B-139542, JUL. 20, 1960

B-139542: Jul 20, 1960

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THAT ACT WAS RETROACTIVE TO THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGAN ON OR AFTER JANUARY 1. WERE GRANTED. WAS EARNING BASIC COMPENSATION AT THE HOURLY RATE OF $1.88. HE WAS REINSTATED AS A SUBSTITUTE ON APRIL 19. HE WAS REINSTATED TO THE SAME STEP 2 IN GRADE LEVEL 4. AS A RESULT OF SUCH LEGISLATION YOUR DEPARTMENT ISSUED INSTRUCTIONS UNDER WHICH THE EMPLOYEE'S SALARY WAS INCREASED TO THE HOURLY RATE OF $2.07. WHICH IS STEP 1 OF LEVEL 4. SUCH ACTION WAS BASED UPON OUR DECISIONS 29 COMP. THOSE DECISIONS HOLD THAT IN CASES OF STATUTORY RETROACTIVE COMPENSATION INCREASES THE INCREASED COMPENSATION SCHEDULES ARE CONSTRUCTIVELY IN EXISTENCE THROUGHOUT THE PERIOD OF RETROACTIVITY. AS A RESULT OF THAT ACTION THE EMPLOYEE WAS REQUIRED TO REFUND THE DIFFERENCE BETWEEN THE $2.07 RATE AND THE $2 RATE.

B-139542, JUL. 20, 1960

TO THE POSTMASTER GENERAL:

YOUR LETTER OF JUNE 14, 1960, YOUR REFERENCE 800, REQUESTS OUR DECISION UPON CERTAIN QUESTIONS, QUOTED HEREINAFTER, ARISING UNDER TITLE IV, INCREASES IN COMPENSATION OF POSTAL EMPLOYEES, ACT OF MAY 27, 1958, PUBLIC LAW 85-426, 72 STAT. 147. THAT ACT WAS RETROACTIVE TO THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGAN ON OR AFTER JANUARY 1, 1958.

YOU POINT OUT THAT DURING THE RETROACTIVE PERIOD OF THE STATUTE, I.E., JANUARY 11 THROUGH MAY 26, 1958, A LARGE NUMBER OF FORMER POSTAL EMPLOYEES APPLIED FOR, AND WERE GRANTED, REINSTATEMENT IN THE POSTAL FIELD SERVICE. YOU REFER TO THE CASE OF A SUBSTITUTE EMPLOYEE WHO, WHEN HE LEFT THE POSTAL FIELD SERVICE, WAS EARNING BASIC COMPENSATION AT THE HOURLY RATE OF $1.88, STEP 2 OF LEVEL 4. HE WAS REINSTATED AS A SUBSTITUTE ON APRIL 19, 1958. UNDER SECTION 753.312, POSTAL MANUAL, HIGHEST PREVIOUS SALARY RULE, HE WAS REINSTATED TO THE SAME STEP 2 IN GRADE LEVEL 4, THE STATUS HE PREVIOUSLY HELD. TITLE IV, REFERRED TO ABOVE, AUTHORIZED STATUTORY SALARY INCREASES, AND SECTION 407 (A) THEREOF MADE THEM RETROACTIVE. AS A RESULT OF SUCH LEGISLATION YOUR DEPARTMENT ISSUED INSTRUCTIONS UNDER WHICH THE EMPLOYEE'S SALARY WAS INCREASED TO THE HOURLY RATE OF $2.07, THE NEW SALARY RATE PROVIDED FOR STEP 2 OF LEVEL 4. HOWEVER, YOUR REGIONAL OFFICIALS QUESTIONED THE ADMINISTRATIVE ACTION AND AGAIN APPLYING THE HIGHEST PREVIOUS SALARY RULE IN RELATION TO THE NEW RETROACTIVE PAY SCHEDULES, ADJUSTED THE EMPLOYEE'S SALARY TO THE HOURLY RATE OF $2, EFFECTIVE APRIL 19, 1958, WHICH IS STEP 1 OF LEVEL 4. SUCH ACTION WAS BASED UPON OUR DECISIONS 29 COMP. GEN. 33; 31 ID. 166; 38 ID. 188; 36 ID. 40. THOSE DECISIONS HOLD THAT IN CASES OF STATUTORY RETROACTIVE COMPENSATION INCREASES THE INCREASED COMPENSATION SCHEDULES ARE CONSTRUCTIVELY IN EXISTENCE THROUGHOUT THE PERIOD OF RETROACTIVITY. AS A RESULT OF THAT ACTION THE EMPLOYEE WAS REQUIRED TO REFUND THE DIFFERENCE BETWEEN THE $2.07 RATE AND THE $2 RATE. HE THEN FILED A CLAIM WITH OUR CLAIMS DIVISION FOR THE AMOUNT OF THE REFUND. HIS CLAIM WAS DISALLOWED WHICH HAD THE EFFECT OF AFFIRMING THE ACTION OF YOUR REGIONAL OFFICIALS.

