B-31789, JANUARY 21, 1943, 22 COMP. GEN. 683

B-31789, JANUARY 21, 1943, 22 COMP. GEN. 683

OVERTIME COMPENSATION UNDER THE ACT OF DECEMBER 22, 1942 - EFFECT OF LEAVE WITHOUT PAY IN ACCORDANCE WITH EXECUTIVE ORDER NO. 9289 PROVIDING FOR COMPUTATION ON AN ANNUAL BASIS OF THE OVERTIME COMPENSATION OF PER ANNUM EMPLOYEES PAYABLE UNDER THE ACT OF DECEMBER 22, 1942, FOR EMPLOYMENT IN EXCESS OF 40 HOURS PER WEEK, THE GROSS PER ANNUM SALARY, INCLUDING BASIC AND OVERTIME COMPENSATION, SHOULD BE PRORATED FOR EACH DAY A FULL TIME EMPLOYEE IS IN A PAY STATUS DURING A PAY PERIOD, AND, THEREFORE, AN EMPLOYEE WHO IS IN A LEAVE-WITHOUT-PAY STATUS FOR ONE 8 HOUR WORKDAY DURING HIS REGULARLY ESTABLISHED 48-HOUR WORKWEEK IS ENTITLED TO 1/360 OF THE GROSS PER ANNUM COMPENSATION FOR EACH DAY IN A PAY STATUS DURING THE PAY PERIOD, AND THERE SHOULD BE WITHHELD ONLY 1/360 OF SUCH GROSS COMPENSATION FOR THE DAY IN A NONPAY STATUS.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF LABOR, JANUARY 21, 1943:

I HAVE YOUR LETTER OF JANUARY 15, 1943, AS FOLLOWS:

YOUR ASSISTANCE IS REQUESTED IN THE DETERMINATION OF THE PROPER BASIS, UNDER SENATE JOINT RESOLUTION 170, 77TH CONGRESS, AND EXECUTIVE ORDER 9289, FOR DEDUCTIONS FROM PAY FOR ABSENCE ON APPROVED LEAVE WITHOUT PAY.

A MINIMUM WORK SCHEDULE OF A 6-DAY, 48-HOUR WEEK HAS BEEN ESTABLISHED FOR THE DEPARTMENT. ONE OF THE EMPLOYEES OF THIS DEPARTMENT, A JUNIOR CARD PUNCH OPERATOR, CAF-2, $1440 PER ANNUM, WHOSE STATUS FOR LEAVE PURPOSES IS TEMPORARY, WAS ABSENT ON APPROVED LEAVE WITHOUT PAY ON JANUARY 6, 1943. TWO DIFFERENT METHODS OF COMPUTING THE SALARY PAYMENT, BASED ON ESSENTIALLY DIFFERENT CONCEPTS OF THE BASIC PRINCIPLES OF THE OVERTIME PAY LEGISLATION HAVE BEEN PROPOSED.

(1) DEDUCT 1/360 OF THE ANNUAL GROSS SALARY FOR EACH DAY OF ABSENCE ON LEAVE WITHOUT PAY. UNDER THIS METHOD, FOR WORKING 5 DAYS, 40 HOURS, THE EMPLOYEE WOULD BE PAID AT THE RATE OF $4.86666 PER DAY ( 1/360 OF $1440 PLUS 1/360 OF $312) FOR 6 DAYS. HIS PAY WOULD BE ONLY $4.87 LESS THAN THAT OF AN EMPLOYEE WHO WORKED 6 DAYS, OR 48 HOURS. ALTHOUGH HE HAD NOT WORKED IN EXCESS OF 40 HOURS DURING THAT WORK WEEK, THE EMPLOYEE WOULD NEVERTHELESS RECEIVE $5.20 OF OVERTIME PAY.

IF THE RESOLUTION IS TO BE REGARDED PRIMARILY AS A PAY-INCREASE MEASURE IN WHICH THE OVERTIME RATES SERVE MERELY AS A DEVICE FOR COMPUTING INCREASED ANNUAL COMPENSATION, THEN IT WOULD SEEM THAT THE FACT THAT OVERTIME COMPENSATION IS PAID WHEN NO OVERTIME IS WORKED, IS IMMATERIAL.

(2) PAY OVERTIME ONLY WHEN THE ACTUAL NUMBER OF HOURS WORKED DURING THE WORK-WEEK EXCEEDS 40. UNDER THIS METHOD, THE EMPLOYEE WOULD BE PAID AT THE RATE OF $4.00 PER DAY (1/360 OF $1440) FOR 6 DAYS. NOT HAVING WORKED IN EXCESS OF 40 HOURS DURING THAT WORK-WEEK, THE EMPLOYEE WOULD NOT QUALIFY FOR OVERTIME PAY FOR THAT WEEK. HIS PAY WOULD BE $10.07 LESS THAN THAT OF AN EMPLOYEE WHO WORKED 6 DAYS, OR 48 HOURS.

THIS METHOD APPEARS TO CARRY OUT THE INTENT OF THE RESOLUTION, IF THE RESOLUTION, IN EXTENDING AN ACT "AUTHORIZING OVERTIME RATES OF COMPENSATION * * * ," IS TO BE REGARDED AS PRIMARILY INTENDED TO RECOGNIZE AND COMPENSATE FOR EXTRA SERVICE RENDERED BY GOVERNMENT EMPLOYEES IN WARTIME.

