B-125137, OCTOBER 28, 1955, 35 COMP. GEN. 241

B-125137, OCTOBER 28, 1955, 35 COMP. GEN. 241

COMPENSATION FOR PERIOD OF UNJUSTIFIED REMOVAL - RATE PAYABLE - UNEMPLOYMENT COMPENSATION PAYMENTS A PREFERENCE ELIGIBLE EMPLOYEE OF THE POSTAL SERVICE WHO WAS ADMINISTRATIVELY REMOVED FOR CAUSE AND LATER, UPON A FINDING BY THE BOARD OF APPEALS AND REVIEW OF THE CIVIL SERVICE COMMISSION THAT THE REMOVAL WAS UNJUSTIFIED, WAS RESTORED RETROACTIVELY, IS ENTITLED TO BACK PAY PURSUANT TO SECTION 6 (B) (2) OF THE ACT OF JUNE 10, 1948, FOR THE PERIOD OF REMOVAL COMPUTED ONLY AT THE RATE RECEIVED ON THE DATE OF DISCHARGE AND, THEREFORE, SUCH RETROACTIVE COMPENSATION MAY NOT INCLUDE ANY AUTOMATIC OR GENERAL INCREASES WHICH WERE EFFECTIVE DURING THE REMOVAL PERIOD. UNEMPLOYMENT COMPENSATION RECEIVED FROM THE OKLAHOMA EMPLOYMENT SECURITY COMMISSION BY A POSTAL SERVICE EMPLOYEE DURING A PERIOD OF UNJUSTIFIED REMOVAL FROM THE SERVICE MAY BE REQUIRED TO BE REFUNDED BY THE STATE COMMISSION AND, THEREFORE, NO DEDUCTION SHOULD BE MADE FROM THE BACK PAY TO WHICH THE EMPLOYEE IS ENTITLED ON RESTORATION PURSUANT TO THE ACT OF JUNE 10, 1948.

TO ROBERT W. MILLIGAN, OCTOBER 28, 1955:

THERE HAS BEEN RECONSIDERED, IN THE LIGHT OF YOUR CORRESPONDENCE, OUR SETTLEMENT OF JULY 12, 1955, RELATIVE TO YOUR CLAIM FOR COMPENSATION FOR THE PERIOD OF YOUR UNJUSTIFIED REMOVAL FROM THE POSTAL SERVICE.

ON MAY 19, 1954, YOU WERE ADMINISTRATIVELY REMOVED, FOR CAUSE, FROM THE POSITION OF CITY CARRIER, UNITED STATES POST OFFICE, BARTLESVILLE, OKLAHOMA. YOU APPEALED THE ADVERSE ACTION TO THE CIVIL SERVICE COMMISSION UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, 5 U.S.C. 863. THE BOARD OF APPEALS AND REVIEW OF THE CIVIL SERVICE COMMISSION FOUND THE ADMINISTRATIVE ACTION TO HAVE BEEN UNJUSTIFIED, AND RECOMMENDED THAT YOU BE RETROACTIVELY RESTORED TO YOUR FORMER POSITION. PURSUANT TO THAT RECOMMENDATION YOU WERE ADMINISTRATIVELY RESTORED. YOU RESUMED ACTIVE DUTY ON APRIL 21, 1955.

IN OUR SETTLEMENT OF JULY 12, 1955, YOU WERE ALLOWED COMPENSATION FOR THE PERIOD OF YOUR REMOVAL ( MAY 20, 1954, TO APRIL 20, 1955) IN THE AMOUNT OF $3,374.43, LESS $196 RECEIVED AS UNEMPLOYMENT COMPENSATION. THE SUM OF $3,374.43 WAS COMPUTED AT $3,670 PER ANNUM, YOUR RATE OF COMPENSATION ON THE DATE OF YOUR REMOVAL FROM SERVICE. YOU ALLEGE ERROR IN THAT THE AUTOMATIC INCREASE IN COMPENSATION THAT YOU WOULD HAVE EARNED ON JULY 1, 1954, BUT FOR THE UNJUSTIFIED REMOVAL, AND THE GENERAL INCREASE IN COMPENSATION EFFECTIVE MARCH 1, 1955 ( PUBLIC LAW 68, JUNE 10, 1955, 69 STAT. 88), WERE NOT CONSIDERED IN THE COMPUTATION OF YOUR BACK PAY.

