B-35897, SEPTEMBER 23, 1943, 23 COMP. GEN. 208

B-35897: Sep 23, 1943

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- WHICH PAYMENT IS SPECIFICALLY AUTHORIZED BY THE ACT OF JULY 12. - IS IN ADDITION TO THE EMPLOYEES' REGULAR OR BASIC COMPENSATION. EMPLOYEES SEPARATED FROM THE SERVICE ON OR PRIOR TO THAT DATE WHO HAVE BEEN PAID THE LUMP SUM PAYMENT AUTHORIZED UNDER THE SAID ACT FOR ACCUMULATED AND ACCRUED LEAVE MAY NOT BE REGARDED AS IN AN ANNUAL LEAVE STATUS FOR ANY PERIOD SUBSEQUENT TO JANUARY 1. ALTHOUGH THE GRANTING OF LEAVE WITHOUT PAY AFTER THE DATE A POSITION IS ABOLISHED BY LAW IS UNAUTHORIZED. RESPECTING THE GRANTING OF LEAVE WITHOUT PAY OR FURLOUGH TO EMPLOYEES WITH UNUSED LEAVE WHOSE SERVICES ARE TERMINATED UNDER CERTAIN CONDITIONS. AS FOLLOWS: I HAVE YOUR DECISION OF AUGUST 6. 1943 MAKING INQUIRY AS TO THE AVAILABILITY OF THE APPROPRIATION FOR LIQUIDATION OF THE NATIONAL YOUTH ADMINISTRATION FOR THE PAYMENT OF ACCUMULATED AND ACCRUED ANNUAL LEAVE TO THOSE EMPLOYEES WHOSE SERVICES ARE ESSENTIAL THROUGHOUT THE PERIOD OF LIQUIDATION.

