B-137898, DECEMBER 2, 1958, 38 COMP. GEN. 402

B-137898: Dec 2, 1958

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WAGE INCREASES TO EMPLOYEES WHO ARE RECEIVING SAVED RATES OF COMPENSATION UNDER 5 U.S.C. 1114 FOLLOWING CONVERSION FROM CLASSIFIED TO WAGE BOARD POSITIONS. WHICH RATES ARE HIGHER THAN PREVAILING RATES. ARE NOT AUTHORIZED. YOU SAY THAT THE GROUP TO WHOM THE WAGE INCREASE IS PROPOSED CONSISTS OF 4. 500 EMPLOYEES WHO WERE CONVERTED FROM CPC POSITIONS TO THE WAGE ADMINISTRATION SYSTEM IN AUGUST 1955 PURSUANT TO THE PROVISION OF PUBLIC LAW 763. THAT PROVISION OF LAW EXCEPTS SUCH EMPLOYEES FROM THE CLASSIFICATION ACT AND PROVIDES THAT THEIR COMPENSATION "SHALL BE FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH PREVAILING RATES.'. YOU FURTHER SAY THAT THE EMPLOYEES IN QUESTION ARE RECEIVING "SAVED RATES" OF COMPENSATION IN ACCORDANCE WITH SECTION 114 OF PUBLIC LAW 763.

B-137898, DECEMBER 2, 1958, 38 COMP. GEN. 402

CIVILIAN PERSONNEL - WAGE BOARD EMPLOYEES - WAGE ADJUSTMENTS - SAVED RATES ALTHOUGH THE AUTHORITY TO FIX SALARIES OF WAGE BOARD EMPLOYEES CONSISTENT WITH THE PUBLIC INTEREST CONTEMPLATES CONSIDERATION OF FACTORS OTHER THAN PREVAILING RATES, IT DOES NOT PERMIT THE ESTABLISHMENT OF RATES WITHOUT REGARD TO PREVAILING RATES; THEREFORE, WAGE INCREASES TO EMPLOYEES WHO ARE RECEIVING SAVED RATES OF COMPENSATION UNDER 5 U.S.C. 1114 FOLLOWING CONVERSION FROM CLASSIFIED TO WAGE BOARD POSITIONS, WHICH RATES ARE HIGHER THAN PREVAILING RATES, ARE NOT AUTHORIZED.

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, DECEMBER 2, 1958:

YOUR LETTER OF NOVEMBER 5, 1958, REQUESTS OUR DECISION AS TO WHETHER YOU MAY GRANT A FIVE-CENT PER HOUR INCREASE IN THE WAGES OF ALL VETERANS ADMINISTRATION WAGE ADMINISTRATION EMPLOYEES UPON THE BASIS THAT SUCH INCREASE WOULD BE IN THE PUBLIC INTEREST WITHIN THE MEANING OF SECTION 202 (7) OF THE CLASSIFICATION ACT OF 1949 AS AMENDED BY SECTION 105 (A) OF PUBLIC LAW 763 APPROVED SEPTEMBER 1, 1954, 5 U.S.C. 1082 (7).

YOU SAY THAT THE GROUP TO WHOM THE WAGE INCREASE IS PROPOSED CONSISTS OF 4,500 EMPLOYEES WHO WERE CONVERTED FROM CPC POSITIONS TO THE WAGE ADMINISTRATION SYSTEM IN AUGUST 1955 PURSUANT TO THE PROVISION OF PUBLIC LAW 763, 83D CONGRESS (SECTION 105 AMENDING PARAGRAPH 7 OF SECTION 202 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 68 STAT. 1106). THAT PROVISION OF LAW EXCEPTS SUCH EMPLOYEES FROM THE CLASSIFICATION ACT AND PROVIDES THAT THEIR COMPENSATION "SHALL BE FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH PREVAILING RATES.'

