B-157753, FEBRUARY 13, 1967, 46 COMP. GEN. 664

B-157753, FEBRUARY 13, 1967, 46 COMP. GEN. 664

COMPENSATION - SEVERANCE PAY - COMPUTATION - GENERAL SCHEDULE EMPLOYEES FULL-TIME GENERAL SCHEDULE EMPLOYEES WHO INVOLUNTARILY SEPARATED FROM THE GOVERNMENT SERVICE AND ELIGIBLE TO RECEIVE THE TOTAL SEVERANCE PAY "NOT TO EXCEED 1 YEAR'S PAY AT THE RATE RECEIVED BEFORE SEPARATION," PAYABLE IN "REGULAR PAY PERIODS" THAT IS PRESCRIBED BY SECTIONS 9 (C) AND (D) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1965, ARE ENTITLED TO "TOTAL SEVERANCE PAY," COMPUTED BY THE METHOD PROVIDED IN 5 U.S.C. 5504 (B), IN AN AMOUNT EQUAL TO THE PAY OF 26 BIWEEKLY PAY PERIODS OF 80 HOURS EACH. COMPENSATION - SEVERANCE PAY - COMPUTATION - OTHER THAN GENERAL SCHEDULE EMPLOYEES THE "ONE YEAR'S PAY" PRESCRIBED IN SECTION 9 (D) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1965 AS THE TOTAL SEVERANCE PAY ENTITLEMENT OF EMPLOYEES INVOLUNTARILY SEPARATED FROM THE GOVERNMENT MAY BE CONSTRUED IN THE CASE OF FULL-TIME EMPLOYEES, OTHER THAN THE EMPLOYEES PAID UNDER THE GENERAL SCHEDULE, SUCH AS WAGE BOARD AND POSTAL SERVICE EMPLOYEES AS BASIC PAY FOR 26 BIWEEKLY PAY PERIODS. COMPENSATION - SEVERANCE PAY - COMPUTATION - PART-TIME EMPLOYEES THE MAXIMUM SEVERANCE PAY ENTITLEMENT OF PART-TIME EMPLOYEES UNDER THE FEDERAL EMPLOYEES SALARY ACT OF 1965, UPON INVOLUNTARY SEPARATION FROM THE GOVERNMENT SERVICE IS ARRIVED AT MY MULTIPLYING THEIR BASIC WEEKLY COMPENSATION (HOURLY RATE TIMES REGULAR HOURS OF SERVICE) TIMES 52 WEEKS. COMPENSATION - SEVERANCE PAY - COMPUTATION - POSTAL SUBSTITUTE EMPLOYEES A VALID METHOD FOR DERIVING 1 WEEK'S BASIC COMPENSATION FOR POSTAL SUBSTITUTE EMPLOYEES INVOLUNTARILY SEPARATED FROM THE SERVICE OF THE GOVERNMENT AND ENTITLED TO THE SEVERANCE PAY PRESCRIBED BY THE FEDERAL EMPLOYEES SALARY ACT OF 1965, IS TO TOTAL THE HOURS WORKED IN THE PRECEDING 26 BIWEEKLY PAY PERIODS NOT IN EXCESS OF 80, DIVIDING BY 52 AND MULTIPLYING BY THE TOTAL HOURLY RATE, AND ARRIVING AT THE TOTAL SEVERANCE PAY ENTITLEMENT OF THE SUBSTITUTE EMPLOYEES BY MULTIPLYING THEIR BASIC WEEKLY COMPENSATION BY 52 WEEKS. COMPENSATION - SEVERANCE PAY - COMPUTATION - SECOND SEPARATION WHEN AN EMPLOYEE WHO WAS INVOLUNTARILY SEPARATED FROM THE GOVERNMENT SERVICE IS REEMPLOYED WHILE RECEIVING THE SEVERANCE PAY PRESCRIBED BY THE FEDERAL EMPLOYEES SALARY ACT OF 1965, AND THEREAFTER AGAIN IS SEPARATED UNDER CONDITIONS ENTITLING HIM TO SEVERANCE PAY, HE MAY BE CREDITED A SECOND TIME WITH 52 WEEKS, BUT NO ADDITIONAL DAYS, LESS THE NUMBER OF WEEKS AND DAYS FOR WHICH HE PREVIOUSLY HAD RECEIVED SEVERANCE PAY.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, FEBRUARY 13, 1967:

THIS IS IN REPLY TO YOUR LETTER OF DECEMBER 30, 1966, REQUESTING OUR DECISION CONSTRUING THE LIMITATION ON TOTAL SEVERANCE PAY CONTAINED IN THE LAST SENTENCE OF SECTION 9 (D) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1965, PUBLIC LAW 89-301, 79 STAT. 1119.

