B-79556, JANUARY 11, 1949, 28 COMP. GEN. 405

B-79556: Jan 11, 1949

Additional Materials:

Contact:

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

 

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

COMPENSATION - OVERTIME - PANAMA CANAL EMPLOYEE SUBJECT TO CLASSIFICATION ACT: IN THE CASE OF A PANAMA CANAL EMPLOYEE WHOSE COMPENSATION WAS FIXED BY THE GOVERNOR OF THE PANAMA CANAL IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923. SUCH COMPENSATION IS NOT TO BE REGARDED AS FIXED BY A WAGE-FIXING AUTHORITY WITHIN THE MEANING OF THE 40-HOUR WEEK STATUTE OF MARCH 28. NOR ARE THE OVERTIME COMPENSATION PROVISIONS OF SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 FOR EMPLOYEES WHOSE BASIC COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS AND ADJUSTED BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY APPLICABLE TO SUCH EMPLOYEE. 1949: REFERENCE IS MADE TO YOUR LETTER OF JULY 7. FOR WORK ALLEGED TO HAVE BEEN PERFORMED IN EXCESS OF 40 HOURS PER WEEK AS AN EMPLOYEE OF THE PANAMA CANAL.

B-79556, JANUARY 11, 1949, 28 COMP. GEN. 405

COMPENSATION - OVERTIME - PANAMA CANAL EMPLOYEE SUBJECT TO CLASSIFICATION ACT: IN THE CASE OF A PANAMA CANAL EMPLOYEE WHOSE COMPENSATION WAS FIXED BY THE GOVERNOR OF THE PANAMA CANAL IN ACCORDANCE WITH THE CLASSIFICATION ACT OF 1923, AS AMENDED, SUCH COMPENSATION IS NOT TO BE REGARDED AS FIXED BY A WAGE-FIXING AUTHORITY WITHIN THE MEANING OF THE 40-HOUR WEEK STATUTE OF MARCH 28, 1934, SO AS TO ENTITLE THE EMPLOYEE TO OVERTIME COMPENSATION THEREUNDER; NOR ARE THE OVERTIME COMPENSATION PROVISIONS OF SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 FOR EMPLOYEES WHOSE BASIC COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS AND ADJUSTED BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY APPLICABLE TO SUCH EMPLOYEE.

COMPTROLLER GENERAL WARREN TO KING AND KING, ESQUIRES, JANUARY 11, 1949:

REFERENCE IS MADE TO YOUR LETTER OF JULY 7, 1948, IN BEHALF OF MR. JOHN G. CLAYBOURN, REQUESTING REVIEW OF THE SETTLEMENT OF THIS OFFICE DATED JULY 2, 1948, WHICH DISALLOWED MR. CLAYBOURN'S CLAIM FOR OVERTIME COMPENSATION, FOR WORK ALLEGED TO HAVE BEEN PERFORMED IN EXCESS OF 40 HOURS PER WEEK AS AN EMPLOYEE OF THE PANAMA CANAL, UNDER SECTION 23 OF THE ACT OF MARCH 28, 1934, 48 STAT. 522,"AS AMENDED BY THE ACT OF JULY 9, 1937, 50 STAT. 486," AND UPON THE AUTHORITY OF UNITED STATES V. TOWNSLEY, 323 U.S. 557, AND HEARNE V. UNITED STATES, 107 C.1CLS. 335, CERTIORARI DENIED, 331 U.S. 858. SAID CLAIM WAS DISALLOWED FOR THE STATED REASONS THAT SINCE THE GRADES, PROFESSIONAL-6 AND -7, OF THE POSITION OF SUPERINTENDENT, DREDGING DIVISION, OCCUPIED BY THE CLAIMANT DURING THE PERIOD OF HIS CLAIM ARE WITHIN THE PURVIEW OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, IT WAS NOT CONSIDERED THAT THE 1934 ACT APPLIED TO HIM, OR THAT HE WAS ENTITLED TO OVERTIME UNDER THE COURT CASES CITED.

SECTION 23 OF THE ACT OF MARCH 28, 1934, SUPRA, PROVIDES AS FOLLOWS:

THE WEEKLY COMPENSATION, MINUS ANY GENERAL PERCENTAGE REDUCTION WHICH MAY BE PRESCRIBED BY ACT OF CONGRESS, FOR THE SEVERAL TRADES AND OCCUPATIONS, WHICH IS SET BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES, SHALL BE REESTABLISHED AND MAINTAINED AT RATES NOT LOWER THAN NECESSARY TO RESTORE THE FULL WEEKLY EARNINGS OF SUCH EMPLOYEE IN ACCORDANCE WIH THE FULL-TIME WEEKLY EARNINGS UNDER THE RESPECTIVE WAGE SCHEDULES IN EFFECT ON JUNE 1, 1932: PROVIDED, THAT THE REGULAR HOURS OF LABOR SHALL NOT BE MORE THAN FORTY PER WEEK; AND ALL OVERTIME SHALL BE COMPENSATED FOR AT THE RATE OF NOT LESS THAN TIME AND ONE HALF.