B-35897, SEPTEMBER 23, 1943, 23 COMP. GEN. 208

EMPLOYEES SEPARATED FROM SERVICE UPON TERMINATION OF AGENCY AND PAID LUMP SUM FOR ACCRUED LEAVE; LEAVE RIGHTS, ETC. THE LUMP-SUM PAYMENT FOR ACCUMULATED AND ACCRUED ANNUAL LEAVE OF EMPLOYEES OF THE NATIONAL YOUTH ADMINISTRATION SEPARATED FROM THE SERVICE ON OR PRIOR TO JANUARY 1, 1944, ON ACCOUNT OF THE LIQUIDATION OF THAT AGENCY--- WHICH PAYMENT IS SPECIFICALLY AUTHORIZED BY THE ACT OF JULY 12, 1943--- IS IN ADDITION TO THE EMPLOYEES' REGULAR OR BASIC COMPENSATION, AND, THEREFORE, SUCH LUMP-SUM PAYMENT MAY NOT BE REGARDED AS SUBJECT TO RETIREMENT DEDUCTIONS. THE SEPARATION DATE OF EMPLOYEES OF THE NATIONAL YOUTH ADMINISTRATION MAY NOT BE MADE EFFECTIVE AS OF A DATE LATER THAN JANUARY 1, 1944--- THE FINAL DATE SPECIFIED IN THE ACT OF JULY 12, 1943, FOR LIQUIDATION OF THAT AGENCY --- SO THAT, EMPLOYEES SEPARATED FROM THE SERVICE ON OR PRIOR TO THAT DATE WHO HAVE BEEN PAID THE LUMP SUM PAYMENT AUTHORIZED UNDER THE SAID ACT FOR ACCUMULATED AND ACCRUED LEAVE MAY NOT BE REGARDED AS IN AN ANNUAL LEAVE STATUS FOR ANY PERIOD SUBSEQUENT TO JANUARY 1, 1944, NOR MAY ANNUAL LEAVE BE COMPUTED OVER A PERIOD AFTER THAT DATE. ALTHOUGH THE GRANTING OF LEAVE WITHOUT PAY AFTER THE DATE A POSITION IS ABOLISHED BY LAW IS UNAUTHORIZED, THE PROVISIONS OF SECTION 9 (C) OF THE ANNUAL LEAVE REGULATIONS, AS AMENDED BY EXECUTIVE ORDER NO. 9371, RESPECTING THE GRANTING OF LEAVE WITHOUT PAY OR FURLOUGH TO EMPLOYEES WITH UNUSED LEAVE WHOSE SERVICES ARE TERMINATED UNDER CERTAIN CONDITIONS, MAY BE REGARDED AS AUTHORIZING THE BRIDGING OVER OF A PERIOD NOT TO EXCEED 12 MONTHS BETWEEN THE DATE OF SEPARATION OF AN EMPLOYEE FROM THE NATIONAL YOUTH ADMINISTRATION--- ON ACCOUNT OF THE LIQUIDATION OF THAT AGENCY ON OR PRIOR TO JANUARY 1, 1944--- AND REAPPOINTMENT IN ANOTHER GOVERNMENT AGENCY FOR THE PURPOSE OF TRANSFERRING ANNUAL AND SICK LEAVE CREDITS PURSUANT TO SECTIONS 6 AND 9 OF THE ANNUAL AND SICK LEAVE REGULATIONS, RESPECTIVELY. THE LUMP-SUM PAYMENT AUTHORIZED BY THE ACT OF JULY 12, 1943, TO BE MADE FOR ACCUMULATED AND ACCRUED ANNUAL LEAVE OF EMPLOYEES OF THE NATIONAL YOUTH ADMINISTRATION SEPARATED FROM THE SERVICE ON OR PRIOR TO JANUARY 1, 1944, DUE TO THE LIQUIDATION OF THAT AGENCY, DOES NOT CONSTITUTE "SALARY" WITHIN THE MEANING OF DUAL COMPENSATION STATUTES OF 1916, PROHIBITING, UNDER CERTAIN CONDITIONS, THE PAYMENT FROM APPROPRIATED FUNDS OF MORE THAN ONE SALARY TO A PERSON. WHILE THE PROVISIONS OF THE ACT OF JULY 12, 1943, AUTHORIZE A LUMP SUM PAYMENT FOR ACCUMULATED AND ACCRUED ANNUAL LEAVE OF EMPLOYEES OF THE NATIONAL YOUTH ADMINISTRATION SEPARATED FROM THE SERVICE ON OR PRIOR TO JANUARY 1, 1944, ON ACCOUNT OF THE LIQUIDATION OF THAT AGENCY, SUCH EMPLOYEES--- EXCEPT THOSE WHO, BECAUSE OF THEIR PERIOD OF ACTIVE DUTY, CANNOT LIQUIDATE ANY OR ALL OF THEIR ANNUAL LEAVE BY THAT DATE--- MAY BE GRANTED TERMINAL ANNUAL LEAVE IN THE USUAL MANNER OVER PERIODS UP TO AND INCLUDING THAT DATE.

ACTING COMPTROLLER GENERAL YATES TO THE CHAIRMAN, WAR MANPOWER COMMISSION, SEPTEMBER 23, 1943:

THERE HAS BEEN CONSIDERED YOUR LETTER OF SEPTEMBER 3, 1943, AS FOLLOWS:

