B-58458, JUNE 20, 1946, 25 COMP. GEN. 897

B-58458: Jun 20, 1946

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1946: I HAVE YOUR LETTER OF JUNE 7. FOUR OF WHICH ARE CLASSIFIED UNDER THE CLASSIFICATION ACT OF 1923. IN GRADE CAF-14 AND SIX OF WHICH ARE CLASSIFIED IN CLASS 13. WILL BE AFFECTED BY THE PROVISION OF SECTION 7 (B) OF FEDERAL EMPLOYEES PAY ACT OF 1946. THE INCUMBENTS ARE PAID THE 25 PERCENT DIFFERENTIAL ALLOWABLE FOR FOREIGN SERVICE. ATTAIN THE TOP SALARY STEP OF THAT GRADE ARE AFFECTED AS WELL AS THOSE WHOSE POSITIONS ARE CLASSIFIED IN GRADE 14. IT IS THE OPINION OF THIS DEPARTMENT THAT THE PAYMENT OF THE DIFFERENTIAL OF 25 PERCENT AUTHORIZED FOR EMPLOYEES FOR SERVICES RENDERED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES IS NOT PROHIBITED BY SECTION 7 (B) OF THIS ACT EVEN THOUGH THE TOTAL ANNUAL COMPENSATION RECEIVED IS IN EXCESS OF $10.

B-58458, JUNE 20, 1946, 25 COMP. GEN. 897

FEDERAL EMPLOYEE PAY ACT OF 1946 - AGGREGATE COMPENSATION LIMITATION AS APPLIED TO COMPENSATION DIFFERENTIAL FOR DUTY OUTSIDE U.S. IN VIEW OF THE PROVISIONS OF SECTION 7 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1946, LIMITING TO $10,000 PER ANNUM THE AGGREGATE RATE OF COMPENSATION WHICH MAY BE PAID "BY REASON OF THE ENACTMENT OF THIS ACT," AN OFFICER OR EMPLOYEE, OTHERWISE SUBJECT TO THE LIMITATION, ON DUTY OUTSIDE THE CONTINENTAL UNITED STATES MAY NOT BE PAID IN EXCESS OF $10,000 PER ANNUM WHERE HIS BASIC COMPENSATION (REGULAR BASIC RATE PLUS COMPENSATION DIFFERENTIAL) WOULD BE INCREASED BY OPERATION OF SECTION 2 OF SAID ACT TO A RATE EXCEEDING THE LIMITATION. 25 COMP. GEN. 188, AMPLIFIED.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, JUNE 20, 1946:

I HAVE YOUR LETTER OF JUNE 7, 1946, AS FOLLOWS:

THE OFFICE OF SURPLUS PROPERTY OF THE DIVISION OF TERRITORIES AND ISLAND POSSESSIONS OF THIS DEPARTMENT HAS THREE OFFICES LOCATED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, NAMELY: ANCHORAGE, ALASKA; HONOLULU, HAWAII; AND SAN JUAN, PUERTO RICO. THE SALARIES OF TEN ESTABLISHED POSITIONS IN THESE OFFICES, FOUR OF WHICH ARE CLASSIFIED UNDER THE CLASSIFICATION ACT OF 1923, AS AMENDED, IN GRADE CAF-14 AND SIX OF WHICH ARE CLASSIFIED IN CLASS 13, WILL BE AFFECTED BY THE PROVISION OF SECTION 7 (B) OF FEDERAL EMPLOYEES PAY ACT OF 1946, PUBLIC LAW 390, 79TH CONGRESS, SECOND SESSION, APPROVED MAY 24, 1946. IN ADDITION TO THE BASIC SALARY RATES, THE INCUMBENTS ARE PAID THE 25 PERCENT DIFFERENTIAL ALLOWABLE FOR FOREIGN SERVICE. DEPENDING UPON YOUR INTERPRETATION OF SECTION 7 (B) OF THIS ACT, THE SALARY RATES OF THE EMPLOYEES IN GRADE CAF- 13 WHO MAY, THROUGH PROMOTIONS, ATTAIN THE TOP SALARY STEP OF THAT GRADE ARE AFFECTED AS WELL AS THOSE WHOSE POSITIONS ARE CLASSIFIED IN GRADE 14.

