B-125559, JUL. 30, 1957

B-125559, JUL. 30, 1957

TO MR. JOHN BOYLE:

ON JUNE 10, 1957, YOU REQUESTED RECONSIDERATION OF OUR DECISION OF DECEMBER 27, 1955, B-125559, TO YOU. WITH YOUR REQUEST YOU SUBMITTED "EXHIBITS A THROUGH F.' THE QUESTION RAISED IN THE DECISION WAS WHETHER, AS A REEMPLOYED ANNUITANT, THE ANNUITY ALLOCABLE TO YOUR PERIOD OF EMPLOYMENT SHOULD BE DEDUCTED FROM YOUR COMPENSATION.

YOU SAY:

"THE CRUX OF THE PROBLEM IS IMMEDIATELY PRESENTED BY THE APPROVAL OF COMPENSATION WITHOUT DEDUCTION FOR RETIREMENT BASED ON THE STATED TERMS OF THE LATEST CONTRACT. SAID NEW CONTRACT STATES APPLICANT'S DUTIES IN MORE DETAILED FORM AND MORE CLEARLY DEFINES HIS RELATIONSHIP TO THE GOVERNMENT. HOWEVER, NO CHANGE HAS OCCURRED IN SAID DUTIES OR RELATIONSHIP SINCE THE TIME OF EXECUTION OF THE FIRST CONTRACT ON JUNE 31, 1953. ALTHOUGH NOT STATED IN DETAIL IN PRIOR CONTRACTS, THIS IS THE RELATIONSHIP WHICH HAS EXISTED AND DOES EXIST AND ON WHICH CLAIMANT BASES HIS CLAIM FOR REFUND OF RETIREMENT DEDUCTIONS MISTAKENLY WITH-HELD FROM HIS COMPENSATION FROM JUNE 31, 1953, TO JULY 1, 1956.'

FROM THAT STATEMENT YOU APPEAR TO SEEK APPROVAL OF COMPENSATION WITHOUT DEDUCTION FOR RETIREMENT BASED UPON THE TERMS OF THE LATEST CONTRACT DATED FEBRUARY 20, 1957, COVERING THE PERIOD JULY 1, 1956 TO JUNE 30, 1957, AS WELL AS APPROVAL OF SIMILAR COMPENSATION PAYMENTS WITHOUT DEDUCTION FOR RETIREMENT COVERING THE PERIOD OF YOUR ENTIRE SERVICE WITH THE GENERAL SERVICES ADMINISTRATION AS A CONSULTANT AND EXPERT ADVISER ON PATENT MATTERS, FROM JUNE 30, 1953 TO JUNE 30, 1956. YOUR ENTITLEMENT TO THE AMOUNT CLAIMED DEPENDS UPON WHETHER YOUR RELATIONSHIP WITH THE GOVERNMENT IS THAT OF AN EMPLOYEE OR THAT OF AN INDEPENDENT CONTRACTOR.

THE AGREEMENT OF FEBRUARY 22, 1957, ENTERED INTO BETWEEN YOU AND THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, ESSENTIALLY IS THE SAME AS THAT EXECUTED ON JUNE 29, 1953 AND ANY DIFFERENCES WILL NOT ALTER YOUR ULTIMATE RIGHTS.

CONCERNING THE WRITTEN AGREEMENT DATED FEBRUARY 20, 1957, ACCEPTED BY YOU ON FEBRUARY 22, 1957, COVERING THE PERIOD JULY 1, 1956, TO JUNE 30, 1957, WE ADVISED THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, ON MAY 16, 1957, AS FOLLOWS:

"UNDER THIS CONTRACT MR. BOYLE HAS RENDERED SERVICES FROM JULY 2, 1956. TO THE EXTENT THE CONTRACT PURPORTS TO BE RETROACTIVE FROM FEBRUARY 22, 1957 TO JULY 1, 1956, WE DEEM THAT PORTION TO BE MERELY CONFIRMATORY OF AN ORAL AGREEMENT AND WE DO NOT HERE QUESTION THE CONTRACT CONCERNING ITS RETROACTIVE PART. BUT SINCE THAT CONTRACT DOES NOT DIFFER MATERIALLY FROM THE PRIOR CONTRACT WHICH RESULTED IN THE PAYMENTS OBJECTED TO IN THE AUDIT WE DO QUESTION THE FAILURE OF THE ADMINISTRATIVE OFFICE TO CONTINUE THE REDUCTION OF THE $50 PER DAY RATES BY THE AMOUNT OF "THE RETIREMENT ANNUITY ALLOCABLE TO THE PERIOD OF ACTUAL EMPLOYMENT" AS PROVIDED BY SECTION 2 (B) OF THE ACT OF FEBRUARY 28, 1948.

"IN THE CIRCUMSTANCES PROMPT STEPS SHOULD BE TAKEN TO REDUCE ALL PER DIEM PAYMENTS TO MR. BOYLE BY THE CIVIL SERVICE ANNUITY ALLOCABLE TO DAYS OF EMPLOYMENT IN ACCORDANCE WITH 28 COMP. GEN. 693, TO COLLECT FROM HIM THE EXCESS PAYMENTS MADE SINCE JULY 2, 1956, AND TO REPORT TO OUR OFFICE WHEN SUCH STEPS SHALL HAVE BEEN TAKEN.'

YOUR SUBSEQUENT REQUEST FOR REVIEW SHOWS THAT YOU DO NOT AGREE WITH THE VIEW EXPRESSED BY US IN OUR LETTER OF MAY 16, 1957, AND YOU SUBMIT FURTHER EVIDENCE TO ESTABLISH THAT THE CONTRACT CONSTITUTES YOU AN INDEPENDENT CONTRACTOR.

EXHIBIT "B" SUBMITTED BY YOU SHOWS THAT DURING THE MONTH OF DECEMBER 1956, YOU RENDERED SERVICES ON CERTAIN DAYS FOR A SPECIFIC NUMBER OF HOURS, AGGREGATING 8 HOURS FOR THE MONTH AND THAT PAYMENT THEREFOR WAS APPROVED ADMINISTRATIVELY FOR $50 COVERING 8 HOURS OF SERVICE. EXHIBIT "F" REPRESENTS A DETAILED STUDY BY AN ATTORNEY OF THE OFFICE OF GENERAL COUNSEL, GENERAL SERVICES ADMINISTRATION, CONCERNING THE STATUS OF EXPERTS AND CONSULTANTS IN THE GOVERNMENT SERVICE. IN THAT EXHIBIT, THE ARGUMENT IS ADVANCED THAT A CONTRACTUAL RELATIONSHIP EXISTS BUT THAT AN EMPLOYER- EMPLOYEE RELATIONSHIP DOES NOT EXIST. THAT ARGUMENT MERELY STATES THE ISSUE, IT DOES NOT RESOLVE THE LEGAL PROBLEMS INVOLVED. GENERALLY, WHEN THE GOVERNMENT PROCURES PERSONAL SERVICES OF EXPERTS OR CONSULTANTS, THE QUESTION OF WHETHER THE PERSON IS AN INDEPENDENT CONTRACTOR OR ONE EMPLOYED UNDER A PERSONAL SERVICE CONTRACT WHOSE RELATIONSHIP TO THE GOVERNMENT IS THAT OF EMPLOYER EMPLOYEE BY VIRTUE OF HIS APPOINTMENT IS LARGELY ANSWERED BY THE METHOD BY WHICH HE IS COMPENSATED. THE INDIVIDUAL MAY BE PAID (1) AN AGREED LUMP SUM FOR PREPARING A REPORT OR COMPLETING SOME PROJECT; (2) A FEE FOR A GIVEN SERVICE WITHOUT STRICT REGARD FOR THE TIME ELEMENT; OR, (3) A FIXED RATE OF COMPENSATION, GENERALLY A RATE PER DAY, ON AN ACTUALLY EMPLOYED BASIS. THE LAST MAY BE TEMPORARY OR INTERMITTENT. THE FIRST TWO METHODS GENERALLY DO NOT CREATE AN EMPLOYER- EMPLOYEE RELATIONSHIP. THE THIRD METHOD USUALLY DOES. THERE ARE, OF COURSE, OTHER ELEMENTS THAT AID IN DETERMINING THE RELATIONSHIP, SUCH AS THE DEGREE OF SUPERVISION RECEIVED, THE EXTENT TO WHICH THE EMPLOYEE'S OWN EQUIPMENT, SPACE AND OTHER FACILITIES ARE USED, OR THE QUESTION OF RESPONSIBILITY FOR THE END RESULT.

