B-55971, JUNE 5, 1946, 25 COMP. GEN. 830

B-55971: Jun 5, 1946

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

COMPENSATION - INITIAL SALARY RATES - RESTORATION OF EXECUTIVE ORDER EMPLOYEES AFTER MILITARY SERVICE WHERE ADMINISTRATIVE ACTION WAS NOT TAKEN EITHER TO CONVERT THE POSITIONS OF EMPLOYEES ON MILITARY FURLOUGH FROM GRADES UNDER THE SALARY SCHEDULES PRESCRIBED BY EXECUTIVE ORDER NO. 6746 TO CLASSIFICATION ACT GRADES. THE MAXIMUM INITIAL SALARY TO WHICH THE EMPLOYEES ARE ENTITLED UPON RESTORATION AFTER MILITARY SERVICE IN SIMILAR CLASSIFICATION ACT POSITIONS. AS FOLLOWS: REFERENCE IS MADE TO YOUR DECISION B-55971 OF APRIL 11. THAT DECISION HELD IN EFFECT THAT AN EMPLOYEE OF HOME OWNERS' LOAN CORPORATION WHO ENTERED ACTIVE SERVICE IN THE UNITED STATES NAVAL RESERVE FROM A POSITION WHICH WAS CLASSIFIED IN ACCORDANCE WITH EXECUTIVE ORDER 6746 COULD NOT HAVE HIS SALARY IN THE EXECUTIVE ORDER GRADE INCREASED BY THE FORMULA PRESCRIBED BY SECTION 405 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 UPON HIS RETURN FROM SUCH ACTIVE SERVICE TO A POSITION OF LIKE SENIORITY.

B-55971, JUNE 5, 1946, 25 COMP. GEN. 830

COMPENSATION - INITIAL SALARY RATES - RESTORATION OF EXECUTIVE ORDER EMPLOYEES AFTER MILITARY SERVICE WHERE ADMINISTRATIVE ACTION WAS NOT TAKEN EITHER TO CONVERT THE POSITIONS OF EMPLOYEES ON MILITARY FURLOUGH FROM GRADES UNDER THE SALARY SCHEDULES PRESCRIBED BY EXECUTIVE ORDER NO. 6746 TO CLASSIFICATION ACT GRADES, OR TO INCREASE THE RATES THEREOF PURSUANT TO THE FORMULA SET FORTH IN SECTION 405 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 FOR CLASSIFICATION ACT EMPLOYEES, THE MAXIMUM INITIAL SALARY TO WHICH THE EMPLOYEES ARE ENTITLED UPON RESTORATION AFTER MILITARY SERVICE IN SIMILAR CLASSIFICATION ACT POSITIONS, MUST BE AT RATES WHICH MOST NEARLY EQUAL, BUT DO NOT EXCEED, THE RATES RECEIVED IN THEIR FORMER EXECUTIVE ORDER POSITIONS PLUS THE BENEFIT OF WITHIN-GRADE PROMOTIONS AND REALLOCATIONS. 25 COMP. GEN. 230, DISTINGUISHED.

COMPTROLLER GENERAL WARREN TO THE NATIONAL HOUSING ADMINISTRATOR, JUNE 5, 1946:

THERE HAS BEEN CONSIDERED YOUR LETTER OF MAY 9, 1946, AS FOLLOWS:

REFERENCE IS MADE TO YOUR DECISION B-55971 OF APRIL 11, 1946, ADDRESSED TO E. S. FRAZIER, AUTHORIZED CERTIFYING OFFICER, HOME OWNERS' LOAN CORPORATION, NATIONAL HOUSING AGENCY, 2 PARK AVENUE, NEW YORK CITY. THAT DECISION HELD IN EFFECT THAT AN EMPLOYEE OF HOME OWNERS' LOAN CORPORATION WHO ENTERED ACTIVE SERVICE IN THE UNITED STATES NAVAL RESERVE FROM A POSITION WHICH WAS CLASSIFIED IN ACCORDANCE WITH EXECUTIVE ORDER 6746 COULD NOT HAVE HIS SALARY IN THE EXECUTIVE ORDER GRADE INCREASED BY THE FORMULA PRESCRIBED BY SECTION 405 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 UPON HIS RETURN FROM SUCH ACTIVE SERVICE TO A POSITION OF LIKE SENIORITY, STATUS AND PAY WHICH WAS ALLOCATED TO A CLASSIFICATION ACT GRADE.

