Ronald D. Wilcox, M.D., DAB CR6245 (2023)

DECISION

Ronald D. Wilcox, M.D., an employee of the Department of Health and Human Services (HHS), has timely appealed HHS’s determination that he was overpaid $37,762.48 because, for two years, the agency mistakenly added, to his base pay, what should have been a one-time recruitment bonus, paid in two lump sums. 

I find that Petitioner was overpaid $37,762.48.  I therefore affirm HHS’s determination. 

Background

In a letter dated December 17, 2022, the Defense Finance and Accounting Service (DFAS), which handles payroll for HHS, advised Petitioner that, during the pay periods ending January 2, 2021, through December 18, 2021, he was overpaid $35,065.16.  HHS Ex. 16.  A second letter, also dated December 17, 2022, advised Petitioner that, during the pay periods ending December 5, 2020, through December 19, 2020, he was overpaid $2,697.32.  HHS Ex. 17.  Petitioner disputes the overpayments and, on January 6, 2023, requested a hearing.  

HHS now moves for summary judgment.  With its motion and brief (HHS Br.), it submits 19 exhibits (HHS Exs. 1-19).  In addition to his hearing request, Petitioner submits a “timeline of events,” marked P. Ex. 1, and an additional notice letter from DFAS, dated

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April 9, 2022, marked as P. Ex. 2.¹    In the absence of any objections, I admit into evidence HHS Exs. 1-19 and P. Exs. 1-2. 

The regulations that govern these proceedings instruct me to provide an oral hearing if I determine “that the matter cannot be resolved by review of documentary evidence alone because an issue of credibility or veracity is involved.”  45 C.F.R. § 33.6(c)(2).  In my prehearing order, I advised Petitioner that, to secure an oral hearing, he should affirmatively ask to cross-examine one of HHS’s witnesses and show that conducting an oral hearing is necessary to resolve an issue of credibility or veracity.  Prehearing Order at 5 (¶ 8) (January 24, 2023). 

HHS has proffered one witness and provided her direct testimony in the form of a written declaration.²    Petitioner has not asked to cross-examine her or otherwise indicated that an oral hearing is necessary.  I therefore decide this case based on the written record, without considering whether the standards for summary judgment are satisfied. 

Discussion

Petitioner owes the Department of Health and Human Services $37,762.48.³ 

The facts here are straightforward.  In a posting that opened on June 26, 2020, and closed on July 20, 2020, HHS’s Health Resources and Services Administration (HRSA), HIV/AIDS Bureau announced job openings for two physicians.  The jobs were listed at grade-level GS 15, with a salary range of $142,701 to $170,800.  HHS Ex. 1 at 1.  The posting indicated that recruitment incentives⁴  could be authorized and that the position

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was eligible for a “Physicians’ Comparability Allowance” of up to $30,000 per year.⁵    HHS Ex. 1 at 4, 6. 

Petitioner applied and negotiated his salary.  The HIV/AIDS Bureau requested approval for an advanced pay rate, as authorized in 5 C.F.R. Part 531, Subpart B (Superior Qualifications), which the Office of Human Resources (HR) approved.  HHS Ex. 8.  HR also approved a leave exception so that, even though he was new to federal service, Petitioner would receive eight hours of annual leave each pay period.  HHS Ex. 9.  It approved an annual $14,000 Physicians’ Comparability Allowance (HHS Ex. 10) and, most significant for purposes of this decision, a $29,200 recruitment incentive (or 20.53% of his base pay), to be paid in two lump sums.  HHS Exs. 10, 11.  

Based on these approvals, Petitioner should have received approximately $199,400 his first year:  $170,800 (the salary for a GS 15 step 10, including locality pay) + $14,000 (Physicians’ Comparability Allowance) + $14,600 (half of the recruitment incentive).   His second-year salary would have been roughly the same, depending on any cost-of-living adjustment.  Thereafter, however, the recruitment incentive would end, and he would be paid the salary for a GS 15 step 10 plus a Physicians’ Comparability Allowance only. 

