B-54574, JANUARY 7, 1946, 25 COMP. GEN. 502

B-54574: Jan 7, 1946

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SUCH EMPLOYEES ARE "SUBJECT" TO THE CLASSIFICATION ACT AS AMENDED BY THE FEDERAL EMPLOYEES PAY ACT OF 1945. THE FIXING OF WITHIN-GRADE SALARY STEPS OF EMPLOYEES UPON RESTORATION AFTER MILITARY DUTY IS NOT SUBJECT TO ADMINISTRATIVE DISCRETION. IS TO BE ACCOMPLISHED ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE 1945 ACT. WAS RESTORED TO HIS FORMER CIVILIAN POSITION OR TO ONE OF LIKE SENIORITY. MUST BE DETERMINED AS OF THE EFFECTIVE DATE OF SUCH RESTORATION WITHOUT REGARD TO PERSONNEL ACTIONS TAKEN WHILE THE EMPLOYEE WAS ON MILITARY FURLOUGH PURPORTING TO GRANT WITHIN GRADE SALARY ADVANCEMENTS OR PURPORTING TO CONVERT THE STATUS OF THE EMPLOYEE. WHERE AFFIRMATIVE ADMINISTRATIVE ACTION WAS TAKEN WHILE AN EMPLOYEE WAS ON MILITARY FURLOUGH TO CONVERT HIS POSITION UNDER A SALARY SCHEDULE PRESCRIBED BY EXECUTIVE ORDER NO. 6746 TO A GRADE AT A HIGHER RATE UNDER THE CLASSIFICATION ACT WITH A RESULTANT "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF THE WITHIN-GRADE SALARY ADVANCEMENT PROVISIONS OF SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945.

B-54574, JANUARY 7, 1946, 25 COMP. GEN. 502

FEDERAL EMPLOYEES PAY ACT OF 1945 - SALARY RATES ADMINISTRATIVELY FIXED IN ACCORDANCE WITH CLASSIFICATION ACT; WITHIN-GRADE PROMOTIONS AFTER MILITARY DUTY WHERE THE FEDERAL HOME LOAN BANK ADMINISTRATION, PURSUANT TO THE PROVISIONS OF SECTION 19 OF THE ACT OF JULY 2, 1932, AS AMENDED, HAS ADOPTED THE CLASSIFICATION ACT FOR THE PURPOSE OF FIXING THE GRADES AND SALARIES OF ITS EMPLOYEES, SUCH EMPLOYEES ARE "SUBJECT" TO THE CLASSIFICATION ACT AS AMENDED BY THE FEDERAL EMPLOYEES PAY ACT OF 1945, AND, THEREFORE, THE FIXING OF WITHIN-GRADE SALARY STEPS OF EMPLOYEES UPON RESTORATION AFTER MILITARY DUTY IS NOT SUBJECT TO ADMINISTRATIVE DISCRETION, BUT, RATHER, IS TO BE ACCOMPLISHED ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE 1945 ACT. THE SALARY RATE OF AN EMPLOYEE WHO, UPON DISCHARGE FROM THE MILITARY SERVICE, WAS RESTORED TO HIS FORMER CIVILIAN POSITION OR TO ONE OF LIKE SENIORITY, STATUS, AND PAY, PURSUANT TO THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED, MUST BE DETERMINED AS OF THE EFFECTIVE DATE OF SUCH RESTORATION WITHOUT REGARD TO PERSONNEL ACTIONS TAKEN WHILE THE EMPLOYEE WAS ON MILITARY FURLOUGH PURPORTING TO GRANT WITHIN GRADE SALARY ADVANCEMENTS OR PURPORTING TO CONVERT THE STATUS OF THE EMPLOYEE--- AS DISTINGUISHED FROM HIS POSITION--- FROM CLASSIFICATION UNDER AN EXECUTIVE ORDER GRADE TO A CLASSIFICATION ACT GRADE. WHERE AFFIRMATIVE ADMINISTRATIVE ACTION WAS TAKEN WHILE AN EMPLOYEE WAS ON MILITARY FURLOUGH TO CONVERT HIS POSITION UNDER A SALARY SCHEDULE PRESCRIBED BY EXECUTIVE ORDER NO. 6746 TO A GRADE AT A HIGHER RATE UNDER THE CLASSIFICATION ACT WITH A RESULTANT "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF THE WITHIN-GRADE SALARY ADVANCEMENT PROVISIONS OF SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, THE EMPLOYEE IS ENTITLED, UPON REEMPLOYMENT AFTER MILITARY SERVICE, TO CREDIT TOWARD WITHIN-GRADE SALARY ADVANCEMENTS IN THE CLASSIFIED POSITION FROM THE DATE OF SUCH CONVERSION. WHERE AFFIRMATIVE ADMINISTRATIVE ACTION WAS TAKEN AT THE TIME OF THE EMPLOYEE'S REEMPLOYMENT AFTER MILITARY SERVICE TO CONVERT THE EMPLOYEE'S POSITION UNDER A SALARY SCHEDULE PRESCRIBED B EXECUTIVE ORDER NO. 6746 TO A GRADE AT A HIGHER RATE UNDER THE CLASSIFICATION ACT WITH A RESULTANT ,EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF THE WITHIN- GRADE SALARY-ADVANCEMENT PROVISIONS OF SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, THE EMPLOYEE MAY NOT BE CREDITED WITH ANY TIME SPENT IN THE MILITARY SERVICE TOWARD A WITHIN GRADE SALARY ADVANCEMENT IN THE CLASSIFIED POSITION, IRRESPECTIVE OF "PERSONNEL ACTIONS" TAKEN WHILE THE EMPLOYEE WAS ON MILITARY FURLOUGH CHANGING HIS STATUS TO A CLASSIFIED GRADE. THE INITIAL SALARY RATE IN A CLASSIFICATION ACT GRADE TO WHICH AN EMPLOYEE'S POSITION UNDER A SALARY SCHEDULE PRESCRIBED BY EXECUTIVE ORDER NO. 6746 WAS CONVERTED UPON HIS REEMPLOYMENT AFTER MILITARY SERVICE MAY BE ADMINISTRATIVELY FIXED SO AS TO CAUSE NO LOSS IN COMPENSATION WHICH HAD ACCRUED UNDER THE EXECUTIVE ORDER GRADE (INCLUDING WITHIN-GRADE ADVANCEMENTS) AT THE TIME OF HIS REEMPLOYMENT.