THE PURPOSE OF THIS LETTER IS TO REQUEST RECONSIDERATION OF YOUR DECISION B-55971 IN THE LIGHT OF THE CIRCUMSTANCES HEREINAFTER STATED, SINCE THE APPLICATION OF THE RULE PRESCRIBED IN THAT DECISION WILL WORK A HARDSHIP UPON SOME RETURNING VETERANS AND MAY PLACE THE FEDERAL HOME LOAN BANK ADMINISTRATION IN THE POSITION OF DISCRIMINATING, OR APPARENTLY DISCRIMINATING AGAINST SOME VETERANS BY COMPARISON WITH EMPLOYEES WHO DID NOT ENTER MILITARY SERVICE.

AS WAS POINTED OUT IN THE NATIONAL HOUSING ADMINISTRATOR'S LETTER TO YOU OF DECEMBER 12, 1945, QUOTED IN YOUR DECISION B-54574 OF JANUARY 7, 1946, ALL ACTIVE POSITIONS, WITH ONE EXCEPTION, 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, THE EFFECTIVE DATE OF THE BASE PAY INCREASE PROVIDED BY THE FEDERAL EMPLOYEES PAY ACT OF 1945. THE ONE EXCEPTION, WHICH WAS A POSITION IN THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION, WAS CONVERTED TO CLASSIFICATION ACT GRADE ON JULY 16, 1945. HOWEVER, A NUMBER OF POSITIONS OF EMPLOYEES IN MILITARY SERVICE WERE NOT CONVERTED AS MANY OF SUCH EMPLOYEES WERE NOT LIKELY TO RETURN AND MANY OF THE POSITIONS WOULD HAVE CEASED TO EXIST PRIOR TO THE RETURN OF THE EMPLOYEES. ALSO, IT WAS GENERALLY CONSIDERED THAT THE RIGHTS OF AN EMPLOYEE IN MILITARY SERVICE COULD NOT BE IMPAIRED DURING HIS ABSENCE BY ADMINISTRATIVE DECISION TO PROCESS PERSONNEL ACTION OR NOT TO PROCESS SUCH AN ACTION. A RETURNED VETERAN WHOSE SALARY IS REDUCED BY APPLICATION OF THE RULE IN YOUR DECISION MAY FAIRLY ARGUE THAT HAD HE BEEN ON ACTIVE DUTY IN THE FEDERAL HOME LOAN BANK ADMINISTRATION IMMEDIATELY PRIOR TO JULY 1, 1945, HIS POSITION WOULD HAVE BEEN CONVERTED TO CLASSIFICATION ACT GRADE AND HE WOULD HAVE THE BENEFIT OF THE BASE PAY INCREASE, AND THAT IT IS ONLY BECAUSE OF HIS MILITARY SERVICE THAT HE SUFFERS LOSS OF PAY. ADEQUATE ANSWER TO SUCH AN ARGUMENT APPEARS, ESPECIALLY SINCE IT IS UNDERSTOOD THAT THE REEMPLOYMENT PROVISIONS OF THE SELECTIVE TRAINING AND SERVICE ACT ARE TO BE LIBERALLY CONSTRUED IN FAVOR OF THE VETERAN.

RELYING ON YOUR DECISION IN 25 COMP. GEN. 230 THAT THE BASIC SALARY RATE OF THE LAST POSITION HELD IN THE FEDERAL SERVICE, REGARDLESS OF THE LAW UNDER WHICH SUCH BASIC SALARY RATE WAS PAID, MIGHT BE INCREASED BY THE FORMULA PRESCRIBED IN SECTION 405 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 FOR THE PURPOSE OF DETERMINING THE MAXIMUM BASIC SALARY RATE DUE AN EMPLOYEE REINSTATED ON AND AFTER THAT DATE IN A CLASSIFICATION ACT GRADE, THIS AGENCY SO INCREASED THE SALARY RATES OF RETURNING VETERANS WHO LAST OCCUPIED A POSITION CLASSIFIED IN AN EXECUTIVE ORDER GRADE UPON THEIR RETURN TO DUTY IN A POSITION IN A CLASSIFICATION ACT GRADE. HOWEVER, THIS WAS DONE INDIVIDUALLY FOR RETURNING VETERANS RATHER THAN BY AN INCREASE IN THE EXECUTIVE ORDER RATES THEMSELVES. YOUR DECISION B-55971 INDICATES THAT IN ORDER TO APPLY THE PRINCIPLE OF 25 COMP. GEN. 230, THERE WAS REQUIRED TO BE AN INCREASE IN THE EXECUTIVE ORDER RATES THEMSELVES. DID NOT APPEAR FROM THE SUBMISSION IN 25 COMP. GEN. 230 OR IN THE DECISION ITSELF THAT THIS LATTER REQUIREMENT WAS COMPLIED WITH BY A GENERAL INCREASE IN THE APPOINTIVE COMPENSATION SCHEDULE THEREIN MENTIONED. THE FEDERAL HOME LOAN BANK ADMINISTRATION MIGHT HAVE APPROACHED THE PROBLEM FROM A DIFFERENT STANDPOINT HAD IT BEEN AWARE OF THE REQUIREMENT WHICH IS NOW STATED IN DECISION B-55971 AS THE MATTER WAS THE SUBJECT OF CAREFUL STUDY SO THAT RETURNING VETERANS COULD BE MAINTAINED IN THE SAME RELATIVE POSITION AS OTHER EMPLOYEES WITH RESPECT TO THE BASE PAY INCREASE.

