B-122555, FEBRUARY 15, 1955, 34 COMP. GEN. 382

B-122555: Feb 15, 1955

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OFFICERS AND EMPLOYEES - UNJUSTIFIED SUSPENSION OR REMOVAL - COMPENSATION AND OUTSIDE EARNINGS DEDUCTION EMPLOYEE WHO WAS SUSPENDED UNDER ACT OF AUGUST 26. IS ENTITLED UPON REINSTATEMENT TO COMPENSATION COMPUTED AT THE RATE HE WAS RECEIVING ON THE DATE OF SUSPENSION. HOLIDAY AND OVERTIME PAY WHICH HE WOULD HAVE EARNED DURING THE PERIOD OF SUSPENSION. AN EMPLOYEE WHO WAS SUSPENDED UNDER THE ACT OF AUGUST 25. SUBSEQUENTLY REINSTATED IS ENTITLED. UNLESS THE MONEY WAS USED IN THE BUSINESS FROM WHICH THE EARNINGS WERE REPORTED. 955: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4. INFORMAL INFORMATION RECEIVED FROM THE FISCAL SECTION OF THE WEATHER BUREAU IS TO THE EFFECT THAT THE EMPLOYEE WAS SUSPENDED UNDER THE PROVISIONS OF THE ACT OF AUGUST 26.

B-122555, FEBRUARY 15, 1955, 34 COMP. GEN. 382

OFFICERS AND EMPLOYEES - UNJUSTIFIED SUSPENSION OR REMOVAL - COMPENSATION AND OUTSIDE EARNINGS DEDUCTION EMPLOYEE WHO WAS SUSPENDED UNDER ACT OF AUGUST 26, 1950, IS ENTITLED UPON REINSTATEMENT TO COMPENSATION COMPUTED AT THE RATE HE WAS RECEIVING ON THE DATE OF SUSPENSION, AND ANY NIGHT DIFFERENTIAL, HOLIDAY AND OVERTIME PAY WHICH HE WOULD HAVE EARNED DURING THE PERIOD OF SUSPENSION, LESS HIS INTERIM NET EARNINGS. AN EMPLOYEE WHO WAS SUSPENDED UNDER THE ACT OF AUGUST 25, 1950, AND SUBSEQUENTLY REINSTATED IS ENTITLED, IN DETERMINATION OF HIS INTERIM NET EARNINGS FOR PURPOSES OF COMPUTING BACK PAY, TO DEDUCT ORDINARY AND NECESSARY BUSINESS EXPENSES INCIDENT TO HIS GROSS INTERIM EARNINGS, BUT NOT LEGAL EXPENSES INCURRED IN DEFENDING AGAINST THE SUSPENSION, OR INTEREST ON MONEY BORROWED, UNLESS THE MONEY WAS USED IN THE BUSINESS FROM WHICH THE EARNINGS WERE REPORTED.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO SAMUEL SMITH, DEPARTMENT OF COMMERCE, FEBRUARY 15, 955:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1955, FILE R01-3.2, REQUESTING A DECISION AS TO THE PROPER COMPUTATION OF THE AMOUNT DUE AN EMPLOYEE FOR THE PERIOD OF HIS SUSPENSION FROM THE WEATHER BUREAU, DEPARTMENT OF COMMERCE, FROM JUNE 24, 1954, TO NOVEMBER 18, 1954, UNDER THE CIRCUMSTANCES RELATED BELOW.

INFORMAL INFORMATION RECEIVED FROM THE FISCAL SECTION OF THE WEATHER BUREAU IS TO THE EFFECT THAT THE EMPLOYEE WAS SUSPENDED UNDER THE PROVISIONS OF THE ACT OF AUGUST 26, 1950, 64 STAT. 476, WHICH COVERS SUMMARY SUSPENSIONS FROM THE SERVICE AND REMOVALS IN THE INTEREST OF NATIONAL SECURITY. THAT ACT PROVIDES IN PERTINENT PART AS FOLLOWS:

* * * PROVIDED FURTHER, THAT ANY PERSON WHOSE EMPLOYMENT IS SO SUSPENDED OR TERMINATED UNDER THE AUTHORITY OF THIS ACT MAY, IN THE DISCRETION OF THE AGENCY HEAD CONCERNED, BE REINSTATED OR RESTORED TO DUTY, AND IF SO REINSTATED OR RESTORED SHALL BE ALLOWED COMPENSATION FOR ALL OR ANY PART OF THE PERIOD OF SUCH SUSPENSION OR TERMINATION IN AN AMOUNT NOT TO EXCEED THE DIFFERENCE BETWEEN THE AMOUNT SUCH PERSON WOULD NORMALLY HAVE EARNED DURING THE PERIOD OF SUCH SUSPENSION OR TERMINATION, AT THE RATE HE WAS RECEIVING ON THE DATE OF SUSPENSION OF TERMINATION, AS APPROPRIATE, AND THE INTERIM NET EARNINGS OF SUCH PERSON * * *.