SECTION 6 (B) (2), PUBLIC LAW 623 (5 U.S.C. 652) APPLICABLE HEREIN, AND UNDER WHICH YOU CLAIM COMPENSATION FOR THE PERIOD OF YOUR REMOVAL PROVIDES:

(2) ANY PERSON WHO IS DISCHARGED, SUSPENDED, OR FURLOUGHED WITHOUT PAY, UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944, AS AMENDED, WHO, AFTER ANSWERING THE REASONS ADVANCED FOR SUCH DISCHARGE, SUSPENSION, OR FURLOUGH OR AFTER AN APPEAL TO THE CIVIL SERVICE COMMISSION, AS PROVIDED UNDER SUCH SECTION, IS REINSTATED OR RESTORED TO DUTY ON THE GROUND THAT SUCH DISCHARGE, SUSPENSION, OR FURLOUGH WAS UNJUSTIFIED OR UNWARRANTED, SHALL BE PAID COMPENSATION AT THE RATE RECEIVED ON THE DATE OF SUCH DISCHARGE, SUSPENSION, OR FURLOUGH FOR THE PERIOD FOR WHICH HE RECEIVED NO COMPENSATION WITH RESPECT TO THE POSITION FROM WHICH HE WAS DISCHARGED, SUSPENDED, OR FURLOUGHED, LESS ANY AMOUNTS EARNED BY HIM THROUGH OTHER EMPLOYMENT DURING SUCH PERIOD, AND SHALL FOR ALL PURPOSES EXCEPT THE ACCUMULATION OF LEAVE BE DEEMED TO HAVE RENDERED SERVICE DURING SUCH PERIOD.

THE SECTION IS SPECIFIC AS TO THE RATE OF COMPENSATION TO BE USED IN THE COMPUTATION OF BACK PAY IN CASES OF UNJUSTIFIED REMOVAL. IT STATES THAT THE EMPLOYEE "SHALL BE PAID COMPENSATION AT THE RATE RECEIVED ON THE DATE OF SUCH DISCHARGE * * * FOR THE PERIOD FOR WHICH HE RECEIVED NO COMPENSATION WITH RESPECT TO THE POSITION FROM WHICH HE WAS DISCHARGED.' AND WHILE THE SECTION GOES ON TO STATE THAT THE EMPLOYEE "SHALL FOR ALL PURPOSES EXCEPT THE ACCUMULATION OF LEAVE BE DEEMED TO HAVE RENDERED SERVICE DURING SUCH PERIOD," THE LATTER PROVISION CANNOT BE GIVEN SUCH SCOPE AS TO NULLIFY THE COMPENSATION PROVISION OF THE SECTION. RATHER, IN THE COMPUTATION OF BACK PAY, THE SPECIFIC AND NOT THE GENERAL PROVISION IS CONTROLLING.

IN GREEN V. UNITED STATES, 124 C.1CLS. 186, THE UNITED STATES COURT OF CLAIMS HAD BEFORE IT A CASE INVOLVING SECTION 6 (B) (3), PUBLIC LAW 623 (5 U.S.C. 652 (B) (3) (, IDENTICAL TO THE SECTION HERE UNDER CONSIDERATION EXCEPT THAT IT PERTAINS TO REMOVALS IN A REDUCTION IN FORCE. THE COURT HELD:

UNDER SECTION 652 (B) (3) PLAINTIFF IS ENTITLED TO RECOVER "COMPENSATION AT THE RATE RECEIVED ON THE DATE OF SUCH REMOVAL ( JUNE 30, 1946) FOR THE PERIOD FOR WHICH HE RECEIVED NO COMPENSATION WITH RESPECT TO THE POSITION FROM WHICH HE WAS REMOVED, LESS ANY AMOUNTS EARNED BY HIM THROUGH OTHER EMPLOYMENT DURING SUCH PERIOD.' ON JUNE 30, 1946, PLAINTIFF WAS RECEIVING COMPENSATION AT THE RATE $6,440 PER ANNUM. IT IS THIS RATE WHICH DETERMINES THE AMOUNT OF PLAINTIFF'S RECOVERY UNDER SECTION 652 (B) (3), AND HE IS NOT ENTITLED UNDER THAT SECTION TO THE GENERAL INCREASE IN SALARY WHICH ATTACHED TO HIS POSITION ON THE DAY FOLLOWING HIS SEPARATION THEREFROM. * * *

