B-129688, JANUARY 2, 1957, 36 COMP. GEN. 482

B-129688: Jan 2, 1957

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COST-OF-LIVING ALLOWANCES WHICH ARE SAVED BY CIVIL SERVICE REGULATIONS OR BY ADMINISTRATIVE ACTION TO EMPLOYEES WHOSE POSITIONS ARE CONVERTED FROM CLASSIFICATION ACT SCHEDULE TO WAGE BOARD SCHEDULE NOW ARE REGARDED AS "BASIC COMPENSATION" RATHER THAN "ADDITIONAL COMPENSATION.' 34 COMP. NIGHT DIFFERENTIAL WHICH IS SAVED BY CIVIL SERVICE REGULATIONS OR BY ADMINISTRATIVE ACTION TO EMPLOYEES WHOSE POSITIONS ARE CONVERTED FROM CLASSIFICATION ACT SCHEDULE TO WAGE BOARD SCHEDULE SHOULD BE INCLUDED IN THE COMPUTATION OF RETIREMENT DEDUCTIONS AS WELL AS OVERTIME COMPENSATION AND LEAVE. NIGHT DIFFERENTIAL WHICH IS SAVED BY CIVIL SERVICE REGULATIONS OR BY ADMINISTRATIVE ACTION TO EMPLOYES WHOSE POSITIONS ARE CONVERTED FROM CLASSIFICATION ACT SCHEDULE TO WAGE BOARD SCHEDULE SHOULD BE INCLUDED IN THE COMPUTATION OF RETIREMENT DEDUCTIONS AS WELL AS OVERTIME COMPENSATION AND LEAVE.

B-129688, JANUARY 2, 1957, 36 COMP. GEN. 482

WAGE BOARD EMPLOYEES - CONVERSION FROM CLASSIFIED POSITIONS - BASIC COMPENSATION - NIGHT PAY - LIFE INSURANCE, RETIREMENT, ETC. DEDUCTIONS NIGHT DIFFERENTIAL, POST DIFFERENTIAL, AND COST-OF-LIVING ALLOWANCES WHICH ARE SAVED BY CIVIL SERVICE REGULATIONS OR BY ADMINISTRATIVE ACTION TO EMPLOYEES WHOSE POSITIONS ARE CONVERTED FROM CLASSIFICATION ACT SCHEDULE TO WAGE BOARD SCHEDULE NOW ARE REGARDED AS "BASIC COMPENSATION" RATHER THAN "ADDITIONAL COMPENSATION.' 34 COMP. GEN. 708, MODIFIED. NIGHT DIFFERENTIAL WHICH IS SAVED BY CIVIL SERVICE REGULATIONS OR BY ADMINISTRATIVE ACTION TO EMPLOYEES WHOSE POSITIONS ARE CONVERTED FROM CLASSIFICATION ACT SCHEDULE TO WAGE BOARD SCHEDULE SHOULD BE INCLUDED IN THE COMPUTATION OF RETIREMENT DEDUCTIONS AS WELL AS OVERTIME COMPENSATION AND LEAVE. NIGHT DIFFERENTIAL WHICH IS SAVED BY CIVIL SERVICE REGULATIONS OR BY ADMINISTRATIVE ACTION TO EMPLOYES WHOSE POSITIONS ARE CONVERTED FROM CLASSIFICATION ACT SCHEDULE TO WAGE BOARD SCHEDULE SHOULD BE INCLUDED IN THE COMPUTATION OF RETIREMENT DEDUCTIONS AS WELL AS OVERTIME COMPENSATION AND LEAVE. NIGHT DIFFERENTIAL WHICH IS SAVED BY CIVIL SERVICE REGULATIONS OR BY ADMINISTRATIVE ACTION TO EMPLOYES WHOSE POSITIONS ARE CONVERTED FROM CLASSIFICATION ACT SCHEDULE TO WAGE BOARD SCHEDULE SHOULD BE INCLUDED IN THE BASIC ANNUAL SALARY ON WHICH FEDERAL EMPLOYEES' SHARE OF THE COST OF GROUP LIFE INSURANCE IS COMPUTED. UNDER THE REGULATIONS OF THE CIVIL SERVICE COMMISSION, INSURANCE DEDUCTIONS UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954 FOR WAGE BOARD EMPLOYEES, WHOSE NIGHT RATE IS CONSIDERED AS BASIC COMPENSATION AND WHO WORK INTERMITTENTLY ON TOURS OF DUTY WHICH INCLUDE PERIODS OF NIGHT WORK OF VARYING LENGTH, AND WHOSE TOURS OF DUTY (DAY AND NIGHT) DURING A YEAR CANNOT BE ACCURATELY PROJECTED MAY BE MADE UPON THE BASIS OF THE EMPLOYEE'S DAY OR NIGHT ANNUAL RATE OF COMPENSATION IN EFFECT AT THE END OF EACH PAY PERIOD.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, JANUARY 2, 1957:

THE DEPUTY ADMINISTRATOR'S LETTER OF OCTOBER 31, 1956, REQUESTS OUR ADVICE UPON CERTAIN MATTERS CONCERNING SAVED COMPENSATION OF EMPLOYEES CONVERTED WITH THEIR POSITIONS FROM A CLASSIFIED SCHEDULE TO A PREVAILING RATE SCHEDULE PURSUANT TO SECTION 202 (7) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED BY SECTION 105 (A) OF THE ACT OF SEPTEMBER 1, 1954 ( PUBLIC LAW 763), 68 STAT. 1106, 5 U.S.C. 1082. THE LETTER ALSO PRESENTS FOR OUR DECISION THE MATTER OF THE COMPENSATION RATE TO BE USED IN CERTAIN CASES FOR PURPOSES OF INSURANCE COVERAGE AND DEDUCTIONS UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT OF 1954, 68 STAT. 736, 5 U.S.C. 2091 NOTE.

IN OUR DECISION OF JUNE 28, 1955, 34 COMP. GEN. 708, WE HELD AMONG OTHER THINGS THAT WHEN EMPLOYEES ARE TRANSFERRED FROM CLASSIFIED SCHEDULES TO PREVAILING RATE SCHEDULES PURSUANT TO THE AUTHORITY AND MANDATE OF THE ABOVE-CITED PROVISIONS OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, IT WAS WITHIN THE DISCRETION OF THE CIVIL SERVICE COMMISSION OR THE ADMINISTRATIVE AGENCY CONCERNED TO SAVE THE NIGHT PAY DIFFERENTIAL FORMERLY RECEIVED IN THE CLASSIFIED SCHEDULE POSITION ALTHOUGH THE DIFFERENTIAL IN SUCH CLASSIFIED SCHEDULE POSITIONS WAS NOT "BASIC COMPENSATION" WHICH WAS AUTOMATICALLY SAVED BY SECTION 114 OF PUBLIC LAW 763, 5 U.S.C. 1114 NOTE. THE DECISION WENT ON TO STATE (AT PAGE 713) THAT THE SAVING OF THE DIFFERENTIAL BY REGULATIONS OF THE CIVIL SERVICE COMMISSION OR BY ADMINISTRATIVE ACTION DOES NOT CONVERT IT FROM "ADDITIONAL" TO "BASIC" COMPENSATION. A SIMILAR HOLDING AND STATEMENT WAS MADE (AT PAGE 711) WITH RESPECT TO POST DIFFERENTIALS AND TERRITORIAL COST -OF-LIVING ALLOWANCES. HOWEVER, AS POINTED OUT IN THE DEPUTY ADMINISTRATOR'S LETTER, WE HELD IN DECISION OF JUNE 25, 1956, B 128225 (UNPUBLISHED), THAT THE AGGREGATE NIGHT RATE (CONSISTING OF THE STATUTORY SAVED DAY RATE OF THE FORMER CLASSIFIED POSITION PLUS NIGHT DIFFERENTIAL) WAS THE PROPER RATE FOR MAKING RETIREMENT, OVERTIME, AND LEAVE COMPUTATIONS. THAT DECISION WAS CITED AND FOLLOWED IN PRINCIPLE IN OUR DECISION OF JULY 16, 1956, B-128029, 36 COMP. GEN. 37, COPY OF WHICH WAS FURNISHED THE CIVIL SERVICE COMMISSION ON THE SAME DATE. IN THE LAST- MENTIONED DECISION WE STATED AT PAGE 39---

