B-124592, DEC. 1, 1955

B-124592, DEC. 1, 1955

TO HONORABLE R. B. TOOTELL, GOVERNOR, FARM CREDIT ADMINISTRATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 7, 1955, ASKING WHETHER AN EMPLOYEE OF YOUR ADMINISTRATION IS ENTITLED UNDER EXISTING LAW TO A LUMP-SUM PAYMENT FOR ANNUAL LEAVE WHEN HE, WITHOUT A BREAK IN SERVICE, ACCEPTS EMPLOYMENT WITH A FEDERAL LAND BANK, A REGIONAL BANK FOR COOPERATIVES, A PRODUCTION CREDIT CORPORATION OR A FEDERAL INTERMEDIATE CREDIT BANK IN ONE OF THE TWELVE FARM CREDIT DISTRICTS, OR WHETHER THE LEAVE IS TO BE TRANSFERRED UPON AN ADJUSTED BASIS UNDER THE PROVISIONS OF SECTION 205 (E) OF THE ANNUAL AND SICK LEAVE ACT OF 1951, AS AMENDED, 67 STAT. 138.

IN THAT REGARD YOU SAY THAT THUS FAR THE ADMINISTRATION HAS BEEN ACTING ON THE ASSUMPTION THAT SECTION 205 (E) OF THE ANNUAL AND SICK LEAVE ACT OF 1951, 65 STAT. 679, AS ADDED BY SECTION 4 (B) OF THE ACT OF JULY 2, 1953, 67 STAT. 138, DOES NOT APPLY TO OFFICERS AND EMPLOYEES OF THE ADMINISTRATION APPOINTED WITHOUT BREAK IN SERVICE TO POSITIONS WITH THE CORPORATIONS REFERRED TO AND THAT LUMP-SUM PAYMENTS FOR ANNUAL LEAVE ACCRUED HERETOFORE HAVE BEEN MADE TO OFFICERS AND EMPLOYEES SO APPOINTED.

AS YOU WERE INFORMED BY OUR LETTER OF AUGUST 12, 1955, B-124592, WE SOLICITED THE VIEWS OF THE CIVIL SERVICE COMMISSION ON THE QUESTION POSED BY YOUR LETTER. THE COMMISSION'S REPLY IS, IN PERTINENT PART, AS FOLLOWS:

"THE EMPLOYEES OF ALL FOUR CORPORATIONS ARE NOW CARRIED AS GOVERNMENT EMPLOYEES UNDER THE CIVIL SERVICE RETIREMENT ACT. THAT STATUS IS BASED UPON A DETERMINATION WHICH WAS MADE IN 1942, WHEN IT IS UNDERSTOOD THE PROPORTION OF GOVERNMENT REPRESENTATION ON THE BOARDS OF DIRECTORS WAS HIGHER AND ALL FOUR WERE REGARDED AS GOVERNMENT-CONTROLLED. IT WOULD APPEAR THAT THE EMPLOYEES OF THESE CORPORATIONS, IF THEY ARE NOW GOVERNMENT EMPLOYEES, WILL PROBABLY CEASE TO BE GOVERNMENT EMPLOYEES AT SOME POINT AS THE CONTEMPLATED PROGRAM IS CARRIED OUT.

"WHEN A GOVERNMENT EMPLOYEE TRANSFERS TO ANY ANNUAL LEAVE SYSTEM IN AN EMPLOYMENT WHICH IS ALSO CONCEDEDLY GOVERNMENT EMPLOYMENT, WE BELIEVE THAT SECTION 205 (E) OF THE ANNUAL AND SICK LEAVE ACT OF 1951 INTENDS THAT HIS ANNUAL LEAVE BE TRANSFERRED RATHER THAN PAID IN LUMP SUM (EXCEPT, OF COURSE, FOR THE EXEMPT POSITIONS WHICH YOU MENTION). WE DO NOT BELIEVE THAT FOR THIS PURPOSE ANY DISTINCTION SHOULD BE MADE ON THE BASIS THAT THE SEPARATE LEAVE SYSTEM SET UP BY STATUTE IN DETAIL, OR IS BASED ON ADMINISTRATIVE AUTHORITY TO SET UP A LEAVE SYSTEM (WHICH AUTHORITY IN ANY CASE WOULD HAVE PRESUMABLY BEEN GRANTED BY CONGRESS). IN EITHER CASE THE PRINCIPLE BEHIND SECTION 205 (E), THAT GOVERNMENT EMPLOYEES SHALL NOT RECEIVE LUMP SUM PAYMENT FOR THEIR ANNUAL LEAVE WHILE REMAINING IN GOVERNMENT SERVICE WHERE IT COULD BE USED, SHOULD APPLY.

"HOWEVER, IN THE CASE OF THE FOUR CORPORATIONS CONCERNED HERE, IF EMPLOYMENT IN THEM EVER WAS UNQUESTIONABLY GOVERNMENT EMPLOYMENT, THAT STATUS APPEARS TO BE CHANGING. A FAILURE TO PAY IN LUMP SUM FOR ANNUAL LEAVE WHEN GOVERNMENT EMPLOYEES TRANSFER TO ANY OF THESE CORPORATIONS WOULD PROBABLY RESULT IN EVENTUAL FORFEITUREOF THE ANNUAL LEAVE. WE DO NOT BELIEVE THAT SECTION 205 (E) WAS INTENDED TO CAUSE FORFEITURES. TECHNICALLY IT MAY BE DIFFICULT TO DETERMINE A PRECISE POINT IN TIME AT WHICH THE CORPORATIONS BECOME DEFINITELY NON GOVERNMENT FOR PURPOSES. SINCE THE GOVERNOR STATES THAT THE FARM CREDIT ADMINISTRATION HAS BEEN TREATING THEM AS NON-GOVERNMENT FOR LEAVE PURPOSES, WE WOULD SEE NO REASON TO DISTURB THE PRACTICE.'

