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A-12324, NOVEMBER 16, 1926, 6 COMP. GEN. 332

A-12324 Nov 16, 1926
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IS APPLICABLE TO THE EMPLOYEES UNDER THE ALASKA RAILROAD. NOTWITHSTANDING THAT THE RETIREMENT ACT AND THE CLASSIFICATION ACT ARE NOT APPLICABLE TO SUCH EMPLOYEES. THE ALASKA RAILROAD MAY LAWFULLY PRESCRIBE REGULATIONS PROVIDING THAT ONLY THE PAY ORDINARILY PAID IN CASH WILL BE PAID DURING LEAVE OF ABSENCE WITH PAY. THE ALASKA RAILROAD MAY LAWFULLY PRESCRIBE REGULATIONS PROVIDING FOR FURNISHING QUARTERS IN KIND DURING IDLE TIME WHILE THE EMPLOYEES ARE WAITING FOR FAVORABLE WEATHER CONDITIONS TO RESUME WORK. WHERE EMPLOYEES OF THE ALASKA RAILROAD ARE PAID COMPENSATION PARTLY IN CASH AND PARTLY BY ALLOWANCES FURNISHED IN KIND. THERE IS NO LEGAL OBJECTION TO THE COMPUTATION OF THE CASH COMPENSATION ON A PER DIEM BASIS AND THE DETERMINATION OF THE MONETARY VALUE OF THE ALLOWANCES FURNISHED IN KIND ON A MONTHLY BASIS.

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A-12324, NOVEMBER 16, 1926, 6 COMP. GEN. 332

ALASKA RAILROAD - ALLOWANCES IN KIND TO EMPLOYEES SECTION 3 OF THE ACT OF MARCH 2, 1926, 44 STAT. 161, WHICH PROVIDES THAT THE REASONABLE VALUE OF ALLOWANCES FURNISHED IN KIND TO CIVILIAN EMPLOYEES IN THE FIELD SHALL BE DETERMINED AND CONSIDERED AS A PART OF THE COMPENSATION IN FIXING THE SALARY RATE OF SUCH CIVILIANS, IS APPLICABLE TO THE EMPLOYEES UNDER THE ALASKA RAILROAD, NOTWITHSTANDING THAT THE RETIREMENT ACT AND THE CLASSIFICATION ACT ARE NOT APPLICABLE TO SUCH EMPLOYEES. THE ALASKA RAILROAD MAY LAWFULLY PRESCRIBE REGULATIONS PROVIDING THAT ONLY THE PAY ORDINARILY PAID IN CASH WILL BE PAID DURING LEAVE OF ABSENCE WITH PAY, UNDER WHICH THE EMPLOYEES WOULD NOT BE ENTITLED WHILE ON LEAVE WITH PAY TO THE VALUE OF ALLOWANCES FURNISHED IN KIND WHILE ON DUTY. THE ALASKA RAILROAD MAY LAWFULLY PRESCRIBE REGULATIONS PROVIDING FOR FURNISHING QUARTERS IN KIND DURING IDLE TIME WHILE THE EMPLOYEES ARE WAITING FOR FAVORABLE WEATHER CONDITIONS TO RESUME WORK, THE VALUE OF SUCH QUARTERS TO BE DETERMINED AND CONSIDERED AS A PART OF THE COMPENSATION. WHERE EMPLOYEES OF THE ALASKA RAILROAD ARE PAID COMPENSATION PARTLY IN CASH AND PARTLY BY ALLOWANCES FURNISHED IN KIND, THERE IS NO LEGAL OBJECTION TO THE COMPUTATION OF THE CASH COMPENSATION ON A PER DIEM BASIS AND THE DETERMINATION OF THE MONETARY VALUE OF THE ALLOWANCES FURNISHED IN KIND ON A MONTHLY BASIS.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE INTERIOR, NOVEMBER 16, 1926:

