B-168346, DEC. 30, 1969

B-168346: Dec 30, 1969

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1969 EACH OF WHOM WAS PAID AT INCREASED RATES FOR PERIOD DEC. 29. WAS PAID TERMINAL LEAVE AND SEVERANCE PAY AT RATE IN EFFECT AT TIME OF SEPARATION (BEFORE INCREASE). EMPLOYEES ARE ENTITLED TO HAVE THEIR LUMP SUM LEAVE PAYMENTS AND SEVERANCE PAY BASED ON RATES AS INCREASED BY WAGE ORDER EFFECTIVE DEC. 29. BECAUSE SINCE EMPLOYEES WERE LEGALLY ENTITLED TO COMPENSATION INCREASES EFFECTIVE DEC. 29. OAKS WAS FORWARDED HERE BY SECOND ENDORSEMENT DATED NOVEMBER 5. WERE SEPARATED BY REDUCTION IN FORCE FROM THE NAVAL ELECTRONICS LABORATORY CENTER. OAKS WAS REEMPLOYED ON MAY 18. ROWE WAS REEMPLOYED ON APRIL 14. THEREAFTER AN ORDER WAS ISSUED (WHICH WE HAVE BEEN INFORMALLY ADVISED IS DATED MAY 29.

B-168346, DEC. 30, 1969

COMPENSATION--WAGE BOARD EMPLOYEES--INCREASES--RETROACTIVE--EFFECT ON TERMINAL LEAVE AND SEVERANCE PAY REGARDING APPLICABILITY OF AREA WAGE INCREASE GRANTED MAY 29, 1969, RETROACTIVELY EFFECTIVE TO DEC. 29, 1968 TO TERMINAL LEAVE AND SEVERANCE PAY PAID TWO UNGRADED EMPLOYEES SEPARATED BY REDUCTION-IN FORCE JAN. 29, 1969, AND REEMPLOYED PRIOR TO INCREASE OF MAY 29, 1969 EACH OF WHOM WAS PAID AT INCREASED RATES FOR PERIOD DEC. 29, 1968 TO HIS SEPARATION DATE, AND FROM DATE OF HIS REEMPLOYMENT, BUT WAS PAID TERMINAL LEAVE AND SEVERANCE PAY AT RATE IN EFFECT AT TIME OF SEPARATION (BEFORE INCREASE), EMPLOYEES ARE ENTITLED TO HAVE THEIR LUMP SUM LEAVE PAYMENTS AND SEVERANCE PAY BASED ON RATES AS INCREASED BY WAGE ORDER EFFECTIVE DEC. 29, 1968, BECAUSE SINCE EMPLOYEES WERE LEGALLY ENTITLED TO COMPENSATION INCREASES EFFECTIVE DEC. 29, 1968, SUCH INCREASED RATES MUST BE VIEWED AS THEIR SALARY RATES FOR ALL PURPOSES AT TIME OF SEPARATIONS.

TO LIEUTENANT W. E. KENNEDY, JR; SC, USN:

YOUR LETTER OF OCTOBER 22, 1969, REFERENCE FA/7200:LB, REQUESTING AN ADVANCE DECISION ON THE APPLICABILITY OF RETROACTIVE PAY PROVISIONS TO TERMINAL LEAVE AND SEVERANCE PAY PRIOR TO THE REEMPLOYMENT OF MR. WILLIS E. ROWE AND MR. GERALD C. OAKS WAS FORWARDED HERE BY SECOND ENDORSEMENT DATED NOVEMBER 5, 1969, BY COMMANDER, NAVY ACCOUNTING AND FINANCE CENTER, NAFC-3121.

ACCORDING TO THE PAPERS FORWARDED WITH YOUR REQUEST MR. ROWE AND MR. OAKS UNGRADED EMPLOYEES, WERE SEPARATED BY REDUCTION IN FORCE FROM THE NAVAL ELECTRONICS LABORATORY CENTER, SAN DIEGO, ON JANUARY 29, 1969. MR. OAKS WAS REEMPLOYED ON MAY 18, 1969, AND MR. ROWE WAS REEMPLOYED ON APRIL 14, 1969, AT NAVY ACTIVITIES IN THE SAN DIEGO AREA. THEREAFTER AN ORDER WAS ISSUED (WHICH WE HAVE BEEN INFORMALLY ADVISED IS DATED MAY 29, 1969) GRANTING A WAGE INCREASE AS DIRECTED BY THE COORDINATED FEDERAL WAGE SYSTEM REGULAR WAGE RATE SCHEDULE FOR SAN DIEGO AREA RETROACTIVELY EFFECTIVE TO DECEMBER 29, 1968.