I HAVE YOUR DECISION OF AUGUST 6, 1943 (B-35897) (23 COMP. GEN. 85) IN REPLY TO A LETTER FROM THIS OFFICE DATED JULY 22, 1943 MAKING INQUIRY AS TO THE AVAILABILITY OF THE APPROPRIATION FOR LIQUIDATION OF THE NATIONAL YOUTH ADMINISTRATION FOR THE PAYMENT OF ACCUMULATED AND ACCRUED ANNUAL LEAVE TO THOSE EMPLOYEES WHOSE SERVICES ARE ESSENTIAL THROUGHOUT THE PERIOD OF LIQUIDATION. YOUR DECISION RELATIVE TO THIS SUBJECT HAS MATERIALLY ASSISTED THE NATIONAL YOUTH ADMINISTRATION IN ITS PLANS FOR LIQUIDATION, AND I AM, THEREFORE, MOST APPRECIATIVE OF YOUR PROMPT REPLY TO MY INQUIRY. HOWEVER, IT IS DEEMED ADVISABLE TO CONSULT YOUR OFFICE FURTHER IN THIS MATTER IN THAT A NUMBER OF QUESTIONS, HAVING AN IMPORTANT BEARING UPON PERSONNEL ADMINISTRATION, HAVE ARISEN IN CONNECTION WITH THE APPLICATION OF THE ABOVE-CITED DECISION. DECISION B-35897 OF AUGUST 6, 1943, PROVIDES," I HAVE TO ADVISE YOU THAT YOU ARE AUTHORIZED TO PAY THE EMPLOYEES A LUMP-SUM AMOUNT UPON SEPARATION FROM THE GOVERNMENT SERVICE ON OR PRIOR TO JANUARY 1, 1944, FOR THEIR ACCUMULATED AND ACCRUED ANNUAL LEAVE COMPUTED UPON THE BASIS STATED IN SAID DECISION OF MAY 27, 1943.' DECISION B-34531 OF MAY 27, 1943 TO THE SECRETARY OF AGRICULTURE, CONCERNING THE METHOD OF COMPUTATION, PROVIDES,"IT FOLLOWS, AS SUGGESTED IN YOUR LETTER, THAT NO LEAVE ON LEAVE MAY BE PAID FOR AND THAT IT WOULD NOT BE PROPER TO COMPUTE THE LEAVE ON THE PERIOD IMMEDIATELY FOLLOWING SEPARATION. THE LUMP-SUM PAYMENT WILL REPRESENT THE TOTAL COMPENSATION COVERING EACH DAY OF ACCRUED ANNUAL LEAVE WITHOUT ANY CREDIT FOR SUNDAYS AND HOLIDAYS (WHICH OTHERWISE WOULD HAVE BEEN AUTHORIZED HAD THE LEAVE BEEN GRANTED DURING SERVICE).'

SPECIFICALLY, THE QUESTIONS WHICH HAVE ARISEN CONCERNING THE APPLICATION OF THE ABOVE-CITED DECISIONS ARE PRESENTED AS FOLLOWS:

A. AN EMPLOYEE HAVING SUFFICIENT ACCUMULATED AND ACCRUED LEAVE TO HIS CREDIT ON DECEMBER 31, 1943 TO BE RETAINED IN PAY STATUS UNDER USUAL METHOD OF PAYMENT TO JANUARY 31, 1944, IS DISCONTINUED FROM ACTIVE DUTY ON DECEMBER 31, 1943, AND AT THIS TIME IS PAID PROPERLY IN A LUMP-SUM FOR ALL LEAVE TO HIS CREDIT:

1. IS SUCH LUMP-SUM PAYMENT TO BE CONSIDERED FOR ALL PURPOSES AS SALARY? IF THE ANSWER TO THIS INQUIRY IS IN THE AFFIRMATIVE, THE FOLLOWING QUESTIONS ARE PRESENTED FOR CONSIDERATION:

(A) SHALL DEDUCTIONS FOR THE RETIREMENT FUND BE MADE AT THE EXISTING RATE?

(B) SHALL THE DATE OF SEPARATION FROM FEDERAL EMPLOYMENT BE ESTABLISHED AS OF DECEMBER 31, 1943, OR SHALL THE EMPLOYEE BE CONSIDERED IN LEAVE STATUS FOR THE ACTUAL NUMBER OF WORK DAYS REPRESENTED BY THE LUMP-SUM PAYMENT; OR MAY THE EMPLOYEE, AT THE DISCRETION OF THE AGENCY, BE PLACED IN LEAVE WITHOUT PAY STATUS FOR A PERIOD FOLLOWING DECEMBER 31, 1943, THUS PERMITTING TRANSFER OF SICK LEAVE IN THE EVENT OF TRANSFER TO ANOTHER FEDERAL AGENCY? ( (C) IF THE SEPARATION DATE IS DECEMBER 31, 1943 AND THE EMPLOYEE REPORTS ON A RE-EMPLOYMENT BASIS FOR DUTY WITH ANOTHER FEDERAL AGENCY ON JANUARY 5, 1944, WOULD ANY PORTION OF THE LUMP-SUM PAYMENT BE SUBJECT TO REFUND UNDER EXISTING LAWS RELATIVE TO DUAL COMPENSATION?

