OPM Seeking to Limit Back Pay for Federal Employees

Dec 8, 2020

OPM Federal

There have been a lot of recent changes to regulations that may affect Federal Employees directly and we want to make sure that you are kept up to date with any recent changes to help prepare you in advance.

On October 6, 2020, the Office of Personnel Management (OPM) sent out a proposal stating that it is looking to make modifications to the previous rules enacted under the Back Pay Act in 1981. This new proposal would directly impact federal employees that are seeking back pay, which is why we are going to go into detail about what this new proposal is and how it could affect you or someone that you know.

What is the proposal?

This new proposal would revise definitions and add restrictions to limit the type of circumstances where federal employees could seek back pay.

This proposal was filed and posted on the Federal Register on October 6, 2020 stating that “OPM proposes to add a definition of the term “personnel action” and revise the definition of “unjustified or unwarranted personnel action” to clarify that an unjustified or unwarranted personnel action must involve a personnel action such as a suspension, change in grade, or removal, and that the Back Pay Act does not cover pay actions unrelated to personnel actions. OPM also proposes defining the term “employee’s personal representative” to clarify who can request payment of attorney fees on behalf of an employee.”

How would this effect the union?

Most federal employees will choose to have their union represent them in a regular back pay claim as the union lawyers already know federal regulations and are trusted by the federal employee. If they win the case, then the employee is awarded their back pay and OPM is mandated to pay the union attorney fees on behalf of the employee regardless of the amount of back pay that was awarded to the employee.

Therefore OPM is trying to redefine the term “employee’s personal representative” to exclude union attorneys. OPM gave the example of a case where the Jesse Brown VA hospital was ordered to give an employee a $1,000 performance award. In addition to ordering the Department of Veterans Affairs to pay the performance award, the arbitrator also ordered $30,387.50 in attorney fees under the Back Pay Act for the union attorney.

OPM is trying to limit who can be awarded attorney fees because they believe that “requiring agencies to pay tens of thousands of dollars in attorney fees in litigation over much smaller performance awards wastes agency resources.”

What does this mean for Federal Employees?

OPM’s new proposal would limit the type of circumstances where federal employees could seek back pay. Currently, federal employees can seek back pay over debt collections, improper overtime payments, failing to win cash bonuses, and denial of leave or official time requests. However, under OPM’s new regulations, they would restrict claims to prohibited personnel practices, actions “based on unacceptable performance,” other adverse personnel actions promotions, demotions, changes in step or grade, transfers, reassignments, and changes from full-time to part-time work.

This means that any claims involving improper performance awards, retirement annuities, overtime pay, and many other circumstances, will not be accepted as they do not fall within the lines of the redefined personnel actions in the new proposal.

This change in definition could lead to a loss of possible back pay to thousands of federal employees.

How does this rule impact Federal Disability Retirement?

This new proposal will not affect the Federal Disability Retirement process or your estimated benefit annuity. However, keep in mind that if you are also trying to receive back pay on top of your Federal Disability Retirement annuity, your specific case might not qualify under the new revisions. This is where our firm aims to help our clients build the strongest possible case in their favor to receive all pay that is owed from a benefit annuity to back pay.

How does this affect OWCP Federal Workers’ Compensation?

This new proposal will not affect OWCP Federal Workers’ Compensation directly. However, keep in mind that if you are also trying to receive backpay on top of your OWCP Workers’ Compensation, then your specific case might not qualify under the new revisions.

If you are looking to seek back pay from OPM, then we recommend that you contact your union rep directly to discuss your options as they may change based on your specific circumstances. If you are a Federal Employee that is needing assistance with your Federal Disability Retirement or OWCP Federal Workers Compensation case, then contact us to schedule a FREE consultation with us.

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