SEE ALSO O-BRIEN V. UNITED STATES, 124 C.1CLS. 655, AND JEFFREY V. UNITED STATES, 127 C.1CLS. 231.

THE DECISIONS OF THIS OFFICE UPON THE COMPENSATION PAYABLE UNDER PUBLIC LAW 623 ARE IN HARMONY WITH THOSE OF THE COURT OF CLAIMS. WE HAVE HELD THAT NEITHER A PERIODIC WITHIN-GRADE SALARY ADVANCEMENT NOR A GENERAL INCREASE IN COMPENSATION, HAVING AN EFFECTIVE DATE SUBSEQUENT TO THE EMPLOYEE'S REMOVAL, IS FOR CONSIDERATION IN THE COMPUTATION OF BACK PAY. SEE 28 COMP. GEN. 333; ID. 563; 32 ID. 132; 34 ID. 480.

IN VIEW OF THE FOREGOING, THE GROSS AMOUNT OF BACK PAY ALLOWED YOU IN THE SETTLEMENT OF JULY 12, 1955, IS VIEWED AS CORRECT.

IN THE SETTLEMENT THERE WAS DEDUCTED FROM THE BACK PAY DUE YOU AN AMOUNT EQUAL TO THE UNEMPLOYMENT COMPENSATION ($196) RECEIVED FROM THE OKLAHOMA EQUIPMENT SECURITY COMMISSION. THE DEDUCTION WAS IN ERROR. SUPPLEMENTAL SETTLEMENT IN YOUR FAVOR WILL BE ISSUED FOR THE AMOUNT DEDUCTED, LESS THE INCOME TAX APPLICABLE THERETO. HOWEVER, IT MAY BE THAT YOU WILL BE REQUIRED BY THE OKLAHOMA EMPLOYMENT SECURITY COMMISSION TO REFUND SUCH AMOUNT TO THAT AGENCY.

AS TO THE AMOUNT WITHHELD FOR INCOME TAX PURPOSES, YOU ARE ADVISED THAT THE RATE OF 19 PERCENT WAS USED IN ACCORDANCE WITH SECTION 1622A OF THE INTERNAL REVENUE CODE. AN AWARD OF BACK PAY IS CONSIDERED FOR THE PURPOSES OF TAX WITHHOLDING AS A CURRENT SUPPLEMENTAL WAGE PAYMENT. RELATIVE TO SUCH PAYMENTS SECTION 406.306 (3), FEDERAL TAX REGULATIONS, PROVIDES:

IF SUPPLEMENTAL WAGES ARE PAID AND TAX HAS BEEN WITHHELD FROM THE EMPLOYEE'S REGULAR WAGES, THE EMPLOYER MAY DETERMINE THE TAX TO BE WITHHELD FROM SUPPLEMENTAL WAGES BY USING THE APPLICABLE RATE UNDER SECTION 1622 (A) WITHOUT ALLOWANCE FOR EXEMPTION AND WITHOUT REFERENCE TO ANY REGULAR PAYMENT OF WAGES.

HOWEVER, THE BASIS FOR WITHHOLDING IS NOT DETERMINATIVE OF TAX LIABILITY. YOUR ULTIMATE TAX LIABILITY AND ENTITLEMENT TO REFUND ANY PORTION OF THE AMOUNT WITHHELD FOR TAXES IS FOR CONSIDERATION BY THE INTERNAL REVENUE SERVICE. YOU MAY CONTACT THE DISTRICT OFFICE OF THE INTERNAL REVENUE SERVICE FOR INFORMATION AS TO YOUR TAX LIABILITY IN VIEW OF THE AWARD OF BACK PAY.