Additional information on the Recovery of overpayments, Emergency Salary Advances and Priority Payments
To: Heads of Human Resources, Chief Financial Officers, Deputy Chief Financial Officers, Directors/Chiefs of Labour Relations and Compensation, Public Service, Pay Centre, Miramichi
This bulletin provides additional information on the recovery of overpayments for employees impacted by the Phoenix pay system, including emergency salary advances (ESAs) and priority payments. As such, this bulletin replaces the information found within the bulletin dated March 9, 2018. In order to protect the Crown’s right to recover overpayments caused by the implementation of the Phoenix pay system, the Employer intends to modify its current procedure for overpayment recoveries, which requires amendments to the additional flexibilities that were put in place in March 2018. These flexibilities are to ensure that the recoveries do not impose additional financial hardship and stress on employees.
Commencement of Recoveries
As of October 12, 2021, the Public Service Pay Centre or department/agency, for those not served by the Public Service Pay Centre, will begin contacting employees who received overpayments in 2016 and 2017 and do not yet have a repayment plan in place.
Employees will be provided with a letter detailing the overpayment and will be provided with options for repayment. They will not necessarily need to repay these overpayments immediately.
First, an employee may choose to acknowledge their overpayment in writing resulting in a deferral of the recovery of the overpayment until such time that their pay file has been reconciled and they have received their correct pay for three consecutive pay periods.
Alternatively, an employee will have the option to start a repayment plan for the monies that were overpaid. It is incumbent on the delegated authority (the department/agency or the Public Service Pay Centre) to develop in conjunction with the employee a repayment schedule flexible enough to avoid, as possible, adverse impacts on the employee. The employee shall be provided maximum discretion, as reasonable, to determine a repayment plan.
In the event where an employee receives a letter concerning their overpayment and chooses not to contact the Public Service Pay Centre or their department/agency within four weeks as outlined in the letter, they will have a recovery of the overpayment initiated. In accordance with 18.104.22.168 of Appendix A of the Directive on Terms and Conditions of Employment, recovery of overpayments of salary, wages and allowances as a result of the implementation of Phoenix is to occur over the number of pay periods equivalent to the number of pay periods over which the overpayment occurred.
If an employee disagrees with the overpayment amount identified in the letter, they will be able to formally dispute this amount while still acknowledging that an overpayment exists. The Pay Centre or the department/agency compensation representative will then initiate a review of the transaction and provide additional details as required.
These amendments and flexibilities do not change the management of recoveries associated with termination of employment, or the end of term or casual contracts without further extension or renewal.
For individuals on leave without pay (LWOP), these employees will still be required to contact the Public Service Pay Centre or their department/agency upon receipt of the letter and select an option within the prescribed timeframe. No response from the employee will result in recovery commencing by default over the number of pay periods equivalent to the number of pay periods over which the overpayment occurred. This may be effective immediately (e.g. for employees who are receiving payments during their LWOP such as Maternity top-up, Education Allowances or retroactive payments), upon the employee’s return to work or at another time depending on the circumstances.
Treatment of Emergency Salary Advances and Priority Payments
The Treasury Board of Canada Secretariat is of the view that Emergency Salary Advances and priority payments are not in fact advances pursuant to the Accountable Advance Regulations. Rather, these payments are for services rendered for which employees have not yet been compensated. To ensure that all recoveries are managed on a consistent basis, recovery of these payments is to be handled in the same manner as that for salary overpayments, based upon the Directive on Terms and Conditions of Employment. To “facilitate the effective resolution of issues related to Phoenix”, a flexible and respectful approach to managing the recovery of overpayments (including ESAs and priority payments) will be adopted to be responsive to employees’ individual circumstances.
We recognize that the recovery of overpayments can be stressful for employees. Employees in departments and agencies served by the Pay Centre, are encouraged to contact the Client Contact Centre at anytime for changes or questions about overpayment recovery. Employees in departments and agencies not served by the Pay Centre should contact their departmental compensation unit.
All policy related questions should be directed to your Departmental/Agency Corporate Labour Relations or Corporate Compensation Official who, if required will direct their questions to the Compensation and Collective Bargaining Management group at the following email address: Interpretations@tbs-sct.gc.ca.
All questions related to the development of recovery plans or commencement of recoveries can be directed to either:
- Compensation advisors for Departments and Agencies not served by the Public Service Pay Centre or;
- The Public Service Pay Centre (email:email@example.com) for Departments and Agencies served by the Public Service Pay Centre.
Original signed by
Senior Assistant Deputy Minister, Employee Relations and Total Compensation
Office of the Chief Human Resources Officer
Assistant Deputy Minister, Pay Administration Branch
Public Services and Procurement Canada
- Date modified: