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IS UNAUTHORIZED. IS AS FOLLOWS: 1. REFERENCE IS MADE TO LETTER FROM THE CHIEF OF OFFICE. REFERENCE IS ALSO MADE TO YOUR DECISION THEREON DATED OCTOBER 18. IT IS NOW DESIRED TO RESUBMIT THIS CASE FOR RECONSIDERATION FOR THE PURPOSE OF CLARIFICATION OR POSSIBLE MODIFICATION OF YOUR FORMER DECISION. 3. SCHMIDT WAS GRANTED LEAVE WITH PAY DURING THE PERIOD EXTENDING FROM APRIL 14. WAS A SUNDAY. SCHMIDT WAS ABSENT FROM WORK ON MAY 27 AND MAY 28. BOTH OF THESE DAYS WERE REGULAR WORKING DAYS. 4. HAVE NOT BEEN QUESTIONED EITHER BY MR. WE ARE IN DOUBT AS TO THE CORRECTNESS OF THE PAYMENT MADE TO MR. SCHMIDT FOR THE MONTH OF MAY 1937 WAS AS FOLLOWS: LOUIS SCHMIDT. WAS IN CONFORMITY WITH THE REGULATIONS PRESCRIBED BY THE GOVERNOR OF THE PANAMA CANAL IN HIS CIRCULAR DATED MAY 14.

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A-89369, FEBRUARY 16, 1938, 17 COMP. GEN. 646

LEAVES OF ABSENCE - FORTY-HOUR WEEK EMPLOYEES - COMPENSATION RATES - PANAMA CANAL THE 40-HOUR WEEK STATUTE (ACT, MARCH 28, 1934, 48 STAT. 522) PERMITS, BUT DOES NOT REQUIRE, INCREASES IN FULL-TIME WEEKLY EARNINGS, AND DOES NOT PRECLUDE FIXING A LOWER RATE OF COMPENSATION FOR 40-HOUR WEEK EMPLOYEES OF THE PANAMA CANAL FOR LEAVES OF ABSENCE GRANTED AND PAID FOR ON DAYS OUTSIDE THE 40-HOUR WEEKLY TOUR OF DUTY--- USUALLY SATURDAYS AND SUNDAYS-- - BUT A REGULATION FIXING A LOWER RATE OF COMPENSATION FOR DAYS OF AUTHORIZED LEAVE DURING A REGULAR 40-HOUR TOUR OF DUTY, IS UNAUTHORIZED, THE STATUTE SAVING TO EMPLOYEES "THE FULL TIME WEEKLY EARNINGS UNDER THE RESPECTIVE WAGE SCHEDULES IN EFFECT ON JUNE 1, 1932.' 17 COMP. GEN. 348, AMPLIFIED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE GOVERNOR OF THE PANAMA CANAL, FEBRUARY 16, 1938:

YOUR LETTER OF JANUARY 19, 1938, IS AS FOLLOWS:

1. REFERENCE IS MADE TO LETTER FROM THE CHIEF OF OFFICE, THE PANAMA CANAL, TO THE ACTING COMPTROLLER GENERAL DATED SEPTEMBER 30, 1937, CONCERNING THE CLAIM OF MR. LOUIS SCHMIDT, AN EMPLOYEE OF THE PANAMA CANAL IN THE CANAL ZONE. REFERENCE IS ALSO MADE TO YOUR DECISION THEREON DATED OCTOBER 18, 1937.

2. ON ACCOUNT OF UNCERTAINTY AS TO THE INTENT OF YOUR DECISION OF OCTOBER 18, IT IS NOW DESIRED TO RESUBMIT THIS CASE FOR RECONSIDERATION FOR THE PURPOSE OF CLARIFICATION OR POSSIBLE MODIFICATION OF YOUR FORMER DECISION.

3. MR. SCHMIDT WAS GRANTED LEAVE WITH PAY DURING THE PERIOD EXTENDING FROM APRIL 14, 1937, TO MAY 8, 1937, BOTH DATES INCLUSIVE. MAY 9, 1937, WAS A SUNDAY, AND ON MAY 10TH (MONDAY) MR. SCHMIDT RETURNED TO DUTY, HIS REGULAR HOURS OF EMPLOYMENT BEING FROM MONDAY TO FRIDAY, 8 HOURS PER DAY, ON A 40-HOUR WEEK BASIS. SUBSEQUENTLY TO RETURNING TO DUTY, MR. SCHMIDT WAS ABSENT FROM WORK ON MAY 27 AND MAY 28, 1937, WITH PAY, ON ACCOUNT OF ILLNESS. BOTH OF THESE DAYS WERE REGULAR WORKING DAYS.

