A-15763, OCTOBER 16, 1926, 6 COMP. GEN. 263

A-15763: Oct 16, 1926

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CIVILIAN - REFUNDS - DE FACTO EMPLOYEES THE AMOUNT DEDUCTED FOR THE CIVIL RETIREMENT FUND FROM THE COMPENSATION OF AN EMPLOYEE WHO WAS ERRONEOUSLY PERMITTED TO CONTINUE ON DUTY WITHOUT CERTIFICATION AFTER REACHING THE RETIREMENT AGE AND WHO THUS OCCUPIED THE STATUS OF A DE FACTO EMPLOYEE ONLY. REMAINS PAY OR COMPENSATION AND IS SUBJECT TO THE RULE THAT A DE FACTO EMPLOYEE HAS NO LEGAL CLAIM FOR ANY PAY OR COMPENSATION NOT ACTUALLY RECEIVED DURING THE DE FACTO STATUS. IT IS SHOWN THAT DAWSON WAS BORN JULY 8. THAT THROUGH AN OVERSIGHT HE WAS PERMITTED TO CONTINUE TO WORK AND RECEIVE PAY UNTIL JUNE 17. WHEN HE WAS DROPPED FROM THE ROLLS. THAT IS TO SAY. " IS NOT AUTHORIZED UNDER THE STATUTE AND THEREFORE DOES NOT LEGALIZE ANY SERVICE RENDERED AFTER ATTAINING THE RETIREMENT AGE. 6 COMP.

A-15763, OCTOBER 16, 1926, 6 COMP. GEN. 263

RETIREMENT, CIVILIAN - REFUNDS - DE FACTO EMPLOYEES THE AMOUNT DEDUCTED FOR THE CIVIL RETIREMENT FUND FROM THE COMPENSATION OF AN EMPLOYEE WHO WAS ERRONEOUSLY PERMITTED TO CONTINUE ON DUTY WITHOUT CERTIFICATION AFTER REACHING THE RETIREMENT AGE AND WHO THUS OCCUPIED THE STATUS OF A DE FACTO EMPLOYEE ONLY, REMAINS PAY OR COMPENSATION AND IS SUBJECT TO THE RULE THAT A DE FACTO EMPLOYEE HAS NO LEGAL CLAIM FOR ANY PAY OR COMPENSATION NOT ACTUALLY RECEIVED DURING THE DE FACTO STATUS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, OCTOBER 16, 1926:

THERE HAS BEEN RECEIVED YOUR LETTER OF SEPTEMBER 24, 1926, WITH INCLOSURES, REQUESTING DECISION WHETHER THERE MAY BE PAID TO DAVID DAWSON, FORMER QUARTERMAN RIGGER, UNITED STATES NAVAL ORDNANCE PLANT, BALDWIN, N.Y., THE AMOUNT WITHHELD FROM HIS PAY ON ACCOUNT OF RETIREMENT DEDUCTIONS DURING THE PERIOD FROM JULY 8, 1925, TO JUNE 17, 1926, AFTER HE HAD REACHED THE AGE OF RETIREMENT AND HAD NOT BEEN CERTIFIED FOR RETENTION IN THE SERVICE.

IT IS SHOWN THAT DAWSON WAS BORN JULY 8, 1860; THAT HE ENTERED THE GOVERNMENT SERVICE NOVEMBER 13, 1922, AFTER ATTAINING THE AGE OF 62 YEARS; THAT HE REACHED THE AGE OF RETIREMENT FOR EMPLOYEES OF THE CLASS TO WHICH HE BELONGED, 65 YEARS, ON JULY 7, 1925; THAT HE DID NOT APPLY FOR NOR RECEIVE PRIOR TO SAID DATE A CERTIFICATION FOR RETENTION IN THE SERVICE; AND THAT THROUGH AN OVERSIGHT HE WAS PERMITTED TO CONTINUE TO WORK AND RECEIVE PAY UNTIL JUNE 17, 1926, WHEN HE WAS DROPPED FROM THE ROLLS.

IT APPEARS THAT HE HAS BEEN PAID THE RETIREMENT DEDUCTIONS WITHHELD FROM HIS PAY DURING THE PERIOD PRIOR TO JULY 8, 1925; BUT THAT THE COMMISSIONER OF PENSIONS HAS REFUSED TO PAY THE AMOUNT WITHHELD SUBSEQUENT TO JULY 7, 1925, AMOUNTING TO APPROXIMATELY $68.52, CITING 5 COMP. GEN. 70.

SECTION 6 OF THE ACT OF MAY 22, 1920, 41 STAT. 617, PROVIDES IN PLAIN TERMS THAT ALL EMPLOYEES TO WHOM THE ACT APPLIES SHALL "ON ARRIVING AT RETIREMENT AGE * * * BE AUTOMATICALLY SEPARATED FROM THE SERVICE, AND ALL SALARY, PAY, OR COMPENSATION SHALL CEASE FROM THAT DATE.' SAID PROVISION APPLIES REGARDLESS OF WHETHER THE EMPLOYEE HAD HAD SUFFICIENT SERVICE TO ENTITLE HIM TO ANY ANNUITY UNDER THE ACT. 32 OP.ATTY.GEN. 203; 27 COMP. DEC. 858.

