B-40532, MARCH 18, 1944, 23 COMP. GEN. 698

B-40532: Mar 18, 1944

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COMPENSATION - PAYMENTS - TIME FOR MAKING THERE IS NO AUTHORITY UNDER EXISTING LAW TO COMPUTE THE SALARY OF EMPLOYEES WHOSE COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS ON ANY BASIS OTHER THAN THAT SPECIFICALLY PROVIDED BY THE ACT OF JUNE 30. THAT IS. 1944: I HAVE YOUR LETTER OF FEBRUARY 29. AS FOLLOWS: IT IS THE DESIRE OF THE WAR DEPARTMENT. THIS PERIOD OF PAYMENT IS PREFERABLE IN MANY CASES TO THE MONTHLY OR SEMIMONTHLY PAYMENT PLAN NOW IN OPERATION UNDER THE ACT OF 30 JUNE 1906 (34 STAT. 763). THIS DEPARTMENT HAS MANY INSTALLATIONS IN WHICH EMPLOYEES ARE APPOINTED ON A PER DIEM OR PIECE WORK BASIS AS WELL AS ON A PER ANNUM BASIS. COST RECORDS ARE MAINTAINED WHICH REQUIRE FOR ACCURACY THE SYNCHRONIZATION OF PAYMENTS OF BOTH PIECE WORK AND PER ANNUM EMPLOYEES.

B-40532, MARCH 18, 1944, 23 COMP. GEN. 698

COMPENSATION - PAYMENTS - TIME FOR MAKING THERE IS NO AUTHORITY UNDER EXISTING LAW TO COMPUTE THE SALARY OF EMPLOYEES WHOSE COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS ON ANY BASIS OTHER THAN THAT SPECIFICALLY PROVIDED BY THE ACT OF JUNE 30, 1906, THAT IS, INTO 12 EQUAL INSTALLMENTS, ONE OF WHICH SHALL BE THE PAY FOR EACH CALENDAR MONTH, EACH OF THE 12 INSTALLMENTS TO BE DIVIDED BY 30 TO DETERMINE THE DAILY RATE, OR THE DIVISION OF THE ANNUAL RATE BY 360 TO DETERMINE THE DAILY RATE, AND, THEREFORE, THE SALARIES OF EMPLOYEES PAID ON AN ANNUAL OR MONTHLY BASIS MAY NOT BE COMPUTED ON A WEEKLY OR BIWEEKLY BASIS. 20 COMP. GEN. 834, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, MARCH 18, 1944:

I HAVE YOUR LETTER OF FEBRUARY 29, 1944, AS FOLLOWS:

IT IS THE DESIRE OF THE WAR DEPARTMENT, IN CERTAIN CASES, TO COMPUTE THE COMPENSATION OF EMPLOYEES APPOINTED ON A PER ANNUM OR PER MONTH BASIS SO AS TO PAY SUCH EMPLOYEES WEEKLY OR BI-WEEKLY. THIS PERIOD OF PAYMENT IS PREFERABLE IN MANY CASES TO THE MONTHLY OR SEMIMONTHLY PAYMENT PLAN NOW IN OPERATION UNDER THE ACT OF 30 JUNE 1906 (34 STAT. 763).

THIS DEPARTMENT HAS MANY INSTALLATIONS IN WHICH EMPLOYEES ARE APPOINTED ON A PER DIEM OR PIECE WORK BASIS AS WELL AS ON A PER ANNUM BASIS. MANY SUCH INSTALLATIONS, SUCH AS MANUFACTURING ARSENALS, COST RECORDS ARE MAINTAINED WHICH REQUIRE FOR ACCURACY THE SYNCHRONIZATION OF PAYMENTS OF BOTH PIECE WORK AND PER ANNUM EMPLOYEES. FURTHERMORE, IN CERTAIN LOCALITIES IT HAS BEEN FOUND THAT THE PRACTICE OF COMPETING EMPLOYERS IN PAYING SALARIES WEEKLY ATTRACTS WAR DEPARTMENT EMPLOYEES PAID ON A SEMI- MONTHLY BASIS. THIS OCCASIONALLY, HAS RESULTED IN THE LOSS OF PERSONNEL WHICH COULD HAVE BEEN AVOIDED BY AUTHORITY TO CHANGE PAY PERIODS TO CONFORM WITH THOSE OF COMPETITORS. WITH THE PRESENT MANPOWER SHORTAGE AND THE EFFORTS OF THIS DEPARTMENT TO EFFECT PROCEDURAL ECONOMY, A SIMPLIFIED ALTERNATIVE PAY PROCEDURE IS IMPERATIVE. IT HAS BEEN ADMINISTRATIVELY DETERMINED THAT PAYMENT ON THE ABOVE BASIS WOULD SIMPLIFY PAYMENT, EFFECT ECONOMY, AND HELP TO INSURE MAINTENANCE OF MANPOWER QUOTAS.

