A-54762, AUGUST 25, 1934, 14 COMP. GEN. 156

A-54762: Aug 25, 1934

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ARE WITHIN THE TERMS OF SECTION 23 OF THE ACT OF MARCH 28. NO CHANGE IS AUTHORIZED IN THE MONTHLY OR ANNUAL RATES OF COMPENSATION OF EMPLOYEES OF THE PANAMA CANAL SUBJECT TO THE 40-HOUR WEEK STATUTORY PROVISION OTHER THAN THAT REQUIRED TO PAY A RATE NOT LOWER THAN THE RATE PER MONTH OR PER ANNUM PAID AS OF JUNE 1. NO ADDITIONAL COMPENSATION FOR OVERTIME IS AUTHORIZED IN SUCH CASES. WAS UNAUTHORIZED AND THE CLAIMS OF THE EMPLOYEES AFFECTED ARE REQUIRED TO BE READJUSTED ON A MONTHLY BASIS. AS FOLLOWS: THERE IS TRANSMITTED HEREWITH FOR YOUR DECISION. ATTACHED TO THIS CLAIM ARE A COPY OF A LETTER OF THE GOVERNOR OF THE PANAMA CANAL. IN WHICH AN EXPLANATION IS MADE OF THE METHOD USED FOR FIXING THE RATE OF PAY UNDER SECTION 23.

A-54762, AUGUST 25, 1934, 14 COMP. GEN. 156

COMPENSATION - 40-HOUR WEEK - PANAMA CANAL EMPLOYEES OF THE PANAMA CANAL IN THE ARTISAN AND MECHANICAL GROUPS, INCLUDING SUPERVISORS, WHETHER PAID ON AN ANNUAL, MONTHLY, OR DAILY BASIS, ARE WITHIN THE TERMS OF SECTION 23 OF THE ACT OF MARCH 28, 1934, 48 STAT. 522, ESTABLISHING A 40-HOUR WEEK. NO CHANGE IS AUTHORIZED IN THE MONTHLY OR ANNUAL RATES OF COMPENSATION OF EMPLOYEES OF THE PANAMA CANAL SUBJECT TO THE 40-HOUR WEEK STATUTORY PROVISION OTHER THAN THAT REQUIRED TO PAY A RATE NOT LOWER THAN THE RATE PER MONTH OR PER ANNUM PAID AS OF JUNE 1, 1932, LESS ANY APPLICABLE PERCENTAGE REDUCTION, AND NO ADDITIONAL COMPENSATION FOR OVERTIME IS AUTHORIZED IN SUCH CASES. THE ACTION OF THE PANAMA CANAL IN ADJUSTING THE COMPENSATION OF CERTAIN EMPLOYEES PREVIOUSLY PAID ON A MONTHLY BASIS TO COMPENSATION ON AN HOURLY BASIS BECAUSE OF THE 40-HOUR-WEEK STATUTORY PROVISIONS, RESULTING IN AN ACTUAL REDUCTION OF COMPENSATION, WAS UNAUTHORIZED AND THE CLAIMS OF THE EMPLOYEES AFFECTED ARE REQUIRED TO BE READJUSTED ON A MONTHLY BASIS, RETROACTIVE AS OF MARCH 28, 1934, THE DATE OF THE ACT.

COMPTROLLER GENERAL MCCARL TO THE GOVERNOR OF THE PANAMA CANAL, AUGUST 25, 1934:

THERE HAS BEEN RECEIVED YOUR LETTER OF JULY 12, 1934, AS FOLLOWS:

THERE IS TRANSMITTED HEREWITH FOR YOUR DECISION, CLAIM DATED MAY 29, 1934, FILED WITH THE GOVERNOR OF THE PANAMA CANAL, ON BEHALF OF SOME 350 PANAMA CANAL EMPLOYEES, FOR ADDITIONAL COMPENSATION ARISING OUT OF THE METHOD USED IN APPLYING SECTION 23 OF THE INDEPENDENT OFFICES ACT PASSED MARCH 28, 1934. ATTACHED TO THIS CLAIM ARE A COPY OF A LETTER OF THE GOVERNOR OF THE PANAMA CANAL, DATED JUNE 9, 1934, ADDRESSED TO THE DISTRICT ATTORNEY AT ANCON, CANAL ZONE, IN WHICH AN EXPLANATION IS MADE OF THE METHOD USED FOR FIXING THE RATE OF PAY UNDER SECTION 23, AND A COPY OF THE DISTRICT ATTORNEY'S REPLY OF JUNE 11, 1934. I AM ALSO ENCLOSING FOR YOUR FURTHER INFORMATION AND CONSIDERATION COPY OF A LETTER DATED MAY 29, 1934, ADDRESSED BY THE GOVERNMENT TO THE DISTRICT ATTORNEY, ANCON, CANAL ZONE, AND A COPY OF THE DISTRICT ATTORNEY'S REPLY OF JUNE 5, 1934.

ON THE BASIS OF THIS CORRESPONDENCE, YOUR RECONSIDERATION IS REQUESTED OF YOUR DECISION OF APRIL 12, 1934 (A-54762), TO THE EFFECT THAT SECTION 23 IS APPLICABLE TO THE EMPLOYEES OF THE PANAMA CANAL ON THE CANAL ZONE. SHOULD YOU REAFFIRM YOUR DECISION THAT SECTION 23 DOES APPLY TO THE PANAMA CANAL, AND THAT THE WAGES OF CERTAIN EMPLOYEES OF THE PANAMA CANAL ARE FIXED "BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES" AS THOSE TERMS ARE USED IN SECTION 23, YOUR DECISION IS REQUESTED OF THE FOLLOWING QUESTIONS:

1. WHETHER THE PROPER PROCEDURE HAS BEEN FOLLOWED IN FIXING THE RATES OF PAY OF EMPLOYEES WHO HAVE FILED THE CLAIM ATTACHED HERETO, DATED MAY 29, 1934, AND, IF NOT, WHAT PROCEDURE SHOULD HAVE BEEN FOLLOWED IN FIXING THEIR RATES OF PAY?

2. DOES THE PANAMA CANAL ACT 25 PERCENT LIMITATION PREVAIL OVER THE THOMAS AMENDMENT IN CASE THE LATTER RESULTS (THROUGH NECESSARY ADMINISTRATIVE APPLICATION) IN PAY EXCEEDING 25 PERCENT OVER RATES PAID BY THE GOVERNMENT IN THE UNITED STATES?

3. IN CASE THE ANSWER TO QUESTION 2 IS "NO," IS IT REQUIRED BY THE LAW IN THE THOMAS AMENDMENT THAT MECHANICS WHOSE MONTHLY RATES OF PAY AS OF JUNE 1, 1932, WERE DERIVED FROM HOURLY CRAFTSMEN'S RATES OF PAY, BUT INCLUDED COMPENSATION FOR A DEFINITE AMOUNT OF OVERTIME SERVICE (WEEKLY COMPENSATION IN EXCESS OF 48 HOURS' PAY FOR CORRESPONDING CRAFTSMEN COMPENSATED ON AN HOURLY BASIS), AS ILLUSTRATED BY THE GOVERNOR IN THE CASE OF $269.00 RATE FOR POWER-PLANT OPERATORS, MUST NOW, WHEN WORKING 40 HOURS PER WEEK AS PROVIDED UNDER THE THOMAS AMENDMENT, BE PAID THE SAME WEEKLY COMPENSATION AS THEY WERE PAID ON JUNE 1, 1932, DESPITE THE FACT THAT THE MONTHLY RATES THEN IN EFFECT HAD BEEN ESTABLISHED TO INCLUDE COMPENSATION FOR EXTRA AND SUNDAY TIME OVER AND ABOVE THE 48 HOURS PER WEEK CONSTITUTING THE ORDINARY WORK WEEK FOR EMPLOYEES IN COMPARABLE AND RELATED LINES OF WORK? OR WILL THE INTENT OF THE LAW BE FULLY MET IF SUCH CRAFTSMEN AS ARE AFFECTED BY THE THOMAS AMENDMENT ARE GIVEN FOR 40 HOURS' WORK A WEEKLY COMPENSATION WHICH IS EQUIVALENT TO 48 TIMES THE BASIC HOURLY CRAFTSMEN'S RATE OF PAY WHICH WAS IN EFFECT ON JUNE 1, 1932?