THE EMPLOYEE'S ASSIGNMENT REQUIRED THE PERFORMANCE OF DUTIES ON BOARD A UNITED STATES COAST GUARD VESSEL. HE WAS SUSPENDED ON JUNE 24, 1954, AND RESTORED TO DUTY ON NOVEMBER 18, 1954. IT IS REPORTED THAT DURING THE PERIOD OF SUSPENSION HE WOULD HAVE EARNED A BASE SALARY OF $2,058.10 AND THAT HAD HE PERFORMED DUTY ON THE THREE PATROLS HE MISSED WHILE SUSPENDED HE WOULD HAVE EARNED A CONSTRUCTIVE PREMIUM PAY OF $131.91 NIGHT DIFFERENTIAL, $54.72 HOLIDAY, AND $905.64 OVERTIME. A STATEMENT OF THE EMPLOYEE'S INCOME AND EXPENSES FROM OTHER EMPLOYMENT DURING THE PERIOD OF HIS SUSPENSION SHOWS THE FOLLOWING: GROSS INCOME $680.95, BUSINESS EXPENSES $371.41, LEGAL EXPENSES (NON-BUSINESS DEDUCTIONS) $785, AND INTEREST ON MONEY BORROWED $24.

IT IS CLEAR FROM THE QUOTED PROVISION OF THE ACT THAT THE EMPLOYEE'S COMPENSATION FOR THE PERIOD OF HIS SUSPENSION SHOULD BE COMPUTED AT THE RATE HE WAS RECEIVING ON THE DATE HE WAS SUSPENDED. IT SHOULD ALSO INCLUDE THE NIGHT DIFFERENTIAL, HOLIDAY, AND OVERTIME PAY WHICH IT ADMINISTRATIVELY IS DETERMINED HE WOULD NORMALLY HAVE EARNED DURING THE PERIOD OF HIS SUSPENSION--- LESS HIS INTERIM NET EARNINGS.

WITH RESPECT TO THE AMOUNTS CLAIMED BY THE EMPLOYEE AS REPRESENTING PROPER DEDUCTIONS IN ARRIVING AT HIS INTERIM NET EARNINGS, IT MAY BE STATED THAT OBVIOUSLY THE CONGRESS INTENDED, IN USING THE TERM "NET EARNINGS," TO ALLOW SOME DEDUCTIONS FROM TOTAL INTERIM EARNINGS. THERE IS NOTHING IN THE ACT, AND NEITHER HAS THERE BEEN FOUND ANYTHING IN ITS LEGISLATIVE HISTORY, TO IDENTIFY THESE DEDUCTIONS. IT APPEARS REASONABLE, HOWEVER, IN THE ABSENCE OF STATUTORY IDENTIFICATION, TO ALLOW AS DEDUCTIONS THE ORDINARY AND NECESSARY BUSINESS EXPENSES INCURRED IN CONNECTION WITH THE GROSS AMOUNT REPORTED BY THE EMPLOYEE AS EARNINGS DURING THE PERIOD OF HIS SUSPENSION. THE AMOUNT LISTED BY THE CLAIMANT AS LEGAL EXPENSES IS SHOWN AS " NON-BUSINESS DEDUCTIONS.' IT APPEARS FROM THE ENCLOSURES WITH YOUR LETTER THAT THESE ARE LEGAL EXPENSES INCURRED BY HIM IN DEFENDING AGAINST HIS SUSPENSION. ACCORDINGLY, THEY MAY NOT BE ALLOWED AS A DEDUCTION FROM HIS INTERIM EARNINGS. THE AMOUNT OF $371.41, SHOWN IN A LUMP SUM AS BUSINESS EXPENSES, MUST BE ITEMIZED BEFORE A DETERMINATION MAY BE MADE AS TO WHETHER ALL ITEMS INCLUDED IN THAT SUM MAY BE ALLOWED AS ORDINARY AND NECESSARY BUSINESS EXPENSES IN CONNECTION WITH HIS INTERIM EARNINGS. THE INTEREST ON MONEY BORROWED MAY NOT BE ALLOWED AS A DEDUCTION FROM THE INTERIM EARNINGS UNLESS THE BORROWED MONEY WAS USED IN CONNECTION WITH THE BUSINESS FROM WHICH THE EARNINGS WERE REPORTED. YOUR QUESTION IS ANSWERED ACCORDINGLY.