B-173976, NOV 12, 1971

B-173976, NOV 12, 1971

WAGE SCHEDULES - WAGE FREEZE - "45-DAY LAW" DECISION CONCERNING WAGE SCHEDULE ADJUSTMENTS WHICH, UNDER THE "45 DAY LAW," 5 U.S.C. 5343, WOULD OTHERWISE HAVE BECOME EFFECTIVE DURING THE FREEZE PERIOD. THE COMP. GEN. AGREES THAT THE FREEZE DOES NOT ACTUALLY EXTEND THE 45 DAY PERIOD BUT MERELY PREVENTS PAYMENT OF ANY INCREASE UNTIL NOVEMBER 14, 1971. FURTHER, IN COMPUTING THE DEFERRED FEDERAL WAGE SCHEDULES, IT IS APPROPRIATE TO USE THE HIGHER INDUSTRY RATE INSTEAD OF THE FROZEN RATE, EVEN THOUGH IT WAS NOT IN FACT BEING PAID DURING THE SURVEY PERIOD. FINALLY, DEFERRED INDUSTRY INCREASES, WHICH ARE TO BEGIN NOVEMBER 14, 1971 MAY BE USED IN SETTING THE AFFECTED FEDERAL WAGE SCHEDULES.

TO MR. ROBERT E. HAMPTON:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 30, 1971, REQUESTING OUR DECISION REGARDING VARIOUS QUESTIONS CONCERNING WAGE SCHEDULE ADJUSTMENTS WHICH UNDER THE "45-DAY LAW," 5 U.S.C. 5343, WOULD OTHERWISE HAVE BECOME EFFECTIVE DURING THE FREEZE PERIOD DIRECTED BY EXECUTIVE ORDER NO. 11615, AUGUST 15, 1971.

YOU STATE THAT UNDER THE "45-DAY LAW," 5 U.S.C. 5343, WAGE SURVEYS STARTED BEFORE THE FREEZE PERIOD WOULD HAVE BECOME EFFECTIVE AT VARYING TIMES DURING THAT PERIOD. IN ACCORDANCE WITH THE EXECUTIVE ORDER THE CIVIL SERVICE COMMISSION HAS INSTRUCTED THAT NO REVISED SCHEDULES BASED ON THESE SURVEYS BE ISSUED DURING THE FREEZE PERIOD. UNDER THESE INSTRUCTIONS SEVERAL WAGE SCHEDULE ADJUSTMENTS HAVE BEEN DEFERRED. YOU ALSO INDICATE THAT A NUMBER OF INDUSTRY ADJUSTMENTS WERE TO HAVE BEEN EFFECTIVE DURING THE PERIOD COVERED BY THE FREEZE BUT WERE DEFERRED UNTIL TERMINATION OF THE FREEZE.

IN LIGHT OF THE ABOVE YOU REQUEST OUR DECISION REGARDING THE FOLLOWING QUESTIONS:

"1. WE ASSUME THAT THE FREEZE DOES NOT ACTUALLY EXTEND THE 45-DAY PERIOD PRESCRIBED BY 5 U.S.C. SEC 5343 BUT MERELY PREVENTS PAYMENT OF ANY INCREASE UNTIL NOVEMBER 14, 1971. IS THIS CORRECT?

"2. IN COMPUTING THE DEFERRED FEDERAL WAGE SCHEDULES IS IT APPROPRIATE TO USE THE HIGHER INDUSTRY RATE (WHICH IS ALSO DEFERRED) INSTEAD OF THE FROZEN RATE, EVEN THOUGH IT WAS NOT IN FACT BEING PAID DURING THE SURVEY PERIOD?

"3. IF THE ANSWER TO QUESTION 2 IS AFFIRMATIVE, MAY DEFERRED INDUSTRY INCREASES WHICH ARE TO BEGIN BEING PAID NOVEMBER 14 BE USED IN SETTING THE AFFECTED FEDERAL WAGE SCHEDULES, EVEN WHEN THEY WOULD HAVE BEEN EFFECTIVE IN INDUSTRY AFTER THE '45-DAY LAW' DATE?"

SECTION 5343, TITLE 5, U.S.C. PROVIDES IN PART:

"SEC 5343. EFFECTIVE DATE OF PAY INCREASE

"EACH INCREASE IN RATES OF BASIC PAY GRANTED, PURSUANT TO A WAGE SURVEY, TO EMPLOYEES WHOSE PAY IS FIXED AND ADJUSTED UNDER SECTION 5341 OF THIS TITLE IS EFFECTIVE, AS FOLLOWS:

"(1) IF THE WAGE SURVEY IS MADE BY AN AGENCY, EITHER ALONE OR WITH ANOTHER AGENCY, WITH RESPECT TO ITS OWN EMPLOYEES, THE INCREASE IS EFFECTIVE FOR ITS EMPLOYEES NOT LATER THAN THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGINS AFTER THE 44TH DAY, EXCLUDING SATURDAYS AND SUNDAYS, FOLLOWING THE DATE ON WHICH THE WAGE SURVEY WAS ORDERED TO BE MADE."