THE REFERRED-TO TOWNSLEY AND HEARNE CASES HELD, GENERALLY, THAT MONTHLY RATE EMPLOYEES OF THE PANAMA CANAL, WHOSE COMPENSATION IS SET BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES WITHIN THE MEANING OF THE ABOVE- QUOTED PROVISION OF LAW, ARE ENTITLED TO THE OVERTIME COMPENSATION PROVIDED THEREBY, IT HAVING PREVIOUSLY BEEN HELD BY THIS OFFICE THAT SUCH EMPLOYEES WERE NOT ENTITLED TO OVERTIME COMPENSATION. 14 COMP. GEN. 156, AND DECISION OF APRIL 12, 1934, A-54762, QUOTED THEREIN AT PAGE 158. SECTION 3 OF THE ACT OF JULY 9, 1937, 50 STAT. 487--- WHICH APPEARS TO BE THE ONLY PROVISION OF SAID ACT HERE PERTINENT--- PROVIDES AS FOLLOWS:

THAT SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE IS AMENDED SO AS TO READ AS FOLLOWS:

"81. APPOINTMENT, REMOVAL, AND COMPENSATION OF NECESSARY PERSONS: ALL PERSONS, OTHER THAN THE GOVERNOR OF THE PANAMA CANAL, NECESSARY FOR THE CARE, MANAGEMENT, MAINTENANCE, SANITATION, GOVERNMENT, OPERATION, AND PROTECTION OF THE CANAL AND CANAL ZONE SHALL---

"/A) BE APPOINTED BY THE PRESIDENT OR BY HIS AUTHORITY;

"/B) BE REMOVABLE AT THE PLEASURE OF THE PRESIDENT; AND

"/C) RECEIVE SUCH COMPENSATION AS SHALL BE FIXED BY THE PRESIDENT OR BY HIS AUTHORITY UNTIL SUCH TIME AS CONGRESS MAY BY LAW REGULATE THE SAME;

"AND SUCH PERSONS SHALL BE EMPLOYED AND SHALL SERVE UNDER SUCH CONDITIONS OF EMPLOYMENT, INCLUDING MATTERS RELATING TO TRANSPORTATION, MEDICAL CARE, QUARTERS, LEAVE AND THE COMMUTATION THEREOF, AND OFFICE HOURS AND HOURS OF LABOR, AS HAVE BEEN OR SHALL HEREAFTER BE PRESCRIBED BY THE PRESIDENT: PROVIDED, HOWEVER, THAT SALARIES OR COMPENSATION FIXED BY THE PRESIDENT HEREUNDER SHALL IN NO INSTANCE EXCEED BY MORE THAN 25 PERCENTUM THE SALARY OR COMPENSATION PAID FOR THE SAME OR SIMILAR SERVICES TO PERSONS EMPLOYED BY THE GOVERNMENT IN CONTINENTAL UNITED STATES: AND PROVIDED FURTHER, THAT NOTHING CONTAINED IN THIS SECTION SHALL AFFECT THE APPLICATION TO EMPLOYEES OF THE PANAMA CANAL OF THE PROVISIONS OF SECTION 23 OF THE INDEPENDENT OFFICES APPROPRIATION ACT, 1935 (48 STAT. 522).'

THE STATUTORY PROVISION JUST QUOTED, BY ITS OWN TERMS, IS AN AMENDMENT TO THE CANAL ZONE CODE AND NOT AN AMENDMENT TO SECTION 23 OF THE 1934 ACT, AS SUGGESTED BY YOU. THE PROVISO RELATING TO THE 1934 ACT DID NOT AFFECT THE COVERAGE OF THAT ACT ONE WAY OR THE OTHER. TOWNSLEY V. UNITED STATES, 101 C.1CLS. 237, 258, ET SEQ. NOR CAN THE PROVISION RELATING TO AUTHORITY TO FIX COMPENSATION BE REGARDED AS AFFECTING THE MATTER HERE UNDER CONSIDERATION SINCE, AS WILL HEREINAFTER APPEAR, THE CONTROLLING FACTOR BASICALLY IS ONE OF PROCEDURE OR METHOD IN FIXING COMPENSATION AND NOT AUTHORITY TO FIX COMPENSATION.