CONSIDERATION HAS BEEN GIVEN TO YOUR LETTER OF OCTOBER 15, 1926, FORWARDING LETTERS DATED JULY 15, 1926, AND SEPTEMBER 10, 1926, FROM THE GENERAL MANAGER OF THE ALASKA RAILROAD RELATIVE TO THE APPLICATION TO THE COMPENSATION OF EMPLOYEES UNDER THE ALASKA RAILROAD OF SECTION 3 OF THE ACT OF MARCH 2, 1926, 44 STAT. 161, AND THE PROCEDURE THEREUNDER PRESCRIBED IN DECISION DATED JUNE 3, 1925, 5 COMP. GEN. 957.

THE STATUTE PROVIDES AS FOLLOWS:

SEC. 3. THE HEAD OF AN EXECUTIVE DEPARTMENT OR INDEPENDENT ESTABLISHMENT, WHERE, IN HIS JUDGMENT, CONDITIONS OF EMPLOYMENT REQUIRE IT, MAY CONTINUE TO FURNISH CIVILIANS EMPLOYED IN THE FIELD SERVICE WITH QUARTERS, HEAT, LIGHT, HOUSEHOLD EQUIPMENT, SUBSISTENCE, AND LAUNDRY SERVICE; AND APPROPRIATIONS FOR THE FISCAL YEAR 1927 OF THE CHARACTER HERETOFORE USED FOR SUCH PURPOSES ARE HEREBY MADE AVAILABLE THEREFOR: PROVIDED, THAT THE REASONABLE VALUE OF SUCH ALLOWANCES SHALL BE DETERMINED AND CONSIDERED AS PART OF THE COMPENSATION IN FIXING THE SALARY RATE OF SUCH CIVILIANS.

THE PROCEDURE FOR FIXING THE RATES OF COMPENSATION TO INCLUDE THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND PRESCRIBED IN DECISION OF JUNE 3, 1926, WAS INTENDED PRIMARILY FOR APPLICATION TO THOSE FIELD SERVICES TO WHICH THE CLASSIFICATION ACT OF 1923 HAS, TO A CERTAIN EXTENT, BEEN EXTENDED BY THE ACT OF DECEMBER 6, 1924, 43 STAT. 704, THE ACT OF JANUARY 13, 1925, 43 STAT. 746, AND SECTION 2 OF THE ACT OF MARCH 2, 1926, SUPRA, AS CONSTRUED AND APPLIED BY THE VARIOUS DECISIONS OF THIS OFFICE.

THE ALASKA RAILROAD IS NOT SUBJECT TO SUCH STATUTES. DECISION OF AUGUST 23, 1926, A-14869. THE GENERAL MANAGER IS CONTENDING THAT BECAUSE THEREOF, AND BECAUSE THE RETIREMENT ACT IS NOT APPLICABLE TO THE EMPLOYEES UNDER THE ALASKA RAILROAD GENERALLY, THERE IS NO REQUIREMENT THAT THE PROVISIONS OF SECTION 3 OF THE ACT OF MARCH 2, 1926, SUPRA, BE COMPLIED WITH BY THAT SERVICE. NO EXCEPTIONS TO THE REQUIREMENTS OF THAT STATUTE ARE EXPRESSED OR IMPLIED. THE APPLICATION OF THE STATUTE TO A PARTICULAR FIELD ACTIVITY IS NOT DEPENDENT ON THE APPLICATION OF THE CLASSIFICATION ACT AND THE RETIREMENT ACT TO THAT ACTIVITY. THE REQUIREMENTS OF THE STATUTE ARE MANDATORY WHENEVER ALLOWANCES, INCLUDING QUARTERS AND SUBSISTENCE, ARE FURNISHED IN KIND TO CIVILIAN EMPLOYEES. AND THE VALUE DETERMINED AS REQUIRED BY THE STATUTE SHOULD BE SHOWN IN SOME MANNER ON THE PAY ROLLS, OR PAY VOUCHER, OR OTHERWISE IN THE ACCOUNTS OF THE DISBURSING OFFICER IN ORDER THAT IT MAY BE DETERMINED IN THE AUDIT THAT A COMPLIANCE WITH THE STATUTE HAS BEEN MADE.

