Effective May 3, 2012, Employee and Labor Relations Manual (ELM) 436, Back Pay, is revised to update Postal Service™ procedures. Some revisions are not significant: these include changes in section titles, job titles, and organization names as well as improvements in grammar or style.
Employee and Labor Relations Manual (ELM)
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4 Pay Administration
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430 Basic and Special Pay Provisions
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436 Back Pay
[Revise 436 to read as follows:]
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436.2 Limitations
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[Revise 436.2b to read as follows:]
b. Back pay is allowed, unless otherwise specified in the appropriate award or decision, provided the employee has made reasonable efforts to obtain other employment, as follows (see also 436.42f).
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[Revise 436.2d to read as follows:]
d. Leave that is recredited as a result of the corrective action may not exceed the maximum amount of leave to which the employee was eligible (see 512.321).
Uncapped annual leave is recredited as a result of the reversal or modification of a removal by the Equal Employment Opportunity Commission or, for employees eligible for veterans’ preference, by the MSPB.
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436.4 Documents in Support of Claim
436.41 Statements by Local Official
[Revise 436.41 to read as follows:]
The following must be provided on PS Form 8039, Back Pay Decision/Settlement Worksheet:
a. The local official must provide a tabulation of the number and type of pay hours with which the employee should have been credited during the back pay period, including any annual or holiday leave taken, as follows:
(1) Overtime hours and/or night differential, as applicable, are determined by averaging the number of hours that other employees of the office with the same employment status were assigned during the back pay period.
(2) If the claim is for a part-time flexible employee, a tabulation must be provided that shows the number and type of pay hours the employee experienced for a full 13 pay periods prior to the separation or suspension. If the back pay period is less than 1 full pay period, only a 6-pay-period tabulation is required.
b. The local official must provide a statement indicating whether the employee is entitled to any of the following during the back pay period:
(1) Premium pay (see 434).
(2) Change in pay rate or salary schedule.
(3) Step increase and date effective.
(4) Change in leave category and date effective.
(5) Other changes in pay of a general application.
(6) Any other employment-related benefits.
c. The local official must provide a statement indicating that had the employee not been suspended or removed he or she would have worked the hours as reported.
d. The local official must provide a statement showing that monies earned by the employee for other employment during the period covered by the corrected action must be deducted, provided the earnings were from work that replaced the lost postal employment (see 436.2a).
e. The local official will use the employee’s responses to the questions in PS Form 8038, Employee Statement to Recover Back Pay, as a reference when completing PS Form 8039 (see 436.42). Any discrepancies between the two back pay forms should be resolved prior to submission of the forms for processing.
f. The local official must ensure that PS Form 8039 is completed in full and all necessary signatures, including the employee’s, are obtained prior to submission of the documents for processing.
436.42 Statements by Employee
The following must be provided by the employee on PS Form 8038, Employee Statement to Recover Back Pay:
a. Where the original action resulted in separation or suspension, the employee must furnish the following:
(1) The employee must provide a statement as to whether he or she earned any income during the back pay period. If the employee received any outside earnings, the employee must provide information on whether the earnings were from any of the following: (a) a part-time job held at the time of removal; (b) in a new job; or (c) in an enlarged part-time job obtained to replace Postal Service employment. In any of those cases, the employee must provide a statement from the employer showing the record of hours worked and gross earnings during the back pay period.
(2) If the employee was already working in a part-time job at the time of removal or suspension, the employer should include the employee’s record of employment for the 6–month period prior to the removal or suspension.
(3) If outside earnings were from self-employment, the employee must provide an affidavit stating the amount earned during the back pay period. If such employment existed before the back pay period, the earnings must also be stated for 13 pay periods prior to the back pay period.
b. The employee must provide a statement as to whether he or she received any unemployment compensation, and if so, state the amount received and the state that made the payments.
c. The employee must provide a statement that the he or she was ready and able to perform his or her job during the back pay period. If not, the employee must state inclusive dates not ready and able, and the cause of the incapacity or unavailability. The employee may request payment of sick or annual leave, as appropriate, to his or her credit, for the period of incapacity or unavailability during the back pay period.
d. Where the original action resulted in separation or indefinite suspension and the employee obtained no outside employment for all or any part of the back pay period, the employee must furnish the following:
(1) If the back pay period is 45 days or less, the employee is not required to certify or to provide documentation in support of efforts to secure other employment during this period.
(2) If the back pay period is more than 45 days and does not exceed 6 months, the employee must provide a statement certifying the reasons why he or she did not obtain outside employment for all parts of the back pay period that exceeded the first 45 days.
(3) If the back pay period is more than 6 months, the employee must provide documentation in support of efforts to secure other employment for all parts of the back pay period that exceed the first 45 days.
e. On health benefit coverage, the employee should state whether he or she desires to: (1) enroll in any plan, the same as a new employee; or (2) have the prior enrollment reinstated retroactive to the date it was terminated.
f. Where the original action resulted in denial of employment with the Postal Service, the individual must provide documentation in support of his or her efforts to secure other employment for all parts of the back pay period. The individual must also provide a statement of earnings during the back pay period as required by 436.42a.
g. The employee must complete in full and sign both PS Form 8038 and PS Form 8039 indicating his or her agreement or disagreement with the local official’s completion of the form. If the employee does not agree, the basis for the disagreement should be explained.