SECTIONS (C) AND (D), 5 U.S.C. 5595 (C) AND (D), PROVIDE AS FOLLOWS:

(C) AN OFFICER OR EMPLOYEE TO WHOM THIS SECTION APPLIES WHO IS INVOLUNTARILY SEPARATED FROM THE SERVICE, ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION, NOT BY REMOVAL FOR CAUSE ON CHARGES OF MISCONDUCT, DELINQUENCY, OR INEFFICIENCY, SHALL, UNDER RULES AND REGULATIONS PRESCRIBED BY THE PRESIDENT OR SUCH OFFICER OR AGENCY AS HE MAY DESIGNATE, BE PAID SEVERANCE PAY IN REGULAR PAY PERIODS BY THE DEPARTMENT, INDEPENDENT ESTABLISHMENT, CORPORATION, OR OTHER GOVERNMENTAL UNIT, FROM WHICH SEPARATED.

(D) SEVERANCE PAY SHALL CONSIST OF TWO ELEMENTS, A BASIC SEVERANCE ALLOWANCE AND AN AGE ADJUSTMENT ALLOWANCE. THE BASIC SEVERANCE ALLOWANCE SHALL BE COMPUTED ON THE BASIS OF ONE WEEK'S BASIC COMPENSATION AT THE RATE RECEIVED IMMEDIATELY BEFORE SEPARATION FOR EACH YEAR OF CIVILIAN SERVICE UP TO AND INCLUDING TEN YEARS FOR WHICH SEVERANCE PAY HAS NOT BEEN RECEIVED UNDER THIS OR ANY OTHER AUTHORITY AND TWO WEEKS' BASIC COMPENSATION AT SUCH RATE FOR EACH YEAR OF CIVILIAN SERVICE BEYOND TEN YEARS FOR WHICH SEVERANCE PAY HAS NOT BEEN RECEIVED UNDER THIS OR ANY OTHER AUTHORITY. THE AGE ADJUSTMENT ALLOWANCE SHALL BE COMPUTED ON THE BASIS OF 10 PERCENTUM OF THE TOTAL BASIC SEVERANCE ALLOWANCE FOR EACH YEAR BY WHICH THE AGE OF THE RECIPIENT EXCEEDS FORTY YEARS AT THE TIME OF SEPARATION. TOTAL SEVERANCE PAY RECEIVED UNDER THIS SECTION SHALL NOT EXCEED ONE YEAR'S PAY AT THE RATE RECEIVED IMMEDIATELY BEFORE SEPARATION.

AN EXPLANATION AS TO HOW THE SEVERANCE PAY AUTHORIZED UNDER SECTIONS 9 (C) AND (D) OF PUBLIC LAW 89-301 SHOULD BE COMPUTED IS SET FORTH ON PAGE 9 OF S.REPT. NO. 910, OCTOBER 18, 1966, ON H.R. 10281, AS FOLLOWS:

THE MAXIMUM PAYMENT SHALL NOT EXCEED THE ANNUAL RATE OF BASIC COMPENSATION RECEIVED BY THE EMPLOYEE IMMEDIATELY PRIOR TO HIS SEPARATION.

FOR EXAMPLE: JOE JONES IS 48 YEARS OLD AND HAS BEEN EMPLOYED BY THE GOVERNMENT FOR 20 YEARS. HE IS NOT ELIGIBLE FOR AN IMMEDIATE ANNUITY (20 YEARS' SERVICE AT AGE 50). HE IS UNVOLUNTARILY SEPARATED.

