B-127694, JULY 6, 1956, 36 COMP. GEN. 16

B-127694: Jul 6, 1956

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COMPENSATION - PREMIUM PAY - COMPUTATION - CANAL ZONE GOVERNMENT EMPLOYEES TO THE EXTENT THAT THE BASIC COMPENSATION OF THE CANAL ZONE EMPLOYEES IS BASED ON CLASSIFIED RATES APPLICABLE TO EMPLOYEES IN THE UNITED STATES. EMPLOYEES OF THE CANAL ZONE GOVERNMENT WHOSE SALARIES ARE FIXED IN ACCORDANCE WITH CLASSIFICATION RATES AS INCREASED BY THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1955. THAT CONCLUSION WAS BASED UPON THE PROVISION THEREIN QUOTED FROM SECTION 610 OF THE ACT OF JULY 13. AN IDENTICAL PROVISION IS FOUND IN SECTION 202 OF THE ACT OF JUNE 30. TO THE EXTENT THAT THE BASIC COMPENSATION OF THE INVOLVED EMPLOYEES OF THE CANAL ZONE GOVERNMENT IS BASED UPON CLASSIFIED RATES APPLICABLE TO EMPLOYEES IN THE UNITED STATES PLUS 25 PERCENT CANAL ZONE DIFFERENTIAL.

B-127694, JULY 6, 1956, 36 COMP. GEN. 16

COMPENSATION - PREMIUM PAY - COMPUTATION - CANAL ZONE GOVERNMENT EMPLOYEES TO THE EXTENT THAT THE BASIC COMPENSATION OF THE CANAL ZONE EMPLOYEES IS BASED ON CLASSIFIED RATES APPLICABLE TO EMPLOYEES IN THE UNITED STATES, PREMIUM COMPENSATION FOR EMPLOYEES OF THE CANAL ZONE GOVERNMENT SHOULD BE COMPUTED ON THAT PART OF THE BASIC COMPENSATION WHICH DOES NOT EXCEED THE MINIMUM RATE FOR GRADE GS-9 IN THE UNITED STATES, PLUS THE 25 PERCENT CANAL ZONE DIFFERENTIAL. FOR PERIODS PRIOR TO THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1955, THE LIMITATION ON THE PAYMENT OF PREMIUM COMPENSATION FOR EMPLOYEES OF THE CANAL ZONE SHOULD BE MEASURED BY THE MAXIMUM SCHEDULED CLASSIFIED RATE OF GRADE GS-15 FOR EMPLOYEES IN THE UNITED STATES PLUS THE 25 PERCENT CANAL ZONE DIFFERENTIAL. EMPLOYEES OF THE CANAL ZONE GOVERNMENT WHOSE SALARIES ARE FIXED IN ACCORDANCE WITH CLASSIFICATION RATES AS INCREASED BY THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1955, PLUS THE 25 PERCENT DIFFERENTIAL, MAY RECEIVE PREMIUM COMPENSATION COMPUTED ON THE INCREASED RATES, PROVIDED THE AGGREGATE COMPENSATION DOES NOT EXCEED $14,800.

TO THE ACTING GOVERNOR OF THE CANAL ZONE, JULY 6, 1956:

YOUR LETTER OF APRIL 9, 1956, REQUESTS OUR DECISION WHETHER THE PREMIUM COMPENSATION PAYABLE UNDER SECTION 401 (1) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, AS ADDED BY SECTION 208 OF THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1111, 5 U.S.C. SUPP. III 926, ON THAT PART OF THE BASIC COMPENSATION WHICH DOES NOT EXCEED THE MINIMUM RATE OF GS 9, SHOULD BE COMPUTED UPON THE MINIMUM RATE OF THAT GRADE AS FIXED BY THE CLASSIFICATION ACT ($5,440), OR UPON THE MINIMUM RATE AS INCREASED BY THE 25 PERCENT ADDITIONAL COMPENSATION PAYABLE TO THE EMPLOYEES OF THE CANAL ZONE GOVERNMENT.

