CBP has confirmed that appropriate deductions were made from the settlement payments that were issued in March to CBP Technicians.
Last month, over $2 million in back pay, plus interest, was issued to 153 current and former Technicians. Those payments were made pursuant to a settlement involving a series of NTEU national grievances related to CBP’s failure to pay Technicians appropriately for agricultural work under APHIS Directive 402.3. A claims process is currently underway through which any Technician who has served since December 2003 can seek any additional back pay believed to be owed.
The interest that CBP issued with the back payments was substantial. Cumulatively, it brought the total gross payout to date in this matter to $3.15 million. Substantial interest payments have caused many Technicians to ask if required tax deductions had been made from the back pay reflected on the notice and claim form they received from CBP. These questions arose because CBP has yet to provide recipients a statement of interest payments or a breakdown of deductions taken from their settlement payments. CBP has, however, confirmed to NTEU that tax deductions were made from the back pay that was issued to all current and former employees.
CBP has also informed NTEU that current employees will have their back pay, interest, and deductions reflected in their next leave and earnings statements (LES). Those statements will be issued on April 9, for those receiving direct deposit, and April 12, for those receiving paper checks. Back pay received, according to CBP, will be included in the year-to-date pay line item in the statements. The interest payments will be indicated in a separate “interest” line item in the statements. Withholdings from the back pay will be reflected in the withholdings year-to-date line item.
While the LES information will be useful, NTEU has requested that CBP supplement its usual LES procedures in this case by providing affected Technicians with a dedicated breakdown of their settlement back pay, interest, and deductions. This kind of breakdown should make it easier for Technicians to identify payments and deductions related to their settlement payments. We await CBP’s response.
CBP reports that former employees will receive a year-end tax statement (W-2) from CBP that will detail deductions from their back pay. CBP also states that Form 1099s for interest payments will, as required, be issued to current and former employees at the end of the tax year. The agency further reports that, in contrast to back pay, no tax deductions were required to be made from interest payments.