B-155269, OCT. 20, 1964

B-155269: Oct 20, 1964

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CARSON'S EMPLOYMENT RECORD AND OTHER FACTS HAVING A BEARING ON THE QUESTION ARE STATED IN YOUR LETTER AS FOLLOWS: TABLE "DATE RECEIPTS ANNUAL SALARY REASON 7/12/58 $600 - $899.99 $2148 STEP-INCREASE 7/11/59 DO.2218 STEP-INCREASE 7/9/60 DO. 2288 STEP-INCREASE 7/9/60 DO. 2459 P.L. 86-568. CARSON'S SALARY WAS CHANGED TO $2534. HIS OFFICE WAS RELEGATED TO THE RECEIPTS CATEGORY $250 - $349.99 AND HIS SALARY WOULD HAVE BEEN CHANGED TO $1482 (STEP 7) EXCEPT FOR THE SALARY PROTECTION PROVIDED BY PUBLIC LAW 87-270. AFTER THE EXPIRATION OF 104 WEEKS (SHOULD HAVE BEEN SEPTEMBER 30. 2 CALENDAR YEARS) HIS SALARY WAS REDUCED TO $1630 PER ANNUM (STEP-7). IS SOMEWHAT DIFFERENT FROM SECTION 507. B-104080 IS ALSO APPLICABLE TO PERSONS IN THE POSTAL FIELD SERVICE.

B-155269, OCT. 20, 1964

TO MR. LEROY P. AFDEM, AUTHORIZED CERTIFYING OFFICER, BUREAU OF FINANCE AND ADMINISTRATION:

YOUR LETTER OF SEPTEMBER 24, 1964, REFERENCE AIR:LPA:LSP, ENCLOSING A VOUCHER IN THE NET AMOUNT OF $75.90, COVERING THE PERIOD OF SEPTEMBER 28, 1963 TO MARCH 13, 1964, IN FAVOR OF MR. CECIL W. CARSON, A POSTMASTER AT A FOURTH-CLASS POST OFFICE, WHO BECAME ENTITLED TO SALARY PROTECTION UNDER PUBL.L. 87-270, APPROVED SEPTEMBER 21, 1961, 39 U.S.C. 3560, ASKS WHETHER THE VOUCHER PROPERLY MAY BE CERTIFIED FOR PAYMENT.

MR. CARSON'S EMPLOYMENT RECORD AND OTHER FACTS HAVING A BEARING ON THE QUESTION ARE STATED IN YOUR LETTER AS FOLLOWS:

TABLE

"DATE RECEIPTS ANNUAL SALARY REASON

7/12/58 $600 - $899.99 $2148 STEP-INCREASE

7/11/59 DO.2218 STEP-INCREASE

7/9/60 DO. 2288 STEP-INCREASE

7/9/60 DO. 2459 P.L. 86-568, SEC. 104

7/8/61 DO. 2534 STEP-INCREASE

7/8/61 $350 - $599.99 2079 CHANGE IN RECEIPTS

9/30/61 DO. 2534 P.L. 87-270

(SALARY PROTECTION)

7/7/62 $250 - $349.99 2534 CHANGE IN RECEIPTS

10/13/62 DO. 2534 P.L. 87-793,

SEC. 711 (C)

9/28/63 DO. 1630 EXPIRATION OF SALARY

(S/B 9/30/63) PROTECTION

1/4/64 DO. 1704 P.L. 87-793, SEC. 704

"ON SEPTEMBER 30, 1961 THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGAN AFTER THE DATE OF ENACTMENT OF PUBLIC LAW 87-270, MR. CARSON'S SALARY WAS CHANGED TO $2534, SINCE HE QUALIFIED FOR SALARY PROTECTION. ON JULY 7, 1962, HIS OFFICE WAS RELEGATED TO THE RECEIPTS CATEGORY $250 - $349.99 AND HIS SALARY WOULD HAVE BEEN CHANGED TO $1482 (STEP 7) EXCEPT FOR THE SALARY PROTECTION PROVIDED BY PUBLIC LAW 87-270. ON SEPTEMBER 28, 1963, AFTER THE EXPIRATION OF 104 WEEKS (SHOULD HAVE BEEN SEPTEMBER 30, 1963, 2 CALENDAR YEARS) HIS SALARY WAS REDUCED TO $1630 PER ANNUM (STEP-7).