COMPTROLLER GENERAL WARREN TO THE NATIONAL HOUSING ADMINISTRATOR, JANUARY 7, 1946:

THERE HAS BEEN CONSIDERED YOUR LETTER OF DECEMBER 12, 1945, AS FOLLOWS:

IN CONNECTION WITH THE RESTORATION OF VETERANS WHO HAVE REEMPLOYMENT RIGHTS UNDER THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED, OR OTHER SIMILAR STATUTES OR OTHER WAR SERVICE REGULATIONS, SEVERAL QUESTIONS HAVE ARISEN IN THE FEDERAL HOME LOAN BANK ADMINISTRATION CONCERNING THE PROPER STEP WITHIN GRADE TO BE FIXED AS THE INITIAL SALARY RATE. POSITIONS IN THAT AGENCY IN THE PAST WERE CLASSIFIED IN ACCORDANCE WITH THE PROVISIONS OF EXECUTIVE ORDER 6746. SUBSEQUENTLY, THE AGENCY ADMINISTRATIVELY DETERMINED TO CLASSIFY ITS POSITIONS IN ACCORDANCE WITH THE GRADES FIXED BY THE CLASSIFICATION ACT OF 1923, AS AMENDED, AND THIS HAS BEEN ACCOMPLISHED OVER A PERIOD OF TIME AS ADMINISTRATIVELY FEASIBLE FOR ALL ACTIVE POSITIONS. THE POSITIONS IN THE FEDERAL HOME LOAN BANK ADMINISTRATION ARE NOT LEGALLY GOVERNED BY THE CLASSIFICATION ACT OF 1923, AS AMENDED, NOR ARE ALL THE PROCEDURES THEREUNDER FOLLOWED, ALTHOUGH THE GRADES AND SALARIES CONTAINED THEREIN ARE ADMINISTRATIVELY UTILIZED.

IN PRACTICALLY ALL CASES, THE RETURNING VETERANS HAVE BEEN CARRIED IN A MILITARY FURLOUGH STATUS AND IT HAS BEEN THE PRACTICE IN MOST CASES TO PROCESS, DURING THE EMPLOYEES' ABSENCE, PERSONNEL ACTIONS FOR WITHIN-GRADE PROMOTIONS AS THE SAME WOULD HAVE BEEN CALLED FOR HAD THE EMPLOYEES REMAINED ON DUTY. ALSO, IN SOME INSTANCES, SO-CALLED RECORD PERSONNEL ACTIONS WERE PROCESSED CONVERTING FROM EXECUTIVE ORDER GRADES TO CLASSIFICATION ACT GRADES THE POSITIONS OF EMPLOYEES WHO WERE ON MILITARY FURLOUGH.

WHERE AN EMPLOYEE'S POSITION WAS BROUGHT WITHIN A GRADE UNDER THE CLASSIFICATION ACT PRIOR TO HIS DEPARTURE FOR MILITARY SERVICE, LITTLE QUESTION ARISES CONCERNING THE PROPER SALARY STEP UPON RESTORATION. HOWEVER, WHEN AN EMPLOYEE ENTERED MILITARY SERVICE FROM A POSITION CLASSIFIED IN AN EXECUTIVE ORDER GRADE AND RETURNS TO THE SAME POSITION OR A SIMILAR POSITION, QUESTIONS ARISE CONCERNING THE SALARY STEP WITHIN THE APPROPRIATE CLASSIFICATION ACT GRADE. A CASE WHICH ILLUSTRATES THE PROBLEM IS THAT OF AN EMPLOYEE WHO WAS EMPLOYED AS A CLERK, EXECUTIVE ORDER GRADE 6, $1,680, ON APRIL 1, 1941. HE ENTERED MILITARY SERVICE IN OCTOBER, 1941. ON OCTOBER 1, 1942, A RECORD ACTION WAS PROCESSED PURPORTING TO GIVE HIM A WITHIN-GRADE PROMOTION TO $1,740. ON FEBRUARY 1, 1944, A RECORD ACTION WAS PROCESSED PURPORTING TO CONVERT HIS POSITION FROM E.O. GRADE 6, $1,740, TO GRADE CAF-5, AT A SALARY OF $2,000, THE MINIMUM OF THAT GRADE. ON JULY 1, 1945, A RECORD ACTION WAS PROCESSED PURPORTING TO GIVE HIM A BASIC SALARY INCREASE OF $320 (BY ADMINISTRATIVE ADOPTION THE FORMULA IN THE FEDERAL EMPLOYEES PAY ACT OF 1945) AND A PERIODIC INCREASE OF $110, MAKING HIS PURPORTED SALARY $2,430.