IN OUR DECISION OF MARCH 1, 1956, B-126150, 35 COMP. GEN. 495, WE HELD THAT THE PREMIUM COMPENSATION IN LIEU OF OVERTIME, NIGHT DIFFERENTIAL, HOLIDAY PAY, AND OTHER PREMIUM COMPENSATION PROVIDED BY THE 1945 PAY ACT, AS AMENDED, PAYABLE UNDER SAID SECTION 401 (1) TO EMPLOYEES OF THE DEPARTMENT OF THE ARMY STATIONED IN THE CANAL ZONE SHOULD BE BASED ON THAT PART OF THE BASIC COMPENSATION PLUS 25 PERCENT CANAL ZONE DIFFERENTIAL AS WOULD NOT EXCEED $6,800 (THE MINIMUM SCHEDULED RATE OF GS-9 $5,440 PLUS 25 PERCENT). THAT CONCLUSION WAS BASED UPON THE PROVISION THEREIN QUOTED FROM SECTION 610 OF THE ACT OF JULY 13, 1955, 69 STAT. 315. AN IDENTICAL PROVISION IS FOUND IN SECTION 202 OF THE ACT OF JUNE 30, 1955, 69 STAT. 236, MAKING APPROPRIATIONS FOR THE CANAL ZONE. ACCORDINGLY, TO THE EXTENT THAT THE BASIC COMPENSATION OF THE INVOLVED EMPLOYEES OF THE CANAL ZONE GOVERNMENT IS BASED UPON CLASSIFIED RATES APPLICABLE TO EMPLOYEES IN THE UNITED STATES PLUS 25 PERCENT CANAL ZONE DIFFERENTIAL, THE DECISION B- 126150 IS EQUALLY APPLICABLE TO SUCH EMPLOYEES.

YOUR LETTER ALSO REQUESTS OUR DECISION UPON THE QUESTION WHETHER THE MAXIMUM LIMITATION IN SECTION 603 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, AS AMENDED BY THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1112, 5 U.S.C. 901 NOTE, SHOULD BE MEASURED BY THE MAXIMUM SCHEDULED RATE FOR GS-15 AS FIXED IN THE CLASSIFICATION ACT PLUS 25 PERCENT CANAL ZONE DIFFERENTIAL WHEN COMPUTING THE PREMIUM FOR OVERTIME COMPENSATION. IF THAT IS ANSWERED IN THE AFFIRMATIVE, THE FURTHER QUESTION IS ASKED AS TO THE EFFECT OF THE $14,800 MAXIMUM COMPENSATION CONTAINED IN SECTION 9 OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1955, APPROVED JUNE 28, 1955, 69 STAT. 179, 5 U.S.C. 1113 NOTE, UPON OVERTIME COMPENSATION FOR CANAL ZONE EMPLOYEES.

SECTION 209 OF THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1112, 5 U.S.C. 943, AMENDS SECTION 603 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 TO READ AS FOLLOWS:

SEC. 603. (A) NO PREMIUM COMPENSATION PROVIDED BY THIS ACT SHALL BE PAID TO ANY OFFICER OR EMPLOYEE WHOSE RATE OF BASIC COMPENSATION EQUALS OR EXCEEDS THE MAXIMUM SCHEDULED RATE OF BASIC COMPENSATION PROVIDED FOR GRADE GS-15 IN THE CLASSIFICATION ACT OF 1949, AS AMENDED.

(B) IN THE CASE OF ANY OFFICER OR EMPLOYEE WHOSE RATE OF BASIC COMPENSATION IS LESS THAN THE MAXIMUM SCHEDULED RATE OF BASIC COMPENSATION PROVIDED FOR GRADE GS-15 IN THE CLASSIFICATION ACT OF 1949, AS AMENDED, SUCH PREMIUM COMPENSATION MAY BE PAID ONLY TO THE EXTENT THAT SUCH PAYMENT WOULD NOT CAUSE HIS AGGREGATE RATE OF COMPENSATION TO EXCEED SUCH MAXIMUM SCHEDULED RATE WITH RESPECT TO ANY PAY PERIOD.