4. PAYMENTS MADE FOR THE PERIOD FROM APRIL 14 TO APRIL 30, 1937, INCLUSIVE, HAVE NOT BEEN QUESTIONED EITHER BY MR. SCHMIDT OR BY YOUR OFFICE, BUT IN VIEW OF YOUR DECISION OF OCTOBER 18, 1937, WE ARE IN DOUBT AS TO THE CORRECTNESS OF THE PAYMENT MADE TO MR. SCHMIDT FOR THE PERIOD FROM MAY 1 TO MAY 8, 1937, AND MR. SCHMIDT HAS PROTESTED THE PAYMENT MADE FOR SICK LEAVE GRANTED ON MAY 27 AND MAY 28, 1937.

5. THE PAYMENT MADE TO MR. SCHMIDT FOR THE MONTH OF MAY 1937 WAS AS FOLLOWS:

LOUIS SCHMIDT, WIREMAN AT $1.44 AN HOUR:

CHART

ANNUAL LEAVE (PART OF A LEAVE OF ABSENCE EXTENDING FROM APRIL 14,

1937, TO MAY 8, 1937, BOTH DATES

INCLUSIVE.) 5/1 TO 5/8 ----------)

( 80 HOURS AT $1.20 ---- $96.00

SICK LEAVE 5/27-5/28 --------------)

SERVICE, REGULAR TIME ------------- 112 HOURS AT $1.44 --- 161.28

SERVICE, OVERTIME ----------------- 1 1/2 HOURS AT $1.44 - 2.16

BONUS A/C NIGHT WORK -------------- 35 HOURS AT $0.06 ---- 2.10

------ 261.54

DEDUCTIONS:

RETIREMENT ---------------------------------------------- 12.86

MISCELLANEOUS ------------------------------------------- 213.65

------ 226.51

NET AMOUNT DUE ---------------------------------------- 35.03

6. THE PAYMENT MADE TO MR. SCHMIDT FOR THE MONTH OF MAY 1937, SET FORTH IN THE PRECEDING PARAGRAPH, WAS IN CONFORMITY WITH THE REGULATIONS PRESCRIBED BY THE GOVERNOR OF THE PANAMA CANAL IN HIS CIRCULAR DATED MAY 14, 1934. FOR LEAVE OF ABSENCE FROM MAY 1 TO MAY 8, 1937, BOTH DATES INCLUSIVE, MR. SCHMIDT WAS PAID FOR EIGHT DAYS OF EIGHT HOURS EACH, A TOTAL OF 64 HOURS, AT $1.20 PER HOUR, $76.80, AND HE WAS PAID FOR SICK LEAVE MAY 27 AND 28 (FALLING WITHIN HIS 40-HOUR WEEK OF FIVE DAYS OF EIGHT HOURS EACH), TWO DAYS OF EIGHT HOURS EACH, TOTAL 16 HOURS, AT $1.20 PER HOUR, $19.60, A GRAND TOTAL OF $96.00. THIS IS THE SAME AMOUNT WHICH MR. SCHMIDT WOULD HAVE BEEN PAID FOR SIMILAR LEAVE OF ABSENCE WITH PAY PRIOR TO JUNE 1, 1932.

7. THE CLOSING PARAGRAPH OF YOUR DECISION OF OCTOBER 18, 1937, SEEMS TO INDICATE THAT WE SHOULD HAVE PAID MR. SCHMIDT FOR ONLY FIVE DAYS FOR HIS LEAVE OF ABSENCE FROM MAY 1 TO MAY 8, INCLUSIVE, AT EIGHT HOURS PER DAY, 40 HOURS, AT $1.44 PER HOUR, $57.60, AND FOR SICK LEAVE MAY 27 AND 28, TWO DAYS OF EIGHT HOURS EACH, 16 HOURS AT $1.55 PER HOUR, $23.04, A GRAND TOTAL OF $80.64. IF THIS INTERPRETATION OF YOUR DECISION IS ADOPTED, THEN FROM THE FOREGOING FIGURES IT IS EVIDENT THAT THE PANAMA CANAL OVERPAID MR. SCHMIDT THE SUM OF $15.36 DURING THE MONTH OF MAY 1937; THAT IS, FROM MAY 1 TO 8, BOTH INCLUSIVE, AND MAY 27 AND 28.

