B-46790, JANUARY 13, 1945, 24 COMP. GEN. 526

B-46790: Jan 13, 1945

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THAT "SUCH LUMP-SUM PAYMENT SHALL EQUAL THE COMPENSATION THAT SUCH EMPLOYEE WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL OR VACATION LEAVE. UPON THE BASIS THAT THE EMPLOYEE WOULD HAVE REMAINED IN THE SERVICE. THE DATE OF SEPARATION FROM SERVICE IS TO BE REGARDED AS THE LAST DAY OF ACTIVE SERVICE OF AN EMPLOYEE RECEIVING A LUMP-SUM PAYMENT FOR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE UNDER THE ACT OF DECEMBER 21. AT WHICH TIME HE IS ENTITLED UNDER SAID STATUTE TO RECEIVE A LUMP-SUM PAYMENT FOR ALL ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE TO HIS CREDIT ON THE LAST DAY OF ACTIVE DUTY. READING AS FOLLOWS: YOUR DECISIONS ARE RESPECTFULLY REQUESTED REGARDING FOUR PROBLEMS WHICH HAVE ARISEN IN THIS ADMINISTRATION IN CONNECTION WITH THE APPLICATION OF PUBLIC LAW 525.

B-46790, JANUARY 13, 1945, 24 COMP. GEN. 526

LEAVES OF ABSENCE - LUMP-SUM PAYMENTS THE PROVISION IN THE LUMP-SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944, THAT "SUCH LUMP-SUM PAYMENT SHALL EQUAL THE COMPENSATION THAT SUCH EMPLOYEE WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL OR VACATION LEAVE," SERVES ONLY AS A FORMULA OR RULE FOR COMPUTING THE AMOUNT OF THE LUMP-SUM PAYMENT AUTHORIZED UNDER THAT STATUTE FOR ANNUAL OR VACATION LEAVE WITH PAY (INCLUDING SUNDAYS AND HOLIDAYS), AND HAS NO APPLICATION, UPON THE BASIS THAT THE EMPLOYEE WOULD HAVE REMAINED IN THE SERVICE, IN RESPECT OF ANY OTHER LAW. THE DATE OF SEPARATION FROM SERVICE IS TO BE REGARDED AS THE LAST DAY OF ACTIVE SERVICE OF AN EMPLOYEE RECEIVING A LUMP-SUM PAYMENT FOR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE UNDER THE ACT OF DECEMBER 21, 1944, AND, THEREFORE, THE LUMP SUM PAYABLE TO AN EMPLOYEE WHO RESIGNED BETWEEN THE DATE OF THE ACT AND DECEMBER 31, 1944--- THE DATE ON WHICH HE WOULD COMPLETE THE 18-OR 30-MONTH PERIOD OF "SERVICE" TO ENTITLE HIM TO A WITHIN -GRADE PROMOTION HIS SALARY RATE ON THE DATE OF SEPARATION, INCLUDING THAT COVERING THE PERIOD ON AND AFTER JANUARY 1, 1945. AN EMPLOYEE RETIRING FOR AGE--- 70 YEARS--- MAY NOT BE GRANTED TERMINAL ANNUAL LEAVE EITHER IMMEDIATELY PRIOR OR SUBSEQUENT TO RETIREMENT ON AND AFTER THE DATE OF THE LUMP-SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944; INSTEAD, HE MUST WORK THROUGH THE LAST DAY OF THE MONTH IN WHICH HE REACHES 70 YEARS OF AGE, AT WHICH TIME HE IS ENTITLED UNDER SAID STATUTE TO RECEIVE A LUMP-SUM PAYMENT FOR ALL ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE TO HIS CREDIT ON THE LAST DAY OF ACTIVE DUTY.

COMPTROLLER GENERAL WARREN TO THE NATIONAL HOUSING ADMINISTRATOR, JANUARY 13, 1945:

THERE HAS BEEN RECEIVED A LETTER DATED JANUARY 5, 1945, FROM THE DIRECTOR OF PERSONNEL, FEDERAL HOUSING ADMINISTRATION, READING AS FOLLOWS:

YOUR DECISIONS ARE RESPECTFULLY REQUESTED REGARDING FOUR PROBLEMS WHICH HAVE ARISEN IN THIS ADMINISTRATION IN CONNECTION WITH THE APPLICATION OF PUBLIC LAW 525, 78TH CONGRESS, APPROVED DECEMBER 21, 1944, PROVIDING FOR LUMP SUM PAYMENT TO CERTAIN GOVERNMENT EMPLOYEES FOR ACCUMULATED OR ACCRUED ANNUAL LEAVE DUE UPON SEPARATION FROM GOVERNMENT SERVICE.

