[Code of Federal Regulations]

[Title 28, Volume 1]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 28CFR11.8]



[Page 243-249]

 

                    TITLE 28--JUDICIAL ADMINISTRATION

 

                    CHAPTER I--DEPARTMENT OF JUSTICE

 

PART 11_DEBT COLLECTION--Table of Contents

 

               Subpart B_Administration of Debt Collection

 

Sec. 11.8  Salary offset.



    (a) Notice requirements before offset. Deductions under the 

authority of 5 U.S.C. 5514 will not be made unless the creditor agency 

provides the employee with a written Notice of Intent to Offset a 

minimum of 30 calendar days before salary offset is initiated. When the 

Department is the creditor agency, this Notice of Intent shall be hand-

delivered or sent by certified mail to the Assistant Director, Justice 

Employee Data Service, or to the Section Chief, Voucher and Payroll 

Section, Administrative Services Division, FBI, who shall then transmit 

the Notice of Intent to the debtor-employee. The Notice of Intent shall 

state:

    (1) That the organization head has reviewed the records relating to 

the claim and has determined that a debt is owed, including the amount 

of the debt and the facts giving rise to the debt;

    (2) The organization head's intention to collect the debt by means 

of deduction from the employee's current disposable pay account until 

the debt and all accumulated interest is paid in full;

    (3) A repayment schedule that includes the amount, frequency, 

proposed beginning date, and duration of the intended deductions;

    (4) The opportunity for the employee to propose an alternative 

written schedule for the voluntary repayment of the debt, in lieu of 

offset, on terms acceptable to the Department. The employee shall 

include a justification in the request for the alternative schedule. The 

schedule shall be agreed to and signed by both the employee and the 

organization head;



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    (5) An explanation of the Department's policy concerning interest, 

penalties, and administrative costs, including a statement that such 

assessments must be made unless excused in accordance with the Federal 

Claims Collection Standards;

    (6) The employee's right to inspect and copy all records of the 

Department pertaining to the debt claimed or to receive copies of such 

records if the debtor is unable personally to inspect the records, due 

to geographical or other constraints;

    (7) The name, address, and telephone number of an officer or 

employee of the Department to whom requests for access to Department 

records relating to the debt must be sent;

    (8) The employee's right to a hearing conducted by an impartial 

hearing official (an administrative law judge or other hearing official 

not under the supervision or control of the Attorney General) with 

respect to the existence and amount of the debt claimed or the repayment 

schedule (i.e., the percentage of disposable pay to be deducted each pay 

period), so long as a petition is filed by the employee as prescribed in 

paragraph (c)(1) of this section.

    (9) The name, address, and telephone number of the officer or 

employee of the Department to whom a proposal for voluntary repayment 

must be sent; and the name, address, and telephone number of an officer 

or employee of the Department who may be contacted concerning procedures 

for requesting a hearing;

    (10) The method and deadline for requesting a hearing;

    (11) That the timely filing of a petition for a hearing on or before 

the 15th calendar day following receipt of the Notice of Intent will 

stay the commencement of collection proceedings;

    (12) The name and address of the office to which the petition should 

be sent;

    (13) That the Department will initiate certification procedures to 

implement a salary offset not less than 30 days from the date of receipt 

of the Notice of Intent to Offset, unless the employee files a timely 

petition for a hearing;

    (14) That a final decision on whether a hearing will be held (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;

    (15) That any knowingly false or frivolous statements, 

representations, or evidence may subject the employee to:

    (i) Disciplinary procedures appropriate under 5 U.S.C. chapter 75, 5 

CFR part 752, or any other applicable statutes or regulations;

    (ii) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or 

under any other applicable statutory authority; or

    (iii) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 or 

under any other applicable statutory authority;

    (16) Any other rights and remedies available to the employee under 

statutes or regulations governing the program for which the collection 

is being made;

    (17) That unless there are applicable contractual or statutory 

provisions to the contrary, amounts paid on or deducted from debts that 

are later waived or found not to be owed to the United States will be 

promptly refunded to the employee, and

    (i) Interest shall be paid on any amount paid on or deducted from a 

debt that is found not to be owed to the United States; and

    (ii) Interest shall not be paid on any amount paid on or deducted 

from a debt that is later waived; and

    (18) That proceedings with respect to such debt are governed by 5 

U.S.C. 5514.

