Docket No. AWG 24-265

FINAL DECISION

This matter arises under our administrative wage garnishment procedures. In certain cases, the Postal Service may decide to send a nontax debt to the United States Department of the Treasury (“Treasury”) for collection. These debts may involve any indebtedness to the United States, but primarily involve former employees who owe money to the Postal Service. The procedures by which the Postal Service may transfer this debt are set forth in 31 U.S.C. § 3716 and 31 C.F.R. § 285.5. Also, the Postal Service has a separate agreement with Treasury that governs these debts. See, e.g., CY2024 Agreement to Certify Federal Nontax Debts for the Centralized Receivables Service, the Cross-Servicing Program, and the Treasury Offset Program (“Treasury Certification Agreement”).

If a debtor requests a hearing after receipt of a Notice of Intent to Initiate Administrative Wage Garnishment from Treasury pursuant to 31 C.F.R. § 285.11, the matter is referred to the Judicial Officer for resolution. Our review of these debts is largely limited to two issues. The first is whether the Postal Service complied with due process provisions under the regulations, and its obligations under the Treasury Certification Agreement. 31 U.S.C. § 3716. This review consists of accepting evidence from the Postal Service that prior to its referral of the debt to Treasury, the Postal Service gave the debtor appropriate notice. 31 C.F.R. § 285.5(d)(6)(ii)(A). The significance of the prior notice is that it offers the debtor an opportunity to resolve the debt with the agency prior to transfer to Treasury. It allows the debtor to avoid the sometimes-significant collection fees that Treasury adds to these debts. The notice requirements are a prerequisite to any initiation of collection, including wage garnishment. Should the agency improperly certify the debt to Treasury, the agency must recall the debt. See Treasury Certification Agreement, Section II.D.(d) and (e).

The second issue requires us to review whether the debt is valid. The Postal Service carries the burden of proof on both issues. If successful, the Postal Service may, with the assistance of Treasury pursuant to its Treasury Certification Agreement, collect both the debt and any related Treasury fees by administrative wage garnishment. Mr. Desrouilleres does not challenge the validity of the debt at issue here. Rather, in this case, Mr. Desrouilleres challenges whether he received proper notice under 31 U.S.C. § 3716. As the facts are not in dispute, I must decide this case on the legal issue presented to me. Accordingly, a hearing in this matter was unnecessary.

The statute governing notice to a debtor does not specify the means of delivery, but the notice must contain the following information: “[W]ritten notice of the type and amount of the claim, the intention of the head of the agency to collect the claim by administrative offset, and an explanation of the rights of the debtor under this section.” 31 U.S.C. § 3716(a)(1). When the Postal Service initiates collection of a debt it sends a “Dunning notice” along with an invoice to the former employee debtor. ¹ After the invoice is sent to the debtor, the Postal Service may transfer the debt to Treasury for collection if there was no response from the debtor. 31 C.F.R. § 285.5(d)(3). Among other things, a proper transfer of the debt requires the agency to certify that it provided the proper due process to the debtor prior to the transfer of the debt to Treasury. 31
C.F.R. § 285.5(d)(6)(ii)(A).

If the Treasury later seeks to collect the debt by administrative wage garnishment, it must comply with the provisions of 31 C.F.R. § 285.11. These regulations set forth the detailed process that federal agencies, including the Postal Service, must follow to permit nontax debts to be collected by wage garnishment through Treasury. This regulation also permits the hearing process that Mr. Desrouilleres requested in this case.

As discussed, Mr. Desrouilleres does not challenge the validity of the debt. The question before me is what constitutes sufficient notice to the debtor under 31 U.S.C. § 3716. Specifically, Mr. Desrouilleres challenges the notice sent to him by the Postal Service prior to the transfer of the debt to Treasury. On July 23, 2022, Mr. Desrouilleres submitted PS Form 2574 Resignation/Transfer from the Postal Service to the agency. This form seeks, among other information, the employee’s “mailing address and telephone number.” Prior to his resignation, Mr. Desrouilleres had been in an unpaid status for an extended period and had moved to his new address. Mr. Desrouilleres completed this section with his current mailing address and telephone number. This information was different from the Postal Service’s address on file.

Invoice No. 703354333 in the amount of $3,005.05 was sent on or about October 12, 2022, to Mr. Desrouilleres’ address on file. This was the “Dunning notice” referenced above. Mr. Desrouilleres credibly stated that he never received the notice as it was addressed to his former residence and not his current mailing address as reported on the PS Form 2574 submitted in July.