WHERE A FIELD ACTIVITY IS NOT SUBJECT TO THE PROVISIONS OF THE CLASSIFICATION ACT AS EXTENDED TO THE FIELD, SUCH AS THE ALASKA RAILROAD, THE PROCEDURE REQUIRED BY DECISION OF JUNE 3, 1926, OF FIRST FIXING THE PROPER GRADE AND TOTAL SALARY RATE OF THE POSITION ON THE BASIS OF DUTIES INVOLVED, ETC., AND DEDUCTION THEREFROM OF THE DETERMINED VALUE OF THE ITEMS OF ALLOWANCE FURNISHED IN KIND, IS NOT NECESSARILY FOR APPLICATION.

THE GENERAL MANAGER SETS FORTH AT LENGTH CONDITIONS INCIDENT TO THE EMPLOYMENT OF PERSONAL SERVICES IN THE MAINTENANCE AND CONSTRUCTION DEPARTMENT OF THE ALASKA RAILROAD, SUCH AS THE CONSTANT SHIFTING OF EMPLOYEES AND THE VARYING QUALITY AND LOCATION OF QUARTERS AVAILABLE, THE FACT THAT QUARTERS ARE FURNISHED IN SOME LOCATIONS AND NOT IN OTHERS FOR THE SAME CLASS OF EMPLOYEES, DISCONTENT IF FREE QUARTERS ARE NOT FURNISHED, ETC., TO SHOW THE DIFFICULTIES IN COMPLYING WITH THE STATUTES. THESE DIFFICULTIES ARE LARGELY FOR CONSIDERATION AND SOLUTION BY THE ADMINISTRATIVE OFFICE AND DO NOT JUSTIFY A NONCOMPLIANCE WITH THE STATUTE.

THE GENERAL MANAGER STATES IN HIS LETTER DATED JULY 15, 1926, AS FOLLOWS:

IF THE VALUE OF QUARTERS FURNISHED MUST BE REGARDED AS A PART OF A FIXED RATE OF COMPENSATION, THEN WHEN AN EMPLOYEE ENTERS UPON A LEAVE STATUS AND GIVES UP HIS QUARTERS FOR THE TIME BEING, THE REQUIREMENT OF THE CIRCULAR WOULD RESULT IN THE PAYMENT OF THE FULL COMPENSATION RATE DURING THE LEAVE PERIOD, NO DEDUCTION ON ACCOUNT OF ALLOWANCES BEING POSSIBLE, WHICH IS CONTRARY TO THE PAY REGULATIONS OF THE RAILROAD, WHICH CONTEMPLATE THAT ALLOWANCES PAYABLE IN KIND SHALL BE PAID IN KIND ONLY; THE PAY ROLL ARRANGEMENT SUGGESTED IN THE CIRCULAR WOULD MAKE THEM PAYABLE IN MONEY WHEN NOT PAID IN KIND. PAYMENT IN MONEY, WHEN NOT PAID IN KIND, WOULD BE PROPER WHERE A FIXED RATE OF COMPENSATION IS SPECIFIED BY STATUTE; BUT THIS DOES NOT APPLY TO THE ALASKA RAILROAD.

THE ALASKA RAILROAD MAY LAWFULLY PRESCRIBE REGULATIONS PROVIDING THAT ONLY THE PAY ORDINARILY PAID IN CASH WILL BE PAID DURING LEAVE OF ABSENCE WITH PAY. THE CONTRACTS OF EMPLOYMENT OR APPOINTMENTS SHOULD SPECIFY ACCORDINGLY. THIS WOULD BE ON THE BASIS THAT QUARTERS AND SUBSISTENCE ARE AVAILABLE IN KIND WHILE ACTUALLY EMPLOYED, BUT IF THE EMPLOYEE DESIRES LEAVE OF ABSENCE NO RIGHT WOULD ATTACH TO BE REIMBURSED FOR THE DETERMINED VALUE OF QUARTERS AND SUBSISTENCE THAT WOULD BE AVAILABLE IF HE HAD REMAINED ON DUTY.

