B-48076, MARCH 14, 1945, 24 COMP. GEN. 676

B-48076, MARCH 14, 1945, 24 COMP. GEN. 676

COMPENSATION - FORTY-HOUR WEEK EMPLOYEES - EFFECTIVE DATE OF BASIC RATE INCREASES AN INCREASE IN BASIC COMPENSATION AUTHORIZED BY A WAGE BOARD OR OTHER WAGE-FIXING AUTHORITY FOR EMPLOYEES SUBJECT TO THE FORTY-HOUR WEEK STATUTE OF MARCH 28, 1934, MAY NOT BE MADE EFFECTIVE PRIOR TO THE DATE OF FINAL ACTION BY COMPETENT ADMINISTRATIVE AUTHORITY, EVEN THOUGH THE CONDITIONS JUSTIFY THE INCREASE EXISTED PRIOR TO SUCH DATE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE INTERIOR, MARCH 14, 1945:

I HAVE YOUR LETTER OF FEBRUARY 24, 1945, AS FOLLOWS:

THE INTERIOR DEPARTMENT RECENTLY HAS BEEN CONFRONTED WITH A PROBLEM RESPECTING THE LEGALITY OF MAKING RETROACTIVE ADJUSTMENT OF THE COMPENSATION OF UNGRADED EMPLOYEES. THE COMPENSATION IS SET BY WAGE BOARD ACTION AS CONTEMPLATED BY THE ACT OF MARCH 28, 1934 (48 STAT. 522, 5 U.S.C. SEC. 673). THE INTERIOR DEPARTMENT WAGE BOARD PROCEDURE WAS APPROVED BY YOU AS MEETING THE REQUIREMENTS OF THIS ACT ON APRIL 15, 1943 ( DECISION B-33619). I AM NOT UNAWARE OF THE NUMEROUS DECISIONS OF YOUR OFFICE WHICH HOLD WITH RESPECT TO FIELD POSITIONS SUBJECT TO ALLOCATION UNDER THE CLASSIFICATION ACT OF 1923 THAT THE EFFECTIVE DATE OF A CHANGE IN SALARY IS THE DATE OF APPROVAL BY THE PROPER ADMINISTRATIVE OFFICER OR SUCH LATER DATE AS MAY BE ADMINISTRATIVELY FIXED. SEE, FOR EXAMPLE, 22 COMP. GEN. 526 (1942); 21 ID. 95 (1941); 11 ID. 115 (1931); 9 ID. 20 (1929); 6 ID. 768 (1927). IT APPEARS, HOWEVER, THAT THE PROPRIETY OF RETROACTIVELY EFFECTING WAGE ADJUSTMENTS FOR UNGRADED EMPLOYEES NEVER HAS BEEN SPECIFICALLY RULED UPON BY YOU. THIS PROBLEM ACCORDINGLY IS PRESENTED FOR THE PURPOSE OF OBTAINING SUCH A RULING.

AN INTERIOR DEPARTMENT WAGE BOARD MET IN THE FIELD ON MAY 10 AND 11, 1944, FOR THE PURPOSE OF HEARING EVIDENCE SUBMITTED BY LABOR IN AN EFFORT TO JUSTIFY REQUESTS FOR WAGE ADJUSTMENTS WHICH WOULD BRING THE RATE OF PAY FOR UNGRADED WORKERS MORE INTO LINE WITH THAT WHICH PREVAILS IN THE AREA FOR WORK OF A SIMILAR CHARACTER BY PRIVATELY EMPLOYED PERSONS. VERBAL STATEMENTS WERE MADE AND WRITTEN EVIDENCE WAS SUBMITTED AT THAT TIME BY REPRESENTATIVES OF LABOR ORGANIZATIONS, WHICH IN THE JUDGMENT OF SOME MEMBERS OF THE WAGE BOARD REQUIRED FURTHER INVESTIGATION THROUGH THE WAGE ADJUSTMENT BOARD AND THE DAVIS BACON DIVISION OF THE UNITED STATES DEPARTMENT OF LABOR, SUBSEQUENT TO THE PUBLIC HEARINGS ON MAY 10 AND MAY 11. DUE TO THE NECESSITY OF MAKING THIS FURTHER STUDY OF WAGE DATA, THE TIME INVOLVED IN CORRESPONDING WITH THE DEPARTMENT OF LABOR AND THE FIELD MEMBERS OF THE WAGE BOARD BEFORE AN AGREEMENT COULD BE REACHED, THE WAGE RATE SCHEDULES WERE NOT FINALLY RECOMMENDED BY THE WAGE BOARD FOR APPROVAL BY THE SECRETARY OF THE INTERIOR UNTIL OCTOBER 6 AND OCTOBER 17, 1944. THE WAGE RATES WERE MADE EFFECTIVE AS OF THE DATE OF THAT APPROVAL. THE RESULT OF THIS DELAY IN REACHING AGREEMENT AS TO THE CORRECT PREVAILING LOCAL WAGE WAS TO DEPRIVE MANY OF THE WORKMEN ON THE PROJECT FOR SEVERAL MONTHS OF THE DIFFERENCE BETWEEN THE WAGE THEY HAD BEEN PAID AND THE HIGHER WAGE.

