B-52253, SEPTEMBER 26, 1945, 25 COMP. GEN. 295

B-52253: Sep 26, 1945

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FEDERAL EMPLOYEES PAY ACT OF 1945 - AGGREGATE COMPENSATION GUARANTEE WHILE OVERTIME COMPENSATION AUTHORIZED BY SECTION 201 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 IS COMPUTED UPON THE BASIS OF EACH WORKWEEK INDEPENDENTLY OF THE BIWEEKLY PAY PERIOD OF WHICH SUCH WORKWEEK IS A PART. THE AGGREGATE COMPENSATION GUARANTEE PROVIDED BY SECTION 603 (A) OF SAID ACT FOR CERTAIN EMPLOYEES IS REQUIRED TO BE COMPUTED UPON THE BASIS OF THE BIWEEKLY PAY PERIOD. 1945: I HAVE YOUR LETTER OF SEPTEMBER 6. IT IS REQUESTED THAT ENCLOSURES (A) AND (B) BE SUBMITTED TO THE COMPTROLLER GENERAL FOR A DECISION AS TO THE ACCURACY OF THE METHOD USED IN COMPUTING THE SUBJECT CHARTS AND THE EXAMPLES GIVEN IN THE EXPLANATION.

B-52253, SEPTEMBER 26, 1945, 25 COMP. GEN. 295

FEDERAL EMPLOYEES PAY ACT OF 1945 - AGGREGATE COMPENSATION GUARANTEE WHILE OVERTIME COMPENSATION AUTHORIZED BY SECTION 201 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 IS COMPUTED UPON THE BASIS OF EACH WORKWEEK INDEPENDENTLY OF THE BIWEEKLY PAY PERIOD OF WHICH SUCH WORKWEEK IS A PART, THE AGGREGATE COMPENSATION GUARANTEE PROVIDED BY SECTION 603 (A) OF SAID ACT FOR CERTAIN EMPLOYEES IS REQUIRED TO BE COMPUTED UPON THE BASIS OF THE BIWEEKLY PAY PERIOD, SO THAT BASIC AND OVERTIME COMPENSATION EARNED DURING EACH WEEK MUST BE CREDITED INDEPENDENTLY OF THE OTHER WEEK OF THE PAY PERIOD AND THE TOTAL COMPENSATION EARNED DURING THE TWO-WEEK PERIOD MUST BE APPLIED TO SATISFY THE GUARANTEE FOR SUCH PERIOD.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, SEPTEMBER 26, 1945:

I HAVE YOUR LETTER OF SEPTEMBER 6, 1945 (FILE JAG:II:WJG:Z L16 4/LL), FORWARDING FOR CONSIDERATION A LETTER DATED AUGUST 28, 1945, FROM THE BUREAU OF SUPPLIES AND ACCOUNTS, NAVY DEPARTMENT, TO THE JUDGE ADVOCATE GENERAL OF THE NAVY, READING AS FOLLOWS: ENCL: (A) DRAFT OF ONE SUBJECT CHART COVERING PER ANNUM RATE $1,440.

(B) EXPLANATION OF SUBJECT CHARTS.

1. IT IS REQUESTED THAT ENCLOSURES (A) AND (B) BE SUBMITTED TO THE COMPTROLLER GENERAL FOR A DECISION AS TO THE ACCURACY OF THE METHOD USED IN COMPUTING THE SUBJECT CHARTS AND THE EXAMPLES GIVEN IN THE EXPLANATION. IT IS NOT DESIRED THAT THE CHART BE VERIFIED FROM THE STANDPOINT OF THE MATHEMATICAL ACCURACY OF THE COMPUTATIONS.

2. ENCLOSURE (B) EXPLAINS THE INFORMATION CONTAINED IN THESE CHARTS. THIS INFORMATION WILL SERVE TWO USEFUL PURPOSES:

(A) EARNINGS FIGURES, SUBJECT, NOT SUBJECT, AND TOTAL, CAN BE TAKEN DIRECTLY FROM THE CHARTS, ELIMINATING THE NECESSITY OF MACHINE CALCULATIONS.

(B) WITHOUT THESE CHARTS, IN THE CASE OF AN EMPLOYEE ENTITLED TO RECEIVE ANY AMOUNT OF OVERTIME PAY IN ANY PAY PERIOD, IT IS NECESSARY FOR THE PAY ROLL CLERK TO COMPUTE THE TOTAL PAY BASED ON PRESENT RATE, COMPUTE THE GUARANTEED MINIMUM FOR THE TOTAL NUMBER OF HOURS INVOLVED, COMPARE THE TWO, AND PAY WHICHEVER IS GREATER. WITH THE CHARTS, THE PROPER FIGURE MAY BE TAKEN FROM THE CHARTS, ELIMINATING ALL MACHINE COMPUTATIONS AND COMPARISONS.