4. WITH THE FACTS SET FORTH IN THE GOVERNOR'S LETTER OF MAY 29, 1934, TO THE DISTRICT ATTORNEY AS A BASIS, IT IS REQUESTED THAT YOU SPECIFY MORE DEFINITELY THAN IS INDICATED IN YOUR DECISION OF APRIL 12, 1934, THE DIVIDING LINE BETWEEN EMPLOYEES OF THE PANAMA CANAL WHO ARE SUBJECT TO THE PROVISIONS OF SECTION 23, AND THOSE WHO DO NOT COME WITHIN THE SCOPE OF THE PROVISIONS OF THAT SECTION.

IT IS THE OPINION OF THE PANAMA CANAL THAT, IN VIEW OF THE PROVISIONS OF THE PANAMA CANAL ACT AND THE PROCEDURE FOLLOWED IN FIXING THE COMPENSATION OF EMPLOYEES OF THE PANAMA CANAL UNDER THE PROVISIONS OF THAT ACT, THE PROVISIONS OF SECTION 23 OF THE INDEPENDENT OFFICES ACT ARE NOT PROPERLY APPLICABLE TO THE PANAMA CANAL. THIS CONCLUSION IS CONFIRMED BY YOUR DECISION OF JUNE 30, 1934 (A-56221), HOLDING THAT SECTION 23 DOES NOT APPLY TO THE EMPLOYEES OF THE ENGINEER DEPARTMENT OF THE ARMY.

THE DISTRICT ATTORNEY OF THE CANAL ZONE, IN COMMENTING UPON THIS SUBJECT IN HIS MEMORANDUM OF JUNE 5, 1934, ENCLOSED, REACHED THE CONCLUSION THAT SECTION 23 DOES NOT APPLY TO PANAMA CANAL EMPLOYEES FOR REASONS STATED AS FOLLOWS:

"CONGRESS HAS ALWAYS RECOGNIZED THAT THE CONDITIONS AFFECTING EMPLOYMENT WITH THE PANAMA CANAL ARE IN MANY RESPECTS DRASTICALLY DIFFERENT FROM THOSE OBTAINING IN CONTINENTAL UNITED STATES, AND BY SECTION 4 OF THE PANAMA CANAL ACT OF AUGUST 24, 1912 (37 STAT. 560, 569) ENACTED SPECIAL LEGISLATION GOVERNING CONDITIONS OF EMPLOYMENT FOR THE PANAMA CANAL, RESTING SUCH CONDITIONS IN THE DISCRETION OF THE PRESIDENT OR HIS AUTHORITY, UNTIL SUCH TIME AS CONGRESS MIGHT BY LAW REGULATE THE SAME, WITH THE SOLE CONDITION THAT SALARIES OF COMPENSATION SHOULD IN NO INSTANCE EXCEED BY MORE THAN 25 PERCENT THE SALARY OR COMPENSATION PAID FOR THE SAME OR SIMILAR SERVICES TO PERSONS EMPLOYED BY THE GOVERNMENT IN CONTINENTAL UNITED STATES. UNDER THIS AUTHORITY OF CONGRESS THE PRESIDENT, BY EXECUTIVE ORDER OF FEBRUARY 2, 1914, AUTHORIZED THE GOVERNOR OF THE PANAMA CANAL BY ADMINISTRATIVE ACTION TO FIX COMPENSATION AND MAKE APPOINTMENTS OF ALL EMPLOYEES. UNDER MY INTERPRETATION OF THE PRINCIPLES OF STATUTORY CONSTRUCTION, AS QUOTED IN OPINION OF THE ATTORNEY GENERAL OF APRIL 1, 1913 (30 OP.ATTY.GEN. 139, AT 143, CITING RODGERS V. U.S., 185 U.S. 83, 87), THE LATER GENERAL LEGISLATION AS CONTAINED IN SECTION 23 OF THE ACT OF MARCH 28, 1934, DOES NOT AFFECT THE SPECIAL PROVISIONS OF THE EARLIER STATUTE, I.E., SECTION 4 OF THE PANAMA CANAL ACT, SUPRA, THERE BEING NO REPEAL OF THE PREVIOUS LEGISLATION, AND THERE BEING NO INCONSISTENCY IN THE TWO ACTS STANDING TOGETHER.'

THE DISTRICT ATTORNEY MAKES REFERENCE TO THE FACT THAT SENATOR THOMAS OF OKLAHOMA, IN PRESENTING THE AMENDMENT, MENTIONED THE FACT THAT HE INTENDED THAT IT SHOULD APPLY TO EMPLOYEES OF THE PANAMA CANAL, BUT, AS THE DISTRICT ATTORNEY POINTS OUT, THIS STATEMENT IS BY NO MEANS CONCLUSIVE AS TO THE PROPER INTERPRETATION OF THE PROVISION.

THE COMPENSATION OF THE EMPLOYEES OF THE PANAMA CANAL IS CERTAINLY NOT FIXED BY WAGE-FIXING BOARDS OR SIMILAR WAGE-FIXING AUTHORITIES. IT DOES NOT APPEAR, IN VIEW OF THE PROVISIONS OF THE PANAMA CANAL ACT AS CITED BY THE DISTRICT ATTORNEY, THAT WAGE-FIXING AUTHORITIES, SUCH AS THOSE REFERRED TO IN SECTION 23, HAVE HAD ANY MORE TO DO WITH THE FIXING OF WAGES OF EMPLOYEES OF THE PANAMA CANAL THAN THEY HAVE HAD TO DO WITH THE FIXING OF WAGES OF EMPLOYEES OF THE ENGINEER DEPARTMENT OF THE ARMY.

THE DECISION OF APRIL 12, 1934, A-54762, HELD AS FOLLOWS:

WAGE BOARDS IN THE CANAL ZONE ARE NOT SPECIFICALLY REQUIRED BY STATUTE OR EXECUTIVE ORDER. IT IS UNDERSTOOD, HOWEVER, THAT RATES FIXED BY "WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES" IN THE CONTINENTAL UNITED STATES ARE USED AS A BASIS BY THE GOVERNOR OF THE PANAMA CANAL, UNDER AUTHORITY OF THE QUOTED EXECUTIVE ORDER ISSUED PURSUANT TO THE STATUTE QUOTED, TO FIX RATES IN THE CANAL ZONE FOR THE SAME TRADES OR OCCUPATIONS, AND THAT WAGE BOARDS ARE CREATED BY THE GOVERNOR TO ACT IN AN ADVISORY CAPACITY TO HIM IN DETERMINING, AMONG OTHER MATTERS, WHICH SCHEDULE OF RATES FIXED IN THE CONTINENTAL UNITED STATES WOULD BE PROPERLY APPLICABLE.

