B-63602, MARCH 6, 1947, 26 COMP. GEN. 660

B-63602: Mar 6, 1947

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RECOMMENDATIONS HAVE BEEN MADE FOR CHANGES IN PRACTICE SURROUNDING PAYMENT OF THIS DIFFERENTIAL TO CERTAIN INDIVIDUALS OR CLASSES OF EMPLOYEES. THE DEPARTMENT IS UNCERTAIN AS TO THE SCOPE OF ITS AUTHORITY TO MAKE SUCH DISTINCTIONS WITHIN A GEOGRAPHICAL AREA. AS WAS RECOGNIZED IN YOUR DECISION CITED ABOVE. PAYMENT OF A FOREIGN SERVICE DIFFERENTIAL IS MADE NECESSARY AND DESIRABLE FOR A NUMBER OF REASONS. THE DIFFERENTIAL IS ESSENTIAL TO RECRUITMENT FOR ONE AREA BECAUSE OF EXTRAORDINARY COSTS OF FOOD AND SHELTER ALTHOUGH OTHER CONDITIONS ARE NORMAL. INSTANCES WHERE ALL FACTORS COMBINE ARE FORTUNATELY RARE. ANY ONE OF THEM IS ORDINARILY SUFFICIENT TO WARRANT ITS AUTHORIZATION. THIS IS PARTICULARLY TRUE WHERE HIGH COST OF LIVING HAS NOT BEEN A FACTOR REQUIRING PAYMENT OF FOREIGN SERVICE DIFFERENTIALS.

B-63602, MARCH 6, 1947, 26 COMP. GEN. 660

COMPENSATION - DIFFERENTIAL - ADMINISTRATIVE DISCRETION TO DENY DIFFERENTIAL ON BASIS OF FAMILY STATUS WHERE, IN EXTENDING THE PRINCIPLES OF THE CLASSIFICATION ACT TO FIELD POSITIONS PURSUANT TO SECTION 2 OF THE ACT OF JULY 3, 1930, THE SALARY RATE FOR A POSITION OUTSIDE CONTINENTAL UNITED STATES HAS BEEN ADMINISTRATIVELY FIXED TO INCLUDE A COMPENSATION DIFFERENTIAL IN VIEW OF LIVING CONDITIONS OR COSTS AND RESULTING RECRUITMENT DIFFICULTIES, THE ADMINISTRATIVE DISCRETION IN THE MATTER MAY NOT BE SO EXERCISED AS TO PAY A LOWER SALARY RATE, BY EXCLUDING THE DIFFERENTIAL, TO A PARTICULAR INCUMBENT WHO RESIDES WITH OTHER EMPLOYED MEMBERS OF HIS FAMILY, ON THE BASIS THAT THE NEED FOR THE DIFFERENTIAL DOES NOT EXIST UNDER SUCH CIRCUMSTANCES.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, MARCH 6, 1947:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JANUARY 31, 1947, AS FOLLOWS:

PURSUANT TO THE PROVISIONS OF EXECUTIVE ORDER NO. 8955 AND LATER UNDER THE DISCRETIONARY AUTHORITY OUTLINED IN YOUR DECISION OF NOVEMBER 23, 1942 (22 COMP. GEN. 491), THIS DEPARTMENT HAS AUTHORIZED PAYMENT OF A FOREIGN SERVICE DIFFERENTIAL TO EMPLOYEES OCCUPYING POSITIONS SUBJECT TO THE CLASSIFICATION ACT OF 1923, AS AMENDED, IN AREAS OUTSIDE THE CONTINENTAL UNITED STATES. RECOMMENDATIONS HAVE BEEN MADE FOR CHANGES IN PRACTICE SURROUNDING PAYMENT OF THIS DIFFERENTIAL TO CERTAIN INDIVIDUALS OR CLASSES OF EMPLOYEES. THE DEPARTMENT IS UNCERTAIN AS TO THE SCOPE OF ITS AUTHORITY TO MAKE SUCH DISTINCTIONS WITHIN A GEOGRAPHICAL AREA, HOWEVER, AND REQUESTS YOUR ADVICE ON THE QUESTIONS OUTLINED HEREIN.

