B-57718, JUNE 11, 1946, 25 COMP. GEN. 842

B-57718: Jun 11, 1946

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WHOSE SALARY RATES WERE NOT ADJUSTED. 1946: REFERENCE IS MADE TO YOUR LETTER OF MAY 4. AS FOLLOWS: THE QUESTION IS PRESENTED AS TO WHETHER AUTOMATIC WITHIN-GRADE PROMOTIONS. WERE TRANSFERRED TO THE RECONSTRUCTION FINANCE CORPORATION BY EXECUTIVE ORDER 9643 (10 F.R. 13039). THESE EMPLOYEES WERE SUBSEQUENTLY TRANSFERRED TO THE WAR ASSETS CORPORATION BY ACTION OF THE RECONSTRUCTION FINANCE CORPORATION. THE WAR ASSETS CORPORATION AS RELATED PRIMARILY TO THE FUNCTIONS OF THE SURPLUS PROPERTY DISPOSAL WERE TRANSFERRED TO THE WAR ASSETS ADMINISTRATION. ARE MADE APPLICABLE BY THE TERMS OF SECTION 101 (B) THEREOF "TO OFFICERS AND EMPLOYEES WHO OCCUPY POSITIONS SUBJECT TO THE CLASSIFICATION ACT OF 1922.

B-57718, JUNE 11, 1946, 25 COMP. GEN. 842

COMPENSATION - WITHIN-GRADE PROMOTIONS - ELIGIBILITY OF FORMER CLASSIFICATION ACT EMPLOYEES DURING TEMPORARY PERIOD OF EMPLOYMENT UNDER RECONSTRUCTION FINANCE CORPORATION FORMER EMPLOYEES OF THE COMMERCE DEPARTMENT WHO OCCUPIED CLASSIFICATION ACT POSITIONS WHEN TRANSFERRED TO THE RECONSTRUCTION FINANCE CORPORATION IN CONNECTION WITH THE TRANSFER OF SURPLUS PROPERTY DISPOSAL FUNCTIONS TO THE LATTER AGENCY, BUT WHOSE SALARY RATES WERE NOT ADJUSTED, IN VIEW OF THE CONTEMPLATED RETRANSFER OF THE EMPLOYEES TO WAR ASSETS ADMINISTRATION, TO CONFORM TO THOSE FIXED GENERALLY FOR CORPORATION EMPLOYEES WITHOUT REGARD TO THE CLASSIFICATION ACT, MAY BE REGARDED AS HAVING BEEN SUBJECT TO THE CLASSIFICATION ACT DURING THE PERIOD OF EMPLOYMENT UNDER THE CORPORATION, FOR PURPOSES OF WITHIN GRADE SALARY ADVANCEMENTS UNDER SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 OTHERWISE ACCRUING DURING SUCH PERIOD.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR, WAR ASSETS ADMINISTRATION, JUNE 11, 1946:

REFERENCE IS MADE TO YOUR LETTER OF MAY 4, 1946, AS FOLLOWS:

THE QUESTION IS PRESENTED AS TO WHETHER AUTOMATIC WITHIN-GRADE PROMOTIONS, PROVIDED IN THE CLASSIFICATION ACT OF 1923, AS AMENDED BY THE RAMSPECK ACT, AS AMENDED, MAY BE MADE RETROACTIVELY EFFECTIVE IN THE CIRCUMSTANCES SET FORTH HEREIN.

THE PERSONNEL AND FUNDS OF THE OFFICE OF SURPLUS PROPERTY, DEPARTMENT OF COMMERCE, AS RELATED PRIMARILY TO SURPLUS PROPERTY DISPOSAL FUNCTIONS, WERE TRANSFERRED TO THE RECONSTRUCTION FINANCE CORPORATION BY EXECUTIVE ORDER 9643 (10 F.R. 13039), EFFECTIVE NOVEMBER 5, 1945. THESE EMPLOYEES WERE SUBSEQUENTLY TRANSFERRED TO THE WAR ASSETS CORPORATION BY ACTION OF THE RECONSTRUCTION FINANCE CORPORATION. PURSUANT TO EXECUTIVE ORDER 9689 (11 F.R. 1265), SO MUCH OF THE RECORDS, ADMINISTRATIVE PROPERTY, PERSONNEL, AND FUNDS OF THE SURPLUS PROPERTY ADMINISTRATION, THE OFFICE OF WAR MOBILIZATION AND RECONVERSION, THE RECONSTRUCTION FINANCE CORPORATION, AND THE WAR ASSETS CORPORATION AS RELATED PRIMARILY TO THE FUNCTIONS OF THE SURPLUS PROPERTY DISPOSAL WERE TRANSFERRED TO THE WAR ASSETS ADMINISTRATION, EFFECTIVE MARCH 25, 1946.