IN THE FINAL DETERMINATION, THEREFORE, THE GOVERNOR DOES FIX THE SALARY RATES OF CERTAIN EMPLOYEES OF THE PANAMA CANAL ON THE ISTHMUS NOT SUBJECT TO THE CLASSIFICATION ACT AS EXTENDED TO THE FIELD SERVICE "UNDER A PROCEDURE SIMILAR TO THAT FOLLOWED BY WAGE BOARDS, THAT IS WITH REFERENCE TO WAGES, ETC., PAID TO SIMILAR CLASSES IN COMMERCIAL INDUSTRY RATHER THAN WITH REFERENCE TO SALARY RATES OR SCHEDULES OF RATES SPECIFICALLY FIXED BY OR PURSUANT TO STATUTE" (QUOTING FROM THE DECISION OF APRIL 6, 1934). FOR INSTANCE, IT IS UNDERSTOOD THAT IF AND WHEN A WAGE BOARD SHOULD ADJUST THE SALARY RATE PREVIOUSLY FIXED FOR A TRADE OR SIMILAR OCCUPATION AT THE NAVY YARDS IN THE CONTINENTAL UNITED STATES, SUCH CHANGE IN RATE WOULD BE REFLECTED IN THE RATE FIXED BY THE GOVERNOR OF THE PANAMA CANAL FOR THE SAME TRADE OR OCCUPATION IN THE CANAL ZONE.

ACCORDINGLY, WITH RESPECT TO CERTAIN CLASSES OF EMPLOYEES OF THE PANAMA CANAL, THE AUTHORITY VESTED IN THE GOVERNOR OF THE PANAMA CANAL BY EXECUTIVE ORDER ISSUED PURSUANT TO THE ACT OF AUGUST 24, 1912, 37 STAT. 561, IS TO BE REGARDED AS ONE OF THE "OTHER WAGE-FIXING AUTHORITIES" WITHIN THE MEANING OF SECTION 23 OF THE ACT OF MARCH 28, 1934, AND THAT THE PANAMA CANAL EMPLOYEES IN THE "TRADES AND OCCUPATIONS" AS DEFINED IN THE DECISION OF APRIL 6, 1934, ARE SUBJECT TO THE TERMS OF SAID SECTION.

YOU ARE ADVISED, THEREFORE, THAT EMPLOYEES OF THE CLASSES NUMBERED (1) AND (2) IN THE SUBMISSION ARE SUBJECT TO THE PROVISIONS OF SECTION 23 OF THE ACT OF MARCH 28, 1934. AS TO CLASS (2), HOWEVER, NO CHANGE IN THE MONTHLY OR ANNUAL RATE OF COMPENSATION OTHER THAN THAT REQUIRED TO PAY A RATE NOT LOWER THAN THE RATE PER ANNUM OR PER MONTH PAID JUNE 1, 1932, LESS ANY APPLICABLE PERCENTAGE REDUCTIONS, WOULD BE AUTHORIZED. THAT IS TO SAY, THEY ARE TO RECEIVE THE SAME MONTHLY OR ANNUAL COMPENSATION ALTHOUGH THEIR REGULAR HOURS OF DUTY MAY BE REDUCED. AS TO EMPLOYEES IN CLASS (3), THAT IS, THOSE ON FLOATING EQUIPMENT, POLICEMEN, FIREMEN, ETC., IT IS UNDERSTOOD THAT THE RATES OF THESE CLASSES OF EMPLOYEES IN THE CONTINENTAL UNITED STATES ARE USUALLY FIXED NOT BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES, BUT BY OR PURSUANT TO STATUTE. HENCE, IT WOULD APPEAR THAT SECTION 23 OF THE ACT OF MARCH 28, 1934, WOULD NOT BE APPLICABLE TO THEM. LIKEWISE SAID SECTION IS NOT APPLICABLE TO EMPLOYEES OF CLASS (4) WHOSE COMPENSATION IS SUBJECT TO THE CLASSIFICATION ACT AS EXTENDED TO THE FIELD SERVICE (10 COMP. GEN. 519), NOR TO ALIEN EMPLOYEES WHOSE RATES OF WAGES AND HOURS OF LABOR HAVE NOT HERETOFORE CORRESPONDED TO THE RATES OF WAGES AND HOURS OF LABOR PRESCRIBED FOR THE REGULAR FORCE OF EMPLOYEES UNDER THE PANAMA CANAL. 5 COMP. GEN. 235; 10 ID. 322.

IN YOUR LETTER OF MAY 29, 1934, TO THE DISTRICT ATTORNEY, CANAL ZONE, IT WAS STATED AS FOLLOWS:

SECTION 23 OF THE INDEPENDENT OFFICES APPROPRIATION ACT OF MARCH 28, 1934, PROVIDES:

"THE WEEKLY COMPENSATION, MINUS ANY GENERAL PERCENTAGE REDUCTION WHICH MAY BE PRESCRIBED BY ACT OF CONGRESS, FOR THE SEVERAL TRADES AND OCCUPATIONS WHICH IS SET BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES, SHALL BE REESTABLISHED AND MAINTAINED AT RATES NOT LOWER THAN NECESSARY TO RESTORE THE FULL WEEKLY EARNINGS OF SUCH EMPLOYEES IN ACCORDANCE WITH THE FULL-TIME WEEKLY EARNINGS UNDER THE RESPECTIVE WAGE SCHEDULES IN EFFECT ON JUNE 1, 1932: PROVIDED, THAT THE REGULAR HOURS OF LABOR SHALL NOT BE MORE THAN FORTY PER WEEK; AND ALL OVERTIME SHALL BE COMPENSATED FOR AT THE RATE OF NOT LESS THAN TIME AND ONE HALF.'

THE SALARIES AND WAGES PAID TO EMPLOYEES IN THE SERVICE OF THE PANAMA CANAL ARE FIXED IN CONFORMITY WITH THE ACT OF AUGUST 24, 1912 (37 STAT. 560, 569), PROVIDING FOR THE OPENING, MAINTENANCE, PROTECTION, AND OPERATION OF THE PANAMA CANAL, AND IN THE SANITATION AND GOVERNMENT OF THE CANAL ZONE, PARAGRAPH 4 OF WHICH READS, IN PART AS FOLLOWS:

"* * * THE GOVERNOR OF THE PANAMA CANAL SHALL BE APPOINTED BY THE PRESIDENT, BY AND WITH THE ADVICE AND CONSENT OF THE SENATE, COMMISSIONED FOR A TERM OF FOUR YEARS, AND UNTIL HIS SUCCESSOR SHALL BE APPOINTED AND QUALIFIED. HE SHALL RECEIVE A SALARY OF TEN THOUSAND DOLLARS A YEAR. ALL OTHER PERSONS NECESSARY FOR THE COMPLETION, CARE, MANAGEMENT, MAINTENANCE, SANITATION, GOVERNMENT, OPERATION, AND PROTECTION OF THE PANAMA CANAL AND CANAL ZONE SHALL BE APPOINTED BY THE PRESIDENT, OR BY HIS AUTHORITY, REMOVABLE AT HIS PLEASURE, AND THE COMPENSATION OF SUCH PERSONS SHALL BE FIXED BY THE PRESIDENT, OR BY HIS AUTHORITY, UNTIL SUCH TIME AS CONGRESS MAY BY LAW REGULATE THE SAME, BUT SALARIES OR COMPENSATION FIXED HEREUNDER BY THE PRESIDENT SHALL IN NO INSTANCE EXCEED BY MORE THAN 25 PERCENTUM THE SALARY OR COMPENSATION PAID FOR THE SAME OR SIMILAR SERVICES TO PERSONS EMPLOYED BY THE GOVERNMENT IN CONTINENTAL UNITED STATES. * * *"

UNDER THIS AUTHORITY OF CONGRESS THE PRESIDENT BY EXECUTIVE ORDER OF FEBRUARY 2, 1914, AUTHORIZED THE GOVERNOR OF THE PANAMA CANAL BY ADMINISTRATIVE ACTION TO FIX COMPENSATION AND MAKE APPOINTMENTS OF ALL EMPLOYEES.