IF THESE RECORD ACTIONS ARE CONTROLLING, IT WOULD APPEAR THAT THE EMPLOYEE WOULD NOT BE RESTORED AT $2,430, THE SECOND STEP WITHIN CAF 5. HOWEVER, APPLYING TO THE CASE OTHER AND PERHAPS CONTROLLING PRINCIPLES AS HEREINAFTER DISCUSSED, IT WOULD APPEAR THAT THE EMPLOYEE SHOULD BE RESTORED AT EITHER $2,540, THE THIRD STEP WITHIN CAF-5, OR $2,650, THE FOURTH STEP IN THAT GRADE.

UNDER YOUR DECISIONS IN 24 COMP. GEN. 573, 688, AND 729, IT WOULD APPEAR THAT THE EMPLOYEE IS TO BE REGARDED AS HAVING BEEN TERMINATED AND, THEREFORE, THE RECORD PERSONNEL ACTIONS EFFECTED DURING THE EMPLOYEE'S MILITARY SERVICE MAY NOT BE CONTROLLING. THE POSITION HE OCCUPIED AT THE TIME OF ENTRY INTO MILITARY SERVICE WAS AS CLERK, E.O. GRADE 6, $1,680, AND THE PARTICULAR POSITION IS APPROPRIATELY CONVERTED TO CLASSIFICATION ACT GRADE CAF-5, WHICH HAS A SALARY RANGE FROM $2,320 TO $2,980. WHOLLY INDEPENDENT OF THE FACT THAT SUFFICIENT TIME ELAPSED DURING MILITARY SERVICE FOR THREE WITHIN-GRADE PROMOTIONS, THE EMPLOYEE WOULD NOW BE ENTITLED TO THE MINIMUM OF THE GRADE, $2,320. ADDING THE THREE WITHIN- GRADE PROMOTIONS WOULD BRING THE SALARY TO $2,650, THE FOURTH STEP IN CAF- 5, AND THIS MIGHT BE JUSTIFIED BY THE FACT THAT ALL OF SUCH WITHIN-GRADE PROMOTIONS WERE EARNED BY HIM PRIOR TO THE RESTORATION DATE. ON THE OTHER HAND, IT MIGHT BE ARGUED THAT THE INCREASE NECESSARY TO BRING THE EMPLOYEE TO THE MINIMUM OF THE GRADE IS AN "EQUIVALENT" INCREASE AND THAT THE EMPLOYEE THEREFORE SHOULD RECEIVE BUT TWO WITHIN-GRADE PROMOTIONS AT RESTORATION, WHICH WOULD MAKE HIS SALARY $2,540, THE THIRD STEP IN CAF 5. NO BASIS IS PERCEIVED FOR REGARDING THIS INCREASE AS THE "EQUIVALENT" OF MORE THAN ONE OF THE WITHIN-GRADE PROMOTIONS.

WHILE, ACCORDING TO THE RECORD PERSONNEL ACTIONS PROCESSED DURING THE EMPLOYEE'S ABSENCE, HIS RESTORATION SALARY IS $2,430, IT MIGHT BE NOTED THAT HAD THE RECORD PERSONNEL ACTION CONVERTING HIS POSITION TO CAF-5, $2,000 BEEN PROCESSED ON OR JUST BEFORE OCTOBER 1, 1942, THERE WOULD HAVE BEEN A RECORD ACTION ON APRIL 1, 1944, RECORDING A WITHIN GRADE INCREASE TO $2,100 AND ON JULY 1, 1945, A RECORD CHANGE OF THE BASE PAY INCREASE AND AN ADDITIONAL WITHIN-GRADE INCREASE, MAKING THE SALARY $2,540.

WHILE IN THE FACTS OF THE ABOVE CASE THE APPLICATION OF THE PRINCIPLES LAST DISCUSSED SUGGEST A HIGHER STEP WITHIN GRADE THAN IS FIXED BY THE RECORD ACTIONS, THERE ARE CASES WHERE THEIR APPLICATION SUGGESTS ONE STEP LOWER THAN THE RECORD ACTION. TO ILLUSTRATE THIS, IT MAY BE ASSUMED THAT AN EMPLOYEE UPON ENTRY INTO MILITARY SERVICE IN JULY 1942 WAS IN E.O. GRADE 6, $1,740, AND A RECORD CONVERSION IN DECEMBER 1942 CHANGED HIS POSITION TO CLASSIFICATION ACT GRADE CAF-4, $1,800, THE MINIMUM OF THE GRADE. THEREAFTER THERE WOULD BE RECORD WITHIN-GRADE INCREASES ON JULY 1, 1944, TO $1,860 AND ON JULY 1, 1945, A RECORD INCREASE TO $1,920, TOGETHER WITH THE BASE PAY INCREASE TO $2,232. THUS, IF THE RECORD ACTIONS ARE FOLLOWED IN THIS CASE, THE RESTORATION SALARY WOULD BE $2,232. HOWEVER, FOLLOWING THE PRINCIPLES HERETOFORE DISCUSSED (AND CONSIDERING THAT THE EMPLOYEE WAS IN EFFECT TERMINATED AND THE RECORD ACTIONS DO NOT CONTROL) HIS SALARY OF $1,740 UPON ENTRY INTO MILITARY SERVICE WOULD UPON RESTORATION BECOME $2,100, THE MINIMUM OF GRADE CAF-4 AND THERE WOULD BE ADDED TO THIS ONE WITHIN GRADE PROMOTION (ASSUMING THAT THE INCREASE TO $2,100 SHOULD BE REGARDED AS THE EQUIVALENT OF ONE OF THE TWO WITHIN-GRADE PROMOTIONS ACCRUING DURING MILITARY SERVICE) FOR A TOTAL SALARY OF $2,166.