WHILE WE WOULD LIKE TO CONCUR IN THE VIEW EXPRESSED IN THE LAST PARAGRAPH OF THE COMMISSION'S LETTER, OUR REASON FOR NOT SO DOING WILL BE APPARENT FROM WHAT IS SAID HEREAFTER.

OUR DECISIONS CONCERNING THE APPLICABILITY OF THE DUAL COMPENSATION STATUTES TO OFFICERS AND EMPLOYEES OF THE CORPORATIONS REFERRED TO HELD THAT, SINCE THE SALARIES OF SUCH OFFICERS AND EMPLOYEES ARE NOT PAID FROM APPROPRIATED FUNDS, THE DUAL COMPENSATION STATUTES DO NOT APPLY. A-95379, JULY 11, 1938; A-93396, JUNE 7, 1938, AND CASES CITED THEREIN. IN OUR DECISION OF AUGUST 31, 1951, B-105089, IT WAS RULED THAT EMPLOYMENT WITH A FEDERAL LAND BANK, OTHER THAN EMPLOYMENT AS A FEDERAL LAND BANK APPRAISER, MAY NOT BE CONSIDERED AS SERVICE IN A FEDERAL POSITION WITHIN THE MEANING OF THE CLASSIFICATION ACT OF 1949 FOR CREDIT TOWARDS LONGEVITY STEP- INCREASES. THE FOREGOING DECISIONS BASICALLY ARE PREDICATED UPON THE CONCLUSION THAT SERVICE WITH THE CORPORATIONS IS NOT GOVERNMENT EMPLOYMENT WITHIN THE PURVIEW OF THE REFERRED-TO STATUTES.

A CONTRARY VIEW APPARENTLY WAS TAKEN IN OUR DECISIONS OF JUNE 30, 1934, AND JULY 27, 1944, A-55895, WHICH RELATE TO THE ENTITLEMENT OF OFFICERS AND EMPLOYEES OF THE CORPORATIONS UNDER LAWS APPLICABLE TO GOVERNMENT OFFICERS AND EMPLOYEES, TO TRAVEL AND TRANSPORTATION EXPENSES WHEN TRANSFERRING FROM POSITIONS WITH THE CORPORATIONS TO POSITIONS WITH THE FARM CREDIT ADMINISTRATION OR THE DEPARTMENT OF AGRICULTURE. FURTHER, AS APPEARS FROM THE QUOTED PORTION OF THE COMMISSION'S LETTER, OFFICERS AND EMPLOYEES OF THE CORPORATIONS ARE AT PRESENT UNDER THE CIVIL SERVICE RETIREMENT ACT, A SITUATION WHICH IS OF DOUBTFUL PROPRIETY UNLESS SUCH PERSONNEL MAY BE REGARDED AS OFFICERS AND EMPLOYEES IN OR UNDER THE EXECUTIVE BRANCH OF THE UNITED STATES GOVERNMENT. SEE 5 U.S.C. 693.

IT IS APPARENT FROM THE FOREGOING THAT THE STATUS OF THE OFFICERS AND EMPLOYEES OF THE ABOVE CORPORATIONS, IN RELATION TO LAWS GENERALLY AFFECTING GOVERNMENT EMPLOYEES, LONG HAS BEEN A VEXING QUESTION. THE SAME CAN BE SAID OF THE MATTER HEREIN CONSIDERED. WHILE EMPLOYEES OF THE CORPORATIONS REFERRED TO ARE EXEMPT FROM THE COVERAGE OF THE ANNUAL AND SICK LEAVE ACT OF 1951 BY SECTION 202 (B) (1) (I) THEREOF, THEY APPARENTLY ARE GRANTED LEAVE UNDER ADMINISTRATIVE LEAVE SYSTEMS ESTABLISHED PURSUANT TO IMPLIED AUTHORITY FOUND IN FEDERAL LAW. THEY ARE NOT, HOWEVER, SPECIFICALLY EXEMPTED FROM THE LEAVE TRANSFER PROVISIONS OF SECTION 205 (E) OF THE AMENDING ACT WHICH EXPRESSLY EXCEPTS CERTAIN OTHER CLASSES OF EMPLOYEES NOT SUBJECT TO THE 1951 LEAVE ACT. IN THE CIRCUMSTANCES IT IS NOT AT ALL CLEAR THAT LUMP-SUM PAYMENTS FOR LEAVE ARE PROPER WHEN OFFICERS OR EMPLOYEES OF THE CORPORATIONS ARE, WITHOUT BREAK IN SERVICE, APPOINTED TO POSITIONS IN THE FARM CREDIT ADMINISTRATION, OR VICE VERSA. CF. ANSWER TO QUESTION 3, 33 COMP. GEN. 85.

ACCORDINGLY, IT IS OUR CONSIDERED VIEW THAT THE STATUS OF THESE EMPLOYEES WITH REGARD TO THE APPLICABILITY OF FEDERAL STATUTES, INCLUDING SECTION 205 (E) OF THE ANNUAL AND SICK LEAVE ACT OF 1951, AS AMENDED, WHICH RELATES GENERALLY TO GOVERNMENT EMPLOYEES, SHOULD FINALLY BE RESOLVED BY LEGISLATION. UNTIL THE MATTER IS SO RESOLVED, WE FEEL THAT THE EXISTING PRACTICE OF THE ADMINISTRATION OF MAKING LUMP-SUM PAYMENTS IN THESE CASES SHOULD BE DISCONTINUED AS BEING OF QUESTIONABLE LEGALITY.