Tags: union | irs | decision | bonuses

Union Challenges IRS Decision to Withhold $70 Million in Bonuses

Friday, 20 Sep 2013 02:08 PM

By Courtney Coren

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The union representing Internal Revenue Service employees is appealing a mediator's ruling upholding the agency's decision not to pay out $70 million in scheduled bonuses.

According to Politico, the National Treasury Employees Union is asking the Federal Services Impasses Panel to determine if the IRS is obligated to pay the bonuses based on a collective bargaining agreement with its workers already in place.

Union president Colleen Kelley said the ruling by an unnamed third-party mediator did not address "whether the IRS was legally required to pay the awards."

"Bargaining over the negotiated IRS performance awards for frontline employees reached [an] impasse and the parties have applied to the Federal Service Impasses Panel for a ruling on the bargaining proposals," Kelley said, according to Politico.

Acting IRS Commissioner Danny Werfel said in July that the bonuses were being pulled due to budget cuts related to the government-wide sequester, which also forced the agency to implement employee furlough days. The $70 million, he said at the time, was used to offset two furlough days, Politico noted.

"[These] were not easy decisions to make . . . [and] are the result of the difficult budgetary situation that we, along with the rest of the government, find ourselves in," Werfel said then.

According to Politico, Werfel notified IRS employees on Tuesday that the performance bonuses would not be paid this year.

"After pursuing our collective bargaining obligations and receiving a recommended resolution from a third-party fact finder, we will not pay bargaining unit performance awards this fiscal year," Werfel wrote.

Werfel had initially announced earlier that the IRS would follow through with the agency's obligation to pay the bonuses. But Republican Sen. Chuck Grassley of Iowa caught word of the decision and said the bonuses should be canceled, based on a White House budget office directive actually written by Werfel while he was working there.

"The IRS always claims to be short on resources," Grassley said at the time. "But it appears to have $70 million for union bonuses. And it appears to be making an extra effort to give the bonuses despite opportunities to renegotiate with the union and federal instruction to cease discretionary bonuses during sequestration."


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