The District of Columbia served notice yesterday that it will contest a demand by the U.S. Department of Labor that the city reimburse the federal government for salaries paid to 33 city workers hired under a federally financed jobs program.

The notice came in a letter sent by Mayor Walter E. Washington to Ernest G. Green, assistant secretary of labor.

Green last month notified the mayor that a departmental investigation showed 33 employes of the D.C. City Council paid under the CETA program were hired improperly.

Of the 33 workers, 28 had been given the jobs after council members asked for them by name, which Green described as a violation of a provision of the Comprehensive Employment and Training Act designed to insulate the workers from political activity.

"Of the 28 individuals named," the mayor wrote Green, "16 had not previously been identified to us participants whose eligibility and employment were under question... the District [thus] with respect to these participants."

Washington said the city "does intend to [request].... further review" of the dispute.

Green had told the city that any of the questioned CETA workers still on the payroll would have to be terminated immediately. The city promptly transferred the CETA payrool to the regular city payroll, at least temperatily.

There has been no estimate of how much the city may have to pay back to the Treasury if the final ruling goes against the city. One educated guess has placed the amount at more than $250,000, which the city apparently would have to seek in an appropriation bill passed by Congress.