INSOFAR AS COMPARABLE EMPLOYMENT COULD BE FOUND, THE WAGES OF PANAMA CANAL EMPLOYEES HAVE BEEN BASED ON WAGES PAID TO EMPLOYEES IN THE NAVY YARDS, CORPS OF ENGINEERS OF THE UNITED STATES ARMY, AND OTHER GOVERNMENTAL ORGANIZATIONS. IN INSTANCES WHERE IT APPEARED THAT THE GOVERNMENT IN THE UNITED STATES WAS PERFORMING NO COMPARABLE WORK, WAGES PAID BY PRIVATE INDUSTRY HAVE IN SOME INSTANCES BEEN USED AS A GUIDE IN FIXING THE COMPENSATION OF SOME GROUPS OF PANAMA CANAL MPLOYEES; IN OTHER INSTANCES WAGES HAVE BEEN FIXED BY EQUITABLE COORDINATION AND COMPARISON OF DUTIES AND RESPONSIBILITIES. AT ALL TIMES WAGES HAVE BEEN FIXED WITH REGARD TO THE 25 PERCENTUM MAXIMUM LIMITATION ABOVE GOVERNMENT RATES IN THE UNITED STATES REQUIRED BY LAW. AT THE GOVERNOR'S DISCRETION, WAGES MAY BE FIXED AT ANYTHING BELOW THE 25 PERCENT MAXIMUM LIMITATION PRESCRIBED BY LAW. AS A POLICY, WITH THE APPROVAL OF THE SECRETARY OF WAR, WAGES IN GENERAL ARE PAID AT 25 PERCENT ABOVE RATES PREVAILING IN THE UNITED STATES. WE HAVE NO WAGE BOARDS PROVIDED BY LAW BUT DO HAVE BOARDS APPOINTED BY THE GOVERNOR TO EXAMINE DATA AND RECOMMEND RATES TO HIM FOR HIS ACTION. AS THE PANAMA CANAL IS CLASSED AS A FIELD SERVICE, THE CLASSIFICATION ACTS DO NOT APPLY HERE BY LAW BUT THE GOVERNOR HAS ADOPTED THEM ADMINISTRATIVELY AS A CONVENIENT WAY OF CLASSIFYING AND COMPENSATING EMPLOYEES PERFORMING DUTIES SIMILAR TO THOSE PERFORMED BY EMPLOYEES IN THE GOVERNMENTAL SERVICE IN THE UNITED STATES WHO HAVE BEEN BROUGHT UNDER THE CLASSIFICATION PLAN BY LAW.

FROM THE OPINION OF THE JUDGE ADVOCATE GENERAL ENCLOSED HEREWITH I CONCLUDE THAT THE GOVERNOR OF THE PANAMA CANAL IS NOT A WAGE-FIXING AUTHORITY IN THE SENSE INTENDED BY THE LAW, AND THAT THEREFORE ONLY THOSE EMPLOYEES IN THE PANAMA CANAL ORGANIZATION MIGHT BE SUBJECT TO THE 40-HOUR WEEK LAW WHOSE RATES OF PAY ARE BASED DIRECTLY ON SCHEDULES OF COMPENSATION ESTABLISHED FOR SIMILAR WORKERS IN THE SERVICE OF THE GOVERNMENT IN THE UNITED STATES WHEREIN SUCH BASIC SCHEDULES WERE DETERMINED BY A WAGE-FIXING AUTHORITY.

IF THIS VIEWPOINT IS CORRECT, IT THEN APPEARS THAT PANAMA CANAL EMPLOYEES IN SOME TRADES AND OCCUPATIONS MIGHT BE INCLUDED WITHIN THE SCOPE OF THE 40-HOUR WEEK LEGISLATION AND OTHERS ARE NOT.

IN ESTABLISHING WAGE SCHEDULES FOR PANAMA CANAL WORKERS IN THE VARIOUS TRADES AND OCCUPATIONS WHOSE RATES OF PAY ARE DIRECTLY OR INDIRECTLY DERIVED FROM WAGE SCHEDULES PREVAILING FOR CORRESPONDING GROUPS OF EMPLOYEES IN THE UNITED STATES, IT IS POSSIBLE TO GROUP THESE WORKERS INTO THREE FAIRLY DISTINCT CLASSES, AS FOLLOWS:

1. GROUP ONE INCLUDES EMPLOYEES WHOSE RATES OF PAY HAVE BEEN DETERMINED BY TAKING THE SCHEDULE OF RATES PAID BY THE GOVERNMENT TO CORRESPONDING CLASSES OF WORKERS IN CONTINENTAL UNITED STATES AND ADDING THERETO THE 25 PERCENT DIFFERENTIAL ALLOWED FOR PANAMA CANAL SERVICE. THE PANAMA CANAL SCHEDULES OF COMPENSATION FOR CRAFTSMEN EMPLOYED IN THE MACHINE SHOPS, FOUNDRIES, BOILER SHOPS, POWER PLANTS, ETC., ARE DERIVED DIRECTLY FROM THE HOURLY RATES OF PAY PREVAILING FOR SIMILAR CRAFTSMEN EMPLOYED IN THE NAVY YARDS IN CONTINENTAL UNITED STATES. ILLUSTRATIVE OF EMPLOYEES IN THIS GROUP ARE:

A. ADAMS EMPLOYED AS OF JUNE 1, 1932, AS AN ELECTRICIAN AT AN HOURLY RATE OF $1.20. THE $1.20 HOURLY RATE OF PAY WAS DERIVED BY TAKING THE AVERAGE RATES OF PAY PREVAILING FOR ELECTRICIAN IN SIX REPRESENTATIVE NAVY YARDS IN THE UNITED STATES, AND ADDING TO THE AVERAGE RATE SO OBTAINED, THE 25 PERCENT DIFFERENTIAL AUTHORIZED FOR EMPLOYMENT ON THE PANAMA CANAL.

B. BROWN, EMPLOYED AS OF JUNE 1, 1932, AS TELEPHONE MAINTAINER AT A MONTHLY RATE OF COMPENSATION OF $250.00. THE $250.00 MONTHLY RATE WAS DERIVED BY TAKING THE ELECTRICIAN'S HOURLY RATE OF $1.20, DERIVED AS OUTLINED IN THE CASE OF A. ADAMS ABOVE, AND MULTIPLYING THE $1.20 HOURLY RATE BY 208, IN ORDER TO OBTAIN THE 26-DAY MONTHLY EQUIVALENT OF THE HOURLY RATE. THE PRODUCT OF $1.20 TIMES 208 IS $249.60, AND THE MONTHLY RATE OF $250.00 AUTHORIZED WAS INTENDED TO COVER EIGHT HOURS' EMPLOYMENT PER DAY FOR 26 DAYS EACH MONTH.

C. CARR, EMPLOYED AS OF JUNE 1, 1932, AS TOWING LOCOMOTIVE OPERATOR ON THE LOCKS, AT A RATE OF $269.00 PER MONTH. THE $269.00 MONTHLY RATE OF PAY WAS DERIVED BY TAKING THE ELECTRICIAN'S HOURLY RATE OF $1.20, DERIVED AS OUTLINED IN THE CASE OF A. ADAMS ABOVE, AND MULTIPLYING THE $1.20 HOURLY RATE BY 224 IN ORDER TO OBTAIN THE 28-DAY MONTHLY EQUIVALENT OF THE BASIC HOURLY RATE. THE LOCK OPERATORS ARE RECRUITED FROM THE RANKS OF ELECTRICIANS, MACHINISTS, AND OTHER SKILLED CRAFTSMEN, AND WORK PART OF THE TIME AT THEIR RESPECTIVE TRADES AND PART OF THE TIME AS OPERATORS OF THE ELECTRIC TOWING LOCOMOTIVES USED ON THE LOCKS. SUNDAY AND HOLIDAY SERVICE IS REQUIRED OF THESE EMPLOYEES AND THEY ARE GIVEN RELIEF DAYS OFF WHEN THEIR SERVICES CAN BE SPARED. THERE IS NO KNOWN COMPARABLE WORK PERFORMED BY GOVERNMENT EMPLOYEES IN THE UNITED STATES AND FOR MANY YEARS THEIR MONTHLY RATES OF PAY HAVE BEEN ESTABLISHED WITH DIRECT RELATION TO THE HOURLY RATE OF PAY AUTHORIZED FOR ELECTRICIANS IN THE SERVICE OF THE CANAL. THE MONTHLY RATES OF PAY FOR TOWING LOCOMOTIVE OPERATORS HAVE BEEN ADJUSTED CONCURRENTLY WITH CHANGES MADE IN THE ELECTRICIAN'S HOURLY RATE OF PAY.