AS WAS RECOGNIZED IN YOUR DECISION CITED ABOVE, PAYMENT OF A FOREIGN SERVICE DIFFERENTIAL IS MADE NECESSARY AND DESIRABLE FOR A NUMBER OF REASONS, ALL OF WHICH MAY BE TERMED "LIVING CONDITIONS," SUCH AS ISOLATION, COST OF FOOD AND SHELTER, HAZARD OR EXPOSURE TO ABNORMAL CLIMATE OR DISEASE, LACK OF ORDINARY CONVENIENCES, AND OTHERS. IT HAS NOT BEEN POSSIBLE TO FORMULATE A BASIC STATEMENT OF POLICY FOR GENERAL APPLICATION FOR THE REASON THAT THE DOMINANT FACTOR REQUIRING ADDITIONAL SALARY HAS VARIED FROM ONE LOCALITY TO ANOTHER. FOR EXAMPLE, THE DIFFERENTIAL IS ESSENTIAL TO RECRUITMENT FOR ONE AREA BECAUSE OF EXTRAORDINARY COSTS OF FOOD AND SHELTER ALTHOUGH OTHER CONDITIONS ARE NORMAL. LIKEWISE, COST OF LIVING MAY BE UNUSUALLY LOW IN ANOTHER LOCALITY, BUT RECRUITS WOULD NOT BE AVAILABLE WITHOUT ADDED INDUCEMENT BECAUSE OF TROPICAL CLIMATE OR ISOLATION FROM NORMAL SOCIAL CONTACTS. INSTANCES WHERE ALL FACTORS COMBINE ARE FORTUNATELY RARE, BUT ANY ONE OF THEM IS ORDINARILY SUFFICIENT TO WARRANT ITS AUTHORIZATION.

OVER THE PAST SEVERAL YEARS, ADMINISTRATION OF THIS SALARY-FIXING FACTOR HAS BEEN PARTICULARLY DIFFICULT IN SOME AREAS BECAUSE OF COMMODITY SHORTAGES AND GENERAL ECONOMIC DISRUPTIONS OCCASIONED BY THE WAR. THIS IS PARTICULARLY TRUE WHERE HIGH COST OF LIVING HAS NOT BEEN A FACTOR REQUIRING PAYMENT OF FOREIGN SERVICE DIFFERENTIALS. WHEN SUCH COSTS ARE LOW AND COMMODITIES SHORT, THE PRESENCE OF LARGE AMOUNTS OF AMERICAN FUNDS HAS HAD DISTRESSING EFFECTS ON LOCAL ECONOMY. IN ORDER TO RECRUIT PERSONNEL, HOWEVER, THE DEPARTMENT HAS FOUND IT NECESSARY TO CONTINUE HIGHER SALARIES IN SPITE OF THE ADVERSE EFFECT. SINCE THE TERMINATION OF HOSTILITIES, THERE HAS BEEN AN INCREASE IN THE NUMBER OF INSTANCES IN WHICH TWO OR MORE MEMBERS OF A FAMILY ARE EMPLOYED AND RESIDE TOGETHER AT THE OVERSEAS LOCATION. THEREFORE, IT HAS BEEN SUGGESTED THAT THE DIFFERENTIAL BE DISCONTINUED FOR ALL MEMBERS OF A FAMILY WHO MAY BE LIVING UNDER THE SAME ROOF EXCEPT THE HEAD OF THE FAMILY, BASED ON THE DETERMINATION THAT THERE IS A REDUCTION IN LIVING COSTS RESULTING FROM JOINT MAINTENANCE OF THE HOME AND THAT THE ADDED RECRUITMENT INDUCEMENT IS NOT NECESSARY WHEN OVERSEAS EMPLOYMENT PERMITS THE APPLICANT TO JOIN OR REMAIN WITH HIS FAMILY.

OBJECTIONS TO THIS SOLUTION HAVE BEEN RAISED, BASED ON THE CONTENTION THAT THE DEPARTMENT IS NOT AUTHORIZED TO DISTINGUISH AMONG GROUPS OF EMPLOYEES, AS INDICATED ABOVE, OCCUPYING CLASSIFICATION ACT POSITIONS WHERE THERE HAS BEEN GENERAL AUTHORIZATION OF A DIFFERENTIAL PAYMENT FOR A GIVEN AREA. IT IS FURTHER STATED THAT COMPENSATION UNDER THE CLASSIFICATION ACT, OR ANY OTHER SYSTEM PROVIDING FOR EQUAL PAY FOR EQUAL WORK, ATTACHES TO THE DUTIES PERFORMED, AND NOT TO THE INDIVIDUAL, AND THAT ONCE AUTHORIZED THE PERCENTAGE DIFFERENTIAL BECOMES A PART OF BASIC SALARY WHICH MAY NOT BE REDUCED ON AN INDIVIDUAL BASIS.