EACH OF THE EMPLOYEES HAS BEEN PAID AT THE INCREASED RATES FOR THE PERIOD DECEMBER 29, 1968, TO HIS SEPARATION DATE ON JANUARY 29, 1969, AND FROM THE DATE OF HIS REEMPLOYMENT. TERMINAL LEAVE AND SEVERANCE PAY WERE PAID AT THE RATE FOR EACH EMPLOYEE IN EFFECT AT THE TIME OF HIS SEPARATION, I.E; BEFORE THE ABOVE-MENTIONED RATE INCREASES.

THE REQUEST FOR ADVANCE DECISION ASKS WHAT EFFECT THE RETROACTIVE PAY INCREASE HAS ON THE TERMINAL LEAVE AND SEVERANCE PAY FOR EACH EMPLOYEE.

5 U.S.C. 5551 WITH REFERENCE TO ACCUMULATED AND ACCRUED LEAVE ON SEPARATION IN PERTINENT PART PROVIDES THAT "LUMP-SUM PAYMENT SHALL EQUAL THE PAY THE EMPLOYEE * * * WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL EXPIRATION OF THE PERIOD OF THE ANNUAL * * * LEAVE * * *."

SINCE IT APPEARS THAT THE EMPLOYEES WERE LEGALLY ENTITLED TO THE COMPENSATION INCREASES EFFECTIVE DECEMBER 29, 1968, SUCH INCREASED RATES MUST BE VIEWED AS THEIR SALARY RATES FOR ALL PURPOSES AT THE TIME OF THEIR SEPARATIONS FROM THE SERVICE.

ACCORDINGLY, THE LUMP-SUM LEAVE PAYMENTS TO MR. ROWE AND MR. OAKS SHOULD HAVE BEEN BASED ON THE RATES AS INCREASED BY THE WAGE ORDER EFFECTIVE DECEMBER 29, 1968.

WITH REFERENCE TO SEVERANCE PAY, 5 U.S.C. 5595 PROVIDES IN PERTINENT PART:

"(C) SEVERANCE PAY CONSISTS OF---

"(1) A BASIC SEVERANCE ALLOWANCE COMPUTED ON THE BASIS OF 1 WEEK'S BASIC PAY AT THE RATE RECEIVED IMMEDIATELY BEFORE SEPARATION FOR EACH YEAR OF CIVILIAN SERVICE UP TO AND INCLUDING 10 YEARS FOR WHICH SEVERANCE PAY HAS NOT BEEN RECEIVED UNDER THIS OR ANY OTHER AUTHORITY AND 2 WEEKS' BASIC PAY AT THAT RATE FOR EACH YEAR OF CIVILIAN SERVICE BEYOND 10 YEARS FOR WHICH SEVERANCE PAY HAS NOT BEEN RECEIVED * * *

"TOTAL SEVERANCE PAY UNDER THIS SECTION MAY NOT EXCEED 1 YEARS' PAY AT THE RATE RECEIVED IMMEDIATELY BEFORE SEPARATION * * *."

SECTION 550.704 OF THE REGULATIONS OF THE CIVIL SERVICE COMMISSION PROVIDES THAT UPON SEPARATION THE DEPARTMENT SHALL PAY THE EMPLOYEE THE SAME BASIC COMPENSATION AT THE SAME PAY INTERVALS. SECTION 550.703 DEFINES BASIC COMPENSATION TO MEAN THE RATE OF COMPENSATION FIXED BY LAW OR ADMINISTRATIVE ACTION FOR THE POSITION HELD BY AN EMPLOYEE AT THE TIME OF SEPARATION BEFORE ANY DEDUCTIONS AND EXCLUSIVE OF ADDITIONAL COMPENSATION OF ANY KIND.

ACCORDINGLY, THE EMPLOYEES WERE ALSO ENTITLED TO SEVERANCE PAY ON THE BASIS OF THEIR RATES OF COMPENSATION AS INCREASED BY THE ORDER OF MAY 29, 1969.