8. ON THE OTHER HAND, IF MR. SCHMIDT IS PAID ONLY $80.64 FOR THE DAYS IN QUESTION, HE WOULD RECEIVE FOR THE PERIOD FROM MAY 1 TO 8, 1937, LESS COMPENSATION THAN HE WOULD HAVE BEEN PAID FOR LEAVE TAKEN UNDER CORRESPONDING CIRCUMSTANCES FOR A SIMILAR PERIOD PRIOR TO JUNE 1, 1932.

9. YOUR DECISION APPEARS TO IMPLY THAT, NOTWITHSTANDING OUR REGULATIONS, PAYMENT FOR LEAVES OF ABSENCE TAKEN UNDER THE REGULATIONS IN FORCE BETWEEN MAY 14, 1934, AND AUGUST 1, 1937, FOR PERIODS IN EXCESS OF A REGULAR WEEK OF SEVEN DAYS (SUCH AS MAY 1 TO 8, INCLUSIVE, WHICH INCLUDED ONE SUNDAY AND TWO SATURDAYS WHICH ARE NONWORK DAYS FOR CERTAIN 40-HOUR WEEK EMPLOYEES) SHOULD NOT BE MORE THAN THE AMOUNT OF THE EMPLOYEE'S EARNINGS FOR A REGULAR WORK WEEK, AND THAT NO PAYMENT SHOULD HAVE BEEN MADE FOR SUNDAYS AND NON-WORK DAYS FALLING WITHIN SUCH LEAVE PERIOD, ALTHOUGH ALL DAYS OF LEAVE IN AN EXTENDED LEAVE PERIOD INCLUDING SUNDAYS AND NON-WORK DAYS WERE PROPERLY CHARGED TO THE EMPLOYEE'S ACCRUED LEAVE CREDIT. SUCH A RULING WOULD BE CONTRARY TO THE PRACTICE THAT HAS PREVAILED ON THE PANAMA CANAL FOR MANY YEARS AND LONG BEFORE THE 40-HOUR WEEK LAW WAS PASSED.

10. THE SO-CALLED 40-HOUR WEEK LAW BECAME EFFECTIVE ON MARCH 28, 1934. THE PERTINENT PROVISIONS OF THIS LAW ARE AS FOLLOWS:

"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-TIME 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 40 PER WEEK; AND ALL OVERTIME SHALL BE COMPENSATED FOR AT THE RATE OF NOT LESS THAN TIME AND ONE-HALF.'

11. PRIOR TO THE PASSAGE OF THE 40-HOUR WEEK LAW, PAYMENTS TO EMPLOYEES WHILE ON LEAVE WERE MADE UNDER AUTHORITY OF THE EXECUTIVE ORDER OF THE PRESIDENT DATED FEBRUARY 2, 1914, EFFECTIVE APRIL 1, 1914, AS AMENDED BY THE EXECUTIVE ORDER OF JANUARY 15, 1917, TOGETHER WITH REGULATIONS ISSUED BY THE GOVERNOR OF THE PANAMA CANAL PURSUANT TO THESE EXECUTIVE ORDERS. THE EXECUTIVE ORDERS OF FEBRUARY 2, 1914, AND JANUARY 15, 1917, WERE ISSUED PURSUANT TO THE AUTHORITY GIVEN THE PRESIDENT BY THE PANAMA CANAL ACT DATED AUGUST 24, 1912. THE PERTINENT PROVISIONS OF THE EXECUTIVE ORDER OF FEBRUARY 2, 1914, WHICH BECAME EFFECTIVE APRIL 1, 1914, ARE AS FOLLOWS:

"BY VIRTUE OF THE AUTHORITY VESTED IN ME BY LAW, IT IS HEREBY ORDERED THAT THE GENERAL CONDITIONS OF EMPLOYMENT GOVERNING EMPLOYEES ON THE ISTHMUS OF PANAMA, NECESSARY FOR THE COMPLETION, CARE, MANAGEMENT, MAINTENANCE, SANITATION, GOVERNMENT, AND OPERATION OF THE PANAMA CANAL, THE CANAL ZONE, THE PANAMA RAILROAD, AND OTHER ADJUNCTS, SHALL BE AS FOLLOWS:

"LEAVE REGULATIONS

"20. ALL EMPLOYEES WHO ARE CITIZENS OF THE UNITED STATES, AND ALIENS WHOSE COMPENSATION IS MORE THAN $75.00 PER MONTH OR 40 CENTS PER HOUR, SHALL BE ENTITLED TO LEAVE PRIVILEGES.

