B-173976, JUL 11, 1972

B-173976, JUL 11, 1972

CIVILIAN EMPLOYEES - ECONOMIC STABILIZATION ACT AMENDMENTS OF 1971 - PROPRIETY OF RETROACTIVE WITHIN-GRADE INCREASES CONCERNING THE PROPRIETY OF RETROACTIVELY GRANTING WITHIN-GRADE SALARY INCREASES OF CANAL ZONE GOVERNMENT (CZG) EMPLOYEES THAT WERE WITHHELD DURING THE WAGE-PRICE FREEZE UNDER EXECUTIVE ORDER 11615, AUGUST 15, 1971. ALTHOUGH PAY RATES FOR CZG EMPLOYEES ARE NOT FIXED BY STATUTE, GAO HAS PREVIOUSLY HELD THAT WITHIN-GRADE INCREASES WHICH WERE SCHEDULED TO BE PAID AS A RESULT OF AN AGREEMENT OR ESTABLISHED PRACTICE CAME WITHIN THE PROVISIONS OF SECTION 203(C)(3)(A) OF THE ECONOMIC STABILIZATION ACT AMENDMENTS OF 1971, PUB. L. 92-210, APPROVED DECEMBER 22, 1971. ACCORDINGLY, THE SUBJECT INCREASES MAY BE PROCESSED RETROACTIVE TO THE DATE THEY WOULD OTHERWISE HAVE BEEN EFFECTIVE EXCEPT FOR THE WAGE-PRICE FREEZE.

TO GOVERNOR DAVID S. PARKER:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 5, 1972, REQUESTING OUR DECISION AS TO WHETHER IT WOULD BE PROPER TO GRANT RETROACTIVELY THOSE WITHIN-GRADE SALARY INCREASES OF CANAL ZONE GOVERNMENT (CZG) EMPLOYEES THAT WERE WITHHELD DURING THE PERIOD OF THE WAGE-PRICE FREEZE INITIATED BY EXECUTIVE ORDER 11615, AUGUST 15, 1971.

THE QUESTION INVOLVES THE APPLICATION OF SECTION 203(C)(3) OF THE ECONOMIC STABILIZATION ACT AMENDMENTS OF 1971, PUBLIC LAW 92-210 APPROVED DECEMBER 22, 1971. YOUR CONCERN IS WHETHER CERTAIN WITHIN GRADE SALARY INCREASES FOR EMPLOYEES OF CZG BEING PAID AT AN ANNUAL RATE MAY BE CONSIDERED INCREASES "PROVIDED FOR BY LAW OR CONTRACT" WITHIN SECTION 203(C)(3)(A) OF THE ACT, AND OUR DECISION THEREON, B 173976, FEBRUARY 23, 1972.

THE RATES OF COMPENSATION OF EMPLOYEES OF CZG HERE INVOLVED ARE STATED TO BE FIXED ADMINISTRATIVELY PURSUANT TO SECTIONS 101 AND 144 OF TITLE 2, CANAL ZONE CODE, 76A STAT. 14, 17.

YOU POINT OUT THAT OUR DECISION DOES NOT APPEAR SPECIFICALLY TO COVER CLASSES OF CZG EMPLOYEES OTHER THAN WAGE BOARD EMPLOYEES (DESIGNATED IN 35 CFR 253.113 AS "MANUAL CATEGORY"), WHO ARE PAID AT AN ANNUAL RATE. THE MAJORITY OF THESE ARE SAID TO BE IN THE CATEGORY CALLED "NON MANUAL" (35 CFR 253.112) AND COMPENSATED AT RATES ADMINISTRATIVELY FIXED BY REFERENCE TO THE GENERAL SCHEDULE, WITH CORRESPONDING GRADE LEVELS FROM NM-1 TO NM- 15, EACH CONTAINING WITHIN-GRADE STEPS COMPARABLE TO THE STEPS IN THE GENERAL SCHEDULE. THERE ARE APPROXIMATELY 450 EMPLOYEES, IT IS STATED, WHOSE WITHIN-GRADE INCREASES WERE DEFERRED DURING THE PERIOD OF THE WAGE- PRICE FREEZE FROM AUGUST 15 TO NOVEMBER 14, 1971.

IT WAS HELD, AMONG OTHER THINGS, IN OUR DECISION OF FEBRUARY 23, 1972, THAT WITHIN-GRADE SALARY INCREASES WHICH WERE SCHEDULED "TO BE PAID AS A RESULT OF AN AGREEMENT OR AN ESTABLISHED PRACTICE" CAME WITHIN THE PROVISIONS OF SECTION 203(C)(3)(A) OF PUBLIC LAW 92-210, AND THEREFORE RETROACTIVE PAYMENTS COULD BE MADE WHERE SCHEDULED INCREASES WERE PURSUANT TO AN ESTABLISHED PRACTICE.

PURSUANT TO REGULATIONS PROMULGATED UNDER AUTHORITY OF 2 CANAL ZONE CODE 142(B), 155, STEP INCREASES FOR NON-MANUAL CATEGORY EMPLOYEES ARE AUTHORIZED IN ACCORDANCE WITH 5 CFR, PART 531, SUBPART D. PROVISION IS ALSO MADE FOR STEP INCREASES OF THE MANUAL AND SPECIAL CATEGORIES OF EMPLOYEES (35 CFR 253.153). THUS, WHILE RATES OF PAY FOR YOUR EMPLOYEES ARE NOT FIXED BY STATUTE IT IS BY REGULATION AN ESTABLISHED PRACTICE TO PROVIDE WITHIN-GRADE INCREASES. ACCORDINGLY, WE SEE NO REASON WHY THE WITHIN-GRADE INCREASES MAY NOT BE PROCESSED RETROACTIVE TO THE DATE THEY WOULD OTHERWISE HAVE BEEN EFFECTIVE EXCEPT FOR THE WAGE-PRICE FREEZE.