    (b) Review of Departmental records related to the debt. (1) An 

employee who desires to inspect or copy Department records related to 

the debt must send a letter to the official designated in the Notice of 

Intent requesting access to the relevant records. The letter must be 

received in the office of the salary offset coordination official within 

15 days after the employee's receipt of the Notice of Intent.

    (2) In response to a timely request submitted by the debtor, the 

designated salary offset coordination official will notify the employee 

of the location and time when the employee may inspect and copy records 

related to the debt.



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    (3) If the employee is unable personally to inspect the records, due 

to geographical or other constraints, the salary offset coordination 

official shall arrange to send copies of such records to the employee.

    (c) Opportunity for a hearing where the Department is the creditor 

agency. (1) Request for a hearing. (i) An employee who requests a 

hearing on the existence or amount of the debt held by the Department or 

on the offset schedule proposed by the Department must send such request 

to the office designated in the Notice of Intent. The request or 

petition for a hearing must be received by the designated office on or 

before the 15th calendar day following receipt by the employer of the 

notice.

    (ii) The employee must specify whether an oral hearing is requested. 

If an oral hearing is desired, the request should explain why the matter 

cannot be resolved by review of the documentary evidence alone. The 

request must be signed by the employee and must fully identify and 

explain with reasonable specificity all the facts, evidence, and 

witnesses, if any, that the employee believes support his or her 

position.

    (2) Failure to timely submit. If the employee files a request or 

petition for hearing after the expiration of the 15-calendar-day period 

provided for in paragraph (c)(1) of this section, the organization head 

may accept the request if the employee can show that the delay was the 

result of circumstances beyond his or her control or that he or she 

failed to receive actual notice of the filing deadline.

    (3) Obtaining the services of hearing official. (i) When the debtor 

is not a Department employee and the Department cannot provide a prompt 

and appropriate hearing before an administrative law judge or other 

hearing official, the Department may request a hearing official from an 

agent of the paying agency, as designated in 5 CFR part 581, appendix A, 

or as otherwise designated by the paying agency.

    (ii) When the debtor is a Department employee, the Department may 

contact any agent of another agency, as designated in 5 CFR part 581, 

appendix A, or as otherwise designated by the agency, to request a 

hearing official.

    (4) Procedure--(i) Notice. After the employee requests a hearing, 

the hearing official shall notify the employee of the form of the 

hearing to be provided. If the hearing will be oral, the notice shall 

set forth the date, time, and location of the hearing, which must occur 

no more than 30 days after the request is received. If the hearing will 

be conducted by examination of documents, the employee shall be notified 

within 30 days that he or she should submit evidence and arguments in 

writing to the hearing official.

    (ii) Oral hearing. An employee who requests an oral hearing shall be 

provided an oral hearing if the hearing official determines that the 

matter cannot be resolved by review of documentary evidence alone (e.g., 

when an issue of credibility or veracity is involved). The hearing need 

not be an adversarial adjudication, and rules of evidence need not 

apply. Oral hearings may take the form of, but are not limited to:

    (A) Informal conferences with the hearing official in which the 

employee and agency representative are given full opportunity to present 

evidence, witnesses, and argument;

    (B) Informal meetings in which the hearing examiner interviews the 

employee; or

    (C) Formal written submissions followed by an opportunity for oral 

presentation.



Witnesses who testify in oral hearings shall do so under oath or 

affirmation.

    (iii) Documentary hearing. If the hearing official determines that 

an oral hearing is not necessary, he or she shall make the determination 

based upon a review of the written record.

    (iv) Record. The hearing official shall maintain a summary record of 

any hearing conducted under this section.

    (5) Date of decision. The hearing official shall issue a written 

opinion stating his or her decision, based upon all evidence and 

information developed at the hearing, as soon as practicable after the 

hearing, but not later than 60 days after the date on which the petition 

was received by the Department, unless the hearing was delayed at the 

request of the employee, in which case the 60 day decision period shall 

be extended by the number of days by which the hearing was postponed. 