RECENT ENACTMENTS OF THE CONGRESS HAVE REQUIRED IN MOST INSTANCES THE MAINTENANCE OF TIME RECORDS AND THE CALCULATION OF PAY UPON A WEEKLY BASIS. THE WAR OVERTIME PAY ACT OF 1943, APPROVED 7 MAY 1943 ( PUBLIC LAW 49, 78TH CONGRESS) PROVIDES FOR PAYMENT OF OVERTIME UPON THE BASIS OF ADMINISTRATIVE WORK WEEKS FOR MOST CIVILIAN OFFICERS AND EMPLOYEES WHOSE WAGES ARE FIXED ON A MONTHLY OR YEARLY BASIS. EXECUTIVE ORDERS AND CIVIL SERVICE COMMISSION REGULATIONS COVERING OVERTIME PROVIDE FOR THE COMPUTATION OF PAY FOR SUCH EMPLOYEES ON THREE BASIS: FIRST, NORMAL PAY UP TO AND INCLUDING 40 HOURS PER WEEK; SECOND, PRORATED REQUIRED OVERTIME BEYOND 40 HOURS PER WEEK UP TO AND INCLUDING 48 HOURS AND, THIRD, OVERTIME IN EXCESS OF 48 HOURS. TIME RECORDS MAINTAINED ON AN ADMINISTRATIVE WORK- WEEK BASIS IN ACCORDANCE WITH THE ABOVE LAW AND REGULATIONS ARE BASIC DOCUMENTS TO THE PAY ROLL VOUCHER. THE ADVANTAGES WHICH WOULD ACCRUE FROM PAYING FOR THE SAME PERIOD AS SUPPORTED BY THE TIME REPORT ARE EVIDENT.

PAYMENT ON A SEMI-MONTHLY BASIS INVOLVING OVERTIME PAYMENTS BEYOND 40 HOURS IN AN ADMINISTRATIVE WORK WEEK WILL REQUIRE IN THE USUAL CASE, A CARRY-OVER INTO A SUCCEEDING PERIOD OF A PORTION OF THE TIME WORKED IN THE LAST ADMINISTRATIVE WORK WEEK. THIS MAY BE AVOIDED BY A WEEKLY OR BI- WEEKLY PAYMENT PLAN.

DUE TO THE LARGE NUMBER OF PER DIEM OR PER HOUR EMPLOYEES NOW PAID ON A WEEKLY BASIS AND THE STAGGERING OF PAY ENDING DATES FOR PER ANNUM AND PER MONTH EMPLOYEES, FEW PAY ROLLS NOW END AS OF 30 JUNE OF ANY YEAR, AND FISCAL YEAR ACCOUNTING AND REPORTING HAS ALREADY BEEN ADJUSTED TO MEET THIS SITUATION.

YOUR DECISION TO THE SECRETARY OF THE TREASURY REPORTED IN 20 C.G. 834 (B -17249) STATES IN ART:

"ALTHOUGH SAID SECTION ( SECTION 6 OF THE ACT OF 30 JUNE 1906, 34 STAT. 763 (5 U.S.C. 84) 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.'

DECISION IS REQUESTED IF THE WAR DEPARTMENT MAY DETERMINE AND DIRECT THAT THE FREQUENCY OF THE COMPUTATION OF THE PAY OF PER ANNUM OR MONTHLY CIVILIAN EMPLOYEES BE MADE ON A WEEKLY OR BI-WEEKLY BASIS WHERE CONSIDERED NECESSARY.

