B-46831, JANUARY 16, 1945, 24 COMP. GEN. 528

B-46831, JANUARY 16, 1945, 24 COMP. GEN. 528

LEAVES OF ABSENCE - LUMP-SUM PAYMENTS EMPLOYEES WHO ENTERED A TERMINAL LEAVE STATUS PRIOR TO THE DATE OF THE LUMP-SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944, MAY NOT BE PAID A LUMP SUM UNDER THE STATUTE FOR THE UNEXPIRED PERIOD OF SUCH LEAVE. IN THE CASE OF APPLICATIONS FILED ON OR AFTER THE DATE OF THE LUMP SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944 FOR PAYMENT IN ACCORDANCE WITH THE ACT OF AUGUST 1, 1941, AS AMENDED, FOR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE TO THE CREDIT OF EMPLOYEES WHO ENTERED THE MILITARY OR NAVAL SERVICE SUBSEQUENT TO MAY 1, 1940, BUT PRIOR TO DECEMBER 21, 1944, PAYMENT IS REQUIRED TO BE MADE UNDER THE 1944 STATUTE, EVEN THOUGH THE LEAVE PERIOD COVERED BY SUCH PAYMENT, BEGINNING WITH THE DAY FOLLOWING THE LAST DAY OF ACTIVE CIVILIAN SERVICE WAS PRIOR TO DECEMBER 21, 1944. WHERE APPLICATIONS WERE FILED BY EMPLOYEES IN THE ARMED FORCES PRIOR TO THE DATE OF THE LUMP-SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944, FOR PAYMENT UNDER THE ACT OF AUGUST 1, 1941, AS AMENDED, FOR THEIR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE, THE PAYMENT FOR SUCH LEAVE SHOULD BE PROCESSED AS TERMINAL ANNUAL LEAVE UNDER THE LEAVE REGULATIONS THEN IN FORCE, WITHOUT REGARD TO THE 1944 STATUTE. STANDARD PAY-ROLL FORMS ARE ACCEPTABLE AS VOUCHERS IN MAKING LUMP SUM PAYMENTS FOR ACCUMULATED AND CURRENT ACCRUED ANNUAL OR VACATION LEAVE UNDER THE ACT OF DECEMBER 21, 1944; AND IN SUPPORT THEREOF THERE SHOULD BE SHOWN--- IN ADDITION TO THE INFORMATION NOW REQUIRED AS TO NAME, GRADE, SALARY RATE AND SEPARATING ACTION (EXCEPT RETIREMENT DEDUCTIONS/--- THE NUMBER OF DAYS AND HOURS OF ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE, THE PERIOD OVER WHICH SUCH LEAVE HAS BEEN COMPUTED FOR THE PURPOSE OF DETERMINING THE AMOUNT OF THE LUMP-SUM PAYMENT, AND THE TAX DEDUCTION. WHERE EMPLOYEES, WHO HAVE ENTERED THE MILITARY OR NAVAL SERVICE SUBSEQUENT TO MAY 1, 1940, DIE WHILE IN SERVICE ON OR AFTER THE DATE OF THE LUMP-SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944, WITHOUT HAVING EXERCISED THEIR STATUTORY RIGHT OF ELECTION TO BE PAID FOR THEIR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE, THIS OFFICE WILL CONSIDER A CLAIM BY THE DECEDENT'S BENEFICIARY OR ESTATE FOR A LUMP-SUM PAYMENT FOR SUCH LEAVE, ON THE BASIS THAT AT THE TIME OF DEATH THE DECEDENT WAS A "CIVILIAN * * * EMPLOYEE" WITHIN THE MEANING OF SECTION 2 OF THE STATUTE AUTHORIZING LUMP-SUM LEAVE PAYMENTS IN THE CASE OF DECEASED EMPLOYEES. IN THE CASE OF EMPLOYEES WHO HAVE DIED PRIOR TO THE DATE OF THE LUMP SUM LEAVE PAYMENT STATUTE OF DECEMBER 21, 1944, WHILE IN THE MILITARY OR NAVAL SERVICE, WITHOUT HAVING EXERCISED THEIR ELECTION TO BE PAID FOR THEIR ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE UNDER THE ACT OF AUGUST 1, 1941, AS AMENDED, NO LUMP-SUM LEAVE PAYMENTS MAY BE MADE TO THE DECEDENTS' BENEFICIARIES OR ESTATES UNDER SECTION 2 OF THE STATUTE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF AGRICULTURE, JANUARY 16, 1945:

I HAVE YOUR LETTER OF JANUARY 9, 1945, SUBMITTING FOR DECISION SEVERAL QUESTIONS RELATIVE TO THE APPLICATION OF THE ACT OF DECEMBER 21, 1944, 58 STAT. 845, PUBLIC LAW 525.