Decisions



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not timely rendered shall result in the waiver of penalty and interest 

costs. The decision of the hearing official shall be final.

    (6) Content of decision. The written decision shall include:

    (i) A summary of the facts concerning the origin, nature, and amount 

of the debt;

    (ii) The hearing official's findings, analysis, and conclusions; and

    (iii) The terms of any repayment schedules, if applicable.

    (7) Failure to appear. If, in the absence of good cause shown (e.g., 

illness), the employee or the representative of the Department fails to 

appear, the hearing official shall proceed with the hearing as 

scheduled, and make his or her determination based upon the oral 

testimony presented and the documentation submitted by both parties. At 

the request of both parties, the hearing official may schedule a new 

hearing date. Both parties shall be given reasonable notice of the time 

and place of this new hearing.

    (d) Certification where the Department is the creditor agency. (1) 

The salary offset coordination officer shall provide a certification to 

the appropriate payroll office in all cases where:

    (i) The hearing official determines that a debt exists; or

    (ii) The employee admits the existence and amount of the debt by 

failing to request a hearing.

    (2) The certification must be in writing and must state:

    (i) That the employee owes the debt;

    (ii) The amount and basis of the debt;

    (iii) The date the government's right to collect the debt first 

accrued;

    (iv) That the Department's regulations have been approved by OPM 

pursuant to 5 CFR part 550, subpart K;

    (v) If the collection is to be made by lump-sum payment, the amount 

and data such payment will be collected;

    (vi) If the collection is to be made in installments, the number of 

installments to be collected, the amount of each installment, and the 

commencing date of the first installment, if a date other than the next 

officially established pay period; and

    (vii) The date the employee was notified of the debt, the action(s) 

taken under 5 U.S.C. 5514(a), and the dates such actions were taken.

    (e) Voluntary repayment agreements as alternative to salary offset 

where the Department is the creditor agency. (1) In response to a Notice 

of Intent, an employee may propose to repay the debt in accordance with 

scheduled installment payments. Any employee who wishes to repay a debt 

without salary offset shall submit in writing a proposed agreement to 

repay the debt. The proposal shall set forth a proposed repayment 

schedule. Any proposal under this subsection must be received by the 

office of the official designated in the notice within 15 calendar days 

after receipt of the Notice of Intent.

    (2) In response to a timely proposal by the debtor, the organization 

head shall notify the employee whether the employee's proposed written 

agreement for repayment is acceptable. It is within the organization 

head's discretion to accept or reject a repayment agreement.

    (3) If the organization head decides that the proposed repayment 

agreement is unacceptable, the employee shall have 15 days from the date 

he or she received notice of the decision in which to file a petition 

for a hearing.

    (4) If the organization head decides that the proposed repayment 

agreement is acceptable, the arrangement shall be put in writing and 

signed by both the employee and the organization head.

    (f) Special review where the Department is the creditor agency. (1) 

An employee subject to salary offset or a voluntary repayment agreement 

may, at any time, request a special review by the Department of the 

amount of the salary offset or voluntary payment, based on materially 

changed circumstances, including but not limited to catastrophic 

illness, divorce, death, or disability.

    (2) In determining whether, as a result of materially changed 

circumstances, an offset would prevent the employee from meeting 

essential subsistence expenses (costs incurred for food, housing, 

clothing, transportation, and medical care), the employee shall submit a 

detailed statement and supporting documents for the employee,



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his or her spouse, and dependents indicating:

    (i) Income for all sources;

    (ii) Assets;

    (iii) Liabilities;

    (iv) Number of dependents;

    (v) Expenses for food, housing, clothing, and transportation;

    (vi) Medical expenses; and

    (vii) Exceptional expenses, if any.

    (3) If the employee requests a special review under this paragraph, 

the employee shall file an alternative proposed offset or payment 

schedule and a statement, with supporting documents, showing why the 

current salary offset or payments result in an extreme financial 

hardship to the employee.

