame. The employee may submit his or her proposed alternative repayment schedule to the postmaster or installation head at any time after receiving notice of the Postal Service’s intention to collect an outstanding debt through involuntary salary offsets.
    3. Consideration. Based upon the material submitted by the employee and postal records relating to the debt, the postmaster or installation head must consider (1) the extent to which the assets of the employee and his or her spouse and dependents are available to meet their essential material expenses and to repay the postal debt, (2) whether the essential material expenses have been minimized as much as possible, and (3) the extent to which the employee and his or her spouse and dependents can borrow to finance their essential expenses and to repay the debt. An employee’s alternative offset schedule should be approved only if it provides for installment payments that bear a reasonable relationship to the size of the debt and the employee’s ability to pay. Generally, an alternative offset schedule should provide for installment payments of no less than 10 percent of disposable pay per pay period, and for a repayment period of 26 pay periods or less.
    4. Notification. The postmaster or installation head must notify the employee in writing of his or her decision regarding the employee’s proposed alternative offset schedule within 15 calendar days of receiving it from the employee.
    5. Implementation. The postmaster or installation head and the employee must implement the terms of an acceptable alternative repayment agreement by completing the appropriate sections of Form 3239.
    452.336 Debt Collection Hearing

    If an employee wishes to request a hearing, the employee and the Postal Service proceed as follows:

    1. Hearing Request. If an employee desires a hearing prescribed by section 5 of the Debt Collection Act on the Postal Service’s determination of the existence or amount of the debt, or on the involuntary repayment terms proposed by the Postal Service, the employee must file a written petition for a hearing in accordance with the requirements of 39 CFR 961.4. The petition must be filed with the
    2. RECORDER
      JUDICIAL OFFICER
      US POSTAL SERVICE
      2101 WILSON BLVD STE 600
      ARLINGTON VA 22201–3078

      on or before the fifteenth calendar day following the employee’s receipt of the Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act. The hearing procedures are set forth in 39 CFR Part 961, which is incorporated herein by reference.

    3. Postdecision Responsibilities. After an employee has been accorded a requested hearing and a written decision has been rendered, the general counsel of the Postal Service notifies the appropriate postmaster or installation head of the determination. If the hearing decision indicates that the employee is not indebted to the Postal Service, the postmaster or installation head must take the necessary steps to remove all references to the debt from the employee’s records. However, if the decision authorizes the Postal Service to offset an employee’s salary, the postmaster or installation head must initiate the authorized offsets by completing the appropriate sections of PS Form 3239.
    452.34 Employee Failure to Respond

    If, upon receiving notice of the Postal Service’s intention to collect a debt through involuntary salary offsets, the employee fails to repay the debt, fails to consent to the Postal Service’s proposed offsets, fails to propose an acceptable alternative offset schedule, and does not request a hearing on the Postal Service’s determination of the debt or its proposed offset schedule, the postmaster or installation head may initiate the offsets specified in the Postal Service’s notice to the employee, no earlier than 30 calendar days after the debtor’s receipt of that notice, by completing the appropriate sections of PS Form 3239.

    452.4 Exceptions to Procedures Found in Sections 452.2 and 452.3

    1. The procedures governing the collection of postal debts contained in sections 452.2 and 452.3 do not apply to:
      1. Amounts to be collected which arose from the employee’s election of coverage or change of coverage under a federal benefits program requiring periodic deductions from pay, and were accumulated over four pay periods or less;
      2. Routine intra–agency adjustments of pay that are attributable to clerical or administrative errors or delays in processing pay documents that have occurred within the four pay periods preceding the pay period in which the first adjustment is made, provided the individual is given notice in accordance with section 452.4b; or
      3. Any adjustment that amounts to $50 or less, provided the individual is given notice in accordance with section 452.4b.
    2. At the time the first adjustment is made pursuant to section 452.4a2 or 3, or as soon thereafter as practical, the individual must be provided written notice of the nature and the amount of the debt and adjustments and a point of contact for contesting collection.