THE QUESTIONS WILL BE STATED AND ANSWERED IN THE ORDER PRESENTED.

1. ARE THE PROVISIONS OF THE ACT TO BE CONSIDERED MANDATORY, IN THAT THE SEPARATION DATE SHALL BE AS OF THE LAST DAY OF ACTIVE DUTY, REGARDLESS OF WHETHER THE EMPLOYEE WISHES TO REMAIN ON THE ROLLS UNTIL THE EXPIRATION OF THE PERIOD THAT WOULD BE COVERED BY HIS ACCUMULATED AND ACCRUED LEAVE, OR MAY THE EMPLOYEE ELECT TO HAVE TERMINAL LEAVE RUN IN THE USUAL MANNER WITH REGULATION EFFECTIVE AT THE EXPIRATION OF SUCH LEAVE?

IT WAS HELD IN DECISION OF JANUARY 11, 1945, B-46683, 24 COMP. GEN. 511 (ANSWER TO QUESTION 2):

* * * THAT THE STATUTE IS MANDATORY AND THAT TERMINAL ANNUAL OR VACATION LEAVE MAY NOT BE GRANTED IMMEDIATELY PRIOR TO SEPARATION FROM THE SERVICE IN ANY CASE WHERE IT IS KNOWN IN ADVANCE THAT THE EMPLOYEE IS TO BE SEPARATED FROM THE SERVICE. * * *

THAT HOLDING SERVES TO ANSWER THIS QUESTION.

2. IS IT MANDATORY THAT AN EMPLOYEE, WHO ENTERED ON TERMINAL LEAVE PRIOR TO THE EFFECTIVE DATE OF THE ACT, BE PAID A LUMP-SUM PAYMENT FOR THE UNEXPIRED PERIOD OF SUCH LEAVE?

THIS QUESTION IS ANSWERED IN THE NEGATIVE. SEE ANSWER TO QUESTION 1, DECISION OF JANUARY 11, 1945, SUPRA.

3. WE HAVE CASES OF EMPLOYEES WHO ENTERED MILITARY SERVICE PRIOR TO THE EFFECTIVE DATE OF THIS ACT, BUT DID NOT ELECT TO RECEIVE COMPENSATION FOR ACCUMULATED AND ACCRUED ANNUAL LEAVE. SOME OF THESE EMPLOYEES HAVE NOW REQUESTED THAT COMPENSATION FOR SUCH LEAVE BE PAID. INASMUCH AS THE LEAVE PERIODS FOR WHICH THEY WOULD BE PAID ARE PRIOR TO THE DATE OF PUBLIC LAW 525, IS THE COMPENSATION FOR LEAVE PAYABLE UNDER THIS ACT?

SECTION 1 OF THE ACT OF DECEMBER 21, 1944, PUBLIC LAW 525, PROVIDES, SO FAR AS HERE MATERIAL, AS FOLLOWS:

THAT WHENEVER ANY CIVILIAN OFFICER OR EMPLOYEE OF THE FEDERAL GOVERNMENT OR THE GOVERNMENT OF THE DISTRICT OF COLUMBIA * * * ELECTS TO BE PAID COMPENSATION FOR LEAVE IN ACCORDANCE WITH THE ACT OF JUNE 23, 1943, HE SHALL BE PAID COMPENSATION IN A LUMP SUM FOR ALL ACCUMULATED AND CURRENT ACCRUED ANNUAL OR VACATION LEAVE TO WHICH HE IS ENTITLED UNDER EXISTING LAW. * * *

