DS Agents deployed to Iraq charged overpayment for overtime worked, State Dept demands repayment. Isn’t that like working for free?

This is one of those cases that makes me simply want to — well, puke.

These DS agents were sent to Iraq, according to court papers, “in support of State’s attempt to establish a diplomatic presence in Iraq, after the fall of Saddam Hussein’s regime.” They worked ungodly long hours under difficult conditions. They got paid for those hours worked. But see – there was a pay cap to how much you could earn over there. At that time, the pay cap was the $128,200 maximum available under level V of the Executive Schedule. Due to OT, these DS agents exceeded the maximum amount permitted.

So, the State Department basically slapped the agents head for not keeping track of their earnings and required the agents to pay back the “overpayment.” In short, to give back all dollar amount in excess of  $128,200 per individual, even if those constitutes payment for hours already worked. Does that sound fair? Nope, but that’s what happened. It was considered a “debt” that had to be collected. Subsequently, a law was passed to allow for a pay cap waiver for certain Feds. But the State Dept apparently refused to grant those waivers.

Below is what the Foreign Service Grievance Board (FSGB) reported to Congress in its annual report:

In Richard Lubow, et al. v. United States Department of State, 2010 U.S. Dist. LEXIS 80830 (D.D.C. 2010), the Court vacated in part the decisions of the Department of State and the General Services Administration Contract Board of Appeals that denied pay claims by five individuals who were initially compensated for overtime hours worked in Iraq and then had those payments recouped on the grounds that to the extent that the pay exceeded the maximum pay that was permitted to be paid pursuant to 5 CFR Part 550, for 2004, it was paid contrary to law. The Department demanded repayment of the overpayment of wages and further declined to waive repayment of that debt.

The Court found that neither the Department nor the GSA Contract Board of Appeals had considered whether the provisions of the Emergency Supplemental Act for Defense, the Global War on Terror, and Tsunami Relief of 2005 (“Appropriations Act of 2005”), which permitted federal agencies to waive the pay cap for certain federal employees in calendar year 2005, up to a maximum of $200,000, applied to payments made to the plaintiffs (grievants) during pay period 25 of 2004, which sums were actually paid in January 2005. The Board of Contract Appeals did not consider the legislation because it had not yet been passed when it reached its conclusions. The court further found that there was no indication on the record that the State Department had taken the 2005 pay cap waiver into account when it determined whether and how much debt the plaintiffs owed the Department. The FSGB did not rule upon the issue because the argument was never asserted before the Board as a basis for finding that the debt was not valid, in part. The court remanded the cases to the State Department and the Board of Contract Appeals for further consideration taking into account the effects of the Department’s August 2005 waiver of the premium pay cap as it would apply to plaintiffs’ earnings in pay period 25 of 2004. No decision on the remand has been reported to the FSGB as of this date.

I did some digging, because dammit, this just doesn’t sound right, does it?

Here are the five cases filed with the Foreign Service Grievance Board. You may use the numbers in bold below to search for the full documents in the FSGB unfriendly web:

FSGB No. 2006-033 | Grievant was assigned to [Named Post] from February [Year #1] until February [Year #2].  In November [Year #1], the Department notified grievant that his pay had reached or would shortly reach the statutory cap applicable to the total of base pay plus premium pay.  In April [Year #2], the Department notified him that of the total [Year #1] premium payments made to him, $10,514.98 ($10,669.69 minus a $154.71 Medicare payment) exceeded the cap and required reimbursement.

FSGB No. 2006-032 | Grievant was assigned to [Named Post] from January [Year #1] until December [Year #1].  In November [Year #1], the Department notified grievant that his pay had reached or would shortly reach the statutory cap applicable to the total of base pay plus premium pay.  In April [Year #2], the Department notified him that of the total [Year #1] premium payments made to him, $435.94 ($442.35 minus a $6.41 Medicare payment) exceeded the cap and required reimbursement.

FSGB No. 2006-031 | Grievant was assigned to [Named Post] from February [Year #1] until February [Year #2].  In November [Year #1], the Department notified grievant that his pay had reached or would shortly reach the statutory cap applicable to the total of base pay plus premium pay.  In April [Year #2], the Department notified him that of the total [Year #1] premium payments made to him, $5,702.69 ($5,786.60 minus an $83.91 Medicare payment) exceeded the cap and required reimbursement.

FSGB No. 2006-030 | Grievant was assigned to [Named Post] from February [Year #1] until February [Year #2].  In November [Year #1], the Department notified grievant that his pay had reached or would shortly reach the statutory cap applicable to the total of base pay plus premium pay.  In April [Year #2], the Department notified him that of the total [Year #1] premium payments made to him, $6,308.07 ($6,400.88 minus a $92.81 Medicare payment) exceeded the cap and required reimbursement.