(D) IF THE EMPLOYEE IS CONSIDERED IN LEAVE STATUS OR IS PLACED IN LEAVE WITHOUT PAY FOR A PERIOD FOLLOWING LUMP-SUM PAYMENT, WOULD ANY PART OF THE LUMP-SUM PAYMENT BE SUBJECT TO REFUND AS DUAL COMPENSATION IF THE EMPLOYEE REPORTS TO ANOTHER FEDERAL AGENCY DURING THE INTERIM PERIOD ON A TRANSFER BASIS?

(E) SHALL THE EXISTING WITHHOLDING TAX BE DEDUCTED FROM THE LUMP SUM PAYMENT?

2. IN THE EVENT YOUR ANSWER TO QUESTION A-1 IS IN THE NEGATIVE, IT IS RESPECTFULLY REQUESTED THAT YOU PROVIDE A REPLY ON THIS BASIS TO EACH OF THE QUESTIONS (A THROUGH D IN ITEM 1), SUPRA.

B. SHALL THE LUMP-SUM PAYMENT BE CONSIDERED AND REPORTED TO THE DEPARTMENT OF INTERNAL REVENUE AS INCOME IN CALENDAR YEAR 1943 OR 1944?

C. THE LANGUAGE OF DECISION B-35897 AUTHORIZES PAYMENT FOR ACCUMULATED AND ACCRUED ANNUAL LEAVE ON OR PRIOR TO JANUARY 1, 1944, BUT OUR INTERPRETATION IS THAT LUMP-SUM PAYMENT IS NOT MANDATORY EXCEPT FOR THOSE EMPLOYEES WHO, BECAUSE OF THEIR PERIOD OF ACTIVE DUTY, CANNOT LIQUIDATE ANY OR ALL OF THEIR ANNUAL LEAVE BY JANUARY 1, 1944. IS OUR INTERPRETATION CORRECT IN THIS RESPECT?

D. MAY AN EMPLOYEE WHO IS AWARDED A LUMP-SUM PAYMENT BEFORE JANUARY 1, 1944, BE RETAINED IN LEAVE WITHOUT PAY STATUS UNTIL JANUARY 1, 1944, AND IF SO, MAY THE EMPLOYEE, ASSUMING TRANSFER TO ANOTHER FEDERAL AGENCY, HAVE ACCUMULATED AND ACCRUED SICK LEAVE TRANSFERRED TO HIS CREDIT ON THE RECORDS OF THE AGENCY TO WHICH HE TRANSFERS?

E. MUST THE LUMP-SUM PAYMENT IN ALL CASES TECHNICALLY RESULT IN A BREAK IN FEDERAL SERVICE FOR THE EMPLOYEE SO PAID, EVEN THOUGH THE EMPLOYEE ENTERS DUTY FOR ANOTHER FEDERAL AGENCY AT THE BEGINNING OF BUSINESS ON THE DAY FOLLOWING THAT ON WHICH THE LUMP-SUM PAYMENT WAS AUTHORIZED?

INASMUCH AS IT IS NECESSARY FOR THE NATIONAL YOUTH ADMINISTRATION TO REDUCE PROGRESSIVELY THE NUMBER OF EMPLOYEES WHO ARE ASSISTING IN THE LIQUIDATION OF THE AGENCY, AN EARLY REPLY WILL BE APPRECIATED.

THE QUESTIONS PRESENTED WILL BE CONSIDERED IN THE LIGHT OF THE FOLLOWING PROVISIONS OF SECTION 9 OF THE ANNUAL LEAVE REGULATIONS, EXECUTIVE ORDER NO. 8384, DATED MARCH 29, 1940, AS AMENDED, BY EXECUTIVE ORDER NO. 9371, DATED AUGUST 24, 1943, EFFECTIVE AUGUST 23, 1943:

SEC. 9. LEAVE WITHOUT PAY SHALL NOT BE GRANTED UNTIL ALL ACCUMULATED AND CURRENT ACCRUED LEAVE ALLOWABLE UNDER THESE REGULATIONS IS EXHAUSTED, EXCEPT THAT

(C) AN EMPLOYEE WHOSE ACTIVE SERVICES ARE TERMINATED AS A RESULT OF THE EXPIRATION OF A STATUTE IN CONNECTION WITH THE ADMINISTRATION OF WHICH HE IS EMPLOYED AND WHO AT THE TIME OF SUCH EXPIRATION HAS NOT EXHAUSTED HIS ACCUMULATED AND CURRENT ACCRUED LEAVE MAY BE GRANTED LEAVE WITHOUT PAY OR FURLOUGH FOR A MAXIMUM PERIOD OF 12 MONTHS.