2. GROUP TWO INCLUDES EMPLOYEES WHOSE RATES OF COMPENSATION ARE NOT BASED DIRECTLY ON WAGE SCHEDULES ESTABLISHED BY THE GOVERNMENT IN THE UNITED STATES BUT WHOSE RATES OF PAY HAVE BEEN FIXED ADMINISTRATIVELY BY THE GOVERNOR WITH CONSIDERATION GIVEN TO THE COMPENSATION SCHEDULES ESTABLISHED FOR OTHER PANAMA CANAL EMPLOYEES WHOSE RATES OF PAY ARE DERIVED DIRECTLY FROM VARIOUS GOVERNMENTAL BASES, INCLUDING THE NAVY YARD BASE. ILLUSTRATIVE OF EMPLOYEES IN THIS GROUP ARE:

D. DIXON, EMPLOYED AS OF JUNE 1, 1932, AS SENIOR TOWING LOCOMOTIVE OPERATOR ON THE LOCKS, AT A RATE OF $290 PER MONTH. THE $290.00 MONTHLY RATE WAS DERIVED BY ADDING A DIFFERENTIAL OF $21.00 TO THE MONTHLY RATE OF $269.00 FOR TOWING LOCOMOTIVE OPERATOR, DERIVED AS INDICATED IN THE CASE OF C. CARR NEXT ABOVE. THE SENIOR TOWING LOCOMOTIVE OPERATOR SERVES IN A SUPERVISORY CAPACITY AND HIS COMPENSATION IS FIXED WITH RELATION TO AND ADJUSTED CONCURRENTLY WITH ANY CHANGE IN THE COMPENSATION FOR LOCOMOTIVE OPERATOR.

E. ELLIS, EMPLOYED AS OF JUNE 1, 1932, AS A FOREMAN IN THE MUNICIPAL DIVISION AT A RATE OF $254 PER MONTH. THE $254.00 RATE IS ONE OF A SERIES OF RATES RANGING FROM $134 TO $284, IN STEPS OF $5.00, ADMINISTRATIVELY ESTABLISHED FOR THE PURPOSE OF PROVIDING A CONVENIENT SCHEDULE OF RATES APPLICABLE TO FOREMEN AND OTHER EMPLOYEES WHOSE COMPENSATION COULD NOT WELL BE BASED DIRECTLY ON RATES PREVAILING IN THE UNITED STATES. THE DETERMINATION OF RATES FOR THESE EMPLOYEES IS WHOLLY ADMINISTRATIVE IN CHARACTER, BUT SUCH RATES ARE ADJUSTED CONCURRENTLY WITH CHANGES MADE IN THE RATES OF PAY FOR CERTAIN GROUPS OF CRAFTSMEN AND IN SUCH A MANNER THAT THE COMPENSATION OF EMPLOYEES CARRIED ON THIS SCHEDULE OF RATES REFLECTS THE AVERAGE INCREASES OR DECREASES IN PAY RECEIVED BY CERTAIN GROUPS OF CRAFTSMEN SUCH AS MASONS, PLUMBERS, CARPENTERS, IRONWORKERS, ETC., WHOSE RATES ARE BASED ON THE NAVY YARD SCHEDULES. THIS EMPLOYEE SUPERVISES A GANG OF ALIEN WEST INDIANS, NONE OF WHOM ARE INCLUDED WITHIN THE SCOPE OF THE 40-HOUR WEEK LEGISLATION.

F. FISHER, EMPLOYED AS OF JUNE 1, 1932, AS A PUMPMAN AT A RATE OF $237.00 PER MONTH. THE $237.00 MONTHLY RATE WAS DERIVED BY MULTIPLYING AN HOURLY RATE OF $1.06 BY 224 IN ORDER TO OBTAIN THE 28-DAY MONTHLY EQUIVALENT OF THE HOURLY RATE. THE PRODUCT OF $1.06 TIMES 224 IS $237.44, AND THE MONTHLY RATE OF $237.00 AUTHORIZED WAS INTENDED TO COVER EIGHT HOURS' EMPLOYMENT PER DAY FOR 28 DAYS PER MONTH. THESE EMPLOYEES ARE REQUIRED TO WORK ON SUNDAYS AND HOLIDAYS AND ARE GIVEN RELIEF DAYS WHEN THEIR SERVICES CAN BE SPARED. THE HOURLY RATE OF $1.06 USED AS A BASIS FOR DETERMINING THEIR MONTHLY RATE OF COMPENSATION IS 5 CENTS AN HOUR LESS THAN THE HOURLY RATE OF PAY AUTHORIZED FOR STEAM ENGINEERS WITH WHOM THE RATES OF PAY FOR PUMPMEN HAVE BEEN COORDINATED FOR A NUMBER OF YEARS BY ADMINISTRATIVE ACTION OF THE GOVERNOR. THE $1.11 AN HOUR RATE FOR STEAM ENGINEERS WAS DERIVED FROM AVERAGE RATES PREVAILING FOR STEAM ENGINEERS IN NAVY YARDS IN THE UNITED STATES.

3. GROUP THREE IS COMPRISED OF EMPLOYEES WHOSE RATES OF PAY ARE DERIVED DIRECTLY FROM WAGE SCHEDULES ESTABLISHED BY PRIVATE INDUSTRY IN THE UNITED STATES. ILLUSTRATIVE OF EMPLOYEES INCLUDED IN THIS GROUP ARE:

G. GRANT, EMPLOYED AS OF JUNE 1, 1932, AS A CARPENTER AT THE RATE OF $1.38 AN HOUR. THE $1.38 HOURLY RATE FOR CARPENTERS WAS DERIVED BY TAKING THE AVERAGE HOURLY WAGE PAID CARPENTERS BY PRIVATE INDUSTRY IN 20 REPRESENTATIVE CITIES OF THE UNITED STATES, AND ADDING THERETO THE 25 PERCENT DIFFERENTIAL AUTHORIZED FOR PANAMA CANAL SERVICE. PRIOR TO THE ENACTMENT OF LEGISLATION WHICH PROHIBITED FURTHER INCREASES OR DECREASES, ADJUSTMENTS IN THIS RATE OF PAY WERE MADE BIMONTHLY TO REFLECT THE WAGES PREVAILING FOR CARPENTERS IN THE UNITED STATES.

H. HILLS, EMPLOYED AS OF JUNE 1, 1932, AS A SIGNAL MAINTAINER AT A RATE OF $243.00 PER MONTH. THE $243.00 RATE WAS DERIVED BY TAKING THE AVERAGE HOURLY RATE PREVAILING FOR SIGNAL MAINTAINERS ON SIX REPRESENTATIVE RAILROADS IN THE UNITED STATES, ADDING THE 25 PERCENT DIFFERENTIAL AUTHORIZED FOR PANAMA CANAL SERVICE, AND MULTIPLYING THE RESULTING HOURLY RATE BY EIGHT AND AGAIN BY 365 TO OBTAIN AN ANNUAL RATE OF COMPENSATION, WHICH ANNUAL RATE WAS THEN DIVIDED BY 12 TO OBTAIN THE MONTHLY RATE. EXCEPT FOR THE INCLUSION OF THE 25 PERCENT DIFFERENTIAL AUTHORIZED FOR PANAMA CANAL SERVICE, THE METHOD OF COMPUTATION IS THAT OUTLINED BY THE UNITED STATES RAILWAY LABOR BOARD FOR THIS CLASS OF EMPLOYEES, AND IS FOLLOWED BY REPRESENTATIVE RAILROADS IN THE UNITED STATES.

