B-55326, FEBRUARY 4, 1946, 25 COMP. GEN. 578

B-55326: Feb 4, 1946

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SO THAT THE SUSPENSION OF ANNUITY PAYMENTS PURSUANT TO SECTION 2 (B) OF SAID ACT DURING THE PERIOD OF SUCH EMPLOYMENT WAS PROPER. 1946: I HAVE YOUR LETTER OF JANUARY 15. 56 STAT. 13) WITH 21 YEARS 1 MONTH AND 27 DAYS OF SERVICE AND WAS AWARDED AN ANNUITY OF $954.60 COMMENCING SEPTEMBER 1. EDWARDS WAS EMPLOYED AT HEADQUARTERS WASHINGTON RECRUITING AND INDUCTION DISTRICT. WORKED ON VARIOUS DAYS AS REQUIRED AND WAS SEPARATED FROM THIS EMPLOYMENT ON MAY 31. THIS REEMPLOYMENT WAS NOT EFFECTED IN ACCORDANCE WITH SECTION 2 (B) OF THE CIVIL SERVICE RETIREMENT ACT (AS AMENDED. 56 STAT. 15) AND CONSEQUENTLY SAID SERVICE WAS HELD TO HAVE BEEN DE FACTO ONLY. SECTION 2 (B) PROVIDES AS FOLLOWS: "NO PERSON SEPARATED FROM THE SERVICE WHO IS RECEIVING AN ANNUITY UNDER THE PROVISIONS OF SECTION 1 OF THIS ACT SHALL BE ELIGIBLE AGAIN TO APPOINTMENT TO ANY APPOINTIVE OFFICE.

B-55326, FEBRUARY 4, 1946, 25 COMP. GEN. 578

RETIREMENT - ANNUITANT SERVING ON PER DIEM "WHEN ACTUALLY EMPLOYED" BASIS WHERE A RETIRED EMPLOYEE, IN RECEIPT OF AN ANNUITY UNDER SECTION 1 (A) OF THE CIVIL SERVICE RETIREMENT ACT OF 1930, AS AMENDED, PERFORMED SERVICE UNDER CONTRACT AT AN INDUCTION STATION AS A TEMPORARY CIVILIAN MEDICAL EXAMINER ON A PER DIEM "WHEN ACTUALLY EMPLOYED" BASIS, THE COMPENSATION ATTACHED THERETO, HAVING BEEN FIXED UPON A TIME BASIS, MUST BE REGARDED AS SALARY--- AS DISTINGUISHED FROM FEES--- RECEIVED BY SUCH PERSON AS AN EMPLOYEE OF THE UNITED STATES, SO THAT THE SUSPENSION OF ANNUITY PAYMENTS PURSUANT TO SECTION 2 (B) OF SAID ACT DURING THE PERIOD OF SUCH EMPLOYMENT WAS PROPER.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, FEBRUARY 4, 1946:

I HAVE YOUR LETTER OF JANUARY 15, 1946, AS FOLLOWS:

THERE HAS BEEN PRESENTED TO THE COMMISSION THE QUESTION OF CONCURRENT PAYMENT OF ANNUITY AND COMPENSATION FOR SERVICE RENDERED UNDER CONTRACT ONA PER DIEM W.A.E. BASIS.

DR. ORANGE EDWARDS, HAVING REACHED THE AGE OF 70 YEARS, RETIRED FROM THE VETERANS' ADMINISTRATION UNDER SECTION 1 (A) OF THE CIVIL SERVICE RETIREMENT ACT (AS AMENDED, 56 STAT. 13) WITH 21 YEARS 1 MONTH AND 27 DAYS OF SERVICE AND WAS AWARDED AN ANNUITY OF $954.60 COMMENCING SEPTEMBER 1, 1940 ( CERT. NO. CSA-107-364).