THE LUMP-SUM PAYMENT "FOR ACCRUED ANNUAL LEAVE OF EMPLOYEES SEPARATED FROM THE GOVERNMENT SERVICE DUE TO THE DISCONTINUANCE OF THE NATIONAL YOUTH ADMINISTRATION" AUTHORIZED BY THE ACT OF JULY 12, 1943, 57 STAT. 518, PUBLIC LAW 135, IS A PAYMENT MADE IN LIEU OF LEAVE EARNED BUT NOT TAKEN. WHILE THE PAYMENT IS MADE BECAUSE OF, AND IN RETURN FOR, SERVICES, AND FOR THAT REASON SHOULD BE REGARDED AS COMPENSATION FOR SERVICES RENDERED, NEVERTHELESS SUCH A LUMP-SUM PAYMENT MADE BECAUSE AN EMPLOYEE HAS NOT TAKEN ANNUAL LEAVE NEED NOT BE REGARDED AS "SALARY" FOR ALL PURPOSES, THE AMOUNT PAYABLE NOT BEING COMPUTED OVER ANY ACTUAL PERIOD OF TIME. ACCORDINGLY, QUESTION A1 IS ANSWERED IN THE NEGATIVE.

AS AN EMPLOYEE ALREADY WILL HAVE RECEIVED THE SALARY OF HIS POSITION FOR ALL OF THE TIME SERVED UP TO AND INCLUDING THE DATE OF HIS SEPARATION, IT FOLLOWS THAT THE LUMP-SUM PAYMENT FOR UNUSED ACCRUED LEAVE IS IN ADDITION TO HIS REGULAR OR BASIC COMPENSATION AND IS NOT SUBJECT TO RETIREMENT DEDUCTIONS. SEE 5 COMP. GEN. 139; COMPARE 27 COMP. DEC. 190. ACCORDINGLY, QUESTION A1 (A) IS ANSWERED IN THE NEGATIVE.

UNDER THE PROVISIONS OF THE ACT OF JULY 12, 1943, THE SEPARATION DATE OF AN EMPLOYEE OF THE NATIONAL YOUTH ADMINISTRATION MAY NOT BE MADE EFFECTIVE AS OF A DATE LATER THAN JANUARY 1, 1944. THE EMPLOYEES WHO RECEIVE THE LUMP-SUM PAYMENT FOR THE LEAVE THEY HAVE NOT TAKEN PRIOR TO THAT TIME ARE NOT TO BE REGARDED AS IN AN ANNUAL LEAVE STATUS AFTER THAT DATE. THAT IS, THE ANNUAL LEAVE FOR WHICH THE LUMP-SUM PAYMENT IS MADE MAY NOT BE COMPUTED OVER A PERIOD AFTER THE POSITION HAS BEEN ABOLISHED BY LAW. DECISION OF MAY 27, 1943, B-34531, TO THE SECRETARY OF AGRICULTURE. NOTWITHSTANDING THE PROVISIONS OF SECTION 9 (C) OF THE ANNUAL LEAVE REGULATIONS AS AMENDED BY EXECUTIVE ORDER NO. 9371, ABOVE QUOTED, THE EMPLOYEES OF THE NATIONAL YOUTH ADMINISTRATION ACTUALLY MAY NOT BE GRANTED LEAVE WITHOUT PAY FOR A PERIOD FOLLOWING JANUARY 1, 1944, IN A POSITION WHICH HAS BEEN ABOLISHED BY STATUTE, BUT THE NEW REGULATION MAY BE INTERPRETED AS AUTHORIZING THE BRIDGING OVER OF A PERIOD NOT TO EXCEED 12 MONTHS BETWEEN SEPARATION FROM THE NATIONAL YOUTH ADMINISTRATION POSITION AND REAPPOINTMENT IN ANOTHER AGENCY OF THE GOVERNMENT FOR THE PURPOSE OF TRANSFERRING ANNUAL AND SICK LEAVE CREDITS PURSUANT TO SECTION 6 OF THE ANNUAL LEAVE REGULATIONS AND SECTION 9 OF THE SICK LEAVE REGULATIONS. QUESTION A1 (B) IS ANSWERED ACCORDINGLY.

