B-155939, FEB. 15, 1965, 44 COMP. GEN. 476

B-155939, FEB. 15, 1965, 44 COMP. GEN. 476

COMPENSATION - WAGE BOARD EMPLOYEES - DOWNGRADING - SAVED COMPENSATION THE GRANTING OF SALARY RETENTION BENEFITS TO WAGE BOARD EMPLOYEES IN THE MILITARY ESTABLISHMENT WHO ARE DEMOTED OR CHANGED THROUGH NO FAULT OF THEIR OWN MAY BE CONSIDERED AS IN THE PUBLIC INTEREST FOR PURPOSES OF DEVIATION FROM THE PREVAILING RATE BASED UPON ACTS OF CONGRESS GRANTING SAVED SALARY BENEFITS TO CLASSIFIED AND POSTAL EMPLOYEES AND, THEREFORE, THE ISSUANCE OF REGULATIONS BY THE MILITARY DEPARTMENTS PRESCRIBING SALARY RETENTION BENEFITS FOR WAGE BOARD EMPLOYEES, OTHER THAN AS A RESULT OF DECREASES IN PREVAILING INDUSTRY RATES AS DISCLOSED BY WAGE SURVEYS, IS WITHIN THE DISCRETIONARY AUTHORITY GRANTED TO HEADS OF DEPARTMENTS AND AGENCIES TO MAKE DEVIATIONS FROM PREVAILING RATES IN THE PUBLIC INTEREST, SUBJECT TO THE RECOMMENDATION THAT THE REGULATIONS BE AS UNIFORM AS PRACTICABLE AND CONFORM AS CLOSELY AS POSSIBLE WITH THE STATUTORY CONDITIONS AND LIMITATIONS ON SAVED SALARY FOR CLASSIFIED AND POSTAL EMPLOYEES.

TO THE SECRETARY OF DEFENSE, FEBRUARY 15, 1965:

ON JANUARY 13, 1965, THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER) REQUESTED OUR DECISION UPON THE QUESTION WHETHER UNDER THE PRESENT LAW THE HEADS OF DEPARTMENTS AND AGENCIES HAVE AUTHORITY TO PROVIDE BY REGULATION FOR WAGE RETENTION UNDER CIRCUMSTANCES WHEN A WAGE BOARD EMPLOYEE IS DEMOTED OR CHANGED THROUGH NO FAULT OF HIS OWN WHEN SUCH PAY RETENTION IS CONSIDERED TO BE IN THE PUBLIC INTEREST. THE CONTROLLING STATUTORY PROVISIONS ARE FOUND IN SECTION 202 (7) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 5 U.S.C. 1082 (7), READING AS FOLLOWS: "PROVIDED, THAT THE COMPENSATION OF SUCH EMPLOYEES (WAGE BOARD EMPLOYEES) SHALL BE FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH PREVAILING RATES," AND SECTION 7474 OF TITLE 10, U.S.C., READING AS FOLLOWS: "THE SECRETARY OF THE NAVY SHALL ESTABLISH RATES OF WAGES FOR EMPLOYEES OF SUCH NAVAL ACTIVITY WHERE THE RATES ARE NOT ESTABLISHED BY OTHER PROVISIONS OF LAW TO CONFORM, AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST, WITH THOSE OF PRIVATE ESTABLISHMENTS IN THE IMMEDIATE VICINITY.'

THE ASSISTANT SECRETARY'S LETTER EXPRESSES CONCERN OVER THE HOLDING IN OUR DECISION OF JUNE 17, 1963, 42 COMP. GEN. 697, THE SYLLABUS OF WHICH READS AS FOLLOWS:

WAGE BOARD EMPLOYEES, WHO, AFTER A DOWNGRADING ACTION AND A TRANSFER OF THEIR WORK FROM THE PUBLIC HEALTH SERVICE TO THE BUREAU OF INDIAN AFFAIRS, RECEIVED SAVED SALARY BENEFITS DUE TO AN ERRONEOUS INTERPRETATION OF THE ADMINISTRATIVE REGULATIONS CONCERNING SALARY RETENTION MAY NOT BE REGARDED AS IN A DE FACTO STATUS DURING THE PERIOD THEY RECEIVED THE OVERPAYMENTS IN THE ABSENCE OF A SAVED SALARY STATUTE OF GENERAL APPLICATION TO WAGE BOARD EMPLOYEES SIMILAR TO SECTION 507 OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C.1107, APPLICABLE TO CLASSIFIED EMPLOYEES, AND, THEREFORE, WAIVER OF RECOVERY OF THE OVERPAYMENTS MAY NOT BE AUTHORIZED.