SO FAR AS THE PRESENT QUESTION IS CONCERNED, THE WORD "ELECTS" REFERS TO AN ELECTION, UNDER THE 1941 STATUTE, AS AMENDED, 56 STAT. 200, BY EMPLOYEES WHO SHALL HAVE ENTERED THE ARMED FORCES SUBSEQUENT TO MAY 1, 1940,"TO RECEIVE, IN ADDITION TO THEIR MILITARY PAY, COMPENSATION IN THEIR CIVILIAN POSITIONS COVERING THEIR ACCUMULATED OR CURRENT ACCRUED LEAVE" INSTEAD OF HAVING SUCH LEAVE REMAIN TO THEIR CREDIT UNTIL THEIR RETURN FROM ACTIVE MILITARY OR NAVAL SERVICE. THIS OFFICE HAS HELD THAT AN EMPLOYEE MAY BE PAID FOR SUCH LEAVE BY FILING AN APPLICATION THEREFOR AT ANY TIME PRIOR TO RESTORATION TO HIS CIVILIAN POSITION. 22 COMP. GEN. 546; DECISION OF NOVEMBER 24, 1944, B 45646, 24 COMP. GEN. 410. THE FILING OF AN APPLICATION TO BE PAID FOR SUCH LEAVE MAY BE ACCEPTED AS AN ELECTION WITHIN THE MEANING OF THE ACT OF DECEMBER 21, 1944. AS THE WORD "ELECTS" IN THE STATUTE IS IN THE PRESENT TENSE, PAYMENT FOR SUCH LEAVE IN A LUMP SUM IS REQUIRED TO BE PROCESSED UNDER THAT STATUTE IN ANY CASE IN WHICH THE APPLICATION IS FILED ON OR AFTER DECEMBER 21, 1944, EVEN THOUGH THE PERIOD OVER WHICH THE LEAVE IS COMPUTED FOLLOWS IMMEDIATELY AFTER THE LAST DAY OF ACTIVE SERVICE THE CIVILIAN POSITION PRIOR TO ENTRY INTO THE ACTIVE MILITARY OR NAVAL SERVICE. 22 COMP. GEN. 229. IN SUCH CASES THE LAST DAY OF ACTIVE SERVICE IN A CIVILIAN POSITION IS TO BE REGARDED AS THE DATE OF SEPARATION OR MILITARY FURLOUGH FROM THE CIVILIAN POSITION, THE PERIOD OVER WHICH THE LEAVE IS COMPUTED NOT COUNTING AS SERVICE IN THE CIVILIAN POSITION IN THIS CONNECTION. SEE ANSWER TO QUESTION 5, DECISION OF JANUARY 11, 1945, SUPRA. WHERE AN APPLICATION WAS FILED PRIOR TO DECEMBER 21, 1944, THE PAYMENT FOR SUCH LEAVE SHOULD BE PROCESSED AS TERMINAL ANNUAL LEAVE UNDER THE LEAVE REGULATIONS THEN IN FORCE WITHOUT REGARD TO THE ACT OF DECEMBER 21, 1922. COMPARE ANSWER TO QUESTION 1, DECISION OF JANUARY 11, 1945, SUPRA.

4. THE ACT PROVIDES THAT IN THE EVENT AN EMPLOYEE TAKES A POSITION IN ANOTHER GOVERNMENT AGENCY PRIOR TO THE EXPIRATION OF THE PERIOD COVERED BY SUCH LEAVE PAYMENT, HE SHALL REFUND TO THE EMPLOYING AGENCY AN AMOUNT EQUAL TO THE COMPENSATION COVERING THE PERIOD BETWEEN THE DATE OF REEMPLOYMENT AND THE EXPIRATION OF SUCH LEAVE PERIOD. SUMS SO REFUNDED SHALL BE COVERED INTO THE TREASURY AS " MISCELLANEOUS RECEIPTS.'

A. SHOULD THE EMPLOYEE BE REQUIRED TO REFUND THE GROSS AMOUNT OF COMPENSATION EARNED OR THE NET COMPENSATION RECEIVED AFTER WITHHOLDING TAX HAS BEEN DEDUCTED?

B. IF REFUND IS TO BE MADE IN THE NET AMOUNT, HOW WILL THE WITHHOLDING TAX ON THE UNEXPIRED PERIOD OF THE LUMP-SUM PAYMENT BE ADJUSTED AND BY WHOM?

C. WILL THE ABOVE PROVISION OF THE ACT REQUIRING REFUNDS HAVE THE EFFECT OF EXCLUDING AN INDIVIDUAL FROM GOVERNMENT EMPLOYMENT BEFORE THE EXPIRATION DATE OF HIS ACCRUED LEAVE IN THE EVENT HE IS FINANCIALLY UNABLE TO MAKE APPROPRIATE REFUND OR WILL THE DENIAL OF LEAVE RECREDIT BY THE EMPLOYING OFFICE SATISFY THIS OBLIGATION?

D. IF REFUND NEED NOT BE MADE IN FULL PRIOR TO NEW EMPLOYMENT, MAY IT BE LIQUIDATED IN INSTALLMENTS, PAYROLL DEDUCTIONS, OR OTHERWISE?