THE BASIS OF THE CLAIM, AS ORIGINALLY SUBMITTED BY YOU UNDER DATE OF DECEMBER 9, 1947, IS THAT THE CLAIMANT WAS EMPLOYED AT A RATE OF COMPENSATION "WHICH WAS FIXED BY THE GOVERNOR OF THE PANAMA CANAL, A WAGE- FIXING AUTHORITY, ACTING WITH THE ADVICE AND WITH THE RECOMMENDATION OF THE SALARY BOARD OF THE PANAMA CANAL; " AND IT IS CONTENDED IN YOUR LETTER OF JULY 7, 1948, THAT THE CLAIMANT DOES NOT COME UNDER THE CLASSIFICATION ACT, BUT THAT HIS COMPENSATION IS FIXED BY THE GOVERNOR PURSUANT TO STATUTORY AUTHORITY AS IMPLEMENTED BY EXECUTIVE ORDER--- THE GOVERNOR MERELY LOOKING ,TO SOME EXTENT" TO THE CLASSIFICATION ACT IN FIXING COMPENSATION.

IN THE VERY NATURE OF THINGS, THE METHOD OF ESTABLISHING COMPENSATION RATES FOR CERTAIN CLASSES OF GOVERNMENT EMPLOYEES BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES AND THE CLASSIFICATION ACT METHOD USED FOR OTHER EMPLOYEES ARE ENTIRELY SEPARATE AND DISTINCT, AND THE ADMINISTRATIVE FUNCTION IN RELATION TO EACH IS DIFFERENT. IN THE FORMER, THE RATES COMPRISING A GENERAL WAGE OR COMPENSATION SCALE ARE, IN THE FINAL ANALYSIS, FIXED ADMINISTRATIVELY, ARE SUBJECT TO ADJUSTMENT FROM TIME TO TIME IN THE ADMINISTRATIVE DISCRETION, AND MAY VARY FROM LOCALITY TO LOCALITY; WHILE IN THE LATTER, THE SCHEDULE OF COMPENSATION RATES IS THAT WHICH THE CONGRESS HAS ESTABLISHED BY THE CLASSIFICATION ACT OF 1923, AS AMENDED, IS, GENERALLY SPEAKING, UNIFORM FOR ALL LOCALITIES, AND THE ADMINISTRATIVE ROLE WITH RESPECT THERETO EXTENDS ONLY TO THE SELECTION OF THE PROPER GRADE IN WHICH A PARTICULAR POSITION IS TO BE ALLOCATED UPON THE BASIS OF THE DUTIES AND RESPONSIBILITIES THEREOF. SECTION 23 OF THE 1934 ACT IS, ON ITS FACE, APPLICABLE ONLY TO EMPLOYEES WHOSE COMPENSATION IS FIXED IN ACCORDANCE WITH THE FORMER METHOD AND, THEREFORE, IT CANNOT HAVE ANY APPLICATION WHATEVER TO EMPLOYEES WHOSE COMPENSATION IS FIXED IN ACCORDANCE WITH THE LATTER METHOD. SEE TOWNSLEY V. UNITED STATES, 101 C.1CLS. 237, 259, AND NOTE THE CAREFUL DISTINCTION MAINTAINED BY THE COURT IN THE HEARNE CASE BETWEEN EMPLOYEES WHOSE COMPENSATION IS FIXED BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES AND THOSE WHOSE COMPENSATION IS FIXED IN ACCORDANCE WITH THE CLASSIFICATION ACT. AN EMPLOYEE'S RIGHTS ARE NO LESS CONTROLLED BY CONSIDERATIONS WITHIN THE SPHERE OF OPERATION OF THE CLASSIFICATION ACT METHOD--- AND, THEREFORE, NOT INFLUENCED BY MATTERS WITHIN THE SPHERE OF OPERATION OF THE ADMINISTRATIVE OR WAGE BOARD METHOD- -- WHEN THAT ACT IS ADMINISTRATIVELY ADOPTED AS THE BASIS FOR COMPENSATION FIXING THAN WHEN SAID ACT IS REQUIRED BY LAW TO BE APPLIED IN FIXING COMPENSATION.