Our caselaw has found that the Postal Service need not prove actual receipt of the notice if it was sent to the employee’s last known address. Billings v. United States Postal Service, AWG 22-306, 2023 WL 3504885 (April 11, 2023) (and cases cited therein). We have often cited the language in 31 C.F.R. § 285.11 as the applicable requirement. Further investigation reveals that regulations promulgated under 31 U.S.C. § 3716 appear to apply slightly differing standards to the type of notice contemplated depending upon the anticipated collection method. For example, under 31 C.F.R. § 285.2 Offset of tax refund payments to collect past-due, legally enforceable nontax debt, the regulations state that the agency has “[n]otified, or has made a reasonable attempt to notify, the debtor that the debt is past-due[.]” Likewise, under 31 C.F.R.
§ 285.5 Centralized offset of Federal payments to collect nontax debts owed to the United States,
the regulations require that the agency make “a reasonable attempt to provide each debtor with
. . . [w]ritten notification, at least sixty days prior to submitting the debt and at the debtor's most current address known to the agency[.]” And as previously noted under 31 C.F.R. § 285.11 Administrative wage garnishment, that notice means “at least 30 days before the initiation of garnishment proceedings, the agency shall mail, by first class mail, to the debtor’s last known address.” Under 31 C.F.R. § 285.5, the regulation further states that “[t]o the extent any provision of this rule is inconsistent with a more specific provision of § 285.2, § 285.4 or § 285.7 of this part, the more specific provision shall apply.”

Administrative wage garnishment, the regulation at issue here, is slightly different than the above-cited regulations. It first acknowledges that “[n]othing in this section requires agencies to duplicate notices or administrative proceedings required by contract or other laws or regulations.” 31 C.F.R. § 285.11(b)(6). It then sets out specific requirements that include an opportunity for hearing. This section appears to place the notice requirement upon the Treasury as the agency because in this case the Postal Service previously transferred the debt to Treasury under 31 U.S.C. § 3716. Henry v. United States Postal Service, AWG 21-524, 2022 WL 1715225 (May 26, 2022) (“This definition clearly permits Treasury to initiate an AWG notice rather than just the creditor agency.”) In other words, the key provisions regarding notice under this regulation are inapplicable to Mr. Desrouilleres’ notice argument.

The notice contemplated by 31 U.S.C. § 3716 remains the original Dunning notice. That Dunning notice must comply with 31 C.F.R. § 285.5 because the original transfer was done as part of the Treasury offset program. Thus, the notice must satisfy the requirement that the agency made “a reasonable attempt to provide each debtor with . . . [w]ritten notification, at least sixty days prior to submitting the debt [to Treasury] and at the debtor’s most current address known to the agency[.]” 31 C.F.R. § 285.5(d)(6)(ii)(A). The most current address known to the agency was submitted by Mr. Desrouilleres on PS Form 2574 on
July 23, 2022. That form, which is presumably the basis for the execution of a PS Form 50 from the Human Resources Shared Services Center (HRSSC), is sufficient notification to the agency of the employee’s most current address.

The Postal Service noted that ELM § 665.5 states that “[e]mployees must keep the installation head informed of their current mailing addresses. Any change in mailing addresses must be reported to the installation head on PS Form 1216, Employee’s Current Mailing Address, through “Self Service” on the Postal Service Blue Page, or through USPS approved methods including PostalEase.” I agree that this provision is both relevant and critical to my analysis.

PS Form 2574 is a Postal Service generated official form. It is used for the purposes of placing the HRSSC on notice of an employee’s separation or transfer. Among other things, it requires the employee to provide an updated mailing address. As this information is vital for HRSSC records, including presumably where to mail the employee’s separation materials and terminal leave check, I find that it constitutes a “USPS approved method” for notifying the agency of a change of address.

ELM § 665.5 contemplates that not every employee will use PS Form 1216 to notify the agency of its change of address, and the broad language within § 665.5 suggests that the Postal Service is open to other acceptable methods for notification. By its plain reading, this section does not limit the employee to only using PS Form 1216 or through PostalEase to notify the agency of a change of address but leaves open the possibility that other methods may satisfy the requirements. I find that submission of PS Form 2574 with updated address information satisfies that requirement.

The record reflects that Mr. Desrouilleres paid $901.51 in fees to Treasury. As the debt has been paid in full there is no need to recall the debt from Treasury. However, as I find that the Postal Service failed to comply with the requirements of 31 U.S.C. § 3716 regarding notice, it is
proper that the Postal Service reimburse Mr. Desrouilleres the Treasury related collection fees he incurred because of that improper transfer of the debt.

Lastly, Mr. Desrouilleres had four hours of sick leave available during his long period out of a pay status. He questioned why that leave was not applied to his benefit while annual leave was paid to him during the same period that resulted in the overdrawn leave debt at issue. There is nothing in the record to show that Mr. Desrouilleres made any timely request to use the four- hour balance of sick leave. At this late date, and without evidence in the record to support a four- hour credit, I decline to apply that to his debt.

ORDER

The Petition is GRANTED IN PART and DENIED IN PART.

The debt is VALID and has been paid in full, however the Postal Service SHALL REFUND the sum of $901.51 to Mr. Desrouilleres within thirty days of the date of this Order.