IT IS THE OPINION OF THIS DEPARTMENT THAT THE PAYMENT OF THE DIFFERENTIAL OF 25 PERCENT AUTHORIZED FOR EMPLOYEES FOR SERVICES RENDERED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES IS NOT PROHIBITED BY SECTION 7 (B) OF THIS ACT EVEN THOUGH THE TOTAL ANNUAL COMPENSATION RECEIVED IS IN EXCESS OF $10,000. HOWEVER, IN VIEW OF THE PROVISIONS OF SECTION 7 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1946, THE QUESTION IS RAISED WHETHER EMPLOYEES IN GRADE CAF-14 AND EMPLOYEES IN GRADE CAF-13 WHO ARE EMPLOYED OUTSIDE THE CONTINENTAL UNITED STATES AND RECEIVE IN ADDITION TO THE BASIC PAY PROVIDED BY THIS ACT A 25 PERCENT PAY DIFFERENTIAL MAY BE PAID IN EXCESS OF $10,000 PER ANNUM.

SINCE THE PROVISIONS OF THE ACT BECOME EFFECTIVE JULY 1, 1946, YOUR EARLY DECISION WILL BE APPRECIATED.

SECTION 7 OF THE FEDERAL EMPLOYEES PAY ACT OF 1946, APPROVED MAY 24, 1946, 60 STAT. 218, PUBLIC LAW 390, PROVIDES AS FOLLOWS:

SEC. 7. (A) SECTION 603 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 IS AMENDED BY INSERTING AFTER THE WORDS "BY REASON OF THE ENACTMENT OF THIS ACT" THE WORDS "OR ANY AMENDMENT THERETO.'

(B) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT, NO OFFICER OR EMPLOYEE SHALL, BY REASON OF THE ENACTMENT OF THIS ACT, BE PAID WITH RESPECT TO ANY PAY PERIOD, BASIC COMPENSATION, OR BASIC COMPENSATION PLUS ANY ADDITIONAL COMPENSATION PROVIDED BY THE FEDERAL EMPLOYEES PAY ACT OF 1945, AS AMENDED, AT A RATE IN EXCESS OF $10,000 PER ANNUM.

SECTION 603 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, APPROVED JUNE 30, 1945, 59 STAT. 303, REFERRED TO IN THE ABOVE SECTION OF THE 1946 ACT, READS AS FOLLOWS:

(B) NOTWITHSTANDING ANY OTHER PROVISION OF THIS ACT, NO OFFICER OR EMPLOYEE SHALL, BY REASON OF THE ENACTMENT OF THIS ACT, BE PAID, WITH RESPECT TO ANY PAY PERIOD, BASIC COMPENSATION, OR BASIC COMPENSATION PLUSANY ADDITIONAL COMPENSATION PROVIDED BY THIS ACT, AT A RATE IN EXCESS OF $10,000 PER ANNUM, EXCEPT THAT (1) ANY OFFICER OR EMPLOYEE WHO WAS RECEIVING OVERTIME COMPENSATION ON JUNE 30, 1945, AND WHOSE AGGREGATE RATE OF COMPENSATION ON SUCH DATE WAS IN EXCESS OF $10,000 PER ANNUM MAY RECEIVE OVERTIME COMPENSATION AT SUCH RATE AS WILL NOT CAUSE HIS AGGREGATE RATE OF COMPENSATION FOR ANY PAY PERIOD TO EXCEED THE AGGREGATE RATE OF COMPENSATION HE WAS RECEIVING ON JUNE 30, 1945, UNTIL HE CEASES TO OCCUPY THE OFFICE OR POSITION HE OCCUPIED ON SUCH DATE OR UNTIL THE OVERTIME HOURS OF WORK IN HIS ADMINISTRATIVE WORKWEEK ARE REDUCED BY ACTION OF THE HEAD OF HIS DEPARTMENT OR INDEPENDENT ESTABLISHMENT OR AGENCY, OR GOVERNMENT-OWNED OR CONTROLLED CORPORATION, AND WHEN SUCH OVERTIME HOURS ARE REDUCED SUCH RATE OF OVERTIME COMPENSATION SHALL BE REDUCED PROPORTIONATELY, AND (2) ANY OFFICER OR EMPLOYEE WHO, BECAUSE OF THE RECEIPT OF ADDITIONAL COMPENSATION IN LIEU OF OVERTIME COMPENSATION, WAS RECEIVING AGGREGATE COMPENSATION AT A RATE IN EXCESS OF $10,000 PER ANNUM ON JUNE 30, 1945, MAY CONTINUE TO RECEIVE SUCH RATE OF AGGREGATE COMPENSATION SO LONG AS HE CONTINUES TO OCCUPY THE OFFICE OR POSITION HE OCCUPIED ON SUCH DATE BUT IN NO CASE BEYOND JUNE 30, 1947.