AS TO EMPLOYEES FOR WHOM RECORD PERSONNEL ACTIONS WERE PROCESSED DURING MILITARY FURLOUGH, IT IS POSSIBLE TO ARGUE THAT SUCH RECORD ACTIONS REFLECT WHAT WOULD HAVE OCCURRED WITH RESPECT TO THE EMPLOYEES' WITHIN- GRADE PROMOTIONS AND CONVERSION FROM EXECUTIVE ORDER GRADE TO CLASSIFICATION ACT GRADE HAD THE EMPLOYEES REMAINED ON ACTIVE DUTY. IF, AS TO SUCH EMPLOYEES, RESTORATION TO DUTY IS TO BE EFFECTED AT THE SALARY FIXED BY THE RECORD ACTIONS, THOSE EMPLOYEES WHOSE POSITIONS WERE NOT CONVERTED DURING MILITARY SERVICE WOULD NEED TO BE RESTORED ON THE BASIS OF SOME FORMULA AS HEREIN DISCUSSED WHICH MIGHT RESULT IN SLIGHTLY DIFFERENT TREATMENT FOR THE TWO CLASSES OF EMPLOYEES.

YOUR DECISION IN THESE CASES WOULD BE APPRECIATED AS TO THE APPROPRIATE SALARY STEP WITHIN GRADE TO APPLY WHEN THE EMPLOYEES LEFT POSITIONS WHICH WERE CLASSIFIED UNDER THE PROVISIONS OF EXECUTIVE ORDER 6746 AND RETURN AFTER MILITARY SERVICE TO THE SAME POSITIONS WHICH HAVE BEEN, OR SIMULTANEOUSLY WITH RESTORATION ARE, CLASSIFIED ADMINISTRATIVELY IN A CLASSIFICATION ACT GRADE. IS THERE ADMINISTRATIVE DISCRETION IN THE FEDERAL HOME LOAN BANK ADMINISTRATION CONCERNING THE SALARY STEP WITHIN GRADE UPON RESTORATION AND, IF SO, CAN IT BE SEPARATELY UTILIZED FOR EACH CASE OF RESTORATION? IN THIS CONNECTION, YOUR ATTENTION IS INVITED TO THE AUTHORITY OF THE AGENCIES WITHIN THE FEDERAL HOME LOAN BANK ADMINISTRATION TO FIX EMPLOYEES' COMPENSATION AS CONTAINED IN THEIR ORGANIC STATUTES. SECTION 19 OF THE FEDERAL HOME LOAN BANK ACT, AS AMENDED, PROVIDES THAT ,THE BOARD (UNDER EXECUTIVE ORDER 9070, THE FEDERAL HOME LOAN BANK ADMINISTRATION) SHALL HAVE POWER TO SELECT, EMPLOY, AND FIX THE COMPENSATION OF SUCH OFFICERS, EMPLOYEES, ATTORNEYS, AND AGENTS AS SHALL BE NECESSARY FOR THE PERFORMANCE OF ITS DUTIES UNDER THIS ACT WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT OR COMPENSATION OF OFFICERS, EMPLOYEES, ATTORNEYS, AND AGENTS OF THE UNITED STATES.' SAID SECTION ALSO PROVIDES WITH RESPECT TO EMPLOYEES THAT THEIR "EMPLOYMENT, COMPENSATION, LEAVE, AND EXPENSES SHALL BE GOVERNED SOLELY BY THE PROVISIONS OF THIS ACT, SPECIFIC AMENDMENTS THEREOF, AND RULES AND REGULATIONS OF THE BOARD NOT INCONSISTENT THEREWITH.' WITH RESPECT TO EMPLOYEES OF HOME OWNERS' LOAN CORPORATION, SECTION 4 (J) OF THE HOME OWNERS' LOAN ACT OF 1933, AS AMENDED, PROVIDES THAT THE CORPORATION "SHALL HAVE POWER TO SELECT, EMPLOY, AND FIX THE COMPENSATION OF SUCH OFFICERS, EMPLOYEES, ATTORNEYS, OR AGENTS AS SHALL BE NECESSARY FOR THE PERFORMANCE OF ITS DUTIES UNDER THIS ACT, WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT OR COMPENSATION OF OFFICERS, EMPLOYEES, ATTORNEYS, OR AGENTS OF THE UNITED STATES.' WITH RESPECT TO EMPLOYEES OF THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, SECTION 402 (C) OF THE NATIONAL HOUSING ACT, AS AMENDED, PROVIDES THAT CORPORATION SHALL HAVE THE POWER TO FIX THE COMPENSATION "OF SUCH OFFICERS, EMPLOYEES, ATTORNEYS, OR AGENTS, AS SHALL BE NECESSARY FOR THE PERFORMANCE OF ITS DUTIES UNDER THIS TITLE, WITHOUT REGARD TO THE PROVISIONS OF ANY OTHER LAWS RELATING TO THE EMPLOYMENT OR COMPENSATION OF OFFICERS OR EMPLOYEES OF THE UNITED STATES.'

