Effective immediately, the Employee and Labor Relations Manual (ELM), Chapter 4, Pay Administration, is revised to set forth policies and procedures for the collection of debts owed by current and former Postal Service employees, bargaining and nonbargaining, by salary and administrative offset.
Accordingly, subchapters 450 and 460 are revised and the following subchapters are added:
n 470, Administrative Offsets for Former Postal Service Nonbargaining Unit Employees.
n 480, Administrative Offsets for Former Postal Service Bargaining Unit Employees.
Current subchapter 470, Recognition and Awards, is renumbered 490.
Employee and Labor Relations Manual (ELM)
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4 Pay Administration
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[Revise the title of subchapter 450 to read as follows:]
450 Collection of Postal Debts From Nonbargaining Unit Employees by Salary Offset
451 General
[Revise 451 to read as follows:]
451.1 Scope
These regulations apply to the collection, by salary offset, of any debt owed the Postal Service by a current employee who is not included in a collective bargaining unit. The regulations in 452.3 may also apply to the collection of any debt owed the Postal Service by a current employee who is included in a collective bargaining unit, if the circumstances specified in 462.32 apply.
Generally, the Postal Service may withhold a maximum of 15 percent of an employee’s disposable pay each pay period by salary offset after providing the employee with certain due process rights (see 452). However, if a federal court has granted judgment upholding the debt, up to 25 percent of the employee’s pay may be withheld each pay period (see 453). Exceptions for bargaining unit employees are provided in 462.4.
451.2 Issues Not Covered in the Subchapter
The following issues are not covered in this subchapter:
a. Collection of debts from bargaining unit employees. Procedures governing the collection of Postal Service debts from bargaining unit employees are found in 460.
b. Other debt collection procedures. Procedures governing the collection of debts from former employees by administrative offset pursuant to the authority of section 10 of the Debt Collection Act, 31 U.S.C. 3716, are found in 470 and 480.
c. Debts due other federal agencies. Regulations governing the collection by involuntary salary offset of debts owed by Postal Service employees to federal agencies other than the Postal Service are not contained in this subchapter.
451.3 Representation
Employees have the right to representation and free choice of representative. If the employee’s designated representative is a Postal Service employee in a duty status, the representative is granted a reasonable amount of official time to perform any function for the employee that is authorized by these regulations.
451.4 Salary Offsets From Other Federal Employees
When the Postal Service requests that another federal agency or entity offset an individual’s federal salary payments, by Treasury Offset Program or otherwise, to satisfy a debt owed by that individual to the Postal Service, the Postal Service will notify the individual as required by law and provide an opportunity for review in accordance with 39 CFR 961 before the offset is taken.
451.5 Definitions
The following definitions apply to the material in this subchapter:
a. Administrative salary offset — the collection of a debt owed to the Postal Service or other government agency through deductions from the disposable pay of a Postal Service employee under the authority of section 5 of the Debt Collection Act of 1982, 5 U.S.C. 5514(a).
b. Court judgment salary offset — the collection of a debt owed to the Postal Service or other government agency through deductions from the current pay of a Postal Service employee under the authority of section 124 of Public Law 97-276.
c. Current pay or disposable pay — that part of an employee’s salary that remains 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.
d. Debt — any outstanding amount owed to the Postal Service by an employee.
e. Employee — a current employee of the Postal Service.
f. Pay — basic pay, special pay, incentive pay, retired pay, retainer pay, or any other authorized pay, including cost-of-living adjustment or territorial cost-of-living allowance, received by an employee.
g. Postmaster or installation head — the top management official at a Post Office or installation or the official who has supervisory responsibility for a debtor employed at Headquarters or in area offices. When the debtor is a postmaster or installation head, the term refers to the official to whom the postmaster or installation head reports.
h. Severe financial hardship — 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.
i. Waiver — the Postal Service’s cancellation, remission, or forgiveness of a debt, the recovery of which is covered by these regulations.
451.6 Time Computation
In computing any period of time prescribed or allowed by these regulations, the day the designated period of time begins to run is not included. The last day of the period computed is included, unless it is a Saturday, Sunday, or legal holiday, in which event the period runs until the end of the next day that is not a Saturday, Sunday, or legal holiday.
451.7 Effect of Waiver Request
If an employee requests a waiver of a debt, the recovery of which is covered by these regulations, that request does not stay the collection process. However, if the waiver request ultimately is granted, the amount collected is refunded to the employee.