ASIDE FROM THE QUESTION WHICH EXISTS AS TO WHETHER THERE WAS ADMINISTRATIVE AUTHORITY TO INCREASE ALL OF THE EXECUTIVE ORDER RATES AS SUCH, THE/DATE WOULD APPEAR TO BE NO SOUND REASON WHY THE RETURNING VETERAN SHOULD BE PENALIZED BECAUSE SUCH ACTION WAS NOT TAKEN.

IF THE PRINCIPLE OF YOUR DECISION B-55971 IS CORRECTLY UNDERSTOOD AND IS APPLIED TO ALL CASES, THE FEDERAL HOME LOAN BANK ADMINISTRATION WILL BE IN THE POSITION OF HAVING TO REDUCE THE SALARY OF QUITE A NUMBER OF RETURNED VETERANS AND MAY BE UNABLE TO GIVE SOME FUTURE RETURNING VETERANS THE BENEFIT OF THE BASE PAY INCREASE OF JULY 1, 1945.

IN VIEW OF THE FOREGOING CIRCUMSTANCES, YOUR DECISION IS RESPECTFULLY REQUESTED ON THE FOLLOWING QUESTIONS:

1. IS IT NECESSARY FOR THE FEDERAL HOME LOAN BANK ASSOCIATION, IN APPLYING THE PRINCIPLE OF YOUR DECISION B-55971 OF APRIL 11, 1946, TO MAKE APPROPRIATE REDUCTIONS IN THE PAY OF VETERANS (INCLUDING THE PAY OF WILLIAM B. MATNEY, WHOSE CASE WAS THE SUBJECT OF YOUR DECISION B 55971) HERETOFORE RESTORED TO DUTY AND IF SO, MUST SUCH REDUCTIONS BE RETROACTIVE TO THE DATE OF RESTORATION?

2. WILL IT BE NECESSARY TO APPLY THE RULE STATED IN YOUR DECISION B-55971 TO FUTURE CASES OF RETURNING VETERANS?

IN REQUESTING RECONSIDERATION OF THE DECISION OF APRIL 11, 1946, B 55971, IT IS URGED THAT THE APPLICATION OF THE RULE PRESCRIBED THEREIN WILL WORK A HARDSHIP UPON SOME RETURNING VETERANS AND MAY PLACE YOUR ADMINISTRATION IN THE POSITION OF APPARENTLY DISCRIMINATING AGAINST SOME VETERANS BY COMPARISON WITH EMPLOYEES WHO DID NOT ENTER THE MILITARY SERVICE.

SUMMARIZING THE FACTS AS DISCLOSED BY THE RECORD IN THIS OFFICE, IT APPEARS THAT HERETOFORE POSITIONS IN YOUR AGENCY WERE CLASSIFIED IN ACCORDANCE WITH THE PROVISIONS OF EXECUTIVE ORDER 6746; THAT PRIOR TO JULY 1, 1945, THE CLASSIFICATION ACT OF 1923, AS AMENDED, WAS ADOPTED FOR THE PURPOSE OF FIXING THE GRADES AND SALARIES OF ITS EMPLOYEES, AND ADMINISTRATIVE ACTION WAS TAKEN TO CONVERT ALL ACTIVE POSITIONS FROM THE EXECUTIVE ORDER GRADES TO CORRESPONDING GRADES UNDER THE CLASSIFICATION ACT. WITH RESPECT TO THE EMPLOYEES WHO ENTERED THE ARMED FORCES, IT WAS STATED THAT A NUMBER OF EXECUTIVE ORDER POSITIONS FORMERLY HELD BY SUCH EMPLOYEES WERE NOT CONVERTED TO CLASSIFICATION ACT GRADES BECAUSE OF THE UNCERTAINTY AS TO WHETHER THE EMPLOYEES WOULD RETURN AND, ALSO, BECAUSE MANY SUCH POSITIONS WOULD HAVE CEASED TO EXIST PRIOR TO THE EMPLOYEES' RETURN.