"21. LEAVE WILL BE DIVIDED INTO THREE CLASSES, VIZ: (1) ANNUAL LEAVE, (2) CUMULATIVE LEAVE, AND (3) TRAVEL LEAVE.

"22. TWENTY-FOUR DAYS ANNUAL LEAVE WILL BE ALLOWED EACH EMPLOYEE FOR EACH YEAR AFTER ENTRY INTO SERVICE * * *

"23. THE SERVICE YEAR SHALL DATE FROM THE DAY ON WHICH AN EMPLOYEE'S PAY IN THE PERMANENT ORGANIZATION BEGINS.

"28. THIRTY DAYS CUMULATIVE LEAVE WILL BE ALLOWED EACH EMPLOYEE PAID ON A MONTHLY OR ANNUAL BASIS FOR EACH YEAR OF HIS SERVICE, AND 20 DAYS TO EACH EMPLOYEE PAID ON AN HOURLY BASIS. THIS LEAVE WILL BE DUE AFTER COMPLETING TEN MONTHS' SERVICE EACH YEAR AND MAY BE TAKEN WHEN THE EMPLOYEE'S SERVICE CAN BE SPARED. * * * EMPLOYEES WILL BE PAID FOR CUMULATIVE LEAVE AT THE RATE EARNED WHEN THE LEAVE BECAME DUE AT THE END OF THE TENTH MONTH OF EACH RESPECTIVE YEAR.

"42. THIS ORDER SHALL TAKE EFFECT FROM AND AFTER THE 1ST DAY OF APRIL 1914.

"/SIGNED) WOODROW WILSON.'

12. THE PERTINENT PROVISIONS OF THE EXECUTIVE ORDER OF JANUARY 15, 1917, ARE AS FOLLOWS:

"BY VIRTUE OF THE AUTHORITY VESTED IN ME BY LAW, THE GENERAL CONDITIONS OF EMPLOYMENT GOVERNING EMPLOYEES ON THE ISTHMUS OF PANAMA, NECESSARY FOR THE COMPLETION, CARE, MANAGEMENT, MAINTENANCE, SANITATION, GOVERNMENT, AND OPERATION OF THE PANAMA CANAL, THE CANAL ZONE, THE PANAMA RAILROAD, AND OTHER ADJUNCTS, PROVIDED BY THE EXECUTIVE ORDER OF FEBRUARY 2, 1914, ARE HEREBY AMENDED BY RESCINDING PARAGRAPHS NUMBERED 22 TO 41, INCLUSIVE, AND SUBSTITUTING IN LIEU OF SUCH RESCINDED PARAGRAPHS THE FOLLOWING:

"22. TWENTY-FOUR DAYS ANNUAL LEAVE WILL BE ALLOWED EACH EMPLOYEE FOR EACH YEAR AFTER ENTRY INTO SERVICE * * *

"23. THE SERVICE YEAR SHALL DATE FROM THE DAY ON WHICH AN EMPLOYEE'S PAY IN THE PERMANENT ORGANIZATION BEGINS.

"26. IN THE CASES OF HOURLY AND PER DIEM EMPLOYEES ANNUAL LEAVE ON ACCOUNT OF SICKNESS OR INJURY SHALL BE BASED UPON A DAY OF EIGHT HOURS.