451.8 Service of Notice and Delivery of Records
A postmaster or installation head must hand deliver any notice required by, or any records requested pursuant to, these regulations to an employee and must obtain a dated, signed receipt of delivery. If personal delivery is not possible, Certified Mail™ or Express Mail® service, return receipt requested, must be used.
452 Procedures Governing Administrative Salary Offsets
452.1 Determination and Collection of Debt
[Revise 452.1 to read as follows:]
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:
a. 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.
b. Other debts must be reported to the manager of the Financial Processing Branch on PS Form 1902, Justification for Billing Accounts Receivable.
c. 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.
d. 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
[Revise 452.21 to read as follows:]
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
[Revise 452.22 to read as follows:]
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:
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455 Action Upon Transfer or Separation
[Revise 455 to read as follows:]
455.1 Withholding Funds From Amount Due
If a Postal Service employee whose wages are subject to offset transfers to another federal agency or separates from employment, the Postal Service applies any amount due the employee at the time of his or her separation to the debt owed the Postal Service, subject to the requirements of 31 U.S.C. 3716 as outlined in 470 and 480, if appropriate. If the debt is still not satisfied, appropriate action as described in 455.2 or 455.3 should be taken.
455.2 Transfer to Another Federal Agency
If a Postal Service employee whose wages are subject to offset transfers to another federal agency, and the full debt cannot be collected from amounts due the employee from the Postal Service, the following procedures apply:
a. The Postal Service must request that the former employee’s new agency continue to offset the debtor’s salary until the debt is satisfied.
b. The request must specify all of the following:
(1) Amount of the original debt.
(2) Amount collected by the Postal Service through salary offsets.
(3) Amount that remains to be collected.
(4) Percentage of the debtor’s disposable earnings or current pay that should be deducted each pay period.
c. In addition, the Postal Service must certify that the former employee has been accorded all due process rights to which he or she is entitled.
d. When the Postal Service sends the request to the new employing agency, it must also send a copy to the former employee at his or her home address.
455.3 Collection of Debt Upon Separation
If the full debt cannot be collected from amounts due the employee at the time of his or her separation, the manager of the Financial Processing Branch must attempt to recover the debt from any retirement or disability payments due the former employee in accordance with the provisions of 5 CFR 831, Subpart R, or 5 CFR 845, Subpart D, subject to the requirements or 31 U.S.C. 3716 as outlined in 470 and 480, if appropriate.
460 Collection of Postal Debts From Bargaining Unit Employees by Salary Offset
461 General
461.1 Scope
[Revise 461.1 to read as follows:]
These regulations apply to the collection, by salary offset, of any debt owed the Postal Service by a current employee who is included in a collective bargaining unit. If the circumstances specified in 462.32 apply to such employees, 452.3 may also apply; consequently, 451.3, 451.6, and 451.8 may apply as well. Procedures governing the collection of a debt from a former employee by administrative offset pursuant to the authority of section 10 of the Debt Collection Act, 31 U.S.C. 3716, are found in 470 and 480.
461.2 Issues Not Covered in the Subchapter
[Revise 461.2 to read as follows:]
The following issues are not covered in this subchapter:
a. Other debt collection procedures. Procedures governing the collection of debts from former employees by administrative offset pursuant to the authority of section 10 of the Debt Collection Act, 31 U.S.C. 3716, are found in 470 and 480.
b. Debts due other federal agencies. Regulations governing the collection by involuntary salary offset of debts owed by Postal Service employees to federal agencies other than the Postal Service are not contained in this subchapter.
461.3 Definitions
[Revise 461.3 to read as follows:]
As used in this subchapter, the following terms have the meaning ascribed to them in 451.5:
a. Administrative salary offset.
b. Court judgment salary offset.
c. Current pay and disposable pay.
d. Debt.
e. Employee.
f. Pay.
g. Postmaster or installation head.
h. Severe financial hardship.
i. Waiver.
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465 Action Upon Transfer or Separation
[Revise 465 to read as follows:]
465.1 Withholding Funds From Amount Due
If a Postal Service employee whose wages are subject to offset transfers to another federal agency or separates from employment, the Postal Service applies any amount due the employee at the time of his or her separation to the debt owed the Postal Service, subject to the requirements of 31 U.S.C. 3716 as outlined in 470 and 480, if appropriate. If the debt is still not satisfied, appropriate action as described in 465.2 or 465.3 should be taken.
