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Public Integrity is investigating government agencies that garnish wages, tax refunds and Social Security income to pay off employee debts. If you have experienced this, please fill out the survey at the end.
Aniisha Sarkissian said she quit her job delivering mail for the U.S. Postal Service because managers wouldn’t pay her for all the hours she worked. Years later the agency told her it was the reverse: that she was overpaid and owed the Postal Service more than $400.
Sarkissian, of Phoenix, is among the dozens of postal workers who contacted the Center for Public Integrity after we published an investigation last year showing that the agency repeatedly underpaid mail carriers without consequences.
In their emails, postal workers told us they were illegally underpaid too. Others pointed to another problem: the Postal Service was garnishing employees’ wages because managers say they were accidentally overpaid. Former postal workers who questioned the overpayments said that unpaid debt has followed them after leaving their jobs, potentially damaging their credit scores and making it harder for them to get loans.
In December and January alone, the Postal Service sent about 3,250 notices to current and former employees about outstanding debts totaling nearly $5 million, according to Public Integrity’s analysis of debt notices obtained through a Freedom of Information Act request. Debts ranged from 6 cents to $17,000.
Public Integrity requested notices dating back 10 years, but the agency said it keeps these records for just 45 days.
None of the letters explained why each employee owed the agency money. They simply stated that USPS was sending the unpaid debt to the U.S. Treasury Department to collect.
Sarkissian said she only recently found out that she owed money to the Postal Service — more than six years after she quit her job. She received a letter from the Treasury Department in February 2021, saying it had taken her entire federal income tax refund — $82.28 — to pay off part of her debt to USPS.
“I was waiting months for that money to pay for books for school,” said Sarkissian, who had to quit the course she was taking to become a medical billing specialist. “This really screwed me up.”
Once a government agency passes on employee debt to the Treasury Department, it can collect the money by taking a person’s Social Security payments, tax refunds, pension and military payments, among other income. Treasury can also add up to 30% in fees to the original balance. The federal government reports these debts to credit bureaus, which can lower credit scores and make it harder to buy a home or car.
A spokesperson for the Postal Service told Public Integrity that the agency follows the requirements of the federal Debt Collection Act.
“As part of the federal government, the Postal Service must guard against the waste of resources, including its finances. This means we have an obligation to try and collect from anyone who owes a debt to the Postal Service, which often involves partnering with the U.S. Department of the Treasury,” wrote Darlene Casey, a public relations representative for USPS, in an email.
Casey declined to specify how much total debt employees owe to the agency and why. Postal workers can contest the debt by filing a petition with the agency’s administrative law office or filing a grievance with their union, which can lead to arbitration. Casey would not say how many debts were appealed by employees or what the outcomes were.
Some mail carriers have fought these debts in arbitration through their labor unions. Forty-three debt-related grievances went to arbitration between 2010 and 2019, according to private arbitration summaries maintained by the National Association of Letter Carriers and obtained by Public Integrity. The association — one of three major postal unions — represents about 290,000 mail carriers.
In at least 18 of those cases, the Postal Service claimed that mail carriers owed the agency money because they were accidentally overpaid. Other times, an employee owed money for allegedly losing a valuable item in the mail. Sometimes officials said a workers’ compensation claim was denied, so the mail carrier had to pay back money they received while off the clock as they awaited a decision.
In about half of the debt-related arbitration cases, mail carriers said the Postal Service never explained the details of the debt or didn’t provide any evidence to justify it.
In one case, the Postal Service accidentally paid a mail carrier in El Paso, Texas, for 29 hours of work he didn’t do, according to a summary of the 2019 arbitration decision. The agency garnished his wages to pay off that debt, then sent him two more invoices — $136.95 and $143.38 — for taxes he allegedly owed on the extra income he received. The agency did not explain what taxes were unpaid or how it calculated the dollar amount, the arbitrator said, according to the summary.
“That specific information was never provided,” he wrote. “The record contains numerous documents purporting to show what [the employee] owed, but these documents would not meet a math teacher’s instruction to ‘show your work.’”
The arbitrator sided with the mail carrier and invalidated the tax-related debt.
Arbitrators ruled in favor of the postal workers in more than half of the 43 cases. Yet the batch of arbitration award summaries reflects only part of the problem. It does not include grievances settled before reaching arbitration or cases from other postal unions. It also doesn’t include debts that are appealed in other ways, such as through the agency’s administrative law office.
Sarkissian, the former mail carrier in Arizona, said she’s been calling and emailing staff at USPS and the Treasury Department to find out why she owes the agency money. She said a former supervisor told her it was because she was paid for hours she never worked. Sarkissian disputes that, saying she quit her job at USPS because she didn’t get paid for all the hours she worked.
In August 2021, the Treasury Department sent her another letter, warning her that it would garnish wages from her current job if she did not pay the remaining $368.88 owed. Sarkissian showed Public Integrity copies of the notices and her email correspondence.
“I want them to leave me alone,” said Sarkissian, who is currently self-employed. “I want them to stop so I can go get a full-time job and file my taxes like a normal citizen without wondering if they are going to take my money.”
The Postal Service declined to comment on Sarkissian’s debt.
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