"OUR ATTENTION HAS BEEN CALLED TO YOUR DECISION NO. B-104080 DATED MAY 16, 1962, WHICH CONSIDERED SECTION 507 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED. THE WORDING OF SECTION 3560 OF TITLE 39, U.S. CODE, IS SOMEWHAT DIFFERENT FROM SECTION 507. NEVERTHELESS, IT HAS BEEN SUGGESTED THAT THE PRINCIPLE OF THE DECISION NO. B-104080 IS ALSO APPLICABLE TO PERSONS IN THE POSTAL FIELD SERVICE; THAT MR. CARSON'S SALARY SHOULD HAVE BEEN REDUCED TO $1,853 PER ANNUM ($1,482 PLUS 25 PERCENT) ON JULY 7, 1962, AND THAT HE WOULD BE ENTITLED TO THAT RATE UNTIL JANUARY 4, 1964, WHEN HIS SALARY WOULD CONVERT TO $1,888 PER ANNUM UNDER SECTION 712 (2) OF PUBLIC LAW 87-793.

"MR. CARSON FEELS THAT HIS SALARY EFFECTIVE JULY 7, 1962, $2534 PER ANNUM, WAS CORRECT, SINCE PUBLIC LAW 87-270 AND SEC. 753.424 OF THE POSTAL MANUAL PROVIDED AT THAT TIME THAT AN EMPLOYEE WOULD RETAIN HIS PROTECTED SALARY RATE FOR TWO YEARS. SEC. 753.424 B OF THE POSTAL MANUAL NOW PROVIDES THAT ANOTHER TWO YEAR PERIOD OF PROTECTION BEGINS WHEN THE EMPLOYEE'S SALARY IS REDUCED FOR THE SECOND TIME.

"MAY THE ATTACHED VOUCHER FOR THE DIFFERENCE BETWEEN $1853 AND $1630 ($1888 AND $1704 EFFECTIVE JANUARY 4, 1964), FOR THE PERIOD SEPTEMBER 28, 1963 THROUGH MARCH 13, 1964, BE CERTIFIED FOR PAYMENT? UNDER THE CIRCUMSTANCES IN THIS CASE WOULD MR. CARSON BE REQUIRED TO REFUND THE DIFFERENCE BETWEEN $2534 AND $1853 FOR THE PERIOD JULY 7, 1962 THROUGH SEPTEMBER 27, 1963?

MR. CARSONS'S SALARY FIRST WAS PROTECTED BY PUB.L. 87-270 UNDER REGULATIONS PUBLISHED IN THE POSTAL BULLETIN OF OCTOBER 12, 1961 (SEE POSTAL MANUAL, CHAP. 7, SEC. 753.424, PERSONNEL TRANSMITTAL LETTER 84, NOVEMBER 6, 1961). THAT SECTION THEN READ AS FOLLOWS:

".424 DURATION OF PROTECTION

"AN EMPLOYEE ENTITLED TO SALARY PROTECTION SHALL RETAIN THE PROTECTED SALARY RATE UNTIL THE BEGINNING OF THE FIRST PAY PERIOD OCCURRING 2 YEARS IMMEDIATELY FOLLOWING THE EFFECTIVE DATE OF THE CHANGE TO LOWER SALARY STANDING OR SEPTEMBER 30, 1961, WHICHEVER IS LATER. SEE 753.425.'

NEITHER THAT REGULATION NOR SECTION 753.425, STATING THE CONDITIONS UNDER WHICH SALARY PROTECTION TERMINATES, PROVIDED FOR A CESSATION OR CHANGE IN THE PROTECTED SALARY SHOULD THE EMPLOYEE BE FURTHER REDUCED IN SALARY STANDING DURING THE TWO-YEAR PROTECTION PERIOD. IN FACT THE REGULATION APPEARS TO BE MERELY REITERATIVE OF THE STATUTORY LANGUAGE OF SUBSECTIONS 3560 (A) AND (B) RATHER THAN INTERPRETATIVE OF SUBSECTION (C). HOWEVER, SECTION 753.424 WAS CHANGED BY TRANSMITTAL LETTER 109, JANUARY 25, 1963, TO READ:

".424 DURATION OF PROTECTION

"A. AN EMPLOYEE ENTITLED TO SALARY PROTECTION SHALL RETAIN THE PROTECTED RATE OF COMPENSATION FOR 2 CALENDAR YEARS FROM THE DATE OF COMMENCEMENT OF SALARY PROTECTION. SEE 753.425.

