Legal Repercussions Loom for Federal Employees Over Phoenix Payroll Overpayments

Post by : Mina Rahman

Current and former federal workers are now confronted with potential legal action regarding overpayments linked to the flawed Phoenix payroll system introduced nearly ten years ago. Many individuals had no prior notification about these excess payments.

To facilitate repayment, the government has turned to private collection companies. In numerous instances, benefits, tax refunds, and credits are being withheld, along with added interest. The Public Service Alliance of Canada (PSAC) is advocating for an immediate cessation of these recovery actions for overpayments that surpass the statutory six-year limit.

Union President Sharon DeSousa highlighted the prolonged financial anxiety and instability that workers have faced because of the Phoenix payroll issues. Treasury Board President Shafqat Ali expressed that he has only just become aware of these circumstances and is committed to collaborating with union representatives to find a solution.

Since its rollout in 2016, the Phoenix system has been the source of numerous payroll inaccuracies, impacting hundreds of thousands of federal staff. The overall figure for overpayments since launch has reached $3.56 billion, with 115,000 employees still responsible for $495 million.

The PSPC noted that while recovery efforts were postponed to prioritize addressing payroll discrepancies, actions have ramped up since 2021. Flexible repayment options are available for those facing difficulties. Nevertheless, PSAC asserts that because of legal constraints, recoveries for overpayments older than six years should not proceed without explicit consent.