IN CONSIDERING THE EFFECT OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 UPON THE PAYMENT OF DIFFERENTIAL PAY FOR SERVICES PERFORMED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, IT WAS HELD IN DECISION OF AUGUST 14, 1945, B-51389, 25 COMP. GEN. 188 (QUOTING FROM THE SYLLABUS):

IN VIEW OF THE PROVISIONS OF SECTION 603 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 LIMITING TO $10,000 PER ANNUM THE AGGREGATE RATE OF COMPENSATION WHICH MAY BE PAID "BY REASON OF THE ENACTMENT OF THIS ACT," AN OFFICER OR EMPLOYEE NOT WITHIN THE EXCEPTIONS TO SUCH LIMITATION, ON DUTY OUTSIDE THE CONTINENTAL UNITED STATES MAY NOT BE PAID IN EXCESS OF $10,000 PER ANNUM WHERE THE BASIC COMPENSATION ATTACHED TO THE POSITION ON JUNE 30, 1945 (REGULAR BASIC RATE PLUS COMPENSATION DIFFERENTIAL), WOULD BE INCREASED BY OPERATION OF SECTION 405 OF SAID ACT TO A RATE EXCEEDING THE LIMITATION.

THE HOLDING IN THAT DECISION WAS BASED UPON THE FACT THAT HAD IT NOT BEEN FOR THE "ENACTMENT" OF THE 1945 PAY ACT, THE EMPLOYEE'S REGULAR BASIC RATE OF $7,500 PER ANNUM (TOP GRADE CAF-14) PLUS THE 25 PERCENT DIFFERENTIAL, ALL OF WHICH CONSTITUTES BASIC COMPENSATION, WOULD NOT HAVE EXCEEDED $10,000 PER ANNUM. SINCE THE INCREASED COMPENSATION ATTACHED TO SUCH POSITION "BY REASON OF THE ENACTMENT OF THIS ACT" WAS ONE OF TWO CONTRIBUTING FACTORS WHICH CAUSED THE SALARY OF THE EMPLOYEE TO EXCEED $10,000 PER ANNUM--- THE OTHER FACTOR BEING THE 25 PERCENT DIFFERENTIAL--- IT NECESSARILY FOLLOWED THAT THE LIMITATION IMPOSED BY THE STATUTE WAS APPLICABLE TO SUCH EMPLOYEES.

WHAT WAS SAID IN THE ABOVE DECISION WITH RESPECT TO THE FEDERAL EMPLOYEES PAY ACT OF 1945 APPLIES WITH EQUAL FORCE AND EFFECT WITH RESPECT TO THE FEDERAL EMPLOYEES PAY ACT OF 1946, BECAUSE SECTION 7 (B) OF THE LATTER ACT, SUPRA, ALSO PROVIDES THAT NO OFFICER OR EMPLOYEE SHALL,"BY REASON OF THE ENACTMENT OF THIS ACT," BE PAID "BASIC COMPENSATION" AT A RATE IN EXCESS OF $10,000. ALSO, SEE 25 COMP. GEN. 151 (QUESTION AND ANSWER 5).

ACCORDINGLY, IN THE LIGHT OF THE DECISIONS, SUPRA, AND HAVING REGARD FOR THE SPECIFIC CEILING OF $10,000 FIXED BY THE TWO ACTS, THE QUESTION PRESENTED IN YOUR LETTER IS ANSWERED IN THE NEGATIVE.