    (4) The organization head shall evaluate the statement and 

supporting documents and determine whether the original offset or 

repayment schedule imposes an extreme financial hardship on the 

employee. The organization head shall notify the employee in writing 

within 30 days of such determination, including, if appropriate, his or 

her acceptance of a revised offset or payment schedule.

    (5) If the special review results in a revised offset or repayment 

schedule, the salary offset coordination officer shall provide a new 

certification to the paying agency.

    (g) Notice of salary offset where the Department is the paying 

agency. (1) Upon receipt of proper certification from the creditor 

agency, the applicable payroll office shall send the employee a written 

notice of salary offset. Such notice shall advise the employee that:

    (i) The certification has been received from the creditor agency; 

and

    (ii) Salary offset will be initiated at the next officially 

established pay interval.

    (2) The applicable payroll office shall provide a copy of the notice 

to the creditor agency and advise such agency of the dollar amount to be 

offset and the pay period when the offset will begin.

    (h) Procedures for salary offset where the Department is the paying 

agency--(1) Generally. (i) The salary offset coordination officer shall 

coordinate salary deductions under this section.

    (ii) The applicable payroll office shall determine the amount of an 

employee's disposable pay and offset salary.

    (iii) Deductions shall begin the pay period following receipt by the 

applicable payroll office of the certification or as soon thereafter as 

possible.

    (2) Types of collection--(i) Lump-sum payment. If the amount of the 

debt is equal to or less than 15 percent of the employee's disposable 

pay, such debt ordinarily will be collected in one lump-sum payment.

    (ii) Installment deductions. Installment deductions will be made 

over a period not greater than the anticipated period of employment. The 

size and frequency of installment deductions will bear a reasonable 

relation to the size of the debt and the employee's ability to pay. 

However, the amount deducted from any period will not exceed 15 percent 

of the disposable pay from which the deduction is made unless the 

employee has agreed in writing to the deduction of a greater amount. The 

installment payment should normally be sufficient in size and frequency 

to liquidate the debt in no more than three years. Installment payments 

of less than $50 should be accepted only in the most unusual 

circumstances.

    (iii) Lump-sum deductions from final check. A lump-sum deduction 

exceeding 15 percent of disposable pay may be made pursuant to 31 U.S.C. 

3716 from any final salary payment due a former employee in order to 

liquidate a debt, whether the former employee was separated voluntarily 

or involuntarily.

    (iv) Lump-sum deductions from other sources. Whenever an employee 

subject to salary offset is separated from the Department, and the 

balance of the debt cannot be liquidated by offset of the final salary 

check, the Department, pursuant to 31 U.S.C. 3716, may offset any later 

payments of any kind against the balance of the debt.

    (3) Multiple debts. Where two or more creditor agencies are seeking 

salary offset, or where two or more debts are owed to a single creditor 

agency, the applicable payroll office may, at its discretion, determine 

whether one or



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more debts should be offset simultaneously within the 15 percent 

limitation. The best interests of the government shall be the primary 

consideration in the determination by the payroll office of the order of 

the debt collection.

    (4) Precedence of salary deductions by the Department. (i) For 

Department employees, debts owed shall be paid out of disposable pay in 

the following order of precedence:

    (A) Indebtedness due the Department.

    (B) Indebtedness due other agencies.

    (C) Garnishments for alimony and child support payments.

    (D) Court-ordered bankruptcy payments under the Bankruptcy Code.

    (E) Optional life insurance premiums.

    (F) Other voluntary deductions including allotments and assignments, 

in the order determined by the paying agency.

    (ii) In the event that a debt to the Department is certified while 

an employee is subject to salary offset to repay another agency, the 

applicable payroll office may decide whether the debt to the other 

agency should be repaid in full before collecting the Department's claim 

or whether changes should be made in the salary deduction being sent to 

the other agency. If debts owed to the Department can be collected in 

one pay period, the payroll office may suspend the salary offset to the 

other agency for that pay period in order to liquidate the Department's 

debt.

