B-53243, NOVEMBER 20, 1945, 25 COMP. GEN. 409

B-53243, NOVEMBER 20, 1945, 25 COMP. GEN. 409

FEDERAL EMPLOYEES PAY ACT OF 1945 - OVERTIME COMPENSATION - ALASKA RAILROAD EMPLOYEES SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, PROVIDING THAT EMPLOYEES WHOSE ANNUAL OR MONTHLY WAGES ARE FIXED BY A WAGE BOARD OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE SHALL BE ENTITLED TO OVERTIME PAY IN ACCORDANCE WITH THE 40-HOUR WEEK STATUTE OF MARCH 28, 1934, COVERS THE SAME ANNUAL AND MONTHLY BASIS EMPLOYEES AS WERE COVERED IN THE WAR OVERTIME PAY ACT OF 1943, AND THE REFERENCE THEREIN TO THE 1934 STATUTE APPLIES TO CONDITIONS UNDER WHICH OVERTIME PAY WAS TO BE RECEIVED AND NOT TO THE CLASS OF EMPLOYEES ENTITLED THERETO. ALASKA RAILROAD EMPLOYEES WHO ARE COMPENSATED AT ANNUAL OR MONTHLY RATES OF PAY FIXED BY NEGOTIATION BETWEEN RAILROAD OFFICIALS AND EMPLOYEE ORGANIZATIONS SUBJECT TO THE APPROVAL OF THE SECRETARY OF THE INTERIOR ARE WITHIN THE PROVISIONS OF SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, AUTHORIZING THE PAYMENT OF OVERTIME COMPENSATION TO EMPLOYEES COMPENSATED ON AN ANNUAL OR MONTHLY BASIS UNDER WAGE BOARD PROCEDURE IN ACCORDANCE WITH THE 40-HOUR WEEK STATUTE OF MARCH 28, 1934; HOWEVER, SIMILAR EMPLOYEES COMPENSATED ON A PER DIEM, PER HOUR, OR PIECE WORK BASIS WHO ARE NOT COVERED BY SAID PROVISIONS SHOULD CONTINUE TO HAVE THEIR OVERTIME COMPENSATION PRESCRIBED BY ADMINISTRATIVE ACTION.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, NOVEMBER 20, 1945:

THERE HAS BEEN CONSIDERED YOUR LETTER OF OCTOBER 17, 1945, AS FOLLOWS:

THE ACT OF MARCH 12, 1914 (38 STAT. 305, 48 U.S.C. SEC. 301), AUTHORIZED THE PRESIDENT "TO FIX THE COMPENSATION OF ALL OFFICERS, AGENTS, OR EMPLOYEES APPOINTED OR DESIGNATED BY HIM" IN THE OPERATION OF THE ALASKA RAILROAD AND "TO AUTHORIZE AND REQUIRE SUCH OFFICERS, AGENTS, OR AGENCIES TO PERFORM ANY OR ALL OF THE DUTIES IMPOSED UPON HIM" BY THE ACT. EXECUTIVE ORDER NO. 3861 OF JUNE 8, 1923, THE PRESIDENT DELEGATED TO THE SECRETARY OF THE INTERIOR THE POWER TO OPERATE THE RAILROAD "IN ALL RESPECTS AND TO ALL INTENTS AND PURPOSES, THE SAME AS IF THE OPERATION THEREOF HAD BEEN PLACED BY LAW UNDER THE JURISDICTION OF THE SECRETARY OF THE INTERIOR.' ON JANUARY 11, 1929, THE SECRETARY PRESCRIBED REGULATIONS GOVERNING THE OFFICE OF GENERAL MANAGER OF THE RAILROAD. THESE REGULATIONS REQUIRE THAT "INCREASES OR DECREASES IN RATES OF PAY, OR CHANGES IN WORKING CONDITIONS, OF ANY CLASS OR BODY OF EMPLOYEES" MUST BE SUBMITTED TO AND RECEIVE THE APPROVAL OF THE SECRETARY BEFORE BECOMING EFFECTIVE. IN ACCORDANCE WITH THIS DIRECTION, THE GENERAL MANAGER, AFTER CONFERENCE WITH LOCAL REPRESENTATIVES OF THE RAILROAD BROTHERHOODS, SUBMITS PROPOSED INCREASES OR ADJUSTMENTS IN WAGE SCHEDULES FROM TIME TO TIME TO THE SECRETARY OR TO THE SPECIAL ADVISER ON LABOR RELATIONS, WHO ACTS FOR AND ON BEHALF OF THE SECRETARY. IN ARRIVING AT WAGE RATES, CONSIDERATION IS GIVEN TO RATES PAID EMPLOYEES PERFORMING SIMILAR DUTIES ON RAILROADS IN THE CONTINENTAL UNITED STATES AND CHANGES IN CONTINENTAL RATES ARE REFLECTED BY CHANGES IN ALASKA RAILROAD RATES. IN ADDITION, IN VIEW OF THE HIGHER COST IN THE TERRITORY, AN EFFORT HAS BEEN MADE TO MAINTAIN ALASKA RAILROAD WAGES AT A LEVEL AT LEAST 25 PERCENT HIGHER THAN WAGES FOR COMPARABLE POSITIONS IN THE STATES.