THE ASSISTANT SECRETARY EMPHASIZES THE FOLLOWING POINTS IN HIS LETTER:

THE DEPARTMENT OF DEFENSE AND OTHER FEDERAL AGENCIES HAVE LONG BEEN OF THE OPINION THAT THE HEADS OF DEPARTMENTS AND AGENCIES PRESENTLY HAVE AUTHORITY UNDER SECTION 202 (7) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED (5 U.S.C. 1082 (7), AND, IN THE CASE OF THE DEPARTMENT OF THE NAVY, UNDER SECTION 7474 OF TITLE 10, U.S.C. FOR ESTABLISHING AND ADMINISTERING A COMPENSATION SYSTEM FOR WAGE BOARD EMPLOYEES WHICH FOLLOWS INDUSTRIAL PRACTICE AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST. UNDER THESE AUTHORITIES, THE MILITARY DEPARTMENTS AND OTHER FEDERAL AGENCIES HAVE ADOPTED PROVISIONS PERMITTING PAY SAVINGS IN A NUMBER OF CIRCUMSTANCES.

THE MOST RECENT BILLS INTRODUCED INTO THE CONGRESS WHICH WOULD HAVE REQUIRED PAY RETENTION FOR WAGE BOARD EMPLOYEES, AND APPARENTLY THOSE REFERRED TO IN B-151438 WERE H.R. 6300 AND H.R. 6313. IN RESPONSE TO A REQUEST FOR COMMENTS FROM THE CHAIRMAN OF THE HOUSE POST OFFICE AND CIVIL SERVICE COMMITTEE, THE DEPARTMENT OF DEFENSE, WITH THE APPROVAL OF THE BUREAU OF THE BUDGET, OPPOSED THEIR ENACTMENT. THIS OBJECTION WAS BASED, NOT ON OPPOSITION TO PAY RETENTION AS SUCH, BUT TO THE MANDATORY PROVISIONS OF THE BILLS, WHICH WOULD HAVE PROVIDED THAT EMPLOYEES ON SAVED PAY RATES WOULD HAVE BEEN ENTITLED TO ADMINISTRATIVE INCREASES IN ADDITION TO THE SAVED RATES. THE REPORTS POINTED OUT THAT THE LEGISLATION WAS NOT NEEDED, THAT THE HEADS OF DEPARTMENTS AND AGENCIES PRESENTLY HAVE AUTHORITY AS INDICATED ABOVE TO ADMINISTRATIVELY SAVE PAY IN THE PUBLIC INTEREST AND THAT REGULATIONS TO DO SO HAVE BEEN ADOPTED.

REGULATIONS NOW PROVIDE FOR PAY SAVINGS FOR WAGE BOARD EMPLOYEES IN A VARIETY OF INSTANCES CONSIDERED TO BE IN THE PUBLIC INTEREST SUCH AS; A CHANGE IN PAY FIXING METHODS; A CHANGE IN THE CLASSIFICATION OF A POSITION BECAUSE OF A CHANGE IN STANDARDS; A TRANSFER OF AN EMPLOYEE IN THE SAME GRADE LEVEL TO A LABOR MARKET AREA WHERE THE WAGE SCHEDULE IS LOWER; OR, A TRANSFER TO A LOWER GRADE JOB IN THE INTEREST OF THE GOVERNMENT.

WE CONSIDER IT IMPERATIVE THAT PAY RETENTION BE CONTINUED FOR A NUMBER OF THOSE SITUATIONS FOR WHICH IT IS CURRENTLY PROVIDED. THIS IS PARTICULARLY IMPORTANT IN VIEW OF THE NUMBER OF EMPLOYEES WHO MAY BE AFFECTED BY THE RECENTLY ANNOUNCED BASE CLOSURE PROGRAM.