ALL OF THE ILLUSTRATIONS GIVEN ABOVE ARE OF EMPLOYEES CARRIED IN THE PANAMA CANAL ORGANIZATION AND EMPLOYED IN THE CANAL ZONE.

APPLICATION OF THE 40-HOUR WEEK LEGISLATION TO

THE THREE CLASSES OF EMPLOYEES OUTLINED ABOVE

IN THE CASE OF EMPLOYEES IN GROUP 1, WHOSE RATES OF PAY ARE DERIVED DIRECTLY FROM THE NAVY-YARD BASE AND WHO ARE PERFORMING DUTIES CLOSELY ANALOGOUS WITH THOSE PERFORMED BY EMPLOYEES IN THE NAVY YARDS, IT IS THOUGHT BY THE COMPTROLLER GENERAL THAT A BASIS EXISTS FOR REGARDING THEM AS COMING WITHIN THE SCOPE OF SECTION 23 OF THE INDEPENDENT OFFICES APPROPRIATION ACT OF MARCH 28, 1934.

WITH RESPECT TO EMPLOYEES IN GROUP 2, TYPICAL OF WHICH IS THE CASE OF E. ELLIS, MUNICIPAL-DIVISION FOREMAN, IT DOES NOT APPEAR TO ME THAT THE MERE FACT THAT WAGES OF EMPLOYEES SUBJECT TO THE 40-HOUR LAW WERE TAKEN INTO CONSIDERATION OR HAD SOME INFLUENCE IN DETERMINING THE RATE OF PAY THAT WAS ADMINISTRATIVELY FIXED FOR THIS EMPLOYEE SHOULD NOW BRING HIM WITHIN THE SCOPE OF THE 40-HOUR WEEK LAW.

IN THE CASE OF EMPLOYEES IN GROUP 3, OPINION ALSO DIFFERS AS TO THE ADJUSTMENTS, IF ANY, REQUIRED BY THE LAW. MANY BUILDING-TRADES CRAFTSMEN EMPLOYED BY PRIVATE INDUSTRY IN THE UNITED STATES HAVE BEEN WORKING ON A 40-HOUR WEEK BASIS FOR A NUMBER OF YEARS. CONSEQUENTLY, PROBABLY IT IS NOT INCORRECT TO STATE THAT PARTIALLY, AT LEAST, WAGES OF BUILDING-TRADES CRAFTSMEN IN PRIVATE INDUSTRY HAD BEEN ADJUSTED WITH RELATION TO THE 40- HOUR WORKING WEEK PRIOR TO THE ENACTMENT OF SECTION 23 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, MARCH 28, 1934. IF THIS ASSUMPTION IS CORRECT, IT THEN FOLLOWS THAT THE HOURLY RATE OF $1.38 FOR CARPENTERS, IN EFFECT ON JUNE 1, 1932, AS ILLUSTRATED IN THE CASE OF G. GRANT ABOVE, HAD ALREADY BEEN ADJUSTED WITH RELATION TO THE SHORTENED WORK WEEK. SEEMINGLY, THEREFORE, IF WE ASSUME THAT THIS EMPLOYEE IS NOW SUBJECT TO SECTION 23 OF THE INDEPENDENT OFFICES APPROPRIATION ACT AND ADJUST HIS RATE OF PAY SO AS TO GIVE HIM THE SAME COMPENSATION FOR 40-HOURS' LABOR THAT HE FORMERLY RECEIVED FOR 48, HE WILL BE RECEIVING DOUBLE BENEFITS FROM THE SHORTENED WORK WEEK.

THE AUTHORITY VESTED IN THE PRESIDENT BY THE ACT OF AUGUST 24, 1912, TO FIX THE RATES OF COMPENSATION OF EMPLOYEES IN THE CANAL ZONE WAS DELEGATED TO THE GOVERNOR OF THE PANAMA CANAL BY EXECUTIVE ORDER DATED FEBRUARY 2, 1914. THERE IS FOR CONSIDERATION, THEREFORE, IN APPLYING SECTION 23 OF THE ACT OF MARCH 28, 1934, ESTABLISHING A 40-HOUR WEEK, NOT THE AUTHORITY OF THE PRESIDENT TO FIX SALARY RATES OF PANAMA CANAL EMPLOYEES (COMPARE DECISION OF JULY 13, 1934, A-56368, RELATIVE TO THE EMPLOYEES OF THE ALASKA RAILROAD), BUT THE ADMINISTRATIVE PROCEDURE ADOPTED BY THE GOVERNOR OF THE PANAMA CANAL PURSUANT TO THE DELEGATION OF AUTHORITY FROM THE PRESIDENT.

BOTH THE BASIC STATUTE OF 1912 AND THE EXECUTIVE ORDER ISSUED PURSUANT THERETO, LIMIT THE COMPENSATION RATES OF EMPLOYEES IN THE CANAL ZONE TO A RATE OF 25 PERCENT IN EXCESS OF THE RATE PAID BY THE GOVERNMENT FOR THE SAME OR SIMILAR SERVICES IN THE CONTINENTAL UNITED STATES. IN ORDER NOT TO EXCEED THIS LIMITATION, THERE IS REQUIRED A COMPARISON BETWEEN THE RATES PAID TO THE EMPLOYEES OF THE PANAMA CANAL AND THE RATES PAID FOR SIMILAR SERVICES IN THE CONTINENTAL UNITED STATES. IF THE RATES PAID IN THE CONTINENTAL UNITED STATES FOR SERVICE SIMILAR TO THAT PERFORMED IN THE CANAL ZONE ARE "SET BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES" (QUOTING FROM SECTION 23 OF THE ACT OF MARCH 28, 1934), THE CONCLUSION IS INESCAPABLE THAT THE ADMINISTRATIVE ACTION OF COMPARISON BETWEEN SUCH SALARY RATES REQUIRED PURSUANT TO THE 1912 STATUTE AND THE EXECUTIVE ORDER ISSUED PURSUANT THERETO, IS A "PROCEDURE SIMILAR TO THAT FOLLOWED BY WAGE BOARDS" (QUOTING FROM DECISION OF APRIL 6, 1934, TO THE PUBLIC PRINTER, 13 COMP. GEN. 267). THIS IS EVIDENTLY THE BASIS FOR THE COMMENT MADE BY SENATOR THOMAS BEFORE THE SENATE, REFERRED TO IN YOUR LETTER, THAT THE 40- HOUR WEEK PROVISION WAS INTENDED FOR THE BENEFIT OF THE EMPLOYEES OF THE PANAMA CANAL.

