Class Action Suit: Payment for Unused Annual Leave

November 7, 2006

The Court of Federal Claims recently approved a class-action settlement. It provides that employees who retired, died or were separated from one of 17 federal agencies between 1993 and 1999, and who received a lump-sum payment for their unused annual leave, may be entitled to additional compensation for this leave.

Former employees may be entitled to additional compensation because their lump-sum payments for unused annual leave did not reflect salary increases, or include compensation for Sunday premium pay or foreign post housing allowances received immediately before retiring or separating abroad.

The list of federal agencies involved in this settlement includes the Departments of State, Commerce and Agriculture. Foreign Service agencies USAID, USIA, and IBB were not included in the settlement agreement. Claims concerning unlisted federal agencies will continue to be litigated.

When federal employees retire they receive a lump-sum payment for unused annual leave. This sum is equal to what they would have received if they had remained in the service until the expiration of their unused annual leave. Leave that would have been used during the year of retirement or separation is paid at the salary level of that year. Leave that would have been used in the next year is paid at the salary level for that year and reflects any salary increase. The settlement is designed to ensure that yearly pay raises were taken into account during the six year period between April 7, 1993 and September 7, 1999 when calculating the lump-sum payment.

The Settlement Administrator recently mailed claim forms to potentially eligible retirees. The claim form supplies information about the effective date of retirement or separation, pay plan and agency of each person to whom the form was sent. The former employee is asked to complete the form by supplying a good-faith estimate of his or her unused leave hours. The claim form must be postmarked no later than April 4, 2007.

Retirees have called AFSA with a number of questions about the settlement process, some that we can answer and some that remain to be answered. We will keep you advised as we learn more and the department develops procedures for dealing with requests for information. Here are some of the most frequently asked questions.

How do I find out how much annual leave I had at the time of retirement?

The easiest way to do this is to pull out your last earnings and leave statement, which will show the balance for your annual leave. Class members are not required to submit supporting documentation to the Settlement Administrator but are asked to submit a good-faith estimate, subject to penalty of perjury.

In the event you are unsure of your hours, you may wish to ask the Payroll Office in the agency in which you were employed for this information. Before asking this office to undertake this search, however, it is advisable to make a rough calculation, taking into consideration the date of your retirement. (The former employees who are most likely to benefit from this settlement are those who were in the Senior Foreign Service and accumulated a large number of hours of unused leave and retired in the latter part of the year).

For example, if you had about 100 hours of unused leave and retired in May, you clearly could have used up all the unused leave well before the following year and would not be entitled to additional compensation. (You can reckon that you would use about 160 hours per month of leave taken). If, however, you had 320 hours of unused leave and retired on December 1, you would have about 120 hours that should have been calculated in light of the pay raise for the following year. (The new pay year usually begins one week or more into the new year).

Please be advised that the Settlement Administrator cannot provide information about your unused annual leave because this information is not in his possession. (The federal agencies involved in the settlement provided the Administrator only with information about date of retirement or separation, pay plan and agency of each person).

I retired from the State Department between 1993 and 1999 and received a lump-sum payment for unused annual leave, but have not received a claim form from the Settlement Administrator. What should I do?

If you believe you are entitled to additional compensation, you can request the claim form most appropriate for your personal situation from the Settlement Administrator online at www.mylumpsumpayment.com/requestClaim.aspx or by phone at 1-866-833-7924, or you may request a claim by writing to: Archuleta Settlement Administrator, P.O. Box 4540, Portland OR 97208-4540.

There are four different claim forms that address four different factual situations, so be careful to select the correct form for your situation. If you have questions about your eligibility or which form to use, you can call the Settlement Administrator at 1-866-833-7924.

Claim forms were mailed only to potential class members who retired; potential class members who quit or were separated must request claim forms. Survivors of deceased potential class members who have not received instructions about submitting a claim, should send a letter to the Settlement Administrator, supplying name, address and Social Security number and asking for instructions about submitting a claim, or call the Administrator at the number listed above.

I retired from USIA, which no longer exists. Do I fall under the State Department umbrella for settlement purposes?

USIA was disbanded and its functions transferred to the Department of State on October 1, 1999, one month after the final eligibility date of the class action. It appears that the Department, as the successor agency, may not have included former USIA employees in its submission to the Settlement Administrator.

The Settlement Administrator recommends that any USIA retiree who believes he or she may be eligible, call the Administrator at 1-866-833-7924 to discuss and file a claim. In addition, these claimants should notify the attorney for the plaintiffs at iralechner@yahoo.com. In the event the claim is rejected in this settlement, it will be turned over to the attorney for the plaintiffs and be on record for possible separate settlement or separate litigation.

I retired from an agency that was not included in the settlement. How do I prosecute a claim?

The Settlement Administrator advises former employees from agencies who were not included in the present settlement, but who believe they are eligible for additional compensation, to file a claim with him and notify the attorney for the plaintiffs at iralechner@yahoo.com.

This will establish your claim and facilitate acquiring information that may become more difficult to obtain over time. There is no guarantee that the court will permit former employees of agencies that are not covered by this settlement to be covered by future settlements; that issue is pending before the court.

For more information, go to mylumpsumpayment.com.