IN GENERAL, IN DETERMINING SALARY RATES TO BE PAID EMPLOYEES UPON RESTORATION TO DUTY AFTER MILITARY SERVICE, MAY THE RULE BE FOLLOWED THAT AN EMPLOYEE'S SALARY WITHIN GRADE IS TO BE FIXED INITIALLY AT SUCH RATE (OR AS NEARLY AS THE SAME CAN BE ADMINISTRATIVELY FIXED BY GIVING EFFECT TO RECORD ACTIONS OR OTHERWISE) AS HE WOULD HAVE BEEN RECEIVING ON THE DATE OF RESTORATION HAD HE REMAINED ON ACTIVE DUTY? WITH ONE EXCEPTION, ALL ACTIVE POSITIONS IN THE FEDERAL HOME LOAN BANK ADMINISTRATION, HOME OWNERS' LOAN CORPORATION AND FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION WHICH HAD NOT THERETOFORE BEEN CONVERTED FROM EXECUTIVE ORDER GRADE TO CLASSIFICATION ACT GRADE WERE SO CONVERTED IMMEDIATELY PRIOR TO JULY 1, 1945; THIS ONE EXCEPTION, WHICH WAS A POSITION IN THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, WAS CONVERTED ON JULY 16, 1945. HOWEVER, SUCH CONVERSION WAS NOT ACCOMPLISHED FOR ALL INACTIVE POSITIONS, I.E., THOSE OF EMPLOYEES WHO WERE ON MILITARY SERVICE, BUT ONLY FOR SOME OF THOSE INACTIVE POSITIONS. UPON RESTORATION IN SUCH CASES, MAY IT BE CONSIDERED THAT HAD THEY REMAINED ON ACTIVE DUTY THEIR POSITIONS WOULD HAVE BEEN CONVERTED TO CLASSIFICATION ACT GRADES IMMEDIATELY PRIOR TO JULY 1, 1945 (AS IN ALL PROBABILITY WOULD HAVE BEEN THE CASE), AND THE INITIAL SALARY RATES FIXED ACCORDINGLY? IF THE EFFECTIVE DATES OF THE RECORD ACTIONS ARE NOT CONTROLLING AS TO CHANGES IN PAY, WHEN DOES THE WAITING PERIOD BEGIN FOR THE NEXT WITHIN-GRADE PROMOTION IN THE CASE FIRST ILLUSTRATED HEREIN?

YOUR DECISION B-53153 OF NOVEMBER 26, 1945, ADDRESSED TO THE SECRETARY OF AGRICULTURE, HAS BEEN NOTED BUT IT IS NOT CLEAR TO WHAT EXTENT THAT DECISION IS APPLICABLE TO THE QUESTIONS HEREIN PRESENTED. YOUR DECISIONS ON THESE QUESTIONS WOULD BE APPRECIATED.

SECTION 19 OF THE FEDERAL HOME LOAN BANK ACT, AS AMENDED (47 STAT. 725, 737), PROVIDES IN PERTINENT PART AS FOLLOWS.

SEC. 19. THE BOARD SHALL HAVE POWER TO SELECT, EMPLOY, AND FIX THE COMPENSATION OF SUCH OFFICERS, EMPLOYEES, ATTORNEYS, AND AGENTS AS SHALL BE NECESSARY FOR THE PERFORMANCE OF ITS DUTIES UNDER THIS ACT WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT OR COMPENSATION OF OFFICERS, EMPLOYEES, ATTORNEYS, AND AGENTS OF THE UNITED STATES. * * *

WHILE UNDER THE EXPRESS PROVISIONS OF THE QUOTED ACT, POSITIONS IN THE FEDERAL HOME LOAN BANK BOARD--- NOW THE FEDERAL HOME LOAN BANK ADMINISTRATION, PURSUANT TO EXECUTIVE ORDER 9070--- ARE NOT SUBJECT TO EXISTING LAWS APPLICABLE TO THE EMPLOYMENT OR COMPENSATION OF OFFICERS OR EMPLOYEES OF THE UNITED STATES, YOU STATE IT IS NOW THE POLICY OF THAT AGENCY TO CLASSIFY ITS POSITIONS IN ACCORDANCE WITH THE GRADES FIXED BY THE CLASSIFICATION ACT OF 1923, AS AMENDED. IT IS FOR NOTING THAT PRIOR TO CONVERSION TO THE SAID CLASSIFICATION ACT, POSITIONS IN THE AGENCY WERE CLASSIFIED IN ACCORDANCE WITH THE PROVISIONS OF EXECUTIVE ORDER 6746, DATED JUNE 21, 1934, AND THAT SUCH CONVERSION HAS BEEN ACCOMPLISHED OVER A PERIOD OF TIME AS ADMINISTRATIVELY FEASIBLE FOR ALL ACTIVE POSITIONS. DECISION OF THIS OFFICE DATED JULY 14, 1945, 25 COMP. GEN. 58, IT WAS HELD, QUOTING FROM THE FIRST PARAGRAPH OF THE SYLLABUS:

WHERE AN AGENCY HAS ELECTED UNDER STATUTORY AUTHORITY TO FIX THE SALARY RATES OF ITS EMPLOYEES IN ACCORDANCE WITH THE CLASSIFICATION ACT AND HAS ADOPTED ALL THE PROCEDURES THEREUNDER INCLUDING THE JURISDICTION OF THE CIVIL SERVICE COMMISSION RESPECTING ALLOCATIONS AND REALLOCATIONS, THE EMPLOYEES OF SUCH AGENCY ARE TO BE REGARDED AS "SUBJECT TO" THE CLASSIFICATION ACT AS THAT TERM IS USED IN THE SEVERAL PROVISIONS OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, THE SAME AS EMPLOYEES WHOSE SALARY RATES ARE REQUIRED BY STATUTE TO BE FIXED IN ACCORDANCE WITH THE CLASSIFICATION ACT. IN THAT CONNECTION, SEE, ALSO, 14 COMP. GEN. 867. THE FEDERAL HOME LOAN BANK ADMINISTRATION APPEARS TO HAVE ADOPTED THE CLASSIFICATION ACT OF 1923 FOR THE PURPOSE OF FIXING THE GRADES AND SALARIES OF ITS EMPLOYEES, THE SAID EMPLOYEES PROPERLY MAY BE REGARDED AS SUBJECT TO THE SAID ACT AS AMENDED BY THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 299, AND THE FIXING OF WITHIN-GRADE SALARY STEPS OF RETURNED VETERANS UPON RESTORATION TO THEIR POSITIONS PROPERLY MAY BE ACCOMPLISHED IN ACCORDANCE WITH THE PROVISIONS THEREOF. ACCORDINGLY, THE QUESTION PRESENTED IN THE 9TH PARAGRAPH OF YOUR LETTER, RELATIVE TO ADMINISTRATIVE DISCRETION IN THIS RESPECT IS ANSWERED, GENERALLY, IN THE NEGATIVE. SEE 15 COMP. GEN. 102; 16 ID. 1005; 17 ID. 563.

THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, AS AMENDED, 50 U.S.C. 308, PROVIDES IN PERTINENT PART AS FOLLOWS:

(B) IN THE CASE OF ANY SUCH PERSON WHO, IN ORDER TO PERFORM SUCH TRAINING AND SERVICE, HAS LEFT OR LEAVES A POSITION, OTHER THAN A TEMPORARY POSITION, IN THE EMPLOY OF AN EMPLOYER AND WHO (1) RECEIVES SUCH CERTIFICATE, (2) IS STILL QUALIFIED TO PERFORM THE DUTIES OF SUCH POSITION, AND (3) MAKES APPLICATION FOR REEMPLOYMENT WITHIN FORTY DAYS AFTER HE IS RELIEVED FROM SUCH TRAINING AND SERVICE---

(A) IF SUCH SERVICE WAS IN THE EMPLOY OF THE UNITED STATES GOVERNMENT, ITS TERRITORIES OR POSSESSIONS, OR THE DISTRICT OF COLUMBIA, SUCH PERSON SHALL BE RESTORED TO SUCH POSITION OR TO A POSITION OF LIKE SENIORITY, STATUS, AND PAY;

SECTION 5 OF THE REGULATIONS GOVERNING WITHIN-GRADE SALARY ADVANCEMENT ( EXECUTIVE ORDER 8882, DATED SEPTEMBER 6, 1941) PROVIDES AS FOLLOWS:

ANY EMPLOYEE OF THE FEDERAL GOVERNMENT WHO IN ACCORDANCE WITH THE PROVISIONS OF THE SELECTIVE TRAINING AND SERVICE ACT OF 1940 ( PUBLIC NO. 783, 76TH CONGRESS), OR OF PUBLIC RESOLUTION NO. 96 APPROVED AUGUST 27, 1940, RELATING TO THE MOBILIZATION OF AUXILIARY MILITARY PERSONNEL, IS RESTORED TO THE SAME POSITION OR A POSITION OF LIKE SENIORITY, STATUS, AND PAY, WITHOUT LOSS OF SENIORITY, SHALL BE ENTITLED TO RECEIVE A SALARY AT A RATE OF NOT LESS THAN THE EMPLOYEE'S LATEST RATE PRIOR TO HIS ENTRANCE INTO ACTIVE MILITARY OR NAVAL DUTY PLUS ANY WITHIN-GRADE SALARY ADVANCEMENT OR ADVANCEMENTS TO WHICH HE WOULD HAVE BEEN ELIGIBLE UNDER THE PROVISIONS OF THE SAID SECTION 7 (B) OF THE CLASSIFICATION ACT OF 1923, AS AMENDED. SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, APPROVED JUNE 30, 1945, 59 STAT. 299, PROVIDES:

SUBSECTION (B) OF SECTION 7 OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, IS AMENDED TO READ AS FOLLOWS:

"/B) ALL EMPLOYEES COMPENSATED ON A PER ANNUM BASIS, AND OCCUPYING PERMANENT POSITIONS WITHIN THE SCOPE OF THE COMPENSATION SCHEDULES FIXED BY THIS ACT, WHO HAVE NOT ATTAINED THE MAXIMUM RATE OF COMPENSATION FOR THE GRADE IN WHICH THEIR POSITIONS ARE RESPECTIVELY ALLOCATED, SHALL BE ADVANCED IN COMPENSATION SUCCESSIVELY TO THE NEXT HIGHER RATE WITHIN THE GRADE AT THE BEGINNING OF THE NEXT PAY PERIOD FOLLOWING THE COMPLETION OF (1) EACH TWELVE MONTHS OF SERVICE IF SUCH EMPLOYEES ARE IN GRADES IN WHICH THE COMPENSATION INCREMENTS ARE LESS THAN $200, OR (2) EACH EIGHTEEN MONTHS OF SERVICE IF SUCH EMPLOYEES ARE IN GRADES IN WHICH THE COMPENSATION INCREMENTS ARE $200 OR MORE, SUBJECT TO THE FOLLOWING CONDITIONS:

"/1) THAT NO EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE WAS RECEIVED DURING SUCH PERIOD, EXCEPT INCREASE MADE PURSUANT TO SUBSECTION (F) OF THIS SECTION;

"/2) THAT AN EMPLOYEE SHALL NOT BE ADVANCED UNLESS HIS CURRENT EFFICIENCY IS "GOOD" OR BETTER THAN "GOOD; "

"/3) THAT THE SERVICE AND CONDUCT OF SUCH EMPLOYEE ARE CERTIFIED BY THE HEAD OF THE DEPARTMENT OR AGENCY OR SUCH OFFICIAL AS HE MAY DESIGNATE AS BEING OTHERWISE SATISFACTORY; AND