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436.7 Interest on Back Pay
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436.72 Availability of Interest
[Revise 436.72 to read as follows:]
Interest is paid on back pay only under the following circumstances:
a. Decisions — awards resulting from legally binding determinations by courts of law, administrative agencies, or the grievance and arbitration process. They are handled as follows:
(1) Administrative Agency Decisions. Interest is paid automatically by Accounting Services for decisions issued by the following agencies:
(a) Merit Systems Protection Board.
(b) Equal Employment Opportunity Commission.
(c) National Labor Relations Board.
(2) Court Decisions. Interest is not paid unless specifically awarded in the decision.
(3) Arbitration Decisions. Interest is paid automatically for arbitration decisions that award back pay for a disciplinary suspension or removal for:
(a) Employees represented by the National Postal Mail Handlers Union (NPMHU) for cases heard after February 20, 1991.
(b) Employees represented by the National Association of Letter Carriers (NALC) and the American Postal Workers Union (APWU) for cases heard after June 12, 1991.
(c) Employees represented by the National Rural Letter Carriers’ Association (NRLCA) for cases heard after February 3, 1996.
Note: For arbitration decisions that are unrelated to a disciplinary suspension or removal, interest is not paid unless it is specifically required by the award.
b. Settlements — awards resulting from agreements between a representative of the Postal Service and an authorized employee representative that are reached through negotiation. Interest is not paid unless it is specifically required by the settlement agreement.
436.73 Determination of Rate of Interest
[Revise 436.73 to read as follows:]
When interest is paid on back pay, the interest rate is determined as follows:
a. Decisions (see Exhibit 436.73a):
(1) Merit Systems Protection Board. The rate of interest is based on the veterans’ preference eligibility of the employee.
(a) For veterans’ preference eligible employees, the rate of interest is calculated using the Internal Revenue Code overpayment rate (26 U.S.C. 6621(a)(1)). Computation methods for applying the rate of interest are as found in 5 CFR 550.806.
(b) For non-veterans’ preference eligible employees, the rate of interest is calculated using the federal judgment rate (28 U.S.C. 1961).
(2) Equal Employment Opportunity Commission. Interest is paid at the Internal Revenue Code overpayment rate (26 U.S.C. 6621(a)(1)). Computation methods for applying the rate of interest are as found in 5 CFR 550.806.
(3) National Labor Relations Board. Interest is paid at the rate assessed by the Internal Revenue Service for the underpayment of federal taxes (26 U.S.C. 6621(a)(2)).
(4) Court Decisions. Interest is paid at the federal judgment rate (28 U.S.C. 1961).
(5) Arbitration Decisions. For arbitration decisions that award back pay for disciplinary suspension or removal, interest is paid at the federal judgment rate (28 U.S.C. 1961).
Note: For arbitration decisions unrelated to disciplinary suspension or removal, interest is not paid unless specifically required by the award.
b. Settlements (see Exhibit 436.73b):
(1) Merit Systems Protection Board (MSPB). The rate of interest for MSPB causes is based on the veterans’ preference eligibility of the employee.
(a) For veterans’ preference eligible employees, the rate of interest is calculated using the Internal Revenue Code overpayment rate (26 U.S.C. 6621(a)(1)). Computation methods for applying the rate of interest are as found in 5 CFR 550.806.
(b) For non-veterans’ preference eligible employees, the rate of interest is calculated using the federal judgment rate (28 U.S.C. 1961).
(2) Equal Employment Opportunity Commission. Interest is paid at the Internal Revenue Code overpayment rate (26 U.S.C. 6621(a)(1)). Computation methods for applying the rate of interest are as found in 5 CFR 550.806.
(3) National Labor Relations Board. Interest is paid at the rate assessed by the Internal Revenue Service for the underpayment of federal taxes (26 U.S.C. 6621(a)(2)).
(4) Court Settlements. Interest is paid at the federal judgment rate (28 U.S.C. 1961).
(5) Grievance Settlements. Interest is paid at the federal judgment rate (28 U.S.C. 1961).
Exhibit 436.73a Interest on Back Pay Decisions
Exhibit 436.73b Interest on Back Pay Settlements
436.74 Responsibility
[Revise 436.74 to read as follows:]
Eagan Accounting Services is responsible for calculating the amount of interest payable.
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We will incorporate the complete text of this revision into the next printed version of the ELM and into the online update available on the Postal Service PolicyNet website:
n Go to http://blue.usps.gov.
n Under “Essential Links” in the left-hand column, click PolicyNet.
n On the PolicyNet page, click Manuals.
(The direct URL for the Postal Service PolicyNet website is http://blue.usps.gov/cpim.)
— Compensation,
Labor Relations, 5-3-12