THE ADDITIONAL INFORMATION NOW FURNISHED SHOWS MORE CLEARLY THAN THE EVIDENCE PREVIOUSLY BEFORE THE OFFICE THAT, IN FIXING THE SALARY RATES OF CERTAIN EMPLOYEES OF THE PANAMA CANAL, THE COMPARISON IS MADE WITH RATES FIXED BY WAGE BOARDS FOR NAVY-YARD EMPLOYEES IN THE SEVERAL "TRADES AND OCCUPATIONS.' YOU ARE ADVISED, THEREFORE, THAT THE DECISION OF APRIL 12, 1934, MUST BE AND IS AFFIRMED, AND SAID DECISION IS APPLICABLE TO ALL THREE GROUPS OF "TRADES AND OCCUPATIONS" DESCRIBED IN LETTER OF MAY 29, 1934, SUPRA. REFERRING TO GROUP 2, THE FACT THAT A DIFFERENTIAL IS PAID TO SUPERVISORS OR OTHERS OCCUPYING PREFERRED POSITIONS DOES NOT ALTER THE BASIC FACT THAT THE COMPARISON IS WITH RATES FIXED BY A WAGE BOARD OR SIMILAR AUTHORITY. WHILE THE RATES PAID TO GROUP 3 ARE NOT COMPARED WITH RATES PAID BY THE GOVERNMENT, THE RATES ARE FIXED ENTIRELY "WITH REFERENCE TO WAGES, ETC., PAID TO SIMILAR CLASSES IN COMMERCIAL INDUSTRY" (QUOTING FROM DECISION OF APRIL 6, 1934, TO THE PUBLIC PRINTER, 13 COMP. GEN. 267). THE CONCLUSION OF THE DECISION OF JUNE 30, 1934, TO THE SECRETARY OF WAR, 13 COMP. GEN. 486, INVOLVING THE FIELD EMPLOYEES OF THE ENGINEER DEPARTMENT OF THE ARMY, CITED IN YOUR LETTER, WAS BASED ON AN ADMINISTRATIVE PROCEDURE FOR FIXING SALARY RATES RECOGNIZED AS EARLY AS AUGUST 8, 1918 (DECISION OF THE COMPTROLLER OF THE TREASURY OF THAT DATE), AS NOT CONSTITUTING A PROCEDURE SIMILAR TO THAT USED BY WAGE BOARDS. THE INSTANT CASE MAY NOT BE REGARDED AS PARALLEL.

THE ABOVE WOULD APPEAR TO ANSWER QUESTION NO. 4.

REFERRING TO THE FIRST THREE QUESTIONS, THE FOLLOWING IS QUOTED FROM YOUR LETTER OF JUNE 9, 1934, TO THE DISTRICT ATTORNEY OF THE CANAL ZONE:

THERE IS ATTACHED HERETO AN APPEAL MADE BY CERTAIN EMPLOYEES OF THE PANAMA CANAL, WHO ARE PROTESTING THE ACTION OF THE GOVERNOR IN PLACING THEM ON AN HOURLY BASIS OF COMPENSATION, AND WHO HAVE REQUESTED THAT THE QUESTION OF PROPER RATES OF PAY UNDER THE THOMAS AMENDMENT BE SUBMITTED TO THE COMPTROLLER GENERAL FOR A DECISION.

THE APPEAL QUESTIONS THE AUTHORITY OF THE GOVERNOR TO RERATE FROM A MONTHLY TO AN HOURLY BASIS THE COMPENSATION OF CERTAIN GROUPS OF MECHANICS WHOSE RATES OF PAY, BOTH AS OF JUNE 1, 1932, AND OF THE PRESENT TIME, ARE DIRECTLY DERIVED FROM THE HOURLY WAGE SCHEDULES ESTABLISHED FOR CIVIL EMPLOYEES IN THE NAVAL ESTABLISHMENT IN CONTINENTAL UNITED STATES, IF SUCH RERATING RESULTS IN LESS PAY FOR 40 HOURS PER WEEK, WITHOUT OVERTIME, THAN THEY RECEIVED ON THE MONTHLY BASIS FOR 224 HOURS, INCLUDING OVERTIME.

TYPICAL OF THE ADJUSTMENTS MADE IS THAT OF THE COMPENSATION OF OPERATORS IN THE POWER-PLANT SYSTEM OF THE PANAMA CANAL. THE RATE OF PAY OF THESE OPERATORS AS OF JUNE 1, 1932, WAS $269.00 PER MONTH, THIS MONTHLY RATE OF COMPENSATION HAVING BEEN DERIVED IN THE FOLLOWING MANNER:

TABLE

TYPICAL ILLUSTRATION SHOWING DERIVATION OF MONTHLY RATES OF PAY AVERAGE HOURLY RATE OF PAY PREVAILING FOR ELECTRICIANS IN SIX

REPRESENTATIVE NAVY YARDS IN THE UNITED STATES ----------------- $0.96 ADDING 25 PERCENT TO THE BASIC STATES' RATE OF PAY IN CONFORMITY

WITH THE PANAMA CANAL ACT -------------------------------------- 0.24

----- BASIC HOURLY RATE FOR ELECTRICIAN IN THE PANAMA CANAL SERVICE --- 1.20 HOURS SERVICE MONTHLY, COVERING EIGHT HOURS' SERVICE PER DAY,

SIX DAYS PER WEEK, FOR 4 1/3 WEEKS; TO WHICH WAS ADDED AN

ALLOWANCE OF 16 HOURS TO COVER OCCASIONAL OVERTIME WORKED IN

EXCESS OF EIGHT HOURS PER DAY AND ALLOWANCE FOR EXTRA

COMPENSATION FOR WORK PERFORMED ON SUNDAYS AND HOLIDAYS -------- 224 PRODUCT OF 224 TIMES $1.20, COVERING 224 HOURS' SERVICE AT BASIC

HOURLY RATE OF $1.20 AN HOUR ---------------------------------- $268.80 MONTHLY RATE OF COMPENSATION, ADJUSTED TO NEAREST DOLLAR ----- - $269.00

TABLE

ILLUSTRATION SHOWING ADJUSTMENT MADE IN ABOVE RATES

THE EMPLOYEES WHO WERE CARRIED AT THE $269.00 MONTHLY RATE OF COMPENSATION, DERIVED AS OUTLINED NEXT ABOVE, WERE PLACED ON AN HOURLY BASIS OF COMPENSATION AT A RATE OF $1.44 PER HOUR, THE HOURLY RATE OF COMPENSATION BEING DERIVED AS FOLLOWS: BASIC HOURLY RATE FOR ELECTRICIAN IN THE PANAMA CANAL SERVICE PRIOR

TO THE ENACTMENT OF THE 40-HOUR WEEK LEGISLATION -------------- $1.20 ADDING 20 PERCENT TO THE FORMER HOURLY RATE, ADJUSTING RATE OF PAY

SO THAT COMPENSATION FOR 40 HOURS' WORK AT NEW RATE WOULD BE

EQUIVALENT TO COMPENSATION FORMERLY RECEIVED FOR 48 HOURS'

WORK ---------------------------------------------------------- 0.24 NEW HOURLY RATE OF PAY FOR ELECTRICIANS IN THE SERVICE OF THE PANAMA

CANAL, AND WHICH HAS ALSO BEEN APPLIED TO ELECTRICIANS IN THE POWER

PLANTS, LOCKS, ETC., WHO FORMERLY WERE CARRIED AT THE $269.00

MONTHLY RATES OF PAY ------------------------------------------ 1.44

THE CONSIDERATIONS THAT LED UP TO THE PLACING OF POWER-PLANT AND OTHER GROUPS OF OPERATING EMPLOYEES ON HOURLY RATES OF PAY MAY BE SUMMARIZED AS FOLLOWS:

(A) THE FORMER MONTHLY RATES OF PAY FOR ELECTRICIANS AND OTHER CRAFTSMEN IN OPERATING POSITIONS INCLUDED COMPENSATION FOR A DEFINITE AMOUNT OF OVERTIME SERVICE EACH MONTH, WHICH NO LONGER CAN BE WORKED UNDER THE NEW LAW.