FAILURE OF THE ADMINISTRATIVE OFFICE TO NOTIFY THE EMPLOYEE OF HIS AUTOMATIC SEPARATION DOES NOT OPERATE TO CONTINUE THE EMPLOYEE IN A PAY STATUS. 26 COMP. DEC. 1079; 6 COMP. GEN. 71. AND PERSONS COULD NOT LEGALLY BE REEMPLOYED OR CONTINUED IN EMPLOYMENT AFTER REACHING RETIREMENT AGE EXCEPT UPON CERTIFICATION, ETC., AS PROVIDED FOR IN SAID SECTION "NOT LESS THAN THIRTY DAYS BEFORE THE ARRIVAL * * * AT THE AGE OF RETIREMENT.' 27 COMP. DEC. 524; ID. 858. A NUNC PRO TUNC CERTIFICATION AND APPROVAL, THAT IS TO SAY, A CERTIFICATION OR APPROVAL MADE SUBSEQUENT TO "THIRTY DAYS BEFORE THE ARRIVAL OF AN EMPLOYEE AT THE AGE OF RETIREMENT," IS NOT AUTHORIZED UNDER THE STATUTE AND THEREFORE DOES NOT LEGALIZE ANY SERVICE RENDERED AFTER ATTAINING THE RETIREMENT AGE. 6 COMP. GEN. 71. APPLYING THESE ESTABLISHED RULES TO THE CASE HERE UNDER CONSIDERATION, IT IS CLEAR THAT DAWSON WAS NOT LEGALLY IN THE SERVICE OF THE GOVERNMENT AT ANY TIME SUBSEQUENT TO JULY 7, 1925. HIS STATUS DURING THE PERIOD FROM JULY 8, 1925, TO JUNE 17, 1926, WAS, AT MOST, THAT OF A DE FACTO EMPLOYEE; AND SERVICE AS A DE FACTO EMPLOYEE CAN NOT FORM THE BASIS OF A LEGAL CLAIM AGAINST THE GOVERNMENT. 3 COMP. GEN. 823; 4 ID. 43; 5 ID. 70. SEE ALSO 12 COMP. DEC. 754.

IN DECISION OF JULY 29, 1925, 5 COMP. GEN. 70, ABOVE CITED, ITEM (C) INVOLVED RETIREMENT DEDUCTIONS MADE FROM PAY EARNED IN A DE FACTO STATUS, WHICH WAS HELD TO CONSTITUTE PAY OF THE DE FACTO EMPLOYEE WITHHELD BY THE GOVERNMENT AND THEREFORE NOT PAYABLE TO THE EMPLOYEE. IN THE PRESENT CASE, THEREFORE, THE ACTION OF THE COMMISSIONER OF PENSIONS WAS CORRECT IN INVOKING THAT DECISION AS THE BASIS FOR REFUSAL TO PAY RETIREMENT DEDUCTIONS WITHHELD FROM THE PAY OF DAVID DAWSON FOR THE PERIOD JULY 8, 1925, TO JUNE 17, 1926, WHILE IN A DE FACTO STATUS. IT HAS BEEN SUGGESTED THAT THE TWO CASES ARE DISTINGUISHABLE IN THAT IN THE FORMER CASE THE ERROR WHICH RESULTED IN SERVICE AFTER RETIREMENT WAS THAT OF THE EMPLOYEE IN MISSTATING HIS AGE, WHILE IN THE PRESENT CASE THE ERROR WAS APPARENTLY THAT OF THE GOVERNMENT OFFICERS IN OVERLOOKING THE DATE THAT THE EMPLOYEE REACHED RETIREMENT AGE. BUT THE LAW AUTHORIZES NO SUCH DISTINCTION. COMP. GEN. 71. THE SAME PRINCIPLE OF LAW IS FOR APPLICATION, WHICH IS THAT THE NONPAYMENT OR SHORT PAYMENT OF SALARY TO A DE FACTO OFFICER OR EMPLOYEE CAN NOT FORM THE BASIS OF A LEGAL CLAIM AGAINST THE UNITED STATES. PACK V. UNITED STATES, 41 CT.CLS. 414; ROMERO V. UNITED STATES, 24 CT.CLS. 331.

IT HAS ALSO BEEN URGED IN SUPPORT OF THE CLAIM IN THIS CASE THAT THE DEDUCTION MADE FROM THE EMPLOYEE'S PAY WAS TANTAMOUNT TO A PAYMENT TO HIM AND, THEREFORE, THAT THE CLAIM IS NOT A CLAIM FOR PAY ON ACCOUNT OF SERVICE RENDERED DURING THE PERIOD FROM JULY 8, 1925, TO JUNE 17, 1926, BUT IS A CLAIM AGAINST THE RETIREMENT FUND AS FOR THE RETURN OF AN AMOUNT DEPOSITED BY AND HELD IN TRUST FOR HIM.