UNDER THE PROVISIONS OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 ( PUBLIC LAW 106, APPROVED JUNE 30, 1945), THE PERIODIC WITHIN-GRADE SALARY ADVANCEMENTS PROVIDED IN TITLE IV THEREOF, ARE MADE APPLICABLE BY THE TERMS OF SECTION 101 (B) THEREOF "TO OFFICERS AND EMPLOYEES WHO OCCUPY POSITIONS SUBJECT TO THE CLASSIFICATION ACT OF 1922, AS AMENDED.'

THE RECONSTRUCTION FINANCE CORPORATION IS AUTHORIZED, UNDER SECTION 4 OF THE ACT OF JANUARY 22, 1932, AS AMENDED (15 U.S.C. 604), TO FIX THE COMPENSATION OF ITS EMPLOYEES WITHOUT REGARD TO THE PROVISIONS OF OTHER LAWS APPLICABLE TO THE EMPLOYMENT AND COMPENSATION OF OFFICERS OR EMPLOYEES OF THE UNITED STATES. A COMPARISON WITH THE ATTACHED TABLE SHOWING GRADES AND SALARY RATES FOR POSITIONS IN THE RECONSTRUCTION FINANCE CORPORATION SHOWS THAT MAXIMUM RATES FOR THE VARIOUS GRADES DO NOT CORRESPOND TO THE MAXIMUM RATES FOR GRADES UNDER THE CLASSIFICATION ACT, AND FURTHER THAT RATES OF PAY DO NOT CONFORM THROUGHOUT TO THOSE APPLICABLE TO POSITIONS UNDER THAT ACT.

AT THE TIME THE EMPLOYEES IN QUESTION WERE UNDER THE COMMERCE DEPARTMENT, THEY OCCUPIED POSITIONS SUBJECT TO THE CLASSIFICATION ACT OF 1923, AS AMENDED. AT A GENERAL ASSEMBLY OF ALL EMPLOYEES AFFECTED BY THE TRANSFER FROM THE DEPARTMENT OF COMMERCE TO RECONSTRUCTION FINANCE CORPORATION, A REPRESENTATIVE OF THE CIVIL SERVICE COMMISSION ASSURED THESE EMPLOYEES THAT THEIR PERSONNEL STATUS WOULD NOT BE ALTERED BY REASON OF THE THEN CONTEMPLATED TRANSFER.

IT IS SUBMITTED THAT THE FORMER DEPARTMENT OF COMMERCE EMPLOYEES WOULD COME WITHIN THE PROVISIONS OF TITLE IV OF THE FEDERAL EMPLOYEES PAY ACT SINCE NO ACTION WAS TAKEN, UPON THEIR TRANSFER, BY RECONSTRUCTION FINANCE CORPORATION TO REVIEW THE DUTIES OR TO ADJUST THE SALARIES OF THESE EMPLOYEES GENERALLY TO SALARY SCHEDULES APPLICABLE TO OTHER CORPORATE EMPLOYEES.