(B) THE THOMAS AMENDMENT TO THE INDEPENDENT OFFICES APPROPRIATION ACT, MARCH 28, 1934, ESTABLISHES 40 HOURS PER WEEK AS THE REGULAR HOURS OF WORK BOTH FOR ELECTRICIANS AND OTHER CRAFTSMEN IN OPERATING POSITIONS AND FOR CORRESPONDING GROUPS OF CRAFTSMEN WORKING AT THEIR RESPECTIVE TRADES. WITH THE PANAMA CANAL MONTHLY RATES OF COMPENSATION FOR CRAFTSMEN IN OPERATING POSITIONS DIRECTLY DERIVED FROM THE HOURLY RATES OF PAY AUTHORIZED FOR CORRESPONDING GROUPS OF CRAFTSMEN WORKING AT THEIR RESPECTIVE TRADES, WITH HOURS OF SERVICE FOR THE TWO GROUPS EQUALIZED BY LAW, AND WITH THE DUTIES PERFORMED BY THE OPERATING EMPLOYEES REQUIRING NO HIGHER DEGREE OF SKILL OR TRAINING THAN THAT REQUIRED OF CORRESPONDING GROUPS OF CRAFTSMEN WORKING AT THEIR RESPECTIVE TRADES, AS A MATTER OF EQUITY IT WAS DEEMED ESSENTIAL THAT THE HOURLY AND MONTHLY COMPENSATION OR EARNINGS OF THE TWO GROUPS BE KEPT IN HARMONY; THIS COULD BE ACCOMPLISHED ONLY BY PLACING THE OPERATING EMPLOYEES ON AN HOURLY BASIS OF PAY.

(C) HAD WE CONTINUED TO COMPENSATE OPERATING EMPLOYEES IN CONFORMITY WITH THE MONTHLY RATES OF PAY WHICH WERE IN EFFECT ON JUNE 1, 1932, THE POWER PLANT EMPLOYEES, FOR EXAMPLE, WHO NOW ARE WORKING THE SAME NUMBER OF HOURS AS POWER-PLANT OPERATORS IN THE NAVY YARDS IN THE UNITED STATES, WHO ARE PERFORMING IDENTICAL DUTIES WITH POWER PLANT OPERATORS THERE, WOULD NOW BE RECEIVING COMPENSATION IN EXCESS OF 25 PERCENT ABOVE THE COMPENSATION RECEIVED BY NAVAL ESTABLISHMENT EMPLOYEES, IN VIOLATION OF THE 25 PERCENT LIMITATION ALLOWED BY LAW.

THE DECISION OF APRIL 12, 1934, SUPRA, SPECIFICALLY HELD AS FOLLOWS:

* * * AS TO CLASS (2), HOWEVER, NO CHANGE IN THE MONTHLY OR ANNUAL RATE OF COMPENSATION OTHER THAN THAT REQUIRED TO PAY A RATE NOT LOWER THAN THE RATE PER ANNUM OR PER MONTH PAID JUNE 1, 1932, LESS ANY APPLICABLE PERCENTAGE REDUCTIONS, WOULD BE AUTHORIZED. THAT IS TO SAY, THEY ARE TO RECEIVE THE SAME MONTHLY OR ANNUAL COMPENSATION ALTHOUGH THEIR REGULAR HOURS OF DUTY MAY BE REDUCED * * *.

NOTWITHSTANDING THIS CLEAR STATEMENT OF THE PROPER PROCEDURE THE RATES OF COMPENSATION OF THE EMPLOYEES IN QUESTION WERE CHANGED FROM A MONTHLY TO A PER HOUR BASIS RESULTING IN AN ACTUAL REDUCTION IN COMPENSATION IN CONTRAVENTION OF THE PLAIN TERMS OF THE STATUTE PROVIDING THAT "THE WEEKLY COMPENSATION * * * SHALL BE REESTABLISHED AND MAINTAINED AT RATES NOT LOWER THAN NECESSARY TO RESTORE THE FULL WEEKLY EARNINGS OF SUCH EMPLOYEES IN ACCORDANCE WITH THE FULL-TIME WEEKLY EARNINGS UNDER THE RESPECTIVE WAGE SCHEDULES IN EFFECT ON JUNE 1, 1932.' REGARDLESS OF THE FACTORS THAT MAY HAVE ENTERED INTO THE FIXING OF THE MONTHLY RATE OF COMPENSATION FOR THESE EMPLOYEES, CURRENT AS OF JUNE 1, 1932, IT IS FUNDAMENTAL THAT A RATE OF COMPENSATION FIXED BY THE MONTH OR YEAR FOR FULL-TIME SERVICE IS INCLUSIVE OF ANY AMOUNT OF OVERTIME; THAT IS, THE COMPENSATION IS FOR EVERY DAY AND EVERY HOUR OF THE MONTH OR YEAR WHETHER OR NOT SERVICE IS ACTUALLY RENDERED. IT IS UNDERSTOOD THAT THE MONTHLY RATES FIXED AS OF JUNE 1, 1932, WERE PROPER AND NOT IN EXCESS OF 25 PERCENT MORE THAN THE RATES PAID FOR THE SAME OR SIMILAR SERVICES IN THE CONTINENTAL UNITED STATES, AND THAT THE EMPLOYEES WERE NOT PAID ANY ADDITIONAL COMPENSATION FOR OVERTIME IN ADDITION TO THE ESTIMATED OR AVERAGE OVERTIME WHICH MAY HAVE ENTERED INTO THE FIXING OF THE MONTHLY RATES. IF SO, IT IS NOT APPARENT THAT THE PAYMENT ON A 40-HOUR WEEK BASIS OF THE SAME MONTHLY COMPENSATION PAID JUNE 1, 1932, FOR A GREATER NUMBER OF HOURS PER WEEK, WHICH WAS FIXED WITH RELATION TO THE COMPENSATION OF MECHANICS, ETC., IN NAVY YARDS, LIKEWISE REQUIRED TO BE NOT LESS THAN THE RATE PAID JUNE 1, 1932, WILL EXCEED THE LIMITATION FIXED IN THE 1912 STATUTE. OF COURSE, IF THE MONTHLY RATES OF COMPENSATION FOR THESE EMPLOYEES AS OF JUNE 1, 1932, WERE NOT ON A PROPER BASIS, THERE WOULD BE FOR SOLUTION ANOTHER PROBLEM, BUT THERE IS NO INTIMATION IN YOUR LETTER THAT THE RATES AS OF JUNE 1, 1932, WERE ANY OTHER THAN PROPER AND LEGAL SALARY RATES. FURTHERMORE, IF THE MONTHLY RATES IN EFFECT ON JUNE 1, 1932, WERE LEGALLY AND PROPERLY FIXED AND DID NOT EXCEED THE 25 PERCENT DIFFERENTIAL, THE PAYMENT OF THE SAME RATES PER MONTH WITH HOURS OF WORK REDUCED TO 40 PER WEEK IS NOW REQUIRED BY THE STATUTE EVEN THOUGH SUCH RATE WHEN REDUCED TO AN HOURLY BASIS WOULD EXCEED BY MORE THAN 25 PERCENT THE HOURLY RATE PAID IN THE UNITED STATES.

REFERRING TO QUESTION NO. 2, THE PROCEDURE ADOPTED CHANGING THE MONTHLY RATES TO PER HOUR RATES, WITH A RESULTING DEDUCTION IN WEEKLY EARNINGS, WAS NOT PROPER. AS STATED IN DECISION OF APRIL 12, THE PROPER PROCEDURE WAS TO CONTINUE THE PAYMENT OF THE SAME MONTHLY RATES OF COMPENSATION EVEN THOUGH THERE MAY HAVE BEEN A REDUCTION IN THE NUMBER OF HOURS PER WEEK AND NO OVERTIME COMPENSATION IS AUTHORIZED. THIS IS THE GENERAL RULE THAT HAS BEEN ADOPTED UNDER THE 40-HOUR WEEK STATUTORY PROVISION FOR ALL EMPLOYEES PAID ON A MONTHLY OR ANNUAL BASIS TO WHICH THE PROVISION IS APPLICABLE.

QUESTIONS NOS. 2 AND 3 WOULD APPEAR TO BE ANSWERED ABOVE.

ACCORDINGLY, THE COMPENSATION OF THESE EMPLOYEES SHOULD BE ADJUSTED EFFECTIVE AS OF MARCH 28, 1934, THE DATE OF THE ACT, IN ACCORDANCE WITH THE RULES STATED IN DECISION OF APRIL 12, 1934, AS AMPLIFIED HEREIN.