WHEN THE WAR OVERTIME PAY ACT OF 1943 (57 STAT. 75) WAS PASSED, A QUESTION AROSE AS TO WHETHER OR NOT ALASKA RAILROAD EMPLOYEES WERE COVERED BY IT. YOU HELD (23 COMP. GEN. 123) THAT EMPLOYEES OF THE RAILROAD WHOSE WAGES ARE FIXED AND ADJUSTED ON A MONTHLY OR YEARLY BASIS CAME WITHIN THE PURVIEW OF THE ACT BY VIRTUE OF AN EXPRESS PROVISION, BUT THAT THOSE WHOSE WAGES ARE FIXED AND ADJUSTED ON A PER DIEM, PER HOUR, OR PIECE WORK BASIS WERE PRECLUDED FROM RECEIVING THE OVERTIME BENEFITS OF THE STATUTE. ORDER TO MAINTAIN EQUILIBRIUM IN THE RAILROAD WAGE STRUCTURE, THE GENERAL MANAGER, WITH THE APPROVAL OF THE SECRETARY OF THE INTERIOR, ADMINISTRATIVELY INCREASED BASE RATES AND OVERTIME PAY OF THOSE EMPLOYEES UNAFFECTED BY THE WAR OVERTIME PAY ACT TO BRING THEIR PAY INTO LINE WITH THAT RECEIVED BY THE ANNUAL AND MONTHLY EMPLOYEES. THE ADMINISTRATIVE ADJUSTMENTS TOOK EFFECT AS OF OCTOBER 1, 1943, AND LEGISLATION (ACT OF DECEMBER 23, 1944, 58 STAT. 915 (916) ( WAS SOUGHT AND OBTAINED FROM CONGRESS AUTHORIZING SIMILAR WAGE INCREASES TO PER DIEM AND HOURLY EMPLOYEES RETROACTIVELY TO MAY 1, 1943, THE DATE ON WHICH THE WAR OVERTIME PAY ACT BECAME EFFECTIVE. THE ACT OF DECEMBER 23 DID NOT AFFECT OVERTIME RATES, BUT MERELY AUTHORIZED BASIC WAGE INCREASES, AND WAS REQUESTED OF CONGRESS BECAUSE OF PREVIOUS RULINGS OF YOUR OFFICE THAT ADMINISTRATIVE CHANGES IN SALARY RATES MIGHT NOT BE MADE RETROACTIVELY EFFECTIVE.