"B. ANOTHER 2-YEAR PERIOD OF ENTITLEMENT TO PROTECTION BEGINS WHEN AN EMPLOYEE WHOSE COMPENSATION IS PROTECTED, IS REDUCED IN SALARY STANDING. THE PROTECTED RATE DURING THE SUBSEQUENT PERIOD OF PROTECTION SHALL BE REDETERMINED UNDER 753.423 IN RELATION TO THE SALARY STANDING FOLLOWING THE LATEST REDUCTION.'

THE LAW IN EFFECT ON SEPTEMBER 30, 1961, REGARDING SECTION 507 OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1107 (C), HAD BEEN CONSTRUED IN OUR DECISION 39 COMP. GEN. 193, CASE I, AS PERMITTING THE RATE INITIALLY SAVED TO CONTINUE THROUGH THE 2-YEAR PERIOD UNLESS BECAUSE OF THE LIMITATION IN SUBSECTION 1107 (C) A REDUCTION IN RATE IS REQUIRED BY A FURTHER GRADE REDUCTION WITHIN THE 2-YEAR PERIOD WHICH CAUSES THE AGGREGATE OF THE REDUCTIONS TO TOTAL MORE THAN 3 GRADES. BY OUR DECISION B-104080 DATED MAY 16, 1962, 41 COMP. GEN. 764, TO WHICH YOU REFER, WE MODIFIED OUR EARLIER DECISION BY RULING THAT EACH REDUCTION WOULD BEGIN A NEW 2-YEAR RETENTION PERIOD, THE RATE OF COMPENSATION TO BE DETERMINED BY 5 U.S.C. 1107 (A), SUBJECT TO THE LIMITATION IMPOSED BY SUBSECTION 1107 (C).

WHILE THERE IS A DEGREE OF SIMILARITY BETWEEN 5 U.S.C. 1107 (C) AND 39 U.S.C. 3560 (C), THERE IS, ALSO, A FUNDAMENTAL DIFFERENCE. THE FORMER STATUTE REQUIRED AN ADJUSTMENT OF THE INITIAL SAVED RATE DURING THE FIRST 2-YEAR PERIOD ONLY IF REQUIRED BY SUBSECTION 1107 (C), WHEREAS 39 U.S.C. 3560 (C), IN EFFECT AT THE TIME OF MR. CARSON'S SECOND REDUCTION OF SALARY STANDING PROVIDED AS FOLLOWS:

"/C) THE RATE OF BASIC SALARY TO WHICH SUCH EMPLOYEE IS ENTITLED UNDER SUBSECTION (B) OF THIS SECTION WITH RESPECT TO EACH REDUCTION IN SALARY STANDING TO WHICH THIS SECTION APPLIES SHALL BE THE LESSER OF THE FOLLOWING:

"/A) THE AMOUNT OF THE EXISTING RATE OF BASIC SALARY OF THE EMPLOYEE IMMEDIATELY PRIOR TO THE REDUCTION IN SALARY STANDING (INCLUDING EACH INCREASE PROVIDED BY LAW IN SUCH RATE); OR

"/B) THE AMOUNT OF THE RATE OF THE SALARY LEVEL OR SALARY RANGE (INCLUDING EACH INCREASE PROVIDED BY LAW IN SUCH RATE) TO WHICH THE EMPLOYEE IS REDUCED, INCREASED BY 24 PERCENTUM.

WE CONSTRUE THE QUOTED LANGUAGE TO REQUIRE A DETERMINATION WHETHER, IN EACH SUCCESSIVE REDUCTION IN SALARY STANDING, THE LESSER SALARY RATE IS TO BE FIXED UNDER CLAUSE A OR B. THEREFORE, WE CONCLUDE THAT THE CURRENT POSTAL REGULATION 753.424 CORRECTLY APPLIES THE LAW. MR. CARSON WAS ENTITLED TO SALARY PROTECTION BECAUSE OF THE SECOND REDUCTION IN SALARY STANDING FOR TWO CALENDAR YEARS BEGINNING ON JULY 7, 1962, UNLESS SOONER TERMINATED PURSUANT TO SECTION 753.425 OF THE REGULATIONS. THAT SECTION PROVIDES FOR TERMINATION OF THE SAVED RATE WHEN THE COMPENSATION OF THE EMPLOYEE IS CHANGED FOR ANY CAUSE TO A RATE HIGHER THAN THE PROTECTED COMPENSATION. IT FOLLOWS THAT A PROPER APPLICATION OF THE STATUTE ON JULY 7, 1962, WOULD HAVE REQUIRED MR. CARSON'S PROTECTED RATE TO BE FIXED AT $1,482 PLUS 25 PERCENT OR $1,853, WHICH RATE WAS LESS THAN HIS EXISTING RATE OF $2,534. THE RATE OF $1,853 WOULD, AS YOU SAY, CONTINUE IN EFFECT UNTIL JANUARY 4, 1964, WHEN PURSUANT TO SECTION 712 (2) OF PUB.L. 87-793, IT SHOULD HAVE BEEN CONVERTED TO $1,888.