465.2 Transfer to Another Federal Agency
If a Postal Service employee whose wages are subject to offset transfers to another federal agency, and the full debt cannot be collected from amounts due the employee from the Postal Service, the following procedures apply:
a. The Postal Service must request that the former employee’s new agency continue to offset the debtor’s salary until the debt is satisfied.
b. The request must specify all of the following:
(1) Amount of the original debt.
(2) Amount collected by the Postal Service through salary offsets.
(3) Amount that remains to be collected.
(4) Percentage of the debtor’s disposable earnings or current pay that should be deducted each pay period.
c. In addition, the Postal Service must certify that the former postal employee has been accorded all due process rights to which he or she is entitled.
d. When the Postal Service sends the request to the new employing agency, it must also send a copy to the former employee at his or her home address.
465.3 Collection of Debt Upon Separation
If the full debt cannot be collected from amounts due the employee at the time of his or her separation, the manager of the Financial Processing Branch must attempt to recover the debt from any retirement or disability payments due the former employee in accordance with the provisions of 5 CFR 831, Subpart R, or 5 CFR 845, Subpart D subject to the requirements or 31 U.S.C. 3716 as outlined in 470 and 480, if appropriate.
[Add subchapter 470 to read as follows:]
470 Administrative Offsets for Former Postal Service Nonbargaining Unit Employees
471 General
471.1 Definitions
For purposes of this subchapter, the following definitions apply:
a. Administrative offset — the withholding of money due and payable by the Postal Service or the United States to an individual, or held by the Postal Service or the United States on behalf of an individual, to satisfy a debt owed the United States by that person, as defined in 31 U.S.C. 3701(a)(1).
b. Debt — an amount of money, funds, or property that has been determined by an agency official to be due to the United States from any person, organization, or entity (except another federal agency), including an amount of money, funds, or property owed by a person to a state, the District of Columbia, American Samoa, Guam, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, or the Commonwealth of Puerto Rico.
c. Federal Claims Collection Standards (FCCS) — standards promulgated by the Department of Justice and the Department of the Treasury and codified at 31 CFR 900–904.
d. Former employee — an individual whose employment with the Postal Service has ceased; an employee is considered formally separated from the Postal Service rolls as of close of business on the effective date of his or her separation.
471.2 Scope
These regulations apply to the collection by administrative offset of any debt owed the Postal Service by a former employee who is not included in a collective bargaining unit. Before collecting a debt by administrative offset, the Postal Service will, to the extent feasible, facilitate the informal resolution of the debt and provide the individual with an opportunity to voluntarily repay the debt.
471.3 Authority
Under section 10 of the Debt Collection Act, 31 U.S.C. 3716, the Postal Service may, after providing certain procedural rights, take an administrative offset from payments due to a former employee in order to satisfy any debt that former employee owes to the Postal Service.
472 Federal Claims Collection Standards Adopted
The provisions for administrative offset in the FCCS, set forth in 31 CFR 901.1–12, shall govern the taking of an administrative offset by the Postal Service and are hereby adopted without change by cross-reference. In the event of any inconsistency between this regulation and the FCCS, the provisions of the FCCS will prevail.
472.1 Notice and Opportunity for Review
472.11 Procedures
The Postal Service may initiate an administrative offset only after the former employee has been provided with written notice in compliance with the administrative offset provisions of the FCCS. The written notice must inform the former employee that he or she may pursue one or more of the following options:
a. Inspect and copy Postal Service records related to the debt.
b. Request a review of the determination of indebtedness, in accordance with 39 CFR 966.
c. Make a written agreement to repay the debt.
472.12 Exceptions
The Postal Service may omit these procedures in certain circumstances set forth in the FCCS. These circumstances include, but are not limited to, the following:
a. If the Postal Service first learns that a former employee owes money when insufficient time is available to afford the employee prior notice and an opportunity for review before the former employee must be paid. When prior notice and an opportunity for review are omitted under these circumstances, the Postal Service will give the former employee notice and an opportunity for review as soon as practicable and will promptly refund any money found not to have been owed by the former employee.
b. If the Postal Service (or another agency) has already given a former employee the notice and review opportunities set forth in the FCCS with respect to a particular debt, the notice and review may be omitted. This includes, but is not limited to, when the Postal Service has already provided a former employee with the notice and review opportunities set forth in 450 and 460 with respect to a particular debt.
