LEAVE BUY BACK
The term Leave Buy-Back applies when a rural carrier sustained a job-related injury that has been approved by OWCP, used sick or annual leave, and now wants the used leave restored.
An employee who sustains a job-related disability (either traumatic or occupational) has the option of using sick or annual leave or both to avoid interruption of income. If the employee uses leave during a period of disability caused by an occupational disease (CA-2) or illness and the claim is approved, the employee may, with the approval of the Postal Service, "buy-back" the leave and have it recredited to their account. If the employee uses leave during a period of disability caused by a traumatic injury (CA-1) and the claim is approved by OWCP, the employee may "buy-back" leave taken after the 45 day continuation of pay (COP) period. The employee may not repurchase leave used during the 45 day COP period unless the employee was not entitled to receive COP.
If an employee elects sick or annual leave, entitlement to COP is not preserved. This means that the 45 calendar day period continues to run. Each full or partial day for which the employee is absent from work due to a disability will be counted as one day against entitlement to COP, regardless of whether sick or annual leave is used. Therefore, while an employee may use COP intermittently along with sick and annual leave, entitlement is not extended beyond 45 days of combined absences.
An election to use sick or annual leave during the 45-day COP period is not considered irrevocable. If an employee elects COP after a period of leave use, the Postal Service is required to make such a change on a prospective basis (from the date of the employee's request). The employee may also receive COP in lieu of previously used annual or sick leave, provided the request to buy-back leave is made within one year of the date the leave was used or the claim was approved, whichever is later. The claimant must provide medical evidence of disability. Where timely request is made, the employing agency is to convert the leave used to COP and restore the leave to the employee.
When the 45 day period expires, an employee may use sick or annual leave and then buy back the leave when OWCP approves the claim for compensation. This is true for Occupational Disease claims (CA-2) from the onset of disability.
Note: If less than 14 days of leave are used following the COP period, the first 3 days are charged to LWOP and no compensation is payable for these days. These are called waiting days. The employee must repurchase these 3 days, however, and must repay the agency for the leave received.
Effective August 1, 1996, the U.S. Department of Labor, Office of Workersí Compensation Programs (OWCP) implemented a new procedures with the goal of streamlining the process of leave buy back. Two new forms, a Time Analysis Form (CA-7a) and a Worksheet/Certification and Election Form (CA-7b) have been developed to be filed with Form CA-7 in leave buy back claims. The new form CA-7a is to be used when leave dates are intermittent or when more than one continuous period of leave is claimed. The CA-7b fully explains the process to the claimant and allows an estimate of the FECA entitlement (the amount of compensation payable by OWCP). It requires the Postal Service to advise the employee of the amount required to reinstate the leave in question and to agree to the process in advance of submission of the form. These two new forms allow the injured rural carrier to know exactly how much money is owed to the Postal Service for their portion of the leave buy back before having to wait for the CA-7 to be processed by OWCP. Based on past experience, many rural carriers decided against leave buy back when they received the EN1207 from OWCP showing how much they owed.
Unless there is a significant variance between the Postal Service estimate of FECA entitlement and the actual entitlement, the leave buy back claim can be paid immediately upon receipt of the completed claim, providing the medical evidence supports injury related time loss for each date claimed. This new procedure should reduce processing times considerably. In the past, leave buy back could take anywhere from 6 months to a year for completion.
If a claimant buys back sick or annual leave during the same tax year in which the leave was used, the amount repaid is excluded from the claimant's taxable income for the year. This would require the USPS to amend Form W-2 for that year.
If buy-back is made for leave used in a prior tax year, the claimant may not retroactively adjust the tax return for the year during which the leave was used. The claimant may only deduct as an employee expense (subject to 3% threshold) for the current tax year the amount repaid, provided deductions are itemized. In such instances, it is not necessary to reflect the repurchase through the payroll system, nor is it necessary to amend the Form W-2 for the year the leave was used. Further questions regarding this should be addressed to the Internal Revenue Service.
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