PURSUANT TO THE PROVISIONS OF THE STABILIZATION ACT OF OCTOBER 2, 1942 (56 STAT. 765, 50 U.S.C. SEC. 961), AS AMENDED, AND EXECUTIVE ORDER NO. 9250 OF OCTOBER 3, 1942 (7 F.R. 7871), THE NATIONAL WAR LABOR BOARD BY GENERAL ORDER NO. 21, DELEGATED TO THE SECRETARY OF THE INTERIOR, TO BE EXERCISED IN HIS BEHALF BY THE SPECIAL ADVISER ON LABOR RELATIONS, ITS POWER TO APPROVE OR DISAPPROVE ALL APPLICATIONS FOR WAGE AND SALARY ADJUSTMENTS COVERING EMPLOYEES OF THE INTERIOR DEPARTMENT WITHIN THE CONTINENTAL LIMITS OF THE UNITED STATES AND ALASKA, WHOSE WAGES ARE NOT FIXED BY STATUTE, IN ACCORDANCE WITH THE PROVISIONS OF THE ORDER. I AM INFORMALLY ADVISED THAT THE NATIONAL WAR LABOR BOARD APPROVES RETROACTIVE PAYMENT OF COMPENSATION ADJUSTMENTS IN PRIVATE INDUSTRY, WHETHER SUCH ADJUSTMENTS ARE THE RESULT OF DISPUTES BETWEEN LABOR UNIONS AND EMPLOYERS, OR THE VOLUNTARY REQUEST OF AN EMPLOYER THAT AN ADJUSTMENT BE MADE. I AM FURTHER ADVISED THAT IT IS THE INFORMAL CONSENSUS OF THE MEMBERS OF THE NATIONAL WAR LABOR BOARD THAT RETROACTIVE PAYMENT TO FEDERAL WORKERS WHERE ADJUSTMENTS HAVE BEEN REQUIRED BECAUSE WAGES PAID DID NOT IN FACT REFLECT THE PREVAILING LOCAL WAGE IS WITHIN THE CONTEMPLATION OF THE STABILIZATION ACT AND EXECUTIVE ORDER NO. 9250, AND HENCE SUBJECT TO ADJUSTMENT.

THE OVERTIME PAY PROCEDURE FOR SIMILAR WORK AFFECTING INTERSTATE COMMERCE, UNDER THE PROVISIONS OF THE FAIR LABOR STANDARDS ACT (52 STAT. 1050, 29 U.S.C. SECS. 201 ET SEQ.), EMPHASIZES THE INEQUITY OF NONPAYMENT RETROACTIVELY IN CASES WHERE SUCH WAGE ADJUSTMENTS HAVE BEEN UNDULY DELAYED, TO THE DETRIMENT OF THE WORKERS. IN ALL CASES INVOLVING VIOLATIONS OF THE MINIMUM WAGE AND OVERTIME PROVISIONS OF THAT ACT IT IS THE POLICY OF THE WAGE AND HOUR DIVISION OF THE LABOR DEPARTMENT, UNDER WHOSE JURISDICTION THE ACT IS ADMINISTERED, TO INSIST UPON PAYMENT OF LEGALLY EARNED BUT UNPAID WAGES DUE TO EMPLOYEES. IN LITIGATED CASES THE COURTS ALSO GENERALLY HAVE MADE THE PAYMENT OF BACK WAGES A CONDITION OF SETTLEMENT. (W. AND H. ANNUAL REPORT (1940) P. 87.) AN EMPLOYEE CANNOT CONTRACT AWAY HIS RIGHT TO OVERTIME UNDER THE ACT (D. AND L. PRODUCTION CO. V. I. L. CUNIFF, 165 S.W./2D) 933 ( TEXAS, 1942 CIV. APP.) (, AND THERE IS NO AUTHORITY FOR ANYONE TO CONSENT TO A VIOLATION OF THE OVERTIME PROVISIONS OF THE ACT ( LA GUARDIA ETC. V. AUSTIN-BLISS GENERAL TIRE CO., INC., 41 F.1SUPP. 678 ( D.C.N.Y., 1941).