"29. THIRTY DAYS CUMULATIVE LEAVE WILL BE ALLOWED EACH EMPLOYEE PAID ON A MONTHLY OR ANNUAL BASIS FOR EACH YEAR OF HIS SERVICE, AND TWENTY DAYS TO EACH EMPLOYEE PAID ON AN HOURLY BASIS. THIS LEAVE WILL BE DUE AFTER COMPLETING TEN MONTHS' SERVICE EACH YEAR. * * *

"31. LEAVE TAKEN AFTER THE CLOSE OF THE SERVICE YEAR IN WHICH IT WAS EARNED SHALL BE PAID FOR AT THE RATE OF PAY RECEIVED AT THE END OF THE TENTH MONTH OF THE SERVICE YEAR IN WHICH THE LEAVE WAS EARNED. WHEN AN EMPLOYEE ENTERS UPON IT LEAVE OF ABSENCE WHICH CONSISTS OF OR INCLUDES ANNUAL LEAVE EARNED IN THE SAME YEAR IN WHICH HE ENTERS ON THE LEAVE, SUCH ANNUAL LEAVE WILL BE PAID FOR AT THE RATE RECEIVED BY THE EMPLOYEE WHEN HE ENTERED ON THE LEAVE.

"42. OFFICE HOURS AND HOURS OF LABOR WILL BE FIXED BY THE GOVERNOR WITHIN THE LIMITS PRESCRIBED BY LAW.

"THIS ORDER SHALL TAKE EFFECT ON AND AFTER THE 31ST DAY OF DECEMBER 1916, AND SHALL APPLY TO ALL CLASSES OF LEAVE WITH PAY EARNED AND DUE AS OF THAT DATE AND THEREAFTER.

"/SIGNED) WOODROW WILSON.'

13. THE PERTINENT PROVISIONS OF THE REGULATIONS ISSUED BY THE GOVERNOR OF THE PANAMA CANAL PURSUANT TO THE ABOVE EXECUTIVE ORDERS AND TO HIS GENERAL AUTHORITY CONTAINED IN THE PANAMA CANAL ACT APPROVED AUGUST 24, 1912, ARE AS FOLLOWS:

"54.16. CHARGING SUNDAYS OR HOLIDAYS.--- IN ALL CASES WHERE A SUNDAY OR HOLIDAY FALLS WITHIN A LEAVE OF ABSENCE, OR WITHIN A PERIOD OF ABSENCE ON ACCOUNT OF ILLNESS, SO THAT THE EMPLOYEE IS ON LEAVE BOTH PRIOR AND SUBSEQUENT TO SUCH DAY, THE SUNDAY OR HOLIDAY SHALL BE COUNTED AS ONE DAY OF LEAVE: PROVIDED, THAT IF THE EMPLOYEE WORKED HALF OF THE DAY PRECEDING AND HALF OF THE DAY FOLLOWING A SUNDAY OR HOLIDAY, THE SUNDAY OR HOLIDAY SHALL NOT BE CHARGED AGAINST HIS LEAVE, EXCEPT AS PROVIDED IN LAST SENTENCE OF PARAGRAPH 54.17.

"54.17. SUNDAYS AND HOLIDAYS NOT CHARGED.--- IF AN EMPLOYEE ENTERS UPON, OR RETURNS FROM, A LEAVE OF ABSENCE OR ILLNESS ON A SUNDAY OR HOLIDAY, OR ON THE DAY FOLLOWING A SUNDAY OR HOLIDAY, THE SUNDAY OR HOLIDAY SHALL NOT BE CONSIDERED A PART OF HIS LEAVE IF THE EMPLOYEE WORKED THE FULL DAY PRECEDING, IN CASE OF ENTRY ON LEAVE, OR THE FULL DAY FOLLOWING, IN CASE OF RETURN FROM LEAVE. THE PROVISIONS OF PARAGRAPHS 54.16 AND 54.17 APPLY TO EMPLOYEES WHO WORK REGULARLY ON SUNDAYS AND HOLIDAYS ONLY WHEN THE ABSENCE IS FOR MORE THAN TEN DAYS, EXCLUSIVE OF THE SUNDAYS OR HOLIDAYS AT THE BEGINNING OR END OF THE ABSENCE.'

14. AN ILLUSTRATION OF THE METHOD FOLLOWED IN MAKING PAYMENTS OF LEAVE GRANTED TO HOURLY EMPLOYEES PRIOR TO THE 40-HOUR WEEK LAW IS CONTAINED IN THE FOLLOWING EXAMPLE:

CHART

4/1/31, JOHN DOE WAS EMPLOYED AT $1.00 AN HOUR.

4/1/32, PROMOTED AND RERATED TO $1.25 AN HOUR.

