B-17249, MAY 29, 1941, 20 COMP. GEN. 834

B-17249: May 29, 1941

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COMPENSATION - STAGGERED PAYDAYS THERE WOULD APPEAR TO BE NO LEGAL OBJECTION TO PAYING EMPLOYEES WHOSE COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS ON THE 8TH AND 23D DAY OF EACH MONTH. PROVIDED PAYMENT IS NOT MADE IN ADVANCE OF THE RENDITION OF SERVICES. SINCE PRESENT PRACTICE OF PAYING SUCH EMPLOYEES ON THE 15TH AND LAST DAY OF THE MONTH IS A MATTER OF ADMINISTRATIVE POLICY AND NOT GOVERNED BY ANY REQUIREMENT OF LAW. IF IT BE ADMINISTRATIVELY DETERMINED TO PAY EMPLOYEES WHOSE COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS ON THE 8TH DAY OF THE MONTH. 1941: I HAVE YOUR LETTER OF MAY 27. WHERE THE COMPENSATION OF ANY PERSON IN THE SERVICE OF THE UNITED STATES IS ANNUAL OR MONTHLY THE FOLLOWING RULES FOR DIVISION OF TIME AND COMPUTATION OF PAY FOR SERVICES RENDERED ARE HEREBY ESTABLISHED: ANNUAL COMPENSATION SHALL BE DIVIDED INTO TWELVE EQUAL INSTALLMENTS.

B-17249, MAY 29, 1941, 20 COMP. GEN. 834

COMPENSATION - STAGGERED PAYDAYS THERE WOULD APPEAR TO BE NO LEGAL OBJECTION TO PAYING EMPLOYEES WHOSE COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS ON THE 8TH AND 23D DAY OF EACH MONTH, INSTEAD OF ON THE 15TH AND LAST DAY OF THE MONTH, PROVIDED PAYMENT IS NOT MADE IN ADVANCE OF THE RENDITION OF SERVICES, AS PROHIBITED BY SECTION 3648, REVISED STATUTES, SINCE PRESENT PRACTICE OF PAYING SUCH EMPLOYEES ON THE 15TH AND LAST DAY OF THE MONTH IS A MATTER OF ADMINISTRATIVE POLICY AND NOT GOVERNED BY ANY REQUIREMENT OF LAW. IF IT BE ADMINISTRATIVELY DETERMINED TO PAY EMPLOYEES WHOSE COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS ON THE 8TH DAY OF THE MONTH, INSTEAD OF ON THE 15TH DAY UNDER THE PRESENT PRACTICE, SUCH PAYMENT SHOULD COVER SERVICES FROM THE LAST DAY OF THE PRECEDING MONTH THROUGH THE 8TH DAY OF THE MONTH AND BE FOR EIGHT ONE-THIRTIETHS OF A MONTH, SINCE THE ADMINISTRATIVELY PROPOSED PAYMENT OF ONE-FOURTH OF A MONTH'S COMPENSATION ON THAT DAY WOULD RESULT IN INACCURATE ACCOUNTING AND CREATE MANY ADMINISTRATIVE PROBLEMS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE TREASURY, MAY 29, 1941:

I HAVE YOUR LETTER OF MAY 27, 1941, AS FOLLOWS:

I AM TRANSMITTING HEREWITH FOR YOUR INFORMATION A COPY OF A LETTER ADDRESSED TO THE SECRETARY OF THE NAVY IN REPLY TO A REQUEST THAT EMPLOYEES OF THE NAVY DEPARTMENT BE PAID BY CHECK INSTEAD OF CASH. INDICATED IN THIS DEPARTMENT'S LETTER, THE PROPOSED CHANGE FROM A CASH BASIS TO A CHECK BASIS WOULD INCREASE THE DIFFICULTIES ALREADY EXISTING IN WASHINGTON IN CONNECTION WITH THE CASHING OF GOVERNMENT PAY CHECKS TWICE EACH MONTH.