(1) IT IS UNDERSTOOD THAT UNDER THIS LAW THE PERIOD OF TERMINAL ANNUAL LEAVE IS NOT TO BE CONSIDERED AS SERVICE. THEREFORE, THE QUESTION ARISES AS TO WHETHER AN EMPLOYEE WHO COMPLETES HIS PERIOD OF ELIGIBILITY FOR A WITHIN-GRADE PAY INCREASE UNDER PUBLIC LAW 200 DURING THE QUARTER ENDING DECEMBER 31, 1944, AND WHO RESIGNS WITH LAST WORKING DAY PRIOR TO DECEMBER 31, 1944, BUT WITH SUFFICIENT ANNUAL LEAVE TO CARRY HIM BEYOND JANUARY 1, 1945, IS ENTITLED TO RECEIVE COMPENSATION FOR THE WITHIN-GRADE PAY INCREASE HE WOULD HAVE RECEIVED JANUARY 1, 1945, HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL LEAVE.

(2) AGAIN TAKING INTO CONSIDERATION THE FACT THAT THE PERIOD OF TERMINAL LEAVE IS NOT TO BE CONSIDERED AS SERVICE, IT IS QUESTIONABLE WHETHER AN EMPLOYEE RETIRING BECAUSE OF AGE SHOULD, AS IN THE PAST, TAKE THE ANNUAL LEAVE TO HIS CREDIT PRIOR TO THE DATE OF REACHING RETIREMENT AGE, OR WHETHER HE MAY REMAIN IN A DUTY STATUS THROUGH SUCH DATE AND BE PAID FOR ANNUAL LEAVE SUBSEQUENT THERETO.

(3) IN READJUSTING EMPLOYEES FROM A FULL-TIME PER ANNUM BASIS TO EITHER A PER DIEM STATUS OR A PART-TIME PER ANNUM BASIS, WE HAVE PREVIOUSLY REQUIRED THEM TO EXHAUST ALL ANNUAL LEAVE TO THEIR CREDIT ON A FULL-TIME BASIS BEFORE CHANGING THEIR STATUS AND BEFORE PERMITTING THEM TO PERFORM ANY INTERMITTENT OR PART-TIME DUTY. SECTION 3 OF THE LAW PROVIDES FOR LUMP SUM PAYMENTS FOR ANNUAL LEAVE TO EMPLOYEES TRANSFERRING TO POSITIONS UNDER DIFFERENT LEAVE SYSTEMS. PER DIEM AND PART-TIME EMPLOYEES ARE NOT SUBJECT TO ANY LEAVE SYSTEM. YOUR DECISION IS REQUESTED AS TO WHETHER WE MAY COMPENSATE SUCH EMPLOYEES FOR THEIR ANNUAL LEAVE TO EMPLOYEES TRANSFERRING TO POSITIONS UNDER DIFFERENT LEAVE SYSTEMS. PER DIEM AND PART-TIME EMPLOYEES ARE NOT SUBJECT TO ANY LEAVE SYSTEM. YOUR DECISION IS REQUESTED AS TO WHETHER WE MAY COMPENSATE SUCH EMPLOYEES FOR THEIR ANNUAL LEAVE IN A LUMP SUM AND PERMIT THEM TO PERFORM INTERMITTENT OR PART-TIME SERVICE ON DATES WHICH ORDINARILY WOULD BE COVERED BY THE PERIOD OF TERMINAL ANNUAL LEAVE, OR WILL SUCH ACTION INVOLVE DUAL COMPENSATION.

(4) PLEASE ADVISE THE EXACT WITHHOLDING TAX TABLE WHICH SHOULD BE USED IN COMPUTING THE AMOUNT OF TAX TO BE TAKEN ON LUMP SUM PAYMENTS.

QUESTION (1). SECTION 1 OF THE ACT OF DECEMBER 21, 1944, 58 STAT. 845, PUBLIC LAW 525, CONTAINS A SENTENCE, AS FOLLOWS:

* * * SUCH LUMP-SUM PAYMENT SHALL EQUAL THE COMPENSATION THAT SUCH EMPLOYEE WOULD HAVE RECEIVED HAD HE REMAINED IN THE SERVICE UNTIL THE EXPIRATION OF THE PERIOD OF SUCH ANNUAL OR VACATION LEAVE * * *.