3. THESE CHARTS ARE NEEDED BY NAVAL ACTIVITIES IMMEDIATELY UPON ADOPTION OF A 40-HOUR WEEK. INASMUCH AS THE USE OF THESE CHARTS WILL EFFECT A SUBSTANTIAL SAVING IN MAN-HOURS AND MACHINE-HOURS ON PAY ROLL WORK, IT IS DESIRED THAT THEY BE MADE AVAILABLE FOR DISTRIBUTION AT THE EARLIEST POSSIBLE DATE.

ENCLOSURE (B/--- CONSISTING OF AN EXPLANATION OF THE CHART OF COMPUTATIONS COVERING THE PER ANNUM RATE OF $1,440 (DENOMINATED AS ENCLOSURE (A) (, IS AS FOLLOWS.

1. SECTION 603 (A), FEDERAL EMPLOYEES PAY ACT OF 1945, PROVIDES THAT AN EMPLOYEE PREVIOUSLY EARNING $1,800 OR LESS SHALL BE GUARANTEED A MINIMUM AMOUNT BELOW WHICH HIS TOTAL PAY FOR ANY PAY PERIOD SHALL NOT FALL. THIS MINIMUM AMOUNT IS BASED ON HIS PREVIOUS TOTAL RATE (BASE PAY PLUS THE PREVIOUS $300 OR 25 PERCENT GUARANTEE). IF HIS TOTAL PAY, BASED ON PRESENT REGULAR AND OVERTIME RATES, IS LESS THAN THE MINIMUM FOR A PARTICULAR PAY PERIOD, HE SHALL RECEIVE FOR THAT PAY PERIOD SUCH ADDITIONAL AMOUNT AS IS NECESSARY TO BRING HIS TOTAL PAY UP TO THE GUARANTEED MINIMUM. THIS ADDITIONAL AMOUNT IS REFERRED TO IN THESE CHARTS AS "GUARANTEED DIFFERENTIAL.' IF HIS TOTAL EARNINGS EQUAL OR EXCEED THE GUARANTEED MINIMUM, SECTION 603 (A) IS NOT APPLICABLE TO HIM FOR THAT PAY PERIOD. THE "GUARANTEED DIFFERENTIAL" IS APPLICABLE ONLY TO EMPLOYEES ON A 40 HOUR WORK WEEK. IT DOES NOT APPLY TO EMPLOYEES REGULARLY ASSIGNED A 44 OR 48 HOUR WORK WEEK.

2. THE FIRST FOUR COLUMNS SHOW EARNINGS ON LESS THAN 40 HOURS IN A PAY PERIOD; SUBJECT PAY, GUARANTEED DIFFERENTIAL (WHICH IS NOT SUBJECT), AND TOTAL PAY OR GUARANTEED MINIMUM, FOR EACH NUMBER OF REGULAR HOURS FROM ONE TO 39 INCLUSIVE. IF THE EMPLOYEE IS IN A PAY STATUS FOR LESS THAN 40 HOURS IN A PAY PERIOD, OBVIOUSLY NO OVERTIME IS INVOLVED.

3.COLUMN (5) ON THE CHART SHOWS REGULAR HOURS FROM 40 TO THE MAXIMUM OF 80 IN ANY BIWEEKLY PAY PERIOD.

4. COLUMN (6)," SUBJECT PAY," SHOWS AMOUNT EARNED FOR THE NUMBER OF REGULAR HOURS SHOWN IN COLUMN (5), CALCULATED AT THE PRESENT BASE PAY RATE.

5. COLUMN (7)," GUARANTEED DIFFERENTIAL," SHOWS, FOR EACH NUMBER OF REGULAR HOURS IN COLUMN (5), THE AMOUNT NECESSARY TO BRING THE TOTAL PAY UP TO THE GUARANTEED MINIMUM, PROVIDED NO OVERTIME IS INVOLVED.

6. COLUMN (8)," GUARANTEED MINIMUM," IS THE TOTAL OF COLUMNS (6) AND (7). EACH FIGURE IN THIS COLUMN IS THE GUARANTEED MINIMUM FOR THE NUMBER OF HOURS SHOWN ON THE SAME LINE IN COLUMN (5), REGARDLESS OF WHETHER THESE HOURS ARE ALL REGULAR HOURS OR WHETHER THEY ARE A COMBINATION OF REGULAR AND OVERTIME HOURS.

