A-10802, AUGUST 24, 1925, 5 COMP. GEN. 139

A-10802: Aug 24, 1925

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1925: I HAVE YOUR LETTER OF AUGUST 10. THE SPECIFIC QUESTION INVOLVED APPEARS TO BE WHETHER PAYMENT IN LIEU OF LEAVE EARNED BUT NOT TAKEN IS SUBJECT TO THE 2 1/2 PERCENT RETIREMENT DEDUCTION. MAY BE PAID NO MORE THAN 97 1/2 PERCENT OF BASE PAY FOR LEAVE OF ABSENCE OR 97 1/2 PERCENT OF ANY CASH COMMUTATION THEREOF * * IT WAS POINTED OUT IN THAT DECISION THAT THE COMPENSATION WAS FOR THE PERIOD OF LEAVE. THE PAYMENT WAS HELD TO BE NOT IN ADDITION TO THE BASE PAY OF THE POSITIONS AS FIXED BY LAW OR REGULATION. THE LEAVE PAY INVOLVED IN THAT DECISION WAS NOT PAY IN LIEU OF LEAVE BUT PAY FOR THE PERIOD OF LEAVE ACTUALLY TAKEN. THE PAYMENTS FOR LEAVE NOT TAKEN ARE MADE AT THE END OF THE LEAVE YEAR AND ARE IN LIEU OF THE LEAVE NOT TAKEN.

A-10802, AUGUST 24, 1925, 5 COMP. GEN. 139

RETIREMENT DEDUCTIONS - GOVERNMENT PRINTING OFFICE EMPLOYEES THE 2 1/2 PERCENT RETIREMENT DEDUCTION FROM THE PAY OF EMPLOYEES OF THE GOVERNMENT PRINTING OFFICE, UNDER THE PROVISIONS OF THE ACT OF MAY 22, 1920, 41 STAT. 614, SHOULD BE COMPUTED ON THE BASIC SALARY, PAY, OR COMPENSATION OF THE EMPLOYEE, BUT NOT ON ANY PAYMENT MADE IN LIEU OF LEAVE EARNED BUT NOT TAKEN.

COMPTROLLER GENERAL MCCARL TO THE PUBLIC PRINTER, AUGUST 24, 1925:

I HAVE YOUR LETTER OF AUGUST 10, 1925, REQUESTING DECISION WHETHER A CHANGE SHOULD BE MADE FROM THE PRACTICE OF TAXING FOR RETIREMENT ALL PAYMENTS OTHER THAN THOSE FOR OVERTIME WORK. THE SPECIFIC QUESTION INVOLVED APPEARS TO BE WHETHER PAYMENT IN LIEU OF LEAVE EARNED BUT NOT TAKEN IS SUBJECT TO THE 2 1/2 PERCENT RETIREMENT DEDUCTION.

SECTION 8 OF THE ACT OF MAY 22, 1920, 41 STAT. 614, PROVIDES THAT--

* * * THERE SHALL BE DEDUCTED AND WITHHELD FROM THE BASIC SALARY, PAY, OR COMPENSATION OF EACH EMPLOYEE TO WHOM THIS ACT APPLIES A SUM EQUAL TO 2 1/2 PERCENTUM OF SUCH EMPLOYEE'S BASIC SALARY, PAY, OR COMPENSATION * *

SECTION 2 OF THE ACT PROVIDES THAT---

THE TERM "BASIC SALARY, PAY, OR COMPENSATION" WHEREVER USED IN THIS ACT, SHALL BE SO CONSTRUED AS TO EXCLUDE FROM THE OPERATION OF THE ACT ALL BONUSES, ALLOWANCES, OVERTIME PAY, OR SALARY, PAY, OR COMPENSATION GIVEN IN ADDITION TO THE BASE PAY OF THE POSITIONS AS FIXED BY LAW OR REGULATION.

IN DECISION OF AUGUST 20, 1920, 27 COMP. DEC. 190, THE COMPTROLLER OF THE TREASURY HELD THAT---

EMPLOYEES OF THE PANAMA CANAL AFFECTED BY THE RETIREMENT ACT OF MAY 22, 1920, 41 STAT. 614, MAY BE PAID NO MORE THAN 97 1/2 PERCENT OF BASE PAY FOR LEAVE OF ABSENCE OR 97 1/2 PERCENT OF ANY CASH COMMUTATION THEREOF * *

IT WAS POINTED OUT IN THAT DECISION THAT THE COMPENSATION WAS FOR THE PERIOD OF LEAVE. THEREFORE, THE PAYMENT WAS HELD TO BE NOT IN ADDITION TO THE BASE PAY OF THE POSITIONS AS FIXED BY LAW OR REGULATION. IN OTHER WORDS, THE LEAVE PAY INVOLVED IN THAT DECISION WAS NOT PAY IN LIEU OF LEAVE BUT PAY FOR THE PERIOD OF LEAVE ACTUALLY TAKEN.

IN THE CASE OF EMPLOYEES OF THE GOVERNMENT PRINTING OFFICE, THE PAYMENTS FOR LEAVE NOT TAKEN ARE MADE AT THE END OF THE LEAVE YEAR AND ARE IN LIEU OF THE LEAVE NOT TAKEN. SUCH PAYMENTS ARE IN ADDITION TO THE REGULAR PAY OF EMPLOYEES SO PAID. AN EMPLOYEE WHO TAKES 30 DAYS' LEAVE DURING A LEAVE YEAR RECEIVES ONLY THE BASE PAY OF HIS POSITION; THAT IS, 12 MONTHS' PAY FOR 11 MONTHS OF WORK AND 1 MONTH OF LEAVE. THE EMPLOYEE WHO TAKES NO LEAVE DURING THE LEAVE YEAR RECEIVES 13 MONTHS' PAY FOR 12 MONTHS OF WORK, THE EXTRA MONTH'S PAY BEING IN LIEU OF THE LEAVE NOT TAKEN.

THE PAYMENTS IN LIEU OF LEAVE ARE PAYMENTS IN ADDITION TO THE REGULAR BASIC PAY OF THE POSITIONS AND ARE, THEREFORE, NOT SUBJECT TO DEDUCTION UNDER THE ACT OF MAY 22, 1920. YOUR QUESTION IS ANSWERED ACCORDINGLY.