AS THE LUMP-SUM PAYMENT MADE IN LIEU OF LEAVE NOT TAKEN IS NOT COMPUTED OVER ANY PERIOD OF TIME, IT NEED NOT BE REGARDED AS "SALARY" WITHIN THE MEANING OF THE DUAL COMPENSATION ACT OF MAY 10, 1916, 39 STAT. 120, AS AMENDED BY THE ACT OF AUGUST 29, 1916, 39 STAT. 582, PROVIDING:

THAT UNLESS OTHERWISE SPECIALLY AUTHORIZED BY LAW, NO MONEY APPROPRIATED BY THIS OR ANY OTHER ACT SHALL BE AVAILABLE FOR PAYMENT TO ANY PERSON RECEIVING MORE THAN ONE SALARY WHEN THE COMBINED AMOUNT OF SAID SALARIES EXCEEDS THE SUM OF $2,000 PER ANNUM * * *.

COMPARE 18 COMP. GEN. 768, 772, AND THE DECISIONS THEREIN CITED. ACCORDINGLY, QUESTION A1 (C) IS ANSWERED IN THE NEGATIVE. OF COURSE, IT IS TO BE UNDERSTOOD THAT NO PORTION OF THE ANNUAL LEAVE NOT TAKE UNDER THE NATIONAL YOUTH ADMINISTRATION FOR WHICH A LUMP-SUM PAYMENT HAS BEEN MADE, MAY LATER BE RECREDITED TO AN EMPLOYEE IN ANOTHER AGENCY OF THE GOVERNMENT.

IN VIEW OF THE ANSWERS TO QUESTION A1 (B) AND A1 (C), NO ANSWER TO QUESTION A1 (E) APPEAR NECESSARY.

QUESTION A1 (E) PROPERLY IS FOR CONSIDERATION BY THE COMMISSIONER OF INTERNAL REVENUE. PENDING A DECISION OF THE COMMISSIONER OF INTERNAL REVENUE TO THE CONTRARY, IT IS THE VIEW OF THIS OFFICE THAT THE WITHHOLDING TAX SHOULD BE DEDUCTED FROM THE LUMP-SUM PAYMENT.

QUESTION B, ALSO, PROPERLY IS FOR CONSIDERATION BY THE COMMISSIONER OF INTERNAL REVENUE, RATHER THAN BY THIS OFFICE.

REFERRING TO QUESTION C, YOUR INTERPRETATION IS CORRECT. THAT IS TO SAY, OVER PERIODS UP TO AND INCLUDING JANUARY 1, 1944, THE EMPLOYEES OF THE NATIONAL YOUTH ADMINISTRATION MAY BE GRANTED TERMINAL ANNUAL LEAVE IN THE USUAL MANNER.

QUESTION D IS ANSWERED IN THE AFFIRMATIVE SUBJECT TO A LIMITATION OF 12 MONTHS BETWEEN JANUARY 1, 1944, AND REAPPOINTMENT IN ANOTHER AGENCY OF THE GOVERNMENT. SEE ANSWER HEREIN TO QUESTION A1 (B).

IN VIEW OF THE PROVISIONS OF SECTION 9 (C) OF THE ANNUAL LEAVE REGULATIONS, AS AMENDED BY EXECUTIVE ORDER NO. 9371, AND THE ANSWERS TO QUESTIONS A1 (B) AND D, IT APPEARS THAT NO ANSWER IS REQUIRED TO QUESTION E. ..END :