THUS AT THE TIME THAT THE FEDERAL EMPLOYEES PAY ACT OF 1945 ( PUBLIC LAW 106, 79TH CONG. (, WAS ENACTED, ONLY ANNUAL AND MONTHLY EMPLOYEES WERE SUBJECT TO FEDERAL OVERTIME PAY LEGISLATION. THE 1945 PAY ACT PROVIDES (SEC. 102 (C) ): "THIS ACT, EXCEPT SECTIONS 203 AND 607, SHALL NOT APPLY TO EMPLOYEES WHOSE BASIC COMPENSATION IS FIXED AND ADJUSTED FROM TIME TO TIME IN ACCORDANCE WITH PREVAILING RATES BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE.' IT IS SETTLED THAT ALASKA RAILROAD EMPLOYEES ARE EMPLOYEES WHOSE WAGES ARE SO FIXED. SECTION 607, DEALING WITH PERSONNEL CEILINGS, IS NOT RELEVANT TO THE PROBLEM I WISH TO PRESENT TO YOU. SECTION 203, HOWEVER, PROVIDES THAT: "EMPLOYEES WHOSE BASIC RATE OF COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS AND ADJUSTED FROM TIME TO TIME IN ACCORDANCE WITH PREVAILING RATES BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE SHALL BE ENTITLED TO OVERTIME PAY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 23 OF THE ACT OF MARCH 28, 1934 ( U.S.C. 1940 EDITION, TITLE 5, SECTION 673C).' THIS WOULD APPEAR TO DIRECT PAYMENT OF OVERTIME TO ANNUAL AND MONTHLY ALASKA RAILROAD EMPLOYEES IN ACCORDANCE WITH THE 1934 ACT, WHICH SET A 40-HOUR WEEK AND PROVIDED PAYMENT AT THE RATE OF TIME AND ONE-HALF FOR OVERTIME. HOWEVER, BY A DECISION DATED JULY 13, 1934 (14 COMP. GEN. 42), THE COMPTROLLER GENERAL DECLARED THAT RAILROAD EMPLOYEES WERE GENERALLY REGARDED AS A DISTINCT CLASS OF PERSONNEL AND NOT AS BEING WITHIN THE "TRADES AND OCCUPATIONS" REFERRED TO IN SECTION 23 OF THE ACT OF MARCH 28, 1934. HE CONCLUDED THAT CONGRESS HAD NOT INTENDED TO APPLY THE 40-HOUR WEEK REQUIREMENT TO THE ALASKA RAILROAD AND THAT SECTION 23 DID NOT APPLY TO COMPEL SUCH A WORK WEEK TO BE SET ADMINISTRATIVELY.

IT IS THE VIEW OF THIS DEPARTMENT THAT, IN THE LIGHT OF THE COMPTROLLER GENERAL'S DECISION, HOLDING SECTION 23 OF THE 1934 ACT INAPPLICABLE TO THE ALASKA RAILROAD, SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, BY EMPLOYING THE STANDARDS OF SECTION 23 AS THE BASIS FOR OVERTIME RATES OF ANNUAL AND MONTHLY EMPLOYEES WHOSE WAGES ARE SET BY ADMINISTRATIVE ACTION, IS EQUALLY INAPPLICABLE TO SUCH EMPLOYEES OF THE ALASKA RAILROAD. BECAUSE THE WAR OVERTIME PAY ACT OF 1943, WHICH YOU HELD APPLICABLE TO ANNUAL AND MONTHLY EMPLOYEES BUT NOT TO PER DIEM OR HOURLY WORKERS, EXPIRED BY ITS TERMS ON JUNE 30, 1945, IT IS FURTHER THE VIEW OF THIS DEPARTMENT THAT THERE IS NOW NO FEDERAL STATUTORY OVERTIME FORMULA APPLICABLE TO ANY CLASS OF ALASKA RAILROAD EMPLOYEES, AND THAT ALL GROUPS, WHETHER ANNUAL, MONTHLY, PER DIEM OR HOURLY, ARE AGAIN SUBJECT TO HAVING THEIR OVERTIME COMPENSATION PRESCRIBED BY ADMINISTRATIVE ACTION, JUST AS THEY WERE BEFORE THE WAR OVERTIME PAY ACT OF 1943 WAS ENACTED. IT IS REQUESTED THAT I BE ADVISED WHETHER YOUR OFFICE CONCURS IN THESE VIEWS, SO THAT THE GENERAL MANAGER OF THE RAILROAD MAY BE DIRECTED HOW TO PROCEED IN ADJUSTING WAGE SCHEDULES.

SECTIONS 102 (C) AND 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 296, 297, PROVIDE:

(C) THIS ACT, EXCEPT SECTIONS 203 AND 607, SHALL NOT APPLY TO EMPLOYEES WHOSE BASIC COMPENSATION IS FIXED AND ADJUSTED FROM TIME TO TIME IN ACCORDANCE WITH PREVAILING RATES BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE.