THE INFORMATION BEFORE THIS OFFICE DEFINITELY SHOWS THAT THE CLAIMANT'S POSITION WAS ALLOCATED TO GRADES PROVIDED BY THE CLASSIFICATION ACT, AND, THEREFORE, THAT THE GOVERNOR MUST HAVE LOOKED TO THE COMPENSATION SCHEDULES PROVIDED BY THAT ACT TO FIND THE PROPER MEASURE OF COMPENSATION FOR THE DUTIES AND RESPONSIBILITIES OF THE CLAIMANT'S POSITION, THUS BRINGING THE CASE WITHIN THE SECOND METHOD OF COMPENSATION FIXING DISCUSSED IN THE PRECEDING PARAGRAPH, RATHER THAN TO A WAGE SCALE ADOPTED UPON THE RECOMMENDATION OF A WAGE BOARD SO AS TO BRING THE CASE WITHIN THE FIRST METHOD DISCUSSED ABOVE, TO WHICH SECTION 23 OF THE 1934 ACT IS APPLICABLE. THE TOWNSLEY CASE AND THE HEARNE CASE MAY BE CONSIDERED AS AUTHORITY FOR HOLDING THAT THE GOVERNOR OF THE PANAMA CANAL IS A WAGE- FIXING AUTHORITY WITHIN THE MEANING OF THE 1934 ACT ONLY WHEN HE SETS UP A WAGE OR COMPENSATION SCALE UPON THE ADVICE AND RECOMMENDATION OF A WAGE BOARD, AS HEREINBEFORE SHOWN, THE COMPENSATION SCHEDULES PRESCRIBED BY THE CLASSIFICATION ACT DO NOT PARTAKE OF THAT CHARACTER, SO THAT THOSE CASES DO NOT CONSTITUTE AUTHORITY FOR THE PROPOSITION THAT THE GOVERNOR IS A WAGE-FIXING AUTHORITY WITH THE MEANING OF THE 1934 ACT WHEN HE FIXED COMPENSATION IN ACCORDANCE WITH THE CLASSIFICATION ACT SCHEDULES, WHICH HAVE BEEN PRESCRIBED BY THE CONGRESS. YOU HAVE NOT OFFERED ANY EXPLANATION OF THE FUNCTIONS OF THE SALARY BOARD REFERRED TO BY YOU, AND JUST HOW ITS FUNCTIONS AFFECT THE VALIDITY OF THE PRESENT CLAIM. HOWEVER, IT IS MY UNDERSTANDING THAT THE PRIMARY FUNCTION OF THE BOARD IS TO RECOMMEND RATES FOR INDIVIDUAL POSITIONS IN ACCORDANCE WITH PREVIOUSLY ESTABLISHED WAGE OR COMPENSATION SCALES, IN CONTRADISTINCTION TO THE FUNCTION OF THE PANAMA CANAL WAGE BOARD OF RECOMMENDING THE WAGE OR COMPENSATION SCALES THEMSELVES. CLEARLY, SUCH FUNCTION OF THE SALARY BOARD DOES NOT SERVE TO CONSTITUTE A FIXING OF COMPENSATION "BY WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES" WITHIN THE MEANING OF THE 1934 ACT.

WITH RESPECT TO THE CASE OF GRAY V. UNITED STATES, 110 C.1CLS. 661, REFERRED TO BY YOU, IT IS NOT UNDERSTOOD THAT THAT CASE HAD ANY EFFECT TO EXTEND THE COVERAGE OF THE 1934 ACT, AS THERETOFORE APPLIED, BUT MERELY INVOLVED COMPUTATION OF THE OVERTIME COMPENSATION OF A PANAMA CANAL EMPLOYEE--- WHO WAS WITHIN THE PURVIEW OF THE 1934 ACT AS PREVIOUSLY CONSTRUED IN THE TOWNSLEY AND HEARNE CASES--- AS AFFECTED BY CERTAIN PROVISIONS OF SUBSEQUENT OVERTIME COMPENSATION STATUTES ENACTED IN CONNECTION WITH THE NATIONAL EMERGENCY CONDITIONS EXISTING PRIOR TO AND DURING THE WAR, AND, THEREFORE, SINCE IT IS HELD HEREIN THAT THE CLAIMANT IS NOT WITHIN THE PURVIEW OF THE 1934 ACT, THE GRAY CASE HAS NO BEARING UPON THE PRESENT MATTER. LIKEWISE, SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 297, WHICH DEALS WITH EMPLOYEES WHOSE BASIC RATE OF COMPENSATION IS FIXED ON AN ANNUAL OR MONTHLY BASIS AND ADJUSTED FROM TIME TO TIME IN ACCORDANCE WITH PREVAILING RATES BY WAGE BOARDS OR SIMILAR ADMINISTRATIVE AUTHORITY SERVING THE SAME PURPOSE, HAS NO APPLICATION HERE.

ACCORDINGLY, I FIND NO BASIS FOR HOLDING THAT THE CLAIMANT IS ENTITLED TO OVERTIME COMPENSATION UNDER SECTION 23 OF THE ACT OF MARCH 28, 1934, FOR ANY OVERTIME SERVICES WHICH HE MAY HAVE RENDERED, OR THAT HE IS WITHIN THE OVERTIME COMPENSATION PROVISIONS OF SECTION 203 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, SUPRA, RATHER THAN SUBJECT TO THE OVERTIME COMPENSATION LIMITATIONS OF SECTION 201 (B) OF SAID ACT, 59 STAT. 297, AND, THEREFORE, THE SETTLEMENT OF JULY 2, 1948, MUST BE, AND IS, SUSTAINED.