JONES IS ELIGIBLE FOR SEVERANCE PAY. THE AMOUNT IS DETERMINED BY MULTIPLYING HIS WEEKLY SALARY BY 10 (HIS FIRST 10 YEARS) AND TWICE HIS WEEKLY SALARY BY 10 (HIS SECOND 10 YEARS). IF HIS WEEKLY SALARY (ANNUAL RATE DIVIDED BY 2,080 HOURS MULTIPLIED BY 40 HOURS) IS $100, HIS BASIC SEVERANCE PAY WOULD BE $3,000, TO WHICH WOULD BE ADDED $2,400, REPRESENTING THE AGE ADJUSTMENT (10 PERCENT OF BASIC SEVERANCE PAY FOR EACH YEAR OVER 40--- JONES IS 8 YEARS OVER 40). HIS TOTAL PAY WOULD BE $5,400. IF HIS ANNUAL RATE WAS ONLY $5,200 (52 WEEKS TIMES $100), THE MAXIMUM AMOUNT PAYABLE WOULD BE $5,200.

IF THE SEPARATED EMPLOYEE IS REEMPLOYED BY THE GOVERNMENT WHILE RECEIVNG SEVERANCE PAY, THE PAYMENT STOPS UPON THE DATE OF REEMPLOYMENT AND ANY UNEXPIRED PERIOD OF SERVICE REMAINING SHALL BE CREDITED TO HIS "ACCOUNT" IN EVENT OF SUBSEQUENT SEPARATION.

IN 5 U.S.C. 5504 (B) CONGRESS HAS PRESCRIBED THE METHOD BY WHICH PAY FOR EMPLOYEES SUBJECT TO THAT SECTION SHALL BE COMPUTED. THE SECTION IS IN PART AS FOLLOWS:

(B) FOR PAY COMPUTATION PURPOSES AFFECTING AN EMPLOYEE, THE ANNUAL RATE OF BASIC PAY ESTABLISHED BY OR UNDER STATUTE IS DEEMED PAYMENT FOR EMPLOYMENT DURING 52 BASIC ADMINISTRATIVE WORKWEEKS OF 40 HOURS. WHEN IT IS NECESSARY FOR COMPUTATION OF PAY UNDER THIS SUBSECTION TO CONVERT AN ANNUAL RATE OF BASIC PAY TO A BASIC HOURLY, DAILY, WEEKLY, OR BIWEEKLY RATE, THE FOLLOWING RULES GOVERN:

(1) TO DERIVE AN HOURLY RATE, DIVIDE THE ANNUAL RATE BY 2,080.

(2) TO DERIVE A DAILY RATE, MULTIPLY THE HOURLY RATE BY THE NUMBER OF DAILY HOURS OF SERVICE REQUIRED.

(3) TO DERIVE A WEEKLY OR BIWEEKLY RATE, MULTIPLY THE HOURLY RATE BY 40 OR 80, AS THE CASE MAY BE. RATES ARE COMPUTED TO THE NEAREST CENT, COUNTING ONE-HALF AND OVER AS A WHOLE CENT. * * *

THE TERMS "TOTAL SEVERANCE PAY" AND "ONE YEAR'S PAY" AS USED IN THE LAST SENTENCE OF SECTION 9 (D), ABOVE, MUST BE READ IN CONNECTION WITH TTHE SUCCEEDING WORDS "AT THE RATE RECEIVED IMMEDIATELY BEFORE SEPARATION.' CONSIDERED IN ITS ENTIRETY AND IN THE LIGHT OF THE LEGISLATIVE HISTORY QUOTED ABOVE, THE SENTENCE IS VIEWED MERELY AS PLACING MAXIMUM LIMITATION UPON THE AMOUNT OF SEVERANCE PAY AUTHORIZED UNDER THE SECTION, SPECIFICALLY IT LIMITS SEVERANCE PAY TO AN AMOUNT EQUAL TO 1 YEAR'S PAY AT THE RATE RECEIVED IMMEDIATELY PRIOR TO SEPARATION. WE ARE OF THE OPINION THAT THE MAXIMUM SEVERANCE PAY WOULD BE THE SAME IRRESPECTIVE OF THE ACTUAL NUMBER OF DAYS IN ANY SERVICE YEAR. OUR DECISION OF OCTOBER 20, 1966, 46 COMP. GEN. 346, CITED IN YOUR LETTER IS NOT CONTROLLING HERE.

