Fed Worker Back Pay Settlement OKed

December 23, 2002 (PLANSPONSOR.com) - More than 100,000 current and former federal workers could soon start the process of collecting some $173.5 million in back pay from the Federal government.

The checks are expected to be as much as $50,000 in some cases.

According to a Washington Post report the approval by US Judge Nancy Firestone of the US Court of Federal Claims means the November settlement of a lawsuit by the National Treasury Employees Union (NTEU) against the US Justice Department can be implemented.  

In her order approving the settlement, Firestone called it “fair, adequate, and reasonable,” the Post said.

Pay Caps

The lawsuit stemmed from a 1982 Office of Personnel Management (OPM) rule governing how pay raises would be calculated for federal employees who receive “special rate” salaries. Such employees operate under a different pay scale than general schedule employees because they work in hard-to-fill positions.

Under the 1982 regulation, the salaries of special rate employees were no longer reviewed whenever general schedule employees received a federal pay raise, a move the union contended unfairly capped their raises from 1982 to 1988, according to the Post story.

“As a result, many special rate employees received little or no pay increases during the years the OPM regulation was in effect, while their colleagues paid under the general schedule received pay increases almost every year,” Firestone wrote in her order.

Limit Less?

The settlement won’t mean money for all of the 212,000 current and former employees who were in the special rate category from 1982 to 1988. The back pay and other monetary awards will go to those whose raises were improperly capped during that period.

The NTEU estimates that group to number about 129,000 individuals, many of whom have left the government, retired or died, according to the Post.

The typical award would range from $1,000 to $3,000, although in some cases much larger amounts would be paid, union officials said. The union estimates that 50 people are in line to receive more than $50,000 each

Under the judge’s order, class members will be mailed materials describing the amounts they are owed. Recipients can claim the payment by signing and returning the claim form, or they may file a challenge if they believe the amount is inaccurate. The OPM is required to pay $400,000 to cover settlement administration expenses.

Spring Things

Kelley said class members would receive the mailed notices by spring, with payments to follow late next year.

“After all of this effort, it will be very gratifying to see this money paid to those who deserve it,” said Colleen Kelley, president of the NTEU, which initiated the class action lawsuit in 1983. The union represents 150,000 employees in 28 agencies.

Under the agreement, the government also will pay $3.6 million in plaintiffs’ attorney fees and $500,000 to cover legal expenses.