(a) The agency head (or designee) of the creditor Labor Department
agency shall send appropriate written demands to the debtor in terms
which inform the debtor of the consequences of failure to repay claims.
In accordance with guidelines as may be established by the Chief
Financial Officer, a total of three progressively stronger written
demands at not more than 30-day intervals will normally be made unless a
response to the first or second demand indicates that a further demand
would be futile and the debtor's response does not require rebuttal. In
determining the timing of the demand letters, agencies should give due
regard to the need to act promptly so that a debt to be collected by
salary offset will be recovered during the employee's anticipated period
of employment with the Government.
(b) In accordance with guidelines as may be established by the Chief
Financial Officer, the creditor Labor Department agency shall send (at
least 30 days prior to any deduction) written notice to the debtor,
informing such debtor as appropriate:
(1) Of the origin, nature and amount of the indebtedness determined
by the agency to be due;
(2) Of the intention of the agency to initiate proceedings to
collect the debt by means of deduction from the employee's current
disposable pay account;
(3) Of the amount, frequency, proposed beginning date, and duration
of the intended deductions;
(4) Unless such payments are excused in accordance with the FCCS, of
the creditor agency's policy concerning assessment of interest,
penalties, and administrative costs;
(5) Of the employee's right to inspect and copy Government records
relating to the debt or, if the employee or his or her representative
cannot personally inspect the records, to request and receive a copy of
such records;
(6) If not previously provided, of the opportunity (under terms
agreeable to the creditor agency) to establish a schedule for the
voluntary repayment of the debt or to enter into a written agreement to
establish a schedule for repayment of the debt in lieu of offset. The
agreement must be in writing, be signed by both the employee and the
creditor agency, and be documented in the creditor agency's files (4 CFR
102.2(e));
(7) Of the employee's right to a hearing conducted by an
administrative law judge of the Department of Labor, if a petition is
filed as prescribed by the Department of Labor. In the event the debtor
is an employee working in the
Office of Administrative Law Judges, the notification shall inform such
debtor of the right to elect to have the review of the agency's
determination heard and decided by a person who is not in the Office of
Administrative Law Judges, and not under the supervision and control of
the Secretary of Labor; in such a case, all provisions in this subpart
will otherwise apply, unless stated otherwise in the notification;
(8) Of the method and time period for petitioning for hearing;
(9) That the timely filing of a petition for hearing will stay the
commencement of collection proceedings, unless the creditor agency
determines that Sec. 20.81(d) applies and further informs the debtor of
the basis for its determination;
(10) That a final decision on the hearing (if one is requested) will
be issued at the earliest practical date, but not later than 60 days
after the filing of the petition requesting the hearing unless the
employee requests and the administrative law judge grants a delay in the
proceedings;
(11) That any knowingly false or frivolous statements,
representations, or evidence may subject the employee to:
(i) Disciplinary procedures appropriate under chapter 75 of title 5
U.S.C., part 752 of title 5, Code of Federal Regulations, or any other
applicable statutes or regulations;
(ii) Penalties under the False Claims Act, sections 3729-3731 of
title 31 U.S.C., or any other applicable statutory authority; or
(iii) Criminal penalties under sections 286, 287, 1001 and 1002 of
title 18 U.S.C., or any other applicable statutory authority;
(12) Of any other rights and remedies available to the employee
under statutes or regulations governing the program for which the
collection is being made; and
(13) That unless there are applicable contractual or statutory
provisions to the contrary, amounts paid on or deducted for the debt
which are later waived or found not owed to the United States will be
promptly refunded to the employee.
(c) Creditor Labor Department agencies shall also include in their
demand letters the notice provisions to debtors required by other
regulations of the Labor Department, pertaining to disclosures to credit
reporting agencies, administrative offset from other sources of funds,
and the assessment of interest, penalties and administrative costs, to
the extent inclusion of such is appropriate and practicable.
(d) The responsible agency head (or designee) shall exercise due
care to ensure that demand letters are mailed or hand-delivered on the
same day that they are actually dated. If evidence suggests that the
debtor is no longer located at the address of record, reasonable action
shall be taken to obtain a current address.
(e) The creditor Labor Department agency shall, in the initial
demand letter to the debtor, provide the name of an agency employee who
can provide a full explanation of the claim.
(f) In any internal Labor Department collection, the provisions of
Sec. 20.78 paragraphs (a) through (e) need not be applied to any
adjustment to pay which is not considered to be the result of collection
of a debt, such as excess pay or allowances caused by:
(1) An employee's election of coverage or a change of coverage under
a Federal benefits program requiring periodic deductions from pay, if
the amount to be recovered was accumulated in four pay periods or less;
or
(2) Ministerial adjustments in pay rates or allowances which cannot
be placed into effect immediately because of normal processing delays,
if the amount to be recovered was accumulated in four pay periods or
less.