In a letter to Petitioner, dated October 9, 2020, HRSA confirmed Petitioner’s appointment to the position, at GS 15, step 10, with an annual salary of $170,800.  HHS Ex. 3.  In an email sent the same day, Petitioner protested, claiming that “the last notification of salary . . . was $214[,000] per year.”  HHS Ex. 4 at 1.  He did not explain where that notification came from and has provided no evidence of it.  Nevertheless, a HRSA human resources specialist sent an amended letter, also dated October 9, 2020, stating, incorrectly, that his annual salary would be $214,000, which “reflects the 2020 GS pay rate.”  HHS Ex. 5.  In fact, the maximum GS pay rate in 2020 for Petitioner’s duty station was $170,800.  See U.S. Office of Personnel Management, Salary Table 2020-DCB, https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2020/DCB.pdf (last visited Feb. 28, 2023).  

In an email, dated October 19, 2020, a different HRSA human resources specialist corrected the error by accurately describing Petitioner’s compensation package: 

• He would receive a recruitment incentive of $29,200, which would be paid in two lump sums of $14,600 each.  The first payment would be paid when he started work – October 25, 2020.  The second would be paid a year later – October 24, 2021. 

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• His starting salary would be at the GS 15, step 10 level – $170,800. 
• In addition, he would receive a Physicians’ Comparability Allowance of $14,000. 
• He would have a higher annual leave accrual rate – 8 hours per pay period. 

HHS Ex. 6 at 1.  Petitioner acknowledges that he received the email but points out that it included no indication of the total being offered.  P. Ex. 1 at 2 (¶ 11).  It is, of course, not difficult to add these figures, and the total is obvious ($170,800 + $14,000 = $184,800 plus the additional $14,600 per year for the first two years). 

On October 24, 2020, Petitioner signed a Recruitment, Relocation, and Retention Incentives Service Agreement.  The document set out exactly what Petitioner would be paid:  $142,180 in base pay + $28,620 locality pay (total $170,800).  In addition, he would receive $14,000 (marked “other” on the form).  Finally, he would receive $29,200 as a recruitment incentive, paid in two lump sums of $14,600, on October 25, 2020, and October 24, 2021.  HHS Ex. 11 at 2-3. 

Petitioner began working at HHS on October 25, 2020.  HHS Ex. 11 at 2; HHS Ex. 19 at 2 (Ganey Decl. ¶ 8).  He apparently asked that his lump sum recruitment incentive be “spread out each pay period over the year to decrease the tax burden and was verbally told that would be fine.”  P. Ex. 1 at 2 (¶ 12). 

HRSA processed the recruitment incentive incorrectly.  Instead of paying the $29,200 (which represented 20.53% of his base pay) in two lump sums, it added 20.53% to his biweekly salary.  HHS Ex. 12; HHS Ex. 19 at 3, 4 (Ganey Decl. ¶¶ 10, 17).  This meant that he was paid an additional $1,348.66 every pay period for 54 pay periods, from October 2020 until November 2022, when auditors, reviewing recruitment incentive payments, discovered the mistake.  HHS Exs. 15, 18; see HHS Ex. 19 at 3, 4 (Ganey Decl. ¶¶ 10-12, 17). 

Petitioner maintains that in 2020 and 2021 he received no indication of an issue with the salary offered in his last offer letter, and he accepted the position with the understanding that $214,000 would be his starting salary.  “There is no indication in the offer letter that my salary would drop after the recruitment bonus was completed[,] and this was never verbally expressed to me by anyone at HR.”  P. Ex. 1 at 5.⁶   

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The October 9 letter with the incorrect salary information (HHS Ex. 5) was an unfortunate mistake, but staff corrected the error in the October 19 email.  HHS Ex. 6. Moreover, Petitioner himself signed the Recruitment, Relocation, and Retention Incentives Service Agreement, which detailed his salary plus the separate recruitment incentive.  HHS Ex. 11 at 2-3.  He knew or should have known exactly what his compensation would be.  In any event, HRSA was bound (as am I) to honor the recruitment incentive agreement.  No one from HRSA was authorized to pay Petitioner more than the approved compensation.  No one was authorized to pay the recruitment incentive in biweekly increments instead of two lump sum payments.  See HHS Ex. 19 at 3 (Ganey Decl. ¶ 10). 