IT IS YOUR CONTENTION THAT UPON HIS RETURN FROM MILITARY SERVICE AN EMPLOYEE WHO FORMERLY OCCUPIED AN EXECUTIVE ORDER POSITION WHICH PREVIOUSLY WAS NOT CONVERTED TO THE CLASSIFICATION ACT IS ENTITLED TO BE RESTORED TO A POSITION UNDER THE CLASSIFICATION ACT AT A SALARY RATE COMPARABLE WITH THAT OF HIS FORMER EXECUTIVE ORDER POSITION INCREASED BY THE FORMULA PRESCRIBED BY SECTION 405 (A) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 300. WITH REGARD TO THE DECISION OF APRIL 11, 1946, WHEREIN IT WAS HELD THAT EXECUTIVE ORDER SALARY RATES MAY NOT BE SO INCREASED UNLESS ACCOMPLISHED BY ADMINISTRATIVE ACTION, IT WAS POINTED OUT THAT THE FACTS CONSIDERED IN DECISION OF AUGUST 28, 1945 (25 COMP. GEN. 230) APPARENTLY DID NOT SHOW ADMINISTRATIVE INCREASES IN SALARY RATE APPLICABLE TO THE NON-CLASSIFICATION ACT POSITION INVOLVED THEREIN, BUT NEVERTHELESS THE PERCENTAGE INCREASE PRESCRIBED BY THE FEDERAL EMPLOYEES PAY ACT OF 1945 WAS APPLIED IN DETERMINING THE MAXIMUM SALARY PAYABLE UPON REINSTATEMENT TO A POSITION UNDER THE CLASSIFICATION ACT.

AS SET FORTH IN THE DECISION OF APRIL 11, 1946, THE RULE STATED IN 25 COMP. GEN. 230 RELATES TO REINSTATEMENTS AFTER JULY 1, 1945, AND MERELY REAFFIRMS THE ESTABLISHED REINSTATEMENT POLICY OF MAINTAINING EMPLOYEES IN THE SAME RELATIVE STATUS OF OTHER EMPLOYEES AS TO THE SALARY THEY LAST RECEIVED IN THE FEDERAL SERVICE. THAT IS TO SAY, THE DECISION IN THAT CASE DID NOT AUTHORIZE REINSTATEMENT OF THE EMPLOYEE TO HIS FORMER NON- CLASSIFICATION ACT POSITION AND THE APPLICATION OF THE PERCENTAGE INCREASE TO THE SALARY RATE APPLICABLE THERETO FOR THE PURPOSE OF CONVERTING THE POSITION TO A CORRESPONDING GRADE UNDER THE CLASSIFICATION ACT, BUT MERELY PERMITTED THE ADMINISTRATIVE OFFICE IN ITS DISCRETION TO REINSTATE THE EMPLOYEE AT A MAXIMUM INITIAL SALARY RATE WHICH WOULD INCLUDE AN AMOUNT EQUAL TO THE PERCENTAGE INCREASE WHICH PREVIOUSLY HAD BEEN RECEIVED BY OTHER EMPLOYEES IN THE SAME RELATIVE STATUS. ON THE CONTRARY, RESTORATION AFTER MILITARY SERVICE TO THE SAME POSITION FORMERLY HELD BY THE VETERAN OR TO ONE OF LIKE SENIORITY, STATUS, AND PAY IS AN ABSOLUTE RIGHT CONFERRED BY LAW, 54 STAT. 890, UPON MEETING THE REQUISITE CONDITIONS PRESCRIBED THEREBY, AND THE INITIAL SALARY RATE UPON RESTORATION MUST NOT BE LESS THAN THAT WHICH WOULD HAVE BEEN ATTACHED TO HIS FORMER POSITION IF IT STILL WERE IN EXISTENCE. ACCORDINGLY, IF THE EXECUTIVE ORDER POSITION FORMERLY OCCUPIED BY A RETURNED VETERAN WAS NOT CONVERTED TO A CORRESPONDING CLASSIFICATION ACT GRADE PRIOR TO JULY 1, 1945, THE MAXIMUM INITIAL SALARY TO WHICH HE WOULD BE ENTITLED AS A MATTER OF RIGHT MUST BE LIMITED TO THE RATE LAST RECEIVED BY HIM IN THE EXECUTIVE ORDER POSITION PLUS ANY WITHIN-GRADE PROMOTION WHICH ACCRUED TO HIS BENEFIT, AND THE BENEFIT OF ALL REALLOCATIONS WHICH AFFECTED HIS POSITION. FURTHERMORE, IF RESTORATION IS TO BE MADE IN A POSITION OF LIKE SENIORITY, STATUS, AND PAY UNDER THE CLASSIFICATION ACT, THE POSITION THEREUNDER MUST BE AT A SALARY RATE WITHIN A GRADE WHICH MOST NEARLY EQUALS, BUT DOES NOT EXCEED, THE SALARY HE WOULD HAVE RECEIVED HAD RESTORATION BEEN EFFECTED IN THE EXECUTIVE ORDER GRADE.

