B-151640, JUN. 4, 1963

B-151640, JUN. 4, 1963

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

YOUR LETTER OF MAY 22, 1963, REQUESTS OUR DECISION AS TO THE RATE OF COMPENSATION WHICH WOULD BE APPLICABLE IN COMPUTING THE COMPENSATION OF AN EMPLOYEE WHO MAY BE SEPARATED FOR RETIREMENT PRIOR TO JUNE 8, 1963, THE DATE HE WOULD OTHERWISE RECEIVE A REDUCTION IN HIS SALARY RATE BECAUSE OF THE EXPIRATION OF THE PERIOD DURING WHICH HIS FORMER SALARY RATE HAS BEEN SAVED UNDER THE PROVISION OF SECTION 507 (A) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 5 U.S.C. 1107.

YOU SAY THAT THE EMPLOYEE IN QUESTION WAS REDUCED FROM GRADE GS-12 TO GRADE GS-9 ON JUNE 9, 1961, BUT HAS RETAINED HIS SALARY RATE IN GRADE GS- 12 (NOW $11,680 PER ANNUM) PURSUANT TO SECTION 507 (A) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED. HOWEVER, BY OPERATION OF THAT STATUTE THE TWO YEAR PERIOD DURING WHICH THE EMPLOYEE IS ENTITLED TO RETAIN THE HIGHER SALARY RATE WILL EXPIRE ON JUNE 8, 1963, AND THE EMPLOYEE'S SALARY RATE, EFFECTIVE JUNE 9, 1963, WILL BE REDUCED TO $8,700 PER ANNUM, THE TOP STEP OF GRADE GS-9.

THE ACT OF DECEMBER 21, 1944, AS AMENDED, 5 U.S.C. 61B, PROVIDES IN PERTINENT PART, AS FOLLOWS:

"WHENEVER ANY CIVILIAN OFFICER OR EMPLOYEE OF THE FEDERAL GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA IS SEPARATED FROM THE SERVICE * * * HE SHALL BE PAID COMPENSATION IN A LUMP SUM FOR ALL ACCUMULATED AND CURRENT ACCRUED ANNUAL OR VACATION LEAVE TO WHICH HE IS ENTITLED UNDER EXISTING LAW. SUCH LUMP-SUM PAYMENT SHALL EQUAL THE COMPENSATION THAT SUCH OFFICER OR EMPLOYEE WOULD HAVE REACHED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL OR VACATION LEAVE EXCEPT THAT AFTER AUGUST 31, 1953, NO SUCH LUMP-SUM PAYMENT SHALL EXCEED COMPENSATION FOR ANY PERIOD OF SUCH LEAVE IN EXCESS OF THIRTY DAYS OR THE NUMBER OF DAYS CARRIED OVER TO HIS CREDIT AT THE BEGINNING OF THE LEAVE YEAR IN WHICH ENTITLEMENT TO PAYMENT OCCURS, WHICHEVER IS THE GREATER.'

WE HAVE HELD UNDER THE ABOVE ACT THAT LUMP-SUM LEAVE PAYMENTS THEREUNDER SHOULD BE COMPUTED ON THE BASIS OF THE EMPLOYEE'S RIGHTS AT THE TIME OF SEPARATION UNDER ALL APPLICABLE LAWS AND REGULATIONS EXISTING AT THAT TIME WHICH WOULD HAVE AFFECTED HIS COMPENSATION HAD HE REMAINED IN THE SERVICE FOR THE PERIOD COVERED BY THE LEAVE. 38 COMP. GEN. 161; 36 ID. 18; 26 ID. 102.

IN THE INSTANT CASE, IF THE EMPLOYEE REMAINS IN THE SERVICE, HIS SALARY BY OPERATION OF LAW WILL BE REDUCED ON JUNE 9, 1963. THEREFORE, UNDER THE RULE SET FORTH IN THE DECISIONS REFERRED TO ABOVE, THE EMPLOYEE'S LUMP-SUM LEAVE PAYMENT IF HE BE SEPARATED PRIOR TO JUNE 9, 1963, IS FOR COMPUTATION ON THE BASIS OF THE SAVED PAY RATE FOR THAT PART OF HIS LEAVE UP TO AND INCLUDING JUNE 8; HOWEVER, FOR THAT PORTION BEGINNING ON JUNE 9, 1963, PAYMENT WOULD BE ON THE BASIS OF THE LOWER SALARY HE WOULD HAVE BEEN RECEIVING ON THAT DATE AND THEREAFTER AS THOUGH HE HAD REMAINED IN THE SERVICE. CF. 32 COMP. GEN. 76.