SECTION 8 OF THE CIVIL SERVICE RETIREMENT ACT OF MAY 22, 1920, 41 STAT. 618, PROVIDED AS FOLLOWS:

THAT BEGINNING ON THE FIRST DAY OF THE THIRD MONTH NEXT FOLLOWING THE PASSAGE OF THIS ACT AND MONTHLY THEREAFTER 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 EACH EMPLOYEE'S BASIC SALARY, PAY, OR COMPENSATION. THE SECRETARY OF THE TREASURY SHALL CAUSE THE SAID DEDUCTIONS TO BE WITHHELD FROM ALL SPECIFIC APPROPRIATIONS FOR THE PARTICULAR SALARIES OR COMPENSATION FORM WHICH THE DEDUCTIONS ARE MADE AND FROM ALL ALLOTMENTS OUT OF LUMP SUM APPROPRIATIONS FOR PAYMENTS OF SUCH SALARIES OR COMPENSATION FOR EACH FISCAL YEAR, AND SAID SUMS SHALL BE TRANSFERRED ON THE BOOKS OF THE TREASURY DEPARTMENT TO THE CREDIT OF A SPECIAL FUND TO BE KNOWN AS "THE CIVIL-SERVICE RETIREMENT AND DISABILITY FUND," AND SAID FUND IS HEREBY APPROPRIATED FOR THE PAYMENT OF ANNUITIES, REFUNDS, AND ALLOWANCES AS PROVIDED IN THIS ACT.

IT WILL BE NOTED THAT THE STATUTE PROVIDES, NOT FOR THE PAYMENT OF A PART OF THE EMPLOYEE'S SALARY, PAY, OR COMPENSATION INTO THE RETIREMENT FUND, BUT FOR A DEDUCTION AND WITHHOLDING OF "A SUM EQUAL TO 2 1/2 PERCENTUM OF THE BASIC SALARY, PAY, OR COMPENSATION.' THE TRANSFER TO THE RETIREMENT FUND OF AN AMOUNT EQUAL TO THE DEDUCTIONS-- WHICH TRANSFER THE SECRETARY OF THE TREASURY WAS AUTHORIZED TO MAKE ON THE BASIS OF THE SALARY APPROPRIATIONS--- IS NOT THE SAME AS, NOR EQUIVALENT TO, PAYMENT TO THE EMPLOYEE. SEE 26 COMP. DEC. 1059. IF AN AMOUNT IS ERRONEOUSLY TRANSFERRED BY THE SECRETARY FROM A SALARY APPROPRIATION TO THE RETIREMENT FUND THE PROPER PROCEDURE TO EFFECT AN ADJUSTMENT IS BY A RESTORATION OR RETRANSFER OF THE AMOUNT FROM THE RETIREMENT FUND TO THE SALARY APPROPRIATION, AND ANY CLAIM AN EMPLOYEE MAY HAVE ON ACCOUNT OF AN ERRONEOUS DEDUCTION IS A CLAIM AS FOR A SHORT-PAYMENT OF SALARY.

IN VIEW OF THE WELL ESTABLISHED RULE AS HEREINBEFORE STATED WITH RESPECT TO SERVICE OF DE FACTO EMPLOYEES, IT MAY BE ASSUMED THAT IT WOULD NOT SERIOUSLY BE CONTENDED THAT THIS EMPLOYEE WOULD HAVE A LEGAL CLAIM AGAINST THE UNITED STATES IF ALL OF HIS PAY HAD BEEN WITHHELD FOR THE PERIOD FROM JULY 8, 1925, TO JUNE 17, 1926; AND THE SITUATION IN THIS RESPECT IS NOT CHANGED BY THE FACT THAT ONLY 2 1/2 PERCENT, INSTEAD OF 100 PERCENT, OF THE PAY WAS WITHHELD.

DE FACTO SERVICE GIVES NO RIGHT OR BENEFIT WHATEVER UNDER THE RETIREMENT ACT EITHER IN COMPUTING LENGTH OF SERVICE FOR DETERMINING THE AMOUNT OF ANNUITIES OR IN COMPUTING THE AMOUNT OF THE REFUND TO BE MADE TO A FORMER EMPLOYEE UPON FINAL SEPARATION FROM THE SERVICE.

YOU ARE ADVISED, THEREFORE, THAT THERE IS NO AUTHORITY TO PAY TO DAVID DAWSON THE AMOUNT OF RETIREMENT DEDUCTIONS MADE FROM HIS SALARY FOR THE PERIOD JULY 7, 1925, TO JUNE 17, 1926. DECISION OF JULY 29, 1925, 5 COMP. GEN. 70, IS AFFIRMED.