B-126960, APRIL 20, 1956, 35 COMP. GEN. 567

B-126960: Apr 20, 1956

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EVEN THOUGH SUCH RATE IS LOWER THAN THE AGGREGATE OF THE BASIC GENERAL SCHEDULE RATE PLUS THE FOREIGN POST DIFFERENTIAL OR THE TERRITORIAL COST-OF-LIVING ALLOWANCE. TO WHICH HIS POSITION WAS ADMINISTRATIVELY ALLOCATED UPON CONVERSION. SUCH OPTION IS STATED TO HAVE BEEN PROVIDED BECAUSE THE DEPARTMENT FORESAW CASES WHERE IT WOULD BE TO THE EMPLOYEE'S ADVANTAGE TO RETAIN HIS UNGRADED. " EVEN THOUGH THE RATE WAS LOWER THAN THE AGGREGATE OF THE "BASIC" GRADED RATE PLUS A DIFFERENTIAL OR ALLOWANCE. SUCH OPTION APPARENTLY WAS PREDICATED UPON THE LANGUAGE IN SECTION 114 OF THE ACT OF SEPTEMBER 1. AS FOLLOWS: CONCERNING THOSE CASES WHERE THE COMPENSATION OF THE CONVERTED (PREVAILING RATE) POSITION IS LESS THAN THE BASIC COMPENSATION OF THE NEW (CLASSIFIED) POSITION.

B-126960, APRIL 20, 1956, 35 COMP. GEN. 567

COMPENSATION - SAVINGS PROVISION IN ACT OF SEPTEMBER 1, 1954 - CONVERSION OF OVERSEAS POSITIONS IF IN THE CONVERSION OF AN OVERSEAS EMPLOYEE'S POSITION FROM A PREVAILING RATE SCHEDULE TO A GENERAL SCHEDULE POSITION IT WOULD BE TO THE EMPLOYEE'S ADVANTAGE TO RETAIN THE PREVAILING WAGE RATE, EVEN THOUGH SUCH RATE IS LOWER THAN THE AGGREGATE OF THE BASIC GENERAL SCHEDULE RATE PLUS THE FOREIGN POST DIFFERENTIAL OR THE TERRITORIAL COST-OF-LIVING ALLOWANCE, THE SAVINGS PROVISION OF SECTION 114 OF THE FRINGE BENEFIT ACT OF SEPTEMBER 1, 1954, NEED NOT BE INVOKED TO REQUIRE THE EMPLOYEE TO TAKE THE GENERAL SCHEDULE RATE. 34 COMP. GEN. 708, MODIFIED.

TO THE SECRETARY OF THE NAVY, APRIL 20, 1956:

ON FEBRUARY 8, 1956, THE ACTING SECRETARY, REQUESTED OUR DECISION CONCERNING THE PROPER RATE OF COMPENSATION PAYABLE UPON CONVERSION OF A POSITION FROM A PREVAILING RATE SYSTEM TO A POSITION UNDER THE GENERAL SCHEDULE OF THE CLASSIFICATION ACT OF 1949, 63 STAT. 954, 5 U.S.C. 1071 NOTE, AS AMENDED BY THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1105.

THE LETTER STATES THAT AN OVERSEAS EMPLOYEE OCCUPYING A POSITION UNDER A PREVAILING RATE SYSTEM HAS ELECTED--- IN ACCORDANCE WITH SECRETARY OF THE NAVY NOTICE 12156 DATED JULY 22, 1955, ISSUED TO SUPPLEMENT THE ACT OF SEPTEMBER 1, 1954--- TO CONTINUE TO RECEIVE HIS PREVAILING WAGE RATE OF $7,490 PER ANNUM RATHER THAN THE RATE OF $6,250 PER ANNUM, TOP STEP OF GRADE GS-9, TO WHICH HIS POSITION WAS ADMINISTRATIVELY ALLOCATED UPON CONVERSION, PLUS THE $1,250 COST-OF LIVING ALLOWANCE APPLICABLE THERETO, MAKING A TOTAL OF $7,500. SUCH OPTION IS STATED TO HAVE BEEN PROVIDED BECAUSE THE DEPARTMENT FORESAW CASES WHERE IT WOULD BE TO THE EMPLOYEE'S ADVANTAGE TO RETAIN HIS UNGRADED--- PREVAILING WAGE--- RATE, 100 PERCENT OF WHICH WOULD BE "BASIC COMPENSATION," EVEN THOUGH THE RATE WAS LOWER THAN THE AGGREGATE OF THE "BASIC" GRADED RATE PLUS A DIFFERENTIAL OR ALLOWANCE. SUCH OPTION APPARENTLY WAS PREDICATED UPON THE LANGUAGE IN SECTION 114 OF THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1108, 5 U.S.C. 1114 NOTE, READING AS FOLLOWS:

NOTHING CONTAINED IN THIS TITLE SHALL BE CONSTRUED TO DECREASE THE EXISTING RATE OF BASIC COMPENSATION OF ANY PRESENT EMPLOYEE, BUT WHEN HIS POSITION BECOMES VACANT ANY SUBSEQUENT APPOINTEE TO SUCH POSITION SHALL BE COMPENSATED IN ACCORDANCE WITH THE SCALE OF PAY APPLICABLE TO SUCH POSITION. ( ITALICS SUPPLIED.)