7. COLUMNS (9) TO (14) INCLUSIVE SHOW THE AMOUNT OF NOT SUBJECT PAY FOR OVERTIME HOURS WHEN COMBINED WITH THE NUMBER OF REGULAR HOURS SHOWN ON THE SAME LINE IN COLUMN (5). THIS FIGURE IS THE AMOUNT OF OVERTIME OR THE GUARANTEED DIFFERENTIAL, WHICHEVER IS GREATER.

8.THE FOLLOWING EXAMPLES ARE BASED ON THE PRESENT PER ANNUM RATE OF $1,440 FOR A BIWEEKLY PAY PERIOD. THESE EXAMPLES ARE GIVEN MERELY TO EXPLAIN HOW THE FIGURES ON THE CHART WERE ARRIVED AT.

(1) AN EMPLOYEE IS IN A PAY STATUS 20 HOURS THE FIRST WEEK AND IS ON LEAVE WITHOUT PAY ALL THE SECOND WEEK.

SUBJECT PAY, 20 X .6923076 (OR FROM CHART) ------------------ $13.84

NOT SUBJECT PAY (GUARANTEED DIFFERENTIAL) 20 X .0288461

(OR FROM CHART) ----------------------------------------- .58

TOTAL ------------------------------------------------ 14.42

(2) AN EMPLOYEE IS IN A PAY STATUS 32 HOURS THE FIRST WEEK AND 40 HOURS THE SECOND WEEK.

SUBJECT PAY, 72 X .6923076 (OR FROM CHART) ---------------- $49.84

NOT SUBJECT PAY (GUARANTEED DIFFERENTIAL) 72 X .1288461

(OR FROM CHART) ----------------------------------------- 2.08

TOTAL ------------------------------------------------ 51.92

(3) AN EMPLOYEE IS IN A PAY STATUS 41 HOURS THE FIRST WEEK AND IS ON LEAVE WITHOUT PAY ALL OF THE SECOND WEEK.

HIS EARNINGS WOULD BE CALCULATED AS FOLLOWS:

SUBJECT PAY, 40 X .6923076 (OR FROM CHART) --------------- $27.69

NOT SUBJECT PAY (OVERTIME) 1 X 1.0384615 -------------------- 1.03

TOTAL ------------------------------------------------ 28.72

FROM THE CHART IT CAN BE SEEN THAT THE GUARANTEED MINIMUM FOR A TOTAL OF 41 HOURS IS $29.56. THEREFORE, HE MUST BE PAID:

SUBJECT PAY ----------------------------------------------- $27.69

NOT SUBJECT PAY ------------------------------------------- 1.87

TOTAL ------------------------------------------------ 29.56

THE NOT SUBJECT PAY IS MADE UP OF:

OVERTIME ---------------------------------- $1.03

GUARANTEED DIFFERENTIAL ------------------- .84

TOTAL ----------------------------------- 1.87 HOWEVER, IT IS NOT REQUIRED THAT THIS BREAKDOWN BE DETERMINED NOR SHOWN ON THE PAY ROLL. IS NECESSARY ONLY TO TAKE THE NOT SUBJECT PAY FIGURE OF $1.87 FROM COLUMN (9) ON THE CHART.

(4) AN EMPLOYEE IS IN A PAY STATUS 40 HOURS THE FIRST WEEK AND 42 HOURS THE SECOND WEEK.

HIS EARNINGS WOULD BE CALCULATED AS FOLLOWS:

SUBJECT PAY, 80 X .6923076 (OR FROM CHART) ---------------- $55.38

NOT SUBJECT PAY, (OVERTIME) 2 X 1.0384615 ----------------- 2.07

TOTAL ------------------------------------------------ 57.45

FROM THE CHART IT CAN BE SEEN THAT THE GUARANTEED MINIMUM FOR 80 HOURS OR MORE IS $57.69. THEREFORE, HE MUST BE PAID:

SUBJECT PAY ----------------------------------------------- $55.38

NOT SUBJECT PAY ------------------------------------------- 2.31

TOTAL -------------------------------------------------- 57.69

(5) AN EMPLOYEE IS IN A PAY STATUS 32 HOURS THE FIRST WEEK AND 48 HOURS THE SECOND WEEK.