"/4) THAT ANY EMPLOYEE, (A) WHO, WHILE SERVING UNDER PERMANENT, WAR SERVICE, TEMPORARY, OR ANY OTHER TYPE OF APPOINTMENT, HAS LEFT HIS POSITION TO ENTER THE ARMED FORCES OR THE MERCHANT MARINE, OR TO COMPLY WITH A WAR TRANSFER AS DEFINED BY THE CIVIL SERVICE COMMISSION, (B) WHO HAS BEEN SEPARATED UNDER HONORABLE CONDITIONS FROM ACTIVE DUTY IN THE ARMED FORCES, OR HAS RECEIVED A CERTIFICATE OF SATISFACTORY SERVICE IN THE MERCHANT MARINE, OR HAS A SATISFACTORY RECORD ON WAR TRANSFER, AND (C) WHO, UNDER REGULATIONS OF THE CIVIL SERVICE COMMISSION OR THE PROVISIONS OF ANY LAW PROVIDING FOR RESTORATION OR REEMPLOYMENT, OR UNDER ANY OTHER ADMINISTRATIVE PROCEDURE WITH RESPECT TO EMPLOYEES NOT SUBJECT TO CIVIL SERVICE RULES AND REGULATIONS, IS RESTORED, REEMPLOYED, OR REINSTATED IN ANY POSITION SUBJECT TO THIS SECTION, SHALL UPON HIS RETURN TO DUTY BE ENTITLED TO WITHIN-GRADE SALARY ADVANCEMENTS WITHOUT REGARD TO PARAGRAPHS (2) AND (3) OF THIS SUBSECTION, AND TO CREDIT SUCH SERVICE IN THE ARMED FORCES, IN THE MERCHANT MARINE, AND ON WAR TRANSFER, TOWARD SUCH WITHIN- GRADE SALARY ADVANCEMENTS. AS USED IN THIS PARAGRAPH THE TERM "SERVICE IN THE MERCHANT MARINE" SHALL HAVE THE SAME MEANING AS WHEN USED IN THE ACT ENTITLED "AN ACT TO PROVIDE REEMPLOYMENT RIGHTS FOR PERSONS WHO LEAVE THEIR POSITIONS TO SERVE IN THE MERCHANT MARINE, AND FOR OTHER PURPOSES," APPROVED JUNE 23, 1943 ( U.S.C., 1940 EDITION, SUPP. IV, TITLE 50 APP., SEC. 1471 TO 1475, INC.).'

IT IS UNDERSTOOD FROM YOUR LETTER THAT EMPLOYEES OF THE FEDERAL HOME LOAN BANK ADMINISTRATION SERVING IN THE ARMED FORCES WERE CARRIED IN A MILITARY FURLOUGH STATUS, AND DURING THEIR ABSENCE, IN MOST CASES, PERSONNEL ACTIONS WERE PROCESSED GRANTING WITHIN-GRADE PROMOTIONS IN THE SAME MANNER AS IF THE EMPLOYEES HAD REMAINED ON DUTY. IN THAT CONNECTION, YOU STATE "IN SOME INSTANCES, SO-CALLED RECORD PERSONNEL ACTION PROCESSED CONVERTING FROM EXECUTIVE ORDER GRADES TO CLASSIFICATION GRADES, THE POSITIONS OF EMPLOYEES WHO WERE ON MILITARY FURLOUGH. IN 24 COMP. GEN. 688, AT PAGE 690, IT WAS HELD:

REFERRING TO QUESTIONS 4 AND 5, THIS OFFICE DOES NOT REQUIRE ANY CHANGE IN EXISTING ADMINISTRATIVE PROCEDURE REGARDING THE GRANTING OF MILITARY FURLOUGH TO WAR SERVICE APPOINTEES. BUT, IN ANY EVENT, THE PLACING OF SUCH EMPLOYEES UPON MILITARY FURLOUGH CAN HAVE NO LEGAL FORCE AND EFFECT TO PRESERVE A CIVILIAN STATUS AFTER THE EFFECTIVE DATE OF THE MILITARY FURLOUGH GRANTED TO ANY CIVILIAN EMPLOYEE. ALSO, SEE 24 COMP. GEN. 729, AND B-53760, DECEMBER 4, 1945.

IN LINE WITH THE HOLDINGS IN THE SAID DECISIONS,"SO-CALLED PERSONNEL ACTIONS" PURPORTING TO GRANT WITHIN-GRADE SALARY ADVANCEMENTS AND PURPORTING TO MAKE CHANGES IN CLASSIFICATIONS FROM EXECUTIVE ORDER GRADES TO CLASSIFICATION ACT GRADES WERE LEGALLY NON-EFFECTIVE, AND THE SALARY RATE OF THE VETERAN WHO IS RESTORED TO THE POSITION HELD BY HIM PRIOR TO HIS ENTRANCE INTO THE ARMED FORCES OR TO ONE OF LIKE SENIORITY, STATUS, AND PAY, PURSUANT TO THE SELECTIVE TRAINING AND SERVICE ACT OF 1940, SUPRA, MUST BE DETERMINED AS OF THE EFFECTIVE DATE OF SUCH RESTORATION. ACCORDINGLY, IF AS IS UNDERSTOOD, THE INVOLVED EXECUTIVE ORDER POSITIONS ACTUALLY WERE NOT CONVERTED TO CLASSIFICATION ACT GRADES IN ABSENTIA, THE FIRST QUESTION PRESENTED IN PARAGRAPH 10 OF YOUR LETTER IS ANSWERED IN THE NEGATIVE. SEE DECISIONS B-54297 OF JANUARY 3, 1946, 25 COMP. GEN. 477; AND B-53153 OF NOVEMBER 26, 1945, 25 COMP. GEN. 419 (PARTICULARLY THE ANSWER TO THE LAST PARAGRAPH OF THE SUBMISSION).