IN ORDER TO AVOID INCREASING THESE DIFFICULTIES, THE TREASURY HAS SUGGESTED FOR THE CONSIDERATION OF THE SECRETARY OF THE NAVY THE FEASIBILITY OF PAYING EMPLOYEES OF THE NAVY DEPARTMENT ON THE 8TH AND 23D DAY OF EACH MONTH INSTEAD OF THE 15TH AND LAST DAY OF THE MONTH. IT HAS BEEN SUGGESTED THAT THE PROCEDURE BE COMMENCED ON JUNE 8TH, AT WHICH TIME THE EMPLOYEES WOULD RECEIVE A PAY CHECK FOR ONE-HALF OF THE AMOUNT WHICH THEY WOULD ORDINARILY RECEIVE ON JUNE 15. THEREAFTER, THEY WOULD RECEIVE A PAY CHECK FOR 1/24TH OF THEIR ANNUAL COMPENSATION ON THE 23D AND 8TH DAY OF EACH MONTH. IF THE 8TH OR 23D OF THE MONTH SHOULD FALL ON SUNDAY OR A HOLIDAY, THE EMPLOYEES WOULD RECEIVE THEIR PAY ON THE SUCCEEDING WORKING DAY.

TITLE 5, U.S. CODE, SECTION 84, PROVIDES THAT THE ANNUAL COMPENSATION SHALL BE DIVIDED INTO TWELVE EQUAL INSTALLMENTS, ONE OF WHICH SHALL BE THE PAY FOR EACH CALENDAR MONTH, AND IN MAKING PAYMENTS FOR A FRACTIONAL PART OF A MONTH ONE-THIRTIETH OF ONE OF SUCH INSTALLMENTS, OR OF A MONTHLY COMPENSATION, SHALL BE THE DAILY RATE OF PAY. HAVING THIS IN MIND, THE PAY CHECK ISSUED ON JUNE 8TH WOULD COVER THE FIRST QUARTER OF THE MONTH OF JUNE. THE PAY CHECK ISSUED ON JUNE 23D WOULD COVER THE SECOND AND THIRD QUARTERS OF THE PAY FOR JUNE, AND THE PAY CHECK ISSUED ON JULY 8TH WOULD COVER THE LAST QUARTER OF THE MONTH OF JUNE (PAYABLE FROM THE 1941 APPROPRIATION), AND THE FIRST QUARTER OF THE MONTH OF JULY (PAYABLE FROM THE 1942 APPROPRIATION). IF A PERSON SHOULD BE APPOINTED ON JUNE 28TH, HE WOULD RECEIVE A PAY CHECK ON JULY 8TH FOR THREE-THIRTIETHS OF HIS SALARY FOR THE MONTH OF JUNE (PAYABLE FROM THE 1941 APPROPRIATION), AND ONE FOURTH OF HIS MONTHLY SALARY FOR JULY (PAYABLE FROM THE 1942 APPROPRIATION). THIS PROCEDURE WOULD APPEAR TO BE IN COMPLIANCE WITH TITLE 5, U.S. CODE, SECTION 84, AND WOULD NOT INVOLVE ANY CHANGE IN EXISTING PAY SCHEDULES.

IT WOULD BE APPRECIATED IF YOU WOULD GIVE THIS DEPARTMENT THE BENEFIT OF YOUR VIEWS WITH RESPECT TO THIS MATTER AT THE EARLIEST POSSIBLE DATE IN ORDER THAT THIS DEPARTMENT MAY DISCUSS IT WITH THE NAVY DEPARTMENT IN CONNECTION WITH ITS LETTER OF MAY 8, 1941.