SEC. 203. EMPLOYEES WHOSE BASIC RATE OF COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS AND ADJUSTED FROM TIME TO TIME IN ACCORDANCE WITH PREVAILING RATES BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE SHALL BE ENTITLED TO OVERTIME PAY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 23 OF THE ACT OF MARCH 28, 1934 ( U.S.C., 1940 EDITION, TITLE 5, SEC. 673C). THE RATE OF COMPENSATION FOR EACH HOUR OF OVERTIME EMPLOYMENT OF ANY SUCH EMPLOYEE SHALL BE COMPUTED AS FOLLOWS:

(A) IF THE BASIC RATE OF COMPENSATION OF THE EMPLOYEE IS FIXED ON AN ANNUAL BASIS, DIVIDE SUCH BASIC RATE OF COMPENSATION BY TWO THOUSAND AND EIGHTY AND MULTIPLY THE QUOTIENT BY ONE AND ONE-HALF; AND

(B) IF THE BASIC RATE OF COMPENSATION OF THE EMPLOYEE IS FIXED ON A MONTHLY BASIS, MULTIPLY SUCH BASIC RATE OF COMPENSATION BY TWELVE TO DERIVE A BASIC ANNUAL RATE OF COMPENSATION, DIVIDE SUCH BASIC ANNUAL RATE OF COMPENSATION BY TWO THOUSAND AND EIGHTY, AND MULTIPLY THE QUOTIENT BY ONE AND ONE-HALF.

IN HOUSE REPORT 726 ON THE FEDERAL EMPLOYEES PAY ACT OF 1945, IT WAS STATED WITH RESPECT TO SECTION 203:

SECTION 203. WAGE BOARD EMPLOYEES.--- THIS SECTION COVERS ABOUT 150,000 EMPLOYEES WHOSE BASIC COMPENSATION IS FIXED AND ADJUSTED FROM TIME TO TIME ON A PER ANNUM OR MONTHLY BASIS BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE. THESE EMPLOYEES, EXCEPT IN THE GOVERNMENT PRINTING OFFICE AND THE TENNESSEE VALLEY AUTHORITY, WERE SPECIFICALLY INCLUDED WITHIN THE WAR OVERTIME PAY ACT OF 1943, BECAUSE AT THAT TIME THEY WERE NOT REGARDED AS FALLING WITHIN THE ACT OF MARCH 28, 1934, WHICH PROVIDES TRUE TIME AND ONE-HALF RATES FOR SIMILAR EMPLOYEES PAID AT HOURLY OR DAILY RATES.

SINCE THAT TIME, HOWEVER, THE SUPREME COURT OF THE UNITED STATES, IN U.S. V. TOWNSLEY (323 U.S. 557, JAN. 15, 1945) HAS DECIDED (1) THAT SECTION 23 OF THE ACT OF MARCH 28, 1934, INSOFAR AS IT APPLIES TO OVERTIME PAY, COVERS WAGE-SCHEDULE EMPLOYEES WHOSE BASE PAY IS FIXED ON A MONTHLY BASIS; AND (2) THAT THE PROPER METHOD OF COMPUTING SUCH OVERTIME COMPENSATION FOR EMPLOYEES PAID ON A MONTHLY BASIS IS FIRST TO MULTIPLY THE MONTHLY RATE BY 12 AND DIVIDE THE PRODUCT BY 260, .E., 52 TIMES 5. THIS GIVES THE STRAIGHT-TIME DAILY RATE, WHICH IS MULTIPLIED BY 1 1/2 TO DERIVE THE OVERTIME RATE FOR 1 DAY OF 8 HOURS.

THE COMMITTEE BELIEVES IT TO BE SOUND TO TREAT THE MONTHLY AND PER ANNUM WAGE-SCHEDULE EMPLOYEES IN THE SAME WAY AS PER AND HOURLY WAGE SCHEDULE EMPLOYEES ARE TREATED UNDER THE ACT OF MARCH 28, 1934. THE FUNDAMENTAL CRITERION SHOULD BE THE METHOD BY WHICH THE BASIC RATES ARE ESTABLISHED, AND DIFFERENCES IN OVERTIME PAY TREATMENT SHOULD NOT REST ON WHETHER SUCH RATES ARE ADMINISTRATIVELY EXPRESSED IN TERMS OF AN HOUR, A DAY, A MONTH, OR A YEAR.