BRIEFLY YOU SHOW THAT THE ADMINISTRATIVE ACTION OF YOUR REGIONAL OFFICIALS, AND OUR AFFIRMANCE THEREOF, GRANTED THE EMPLOYEE HERE INVOLVED, A SALARY INCREASE OF ONLY 6.38 PERCENT (NAMELY, FROM $1.88 TO $2 PER HOUR) AND YOU CONTEND SUCH ACTION WAS CONTRARY TO THE INTENT OF THE CONGRESS SINCE UNDER SECTION 401 ABOVE EMPLOYEES IN LEVEL 4 AND OTHER LEVELS WERE AUTHORIZED A STATUTORY INCREASE OF 10 PERCENT (7 1/2 PERMANENT AND 2 1/2 TEMPORARY).

IN VIEW OF THE FOREGOING STATE OF FACTS, YOU ASK THE FOLLOWING QUESTIONS:

"1. MAY MR. MAIRORANO'S RECORDS (AND THOSE OF ALL OTHER EMPLOYEES SIMILARLY SITUATED) BE CORRECTED TO SHOW HIS REINSTATEMENT TO STEP 2 OF PFS4, EFFECTIVE APRIL 19, 1958? IF THE ANSWER IS IN THE AFFIRMATIVE, WE ASSUME MR. MAIRORANO (AND THE OTHER EMPLOYEES WHO MADE REFUNDS) MAY BE REPAID THE COMPENSATION WHICH HE HERETOFORE WAS REQUIRED TO REFUND.

"IN A NUMBER OF CASES, THE EMPLOYEES HAVE EITHER NOT YET BEEN REDUCED IN STEP, OR IF THEY HAVE ALREADY BEEN REDUCED IN STEP, THEY HAVE NOT YET BEEN REQUIRED TO MAKE REFUND. IF YOUR ANSWER TO QUESTION 1 IS IN THE NEGATIVE, YOUR FURTHER DECISION IS REQUESTED ON THE FOLLOWING QUESTIONS:

"2. WILL IT BE NECESSARY TO REDUCE THE EMPLOYEES TO THE MAXIMUM STEPS PERMITTED BY THE WORDING OF SECTION 756.312 HAD SECTION 401 OF PUBLIC LAW 85-426 BEEN IN ACTUAL EXISTENCE AT THE TIME OF THEIR REINSTATEMENT, AND

"3. IF THE ANSWER TO QUESTION 2 IS IN THE AFFIRMATIVE, MAY COLLECTIONS OF THE OVERPAYMENTS BE WAIVED?

OUR DECISIONS, PREVIOUSLY REFERRED TO, INVOLVED SALARY INCREASES WHICH WERE APPLICABLE FOR THE MOST PART TO INDIVIDUALS SUBJECT TO THE CLASSIFICATION ACT OF 1949. WE NOTE THAT SINCE 1955 EACH SALARY INCREASE ACT FOR EMPLOYEES SUBJECT TO THE CLASSIFICATION ACT OF 1949, AS AMENDED, HAS INCLUDED A PROVISION WHICH SPECIFICALLY REQUIRES THAT THE COMPENSATION OF EMPLOYEES (REINSTATED UNDER SUCH ACT AT A RATE OF COMPENSATION WHICH WAS FIXED ON THE BASIS OF A HIGHER PREVIOUSLY EARNED RATE AND WHICH IS ABOVE THE MINIMUM RATE OF THE GRADE OF SUCH EMPLOYEE) BE ADJUSTED ON THE BASIS OF THE INCREASE PROVIDED IN SUCH SALARY INCREASE ACT FOR THE STEP OF THE GRADE HE WAS IN AT THAT TIME.

WHILE NO SUCH PROVISIONS HAVE APPEARED IN THE POSTAL SALARY INCREASE LAWS, IT IS EVIDENT THAT WHEN THE CONGRESS HAS BEEN MADE AWARE OF THE APPLICATION OF A "HIGHEST PREVIOUS RATE RULE" TO THE RETROACTIVE PERIOD OF A PAY STATUTE THEY CONSISTENTLY HAVE MANIFESTED AN INTENT THAT EMPLOYEES SHOULD BE RETAINED IN THE STEP OF THE GRADE IN WHICH THEY WERE AT THE DATE OF ENACTMENT AND RECEIVE THE INCREASE FOR THAT STEP TO THE SAME EXTENT AS OTHER EMPLOYEES IN THAT STEP WHO HAD BEEN ON THE ROLLS FOR THE FULL RETROACTIVE PERIOD.

THEREFORE, AND AS THERE IS AN INDICATION IN THE LEGISLATIVE HISTORY OF PUBLIC LAW 85-426, THAT THE PURPOSE THEREOF WAS TO GRANT TO ALL EMPLOYEES ON THE ROLLS IN CERTAIN GRADE LEVELS A 10 PERCENT INCREASE IN COMPENSATION, WE WILL INTERPOSE NO OBJECTION TO YOUR GRANTING SUCH EMPLOYEES THE INCREASE APPLICABLE TO THE STEP IN WHICH THEY WERE AT THE TIME THE STATUTE WAS ENACTED. QUESTION 1 IS ANSWERED IN THE AFFIRMATIVE, THUS RENDERING UNNECESSARY ANY ANSWERS TO THE OTHER QUESTIONS PRESENTED.