AS SHOULD BE EXPECTED, MANY DIFFICULTIES ATTENDED THE CONSOLIDATION OF THE OFFICE OF SURPLUS PROPERTY, COMMERCE DEPARTMENT, WITH THE CORPORATION, ESPECIALLY DURING THE TRANSITIONAL STAGES. EXECUTIVE ORDER 9689 WAS ISSUED ON JANUARY 31, 1946 BEFORE IT BECAME POSSIBLE TO INSTITUTE APPROPRIATE PROCESSES FOR READJUSTING THE SALARIES AND DUTIES OF FORMER COMMERCE DEPARTMENT EMPLOYEES TO COMPARABLE RECONSTRUCTION FINANCE CORPORATION GRADES. GENERALLY, THE SALARY RATES PAID THESE EMPLOYEES DO NOT APPEAR IN THE EXECUTIVE ORDER SALARY SCHEDULES. HOWEVER, THE RECONSTRUCTION FINANCE CORPORATION TRANSFERRED THESE EMPLOYEES TO EXECUTIVE ORDER GRADES, WITHIN THE LIMITS OF WHICH THE CLASSIFIED SALARY RATES HAPPENED TO FALL, WITHOUT ANY CHANGES IN SALARY RATES AND WITHOUT A REVIEW OR ADJUSTMENT OF THE DUTIES OF THESE EMPLOYEES TO BRING THEM INTO LINE WITH THOSE APPLICABLE TO OTHER CORPORATE EMPLOYEES. SINCE ALL THE FUNCTIONS OF THE WAR ASSETS CORPORATION WERE TO BE TRANSFERRED TO THE WAR ASSETS ADMINISTRATION ON MARCH 25, 1946, IT WAS THOUGHT MORE FEASIBLE TO WITHHOLD ACTION WITH REGARD TO AUTOMATIC PROMOTIONS UNTIL SUCH TIME AS OUR ORGANIZATION BECAME AN ADMINISTRATION.

SINCE THE CORPORATION MADE NO CHANGE IN THE SALARIES OF THE EMPLOYEES IN QUESTIONS, UPON THEIR TRANSFER, TO CONFORM TO PRESCRIBED RECONSTRUCTION FINANCE CORPORATION RATES, IT IS SUBMITTED THAT THE RECONSTRUCTION FINANCE CORPORATION SHOULD BE DEEMED TO HAVE ELECTED UNDER STATUTORY AUTHORITY TO FIX THE RATES OF THESE EMPLOYEES "IN ACCORDANCE WITH THE CLASSIFICATION ACT, AS AMENDED," THE EFFECT OF WHICH WOULD SEEM TO BRING THESE EMPLOYEES WITHIN THE PURVIEW OF TITLE IV, OF THE FEDERAL EMPLOYEES PAY ACT OF 1945. SEE IN THIS CONNECTION 25 COMP. GEN. 58.

IN VIEW OF THE FOREGOING, AND INASMUCH AS THE FUNDS AVAILABLE FOR WITHIN- GRADE SALARY ADVANCEMENTS WERE TRANSFERRED WITH EACH SUCCESSIVE TRANSFER OF FUNCTIONS AND PERSONNEL AND SUCH FUNDS ARE NOW UNDER THE CUSTODY OF THE WAR ASSETS ADMINISTRATION, IT IS FELT THAT PAYMENTS AT THIS TIME, BY THIS ADMINISTRATION AT CLASSIFIED SCHEDULE RATES, IN ACCORDANCE WITH THE SALARY ADVANCEMENT PROVISIONS OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, WOULD NOT CONSTITUTE RETROACTIVE PROMOTIONS OF THE TYPE GENERALLY PROHIBITED BY LAW. SEE IN THIS CONNECTION, B 40203, DATED MARCH 4, 1944.

YOUR DECISION IS REQUESTED AS TO THE LEGALITY OF OUR PROCESSING PROMOTIONS WHICH BECAME DUE BETWEEN NOVEMBER 5, 1945, AND MARCH 25, 1946, RETROACTIVELY AS OF THE DATES THE EMPLOYEES WERE ELIGIBLE TO RECEIVE THESE SALARY ADVANCEMENTS.

EXECUTIVE ORDER 9689, DATED JANUARY 31, 1946, PROVIDES, INTER ALIA, THAT ALL POSITIONS TRANSFERRED TO THE WAR ASSETS ADMINISTRATION SHALL BE SUBJECT TO THE CLASSIFICATION ACT OF 1923, 42 STAT. 1488.