IN DECISION OF NOVEMBER 26, 1945, B-53153, TO THE SECRETARY OF AGRICULTURE, IT WAS HELD THAT THE CONVERSION OF POSITIONS ALLOCATED TO GRADES WITHIN THE SALARY SCHEDULE PRESCRIBED BY EXECUTIVE ORDER 6746, DATED JUNE 21, 1934, TO GRADES IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923 "ARE MATTERS GOVERNED ENTIRELY BY ADMINISTRATIVE CONSIDERATIONS IN EACH PARTICULAR CASE AND THE FACT THAT CERTAIN POSITIONS ADMINISTRATIVELY WERE CONVERTED TO CLASSIFICATION ACT GRADES IN NOWISE WOULD EFFECT A CONVERSION OF SIMILAR POSITIONS IN THE ABSENCE OF AFFIRMATIVE ADMINISTRATIVE ACTION RELATIVE THERETO.' IT IS NOT UNDERSTOOD FROM YOUR LETTER THAT AFFIRMATIVE ADMINISTRATIVE ACTION WAS TAKEN TO CONVERT INACTIVE POSITIONS IN THE FEDERAL HOME LOAN BANK ADMINISTRATION FROM EXECUTIVE ORDER CLASSIFICATION TO GRADES UNDER THE CLASSIFICATION ACT. HENCE, IN ANSWER TO THE LAST QUESTION PRESENTED IN PARAGRAPH 10 OF YOUR LETTER, I HAVE TO ADVISE THAT THE EFFECTIVE DATES OF THE RECORD PERSONNEL ACTIONS ARE NOT CONTROLLING FOR THE PURPOSE OF WITHIN-GRADE SALARY ADVANCEMENTS, AND THE WAITING PERIOD FOR SUBSEQUENT PROMOTIONS MUST BE RECORDED FROM THE DATE THE REEMPLOYED VETERAN IS RESTORED TO DUTY.

IN THE LIGHT OF THE FOREGOING, IF THE EXECUTIVE ORDER POSITION OF THE EMPLOYEE FIRST ILLUSTRATED IN PARAGRAPH 3 OF YOUR LETTER ACTUALLY WAS CONVERTED TO THE CLASSIFICATION ACT GRADE ON FEBRUARY 1, 1944, BY AFFIRMATIVE ADMINISTRATIVE ACTION, HE IS ENTITLED TO BE REEMPLOYED AT GRADE CAF-5 ($2,320) PLUS ANY WITHIN-GRADE SALARY ADVANCEMENTS ACCRUING TO HIS BENEFIT SINCE THAT DATE. THUS, ALLOWING CREDIT FOR ONE WITHIN GRADE PROMOTION (EFFECTIVE JULY 1, 1945), HIS SALARY RATE UPON RESTORATION TO HIS POSITION PROPERLY MAY BE FIXED AT $2,430 PER ANNUM, THE SECOND STEP IN GRADE CAF-5. ON THE OTHER HAND, IF THE "RECORD ACTION" PROCESSED ON FEBRUARY 1, 1944, MERELY PURPORTED TO CHANGE THE STATUS OF THE INDIVIDUAL EMPLOYEE, AND IF AFFIRMATIVE ACTION ADMINISTRATIVELY TO CONVERT THE POSITION IS NOT TAKEN UNTIL THE DATE THE EMPLOYEE IS REINSTATED, HIS SALARY WOULD BE FOR FIXING AT THE MINIMUM RATE PROVIDED FOR IN GRADE CAF-5 ($2,320). IN THAT EVENT, NO CREDIT FOR WITHIN-GRADE PROMOTIONS WOULD ALLOWABLE SINCE THE INCREASE IN COMPENSATION RESULTING FROM THE CONVERSION FROM EXECUTIVE ORDER GRADE 6 ($1,680) TO CAF-5 ($2,320), EXCEEDS ONE SALARY STEP IN THE FORMER GRADE AND MUST BE CONSIDERED AN "EQUIVALENT INCREASE" AS THAT TERM IS USED IN SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, SUPRA. 21 COMP. GEN. 369.

APPLYING THE PRINCIPLES HEREINBEFORE SET FORTH TO THE CASE ILLUSTRATED IN PARAGRAPH 7 OF YOUR LETTER AND ASSUMING THAT AFFIRMATIVE ADMINISTRATIVE ACTION WAS TAKEN IN DECEMBER, 1942, TO CONVERT THE EMPLOYEE'S POSITION FROM EXECUTIVE ORDER GRADE 6 ($1,740) TO CAF GRADE 4 ($1,800), REEMPLOYMENT PROPERLY MAY BE EFFECTED AT THE SECOND SALARY STEP IN THE LATTER GRADE ($2,232). HOWEVER, IF THE ,RECORD ACTION" PROCESSED IN DECEMBER, 1942, WAS MERELY PERSONAL TO THE EMPLOYEE AND DID NOT CONSTITUTE AFFIRMATIVE ADMINISTRATIVE ACTION ON THE POSITION, REINSTATEMENT MAY BE ONLY AT THE MINIMUM RATE IN GRADE CAF-4 ($2,100). IN THAT CONNECTION, IT SHOULD BE KEPT IN MIND THAT IF THE SALARY RATE OF THE EXECUTIVE ORDER GRADE HELD BY THE EMPLOYEE WHEN HE ENTERED THE ARMED FORCES (INCLUDING WITHIN-GRADE SALARY ADVANCEMENTS TO WHICH HE WOULD BE ENTITLED UPON REEMPLOYMENT), EXCEEDS THE MINIMUM STEP OF THE CAF GRADE TO WHICH HIS POSITION WAS CONVERTED, THE SALARY STEP COULD BE FIXED ADMINISTRATIVELY TO CORRESPOND TO THE SALARY WHICH HAD ACCRUED TO HIM IN HIS EXECUTIVE ORDER POSITION AT THE TIME OF HIS REEMPLOYMENT. SEE DECISION OF DECEMBER 4, 1945, B-53760 ( CASE NO. 1).