11/1/32, GRANTED 24 DAYS ANNUAL AND 44 DAYS CUMULATIVE LEAVE, PAYMENT

FOR WHICH WAS COMPUTED AS FOLLOWS:

24 DAYS ANNUAL LEAVE 11/1-11/24 (EARNED IN THE SAME YEAR

IN WHICH HE ENTERED ON LEAVE AND PAID FOR AT THE RATE

RECEIVED WHEN HE ENTERED ON THE LEAVE), 192 HOURS

AT $1.25 EQUALS --------------------------------------- $240.00

44 DAYS CUMULATIVE LEAVE 11/25-1/7 (EARNED DURING FIRST

SERVICE YEAR AND PAID FOR AT THE RATE RECEIVED AT THE

END OF THE TENTH MONTH OF THE SERVICE YEAR IN WHICH

IT WAS EARNED), 352 HOURS AT $1.00 EQUALS ------------- 352.00

592.00

15. THE ABOVE METHOD OF PAYMENT WAS MODIFIED BY ORDER OF THE GOVERNOR IN HIS CIRCULAR DATED MAY 14, 1934, WHICH REMAINED IN FORCE UNTIL AUGUST 1, 1937. MR. SCHMIDT WAS PAID UNDER PROVISIONS OF THIS CIRCULAR ORDER. THE PERTINENT PROVISIONS OF THE CIRCULAR OF MAY 14, 1934, FOLLOW: "1. EMPLOYEES OF THE PANAMA CANAL WHO ARE SUBJECT TO THE 40-HOUR WEEK SCHEDULE PROVIDED BY THE INDEPENDENT OFFICES APPROPRIATION ACT OF MARCH 28, 1934, WILL BE GOVERNED BY THE FOLLOWING RULES COVERING PAYMENT FOR OVERTIME, SUNDAYS, HOLIDAYS, AND LEAVE OF ABSENCE.

"3. LEAVE WILL BE GRANTED IN ACCORDANCE WITH THE GENERAL CONDITIONS SPECIFIED IN THE PERSONNEL REGULATIONS, EXCEPT AS MODIFIED HEREIN:

"/A) LEAVE WITH PAY IS ONLY ALLOWABLE WHEN THE EMPLOYEE IS ABSENT ON A PAY-STATUS DAY, EXCEPT THAT ABSENCES IN EXCESS OF TEN DAYS ON LEAVE ORDER OR ON SICK CERTIFICATE WILL BE PAID AS CONTINUOUS LEAVE INCLUDING SUNDAYS OR OTHER NON-PAY-STATUS DAYS. THIS MODIFIES PARAGRAPH 54.16 AND PARAGRAPH 54.17 OF THE PERSONNEL REGULATIONS.

"/B) ANY LEAVE TAKEN WITHIN THE WORK WEEK AFTER COMPLETING 40 HOURS SHALL BE CHARGED TO LEAVE CREDITS AT STRAIGHT TIME RATE. ONE HALF DAY OF LEAVE WILL BE ALLOWABLE FOR ABSENCE ON ANY WORK DAY OF 5 HOURS OR LESS; FOR MORE THAN 5 HOURS, ONE DAY WILL BE CHARGED; WHEN ABSENCE IS PROPERLY COVERED.

"/C) LEAVE FOR HOURLY EMPLOYEES WILL BE PAID ON THE BASIS OF 8 HOURS PER DAY PROVIDED BY EXECUTIVE ORDER OF FEBRUARY 2, 1914, AT THE BASIC RATES IN EXISTENCE PRIOR TO MARCH 28, 1934, OR 5/6 OF THE NEW HOURLY RATES NECESSITATED BY THE REDUCTION OF HOURS FROM 48 TO 40 WEEKLY. THIS IS NECESSARY TO CONFORM WITH THE INTENT OF THE EXECUTIVE ORDER GRANTING LEAVE.

"/SIGNED) J. L. SCHLEY, GOVERNOR.'

