B-127248, MAY 10, 1956

B-127248: May 10, 1956

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IT APPEARS THAT AN ALASKA RAILROAD EMPLOYEE WHO WAS RETIRED FOR AGE JUNE 30. WAS. AN AMOUNT EQUAL TO HIS RETIREMENT ANNUITY WAS DEDUCTED FROM HIS SALARY TO ARRIVE AT A NET PAY RATE FOR THE PERIOD OF EMPLOYMENT. WHILE SERVING IN THE TEMPORARY EMPLOYMENT THE EMPLOYEE WAS PAID A LUMP-SUM AMOUNT AT THE GROSS-SALARY RATE FOR 480 HOURS. IN OUR AUDIT AN INFORMAL EXCEPTION WAS TAKEN TO THE LUMP SUM PAYMENT BECAUSE. SINCE THERE WAS NO BREAK IN SERVICE BETWEEN THE TWO EMPLOYMENTS. AS A RESULT OF THAT ACTION THE ADMINISTRATIVE ASSISTANT SECRETARY STATES THAT: "* * * STEPS HAVE NOW BEEN TAKEN TO HOLD ANY CURRENT OR SUBSEQUENT SALARY PAYMENTS FOR CURRENT ANNUAL LEAVE AND TO HOLD THE REPAYMENT OF 480 HOURS LUMP-SUM LEAVE.

B-127248, MAY 10, 1956

TO THE SECRETARY OF THE INTERIOR:

ON MARCH 7, 1956, THE ADMINISTRATIVE ASSISTANT SECRETARY REQUESTED OUR DECISION UPON CERTAIN QUESTIONS CONCERNING LUMP-SUM-LEAVE PAYMENTS TO REEMPLOYED ANNUITANTS.

IT APPEARS THAT AN ALASKA RAILROAD EMPLOYEE WHO WAS RETIRED FOR AGE JUNE 30, 1954, WAS, BECAUSE OF HIS HAVING SPECIAL QUALIFICATIONS, REEMPLOYED WITHOUT A BREAK IN SERVICE ON A TEMPORARY 90-DAY BASIS. PURSUANT TO SECTION 2/B) OF THE CIVIL SERVICE RETIREMENT ACT, 62 STAT. 49, 5 U.S.C. 715/B), AN AMOUNT EQUAL TO HIS RETIREMENT ANNUITY WAS DEDUCTED FROM HIS SALARY TO ARRIVE AT A NET PAY RATE FOR THE PERIOD OF EMPLOYMENT. WHILE SERVING IN THE TEMPORARY EMPLOYMENT THE EMPLOYEE WAS PAID A LUMP-SUM AMOUNT AT THE GROSS-SALARY RATE FOR 480 HOURS, THE MAXIMUM ANNUAL LEAVE ACCUMULATED DURING HIS EMPLOYMENT PRIOR TO RETIREMENT. IN OUR AUDIT AN INFORMAL EXCEPTION WAS TAKEN TO THE LUMP SUM PAYMENT BECAUSE, SINCE THERE WAS NO BREAK IN SERVICE BETWEEN THE TWO EMPLOYMENTS, NO PROPER LEGAL BASIS EXISTED FOR SUCH PAYMENT, CITING AS THE AUTHORITY FOR THE AUDIT EXCEPTION, 33 COMP. GEN. 591. AS A RESULT OF THAT ACTION THE ADMINISTRATIVE ASSISTANT SECRETARY STATES THAT: "* * * STEPS HAVE NOW BEEN TAKEN TO HOLD ANY CURRENT OR SUBSEQUENT SALARY PAYMENTS FOR CURRENT ANNUAL LEAVE AND TO HOLD THE REPAYMENT OF 480 HOURS LUMP-SUM LEAVE, WHICH HAS BEEN RECREDITED, UNTIL THERE HAS BEEN A REFUND OF THE LUMP-SUM LEAVE PAYMENT FOR 480 HOURS AT A SALARY RATE OF $10,436.40 MADE ON JUNE 30, 1954.'

IN VIEW OF THE ABOVE-RELATED FACTS AND CIRCUMSTANCES THE ADMINISTRATIVE ASSISTANT SECRETARY REQUESTS OUR RULING UPON THE FOLLOWING QUESTIONS:

"1. MAY THE AMOUNT OF LUMP-SUM LEAVE REFUNDED OR TRANSFERRED BY A RETIRED EMPLOYEE WHO IS REHIRED BE CREDITED TO HIS LEAVE ACCOUNT FOR PAYMENT UPON FINAL SEPARATION, WITH PAYMENT LIMITED TO THE ACTUAL NUMBER OF HOURS OF LEAVE RECREDITED AND WITH PAYMENT AT THE FULL SALARY RATE FOR THE POSITION HELD AT TIME OF FINAL SEPARATION WITHOUT REDUCING THE SALARY RATE BY THE AMOUNT OF ANNUITY WHICH THE ANNUITANT IS RECEIVING AT THAT TIME?