ON FEBRUARY 18, 1944 DR. EDWARDS WAS EMPLOYED AT HEADQUARTERS WASHINGTON RECRUITING AND INDUCTION DISTRICT, AUS, SEATTLE, WASHINGTON AS A TEMPORARY CIVILIAN MEDICAL EXAMINER AT $15 PER DIEM WHEN ACTUALLY EMPLOYED. WORKED ON VARIOUS DAYS AS REQUIRED AND WAS SEPARATED FROM THIS EMPLOYMENT ON MAY 31, 1944. THIS REEMPLOYMENT WAS NOT EFFECTED IN ACCORDANCE WITH SECTION 2 (B) OF THE CIVIL SERVICE RETIREMENT ACT (AS AMENDED, 56 STAT. 15) AND CONSEQUENTLY SAID SERVICE WAS HELD TO HAVE BEEN DE FACTO ONLY. SECTION 2 (B) PROVIDES AS FOLLOWS: "NO PERSON SEPARATED FROM THE SERVICE WHO IS RECEIVING AN ANNUITY UNDER THE PROVISIONS OF SECTION 1 OF THIS ACT SHALL BE ELIGIBLE AGAIN TO APPOINTMENT TO ANY APPOINTIVE OFFICE, POSITION, OR EMPLOYMENT UNDER THE UNITED STATES OR OF THE GOVERNMENT OF THE DISTRICT OF COLUMBIA UNLESS THE APPOINTING AUTHORITY DETERMINES THAT HE IS POSSESSED OF SPECIAL QUALIFICATIONS, IN WHICH EVENT PAYMENT OF HIS ANNUITY SHALL BE TERMINATED DURING THE PERIOD OF HIS APPOINTMENT. ANY SUCH PERSON WHOSE ANNUITY IS TERMINATED SHALL, UPON THE TERMINATION OF HIS APPOINTMENT, HAVE HIS SUBSEQUENT ANNUITY RIGHTS DETERMINED UNDER THE PROVISIONS OF LAW IN EFFECT AT THE TIME OF SUCH TERMINATION.' ACCORDINGLY DR. EDWARDS' ANNUITY WAS SUSPENDED FOR THE PERIOD OF DE FACTO SERVICE AND THEN RESUMED AT THE ORIGINAL RATE. (22 COMP. GEN. 300; 23 ID. 664.)

THE WAR DEPARTMENT HAS INTERVENED ON BEHALF OF DR. EDWARDS CONTENDING THAT HE WAS EMPLOYED ON A FEE BASIS AND HENCE WAS NOT TO BE CONSIDERED AN EMPLOYEE OF THE FEDERAL GOVERNMENT AND THAT THEREFORE NO SUSPENSION OF HIS ANNUITY SHOULD HAVE BEEN EFFECTED.

THIS COMMISSION CONSIDERS THAT THERE EXISTS A DISTINCTION BETWEEN A PER DIEM W.A.E. APPOINTMENT SUCH AS DR. EDWARDS RECEIVED AND A CONTRACT FOR SERVICES ON A FEE BASIS. PERSONS RENDERING SERVICES UNDER CONTRACT STRICTLY ON A FEE BASIS ARE NOT CONSIDERED AS EMPLOYEES OF THE FEDERAL GOVERNMENT AND IF SUCH A PERSON IS AN ANNUITANT NO SUSPENSION OF ANNUITY PAYMENTS TO HIM WOULD BE EFFECTED UNDER THIS CIRCUMSTANCE. IN MAKING THIS DISTINCTION CONSIDERATION HAS BEEN GIVEN TO YOUR DECISION OF JANUARY 4, 1945 (24 COMP. GEN. 495) IN WHICH APPEARS THE FOLLOWING (CONSTRUING SECTION 3 (A) AND (C) OF THE WAR OVERTIME PAY ACT OF 1945):

"APPARENTLY, THE VOUCHER HAS BEEN COMPUTED IN ACCORDANCE WITH SECTION 3 (C) OF THE STATUTE ABOVE QUOTED UPON THE BASIS THAT COMPENSATION OF $40 PER DIEM IS A FEE OR THAT DR. FISK IS A PART-TIME EMPLOYEE. HOWEVER, COMPENSATION ON THE BASIS OF A TIME PERIOD--- $40 PER DIEM--- IS NOT FEE, AND FURTHERMORE, DR. FISK IS NOT TO BE REGARDED AS A PART-TIME EMPLOYEE WITHIN THE MEANING OF SECTION 3 (C) OF THE STATUTE, BUT HE IS AN INTERMITTENT OR IRREGULAR EMPLOYEE WITHIN THE MEANING OF SECTION 3 (A) OF THE STATUTE. * * * "

YOUR DECISION ON THIS QUESTION IS REQUESTED.

IT HAS BEEN CONSISTENTLY HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT COMPENSATION COMPUTED UPON A TIME BASIS IS SALARY AND NOT FEES, REGARDLESS OF WHETHER THE MEASURE OF TIME BE THE YEAR, MONTH, DAY OR HOUR. SEE 18 COMP. GEN. 768, PARTICULARLY THE DISTINCTION MADE BETWEEN SALARY AND FEES AT PAGES 773, 774. IN LINE WITH SUCH HOLDING, THE COMPENSATION PAID TO DR. EDWARDS AS A TEMPORARY CIVILIAN MEDICAL EXAMINER AT $15 PER DIEM HAVING BEEN FIXED UPON A TIME BASIS WAS SALARY AND NOT FEES, AND HE WAS AN EMPLOYEE OF THE UNITED STATES WHILE SO BEING PAID.