SECTION 203, ACCORDINGLY, MAKES MONTHLY AND PER ANNUM WAGE-SCHEDULE EMPLOYEES, WHOSE BASIC RATES ARE ESTABLISHED BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY WITH REFERENCE TO PREVAILING RATES, SUBJECT TO THE OVERTIME PAY PROVISION OF SECTION 23 OF THE ACT OF MARCH 28, 1934, WHICH HAS ALWAYS APPLIED TO SIMILAR HOURLY AND PER DIEM WAGE-SCHEDULE EMPLOYEES. IT ALSO SPELLS OUT THE SAME OVERTIME PAY COMPUTATION METHOD AS IS APPROVED BY THE SUPREME COURT IN THE TOWNSLEY CASE.

IN 23 COMP. GEN. 123, IT WAS HELD (QUOTING FROM THE SYLLABUS).

EMPLOYEES OF THE ALASKA RAILROAD WHO ARE PAID ON A MONTHLY OR YEARLY BASIS AND WHOSE WAGES ARE ADJUSTED, SUBJECT TO THE APPROVAL OF THE SECRETARY OF THE INTERIOR, IN ACCORDANCE WITH WAGE RATES PAID RAILROAD EMPLOYEES IN THE CONTINENTAL UNITED STATES ARE EXPRESSLY INCLUDED WITHIN THE PROVISIONS OF THE WAR OVERTIME PAY ACT OF 1943, BY SECTION 1 THEREOF, WHICH EXTENDS THE BENEFITS OF THE ACT TO EMPLOYEES PAID ON A MONTHLY OR YEARLY BASIS WHOSE WAGES ARE ADJUSTED FROM TIME TO TIME IN ACCORDANCE WITH PREVAILING RATES BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY. COMP. GEN. 596, DISTINGUISHED.

PER DIEM, PER HOUR, OR PIECE WORK EMPLOYEES OF THE ALASKA RAILROAD WHOSE WAGE RATES ARE FIXED BY NEGOTIATION BETWEEN RAILROAD OFFICIALS AND EMPLOYEE ORGANIZATIONS ON THE BASIS OF WAGE RATES PAID SIMILAR RAILROAD EMPLOYEES IN THE CONTINENTAL UNITED STATES SUBJECT TO APPROVAL BY THE SECRETARY OF THE INTERIOR, MAY BE REGARDED AS HAVING THEIR WAGES FIXED AND ADJUSTED BY AN ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE AS A WAGE BOARD WITHIN THE PURVIEW OF EXCEPTION (E) OF THE WAR OVERTIME PAY ACT OF 1943, EXCLUDING FROM THE BENEFITS OF TH ACT PER DIEM AND PER HOUR EMPLOYEES WHOSE WAGE RATES ARE FIXED BY WAGE BOARDS, ETC.

AS THE FEDERAL EMPLOYEES PAY ACT OF 1945 EXCLUDES FROM ITS PROVISIONS ALL EMPLOYEES WHOSE BASIC COMPENSATION IS FIXED AND ADJUSTED BY WAGE BOARDS AND SIMILAR AUTHORITY EXCEPT THOSE WHOSE COMPENSATION IS SO FIXED ON AN ANNUAL OR MONTHLY BASIS, AND, ALSO, SINCE IT IS SHOWN BY THE HOUSE REPORT, SUPRA, THAT SECTION 203 OF THE ACT WAS INTENDED TO COVER THE SAME ANNUAL AND MONTHLY BASIS EMPLOYEES AS WERE COVERED IN THE OVERTIME PAY ACT OF 1943, THE ONLY REASONABLE CONCLUSION WOULD APPEAR TO BE THAT THE REFERENCE IN SECTION 203 TO THE ACT OF MARCH 28, 1934, 48 STAT. 522, WAS INTENDED TO APPLY TO THE CONDITIONS UNDER WHICH THE OVERTIME PAY WAS TO BE RECEIVED AND NOT TO THE CLASS OF EMPLOYEES ENTITLED THERETO AND, ACCORDINGLY, THAT EMPLOYEES OF THE ALASKA RAILROAD WHOSE SALARIES ARE FIXED AND ADJUSTED ON A MONTHLY OR YEARLY BASIS COME WITHIN THE OVERTIME PROVISIONS OF SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT 1945, EFFECTIVE JULY 1, 1945, BUT THAT SAID ACT HAS NO APPLICATION TO EMPLOYEES OF THE ALASKA RAILROAD WHOSE SERVICES ARE FIXED OR ADJUSTED ON A PER DIEM, PER HOUR, OR PIECE WORK BASIS. YOUR SUBMISSION IS ANSWERED ACCORDINGLY.