YOU FURTHER SAY THAT THE EMPLOYEES IN QUESTION ARE RECEIVING "SAVED RATES" OF COMPENSATION IN ACCORDANCE WITH SECTION 114 OF PUBLIC LAW 763, 5 U.S.C. 1114 NOTE, AND THAT WHILE OTHER GROUPS OF EMPLOYEES HAVE RECEIVED SALARY OR WAGE INCREASES THE COMPENSATION OF THE CONVERTED EMPLOYEES HAS REMAINED FROZEN DURING A PERIOD WHEN LIVING COSTS HAVE INCREASED MATERIALLY, AND IT IS TO ALLEVIATE THIS CONDITION THAT A FIVE CENT PER HOUR INCREASE IN COMPENSATION IS PROPOSED.

YOU REFER TO OUR DECISIONS OF MAY 3, 1955, 34 COMP. GEN. 563, AND SEPTEMBER 25, 1956, 36 COMP. GEN. 235, CONCERNING THE "PUBLIC INTEREST" PHRASE APPEARING IN SECTION 202/8) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 5 U.S.C. 1082/8). IN THOSE DECISIONS WE INDICATED THAT WHETHER A WAGE ADJUSTMENT IS CONSISTENT WITH THE PUBLIC INTEREST IS A MATTER PRIMARILY FOR ADMINISTRATIVE DETERMINATION, AND WHEN MADE IT ORDINARILY WILL NOT BE QUESTIONED BY OUR OFFICE IN THE ABSENCE OF SOME COMPELLING REASON. THE QUESTION IN BOTH OF THE DECISIONS INVOLVED "SAVED RATES" OF COMPENSATION FOR WAGE BOARD EMPLOYEES. THE FIRST DECISION POINTED OUT THAT THE CONGRESS FREQUENTLY INCLUDES SAVINGS PROVISIONS IN LEGISLATION AFFECTING PAY OF GOVERNMENT EMPLOYEES WHICH AT LEAST IS A RECOGNITION THAT SAVING OF PAY TO EMPLOYEES IS NOT PER SE CONTRARY TO THE PUBLIC INTEREST. WE THEREFORE CONCLUDED THAT THE HEAD OF A DEPARTMENT COULD DETERMINE THAT IT IS IN THE PUBLIC INTEREST TO SAVE EMPLOYEES FROM REDUCTIONS IN COMPENSATION SO LONG AS THEY CONTINUE TO OCCUPY THE SAME POSITION. NOTHING IN EITHER OF THE DECISIONS CITED IN YOUR LETTER LENDS SUPPORT TO THE PROPOSITION THAT SAVED WAGE BOARD RATES MAY BE INCREASED WITHOUT REGARD TO PREVAILING RATES SOLELY UPON THE THEORY THAT AN INCREASE IS NECESSARY IN THE PUBLIC INTEREST.

WE REALIZE THAT THE TERM "AS IS CONSISTENT WITH THE PUBLIC INTEREST" CONTEMPLATES FACTORS OTHER THAN PREVAILING RATES BUT WE DO NOT AGREE THAT SUCH TERM IN AND OF ITSELF AUTHORIZES THE HEAD OF AN AGENCY TO GRANT A GENERAL WAGE INCREASE WITHOUT REGARD TO PREVAILING RATES. HERE THE EMPLOYEES ALREADY ARE RECEIVING COMPENSATION AT RATES IN EXCESS OF THE PREVAILING RATES, SO PRESUMABLY NO WAGE ADJUSTMENT UPWARD IS POSSIBLE IF PREVAILING RATES ARE CONSIDERED. TO GRANT A WAGE INCREASE AS BEING IN THE PUBLIC INTEREST ON THE BASIS OF THE CONSIDERATION PREVIOUSLY REFERRED TO WOULD BE IGNORING THE LANGUAGE "IN ACCORDANCE WITH PREVAILING RATES.' A FIVE-CENT PER HOUR INCREASE MAY BE GIVEN ON THE BASIS SUGGESTED, THEN IT MIGHT SERVE AS A PRECEDENT FOR EVEN HIGHER INCREASES THUS COMPLETELY NULLIFYING THE PREVAILING RATE CONCEPT OF THE STATUTE.

THEREFORE, IN OUR OPINION, A WAGE INCREASE UNDER THE CIRCUMSTANCES OUTLINED HEREIN WOULD NOT BE AUTHORIZED.