E. IF THE ANSWER TO THE ABOVE QUESTION IS IN THE AFFIRMATIVE AND REFUND IN THE NET AMOUNT IS PERMITTED, SHOULD THE TAX ADJUSTMENT BE MADE PROPORTIONATELY ON EACH INSTALLMENT PAYMENT OR AT THE TIME FINAL INSTALLMENT ON REFUND IS MADE?

F. WILL A REFUND BE REQUIRED OF AN EMPLOYEE WHO RESIGNS AND RECEIVES A LUMP-SUM PAYMENT AND IS SUBSEQUENTLY REEMPLOYED AS A CONSULTANT ON A WAE BASIS BEFORE THE EXPIRATION DATE OF ACCRUED EAVE?

REFERRING TO QUESTIONS A AND B, THE GROSS AMOUNT OF COMPENSATION EARNED IS REQUIRED TO BE REFUNDED. SEE ANSWER TO QUESTION (3), DECISION OF JANUARY 13, 1945, B-46726, 24 COMP. GEN. 522. FOR THE ANSWERS TO QUESTIONS C, D, AND E, REFERENCE IS MADE TO THE FOLLOWING ANSWER TO QUESTIONS (1) AND (2), DECISION OF JANUARY 13, 1945, SUPRA:

IT IS EVIDENT NO CASES OF SUCH REFUNDS ACTUALLY HAVE ARISEN; AND, IF AND WHEN THEY DO ARISE THEY WILL BE FOR CONSIDERATION IN THE FIRST INSTANCE BY THE REEMPLOYING AGENCY. HOWEVER, IT MAY BE STATED THAT THE ACT WOULD SEEM TO CONTEMPLATE AN IMMEDIATE REFUND OF THE ENTIRE AMOUNT OF THE LUMP SUM PAYMENT AND THAT SUCH REQUIREMENT SHOULD BE MADE A CONDITION PRECEDENT TO THE REEMPLOYMENT.

QUESTION F IS ANSWERED IN THE NEGATIVE. SEE ANSWER TO QUESTION (7), DECISION OF JANUARY 13, 1945, SUPRA, AND THE ANSWER TO QUESTION (3), DECISION OF JANUARY 13, 1945, B-46790, 24 COMP. GEN. 526.

5. IN THE EVENT OF DEATH OF THE EMPLOYEE THE ACT SPECIFIES THAT THE LUMP- SUM COMPENSATION SHALL BE PAID TO THE BENEFICIARY DESIGNATED UNDER THE RETIREMENT ACT APPLICABLE TO HIS SERVICE. WHAT PROCEDURE IS PRESCRIBED FOR PREPARATION, VERIFICATION, AND PAYMENT OF SUCH OBLIGATIONS?

THE FIRST PART OF THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE. SUPPORT OF THE LUMP-SUM PAYMENT ON THE PAY-ROLL VOUCHER THERE SHOULD BE SHOWN, IN ADDITION TO THE INFORMATION NOW REQUIRED AS TO NAME, GRADE, SALARY RATE, AND SEPARATING ACTION (EXCEPT RETIREMENT DEDUCTIONS), THE NUMBER OF DAYS AND HOURS OF ACCUMULATED AND CURRENT ACCRUED ANNUAL LEAVE AND THE PERIOD OVER WHICH SUCH LEAVE HAS BEEN COMPUTED FOR THE PURPOSE OF DETERMINING THE AMOUNT OF THE LUMP-SUM PAYMENT, AND THE TAX DEDUCTION.