WHILE IT APPEARS TO BE THE POLICY OF THE WAR DEPARTMENT, THE NAVY DEPARTMENT, THE GOVERNMENT PRINTING OFFICE, AND THE BUREAU OF ENGRAVING AND PRINTING, TO FOLLOW THE GENERAL RULE APPLICABLE TO ALLOCATED POSITIONS IN THE MATTER OF THE EFFECTIVE DATE FOR THE PAYMENT OF WAGES FIXED BY WAGE BOARD PROCEDURES, THAT IS, NOT TO MAKE ADJUSTMENTS RETROACTIVE BEYOND THE DATE OF ADMINISTRATIVE APPROVAL OF A WAGE RATE CHANGE, THE WAR DEPARTMENT HAS INFORMALLY ADVISED THAT SEVERAL SUCH RETROACTIVE ADJUSTMENTS HAVE BEEN MADE, AND THAT THE PAYMENTS HAVE NOT BEEN QUESTIONED BY YOUR OFFICE.

I HAVE DISCOVERED NO STATUTORY OR OTHER PROHIBITION, AND NO DECISION OF YOUR OFFICE, WHICH WOULD PREVENT RETROACTIVE PAYMENT TO UNGRADED EMPLOYEES OF THE INTERIOR DEPARTMENT OF AMOUNTS REPRESENTING THE DIFFERENCE BETWEEN A WAGE BOARD RATE OF COMPENSATION PAID TO THEM AND A RATE LATER DETERMINED TO HAVE IN FACT THE PREVAILING LOCAL WAGE. BECAUSE OF THE FAR-REACHING EFFECT SUCH A PROCEDURE MAY HAVE, HOWEVER, I AM RELUCTANT TO AUTHORIZE ADJUSTMENT WITHOUT SOME SPECIFIC EXPRESSION FROM YOU AS TO WHETHER YOUR OFFICE WOULD FEEL OBLIGED TO TAKE EXCEPTION TO THE PAYMENT OF VOUCHERS REPRESENTING RETROACTIVE PAYMENT OF SUCH DIFFERENCES.

THE ACT OF MARCH 28, 1934, 48 STAT. 522, PROVIDES:

SEC. 23. 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 EMPLOYEES IN ACCORDANCE WITH 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.

ACTION OF "WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES" SETTING OR FIXING BASIC WAGE RATES FOR FEDERAL PERSONNEL COMING WITHIN THE PURVIEW OF THE ABOVE-QUOTED STATUTE IS SUBJECT TO OTHER FEDERAL LAWS AND THE RULES ESTABLISHED THEREUNDER. HENCE, THE RULES STATED BY THE WAGE AND HOUR DIVISION OF THE DEPARTMENT OF LABOR, THE NATIONAL WAR LABOR BOARD, OR THE COURTS UNDER THE FAIR LABOR STANDARDS ACT, 52 STAT. 1060, OR THE STABILIZATION ACT, 56 STAT. 765, BOTH OF WHICH HAVE BEEN MENTIONED IN YOUR LETTER, PROPERLY MAY BE ADOPTED FOR FIXING THE WAGE RATES OF FEDERAL PERSONNEL ONLY TO THE EXTENT THAY SUCH RULES DO NOT CONTRAVENE SOME FEDERAL LAW OR ESTABLISHED RULE APPLICABLE TO FEDERAL PERSONNEL.

SECTION 712, TITLE 31, U.S. CODE, PROVIDES:

SEC. 712. BALANCES OF APPROPRIATIONS; EXPENDITURE.