ILLUSTRATIONS OF OTHER POSSIBLE RESULTS FROM APPLICATION OF THESE PROPOSED METHODS OF COMPUTATION TO VARIOUS CIRCUMSTANCES OF HOURS AND ABSENCES ARE ATTACHED. THEY DEVELOP VERY CLEARLY THE SIGNIFICANCE INVOLVED IN THE CHOICE OF METHODS AND THE IMPORTANCE BOTH TO THE GOVERNMENT AND TO THE INDIVIDUAL EMPLOYEE OF ESTABLISHING BASIC PRINCIPLES WHICH WILL CARRY OUT THE INTENT OF THE CONGRESS IN PASSING THE OVERTIME LEGISLATION. YOUR CONSIDERATION OF THESE PROBLEMS AND DECISION THEREON WILL BE APPRECIATED.

SECTIONS 3 AND 4 OF EXECUTIVE ORDER NO. 9289, DATED DECEMBER 26, 1942, PROVIDE AS FOLLOWS:

SECTION 3. OVERTIME COMPENSATION OF PER-ANNUM EMPLOYEES FOR EMPLOYMENT DURING AN OFFICIALLY ESTABLISHED REGULAR WORKWEEK IN EXCESS OF 40 HOURS MAY BE CALCULATED ON AN ANNUAL BASIS AND PAID IN EQUAL AMOUNTS ON THE REGULAR MONTHLY OR SEMI-MONTHLY PAY DAYS.

SECTION 4. IN THE CASE OF AN EMPLOYEE TO WHOM THE ANNUAL - AND SICK LEAVE LAWS APPROVED MARCH 14, 1936, 49 STAT. 1161, 1162, AS AMENDED ARE APPLICABLE, APPROVED ABSENCE, EXCEPT ON LEAVE WITHOUT PAY, DURING ANY PART OF THE OFFICIALLY ESTABLISHED REGULAR WORKWEEK SHALL BE CHARGED AS ANNUAL OR SICK LEAVE AS THE CASE MAY BE, AND ANY ABSENCE ON APPROVED ANNUAL OR SICK LEAVE SHALL NOT BE CONSTRUED TO REDUCE THE AMOUNT OF OVERTIME COMPENSATION TO WHICH THE EMPLOYEE IS ENTITLED FOR EMPLOYMENT DURING THE OFFICIALLY ESTABLISHED REGULAR WORKWEEK.

SECTION 3 OF THE EXECUTIVE ORDER EVIDENTLY CONTEMPLATES CALCULATION OF THE OVERTIME COMPENSATION UPON AN ANNUAL BASIS COMPUTED IN ACCORDANCE WITH THE OVERTIME FORMULA AUTHORIZED BY PUBLIC LAW 821, APPROVED DECEMBER 22, 1942, 56 STAT. 1068, FOR ALL PURPOSES, INCLUDING THE PRORATING OF THE GROSS PER ANNUM SALARY, INCLUDING BASIC AND OVERTIME COMPENSATION, FOR EACH DAY A FULL TIME EMPLOYEE IS IN A PAY STATUS DURING A PAY PERIOD. SECTION 4 OF THE EXECUTIVE ORDER, AUTHORIZING THE INCLUSION OF ANNUAL AND SICK LEAVE OF ABSENCE WITH PAY AS A PART OF AN OFFICIALLY ESTABLISHED WORKWEEK IS NOT INCONSISTENT WITH SECTION 3 OF SAID ORDER AND DOES NOT IMPEL A CONCLUSION THAT, WHEN A FULL TIME EMPLOYEE IS ON LEAVE OF ABSENCE WITHOUT PAY DURING A WEEK, THE PRORATING RULE AUTHORIZED IN SECTION 3 MAY NOT BE APPLIED IN CALCULATING ON AN ANNUAL BASIS THE AMOUNT OF GROSS COMPENSATION DUE THE EMPLOYEE FOR THAT PORTION OF EACH WEEK IN A PAY STATUS.

WHILE AN OVERTIME FORMULA IS STATED IN THE EARLIER STATUTES CERTAIN PROVISIONS OF WHICH HAVE BEEN EXTENDED BY PUBLIC LAW 821, APPROVED DECEMBER 22, 1942, THE PROPER CONCEPT OF THE LAW BASED UPON ALL OF ITS PROVISIONS, INCLUDING BOTH THE OVERTIME FORMULA FOR INCREASED HOURS OF DUTY AS WELL AS THE AUTHORITY FOR PAYMENT OF ADDITIONAL COMPENSATION ON A 10 PERCENT BASIS FOR EMPLOYEES WHO ARE NOT REQUIRED TO WORK ADDITIONAL TIME, AND ITS LEGISLATIVE HISTORY, IS THAT AN INCREASE IN COMPENSATION IS AUTHORIZED FOR EMPLOYEES COMING WITHIN THE PURVIEW OF THE LAW BECAUSE OF THE WAR EMERGENCY AND THE INCREASED COST OF LIVING. GENERAL REGULATIONS NO. 54, SUPPLEMENT 14, OF THIS OFFICE, DATED DECEMBER 29, 1942, 22 COMP. GEN.---, AND THE ACCOMPANYING SALARY TABLES, WERE ISSUED ON THE BASIS OF THE ABOVE-STATED CONCEPT.

ACCORDINGLY, IN THE CASE MENTIONED IN YOUR LETTER THE EMPLOYEE IS ENTITLED TO 1/360 OF THE GROSS COMPENSATION INCLUDING BASIC AND OVERTIME COMPENSATION FOR EACH DAY IN A PAY STATUS DURING THE PAY ROLL PERIOD AND THERE SHOULD BE WITHHELD ONLY 1/360 OF THE GROSS COMPENSATION, INCLUDING BASIC AND OVERTIME FOR JANUARY 6, 1943, ON WHICH DAY THE EMPLOYEE WAS IN A NON-PAY STATUS (LEAVE WITHOUT PAY). THUS, THE METHOD OF COMPUTATION DESIGNATED BY YOU AS (1) IS CORRECT.