SECTION 6 OF THE ACT OF JUNE 30, 1906, 34 STAT. 763 (5 U.S.C. 84), PROVIDES:

HEREAFTER, WHERE THE COMPENSATION OF ANY PERSON IN THE SERVICE OF THE UNITED STATES IS ANNUAL OR MONTHLY THE FOLLOWING RULES FOR DIVISION OF TIME AND COMPUTATION OF PAY FOR SERVICES RENDERED ARE HEREBY ESTABLISHED: ANNUAL COMPENSATION SHALL BE DIVIDED INTO TWELVE EQUAL INSTALLMENTS, ONE OF WHICH SHALL BE THE PAY FOR EACH CALENDAR MONTH; AND IN MAKING PAYMENTS FOR A FRACTIONAL PART OF A MONTH ONE THIRTIETH OF ONE OF SUCH INSTALLMENTS, OR OF A MONTHLY COMPENSATION, SHALL BE THE DAILY RATE OF PAY. FOR THE PURPOSE OF COMPUTING SUCH COMPENSATION AND FOR COMPUTING TIME FOR SERVICES RENDERED DURING A FRACTIONAL PART OF A MONTH IN CONNECTION WITH ANNUAL OR MONTHLY COMPENSATION, EACH AND EVERY MONTH SHALL BE HELD TO CONSIST OF THIRTY DAYS, WITHOUT REGARD TO THE ACTUAL NUMBER OF DAYS IN ANY CALENDAR MONTH, THUS EXCLUDING THE THIRTY-FIRST OF ANY CALENDAR MONTH FROM THE COMPUTATION AND TREATING FEBRUARY AS IF IT ACTUALLY HAD THIRTY DAYS. ANY PERSON ENTERING THE SERVICE OF THE UNITED STATES DURING A THIRTY ONE DAY MONTH AND SERVING UNTIL THE END THEREOF SHALL BE ENTITLED TO PAY FOR THAT MONTH FROM THE DATE OF ENTRY TO THE THIRTIETH DAY OF SAID MONTH, BOTH DAYS INCLUSIVE; AND ANY PERSON ENTERING SAID SERVICE DURING THE MONTH OF FEBRUARY AND SERVING UNTIL THE END THEREOF SHALL BE ENTITLED TO ONE MONTH'S PAY, LESS AS MANY THIRTIETHS THEREOF AS THERE WERE DAYS ELAPSED PRIOR TO DATE OF ENTRY: PROVIDED, THAT FOR ONE DAY'S UNAUTHORIZED ABSENCE ON THE THIRTY-FIRST DAY OF ANY CALENDAR MONTH ONE DAY'S PAY SHALL BE FORFEITED.

ALTHOUGH SAID SECTION PRESCRIBES THE BASIS ON WHICH SALARY PAYMENTS TO SUCH EMPLOYEES ARE TO BE COMPUTED, IT DOES NOT PRECLUDE PAYMENTS OF COMPENSATION OFTENER THAN ONCE A MONTH NOR DOES THERE APPEAR TO BE ANY OTHER LAW WHICH PRECLUDES THE PAYMENT OF COMPENSATION TO SUCH EMPLOYEES OFTENER THAN ONCE A MONTH. NEITHER DOES SAID SECTION SPECIFY THE FREQUENCY WITH WHICH PAYMENTS ARE TO BE MADE. THE PRESENT PRACTICE OF PAYING EMPLOYEES WHOSE COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS ON THE 15TH AND LAST DAY OF EACH MONTH IS NOT GOVERNED BY ANY REQUIREMENT OF LAW BUT RATHER IS A MATTER OF ADMINISTRATIVE REGULATION OR POLICY. CONSEQUENTLY, THERE WOULD APPEAR TO BE NO LEGAL OBJECTION TO PAYING SUCH EMPLOYEES ON THE 8TH AND 23D DAY OF EACH MONTH, IN LIEU OF THE 15TH AND LAST DAY, PROVIDED, OF COURSE, THAT PAYMENT MAY NOT BE MADE IN ADVANCE OF THE RENDITION OF SERVICES. SEE SECTION 3648, REVISED STATUTES. ACCORDINGLY, SHOULD IT BE ADMINISTRATIVELY DETERMINED BY THE SECRETARY OF THE NAVY TO PAY THE CIVILIAN EMPLOYEES OF THE NAVY DEPARTMENT ON THE 8TH AND 23D DAY OF EACH MONTH THIS OFFICE WILL INTERPOSE NO OBJECTION THERETO.