SUCH A DECISION WOULD BE JUSTIFIED FOR OBVIOUS REASONS. IT WOULD PROVIDE EQUITABLE TREATMENT FOR BOTH CLASSIFICATION ACT AND WAGEBOARD EMPLOYEES. IT WOULD BE IN ACCORDANCE WITH THE ANNOUNCED OBJECTIVE OF AVOIDING ADVERSE EFFECTS ON EMPLOYEES TO THE EXTENT IT IS REASONABLE AND POSSIBLE. WOULD PROMOTE MORALE DURING THE HEAVY REDUCTIONS WHICH ARE TO BE MADE AND WOULD ASSIST EMPLOYEES IN ADJUSTING TO THE PHYSICAL MOVES AND GIVE THEM TIME TO PREPARE FOR REDUCTIONS IN SALARY.

WE HAVE CAREFULLY CONSIDERED OUR DECISION IN 42 COMP. GEN. 697 IN THE LIGHT OF THE INFORMATION APPEARING IN YOUR SUBMISSION. IN THAT DECISION THE POLICY OF THE DEPARTMENT OF THE INTERIOR PRECLUDED THE GRANTING OF WAGE RETENTION BENEFITS UNDER THE CIRCUMSTANCES PRESENT IN THAT CASE, AND THE SOLE QUESTION BEFORE US WAS WHETHER RECOVERY OF ILLEGAL PAYMENTS COULD BE WAIVED. IN EFFECT THE DECISION HELD THAT SINCE THE CONGRESS HAS NOT ENACTED ANY GENERAL LEGISLATION PROVIDING WAGE RETENTION BENEFITS FOR PREVAILING RATE EMPLOYEES, THERE WAS NO AUTHORITY UNDER WHICH THE DEPARTMENT OF THE INTERIOR RETROACTIVELY COULD ALTER ITS POLICY IN ORDER TO PROVIDE WAGE RETENTION BENEFITS FOR THE EMPLOYEES THERE INVOLVED OR UNDER WHICH THE GENERAL ACCOUNTING OFFICE COULD WAIVE RECOVERY OF OVERPAYMENTS RESULTING FROM AN ADMINISTRATIVE MISINTERPRETATION OF THE DEPARTMENT'S POLICY.

WE RECOGNIZE A DISCRETIONARY AUTHORITY IN THE HEADS OF DEPARTMENTS AND AGENCIES TO MAKE REASONABLE DEVIATIONS FROM THE PREVAILING RATE CRITERIA WHEN THE PUBLIC INTEREST REQUIRES AN EXCEPTION TO THE RULE, PARTICULARLY WHEN A BASIC FOR SUCH DEVIATIONS IS TO BE FOUND IN COMMERCIAL OR INDUSTRIAL PRACTICE OR MAY BE DERIVED FROM ACTS OF THE CONGRESS IN ANALOGOUS SITUATIONS. HOWEVER, WE ADHERE TO THE VIEW THAT THE PREVAILING RATE IS THE PRIMARY FACTOR FOR ADMINISTRATIVE CONSIDERATION WHEN IT IS NOT INCONSISTENT WITH THE PUBLIC INTEREST. IN 34 COMP. GEN. 563 WE POINTED OUT THAT THE ACTION ON THE PART OF CONGRESS IN ENACTING SALARY SAVING BENEFITS IN PARTICULAR SITUATIONS IS A CONGRESSIONAL RECOGNITION THAT THE SAVING OF PAY TO EMPLOYEES IN EQUITABLE SITUATIONS IS NOT PER SE CONTRARY TO THE PUBLIC INTEREST. SINCE THE DATE OF THAT DECISION LEGISLATION OF GENERAL APPLICATION HAS BEEN ENACTED WHICH REQUIRES THE SAVING OF PAY FOR EMPLOYEES SUBJECT TO THE CLASSIFICATION ACT OF 1949, AS AMENDED, AS WELL AS FOR EMPLOYEES SUBJECT TO THE CLASSIFICATION ACT OF 1949, AS AMENDED, AS WELL AS FOR EMPLOYEES IN THE POSTAL SERVICE WHO ARE DOWNGRADED UNDER CERTAIN CIRCUMSTANCES. SEE 5 U.S.C. 1107 AND 39 U.S.C. 3560, RESPECTIVELY. SUCH LEGISLATION SETS FORTH THE CONDITIONS UNDER WHICH AND THE LIMITATIONS UPON THE GRANTING OF SAVED PAY TO EMPLOYEES TO WHOM IT APPLIES. WHILE THE STATUTORY BENEFITS TOGETHER WITH THE CONDITIONS AND LIMITATIONS PLACED THEREON DO NOT APPLY TO PREVAILING RATE EMPLOYEES, THE PRESCRIBING OF SUCH CONDITIONS AND LIMITATIONS CLEARLY REFLECT THE POLICY OF CONGRESS CONCERNING THE CONDITIONS UNDER WHICH THE CONGRESS CONSIDERS TI TO BE IN THE PUBLIC INTEREST TO PRESERVE THE COMPENSATION OF THE EMPLOYEES AFFECTED BY SUCH ENACTMENTS.