WHILE ADMINISTRATIVE ACTION POSSIBLY WOULD HAVE BEEN TAKEN PRIOR TO JULY 1, 1945, TO CONVERT THE POSITION IN QUESTION IF THE INCUMBENT HAD NOT BEEN ABSENT THEREFROM, THE FACT REMAINS THAT SUCH ACTION WAS NOT TAKEN AND IN THE ABSENCE THEREOF THE RESULT WOULD HAVE BEEN THE SAME REGARDLESS OF WHETHER THE POSITION WAS ACTIVE OR VACANT.

ALTHOUGH AN APPARENT DISCRIMINATION, SUCH AS THAT ALLUDED TO IN YOUR LETTER, MAY RESULT FROM THE APPLICATION OF THE RULE, SUCH FACT ALONE MAY FORM NO LEGAL BASIS FOR A DIFFERENT CONCLUSION. ACCORDINGLY, AS YOUR LETTER DOES NOT SET FORTH ANY NEW EVIDENCE OR ADDITIONAL FACTS NOT HERETOFORE CONSIDERED IN THE DECISION OF APRIL 11, 1946, THAT DECISION MUST BE, AND IS, AFFIRMED.

WITH RESPECT TO THE CASE OF MR. MATNEY WHICH WAS CONSIDERED IN THE REFERRED-TO DECISION OF APRIL 11, 1946, IN STATING THAT HIS INITIAL COMPENSATION UPON RESTORATION SHOULD BE FIXED AT THE FOURTH STEP OF GRADE P-3 ($3,970 PER ANNUM), OF COURSE, THERE WAS LEFT FOR ADMINISTRATIVE CONSIDERATION THE APPLICATION OF THE PROVISIONS OF SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 299, THAT IS, THE EMPLOYEE HAVING BEEN RESTORED AT THE FOURTH STEP IN GRADE P-3, IF THE OTHER CONDITIONS OF THAT SECTION ARE MET, AN ADDITIONAL ADVANCE IN SALARY AMOUNTING TO $110 PER ANNUM IS POSSIBLE--- HAVING REGARD FOR THE FACT THAT HIS LAST EQUIVALENT INCREASE WAS EFFECTIVE APRIL 1, 1944, MADE MORE THAN 12 MONTHS PRIOR TO HIS RESTORATION.

THE PRINCIPLES SET FORTH HEREIN AND IN THE DECISION OF APRIL 11, 1946, ARE FOR APPLICATION IN FIXING THE MAXIMUM INITIAL SALARY RATE TO WHICH A VETERAN LEGALLY IS ENTITLED UPON RESTORATION TO HIS CIVILIAN POSITION AND, IN VIEW THEREOF, BOTH QUESTIONS PRESENTED IN THE PENULTIMATE PARAGRAPH OF YOUR LETTER ARE ANSWERED IN THE AFFIRMATIVE. HOWEVER, IT SHOULD BE KEPT IN MIND THAT THERE ARE NOT LEGAL INHIBITIONS AGAINST RESTORING A VETERAN, UPON MEETING REGULATORY PROVISIONS PROMULGATED BY THE CIVIL SERVICE COMMISSION, TO A POSITION IN A HIGHER GRADE THAN THAT HELD BY HIM PRIOR TO HIS MILITARY SERVICE OR PROMOTING HIM TO A HIGHER GRADE AFTER HE HAS BEEN RESTORED.