Pay & Benefits

OPM calls for narrower rules for awarding back pay

Under the Back Pay Act, federal employees have the right to have certain pay and attorney fees awarded to them if it is determined that a personnel action that resulted in them losing pay was unjust.

This back pay is different than what Congress grants to federal employees that are furloughed because of a shutdown.

But the Office of Personnel Management proposed Oct. 7 to narrow the kinds of situations that entitlement applies to by restricting what constitutes a personnel action and who can be considered a personal representative that would warrant the payment of attorney fees.

Under current Back Pay Act regulations, an employee would be entitled to back payment if an appropriate authority determines that a personnel action or pay action was unjust or unwarranted. This means that the government could be required to provide back pay due to an unjust action — such as a reduction in pay grade — or inaction — such as the employee being unfairly rejected for a performance bonus.

OPM’s proposed changes would remove much of the entitlement to receive back pay for agency inaction.

“The term ‘personnel action’ does not refer to other actions that could, outside the context of a [prohibited personnel practice], affect employee pay, such as debt collections, improper overtime payments, rejections for cash awards, leave denials or denials of taxpayer-funded union time,” OPM wrote in the proposed rule.

An employee could still file a complaint against an agency for any of the above actions but would not be guaranteed back payment under the Back Pay Act’s proposed regulation changes.

OPM argued that congressional efforts to expand the scope of the law acknowledge that it was only ever intended to cover personnel actions, such as “reductions in grade, removals, suspensions, and other unwarranted or unjustified actions.”

Under current interpretation, OPM argued, the Back Pay Act could be used to force the government to pay for expensive litigation over relatively small amounts of pay.

“For example, on January 12, 2020, an arbitrator held that the Jesse Brown VA hospital should have given 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,” OPM wrote.

“Requiring agencies to pay tens of thousands of dollars in attorney fees in litigation over much smaller performance awards wastes agency resources. It also encourages agencies to broadly distribute performance awards, to avoid litigation. This undermines the purpose of performance awards, which is to recognize, reward and incentivize high performance.”

The changes would also prevent union representatives from collecting attorney fees under the Back Pay Act, as the new regulation would interpret the definition of “employee” as an individual, rather than the collective employees that a union represents.

“OPM proposes clarifying that an employee’s personal representative is defined as the executor or administrator of a deceased employee. It should not refer to other potential representatives in administrative or legal proceedings,” OPM wrote.

“OPM believes this clarification is necessary because the courts have interpreted OPM’s use of this term to include labor organizations. Courts have then granted Chevron deference to this construction of OPM’s regulations and interpreted the Back Pay Act to authorize attorney fees to labor organizations.”

Such a change would mean that the attorney fee entitlement would only apply to the very rare set of circumstances where the employee against whom the unauthorized action was taken was deceased at the time of the decision, leaving the executor of that employee’s assets as the person entitled to payment by the government.

Comments on the proposed rule close Nov. 6.

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