THEREFORE, THE VOUCHER IF ADJUSTED TO ACCORD WITH THE FOREGOING AND IF OTHERWISE CORRECT, PROPERLY MAY BE CERTIFIED FOR PAYMENT. HOWEVER, AS ABOVE INDICATED, ON THE FACTS PRESENTED AND IN VIEW OF 39 U.S.C. 3560 (C), WE ARE UNABLE TO CONCLUDE THAT THE CONTINUED PAYMENT TO MR. CARSON OF THE RATE OF $2,534 PER ANNUM, AFTER JULY 7, 1962, WAS INDUCED BY THE REGULATION THEN IN EFFECT. IT FOLLOWS THAT THE OVERPAYMENT MUST BE SET OFF FROM THE SUM OTHERWISE ALLOWABLE ON THE VOUCHER.

YOU FURTHER SAY IN YOUR LETTER:

"ALTHOUGH THE ATTACHED VOUCHER DOES NOT PROVIDE FOR AN ADDITIONAL ALLOWANCE FOR RENT, LIGHT AND FUEL (39 U.S.C. 3544 (H) (, OUR ATTENTION HAS BEEN CALLED TO SEC. 711 (C) OF PUBLIC LAW 87-793 WHICH STATES THAT IF A POSTMASTER'S BASIC COMPENSATION IS GREATER THAN THE RATE HE WOULD RECEIVE BY CONVERSION TO THE SAME NUMERICAL STEP, HE SHALL BE PLACED IN THE FIRST STEP OF THE SCHEDULE WHICH EXCEEDS HIS EXISTING BASIC COMPENSATION AND THAT IF HIS BASIC COMPENSATION IS GREATER THAN AN NUMERICAL STEP, HIS EXISTING BASIC COMPENSATION SHALL BE ESTABLISHED AS HIS BASIC COMPENSATION.

"MR. CARSON'S NUMERICAL STEP PRIOR TO OCTOBER 13, 1962, (EXCLUSIVE OF SALARY PROTECTION) WAS STEP-7, $1482 PER ANNUM WHICH CONVERTED TO STEP-7, $1630 PER ANNUM ON OCTOBER 13, 1962. SINCE HIS BASIC COMPENSATION (INCLUDING SALARY PROTECTION) $2534 AND HIS ALLOWANCE WAS COMPUTED AT STEP -7, $1630, THE RATE HE WOULD HAVE RECEIVED EXCEPT FOR SALARY PROTECTION (39 U.S.C. 3560 (E) (2) ).

"THE POSTMASTERS FEEL THAT SINCE ANOTHER POSTMASTER'S SALARY WHICH WAS SAVED AT $1794 PER ANNUM WAS CONVERTED UNDER SEC. 711 (C) TO $1806 PER ANNUM (STEP-11) ON OCTOBER 13, 1962, AND HIS ALLOWANCE COMPUTED AT THAT RATE, THAT MR. CARSON'S ALLOWANCE SHOULD HAVE BEEN BASED ON $1850 PER ANNUM (STEP-12), THE TOP STEP, NOT ON $1630 (STEP-7).'

IN VIEW OF 39 U.S.C. 3560 (E) (2), THAT THE "BASIC COMPENSATION" FOR USE IN DETERMINING THE ALLOWANCES FOR RENT, FUEL, LIGHT AND EQUIPMENT AUTHORIZED BY 39 U.S.C. 3544 (H), SHALL BE THE BASIC COMPENSATION THE POSTMASTER WOULD HAVE RECEIVED EXCEPT FOR SECTION 3560, NO ADDITIONAL ALLOWANCES WOULD BE DUE THE CLAIMANT BECAUSE OF HIS HIGHER PROTECTED SALARY RATES.