EXCEPT AS OTHERWISE PROVIDED BY LAW, ALL BALANCES OF APPROPRIATIONS CONTAINED IN THE ANNUAL APPROPRIATION BILLS MADE SPECIFICALLY FOR THE SERVICE OF ANY FISCAL YEAR, AND REMAINING UNEXPENDED AT THE EXPIRATION OF SUCH FISCAL YEAR, SHALL ONLY BE APPLIED TO THE PAYMENT OF EXPENSES PROPERLY INCURRED DURING THAT YEAR, OR TO THE FULFILLMENT OF CONTRACTS PROPERLY WITHIN THAT YEAR; AND BALANCES NOT NEEDED FOR SUCH PURPOSES SHALL BE CARRIED TO THE SURPLUS FUND. THIS SECTION, HOWEVER, SHALL NOT APPLY TO APPROPRIATIONS KNOWN AS PERMANENT OR INDEFINITE APPROPRIATIONS.

IT IS WELL SETTLED, OF COURSE, THAT THE FISCAL YEAR APPROPRIATION CURRENT AT THE TIME THE PERSON'S SERVICES ARE PERFORMED IS THE APPROPRIATION AVAILABLE FOR PAYMENT OF COMPENSATION. 10 COMP. DEC. 284; 23 COMP. GEN. 370; 18 OP. ATTY. GEN. 412. ACTION OF WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES FIXING BASIC WAGE RATES AFFECTS IN SOME FORM OR ANOTHER THE OBLIGATING OF FISCAL YEAR APPROPRIATIONS. IT FOLLOWS, THEREFORE, THAT ONLY IN THE EVENT A WAGE BOARD OR OTHER WAGE FIXING AUTHORITY FINALLY HAD FIXED AND DETERMINED AN INCREASED BASIC WAGE RATE DURING A FISCAL YEAR COULD THE PAYMENT OF THE INCREASED BASIC WAGES BE REGARDED AS HAVING BEEN "PROPERLY INCURRED DURING THAT YEAR" WITHIN THE MEANING OF 31 U.S.C CODE 712, ABOVE QUOTED, REGARDLESS OF WHEN THE CONDITIONS IN PRIVATE INDUSTRY OR PUBLIC SERVICE EXISTED UPON THE BASIS OF WHICH THE WAGE BOARD OR OTHER WAGE-FIXING AUTHORITY ACTED.

REFERENCE MAY BE MADE, ALSO, TO 31 U.S.C. 665, PROHIBITING THE INCURRING OF A DEFICIENCY BY ADMINISTRATIVE ACTION DURING A FISCAL YEAR. ALSO, IT MAY BE STATED THAT PAYMENT OF THE GOVERNMENT'S OBLIGATIONS AND THE ACCOUNTING THEREFOR IS SUCH AS TO REQUIRE AN ORDERLY PROCEDURE BASED UPON ADMINISTRATIVE ACTION OBLIGATING APPROPRIATED FUNDS FOR PERSONAL SERVICES PROSPECTIVELY EFFECTIVE UNLESS OTHERWISE SPECIFICALLY AUTHORIZED BY LAW. SEE IN THAT CONNECTION PARSHALL V. UNITED STATES, 147 F. 433, WHEREIN IT WAS STATED, AT PAGE 435, THAT:

* * * IT IS THE SETTLED AND RECOGNIZED POLICY OF CONGRESS TO KEEP ALL THE DEPARTMENTS OF THE GOVERNMENT, IN THE MATTER OF INCURRING OBLIGATIONS FOR EXPENDITURE, WITHIN THE APPROPRIATIONS ANNUALLY MADE FOR CONDUCTING ITS AFFAIRS. * * *

