Southworth PC | Federal Employee Briefing — Tuesday, 11/03/26
Attorneys for Federal Employees — Nationwide
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Today at a Glance
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Two Arbitration Wins at the IRS: Arbitrators ruled that the IRS broke its contract when it refused to let employees take back their resignations during last year's workforce reductions, and again when it cut off credit hours in January. The remedies are reinstatement with back pay and interest, and make-whole relief — if the agency honors them.
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Election Day and the Hatch Act: Dozens of former career federal employees are on today's ballot. The law that required them to leave first still governs every current employee today — what you may do, what you may not, and what it costs to get it wrong.
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A FERS Contribution Debt Is Not the Last Word: When an agency miscodes your retirement plan and bills you for years of missed contributions, the law gives you 30 days' notice, a 15-day window to demand a hearing, and a path to a waiver.
Top Stories:
1. Arbitrators Rule the IRS Violated Its Contract Twice — Employees Who Tried to Withdraw Resignations Must Be Offered Reinstatement With Back Pay, and Flexitour Employees Were Wrongly Cut Off From Credit Hours
Source: Federal News Network, November 2, 2026
TL;DR: The National Treasury Employees Union (NTEU) announced on October 29 that it has won two more arbitration decisions against the IRS; Federal News Network and FEDweek reported them Monday. In the first, an arbitrator found the IRS violated the contract when it refused to accept employees' requests to withdraw their resignations or retirements during the 2025 workforce reductions; the award orders the IRS to offer those employees reinstatement to their former position or an equivalent one, with back pay and interest. In the second, an arbitrator found the agency blocked employees on flexitour schedules from earning credit hours beginning in January 2026; NTEU says it is working on a make-whole process in line with the decision. The union said plainly that the IRS "could appeal or ignore these decisions." That is not hypothetical: the IRS declared the NTEU contract terminated in February and has not complied with a July award ordering telework restored — the subject of a suit NTEU filed last week. The union's position, as FEDweek reported it, is that the FLRA (Federal Labor Relations Authority) has never decertified NTEU and that "even if it had, contractual rights that accrue before decertification remain."
For federal employees, this means:
- If you resigned or retired from the IRS during the 2025 reductions and asked in writing to take it back before the effective date, this award is about you. Keep your resignation letter, your withdrawal request, and the agency's response; NTEU is handling the remedy process.
- An award is not self-executing. If the IRS files exceptions with the FLRA within 30 days, the award waits for the Authority's ruling; if not, it is final and binding — but enforcement is a separate proceeding, which is why July's telework award is now in federal court.
- Credit hours are a statutory feature of flexible schedules, not a favor. If your agency cut them off in 2026, note the date and the instruction you received; make-whole relief depends on showing what you would have earned.
Legal Insight
"If no exception to an arbitrator's award is filed ... during the 30-day period beginning on the date the award is served on the party, the award shall be final and binding. An agency shall take the actions required by an arbitrator's final award," 5 U.S.C. § 7122(b); the award may include back pay under 5 U.S.C. § 5596, which carries interest. An agency "may decline a request to withdraw a resignation before its effective date only when the agency has a valid reason and explains that reason to the employee," 5 C.F.R. § 715.202(b) — a rule OPM amended on October 19, 2026 (91 Fed. Reg. 65940), effective November 18, to add that accepting deferred-resignation benefits is a valid reason to deny withdrawal. Credit hours are hours "within a flexible schedule ... which the employee elects to work," 5 U.S.C. § 6121(4). If either award may apply to you, contact your NTEU chapter now; if you are outside the bargaining unit or your facts differ, consult a federal employment attorney.
2. It Is Election Day — Dozens of Former Career Federal Employees Are on the Ballot, and the Law That Required Them to Leave First Still Governs What Every Current Employee May Do Today
Source: Federal News Network, November 2, 2026
TL;DR: Federal News Network reports that dozens of former career federal employees are running for Congress in today's midterm elections, and profiles twelve who reached the general election, including a former State Department official who resigned in May 2025 after more than 20 years, a former Social Security Administration employee laid off in 2025, a former EEOC administrative judge, and a former Forest Service smokejumper and union local officer. None of them could have run while still employed: the Hatch Act bars a federal employee from running as a candidate for partisan political office. The same statute sets the rules for everyone still on the payroll today. Most employees may take an active part in campaigns on their own time — vote, volunteer, donate, display a yard sign, post from a personal account after hours — but not while on duty, in a federal building, in uniform, or in a government vehicle, and may never use official authority to affect an election or solicit contributions from subordinates. "Further restricted" employees at agencies such as the FBI, the Secret Service, and the CIA may not take an active part in political management or campaigns at all. The Office of Special Counsel (OSC) investigates Hatch Act complaints and prosecutes them before the Merit Systems Protection Board.
For federal employees, this means:
- Today, the line is duty status and location, not opinion. A political post from your personal phone at lunch in a federal building is a violation; the same post from your couch tonight is not. "Liking" or sharing a candidate's post from a work computer is political activity.