THAT PROVISION SERVES ONLY AS A FORMULA OR RULE FOR COMPUTING THE AMOUNT OF THE LUMP-SUM PAYMENT UNDER THAT STATUTE FOR ANNUAL OR VACATION LEAVE OF ABSENCE WITH PAY (INCLUDING SUNDAYS AND HOLIDAYS). THERE IS MANIFESTED NO PURPOSE OR INTENT TO EXTEND TO SUCH PERIOD THE PROVISIONS OF ANY OTHER LAW UPON THE BASIS THAT THE EMPLOYEE WOULD HAVE REMAINED IN THE SERVICE. THE UNDERSTANDING EXPRESSED IN THE FIRST SENTENCE OF QUESTION 1 IS CORRECT, NAMELY, THAT SUCH PERIOD "IS NOT TO BE CONSIDERED AS SERVICE.' SEE IN THAT CONNECTION THE ANSWER TO QUESTION 5, DECISION OF JANUARY 11, 1945, B- 46683, 24 COMP. GEN. 511, AS FOLLOWS:

* * * IT MAY BE STATED THAT THE LAST DAY OF ACTIVE SERVICE OF AN EMPLOYEE RECEIVING A LUMP SUM PAYMENT FOR LEAVE WILL BE THE DATE OF SEPARATION FROM THE SERVICE AND ANY PERIOD BETWEEN THAT DATE AND THE DATE OF REEMPLOYMENT, EITHER IN THE SAME OR A DIFFERENT AGENCY, MUST BE REGARDED AS A BREAK IN SERVICE FOR THE PURPOSE OF DETERMINING RIGHTS TO WITHIN-GRADE PROMOTIONS * * * EVEN THOUGH THE PERIOD USED AS THE MEASURE FOR COMPUTING THE LUMP SUM PAYMENT FOR LEAVE OTHERWISE WOULD BRIDGE OVER THE BREAK IN SERVICE IN WHOLE OR IN PART.

SECTION 7 (B) OF THE CLASSIFICATION ACT, AS AMENDED BY SECTION 2 OF THE ACT OF AUGUST 1, 1941, 55 STAT. 613, AUTHORIZES WITHIN-GRADE PROMOTION, IF THE EMPLOYEE OTHERWISE IS ELIGIBLE,"EACH EIGHTEEN MONTHS OF SERVICE" OR "EACH THIRTY MONTHS OF SERVICE" (ITALICS SUPPLIED), DEPENDING UPON THE GRADE HELD. ACCORDINGLY, AS AN EMPLOYEE IS REQUIRED TO BE REGARDED AS HAVING BEEN SEPARATED FROM THE SERVICE UPON THE LAST DAY OF ACTIVE DUTY PRIOR TO THE BEGINNING OF TERMINAL ANNUAL LEAVE IF ON OR AFTER DECEMBER 21, 1944 (SEE ANSWER TO QUESTION 2, DECISION OF JANUARY 11, 1945, B-46683, 24 COMP. GEN. 511), HE WOULD NOT BE ENTITLED TO RECEIVE COMPENSATION AT AN INCREASED RATE AS FOR WITHIN-GRADE PROMOTION EFFECTIVE AS OF JANUARY 1, 1945, IN COMPUTING THE LUMP-SUM PAYMENT FOR LEAVE. HOWEVER, IF AN EMPLOYEE'S LAST DAY OF ACTIVE DUTY WAS PRIOR TO DECEMBER 21, 1944, AND HE WAS IN A TERMINAL ANNUAL LEAVE STATUS ON OR PRIOR TO THAT DATE, THE ACT OF DECEMBER 21, 1944, REQUIRING PAYMENT OF A LUMP SUM FOR TERMINAL ANNUAL LEAVE, WOULD HAVE NO APPLICATION AND THUS, THE EMPLOYEE WOULD BE ENTITLED TO PAYMENT FOR THE PERIOD OF HIS TERMINAL ANNUAL LEAVE IN THE USUAL MANNER, INCLUDING THE BENEFIT OF THE WITHIN-GRADE PROMOTION EFFECTIVE AS OF JANUARY 1, 1945. SEE ANSWER TO QUESTION 1, DECISION OF JANUARY 11, 1945, B-46683, 24 COMP. GEN. 511, AND THE DECISION CITED THEREIN.

QUESTION (2). AN EMPLOYEE RETIRING FOR AGE--- 70 YEARS--- MAY NOT BE GRANTED TERMINAL ANNUAL LEAVE EITHER IMMEDIATELY PRIOR, OR SUBSEQUENT TO RETIREMENT. INSTEAD, HE MUST WORK THROUGH THE LAST DAY OF THE MONTH IN WHICH HE REACHES 70 YEARS OF AGE AT WHICH TIME HE IS ENTITLED TO RECEIVE A LUMP-SUM PAYMENT FOR ALL ACCUMULATED AND CURRENT ACCRUED LEAVE TO HIS CREDIT UPON THE LAST DAY OF ACTIVE DUTY. SEE ANSWER TO QUESTION 2, DECISION OF JANUARY 11, 1945, B-46683, 24 COMP. GEN. 511.

QUESTION (3). THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE. SEE QUESTION AND ANSWER 7, DECISION OF JANUARY 13, 1945, B-46726, 24 COMP. GEN. 522, TO THE SECRETARY OF WAR.

QUESTION (4). THIS QUESTION IS MORE PROPERLY FOR CONSIDERATION BY THE COMMISSIONER OF INTERNAL REVENUE.