THE METHOD PRESCRIBED IN 5 U.S.C. 5504 (B) WAS RECOGNIZED IN THE LEGISLATIVE HISTORY IN THE EXAMPLE, ABOVE, AS THE ONE THAT WOULD BE USED IN COMPUTING BASIC SEVERANCE PAY. MOREOVER, SECTION 9 (C), ABOVE, SPECIFICALLY PROVIDES FOR THE PAYMENT OF SEVERANCE PAY IN REGULAR PAY PERIODS. UNDER SUCH SYSTEM THE MAXIMUM SEVERANCE PAY ALLOWABLE NECESSARILY WOULD BE PAID IN 26 BIWEEKLY INSTALLMENTS. NEITHER IN PUBLIC LAW 89-301 NOR IN ITS LEGISLATIVE HISTORY DO WE FIND ANY CLEAR EXPRESSION OF INTENT AS TO WHETHER THE LIMITATION--- AS IT APPLIES TO EMPLOYEES SUBJECT TO THE GENERAL SCHEDULE--- IS THE APPLICABLE ANNUAL RATE SPECIFIED IN THE GENERAL SCHEDULE OR THE PAY AN EMPLOYEE, SUBJECT TO SUCH RATE, ACTUALLY WOULD RECEIVE FOR 26 BIWEEKLY PAY PERIODS. IN THE ABSENCE OF A CLEAR EXPRESSION OF LEGISLATIVE INTENT AND HAVING REGARD FOR THE PRACTICAL ASPECT OF THE PROBLEM IT IS NOT UNREASONABLE TO CONSTRUE THE LANGUAGE "SHALL NOT EXCEED ONE YEAR'S PAY AT THE RATE RECEIVED IMMEDIATELY BEFORE SEPARATION" AS BEING TANTAMOUNT TO PAY FOR 26 BIWEEKLY PAY PERIODS AT THE RATE RECEIVED IMMEDIATELY BEFORE SEPARATION. WE CONCLUDE, THEREFORE, THAT THE MAXIMUM LIMITATION IS AN AMOUNT EQUAL TO THE PAY OF 26 BIWEEKLY PAY PERIODS OF 80 HOURS EACH FOR FULL-TIME EMPLOYEES PAID UNDER THE GENERAL SCHEDULE.

SIMILARLY WE CONCLUDE THAT IN THE CASE OF OTHER FULL-TIME EMPLOYEES OF THE GOVERNMENT (WAGE BOARD; POSTAL SERVICE, ETC.) TO WHOM SECTIONS 9 (C) AND (D) APPLY,"ONE YEAR'S PAY" REASONABLY MAY BE CONSTRUED AS BASIC PAY FOR 26 BIWEEKLY PAY PERIODS.

INSOFAR AS PART-TIME EMPLOYEES WHO SATISFY THE OTHER REQUIREMENTS FOR SEVERANCE PAY ARE CONCERNED THEIR TOTAL (MAXIMUM) SEVERANCE PAY ENTITLEMENT WOULD BE ARRIVED AT BY MULTIPLYING THEIR BASIC WEEKLY COMPENSATION (HOURLY RATE TIMES REGULAR HOURS OF SERVICE) TIMES 52 WEEKS. WITH RESPECT TO POSTAL SUBSTITUTES THE METHOD DETAILED IN POSTAL BULLETIN NO. 20533 OF MAY 26, 1966, PAGE 5, PARAGRAPH 3 (A) OF TOTALING THE HOURS WORKED IN THE PRECEDING 26 BIWEEKLY PAY PERIODS NOT IN EXCESS OF 80, DIVIDING BY 52 AND MULTIPLYING BY THE HOURLY RATE IS A VALID METHOD FOR DERIVING 1 WEEK'S BASIC COMPENSATION. THE TOTAL (MAXIMUM) SEVERANCE PAY ENTITLEMENT WOULD BE ARRIVED AT BY MULTIPLYING THEIR BASIC WEEKLY COMPENSATION BY 52 WEEKS.

IF AN EMPLOYEE RECEIVING SEVERANCE PAY IS REEMPLOYED AND THEREAFTER AGAIN IS SEPARATED UNDER CONDITIONS ENTITLING HIM TO SEVERANCE PAY, 52 WEEKS--- WITH NO ADDITIONAL DAYS--- WOULD BE CREDITED A SECOND TIME AND THE NUMBER OF WEEKS AND DAYS FOR WHICH HE PREVIOUSLY HAD RECEIVED SEVERANCE PAY WOULD BE DEDUCTED. SEE SECTION 550.704 (C) OF THE COMMISSION'S REGULATIONS APPEARING AS ATTACHMENT TO FPM LETTER NO. 550.13 OF JANUARY 5, 1966.