B-34940, JULY 16, 1943, 23 COMP. GEN. 30

B-34940: Jul 16, 1943

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

WHICH WAS INTENDED FOR AND HAD THE EFFECT OF A DIFFERENTIAL ALLOWANCE TO MEET THE HIGHER COST OF LIVING AT THE PLACE ASSIGNED AND WHICH WAS TERMINATED UPON THE EMPLOYEE'S SUBSEQUENT TRANSFER TO THE CONTINENTAL UNITED STATES IS NOT AN "EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE" WITHIN THE MEANING OF THE WITHIN-GRADE SALARY -ADVANCEMENT STATUTE OF AUGUST 1. WAS PROMOTED FROM CAF-9. WAS ADMINISTRATIVELY GRANTED A TWO-STEP WITHIN -GRADE PROMOTION. TO "REMAIN IN EFFECT ONLY DURING THE EXISTENCE OF THE CONDITIONS UPON WHICH IT IS BASED. WAS TRANSFERRED TO SAN FRANCISCO. IT IS STATED THE PROMOTION WAS WITHDRAWN. BECAUSE OTHERWISE THERE WOULD HAVE RESULTED A PROMOTION AT AN EARLIER DATE AND FOR A GREATER AMOUNT THAN WHAT WOULD HAVE BEEN AUTHORIZED BY THE SUBSEQUENT ACT OF AUGUST 1.

B-34940, JULY 16, 1943, 23 COMP. GEN. 30

COMPENSATION - AUTOMATIC PROMOTIONS - ELIGIBILITY AS AFFECTED BY ADMINISTRATIVE PROMOTIONS TO MEET HIGHER COST OF LIVING OUTSIDE CONTINENTAL U.S. A TWO-STEP WITHIN-GRADE PROMOTION, ADMINISTRATIVELY GRANTED AN EMPLOYEE STATIONED IN HAWAII, WHICH WAS INTENDED FOR AND HAD THE EFFECT OF A DIFFERENTIAL ALLOWANCE TO MEET THE HIGHER COST OF LIVING AT THE PLACE ASSIGNED AND WHICH WAS TERMINATED UPON THE EMPLOYEE'S SUBSEQUENT TRANSFER TO THE CONTINENTAL UNITED STATES IS NOT AN "EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE" WITHIN THE MEANING OF THE WITHIN-GRADE SALARY -ADVANCEMENT STATUTE OF AUGUST 1, 1941, SUCH AS WOULD AFFECT THE EMPLOYEE'S ELIGIBILITY TO A WITHIN-GRADE SALARY ADVANCEMENT UNDER THE ACT.

ACTING COMPTROLLER GENERAL YATES TO THE SECRETARY OF THE TREASURY, JULY 16, 1943,*

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 28, 1943, REQUESTING DECISION AS TO THE DATE UPON WHICH AN (AUTOMATIC PROMOTION UNDER THE ACT OF AUGUST 1, 1941, MAY BECOME EFFECTIVE IN THE CASE OF AN INTERNAL REVENUE AGENT WHO:

(1) ON JUNE 1, 1940, WHILE STATIONED AT HONOLULU, HAWAII, WAS PROMOTED FROM CAF-9, $3,200, TO CAF-11, $3,800, PER ANNUM;

(2) ON FEBRUARY 16, 1941, IN RECOGNITION OF THE HIGHER COST OF LIVING IN HAWAII AND "IN HARMONY WITH" THE STATUTORY PROVISION FOR A DIFFERENTIAL OF 25 PERCENT IN SALARY RATES FOR CLASSIFIED POSITIONS OUTSIDE THE UNITED STATES (5 U.S.C. 681 (C) (, WAS ADMINISTRATIVELY GRANTED A TWO-STEP WITHIN -GRADE PROMOTION, TO $4,200, TO "REMAIN IN EFFECT ONLY DURING THE EXISTENCE OF THE CONDITIONS UPON WHICH IT IS BASED; " AND

(3) ON NOVEMBER 1, 1941, WAS TRANSFERRED TO SAN FRANCISCO, CALIFORNIA, AT THE SAME GRADE AND DESIGNATION, BUT WITH SALARY RATE RESTORED TO $3,800.

IT IS STATED THE PROMOTION WAS WITHDRAWN, AFTER THE TRANSFER FROM HAWAII IN 1941, BECAUSE IT HAD BEEN GIVEN SOLELY TO MEET THE HIGHER LIVING COSTS THERE, AND BECAUSE OTHERWISE THERE WOULD HAVE RESULTED A PROMOTION AT AN EARLIER DATE AND FOR A GREATER AMOUNT THAN WHAT WOULD HAVE BEEN AUTHORIZED BY THE SUBSEQUENT ACT OF AUGUST 1, 1941. THE PERTINENT DECISIONS ARE DISCUSSED IN YOUR SUBMISSION AND THE CONCLUSION IS SUGGESTED THAT THE PROMOTION OF FEBRUARY 16, 1941, WAS A DIFFERENTIAL WHICH, MERELY NEUTRALIZING THE LOCAL HIGHER COSTS OF LIVING, WAS NOT AN ACTUAL INCREASE IN COMPENSATION, AND WHICH, IN FACT,"WAS BUT A FRACTION OF THAT NOW GIVEN GOVERNMENT-WIDE APPLICATION FOR SERVICE IN THE TERRITORIES, INSULAR POSSESSIONS AND ATLANTIC BASES OF THE UNITED STATES. VIDE CIVIL SERVICE DEPARTMENTAL CIRCULAR NO. 394, SUPPLEMENT NO. 2, OF JANUARY 16, 1943.' IS FINALLY SUGGESTED THAT, IN ANY EVENT, THE PROMOTION WAS NOT AN INCREASE BECAUSE IT WAS SUBSEQUENTLY TAKEN BACK.