IT IS FURTHER STATED IN SAID LETTER OF JULY 15, 1926, AS FOLLOWS:

IN THE CASE OF LABORERS EMPLOYED ON VARIOUS JOBS ALONG THE LINE OF THE RAILROAD AT HOURLY RATES, WEATHER CONDITIONS ON CERTAIN DAYS MAY MAKE IT IMPRACTICABLE FOR THEM TO CONTINUE AT WORK ON THOSE DAYS, OR PARTS OF DAYS. NEVERTHELESS THEY CONTINUE TO OCCUPY THE FREE QUARTERS FURNISHED THEM (IN TEMPORARY CAMPS OR BUNK CARS) AWAITING FAVORABLE WEATHER TO RESUME WORK. WEATHER CONDITIONS VARY ACCORDING TO THE SEASON AND THE LOCALITY IN WHICH WORK IS BEING PERFORMED. IT WOULD BE IMPRACTICABLE FROM THE LABOR EMPLOYMENT STANDPOINT TO CHARGE FOR QUARTERS REGARDLESS OF WHETHER WORK WAS CONTINUOUS OR NOT, AND THE SEPARATE CALCULATIONS REQUIRED WOULD BE EXPENSIVE AND BURDENSOME IN THE ACCOUNTING WORK.

REGULATIONS MAY LIKEWISE LAWFULLY BE PRESCRIBED FOR FURNISHING OF QUARTERS IN KIND DURING SUCH WAITING TIME AS A PART OF THE COMPENSATION. THE CONTRACTS OF EMPLOYMENT OR APPOINTMENTS SHOULD SPECIFY ACCORDINGLY. THE VALUE OF SUCH QUARTERS MUST BE DETERMINED AND CONSIDERED AS A PART OF THE COMPENSATION FOR THE POSITION. UNDER SUCH A REGULATION THERE SHOULD BE NO GREAT AMOUNT OF DIFFICULTY IN COMPLYING WITH THE STATUTE AND ACCOUNTING REQUIREMENTS FOR THE PURPOSE OF THE AUDIT.

IT IS FURTHER STATED IN THE LETTER OF JULY 15, 1926, AS FOLLOWS:

ON ACCOUNT OF THE EXPENSE INCIDENT TO AN INCREASE IN CLERICAL WORK, WE ARE ANXIOUS TO AVOID THE INTRICATE CALCULATIONS REQUIRED IN ASSIGNING THE VALUE OF ALLOWANCES AS A PART OF THE HOURLY AND MONTHLY RATES OF THE SHIFTING CLASSES OF LABOR. IT IS UNDERSTOOD THAT THE REQUIREMENT THAT THE VALUE OF ALLOWANCES BE INCLUDED IN THE TOTAL AMOUNT OF COMPENSATION AS STATED IN THE PAY ROLLS AS APPLIED TO OTHER BRANCHES OF THE SERVICE ARISES FROM THE NECESSITY OF CHECKING RATES OF PAY WHEN DEFINITELY FIXED DIRECTLY BY LAW; HOWEVER, WHEN RATES OF COMPENSATION ARE FIXED BY ADMINISTRATIVE ACTION, AND THERE IS NO NECESSITY FOR CONFORMING TO SALARY LIMITS FIXED IN A GENERAL CLASSIFICATION PRESCRIBED BY LAW, IT WOULD APPEAR THAT THE VERIFICATION OF THE MONEY COMPENSATION AND THE CHECKING OF THE ALLOWANCES IN KIND COULD BE SEPARATED. FOR EXAMPLE, IN THE CASE OF A SECTION LABORER EMPLOYED ON THE RAILROAD, OUR WAGE SCHEDULE WILL SHOW THAT HE IS ENTITLED TO CASH PAY AT THE RATE OF 56 1/4 CENTS PER HOUR AND TO ALLOWANCES OF FREE QUARTERS, INCLUDING HEAT AND LIGHT (VALUED AT SO MUCH PER MONTH) WHEN EMPLOYED AT CERTAIN SPECIFIED POINTS. THE LOCATION OF ACTUAL EMPLOYMENT CAN BE INDICATED ON THE PAY ROLL, SO THAT THE TOTAL COMPENSATION OF THE EMPLOYEE WILL CLEARLY APPEAR, WITHOUT COMPUTING THE RESULTING RATE PER HOUR OR PER MONTH. THIS WILL TEND TO AVOID ERRORS IN APPLYING THE RATE OF PAY DUE IN CASH, AND WILL MAKE IT UNNECESSARY TO SHOW A VARYING RATE OF PAY TO EMPLOYEES OF THE SAME CLASS. IT WILL, HOWEVER, BE A CORRECT AND COMPLETE STATEMENT OF THE COMPENSATION OF THE PAYEE.