IF THE ABOVE DECISION IS IN THE AFFIRMATIVE, ADVICE IS REQUESTED AS TO THE METHOD OF COMPUTATION TO DETERMINE THE AMOUNT TO BE SO PAID. IF IN THE CASE OF PER ANNUM EMPLOYEES, A WEEKLY PAY IS DETERMINED BY DIVIDING THE ANNUAL COMPENSATION INTO 52 EQUAL INSTALLMENTS, AN EMPLOYEE MAY BE PAID HIS FULL ANNUAL COMPENSATION AT THE END OF THE 364TH DAY. THIS WOULD REQUIRE AN ADJUSTMENT OF ONE OR TWO DAYS EACH YEAR. ON THE OTHER HAND, IF A DAILY RATE OF PAY OF 1/360TH OF THE YEARLY RATE OF COMPENSATION IS DETERMINED IN ACCORDANCE WITH SECTION 6 OF THE ACT OF 30 JUNE 1906, 34 STAT. 763, AN EMPLOYEE MAY BE PAID HIS FULL ANNUAL COMPENSATION AT THE END OF THE 360TH DAY. THIS WOULD REQUIRE AN ADJUSTMENT OF FIVE OR SIX DAYS EACH YEAR. A THIRD POSSIBLE METHOD IS SUGGESTED WHEREBY THE PER ANNUM RATE IS DIVIDED BY 365 (OR 366) TO DETERMINE THE PER DIEM RATE. THIS METHOD WOULD AVOID THE ADJUSTMENTS AT THE END OF THE YEAR BUT WOULD TEND TO LOWER THE DAILY RATES NOW PAID TO PER ANNUM EMPLOYEES. IF EITHER THE FIRST OR SECOND METHOD IS PERMITTED, INFORMATION IS REQUESTED AS TO WHETHER THE ADJUSTMENT MAY BE MADE ON A GIVEN DATE FOR ALL EMPLOYEES PAID UNDER THAT METHOD, OR MUST THE ADJUSTMENT BE MADE FOR EACH INDIVIDUAL AT THE END OF HIS WORK YEAR.

AS A POSSIBLE SOLUTION USING THE BASIS OF THE SECOND METHOD MENTIONED ABOVE, THE FOLLOWING IS SUGGESTED. ASSUMING THAT THE PAY PERIOD IS ONE WEEK AND EMPLOYEES ARE IN NORMAL FULL PAY STATUS FOR THAT PERIOD, PAYMENT IS MADE AS FOLLOWS:

EMPLOYEES WOULD BE PAID, ON A DATE AFTER THE END OF THAT PERIOD,

7/360TH OF THEIR ANNUAL SALARIES, EXCEPT THAT FOR ANY WEEK WHICH

INCLUDES THE 31ST OF A MONTH EMPLOYEES RECEIVE ONLY 6/360TH OF

THEIR ANNUAL SALARY. FOR WEEKS EMBRACING THE HYPOTHETICAL 30TH OR

29TH AND 30TH OF FEBRUARY, EMPLOYEES RECEIVE 7/360TH OF THEIR ANNUAL

SALARIES, PLUS 1/360 OF THEIR ANNUAL SALARIES FOR EACH HYPOTHETICAL

DAY IN THE PAY WEEK NECESSARY TO MAKE FEBRUARY EQUIVALENT TO A

30 DAY MONTH. IT WILL BE NOTED THAT UNDER THIS PLAN NO EMPLOYEE WILL HAVE BEEN PAID TO A GIVEN DATE AN AMOUNT THAT WOULD DIFFER FROM THE AMOUNT THAT WOULD HAVE BEEN PAID TO A LIKE TERMINATION DATE.

AUTHORITY TO MAKE PAYMENTS UNDER ONE OF THE ABOVE METHODS WOULD BE MOST CONVENIENT AND BENEFICIAL, PARTICULARLY IF THE PRESENT COMPLICATIONS ARISING FROM 31-DAY MONTHS AND THE MONTH OF FEBRUARY COULD BE AVOIDED. VARIETY OF PAY PERIODS WOULD BE POSSIBLE, WITH NO DIFFICULTIES INVOLVED IN CHANGING FROM ONE TO THE OTHER, PROVIDED THAT SOME PRACTICAL, EASILY UNDERSTOOD MEANS IS EMPLOYED IN ADJUSTING THE ODD DAY/S) NECESSARY TO COMPLETE THE FULL YEAR. IT IS RECOGNIZED THAT PROMULGATION OF SPECIAL SALARY TABLES FOR USE UNDER THE PROPOSED METHODS WILL BE NECESSARY.

THE RULE STATED IN THE DECISION OF MAY 29, 1941, 20 COMP. GEN. 834, TO WHICH YOU REFER, RELATES PRIMARILY TO STAGGERED SEMI-MONTHLY PAYMENTS OF ANNUAL SALARIES AND THERE WERE NOT CONSIDERED THEREIN THE LEGAL AND ACCOUNTING PROBLEMS HERE PRESENTED.