"2. IF THE ANSWER TO THE FIRST QUESTION IS IN THE NEGATIVE, COULD THE ANNUITANTS BE REHIRED OUTSIDE THE SCOPE OF THE CIVIL SERVICE RETIREMENT ACT AND RECEIVE FULL PAY WITHOUT THE APPLICATION OF SECTION 2 (B) OF THE RETIREMENT ACT, IF THE ANNUITANTS WERE (A) EMPLOYEES WHOSE EXPECTED SERVICE WILL BE FOR BRIEF PERIODS BUT NOT TO EXCEED ONE YEAR, (B) EMPLOYEES PAID BY THE HOUR, DAY, OR MONTH, OR YEAR WHEN ACTUALLY EMPLOYED, WHOSE EMPLOYMENT IS PERIODIC, PART TIME, OR RECURRENT AND FOR WHOM A REGULAR TOUR OF DUTY IS NOT CONTEMPLATED, OR (C) EMPLOYEES AND CONSULTANTS PAID ON A CONTRACT OR FEE BASIS.$ "

SECTION 2/B) OF THE CIVIL SERVICE RETIREMENT ACT PROVIDES THAT THE COMPENSATION FOR A REEMPLOYED ANNUITANT SHALL BE REDUCED BY THE AMOUNT OF THE ANNUITY ALLOCABLE TO THE PERIOD OF EMPLOYMENT. THE ACT OF DECEMBER 21, 1944, 58 STAT. 845; 5 U.S.C. 61B, PROVIDES THAT LUMP-SUM ANNUAL LEAVE PAYMENTS "SHALL EQUAL THE COMPENSATION THAT SUCH EMPLOYEE WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL OR VACATION LEAVE.' THOSE QUOTED WORDS ARE CLEAR AND UNAMBIGUOUS AND ADMIT OF NO STATUTORY CONSTRUCTION; HENCE, WE HAVE HAD NO ALTERNATIVE BUT TO HOLD THAT THE LUMP-SUM-LEAVE PAYMENT MADE TO A REEMPLOYED ANNUITANT UPON FINAL SEPARATION FROM THE SERVICE SHALL EQUAL THE AMOUNT OF COMPENSATION THE EMPLOYEE WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE LEAVE PERIOD, NAMELY, THE GROSS SALARY REDUCED BY THE ANNUITY ALLOCABLE TO THE PERIOD COVERED BY THE SALARY PAYMENT. SEE 28 COMP. GEN. 294; 31 ID. 69; 33 ID. 591; 34 ID. 685.

THE VARIOUS ARGUMENTS ADVANCED BY THE ADMINISTRATIVE ASSISTANT SECRETARY AGAINST THE PROPRIETY OF OUR RULINGS IN PRIOR DECISIONS ON THIS MATTER HAVE BEEN GIVEN CAREFUL CONSIDERATION BUT WE FIND NOTHING THEREIN TO WARRANT ANY CHANGE IN SUCH RULINGS. WE SYMPATHIZE WITH THE EMPLOYEE'S STATED FORFEITURE OF A CERTAIN AMOUNT OF ANNUAL LEAVE AND ATTENDANT LOSSES ARISING FROM HIS REEMPLOYMENT BUT THOSE FACTORS CONSTITUTE NO LEGAL BASIS FOR CONSIDERATION HERE. HOWEVER, WE SHOULD LIKE TO ADD HERE THAT IN OUR REPORT CONCERNING SECTION 12 OF S.1153, 84TH CONGRESS, WE HAVE RECOMMENDED REMEDIAL LEGISLATION TO CORRECT THE EXISTING INEQUITIES IN THE STATUTORY LAW. NEVERTHELESS, UNDER PRESENT LAW, THE FIRST QUESTION MUST BE ANSWERED IN THE NEGATIVE.

QUESTION 2 IS ALSO ANSWERED IN THE NEGATIVE AS TO ALL FORMS OF EMPLOYMENT ON A SALARY BASIS, THAT IS, IN WHICH THE COMPENSATION IS BASED ON A TIME BASIS, WHETHER BY THE YEAR, MONTH, DAY, OR HOUR. 18 COMP. GEN. 768; 28 ID. 254. CONTRACT EMPLOYMENT ON A FEE BASIS IN WHICH THE FEE TO BE PAID IS BASED ON THE FURNISHING OF A COMPLETED SERVICE, OR UNIT OF SERVICE, IRRESPECTIVE OF TIME NECESSARY THEREFOR, WOULD NOT BE CONSIDERED EMPLOYMENT WITHIN THE PURVIEW OF SECTION 2/B) OF THE CIVIL SERVICE RETIREMENT ACT. 25 COMP. GEN. 578; 26 ID. 50.