THE AUTHORITY OF THE DEPARTMENT TO PROVIDE OR WITHHOLD DIFFERENTIAL ALLOWANCE FOR SPECIFIC AREAS IS FULLY RECOGNIZED AND WELL-DEFINED. HOWEVER, THERE APPEARS TO BE NO AUTHORITATIVE STATEMENT AS TO WHETHER THAT AUTHORITY EXTENDS TO DIFFERENTIATING BETWEEN INDIVIDUALS IN THE SAME LOCALITY. YOUR ADVICE IS THEREFORE REQUESTED AS TO WHETHER YOU WOULD BE REQUIRED TO RECOGNIZE A CLAIM FILED BY AN EMPLOYEE WHO HAS BEEN DENIED ADDITIONAL COMPENSATION ON THE GROUNDS OF DEPENDENCY UNDER THE ABOVE CIRCUMSTANCES.

THIS OFFICE MAY NOT, OF COURSE, UNDERTAKE TO RENDER A DECISION UPON A QUESTION SUCH AS THAT PRESENTED IN THE LAST SENTENCE OF YOUR LETTER-- THE SETTLEMENT OF CLAIMS UNDER THE PROVISIONS OF 31 U.S.C. 71 BEING CONTROLLED IN EACH INSTANCE BY THE PARTICULAR FACTS INVOLVED AND THE APPLICABLE LAW. HOWEVER, YOUR LETTER WILL BE CONSIDERED AS A REQUEST FOR DECISION INVOLVING PAYMENTS TO BE MADE BY OR UNDER YOUR DEPARTMENT SUCH AS I AM AUTHORIZED AND REQUIRED TO RENDER UNDER AUTHORITY CONTAINED IN THE THIRD PARAGRAPH OF SECTION 74, TITLE 31, UNITED STATES CODE.

EXECUTIVE ORDER NO. 8955 OF DECEMBER 1, 1941, REFERRED TO IN YOUR LETTER, SUPRA, WAS REVOKED BY EXECUTIVE ORDER NO. 9314, DATED MARCH 15, 1943. THEREFORE, THE PROVISIONS OF EXECUTIVE ORDER NO. 8955 AND THE STATUTORY AUTHORITY UPON WHICH THAT ORDER WAS BASED ARE NOT FOR CONSIDERATION AT THE PRESENT TIME, AND THE QUESTION PRESENTED WILL BE ANSWERED SOLELY UPON THE BASIS OF THE POLICY ADOPTED BY THIS OFFICE OF RECOGNIZING THE LONG EXISTING ADMINISTRATIVE PRACTICE OF GRANTING A DIFFERENTIAL IN THE SALARY RATES IN FAVOR OF POSITIONS IN ALASKA AND LATER AT OTHER LOCATIONS OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES.

THE REASONS FOR RECOGNIZING THAT PRACTICE--- WHICH, ALSO, HAD BEEN RECOGNIZED IN EARLIER DECISIONS--- WERE SET OUT IN 22 COMP. GEN. 491, 495, AS FOLLOWS:

SECTION 2 OF THE ACT OF JULY 3, 1930, 46 STAT. 1005, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"THE HEADS OF THE SEVERAL EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS ARE AUTHORIZED AND DIRECTED TO ADJUST THE COMPENSATION OF CERTAIN CIVILIAN POSITIONS IN THE FIELD SERVICES, THE COMPENSATION OF WHICH WAS ADJUSTED BY THE ACT OF DECEMBER 6, 1924 (43 STAT. 604 (704) (, TO CORRESPOND, SO FAR AS MAY BE PRACTICABLE, TO THE RATES ESTABLISHED BY THE ACT OF MAY 28, 1948 ( U.S.C., SUPP. 3, TITLE 5, SEC. 673), AND BY THIS ACT FOR POSITIONS IN THE DEPARTMENTAL SERVICES IN THE DISTRICT OF COLUMBIA: * * *"

AS STATED IN YOUR LETTER, THE DECISIONS OF THIS OFFICE HAVE HELD THAT IN THE ABSENCE OF A STATUTE EXPRESSLY EXEMPTING FIELD POSITIONS FROM THE CLASSIFICATION ACT, 42 STAT. 1488, THE VARIOUS ADMINISTRATIVE OFFICERS ARE "AUTHORIZED AND DIRECTED" TO ADJUST THE SALARY RATES OF FIELD POSITIONS TO CORRESPOND TO THE SALARY RATES PRESCRIBED BY THE CLASSIFICATION ACT FOR THE SAME OR SIMILAR POSITIONS IN THE DEPARTMENTAL SERVICE. THIS OFFICE HAS HELD THAT THE WORDS APPEARING IN THE STATUTE "SO FAR AS MAY BE PRACTICABLE" DO NOT VEST IN AN ADMINISTRATIVE OFFICE ANY AUTHORITY TO FIX THE SALARY RATES OF FIELD POSITIONS WITHOUT REGARD TO THE CLASSIFICATION ACT, BUT DO RECOGNIZE SOME ADMINISTRATIVE DISCRETION IN RESPECT THERETO. 14 COMP. GEN. 420.