AS THIS LIMITATION IS ALSO BASED UPON THE SCHEDULED RATE OF A CLASSIFIED GRADE (RATHER THAN AN ARBITRARY MAXIMUM AMOUNT AS IN THE ORIGINAL SECTION 603) IT FOLLOWS THAT THE RATIONALE OF THE DECISION B 126150 OF MARCH 1, 1956, IS EQUALLY APPLICABLE TO SUCH LIMITATION. ACCORDINGLY, THE PREMIUM COMPENSATION FOR PERIODS NOT AFFECTED BY THE LATER ACT OF JUNE 28, 1955--- SEE SECTION 8 (A) THEREOF--- WOULD BE FOR COMPUTATION ON THE BASIC RATE OF $14,750 (THE MAXIMUM SCHEDULED RATE OF GS-15 $11,800 PLUS CANAL ZONE DIFFERENTIAL OF 25 PERCENT).

SECTION 9 OF THE ACT OF JUNE 28, 1955, 60 STAT. 179 PROVIDES---

SEC. 9. NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT, (1) NO RATE OF COMPENSATION OR SALARY WHICH IS $14,800 OR MORE PER ANNUM SHALL BE INCREASED BY REASON OF THIS ACT AND (2) NO RATE OF COMPENSATION OR SALARY SHALL BE INCREASED BY REASON OF THIS ACT TO AN AMOUNT IN EXCESS OF $14,800 PER ANNUM.

SAID ACT OF JUNE 28, 1955, GRANTED INCREASES IN SCHEDULED RATES OF COMPENSATION FOR THE CLASSIFIED GRADES EFFECTIVE THE FIRST DAY OF THE FIRST PAY PERIOD AFTER FEBRUARY 28, 1955, GENERALLY MARCH 13, 1955. WHILE $14,800 IS THE MAXIMUM RATE ESTABLISHED BY THAT ACT FOR GRADE GS 18, THE LIMITATION IN SECTION 9 IS NOT BASED UPON ANY SCHEDULED RATE OF A CLASSIFICATION GRADE BUT IS AN ARBITRARY LIMITATION. IN 25 COMP. GEN. 897, OUR OFFICE HELD REGARDING A SIMILAR LIMITATION, AS FOLLOWS, QUOTING FROM THE SYLLABUS---

IN VIEW OF THE PROVISIONS OF SECTION 7 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1946, LIMITING TO $10,000 PER ANNUM THE AGGREGATE RATE OF COMPENSATION WHICH MAY BE PAID "BY REASON OF THE ENACTMENT OF THIS ACT," AN OFFICER OR EMPLOYEE, OTHERWISE SUBJECT TO THE LIMITATION, ON DUTY OUTSIDE THE CONTINENTAL UNITED STATES MAY NOT BE PAID IN EXCESS OF $10,000 PER ANNUM WHERE HIS BASIC COMPENSATION (REGULAR BASIC RATE PLUS COMPENSATION DIFFERENTIAL) WOULD BE INCREASED BY OPERATION OF SECTION 2 OF SAID ACT TO A RATE EXCEEDING THE LIMITATION. 25 COMP. GEN. 188.

ACCORDINGLY, SO FAR AS THE BASIC RATES OF COMPENSATION OF EMPLOYEES OF THE CANAL ZONE GOVERNMENT ARE FIXED IN ACCORDANCE WITH PRIOR CLASSIFICATION RATES AS INCREASED BY THE ACT OF JUNE 28, 1955, PLUS 25 PERCENT CANAL ZONE DIFFERENTIAL, ANY PREMIUM COMPENSATION COMPUTED UPON THE INCREASED RATES MAY NOT CAUSE THE AGGREGATE COMPENSATION TO EXCEED $14,800.

ASSUMING THAT YOU HAVE NOT HERETOFORE MADE PAYMENTS IN EXCESS OF THE MAXIMUM LIMITATIONS SO CONSTRUED YOUR LAST QUESTION REGARDING THE RETROACTIVE ADJUSTMENT REQUIRES NO ANSWER.