AS INDICATED IN YOUR LETTER, WE STATED IN OUR DECISION OF JUNE 28, 1955, B-124070, 34 COMP. GEN. 708, IN PART, AS FOLLOWS:

CONCERNING THOSE CASES WHERE THE COMPENSATION OF THE CONVERTED (PREVAILING RATE) POSITION IS LESS THAN THE BASIC COMPENSATION OF THE NEW (CLASSIFIED) POSITION, PLUS THE APPLICABLE POST DIFFERENTIAL OR TERRITORIAL COST-OF-LIVING ALLOWANCE, IT IS OUR VIEW THAT THE SAVINGS PROVISION OF THE STATUTE IS INAPPLICABLE AND THAT THE EMPLOYEES INVOLVED SHOULD BE PAID AT THE CLASSIFIED RATE PLUS THE DIFFERENTIAL OR ALLOWANCE.

THE TYPE CASE WE HAD INFORMALLY DISCUSSED WITH THE CIVIL SERVICE COMMISSION PRIOR TO THE DECISION, AND WITH WHICH WE WERE PRIMARILY CONCERNED AT THE TIME, WAS ONE WHERE THE COMPENSATION OF THE CONVERTED (PREVAILING RATE POSITION), WHILE GREATER THAN THE BASIC COMPENSATION OF THE NEW (CLASSIFIED POSITION), WAS SUBSTANTIALLY LESS THAN THE TOTAL COMPENSATION (BASIC COMPENSATION PLUS THE DIFFERENTIAL OR TERRITORIAL COST -OF-LIVING ALLOWANCE) OF THE NEW POSITION. IF WE HAD CONCLUDED THAT THE SAVINGS PROVISION WAS REQUIRED TO BE INVOKED IN SUCH A SITUATION MANY EMPLOYEES WOULD HAVE BEEN ADVERSELY AFFECTED BY REASON OF THE FACT THAT NO POST DIFFERENTIAL OR TERRITORIAL COST-OF-LIVING ALLOWANCE COULD BE PAID IN ADDITION TO THE SAVED RATE OF COMPENSATION-- SUCH COMPENSATION NOT CONSTITUTING A RATE OF BASIC COMPENSATION "FIXED BY STATUTE.' SEE FIRST PART OF ANSWER TO QUESTION 3 OF THE ABOVE CITED DECISION. TO AVOID THAT RESULT WE CONCLUDED THAT THE SAVINGS PROVISION CONTAINED IN SECTION 114 OF PUBLIC LAW 763 WAS NOT APPLICABLE IN SUCH A SITUATION AND THAT THE EMPLOYEE SHOULD BE PAID AT THE CLASSIFIED RATE PLUS THE DIFFERENTIAL OR COST-OF-LIVING ALLOWANCE. HOWEVER, WE DID NOT INTEND BY THAT CONCLUSION TO REQUIRE THAT ANY EMPLOYEE BE PAID AT A CLASSIFIED RATE AGAINST HIS WISHES WHEN HE CONSIDERS THAT RATE TO BE LESS FAVORABLE TO HIM THAN HAVING THE BASIC COMPENSATION OF THE PREVAILING RATE POSITION SAVED. WE ARE OF THE VIEW THAT WHERE THE COMPENSATION OF THE CONVERTED (PREVAILING RATE) POSITION IS GREATER THAN THE BASIC COMPENSATION OF THE NEW (CLASSIFIED) POSITION BUT LESS THAN THE BASIC COMPENSATION PLUS THE DIFFERENTIAL OR THE TERRITORIAL COST-OF-LIVING ALLOWANCE OF THE NEW POSITION, THERE IS NO REQUIREMENT THAT THE SAVINGS PROVISION BE INVOKED AND THAT THE EMPLOYEE MAY ELECT WHICHEVER COMPENSATION HE DESIRES TO RECEIVE. TO THAT EXTENT OUR ANSWER TO THE SECOND PART OF QUESTION 3 OF OUR DECISION OF JUNE 28, 1955, QUOTED ABOVE, IS MODIFIED. HOWEVER, ONCE SUCH AN ELECTION IS MADE IT MAY NOT THEREAFTER BE CHANGED AT THE EMPLOYEE'S OPTION.

ACCORDINGLY, UNDER THE FACTS AND CIRCUMSTANCES PRESENTED BY YOU, THE EMPLOYEE HERE INVOLVED MAY HAVE HIS $7,490 PER ANNUM PREVAILING RATE SAVED TO HIM.