- Do not ask, suggest, or hint to anyone who reports to you about how they should vote or whether they should donate. Using official authority to influence an election and soliciting contributions from subordinates are the most serious violations and routinely draw suspensions or removal.
- If you need time to vote, ask first. Under OPM's longstanding guidance, agencies may grant a limited excused absence when the polls are not open at least three hours before or after your regular workday; otherwise you vote on your own time. Check your agency's policy.
Legal Insight
An employee "may take an active part in political management or in political campaigns," except that an employee may not use official authority or influence to affect the result of an election, knowingly solicit or receive a political contribution (with a narrow exception for federal labor organization PACs), "run for the nomination or as a candidate for election to a partisan political office," or solicit or discourage the political activity of anyone with business pending before the employing office, 5 U.S.C. § 7323(a)(1)–(4). An employee "may not engage in political activity" while on duty, in any room or building occupied in the discharge of official duties, while wearing a uniform or official insignia, or using a government vehicle, 5 U.S.C. § 7324(a); the agencies whose employees are further restricted are listed in 5 U.S.C. § 7323(b)(2)(B). Penalties are removal, reduction in grade, debarment from federal employment for up to five years, suspension, or reprimand, a civil penalty of up to $1,000, or any combination, 5 U.S.C. § 7326.
3. Your Agency Says a Payroll Error Left You Owing Thousands in FERS Contributions — Before You Agree to a Repayment Plan, Make It Show the Math, and Know the 15-Day Hearing Clock
Source: FedSmith, November 2, 2026
TL;DR: FedSmith published a practical guide Monday to a recurring problem: a debt letter saying the agency withheld the wrong FERS (Federal Employees Retirement System) contribution rate for years and the employee now owes the difference. The three standard rates are 0.8 percent for employees first hired before 2013 (SF-50 code K), 3.1 percent for those hired in 2013 (FERS-RAE, code KR), and 4.4 percent for those hired in 2014 or later (FERS-FRAE, code KF), but prior service, breaks in service, rehires, and transfers can change which rate applies, and miscodes happen most often at those moments. According to FedSmith, the Defense Department has documented coding errors affecting more than 23,000 civilian employees. Under OPM's regulations the agency must pay the shortfall into the retirement fund regardless, and the portion that should have come out of your pay becomes a salary overpayment the agency may collect — unless waived. The article's core advice: verify Block 30 of every SF-50 against your service history, demand the agency's pay-period-by-pay-period calculation, and check the rate, dates, basic-pay base, and any interest or fees before conceding the amount.
For federal employees, this means:
- A lump-sum debt figure is a claim, not a finding. Pull your SF-50s and Leave and Earnings Statements for the disputed period and compare them to the agency's calculation; an overlooked period of pre-2013 service can erase the entire debt.
- Challenging the debt and requesting a waiver are different things with different deadlines. A challenge says the amount is wrong or not owed; a waiver says the debt is valid but collecting it would be unfair. You can pursue both, but asking HR to "explain" the number preserves neither.
- The hearing request is the step most employees miss. A timely written petition stops salary offset from starting; a phone call to payroll does not.
Legal Insight
Any portion of a FERS contribution shortfall "which should have been deducted, but was not, from employee basic pay constitutes an overpayment of pay, subject to collection by the agency from the employee, unless waived under applicable authority such as 5 U.S.C. 5584," 5 C.F.R. § 841.505(d). Before collecting by salary offset, the agency must give at least 30 days' written notice, access to the records, a chance to negotiate a repayment agreement, and a hearing on the existence or amount of the debt if the employee files a petition "on or before the fifteenth day following receipt of the notice," which "shall stay the commencement of collection proceedings," 5 U.S.C. § 5514(a)(2); deductions may not exceed 15 percent of disposable pay without written consent, 5 U.S.C. § 5514(a)(1). An erroneous payment of pay may be waived when collection "would be against equity and good conscience and not in the best interests of the United States," but not where there is an indication of fraud, misrepresentation, fault, or lack of good faith, and only if the application is received within three years after the error was discovered, 5 U.S.C. § 5584(a)–(b). Because the 15-day clock runs from receipt, consult a federal employment attorney promptly if the amount is substantial or the classification looks wrong.
Mindful Moment of the Day
The Election Day Pause
It is Election Day, and a colleague leans over to ask how you are feeling about it all. Notice what your body does first, perhaps a quickened pulse or a tightening in your shoulders. Put both feet on the floor and take three slow breaths, longer on the exhale. Say silently, "I do not have to carry every opinion into this room." Mindfulness here does not mean pretending you have no feelings about the day; it means choosing, calmly, what you do with them.
In Case You Missed It
A few quick hits from our recent posts:
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IRS Told Managers to Ignore a Telework Arbitration Award: What NTEU’s New Lawsuit Says
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Disclaimer:
This briefing is for general informational purposes only and does not constitute legal advice or create an attorney‑client relationship. Federal employment law is fact‑specific and time‑sensitive; you should consult a qualified attorney about your own situation and deadlines. Past results do not guarantee future outcomes.
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