IN VIEW THEREOF AND HAVING REGARD FOR THE LIVING CONDITIONS WHICH HERETOFORE HAVE EXISTED--- AND STILL EXIST--- AT LOCATIONS OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, MAKING IT IMPRACTICABLE FOR VARIOUS ADMINISTRATIVE OFFICES TO RECRUIT PERSONNEL FOR SUCH POSITIONS WITHOUT PAYING HIGHER SALARY RATES THAN THOSE PRESCRIBED BY THE CLASSIFICATION ACT FOR THE SAME OR SIMILAR POSITIONS IN THE DEPARTMENTAL SERVICE, AND AS THE FIXING OF SALARY RATES IN THE FIELD SERVICE PRIMARILY IS AN ADMINISTRATIVE DUTY AND RESPONSIBILITY WITHIN REASONABLE LIMITATIONS, THIS OFFICE HAS NOT OBJECTED, IN THE AUDIT OF PAYROLL ACCOUNTS, TO THE FIXING OF A DIFFERENTIAL BY ADMINISTRATIVE ACTION FOR FIELD EMPLOYEES WHO OCCUPY POSITIONS OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, EITHER IN THE POSSESSIONS OF THE UNITED STATES OR IN FOREIGN COUNTRIES; SO LONG AS THE DIFFERENTIAL DOES NOT EXCEED BY MORE THAN 25 PERCENT THE SALARY RATE AUTHORIZED TO BE FIXED FOR THE SAME OR SIMILAR POSITIONS IN THE STATES. SAID MAXIMUM IS AN ARBITRARY ONE BUT DEEMED REASONABLE AS A LIMITATION ON WHAT MAY BE REGARDED AS A "PRACTICABLE" DIFFERENTIAL AND CORRESPONDS WITH THAT AUTHORIZED BY LAW IN THE CANAL ZONE. SEE SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE AS AMENDED BY SECTION 3 OF THE ACT OF JULY 9, 1937, 50 STAT. 487. SUCH ADMINISTRATIVE PRACTICE HAS LONG BEEN IN FORCE IN ALASKA, AND FOR SHORTER PERIODS AT OTHER LOCATIONS OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES. * * *

AS STATED IN THAT DECISION, THE WORDS APPEARING IN SECTION 2 OF THE ACT OF JULY 3, 1930, 46 STAT. 1005 "SO FAR AS MAY BE PRACTICABLE" DO NOT VEST IN AN ADMINISTRATIVE OFFICE ANY AUTHORITY TO FIX THE SALARY RIGHTS (RATES) OF FIELD POSITIONS WITHOUT REGARD TO THE CLASSIFICATION ACT, BUT DO RECOGNIZE SOME ADMINISTRATIVE DISCRETION IN RESPECT THERETO. HOWEVER, IT WAS INTENDED, IN EXTENDING THE PRINCIPLES OF THE CLASSIFICATION ACT TO THE FIELD, THAT THE CLASSIFICATION AND RESULTING SALARY RATE FOR A POSITION BE BASED UPON THE DUTIES AND RESPONSIBILITIES OF THE POSITION RATHER THAN UPON THE NEEDS OR FAMILY STATUS OF THE INCUMBENT OF THE POSITION. COMP. GEN. 947, 950, AND CASES THEREIN CITED. THEREFORE, THE DIFFERENTIAL, WHEN FIXED PURSUANT TO PROPER AUTHORITY, BECOMES A PART OF THE REGULAR SALARY OR COMPENSATION OF THE POSITION. 24 COMP. GEN. 181, 183; 22 ID. 79, 80; 21 ID. 947; 10 ID. 519.

IN THE LIGHT OF THE FOREGOING, IT WOULD APPEAR THAT THE ADMINISTRATIVE DISCRETION WHICH MAY BE EXERCISED IN FIXING THE SALARY RATE FOR A PARTICULAR POSITION, IN EXTENDING THE PRINCIPLES OF THE CLASSIFICATION ACT TO THE FIELD SERVICE, MAY NOT BE SO EXERCISED AS TO DISCRIMINATE AGAINST THE INCUMBENT OF A POSITION SO AS TO PAY HIM AT A SALARY RATE LESS THAN THAT FIXED FOR THE POSITION SOLELY BECAUSE OF THE FAMILY STATUS OF SUCH INCUMBENT. THE QUESTION PRESENTED IN YOUR LETTER, SUPRA, IS ANSWERED ACCORDINGLY.