* * * ALTHOUGH AN EMPLOYEE'S AGGREGATE RATE FOR NIGHT WORK OR FOR OVERSEA SERVICE IS ADMINISTRATIVELY SAVED TO HIM UPON CONVERSION TO A PREVAILING WAGE SYSTEM, SUCH NIGHT RATE OR OVERSEAS RATE THEREAFTER CONSTITUTES HIS BASIC COMPENSATION FOR SUCH SERVICE.

ALSO, AT FOOT OF PAGE 38, WE STATED:

* * * UPON CONVERSION FROM A CLASSIFICATION ACT POSITION TO A WAGE BOARD GRADE, THE COMPENSATION OF THE EMPLOYEE AFFECTED CEASES TO BE SUBJECT TO THE RULES THERETOFORE OBSERVED IN COMPUTING THE PER ANNUM PAY HE PREVIOUSLY RECEIVED BY VIRTUE OF THAT ACT.

HENCE, WE DO NOT NOW HOLD TO THE VIEWS EXPRESSED IN 34 COMP. GEN. 708 THAT POST DIFFERENTIALS, COST-OF-LIVING ALLOWANCES, AND NIGHT PAY DIFFERENTIALS WHICH MAY BE SAVED BY REGULATIONS OF THE CIVIL SERVICE COMMISSION OR BY ADMINISTRATIVE ACTION ARE TO BE REGARDED AS "ADDITIONAL" RATHER THAN "BASIC" COMPENSATION.

THE DEPUTY ADMINISTRATOR'S LETTER SETS FORTH EXAMPLES WHEREIN THE "SAVED" NIGHT PAY DIFFERENTIAL OF ?14 PER HOUR HAD HERETOFORE BEEN TREATED AS ADDITIONAL COMPENSATION AND, AS SUCH, EXCLUDED FROM THE COMPUTATION OF RETIREMENT AND INSURANCE DEDUCTIONS, INSURANCE COVERAGE, PAY FOR HOLIDAYS, OVERTIME AND LEAVE WITH PAY OF 8 HOURS OR MORE PER PAY PERIOD. OUR DECISION IS REQUESTED AS TO WHETHER THE AGGREGATE HOURLY RATE (INCLUSIVE OF THE ?14 NIGHT DIFFERENTIAL) IS TO BE CONSIDERED BASIC COMPENSATION, PRESUMABLY FOR THE PURPOSES JUST MENTIONED.

