B-32036, FEBRUARY 8, 1943, 22 COMP. GEN. 769

B-32036: Feb 8, 1943

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OVERTIME OR ADDITIONAL COMPENSATION AN INCREASE IN COMPENSATION RECEIVED BY AN EMPLOYEE AS A RESULT OF THE APPLICATION OF SALARY DIFFERENTIALS FOR POSITIONS OUTSIDE THE UNITED STATES WHICH ARE COMPENSATED UNDER THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923. IS NOT AN "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF SECTION 2 OF THE UNIFORM WITHIN GRADE SALARY- ADVANCEMENT STATUTE OF AUGUST 1. THE DIFFERENTIAL IS A PART OF AN EMPLOYEE'S BASE COMPENSATION UPON WHICH RETIREMENT DEDUCTIONS ARE REQUIRED TO BE MADE. 1943: I HAVE YOUR LETTER OF JANUARY 25. AS FOLLOWS: REFERENCE IS MADE TO THE U.S. SUPPLEMENT NO. 2 (COPY ATTACHED) OUTLINING THE PROPOSED POLICY AGREEMENT ON ESTABLISHING UNIFORM SALARY DIFFERENTIALS FOR POSITIONS OUTSIDE THE UNITED STATES AND THE DISTRICT OF COLUMBIA WHICH ARE COMPENSATED UNDER THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923.

B-32036, FEBRUARY 8, 1943, 22 COMP. GEN. 769

COMPENSATION - INCREASE AS RESULT OF DIFFERENTIALS - EFFECT UPON WITHIN GRADE PROMOTIONS, RETIREMENT DEDUCTIONS, AND OVERTIME OR ADDITIONAL COMPENSATION AN INCREASE IN COMPENSATION RECEIVED BY AN EMPLOYEE AS A RESULT OF THE APPLICATION OF SALARY DIFFERENTIALS FOR POSITIONS OUTSIDE THE UNITED STATES WHICH ARE COMPENSATED UNDER THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, IS NOT AN "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF SECTION 2 OF THE UNIFORM WITHIN GRADE SALARY- ADVANCEMENT STATUTE OF AUGUST 1, 1941, AND DOES NOT AFFECT THE INCUMBENT'S ELIGIBILITY TO A WITHIN-GRADE SALARY ADVANCEMENT UNDER THE LATTER ACT, BUT THE DIFFERENTIAL IS A PART OF AN EMPLOYEE'S BASE COMPENSATION UPON WHICH RETIREMENT DEDUCTIONS ARE REQUIRED TO BE MADE, AND UPON WHICH THE INCREASE IN COMPENSATION AND THE SALARY LIMITATIONS OF THE OVERTIME AND ADDITIONAL COMPENSATION ACT OF DECEMBER 22, 1942, SHOULD BE COMPUTED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, FEBRUARY 8, 1943:

I HAVE YOUR LETTER OF JANUARY 25, 1943, AS FOLLOWS:

REFERENCE IS MADE TO THE U.S. CIVIL SERVICE COMMISSION'S DEPARTMENTAL CIRCULAR NO. 394, SUPPLEMENT NO. 2 (COPY ATTACHED) OUTLINING THE PROPOSED POLICY AGREEMENT ON ESTABLISHING UNIFORM SALARY DIFFERENTIALS FOR POSITIONS OUTSIDE THE UNITED STATES AND THE DISTRICT OF COLUMBIA WHICH ARE COMPENSATED UNDER THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923, AS AMENDED. WE ARE IN ACCORD WITH THIS AGREEMENT AND ARE PREPARING THE NECESSARY INSTRUCTIONS TO PUT IT INTO EFFECT. HOWEVER, IN THE MATTER OF COMPUTING AUTOMATIC INCREASES, THE QUESTION IS RAISED AS TO WHETHER AN INCREASE IN THE AMOUNT OF PAY NOW BEING RECEIVED BY AN EMPLOYEE AS THE RESULT OF THE APPLICATION OF SUCH DIFFERENTIAL WOULD BE CONSIDERED AS AN "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF SECTION 7 (B) (1) OF THE CLASSIFICATION ACT, AS AMENDED BY SECTION 2 OF THE ACT OF AUGUST 1, 1941.

IN YOUR LETTER OF JANUARY 2 TO THE ARCHITECT OF THE CAPITOL, B 31316, YOU SAY,"THE ACT OF AUGUST 1, 1941, OPERATES UPON THE BASE PAY ( ITALICS SUPPLIED), WHEREAS THE OVERTIME OR ADDITIONAL COMPENSATION AUTHORIZED OR REQUIRED TO BE PAID BY PUBLIC LAW 821 IS IN ADDITION TO BASE PAY.' IN THE LIGHT OF THIS STATEMENT IT WOULD APPEAR THAT THE DIFFERENTIAL SHOULD NOT BE CONSIDERED AS AN INCREASE IN COMPENSATION IN COMPUTING AUTOMATIC INCREASES FOR EMPLOYEES INVOLVED, AND YOUR ADVICE AS TO WHETHER THIS ASSUMPTION IS CORRECT WOULD BE APPRECIATED.

A QUESTION SIMILAR TO THE ONE PRESENTED BY YOU HERE WAS CONSIDERED AND ANSWERED IN DECISION OF APRIL 25, 1942, 21 COMP. GEN. 947, HOLDING AS FOLLOWS (QUOTING FROM THE LAST PARAGRAPH OF THE SYLLABUS):

PAYMENT OF THE SALARY DIFFERENTIAL TO AN INCUMBENT OF A POSITION COVERED BY EXECUTIVE ORDER NO. 8955, EXTENDING THE CLASSIFICATION ACT TO, AND FIXING SUCH DIFFERENTIAL FOR, POSITIONS IN THE WAR AND NAVY DEPARTMENTS IN CERTAIN AREAS OUTSIDE THE UNITED STATES, IS NOT AN "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF SECTION 2 OF THE UNIFORM WITHIN-GRADE SALARY ADVANCEMENT STATUTE OF AUGUST 1, 1941, AND DOES NOT AFFECT THE INCUMBENT'S ELIGIBILITY TO A WITHIN GRADE SALARY ADVANCEMENT UNDER THAT ACT.

HOWEVER, NOTWITHSTANDING THE RULE STATED IN THAT DECISION, THE 25 PERCENT DIFFERENTIAL CONSTITUTES A PART OF BASE COMPENSATION OF AN EMPLOYEE FROM WHICH RETIREMENT DEDUCTIONS ARE REQUIRED TO BE MADE (10 COMP. GEN. 519, 521), AND ON THE BASIS OF WHICH THE INCREASE IN COMPENSATION AND THE SALARY LIMITATIONS PURSUANT TO THE JOINT RESOLUTION OF DECEMBER 22, 1942, 56 STAT. 1068, PUBLIC LAW 821, SHOULD BE COMPUTED (LETTER DATED DECEMBER 24, 1942, B-31212, TO THE SECRETARY OF WAR).