As to the figures themselves, they are straightforward, and, aside from claiming that he should have been paid an annual salary of $214,000 (which I reject), Petitioner has not come forward with any evidence challenging the math.  In error, Petitioner was paid an additional $1,348.66 each pay period (or 20.53% of his base pay) for 54 pay periods – from the start of his federal employment through November 2022.  The total is offset by the amount of his approved recruitment incentive, $29,200. 

HHS has calculated the amounts by calendar year: 

HHS has recovered this amount through a salary adjustment, for which Petitioner was not entitled to a debt letter or review.  See 45 C.F.R. § 33.3(d)(2) (specifying that the Secretary need not provide advance written notice and the opportunity for a hearing if the overpayment occurred within the four pay periods preceding the adjustment). 

Thus, Petitioner owes the Department of Health and Human Services $37,762.48.⁷ 

With respect to Petitioner’s claims of financial hardship and his suggestion that he is being treated unfairly, my authority is limited.  I may review the validity of the overpayment, but I cannot grant equitable relief.   See U.S. Ultrasound, DAB No. 2302

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at 8 (2010); Wilfredo Nieves, DAB CR5882 at 1 (2021).  However, Petitioner may ask that the debt be waived, which, as HHS points out, is a separate process.  See Nieves at 1 n.1 (explaining that the Office of General Counsel is authorized to review waiver requests but will not do so if a hearing request is pending).  

Finally, pursuant to 45 C.F.R. § 33.6(d)(2)(ii), I find that Petitioner’s request for this review was not baseless, and he did not file it intending to delay collections activity.  

Conclusion

I sustain HHS’s determination.  Petitioner owes the United States government $37,762.48.  This decision is the final agency decision.  5 U.S.C. § 5514(a)(2).  

Endnotes

¹   HHS personnel informed Petitioner that the letter was a mistake, so it’s relevance here is marginal.  Request for Hearing at 1; P. Ex. 1 at 3.  

²   HHS initially filed an e-signed version of the witness declaration, explaining that the witness was travelling and unable to sign manually.  When she returned, HHS substituted her manually-signed copy. Petitioner did not object, and I allow HHS to substitute the exhibit. 

³   I make this one finding of fact/conclusion of law. 

⁴   A recruitment incentive is a bonus paid to a newly-appointed employee if the agency has determined that the position would be difficult to fill without it.  5 C.F.R. § 575.105(a). 

⁵   A Physicians’ Comparability Allowance is an annual bonus designed to recruit and retain physicians serving in the federal government.  See U.S. Office of Personnel Management, Fact Sheet: Physicians’ Comparability Allowances,  https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/physicians-comparability-allowances/ (last visited Feb. 28, 2023).  

⁶   I am baffled by Petitioner’s suggestion that no one told him that his salary would drop after HRSA completed paying the bonus incentive.  If, in fact, the bonus incentive were spread out over two years (as he requested) instead of paid in two lump sums, he should naturally have expected a lower paycheck after two years.  In fact, the evidence suggests that he understood that this could happen.  In an email to HR, sent October 23, 2020, he noted that part of his salary would be a recruitment bonus and asked, “Will that suddenly disappear after year one and my compensation drop dramatically?”  HR replied by explaining (again) that the recruitment incentive would be paid in two lump sums of $14,600.  The first would be paid when he began work, and the second would be paid at the start of his second year, approximate dates:  October 25, 2020, and October 24, 2021.  HHS Ex. 7. 

⁷   An overpayment for two additional pay periods (from November 2020) remains.  This debt has not been processed and is not before me.  HHS Br. at 7.