AS INDICATED ABOVE, OUR PRESENT VIEW IS THAT THE "SAVED" NIGHT DIFFERENTIAL IS IN GENERAL TO BE CONSIDERED AS PART OF BASIC COMPENSATION, AND AS WE STATED AT FOOT OF PAGE 38 (36 COMP. GEN. 37), UPON THE CONVERSION OF AN EMPLOYEE'S POSITION FROM THE CLASSIFICATION ACT SCHEDULE TO A WAGE BOARD GRADE THE HOURLY COMPENSATION OF THE POSITION AND OF THE INCUMBENT CEASES TO BE SUBJECT TO THE RULES THERETOFORE APPLICABLE TO HIS PER ANNUM COMPENSATION WHICH PREVIOUSLY WAS PAID BY VIRTUE OF THAT ACT. IN LINE WITH THAT VIEW, IT MAY BE HELD THAT THE NIGHT DIFFERENTIAL SHOULD BE INCLUDED IN THE COMPUTATION OF RETIREMENT DEDUCTIONS (REQUIRED BY SECTION 1 (D) AND 4 (A) OF THE CIVIL SERVICE RETIREMENT ACT, AS AMENDED BY TITLE IV OF PUBLIC LAW 854, APPROVED JULY 31, 1956, 70 STAT. 743, 5 U.S.C. 2251, TO BE MADE UPON "BASIC SALARY" WHICH IS EXCLUSIVE OF "BONUSES, ALLOWANCES, OVERTIME PAY * * * OR SALARY, PAY OR COMPENSATION GIVEN IN ADDITION TO THE BASIC PAY OF THE POSITION AS FIXED BY LAW OR REGULATIONS" ( AS WELL AS OVERTIME COMPENSATION UNDER SECTION 23 OF THE ACT OF MARCH 28, 1934, 48 STAT. 522, 5 U.S.C. 673C, AND LEAVE WITH PAY WHETHER FOR LESS THAN 8 HOURS AND FOR 8 HOURS OR MORE. 36 COMP. GEN. 37 SUPRA.

UNDER THE FEDERAL EMPLOYEES' GROUP LIFE INSURANCE ACT AND THE REGULATIONS OF THE CIVIL SERVICE COMMISSION ISSUED PURSUANT THERETO, THE AMOUNTS TO BE DEDUCTED FROM THE SALARY OF AN EMPLOYEE AS HIS SHARE OF THE COST OF HIS GROUP INSURANCE IS BASED UPON THE NUMBER OF $1,000 UNITS OF INSURANCE IN FORCE FOR HIM. THE NUMBER OF $1,000 UNITS IS DETERMINED FROM HIS "ANNUAL COMPENSATION.' THE CONTEXT OF SECTION 37.9 (B) OF THE COMMISSION'S REGULATIONS ( FEDERAL PERSONNEL MANUAL, Z1-388) CONCERNING OTHER THAN ANNUAL SALARY RATES INDICATES THAT ANNUAL RATES ARE TO BE DERIVED FROM BASIC UNIT RATES. THE REGULATIONS MAKE NO SPECIFIC PROVISION UNDER AUTHORITY OF SECTION 3 (C), 5 U.S.C. 2092 (C), OF THE ACT FOR THE TREATMENT OF NIGHT DIFFERENTIAL. IN THE ABSENCE OF SUCH A PROVISION, WE PERCEIVE NO OBJECTION TO TREATING "SAVED" NIGHT DIFFERENTIAL AS BASIC COMPENSATION FOR PURPOSES OF INSURANCE DEDUCTIONS, THE SAME AS FOR THE OTHER PURPOSES HEREINBEFORE MENTIONED. SEE FEDERAL PERSONNEL MANUAL, I-3- 11, UNDER THE HEADING " ANNUAL COMPENSATION.' OF COURSE, ANY QUESTION OF THE AMOUNT OF INSURANCE PAYABLE UPON DEATH OR DISMEMBERMENT WILL BE FOR DETERMINATION BY PROPER AUTHORITY IN CONNECTION WITH THE CONSIDERATION OF A CLAIM FOR THE INSURANCE.

THE REMAINING QUESTION ARISES FROM THE FOLLOWING STATEMENT BEGINNING AT THE BOTTOM OF PAGE 39 OF OUR DECISION OF JULY 16, 1956, SUPRA:

* * * IN OTHER WORDS, PAYROLL DEDUCTIONS FOR RETIREMENT AND INSURANCE COVERAGE ARE TO BE BASED UPON HIS AGGREGATE COMPENSATION--- EXCLUDING OVERTIME COMPENSATION--- PAID FOR HIS REGULARLY SCHEDULED TOURS OF DUTY EACH PAY PERIOD. SEE B-128225 DATED JUNE 25, 1956. ( ITALICS SUPPLIED.)