HIS EARNINGS WOULD BE CALCULATED AS FOLLOWS:

SUBJECT PAY, 72 X .6923076 (OR FROM CHART) ---------------- $49.84

NOT SUBJECT PAY (OVERTIME) 8 X 1.0384615 ------------------- 8.30

TOTAL ------------------------------------------------- 58.14

FROM THE CHART IT CAN BE SEEN THAT THE GUARANTEED MINIMUM FOR 80 HOURS IS $57.69. THEREFORE, HE HAS EXCEEDED THE GUARANTEED MINIMUM AND RECEIVES NO DIFFERENTIAL.

9. THESE CHARTS COVER EVERY POSSIBILITY INVOLVING THE GUARANTEED MINIMUM. ANY CASE OF A GREATER NUMBER OF OVERTIME HOURS THAN SHOWN ON CHARTS WILL INVOLVE PAY IN EXCESS OF THE GUARANTEED MINIMUM.

10. IN THOSE CASES WHERE THE MILLS REMAINING FROM THE SUBJECT PAY AND THE MILLS REMAINING FROM THE NOT SUBJECT PAY MAKE A TOTAL OF ONE CENT OR MORE, THE NOT SUBJECT PAY FIGURE HAS BEEN INCREASED BY ONE CENT. THIS IS IN ACCORDANCE WITH THE PROCEDURE FOLLOWED BY THE GENERAL ACCOUNTING OFFICE.

SECTION 603 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 302, PROVIDES:

THE AGGREGATE PER ANNUM RATE OF COMPENSATION WITH RESPECT TO ANY PAY PERIOD, IN THE CASE OF ANY FULL-TIME EMPLOYEE IN THE SERVICE ON JULY 1, 1945, (1) WHO WAS A FULL-TIME EMPLOYEE ON JUNE 30, 1945, (2) WHOSE PER ANNUM BASIC RATE OF COMPENSATION ON JUNE 30, 1945, DID NOT EXCEED A RATE OF $1,800 PER ANNUM, AND (3) WHOSE COMPENSATION IS FIXED IN ACCORDANCE WITH THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, OR THE ACT ENTITLED "AN ACT TO ADJUST THE COMPENSATION OF CERTAIN EMPLOYEES IN THE CUSTOMS SERVICE," APPROVED MAY 29, 1928, AS AMENDED, SHALL NOT, UNDER THE RATES OF COMPENSATION ESTABLISHED BY THIS ACT, SO LONG AS HE CONTINUES TO OCCUPY THE POSITION HE OCCUPIED ON JUNE 30, 1945, BE LESS THAN HIS PER ANNUM BASIC RATE OF COMPENSATION ON SUCH DATE, PLUS THE RATE OF $300 PER ANNUM OR 25 PERCENTUM OF SUCH PER ANNUM BASIC RATE OF COMPENSATION, WHICHEVER IS THE SMALLER AMOUNT.

IN DECISION OF JULY 18, 1945, B-50927, 25 COMP. GEN. 62, IN ANSWER TO QUESTION 2 UNDER THE HEADING "603./A)" OF THE STATUTE, IT WAS STATED:

THE NEW BASIC COMPENSATION OF EMPLOYEES WHOSE POSITIONS ARE SUBJECT TO THE CLASSIFICATION ACT IS FIXED BY SECTION 405 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, ONLY. SECTION 603 (A) OF THE STATUTE MERELY IS A GUARANTEE ON "THE AGGREGATE PER ANNUM RATE OF COMPENSATION WITH RESPECT TO ANY PAY PERIOD" RATHER THAN AN INCREASE IN THE BASIC COMPENSATION. OTHER WORDS, SAID PROVISION GUARANTEES THAT THE AGGREGATE COMPENSATION AUTHORIZED BY ALL PROVISIONS OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 SHALL NOT FALL BELOW THE AGGREGATE COMPENSATION RECEIVED BY AN EMPLOYEE ON JUNE 30, 1945, WHO WAS RECEIVING THE $300 MINIMUM GUARANTEE ADDITIONAL WARTIME COMPENSATION IN LIEU OF OVERTIME COMPENSATION AUTHORIZED BY THE WAR OVERTIME PAY ACT OF 1943, SO LONG AS THE EMPLOYEE OCCUPIES THE SAME POSITION HELD JUNE 30, 1945. HENCE, SUCH ADDITIONAL COMPENSATION PAID PURSUANT TO SECTION 603 (A) OF THE STATUTE MAY NOT BE REGARDED AS BASIC COMPENSATION. THUS, THE NEW BASIC COMPENSATION OF AN EMPLOYEE RECEIVING $1,200 PER ANNUM ON JUNE 30, 1945, IS $1,440 (20 PERCENT INCREASE) UNDER SECTION 405 OF THE STATUTE, THE EMPLOYEE ON A 40-HOUR ADMINISTRATIVE WORKWEEK WOULD CONTINUE TO RECEIVE AN AGGREGATE COMPENSATION FOR ANY PAY PERIOD AT THE RATE OF $1,500 PER ANNUM WHILE HE CONTINUES TO OCCUPY THE SAME POSITION AND UNTIL HIS AGGREGATE COMPENSATION HAS BEEN INCREASED BY REASON OF OTHER PROVISIONS OF THE LAW TO SATISFY THE $300 GUARANTEE. * * * SEE, ALSO, ANSWER TO QUESTION 15, DECISION OF JULY 28, 1945, B 51099, 25 COMP. GEN. 121; DECISION OF AUGUST 28, 1945, B-51697, 25 ID. 230; AND THE "40-HOUR WEEK--- GENERAL ACCOUNTING OFFICE SALARY TABLE NO. 22," PARTICULARLY THE REVERSE SIDE THEREOF AND THE FOOTNOTE READING " " ADDITIONAL COMPENSATION" (THE SO-CALLED GUARANTEE) IS NOT FOR CONSIDERATION WHEN OVERTIME PAY EQUALS OR EXCEEDS THE AMOUNT OF ADDITIONAL COMPENSATION (THE AMOUNT GUARANTEED WITH RESPECT TO ANY PAY PERIOD).' WHILE OVERTIME COMPENSATION IS COMPUTED UPON THE BASIS OF EACH WEEK INDEPENDENTLY OF THE PAY PERIOD, THE GUARANTEE PROVIDED BY SECTION 603 (A) OF THE STATUTE IS REQUIRED TO BE COMPUTED UPON THE BASIS OF THE PAY PERIOD OF TWO WEEKS. THEREFORE, AN EMPLOYEE MUST BE CREDITED WITH BASIC AND OVERTIME COMPENSATION EARNED DURING EACH WEEK OF THE PAY PERIOD INDEPENDENTLY OF THE OTHER WEEK AND THE TOTAL OVERTIME COMPENSATION EARNED DURING THE TWO WEEKS OF THE PAY PERIOD MUST BE APPLIED TO SATISFY THE GUARANTEE FOR THE PAY PERIOD. IN CONNECTION WITH THE FOREGOING IT IS PERTINENT TO NOTE THE FOLLOWING STATEMENT IN HOUSE OF REPRESENTATIVES REPORT NO. 726, 79TH CONGRESS, ON H.R. 3393, WHICH BILL BECAME THE ACT HERE INVOLVED:

THE PURPOSE OF SECTION 603 (A) IS TO PREVENT THESE LOW-SALARIED EMPLOYEES FROM SUFFERING A REDUCTION IN AGGREGATE COMPENSATION IN ANY PAY PERIOD BY REASON OF THE EXPIRATION OF THE $300 OR 25 PERCENT GUARANTY PROVIDED IN THE WAR OVERTIME PAY ACT. THE EMPLOYEES INVOLVED WOULD BE EMPLOYEES, WORKING LITTLE OR NO OVERTIME, WHOSE SALARIES RANGE FROM $720 TO $1,740 A YEAR. AT $1,800 AND ABOVE, THE BASIC PAY INCREASES PROVIDED BY THE BILL AMOUNT TO $300 OR MORE, AND SECTION 603 (A) WOULD N THEN BE APPLICABLE. THE METHOD OF COMPUTATION EMPLOYED IN THE SUBMITTED CHARTS, AND THE EXAMPLES GIVEN IN THE EXPLANATORY STATEMENT QUOTED ABOVE, APPEAR TO APPLY BROADLY, AND IN SUBSTANCE, THE ABOVE-STATED RULES, AND THE USE OF THE CHART FOR THE PRESENT WILL NOT BE OBJECTED TO. OF COURSE, THIS IS NOT TO BE UNDERSTOOD AS PRECLUDING THIS OFFICE FROM QUESTIONING THE APPLICATION OF THE CHART IN PARTICULAR CASES WHICH SPECIALLY MAY BE CALLED TO THE ATTENTION OF THIS OFFICE FOR OFFICIAL ACTION WARRANTING A DEPARTURE FROM THE CHART.