WE HAVE EXAMINED THE REGULATIONS OF THE MILITARY DEPARTMENTS PROVIDING FOR SALARY RETENTION IN THE CASE OF PREVAILING RATE EMPLOYEES AS WELL AS THE REGULATIONS OF CERTAIN OTHER DEPARTMENTS AND AGENCIES OF THE GOVERNMENT. OUR EXAMINATION DISCLOSED THAT THERE IS A SUBSTANTIAL

LACK OF UNIFORMITY IN THE REGULATIONS EVEN AMONG THE THREE MILITARY DEPARTMENTS. WHILE THE REGULATIONS OF THE DEPARTMENT OF THE ARMY (CPC 11, JUNE 23, 1963) INCLUDE CONDITIONS AND LIMITATIONS SIMILAR TO THOSE CONTAINED IN THE LAWS RELATING TO SAVED PAY FOR CLASSIFICATION ACT AND POSTAL EMPLOYEES, THE REGULATIONS OF THE DEPARTMENT OF THE NAVY (NCPI 552 9-1) AND THE DEPARTMENT OF THE AIR FORCE (AFM 40-1 AF 5212 4B) DO NOT APPEAR TO CONTAIN SIMILAR LIMITATIONS. ON THE OTHER HAND, THE REGULATIONS OF THE DEPARTMENT OF THE NAVY ARE SUBSTANTIALLY MORE RESTRICTIVE THAN THOSE OF THE DEPARTMENT OF THE AIR FORCE AND THE DEPARTMENT OF THE ARMY IN THAT THEY AUTHORIZE WAGE RETENTION ONLY IN THAT LIMITED CLASS OF CASES IN WHICH DOWNGRADING RESULTS FROM A REEVALUATION OF THE DUTIES OF A POSITION.

WHILE WE DO NOT VIEW ANY OF THE REGULATIONS AS INVALID PER SE, WE ARE OF THE OPINION THAT IT WOULD BE DESIRABLE FOR THE REGULATIONS OF THE MILITARY DEPARTMENTS TO BE AS UNIFORM AS PRACTICABLE. THIS MIGHT BE ACCOMPLISHED BY THE ISSUANCE OF GENERAL GUIDELINES BY THE DEPARTMENT OF DEFENSE. IT IS OUR FURTHER VIEW THAT THE CONDITIONS AND LIMITATIONS UPON THE GRANTING OF SAVED PAY TO CLASSIFIED AND POSTAL EMPLOYEES PRESCRIBED BY THE STATUTORY ENACTMENTS REFERRED TO ABOVE BE ACCORDED THE MOST SERIOUS CONSIDERATION IN DETERMINING WHEN AND TO WHAT EXTENT THE PUBLIC INTEREST JUSTIFIES THE PRESERVING OF COMPENSATION OF PREVAILING RATE EMPLOYEES, AND IN THE ABSENCE OF COMPELLING REASONS REQUIRING THE USE OF DIFFERENT CRITERIA WE RECOMMEND THAT THE CONDITIONS AND LIMITATIONS UPON THE GRANTING OF PAY RETENTION BENEFITS TO PREVAILING RATE EMPLOYEES CONFORM CLOSELY WITH THOSE PRESCRIBED BY THE CONGRESS FOR CLASSIFICATION ACT AND POSTAL EMPLOYEES.

THIS DECISION AND WAGE RETENTION AS AUTHORIZED HEREUNDER IS NOT TO BE CONSTRUED AS APPLYING IN CASES WHERE WAGE RATE REDUCTIONS ARE BASED UPON DECREASES IN PREVAILING INDUSTRY RATES AS DISCLOSED BY WAGE SURVEYS.

FOR PURPOSES OF INFORMATION WE ARE FORWARDING COPIES OF THIS DECISION TO THE COMMITTEE ON POST OFFICE AND CIVIL SERVICE IN BOTH THE SENATE AND THE HOUSE OF REPRESENTATIVES.