SECTION 1 OF EXECUTIVE ORDER NO. 11615 PROVIDES IN PERTINENT PART AS FOLLOWS:

"SECTION 1. (A) PRICES, RENTS, WAGES, AND SALARIES SHALL BE STABILIZED FOR A PERIOD OF 90 DAYS FROM THE DATE HEREOF AT LEVELS NOT GREATER THAN THE HIGHEST OF THOSE PERTAINING TO A SUBSTANTIAL VOLUME OF ACTUAL TRANSACTIONS BY EACH INDIVIDUAL, BUSINESS, FIRM OR OTHER ENTITY OF ANY KIND DURING THE 30-DAY PERIOD ENDING AUGUST 14, 1971, FOR LIKE OR SIMILAR COMMODITIES OR SERVICES. IF NO TRANSACTIONS OCCURRED IN THAT PERIOD, THE CEILING WILL BE THE HIGHEST PRICE, RENT, SALARY OR WAGE IN THE NEAREST PRECEDING 30-DAY PERIOD IN WHICH TRANSACTIONS DID OCCUR. NO PERSON SHALL CHARGE, ASSESS, OR RECEIVE, DIRECTLY OR INDIRECTLY IN ANY TRANSACTION PRICES OR RENTS IN ANY FORM HIGHER THAN THOSE PERMITTED HEREUNDER, AND NO PERSON SHALL, DIRECTLY OR INDIRECTLY, PAY OR AGREE TO PAY IN ANY TRANSACTION WAGES OR SALARIES IN ANY FORM, OR TO USE ANY MEANS TO OBTAIN PAYMENT OF WAGES AND SALARIES IN ANY FORM, HIGHER THAN THOSE PERMITTED HEREUNDER, WHETHER BY RETROACTIVE INCREASE OR OTHERWISE."

NEITHER THIS SECTION NOR ANY OTHER SECTION OF THE EXECUTIVE ORDER PURPORTS TO EXTEND THE 45-DAY PERIOD PRESCRIBED BY 5 U.S.C. 5343. THEREFORE, WITH RESPECT TO YOUR FIRST QUESTION WE AGREE WITH YOUR ASSUMPTION THAT THE FREEZE MERELY PREVENTS PAYMENT OF ANY INCREASE UNTIL NOVEMBER 14, 1971.

REGARDING YOUR SECOND QUESTION, 5 U.S.C. 5343 PROVIDES FOR THE EFFECTIVE DATE OF WAGE ADJUSTMENTS PURSUANT TO SURVEYS UNDER 5 U.S.C. 5341. SUBSECTION 5341(A) PROVIDES THAT THE PAY OF EMPLOYEES EXCEPTED FROM THE CLASSIFICATION PROVISIONS OF TITLE 5, U.S.C. BY SUBSECTION 5102(C)(7) SHALL BE FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH PREVAILING RATES. INDUSTRY WAGE ADJUSTMENTS WHICH, BUT FOR THE FREEZE, WOULD HAVE BEEN PAID MAY, IN OUR OPINION, QUALIFY AS "PREVAILING RATES" WITHIN THE LAW AND AS SUCH PROPERLY BE VIEWED FOR CONSIDERATION IN WAGE SURVEYS. QUESTION 2 IS THEREFORE ANSWERED IN THE AFFIRMATIVE.

AS TO THE THIRD QUESTION, WE UNDERSTAND INFORMALLY THAT IT IS THE POLICY OF THE COMMISSION NOT TO CONSIDER PRIVATE INDUSTRY RATES WHICH HAVE GONE INTO EFFECT AFTER THE 45-DAY PERIOD HAS EXPIRED EVEN THOUGH THE GOVERNMENT SCHEDULES OF SALARY RATES ARE NOT APPROVED UNTIL AFTER THAT DATE. APPARENTLY THIS POLICY IS PREDICATED ON THE FACT THAT THE CONSIDERATION OF INDUSTRY RATES EFFECTIVE AFTER THE 45TH DAY COULD, BECAUSE OF THE NECESSITY FOR MAKING THE GOVERNMENT SCHEDULES RETROACTIVE TO THE 45TH DAY, RESULT IN GOVERNMENT EMPLOYEES RECEIVING RATES BASED ON INDUSTRY RATES BEFORE THE LATTER ACTUALLY WENT INTO EFFECT. HOWEVER, IN THE SITUATION HERE INVOLVED THE GOVERNMENT RATES CANNOT BE MADE RETROACTIVE BUT PRESUMABLY WILL BE EFFECTIVE ON NOVEMBER 14, 1971, THE SAME DATE AS CERTAIN INDUSTRY RATES. IN VIEW THEREOF AND AS WE ALSO UNDERSTAND THAT THE GOVERNMENT SCHEDULES INVOLVED HAVE NOT ACTUALLY BEEN APPROVED, WE SEE NO OBJECTION TO CONSIDERATION OF INDUSTRY RATES WHICH WILL GO INTO EFFECT ON NOVEMBER 14.