IT APPEARS THAT CERTAIN EMPLOYEES WHO WERE SUBJECT TO THE CLASSIFICATION ACT OF 1923, SUPRA, PRIOR TO THEIR TRANSFER TO THE JURISDICTION OF THE RECONSTRUCTION FINANCE CORPORATION UNDER EXECUTIVE ORDER 9643, DATED OCTOBER 19, 1945--- THAT AGENCY HAVING AUTHORITY TO FIX SALARIES OF ITS EMPLOYEES WITHOUT REGARD TO THE CLASSIFICATION ACT- - HAVE FAILED TO RECEIVE AUTOMATIC WITHIN-GRADE SALARY ADVANCEMENTS WHICH HAD ACCRUED PRIOR TO THEIR RETURN TO POSITIONS SUBJECT TO SUCH ACT IN ACCORDANCE WITH EXECUTIVE ORDER 9689, SUPRA.

AUTOMATIC WITHIN-GRADE SALARY ADVANCEMENTS, AS PROVIDED FOR IN SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, APPROVED JUNE 30, 1945, PUBLIC 106, 79TH CONGRESS, FIRST SESSION, 59 STAT. 299, ARE LIMITED TO EMPLOYEES SUBJECT TO THE CLASSIFICATION ACT OF 1923, AS AMENDED. HENCE, IF THE PERIOD OF EMPLOYMENT IN THE RECONSTRUCTION FINANCE CORPORATION OPERATED TO REMOVE THE INVOLVED EMPLOYEES FROM THE PROVISIONS OF THE CLASSIFICATION ACT, THEY WOULD NOT BE ENTITLED TO THE BENEFIT OF WITHIN- GRADE PROMOTIONS THEREUNDER.

IN VIEW OF THE STATEMENTS IN YOUR LETTER TO THE EFFECT THAT NO ACTION WAS TAKEN BY THE RECONSTRUCTION FINANCE CORPORATION TO ADJUST THE SALARY RATES OF THE EMPLOYEES TO CONFORM WITH THE SALARY SCHEDULES APPLICABLE GENERALLY TO OTHER EMPLOYEES IN THAT AGENCY, PRESUMABLY DUE TO THE CONTEMPLATED RETRANSFER OF SAID EMPLOYEES TO THE WAR ASSETS ADMINISTRATION, IT REASONABLY MAY BE CONCLUDED THAT THEY CONTINUED TO BE SUBJECT TO THE CLASSIFICATION ACT DURING THE ENTIRE PERIOD OF THEIR EMPLOYMENT UNDER THE JURISDICTION OF THE RECONSTRUCTION FINANCE CORPORATION AND, THUS, WERE ENTITLED TO THE BENEFIT OF WITHIN-GRADE SALARY ADVANCEMENTS IN ACCORDANCE WITH SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, SUPRA.

WITH RESPECT TO THE RETROACTIVE EFFECT OF AUTOMATIC WITHIN-GRADE SALARY ADVANCEMENTS, THE DECISION OF MARCH 4, 1944, B-40203, CITED IN YOUR LETTER, QUOTED THE SYLLABUS OF A PRIOR RULING IN 21 COMP. GEN. 369, WHICH, BEING EQUALLY APPLICABLE HERE, IS AGAIN QUOTED, AS FOLLOWS:

AN ADMINISTRATIVE ERROR IN NOT GRANTING AN EMPLOYEE A WITHIN-GRADE SALARY ADVANCEMENT PURSUANT TO THE ACT OF AUGUST 1, 1941, MAY NOT DEFEAT OR DELAY THE RIGHT OF THE EMPLOYEE TO THE ADVANCEMENT ON AND AFTER THE BEGINNING OF ANY QUARTER HE BECAME QUALIFIED AND ENTITLED THERETO, AND ADMINISTRATIVE ACTION RETROACTIVELY CORRECTING THE ERROR IS NOT TO BE REGARDED AS A RETROACTIVELY EFFECTED PROMOTION SUCH AS IS PROHIBITED UNDER THE GENERAL RULE APPLICABLE TO PROMOTIONS.

ACCORDINGLY, AUTOMATIC WITHIN-GRADE SALARY ADVANCEMENTS ACCRUING TO THE EMPLOYEES IN QUESTION DURING THE PERIOD NOVEMBER 5, 1945, TO MARCH 25, 1946, MAY BE PROCESSED RETROACTIVELY EFFECTIVE AS OF THE BEGINNING OF THE NEXT PAY PERIOD FOLLOWING COMPLETION OF THE WAITING PERIOD SPECIFIED IN THE FEDERAL EMPLOYEES PAY ACT OF 1945, SUPRA. ..END :