7. THE ACT PROVIDES FOR LUMP-SUM PAYMENTS "WHENEVER ANY CIVILIAN OFFICER OR EMPLOYEE OF THE FEDERAL GOVERNMENT * * * IS SEPARATED FROM THE SERVICE OR ELECTS TO BE PAID COMPENSATION FOR LEAVE * * *" (ITALICS SUPPLIED) IN ACCORDANCE WITH THE LAW PERMITTING THE PAYMENT OF COMPENSATION FOR ANNUAL LEAVE CONCURRENTLY WITH MILITARY DUTY. WE HAVE NOTED YOUR DECISION IN 22 COMP. GEN. 42, WHEREIN IT WAS HELD THAT A FURLOUGH WITHOUT PAY TO ENTER THE MILITARY SERVICE IS TO BE REGARDED AS A "SEPARATION" FOR THE PURPOSE OF COMPUTING TERMINAL LEAVE, AND THE DECISION IN 22 COMP. GEN. 990 THAT THE ENTRY OF AN EMPLOYEE INTO ACTIVE MILITARY DUTY IS TO BE REGARDED AS "SEPARATION" UNDER THE REGULATION REQUIRING THAT AN EMPLOYEE WHO IS INDEBTED TO THE GOVERNMENT FOR ADVANCED ANNUAL LEAVE AT THE TIME OF HIS SEPARATION FROM THE SERVICE SHALL BE CHARGED WITH SUCH INDEBTEDNESS. NEVERTHELESS, THERE IS SOME DOUBT IN OUR MINDS THAT ENTRY INTO THE MILITARY SERVICE IS INTENDED UNDER PUBLIC LAW 525 TO BE CONSIDERED A SEPARATION FROM THE EMPLOYEE'S CIVILIAN POSITION. IN THIS CONNECTION, IT IS OBSERVED THAT SECTION 1 OF THE ACT STATES "WHENEVER ANY CIVILIAN OFFICER OR EMPLOYEE * * * ELECTS TO BE PAID COMPENSATION * * *.' (ITALICS SUPPLIED.) FURTHERMORE, SECTION 2 PROVIDES FOR LUMP-SUM PAYMENT OF THE COMPENSATION FOR LEAVE TO THE DESIGNATED BENEFICIARY OR ESTATE OF A DECEASED "CIVILIAN OFFICER OR EMPLOYEE.' (ITALICS SUPPLIED.) UNLESS IT BE CONSIDERED THAT THE PERSON WHO LEAVES HIS CIVILIAN POSITION TO ENTER MILITARY SERVICE REMAINS A CIVILIAN OFFICER OR EMPLOYEE FOR THE PURPOSES OF RECEIVING LUMP-SUM COMPENSATION FOR ACCUMULATED AND ACCRUED ANNUAL LEAVE, IT WOULD APPEAR THAT THERE IS NO PROVISION WHEREBY THE LUMP-SUM PAYMENT OTHERWISE DUE SUCH A PERSON MAY BE PAID TO HIS DESIGNATED BENEFICIARY OR ESTATE SHOULD HE DIE WHILE IN THE MILITARY SERVICE. WOULD APPRECIATE BEING ADVISED, THEREFORE, IF PERSONS OTHERWISE CONSIDERED ON MILITARY FURLOUGH MAY BE CONSIDERED AS NOT SEPARATED FROM THEIR CIVILIAN POSITIONS WITH RESPECT TO THE RIGHT TO HAVE LUMP-SUM PAYMENTS MADE UNDER THIS ACT TO THEIR DESIGNATED BENEFICIARIES OR ESTATE.

AS YOU SUGGEST, SECTION 1 OF THE ACT OF DECEMBER 21, 1944, DOES IMPLY THAT A CIVILIAN OFFICER OR EMPLOYEE WHO HAS ENTERED THE ACTIVE MILITARY OR NAVAL SERVICE REMAINS IN A CIVILIAN STATUS FOR THE PURPOSE OF EXERCISING HIS ELECTION TO BE PAID FOR THE ACCUMULATED AND CURRENT ACCRUED LEAVE WHICH STOOD TO HIS CREDIT WHEN HE ENTERED THE ACTIVE MILITARY OR NAVAL SERVICE. SEE ANSWER TO QUESTION 3. UPON THAT BASIS SUCH AN EMPLOYEE MAY BE REGARDED, ALSO, AS HAVING BEEN A "CIVILIAN OFFICER OR EMPLOYEE" AT THE TIME OF DEATH WITHIN THE MEANING OF SECTION 2 OF THE STATUTE AUTHORIZING PAYMENTS IN DEATH CASES. HENCE, IN ANY CASE OF AN EMPLOYEE WHO HAS ENTERED (SUBSEQUENT TO MAY 1, 1940), OR HEREAFTER ENTERS, THE ACTIVE MILITARY OR NAVAL SERVICE AND DIES ON OR AFTER DECEMBER 21, 1944, WITHOUT HAVING EXERCISED HIS ELECTION TO BE PAID FOR HIS LEAVE EITHER IN ACCORDANCE WITH THE PROCEDURE IN EFFECT PRIOR TO DECEMBER 21, 1944, OR IN A LUMP SUM UNDER SECTION 1 OF THE ACT OF DECEMBER 21, 1944, THIS OFFICE WILL CONSIDER A CLAIM BY HIS DESIGNATED BENEFICIARY OR, IN THE ABSENCE OF A DESIGNATED BENEFICIARY, BY HIS ESTATE, UNDER SECTION 2 OF THE STATUTE. PAYMENT FOR LEAVE IN A LUMP SUM IS NOT AUTHORIZED IN ANY CASE WHERE DEATH OCCURRED PRIOR TO DECEMBER 21, 1944.