TO DETERMINE THE DAILY RATE OF A PER ANNUM SALARY OF WAR DEPARTMENT EMPLOYEES THERE IS NO AUTHORITY UNDER EXISTING LAW TO DIVIDE THE ANNUAL SALARY ON ANY BASIS OTHER THAN THAT SPECIFICALLY PROVIDED BY THE ACT OF JUNE 30, 1906, 34 STAT. 763 (5 U.S.C. 84), THAT IS, INTO 12 EQUAL INSTALLMENTS, ONE OF WHICH SHALL BE THE PAY FOR EACH CALENDAR MONTH, EACH OF THE 12 INSTALLMENTS (OR MONTHLY COMPENSATION) TO BE DIVIDED BY 30 TO DETERMINE THE DAILY RATE, OR A DIVISION OF THE ANNUAL RATE BY 360 TO DETERMINE THE DAILY RATE. THERE IS NO AUTHORITY OF LAW TO COMPUTE AND TO MAKE PAYMENTS FOR AN FRACTIONAL PART OF EACH CALENDAR MONTH OF THE YEAR REGARDLESS OF THE NUMBER OF DAYS THEREIN--- WHETHER SUCH PAYMENTS BE MADE WEEKLY OR BIWEEKLY--- ON ANY BASIS ORDER THAN THAT SPECIFICALLY PRESCRIBED BY SAID STATUTE. HENCE, THE ANNUAL RATE MAY NOT BE DIVIDED INTO 52 EQUAL INSTALLMENTS. NEITHER MAY ADJUSTMENTS BE MADE AT THE END OF THE YEAR, NOR MAY THE ANNUAL SALARY BE DIVIDED BY 365 (OR 366) TO DETERMINE THE DAILY RATE. THE AMOUNT OF EACH WEEK'S COMPENSATION DEPENDS UPON THE NUMBER OF CALENDAR DAYS (OF THE YEAR) IN THE WEEK FOR WHICH A DAY'S COMPENSATION ( 1/360 ( OF THE ANNUAL RATE IS PAYABLE, THE THIRTIETH AND THIRTY-FIRST OF A 31-DAY MONTH TO BE REGARDED AS ONE DAY, FEBRUARY 28, IN OTHER THAN LEAP YEARS, TO BE REGARDED AS 3 DAYS, AND FEBRUARY 29, IN LEAP YEARS, TO BE REGARDED AS 2 DAYS. FOR INSTANCE, THE PAY FOR THE WEEK ENDING SATURDAY, MARCH 4, 1944 (CONTAINING FEBRUARY 29) WOULD DIFFER FROM THE PAY FOR THE WEEK ENDING MARCH 11, 1944. LIKEWISE, THE PAY FOR THE WEEK ENDING SATURDAY, APRIL 1, 1944 (INCLUDING MARCH 31) WOULD DIFFER FROM THE PAY FOR THE WEEK ENDING APRIL 8, 1944, AS THE PAY FOR ANY WEEK WHICH INCLUDES THE THIRTY-FIRST DAY OF A MONTH WOULD BE LESS THAN THE PAY FOR ANY WEEK THAT DOES NOT INCLUDE THE THIRTY-FIRST DAY OF A MONTH.

WHILE IT MAY NOT BE STATED THAT WEEKLY OR BIWEEKLY PAYMENTS WOULD BE ILLEGAL IF THE PAYMENTS FOR EACH WEEK BE COMPUTED AS ABOVE STATED, NEVERTHELESS IT SEEMS CLEAR THAT THE ACT OF 1906 CONTEMPLATES A MONTHLY OR SEMIMONTHLY PAYMENT OF ANNUAL SALARIES (WHICH PAYMENTS ARE EASILY COMPUTABLE) AND THAT THERE WAS NOT CONTEMPLATED BY THE CONGRESS THAT ANNUAL SALARIES WOULD BE COMPUTED OR PAID UPON A WEEKLY OR BIWEEKLY BASIS- -- THE WEEK NOT CONSTITUTING AN ALIQUOT PART OF THE MONTH. SINCE, UNDER THE 1906 STATUTE THE COMPUTATION MUST BE ON THE BASIS ABOVE INDICATED, IT IS DOUBTFUL THAT ANY ECONOMY WOULD RESULT FROM MAKING WEEKLY PAYMENTS OF THE COMPENSATION SO COMPUTED. AT ANY RATE, I BELIEVE THE MATTER SHOULD BE CALLED TO THE ATTENTION OF THE CONGRESS FOR ITS CONSIDERATION BEFORE ANY ATTEMPT IS MADE TO ADOPT THE PROCEDURE OF MAKING WEEKLY PAYMENTS OF ANNUAL SALARIES.