472.2 Request for Review
The procedures for requesting a review of the Postal Service’s determination of indebtedness and its proposed administrative offset schedule are set forth in 39 CFR 966, “Rules of Practice in Proceedings Relative to Administrative Offsets Initiated Against Former Employees of the Postal Service.”
472.3 Administrative Offset Programs
The FCCS provides for centralized debt collection and administrative offset programs, which are administered by the Department of the Treasury (“Treasury”), as well as non-centralized, agency-managed administrative offset programs, in which a government agency administers its own debt collection program.
a. The procedures in this subchapter apply to the Postal Service’s use of both centralized Treasury programs and non-centralized, agency-managed programs.
b. Examples of non-centralized, agency-managed programs include the following:
(1) The Postal Service may ask the Office of Personnel Management to satisfy a debt by offsetting the annuity of a federal employee who is leaving government service.
(2) The Postal Service may undertake an internal administrative offset, meaning an offset of payments due to the indebted individual from the Postal Service, in order to satisfy a debt.
c. When the Postal Service requests an administrative offset from another agency, or when the Postal Service refers a debt to Treasury for collection, the Postal Service must first:
(1) Afford the debtor the due-process procedures set forth in 472.1.
(2) Provide written certification to Treasury and/or the agency authorizing payment stating that:
(a) The debtor owes the past due, legally enforceable, delinquent debt in the amount stated; and
(b) The Postal Service has fully complied with its regulations concerning administrative offset.
[Add subchapter 480 to read as follows:]
480 Administrative Offsets for Former Postal Service Bargaining Unit Employees
481 Definitions
For purposes of this subchapter, the definitions set forth in 471.1 apply.
482 Right to Grieve Letters of Demand
Depending on the provisions of the applicable collective bargaining agreement, a former bargaining unit employee or the former employee’s union may have the right to initiate a grievance concerning an employer claim under the Debt Collection Act.
483 Application of Administrative Offset Provisions
483.1 Procedures
If a former bargaining unit employee pursues a grievance in accordance with 482, the procedures regarding administrative offsets in 470 and the review procedures in 39 CFR 966 apply under the following circumstances, if the Postal Service also intends to proceed with the collection of the debt:
a. Failure to initiate a grievance in time. A former bargaining unit employee or the former employee’s union does not initiate, within 14 days of the former employee’s receipt of a letter of demand (including the notice referenced in 472.1), a grievance challenging: (1) the existence of a debt owed to the Postal Service; (2) the amount of such debt; and/or (3) the proposed repayment schedule.
b. Failure to advance a grievance in time. A former bargaining unit employee or the former employee’s union initiates a grievance in time challenging: (1) the existence of a debt owed to the Postal Service; (2) the amount of such debt; and/or (3) the proposed repayment schedule, but the former employee’s union, following receipt of a decision denying the grievance, does not advance the grievance to the next step of the grievance procedure within the time limits set forth in Article 15 of the applicable collective bargaining agreement.
c. Partial settlement of a grievance. A grievance challenging: (1) the existence of a debt owed to the Postal Service; (2) the amount of such debt: and/or (3) the proposed repayment schedule is resolved at any stage of the grievance-arbitration procedure through a written settlement agreement between the Postal Service and the union under which the former employee remains liable for all or a portion of the debt.
d. Ruling of non-arbitrability. An arbitrator rules that a grievance concerning any letter of demand is not arbitrable.
483.2 Exceptions
If an arbitrator opens a hearing on the merits of a grievance concerning any letter of demand, the procedures regarding administrative offsets in 470, including the review procedures in 39 CFR 966, do not apply thereafter, unless:
a. The Postal Service and the union negotiate a partial settlement of the grievance under which the former employee remains liable for all or a portion of the debt and the Postal Service intends to proceed with the collection of the debt (see 483.1c); or
b. The arbitrator makes a ruling of non-arbitrability and the Postal Service intends to proceed with the collection of the debt (see 483.1d).
484 Stay of Collection of Debt
If (a) the provisions of the applicable collective bargaining agreement give a former employee the right to file a grievance concerning an employer claim under the Debt Collection Act, and (b) the former employee timely initiates such a grievance in accordance with the collective bargaining agreement’s provisions, then the Postal Service will stay the collection of the debt by administrative offset until after the disposition of the grievance.
[Renumber subchapter 470 as 490 and revise to read as follows:]
490 Recognition and Awards
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We will incorporate these revisions into the next printed version of the ELM and into the next online updates, 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, 12-13-12