THERE IS NOTED, HOWEVER, THE SUGGESTED PROPOSAL THAT IN THE EVENT THE PROCEDURE IS COMMENCED ON JUNE 8, 1941, EMPLOYEES BE PAID AT THAT TIME--- FOR THE PERIOD JUNE 1 THROUGH JUNE 8--- "ONE-HALF OF THE AMOUNT WHICH THEY WOULD ORDINARILY RECEIVE ON JUNE 15," I.E., ONE-FOURTH OF A MONTH'S PAY. THAT PROPOSAL APPEARS OBJECTIONABLE BECAUSE IT WOULD RESULT IN INACCURATE ACCOUNTING AND, NO DOUBT, WOULD CREATE, WITHOUT JUSTIFICATION, MANY ADMINISTRATIVE PROBLEMS. IF IT BE INTENDED TO PAY THE EMPLOYEES ON JUNE 8 FOR SERVICES PERFORMED THROUGH THAT DAY THEN THE EMPLOYEES ARE ENTITLED UNDER THE ACT OF JUNE 30, 1906, SUPRA, TO PAYMENT FOR EIGHT ONE-THIRTIETHS OF A MONTH INSTEAD OF FOR ONE-FOURTH OF A MONTH. THE RESULT OF PAYING ON THE BASIS OF ONE-FOURTH OF A MONTH ON JUNE 8 WOULD BE THAT AN EMPLOYEE WOULD RECEIVE PAY AT THAT TIME FOR BUT 7 1/2 DAYS, AND WHILE THE DEFICIENCY IN PAY ONE-HALF DAY WOULD BE ADJUSTED THE FOLLOWING MONTH BY REASON OF PAYING COMPENSATION FOR ONE FOURTH OF A MONTH FOR THE 7-DAY PERIOD, JUNE 24 THROUGH JUNE 30, 1941, THE JULY 8, 1941, PAYMENT AGAIN WOULD RESULT IN A DEFICIENCY OF ONE HALF DAY. FURTHERMORE, IF A PARTICULAR EMPLOYEE SHOULD BEGIN WORK ON JUNE 24, 1941, IT WOULD BE INCORRECT TO PAY HIM ON JULY 8, 1941, ON THE BASIS OF ONE-FOURTH OF A MONTH FOR THE PERIOD JUNE 24 THROUGH JUNE 30, SINCE FOR THAT PERIOD SUCH EMPLOYEE WOULD BE ENTITLED TO PAY FOR ONLY SEVEN-THIRTIETHS OF A MONTH. ON THE OTHER HAND, IF ON JULY 8 SUCH EMPLOYEE RECEIVED FULL PAY FOR HALF A MONTH ON THE BASIS OF 7 DAYS IN JUNE AND 8 DAYS IN JULY, THEN THAT EMPLOYEE WOULD HAVE RECEIVED FULL COMPENSATION FOR JULY 8, WHEREAS OTHER EMPLOYEES WOULD HAVE RECEIVED BUT ONE-HALF DAY'S PAY FOR WORK PERFORMED ON THAT DATE.

ACCORDINGLY, IF THE PROPOSED PLAN OF STAGGERING PAY DAYS IS PUT INTO EFFECT IN THE NAVY DEPARTMENT, THE PAYMENT TO BE MADE ON JUNE 8, 1941, TO COVER THE PERIOD FROM JUNE 1 TO 8, SHOULD BE FOR EIGHT ONE THIRTIETHS OF THE MONTH AS TO THOSE EMPLOYEES WHO WORK THE ENTIRE PERIOD AND NOT ON THE BASIS OF ONE-FOURTH OF A MONTH. ON THAT BASIS AND AT THAT TIME THE PROCEDURE WILL HAVE BEEN ACCURATELY AND PROPERLY INAUGURATED AND IT IS NOT ANTICIPATED ANY PARTICULAR DIFFICULTY WILL RESULT WITH RESPECT TO SUBSEQUENT PAYMENTS.