SECTION 7 OF THE CLASSIFICATION ACT, AS AMENDED AUGUST 1, 1941, 55 STAT. 613, 5 U.S.C. 667, QUALIFIES CERTAIN EMPLOYEES FOR A PROMOTION TO THE NEXT HIGHER STEP WITHIN THEIR GRADE, AT THE BEGINNING OF THE CALENDAR QUARTER FOLLOWING THE COMPLETION OF EACH EIGHTEEN OR THIRTY MONTHS OF SERVICE--- DEPENDING UPON THE GRADE--- PROVIDED THAT "NO EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE WAS RECEIVED DURING SUCH PERIOD, EXCEPT INCREASE MADE PURSUANT TO SUBSECTION (F) OF THIS SECTION" (PERTAINING TO RECOGNITION OF ESPECIALLY MERITORIOUS SERVICES). THE AMOUNT OF SUCH ADVANCEMENT IN THE PRESENT CASE WOULD BE $200, AND THE QUESTION IS WHETHER THE TWO-STEP WITHIN-GRADE PROMOTION OF $400 ON FEBRUARY 16, 1941, UNDER THE CIRCUMSTANCES STATED, WAS AN ,INCREASE IN COMPENSATION FROM ANY CAUSE," REQUIRING THE QUALIFYING PERIOD OF THIRTY MONTHS TO START FROM THAT DATE.

IT IS SETTLED THAT AN INCREASE EFFECTIVE TO START THE QUALIFYING PERIOD DOES NOT BECOME THE LESS SO WHEN, AT SOME LATER DATE, IT IS LOST AND THE EMPLOYEE'S LOWER RATE IS RESTORED. 21 COMP. GEN. 369; ID. 478; ID. 641; 22 ID. 1051; B-25121, APRIL 22, 1942. ON THE OTHER HAND, THE AUTOMATIC PROMOTION ACT OPERATES UPON THE EMPLOYEE'S BASIC SALARY RATE (22 COMP. GEN. 589, 596), WHICH IS NOT REGARDED AS AFFECTED BY TEMPORARY ADJUSTMENTS IN THE AMOUNT ACTUALLY PAYABLE, MADE PURSUANT TO GENERAL LAW OR RULE, ON ACCOUNT OF OVERTIME CREDITED (ID.) OR IN RECOGNITION OF BRIEF ASSIGNMENTS TO SPECIAL CRAFTS (21 COMP. GEN. 773).

IN THE CASE OF SERVICE OUTSIDE THE CONTINENTAL UNITED STATES, VARIOUS ADJUSTMENTS UPON THE BASIC PAY SCALES HAVE BEEN INVOKED TO EQUALIZE THE EXCESSIVE COST OF LIVING AND OTHER SPECIAL CONDITIONS OBTAINING IN CERTAIN LOCALITIES. 22 COMP. GEN. 491. WHEN THE ADJUSTMENT TAKES THE FORM OF A PERCENTAGE ALLOWANCE, UP TO 25 PERCENT OF THE CLASSIFICATION GRADE, ITS PAYMENT IS NOT REGARDED AS AN EQUIVALENT INCREASE UNDER THE AUTOMATIC PROMOTION STATUTE, WHETHER IT BE GRANTED ADMINISTRATIVELY (22 COMP. GEN. 769), OR UNDER SPECIAL STATUTE (21 COMP. GEN. 478), OR UNDER THE 1940 EXTENSION OF THE CLASSIFICATION ACT, 54 STAT. 1213 (21 COMP. GEN. 947). THE DIFFERENTIAL IS PAID, SO IT IS UNDERSTOOD, NOT TO GRANT AN INCREASE, BUT TO COUNTERACT AN EFFECTIVE DECREASE WHICH THE ASSIGNMENT TO THE PARTICULAR LOCALITY WOULD ENTAIL. IN THAT ASPECT, IT IS COMPARABLE TO THE COST OF LIVING ALLOWANCES OR THE PAY ADJUSTMENT FOR CURRENCY EXCHANGE LOSSES ALLOWABLE FOR FOREIGN SERVICE, AND TO THE SUBSISTENCE ALLOWANCE REGULARLY GRANTED TO MEET EXTRA LIVING EXPENSES UPON TRAVEL ASSIGNMENTS AWAY FROM HOME. IN ALL SUCH CASES, THE ALLOWANCE CEASES WHEN THE CONDITION IT IS DESIGNED TO MEET NO LONGER EXISTS, AND NO INCREASE IN ACTUAL COMPENSATION IS INTENDED. HOWEVER, WHEN, INSTEAD OF GRANTING ANY SUCH SPECIAL BENEFIT, THE BASIC RATE ITSELF IS CHANGED, BY A PROMOTION TO A HIGHER GRADE, AN "EQUIVALENT INCREASE" NECESSARILY RESULTS, WHATEVER ITS MOTIVATION. 21 COMP. GEN. 369.

UPON THE UNDERSTANDING THAT THE PROMOTION GRANTED IN THE PRESENT CASE WAS INTENDED FOR AND HAD THE EFFECT OF, A DIFFERENTIAL ALLOWANCE TO MEET THE CONDITIONS LOCAL TO THE ASSIGNMENT TO HAWAII, IT MAY BE SO REGARDED FOR THE PURPOSES OF AUTOMATIC PROMOTION, SO THAT THE 30-MONTH PERIOD IS TO BE COMPUTED, UPON THE FACTS STATED, FROM THE DATE OF THE LAST INCREASE IN THE BASIC RATE OF COMPENSATION, NAMELY JUNE 1, 1940.