THERE WOULD APPEAR TO BE NO OBJECTION TO THE PROCEDURE SUGGESTED. THE VALUE OF QUARTERS, HEAT, AND LIGHT IN SUCH A CASE WOULD BE "DETERMINED AND CONSIDERED AS A PART OF THE COMPENSATION IN FIXING THE SALARY RATE OF SUCH CIVILIANS," AS REQUIRED BY THE STATUTE. WHILE IT WOULD BE PREFERABLE THAT BOTH THE CASH RATE OF COMPENSATION AND THE DETERMINED VALUE OF ALLOWANCES FURNISHED IN KIND BE COMPUTED ON THE SAME MEASURE OF TIME, A DIFFERENCE IN THE BASIS OF COMPUTATION WOULD NOT NECESSARILY BE PROHIBITED. THIS OFFICE SHOULD BE FURNISHED A SCHEDULE OF THE DETERMINED VALUE GIVEN TO ALL ALLOWANCES FURNISHED IN KIND AND NOTIFIED PROMPTLY OF THE EFFECTIVE DATE OF ANY MODIFICATIONS OR CHANGES THEREIN.

IF THE FORMS OF PAY ROLLS APPROVED BY THIS OFFICE UNDER DATE OF SEPTEMBER 18, 1926, A-15066, FOR OTHER BUREAUS UNDER THE INTERIOR DEPARTMENT ARE NOT ADAPTABLE TO THE PECULIAR NEEDS OF THE ALASKA RAILROAD, IT IS SUGGESTED THAT A PROPOSED FORM, WHICH WILL MORE NEARLY MEET THE NEEDS OF ACCOUNTING FOR PERSONAL SERVICES UNDER THE RAILROAD, BE SUBMITTED TO THIS OFFICE FOR CONSIDERATION AND APPROVAL, TOGETHER WITH ANY ADDITIONAL STATEMENT OF CONDITIONS EXISTING THAT MAY BE DESIRED.

IT SHOULD BE BORNE IN MIND THAT THE REQUIREMENTS TO DETERMINE THE VALUE OF ALLOWANCES FURNISHED IN KIND, INCLUDING QUARTERS AND SUBSISTENCE, AND TO CONSIDER SAME AS A PART OF THE COMPENSATION OF CIVILIAN EMPLOYEES, ARE UNDER A NEW STATUTE WHICH NECESSITATE SOME ADJUSTMENTS IN THE ADMINISTRATIVE OFFICE IN THE METHOD OF ACCOUNTING FOR PAYMENTS FOR PERSONAL SERVICES, AND THIS OFFICE IS DESIROUS OF COOPERATING WITH THE ADMINISTRATIVE OFFICES TO OBTAIN THE MOST PRACTICABLE AND WORKABLE BASIS FOR THE AUDIT.

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