THE WRITTEN AGREEMENT OF FEBRUARY 20, 1957, PROVIDES FOR PAYMENT "AT THE RATE OF $50 PER DIEM FOR TIME ACTUALLY DEVOTED TO WORK.' WE FIND SOME AMBIGUITY IN THE QUOTED LANGUAGE, IT NOT BEING APPARENT WHETHER YOU ARE TO BE PAID BY THE DAY OR BY A FRACTION OF THE DAY, BUT REFERENCE TO THE WORK SLIPS AND SUMMARY SHEET FURNISHED BY YOU INDICATES THAT YOU ARE COMPENSATED ON AN HOURLY BASIS FOR SUCH OPINIONS AS YOU MAY BE CALLED UPON TO RENDER.

IT IS DIFFICULT FOR US TO DISTINGUISH BETWEEN WORK PERFORMED AND COMPENSATION PAID ON SUCH A BASIS AND THAT OF ANY OTHER INTERMITTENT CONSULTANT APPOINTED UNDER 5 U.S.C. 55 (A) WHOSE DUTIES ARE OF AN EXPERT OR ADVISORY NATURE AND WHOSE COMPENSATION IS FIXED AT A DAILY RATE WHEN ACTUALLY EMPLOYED. THE TERM "CONTRACT" APPEARING IN 5 U.S.C. 55 (A) HAS BEEN CONSTRUED TO INCLUDE PERSONAL SERVICE CONTRACTS, WHICH ESTABLISH AN EMPLOYER-EMPLOYEE RELATIONSHIP, AS WELL AS INDEPENDENT CONTRACTOR RELATIONSHIPS WITH FIRMS, ETC.

WE MUST, THEREFORE, CONCLUDE THAT YOUR RELATIONSHIP TO THE GOVERNMENT BEING ESTABLISHED BY A PERSONAL SERVICE AGREEMENT FALLS INTO THE THIRD CATEGORY REFERRED TO ABOVE AND THAT YOU ARE AN EMPLOYEE OF THE GOVERNMENT SUBJECT TO LAWS OF GENERAL APPLICATION TO GOVERNMENT EMPLOYEES. SINCE YOUR EMPLOYMENT IS INTERMITTENT YOU WOULD NOT UNDER LAW BE ENTITLED TO LEAVE BENEFITS SO THAT CLAUSE IN YOUR CONTRACT IS NOT PERSUASIVE AS TO YOUR STATUS. COMPARE GENERALLY, B-127458, JUNE 6, 1956, COPY OF WHICH IS ENCLOSED FOR YOUR INFORMATION.

IN THE LIGHT OF THE FOREGOING COMMENTS, WE MUST SUSTAIN OUR EARLIER DECISION AND FURTHER RULE THAT THERE SHOULD HAVE BEEN WITHHELD FROM YOUR COMPENSATION UNDER THE CONTRACT OF FEBRUARY 20, 1957, AN AMOUNT EQUAL TO THE ANNUITY ALLOCABLE TO YOUR PERIOD OF EMPLOYMENT.