    (i) Coordinating salary offset with other agencies--(1) 

Responsibility of the Department as the creditor agency. (i) The salary 

offset coordination officer shall be responsible for:

    (A) Arranging for hearing upon proper petition by a federal 

employee;

    (B) Preparing the Notice of Intent to Offset consistent with the 

requirements of paragraph (a) of this section;

    (C) Obtaining hearing officials from other agencies pursuant to 

paragraph (c)(3) of this section; and

    (D) Ensuring that each certification of debt is sent to a paying 

agency pursuant to paragraph (d)(2) of this section.

    (ii) Upon completion of the procedures established in paragraphs (a) 

through (f) of this section, the salary offset coordination officer 

shall submit a debt claim and an installment agreement or other 

instruction on the payment schedule, if applicable, to the employee's 

paying agency.

    (iii) If the employee is in the process of separating from 

government employment, the Department shall submit its debt claim to the 

employee's paying agency for collection by lump-sum deductions from the 

employee's final check. The paying agency shall certify the total amount 

of its collection and furnish a copy of the certification to the 

Department and to the employee.

    (iv) If the employee is already separated and all payments due from 

his or her former paying agency have been paid, the Department may, 

unless otherwise prohibited, request that money due and payable to the 

employee from the federal government be administratively offset to 

collect the debt.

    (v) When an employee transfers to another paying agency, the 

Department shall not repeat the procedures described in paragraphs (a) 

through (f) of this section in order to resume collecting the debt. 

Instead, the Department shall review the debt upon receiving the former 

paying agency's notice of the employee's transfer and shall ensure the 

collection is resumed by the new paying agency.

    (2) Responsibility of the Department as the paying agency--(i) 

Complete claim. When the Department receives a certified claim from a 

creditor agency, the employee shall be given written notice of the 

certification, the date salary offset will begin, and the amount of the 

periodic deductions. Deductions shall be scheduled to begin at the next 

officially established pay interval or as soon thereafter as possible.

    (ii) Incomplete claim. When the Department receives an incomplete 

certification of debt from a creditor agency, the Department shall 

return the debt claim with notice that procedures under 5 U.S.C. 5514 

and 5 CFR 550.1104 must be followed and that a properly certified debt 

claim must be received before action will be taken to collect from the 

employee's current pay account.



[[Page 249]]



    (iii) Review. The Department is not authorized to review the merits 

of the creditor agency's determination with respect to the amount or 

validity of the debt certified by the creditor agency.

    (iv) Employees who transfer from one paying agency to another. If, 

after the creditor agency has submitted the debt claim to the 

Department, the employee transfers to an agency outside the Department 

before the debt is collected in full, the Department must certify the 

total amount collected on the debt. One copy of the certification shall 

be furnished to the employee and one copy shall be sent to the creditor 

agency along with notice of the employee's transfer.

    (j) Interest, penalties, and administrative costs. Where the 

Department is the creditor agency, it shall assess interest, penalties, 

and administrative costs pursuant to 31 U.S.C. 3717 and 4 CFR 102.13.

    (k) Refunds. (1) Where the Department is the creditor agency, it 

shall promptly refund any amount deducted under the authority of 5 

U.S.C. 5514 when:

    (i) The debt is compromised or otherwise found not to be owing to 

the United States; or

    (ii) An administrative or judicial order directs the Department to 

make a refund.

    (2) Unless required by law or contract, refunds under this paragraph 

(k) shall not bear interest.

    (l) Request from a creditor agency for the services of a hearing 

official. (1) The Department may provide a hearing official upon request 

of the creditor agency when the debtor is employed by the Department and 

the creditor agency cannot provide a prompt and appropriate hearing 

before a hearing official furnished pursuant to another lawful 

arrangement.

    (2) The Department may provide a hearing official upon request of a 

creditor agency when the debtor works for the creditor agency and that 

agency cannot arrange for a hearing official.

    (3) The salary offset coordination officer shall arrange for 

qualified personnel to serve as hearing officials.

    (4) Services rendered under this paragraph (l) shall be provided on 

a fully reimbursable basis pursuant to 31 U.S.C. 1535.

    (m) Non-waiver of rights by payments. A debtor's payment, whether 

voluntary or involuntary, of all or any portion of a debt being 

collected pursuant to this section shall not be construed as a waiver of 

any rights that the debtor may have under any statute, regulation, or 

contract except as otherwise provided by law or contract.