IT IS INDICATED THAT THE VETERANS ADMINISTRATION HAS A CONSIDERABLE NUMBER OF EMPLOYEES WHO WORK INTERMITTENTLY ON TOURS OF DUTY WHICH INCLUDE PERIODS OF NIGHT WORK OF VARYING LENGTH SO THAT THE TOURS OF DUTY THAT AN EMPLOYEE WILL WORK IN A YEAR CANNOT BE PROJECTED WITH ANY DEGREE OF ACCURACY. IN THAT SITUATION THE VETERANS ADMINISTRATION PRACTICE IS TO MAKE INSURANCE DEDUCTIONS UPON THE BASIS OF THE EMPLOYEE'S DAY OR NIGHT RATE OF COMPENSATION, AS THE CASE MAY BE, IN EFFECT AT THE END OF THE PAY PERIOD. THE LAST PARAGRAPH OF PAGE I-3 11, FEDERAL PERSONNEL MANUAL, IS CITED AS AUTHORITY. THE QUESTION PRESENTED IS WHETHER THE ABOVE-QUOTED EXCERPT FROM OUR JULY 16 DECISION REQUIRES A CHANGE FROM THE METHOD JUST DESCRIBED TO ONE BASED UPON THE AGGREGATE COMPENSATION (EXCLUDING OVERTIME COMPENSATION) FOR A PAY PERIOD.

THE QUOTED EXCERPT DEALT WITH THE GENERAL QUESTION WHETHER RETIREMENT AND INSURANCE COVERAGE AND DEDUCTIONS SHOULD BE BASED UPON THE DAY RATE ONLY. IT WAS NOT INTENDED AS A DEPARTURE FROM ANY REGULATION OR INSTRUCTION OF THE CIVIL SERVICE COMMISSION RELATING TO INSURANCE COVERAGE AND DEDUCTIONS.

IN DECIDING THE PROPER AMOUNT TO BE DEDUCTED FROM AN EMPLOYEE'S COMPENSATION EACH PAY PERIOD FOR INSURANCE COVERAGE, WE MUST LOOK TO THE LAW AND THE REGULATIONS ISSUED PURSUANT THERETO. WHILE THE INSTRUCTIONS (AS DISTINGUISHED FROM REGULATIONS) ISSUED BY THE CIVIL SERVICE COMMISSION THROUGH THE MEDIUM OF THE FEDERAL PERSONNEL MANUAL ARE GIVEN GREAT WEIGHT IN MATTERS COMING BEFORE US, SUCH INSTRUCTIONS ARE NOT NECESSARILY BINDING UPON US.

REGARDING THE PARTICULAR QUESTION PRESENTED, THAT IS, THE PROPRIETY OF BASING INSURANCE DEDUCTIONS OF THE PARTICULAR CLASS OF EMPLOYEES UNDER DISCUSSION UPON THE ANNUAL RATE THE EMPLOYEE WAS RECEIVING AT THE END OF A PAY PERIOD, WE NOTE THAT SECTION 37.8 (A) OF THE COMMISSION'S REGULATIONS SPECIFIES THAT THE AMOUNT OF AN EMPLOYEE'S LIFE INSURANCE SHALL BE EQUAL TO "THE CURRENT RATE OF HIS ANNUAL COMPENSATION; " AND ALSO THAT SECTION 37.4 (B) OF THE REGULATIONS REQUIRES THAT WHERE THE AMOUNT OF INSURANCE CHANGES DURING A PAY PERIOD, THE AMOUNT WITHHELD FROM SALARY SHALL BE BASED ON THE LAST AMOUNT OF INSURANCE IN FORCE DURING THE PAY PERIOD. THE METHOD DESCRIBED IN THE INSTRUCTION ( FEDERAL PERSONNEL MANUAL, I-3-11) FOR THIS CLASS OF "MULTIPLE RATE" EMPLOYEES APPEARS TO CONFORM WITH THE REGULATIONS, AND, THEREFORE, WE WILL INTERPOSE NO OBJECTION TO A CONTINUATION OF YOUR PRESENT INSURANCE DEDUCTION PRACTICES.