Docket No. AWG 24-70

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, Treasury may, on behalf of the Postal Service, collect both the debt and any related Treasury fees by administrative wage garnishment.

The two debts here were created because the Postal Service paid Ms. Mitchell past her resignation date. Ms. Mitchell does not dispute the issue of notice in this proceeding. Rather, she questions why there was a delay in the processing of her resignation. While the delay certainly led to the payroll error discussed here, the delay itself is not a defense to the debts.

Ms. Mitchell resigned from the Postal Service on September 15, 2022. Tr. 43; Resp. Exh 1. Her resignation was not processed until December 5, 2022. Id. During pay periods 21 through 24 of 2022, representing the dates October 1, 2022, through November 18, 2022, Ms. Mitchell was paid 144 work hours and 16 hours of holiday leave. Tr. 12–16, 24–28, 45; Resp. Exh. 5. This payroll error was more likely than not the result of Ms. Mitchell being on automatic clock rings, and the delay in the processing of her resignation. Thus, the payments made to Ms. Mitchell after the date of her resignation were clearly in error. The $5,502.25 amount reflected on Invoice No. 703375609 is an accurate calculation of the overpayment based upon Ms. Mitchell’s separation date salary. Tr. 24–28.

Likewise, the Postal Service made contributions to Ms. Mitchell’s Thrift Savings Plan account after the date of her resignation consistent with the above overpayment. Tr. 17–23. Those payments totaled $336.12 as evidenced by Invoice No. 703394139. Id.

Through testimony and exhibits, the Postal Service met its burden of proof that the above invoices are valid debts. It appears that Treasury has taken some payments toward one of the debts. The Postal Service shows a balance due of $1,194.83 on Invoice No. 703375609, and the full balance remaining of $336.12 on Invoice No. 703394139.

ORDER

The Petition is DENIED.

The debt of $5,502.25 (Invoice No. 703375609) is VALID. The Postal Service, through the Treasury, may collect the balance and associated fees by administrative wage garnishment or as otherwise permitted by federal law.

The debt of $336.12 (Invoice No. 703394139) is VALID. The Postal Service, through the Treasury, may collect the balance and associated fees as permitted by federal law.