BECAUSE OF THE ABOVE CONSIDERATIONS THIS OFFICE HAS HELD IN A LONG LINE OF DECISIONS THAT INCREASES IN COMPENSATION BASED SOLELY UPON ADMINISTRATIVE ACTION MAY NOT BE MADE RETROACTIVELY EFFECTIVE. ALSO, BASED UPON THE SAME CONSIDERATIONS THIS OFFICE HAS SOUGHT BY A UNIFORM PRACTICAL ACCOUNTING RULE TO MAINTAIN AN ORDERLY PROCEDURE FOR THE FIXATION AND PAYMENT OF COMPENSATION TO FEDERAL PERSONNEL SO AS NOT TO REQUIRE RETROACTIVE ADJUSTMENTS OF COMPENSATION NOT SPECIFICALLY AUTHORIZED BY LAW, THEREBY AVOIDING THE ASSERTION OF CLAIMS FOR INCREASED COMPENSATION COVERING PAST PERIODS, INCLUDING DEATH CASES, OR THE RAISING OF CHARGES AGAINST EMPLOYEES FOR COMPENSATION ALREADY EARNED AT HIGHER RATES WHICH WOULD BE REQUIRED IF COMPETENT ADMINISTRATIVE AUTHORITY, INCLUDING WAGE BOARDS AND OTHER WAGE-FIXING AUTHORITIES, WERE PERMITTED TO DECREASE BASIC WAGE RATES RETROACTIVELY EFFECTIVE--- THE AUTHORITY OF WAGE BOARDS TO FIX BASIC WAGE RATES INCLUDING, ALSO, THE AUTHORITY TO DECREASE BASIC WAGE RATES. SEE IN THAT CONNECTION THE UNIFORM AND PRACTICAL ACCOUNTING RULE APPLIED IN THE DECISIONS OF SEPTEMBER 8, 1924, 4 COMP. GEN. 280, AND APPLIED IN NUMEROUS SUBSEQUENT DECISIONS FIXING THE EFFECTIVE DATE OF SALARY INCREASES OR DECREASES RESULTING FROM THE ALLOCATION OR REALLOCATION OF POSITIONS. THAT RULE HAS BEEN APPLIED OVER A GREAT NUMBER OF YEARS EVEN THOUGH THE CONDITIONS WHICH JUSTIFIED THE REALLOCATION OF THE POSITIONS MAY HAVE EXISTED BEFORE THE EFFECTIVE DATE OF THE INCREASES OR DECREASES IN COMPENSATION.

YOU HAVE REFERRED TO THE RULE STATED IN TWO COURT DECISIONS RENDERED UNDER THE FAIR LABOR STANDARDS ACT THAT "AN EMPLOYEE CANNOT CONTRACT AWAY HIS RIGHT TO OVERTIME COMPENSATION UNDER THE ACT," AND THAT "THERE IS NO AUTHORITY FOR ANYONE TO CONSENT TO A VIOLATION OF THE OVERTIME PROVISIONS OF THE ACT.' THIS OFFICE HAS STATED SUBSTANTIALLY THE SAME RULES UNDER THE ACT OF 1934, SUPRA (SEE 23 COMP. GEN. 962; 24 ID. 39, 155, 189), AND, ALSO, UNDER THE WAR OVERTIME PAY ACT OF 1943, 57 STAT. 75 (SEE 23 COMP. GEN. 17, 398, 721), BUT THOSE RULES RELATE TO THE EMPLOYEES' RIGHT TO RECEIVE OVERTIME COMPENSATION ARISING UNDER THE FORMULA SPECIFICALLY STATED IN THE STATUTES, RATHER THAN UPON THE BASIS OF ADMINISTRATIVE ACTION, WHICH RIGHT TO RECEIVE OVERTIME COMPENSATION MAY NOT BE DEFEATED BY ERRONEOUS ADMINISTRATIVE ACTION, THE CORRECT AMOUNT OF OVERTIME COMPENSATION BEING PAYABLE RETROACTIVELY EFFECTIVE TO CORRECT AN ADMINISTRATIVE ERROR. HENCE, THOSE RULES DO NOT APPLY IN THE INSTANT MATTER INVOLVING ADMINISTRATIVE ACTION PROPOSED TO BE RETROACTIVELY EFFECTIVE TO INCREASE BASIC RATES OF COMPENSATION, THE RIGHT TO RECEIVE BASIC RATES OF COMPENSATION, THE RIGHT TO RECEIVE BASIC COMPENSATION NOT ARISING DIRECTLY UNDER THE STATUTE BUT SOLELY UPON THE BASIS OF ADMINISTRATIVE ACTION OF THE WAGE BOARDS OR OTHER WAGE-FIXING AUTHORITIES AUTHORIZED TO BE TAKEN BY THE STATUTE. FOR REASONS HEREINBEFORE STATED, I HAVE TO ADVISE THAT INCREASES IN BASIC RATES OF COMPENSATION IN THE CASES REFERRED TO MAY NOT BE MADE EFFECTIVE FOR ANY PERIOD OF TIME PRIOR TO THE DATE OF FINAL ACTION BY COMPETENT ADMINISTRATIVE AUTHORITY BASED UPON A WAGE BOARD PROCEDURE.