Payroll snafu leads to delayed paychecks for many feds

Friday - 9/13/2013, 4:13pm EDT

(This story was updated on Mon. Sept. 16 to include comments from the Interior Business Center.)

By Jack Moore and Shefali Kapadia

Employees at multiple federal agencies, who would normally receive a direct deposit electronic paycheck Friday, will have to wait until Tuesday because of a mix-up by the Interior Business Center, one of the largest federal payroll processors.

The error affected 40,000 employees at 23 federal agencies, including the Equal Employment Opportunity Commission, Federal Energy Regulatory Commission, NASA and National Transportation Safety Board, IBC said in a statement.

The official pay date for all agencies serviced by the center's Federal Personnel Payroll System is technically the first Tuesday after the end of the pay period — in this case Sept. 17. Payments, though, are generally provided via direct deposit on the Friday prior to the official pay date.

However, "an oversight occurred during the certification process" for the current pay period, the center's Payroll Operations Divisions Chief Linda Rihel-Todd said in an email to agencies obtained by Federal News Radio. For affected employees, that means either no electronic payment was deposited into their account or a deposit was made but with a hold on it until Sept. 17.

The center first alerted agencies to the mistake Thursday evening. The center, working with the Treasury Department's Financial Management Service, had attempted to cancel the scheduled Sept. 17 payment and resend an electronic payment file for today. However, that attempt was unsuccessful, according to Rihel-Todd's email.

The Interior Business Center "has begun contacting approximately 1,800 financial institutions to alert them of the error and request the financial institutions work with their customers to address the situation," the statement said.

Some banks agreed to recognize the payments on Friday.

A senior official at one of the agencies, who requested anonymity, told Federal News Radio he's fielded calls from employees all day about the payment error. He said he's heard from employees who are facing overdraft fees because of pre-scheduled payments.

The Pension Benefit Guaranty Corporation has already alerted employees in an email that the agency is unable to reimburse employees for any overdrafts that may result from the payment mix-up.

"The federal government may not compensate employees for overdraft or other financial institution fees, but IBC can provide written confirmation that the errors occurred outside of the employee's control and make requests on behalf of the employee that the financial institutions waive any resulting fees," the statement said.

The Interior Business Center is one of four large organizations that provides payroll support to federal agencies. It services 150 federal organizations, including agencies, offices and commissions, totaling 150,000 employees.

IBC will continue to provide customers with updates over the next several days.