NORFOLK, Va. (CN) – The Pentagon stiffed retiring civilian employees of performance-based annual bonuses through a loophole in regulations, denying them the bonus if they quit in the last 3 months of a calendar year, according to a federal class action.
The class claims that employees’ performance is reviewed between Oct. 1 and Sept. 30 – a full year – but if an employee leaves after Sept. 30 but before Jan. 1 of the following year, the Pentagon won’t pay the bonus.
The class claims the Pentagon’s National Security Personnel System, which replaced longevity-based pay with merit-based pay, gives the government the ability to pay bonuses more than 90 days after the employees have earned them.
The performance-based bonuses come “from a pool of money created at least in part through the designation by the Secretary of Defense of a percentage of all the civilian employees’ annual pay increases,” according to the complaint. The class claims this means the employees themselves pay for their own bonuses with contributions from their annual pay increases.
“DOD has wrongfully denied compensation to departing employees who have contributed to and earned these performance-based bonuses on the basis of technical departure timing issues that do not find support in the regulations,” the class claims.
Class representative Ralph Price says he was denied the bonus he earned because he quit 1 day before the first payroll day of the new year – more than 3 months after he had earned his annual bonus.
The class claims the Pentagon is violating the Administrative Procedures Act, the Back Pay Act, and the Constitution.
It seeks back pay, and a declaration that the Pentagon cannot deny performance-based bonuses to employees who have earned them.
The class’s lead counsel is Lisa Bertini with Bertini O’Donnell.