FSGB No. 2006-029 | The Department concluded that grievant was “at fault” because he was aware of the premium pay cap and failed to track adequately the premium payments he received or take corrective action when his pay reached the cap. [Grievant], a Department of State (the Department, agency) Diplomatic Security Officer, appeals the Department’s denial of his request to waive the collection of $7,775.83 in premium pay that exceeded the applicable annual premium pay cap.

Each of the five grievants had in their record of proceeding with the FSGB the following:

“Grievant contested this decision and asked the Department to waive reimbursement under the authority of 5 U.S.C. 5584.  Grievant contended that he was not aware of the overpayment and that when he did become aware of it late in the calendar year, the Department did little to remedy the situation.  He attributed the error to Department inefficiency and stated that it was unfair and unjust for him to reimburse the government for work he performed in extraordinarily dangerous conditions.  He alleged that, even if he had been aware that he was reaching the pay cap, there was nothing he could do to reduce the premium pay owed to him.  Working the standard 40-hour workweek was not an option in [Named Post].  He also objected to the fact that a waiver of the premium pay cap was authorized for employees who served in [Year #2] in [Named Post], but not for those who served in [Year #1].”

In January 2010, the FSGB held that “The Department did not abuse its discretion in denying grievants a waiver of repayment of the premium payments they received for service in (country) in 2004 that exceeded the pay cap established by 5 CFR 550. (see Record of Proceeding | January 7, 2010 FSGB Nos. 2006-029, 030, 031, 032, 033). See the following overview.

Grievants were assigned to (country) in 2004.  In late November of that year, the Department notified them that the combined total of their basic and premium pay had reached or would shortly reach the cap imposed on such pay by 5 CFR 550.  In April of 2005, grievants were advised definitively that their pay had exceeded the cap, and they were directed to repay the excess premium payments. 

Grievants requested that the Department waive collection of the overpayment, citing the authority set forth in 5 U.S.C. § 5584.  The Department denied the request, advising grievants that they were “at fault” under the terms of 5 U.S.C. § 5584(b)(1), and thus, under the statutory criteria, a waiver could not be granted.  Grievants contested that decision in a grievance filed with the Department.  The Department denied the grievance and grievants appealed to the Foreign Service Grievance Board (Board).

In a decision issued July 28, 2008, the Board determined that grievants were not at fault for incurring the excess payments, and that the Department, therefore, was not precluded from granting the waiver.  The Board directed the Department to reconsider on the merits.  In its reconsideration, the Department determined that collection of the debts was not “against equity and good conscience” and would be “in the best interests of the United States” in accordance with the criteria established by the statute granting the Department waiver authority.  It again directed that grievants make repayment of the debts.  Grievants again appealed to the Board.

Grievants argued that it was unfair for the Department to require them to repay payments made to them for overtime actually worked under dangerous conditions when the Department, recognizing the inequity of such a situation, had raised the pay cap for those serving in Iraq in subsequent years.  The Department countered that the legislation authorizing the pay cap to be raised had only been passed the year after grievants’ service, and it did not apply retroactively.  It also contended that over thirty other employees in the same circumstances had been required to repay their debts and had done so, and that it would be inequitable not to require grievants to do so.

The Board found that the Department had applied the regulatory criteria and that there were equities on both sides.  It concluded, therefore, that the Department had not abused its discretion in denying the waiver.  The grievances were denied.

The lawsuit was subsequently filed in the U.S. District Court for the District of Columbia.  Although all FSGB docs posted online are stripped of grievant’s names and other identifying info such as post’s served, names of supervisors etc. the court document names the plaintiffs as Richard Lubow, Joseph Bopp, David Bennett, Frank Benevento and James Landis, each “a current or retired member of the State Department’s Bureau of Diplomatic Security, deployed to Iraq as Foreign Service Specialists.”

This lawsuit is about five DS agents but some thirty others who were affected by this policy opted to settle their “debts,” which means, they essentially worked those hours free for Uncle Sam. In the warzone.

In August 2010, U.S. District Court Judge John Bates ordered that “the decisions of Deputy Assistant Secretary of State Millete and the Board of Contract Appeals that plaintiffs owe a valid debt are REMANDED to the State Department and the Board of Contract Appeals, respectively, for additional consideration in light of the Department’s August 2005 waiver of the premium pay cap, which the Department has applied to earnings for work performed in pay period 25 of 2004.”

Approximately five years running to collect some $30,000 from these five agents; looks like that’s the bounced around time for these cases inside the system. Don’t tell me that Foggy Bottom does not have smarter eggs who can sort through this minor jungle. Dudes, it’s not like these agents did not work their butts off over these “overpayments” “debts” their earned money. 

I have not seen any update on the status after the court ruling. Hopefully this had been settled favorably but I cannot underestimate enough the unreasonableness of a bureaucracy.

Oh, by the way — how are we doing with collecting that $132 MILLION refund over the US Embassy construction in Iraq?