16. MR. SCHMIDT WAS PAID FOR THE VACATION AND SICK LEAVE TAKEN DURING THE MONTH OF MAY 1937, IN CONFORMITY WITH THE PROVISION OF THE CIRCULAR OF MAY 14, 1934. AS HOURLY EMPLOYEES WHEN ON EXTENDED LEAVE OF ABSENCE RECEIVED, PRIOR TO THE PASSAGE OF THE 40-HOUR WEEK LAW, A WEEKLY COMPENSATION COMPUTED ON THE BASIS OF 56 TIMES THEIR HOURLY RATE OF PAY (I.E., FOR 7 DAYS OF 8 HOURS EACH), THE CIRCULAR OF MAY 14 WAS ISSUED IN ORDER TO PREVENT DURING PERIODS OF EXTENDED VACATION OR SICK LEAVE WEEKLY PAYMENTS CONSIDERABLY IN EXCESS OF THOSE PAID TO HOURLY EMPLOYEES PRIOR TO THE ENACTMENT OF THE 40-HOUR WEEK LAW. IT WAS DESIRED FURTHER, FOR ADMINISTRATIVE PURPOSES, TO PRESERVE THE PREVIOUSLY AUTHORIZED NUMBER OF DAYS LEAVE WITH PAY PER YEAR FOR EMPLOYEES AFFECTED BY THE 40-HOUR WEEK LEGISLATION. UNDER THE METHOD OF PAYING VACATION LEAVE AS PROVIDED BY THE CIRCULAR OF MAY 14, 1934, EMPLOYEES WHILE ON LEAVE OF ABSENCE WITH PAY FOR PERIODS OF MAY 14, 1934, EMPLOYEES WHILE ON LEAVE OF ABSENCE WITH PAY FOR PERIODS OF MORE THAN 10 DAYS RECEIVED THE SAME WEEKLY AMOUNT THEY WOULD HAVE RECEIVED PRIOR TO JUNE 1, 1932, WHEREAS IF THEY HAD BEEN PAID AT THE 40-HOUR WEEK HOURLY RATE IT WOULD HAVE MEANT AN INCREASE IN WEEKLY AND ANNUAL COMPENSATION WHICH WAS NOT CONTEMPLATED BY THE SO-CALLED THOMAS AMENDMENT TO THE 40-HOUR WEEK LAW.

17. IT SHOULD BE NOTED, HOWEVER, THAT UNDER THE PROVISIONS OF THE CIRCULAR OF MAY 14, 1934, IN INSTANCES OF SHORT LEAVES OF ABSENCE WHERE THE EMPLOYEE WAS ABSENT ONLY ON ONE OR MORE WORK DAYS DURING THE WEEK ON ACCOUNT OF SICKNESS OR LEAVE, THE TOTAL AMOUNT RECEIVED FOR SUCH WEEK DID NOT PRESERVE THE WEEKLY COMPENSATION THAT WOULD HAVE BEEN RECEIVED PRIOR TO THE PASSAGE OF THE 40-HOUR WEEK LAW. THIS IS THE MATTER COMPLAINED OF BY MR. SCHMIDT.

18. SUMMING UP, THE QUESTIONS ON WHICH CLARIFICATION OR DECISION ARE REQUIRED ARE:

(A) WAS MR. SCHMIDT OVERPAID BY THE PANAMA CANAL FOR MAY 1 TO MAY 8, INCLUSIVE, 1937? IF SO, HOW MUCH?

(B) IN VIEW OF THE PANAMA CANAL'S SPECIAL LEAVE REGULATIONS ISSUED UNDER AUTHORITY OF ACTS OF CONGRESS, SHOULD MR. SCHMIDT HAVE BEEN PAID AT THE RATE OF $1.44 PER HOUR FOR TWO DAYS' SICK LEAVE, MAY 27 AND 28, 1937, OR AT THE RATE OF $1.20 PER HOUR, AS PROVIDED IN THE GOVERNOR'S CIRCULAR OF MAY 14, 1934? THIS CIRCULAR WAS CONSIDERED BY THE PANAMA CANAL AS A LEGAL LEAVE REGULATION ISSUED UNDER AUTHORITY OF ACTS OF CONGRESS AND THE AUTHORITY OF THE PRESIDENT OF THE UNITED STATES, IN THE SAME MANNER THAT THE ORIGINAL LEAVE REGULATIONS WERE ISSUED AND UNDER WHICH PAYMENTS HAD BEEN MADE FOR MANY YEARS WITHOUT OBJECTION BY THE GENERAL ACCOUNTING OFFICE OR BY THE AUDITOR FOR THE WAR DEPARTMENT PRIOR TO THE ESTABLISHMENT OF THE GENERAL ACCOUNTING OFFICE.

(C) COULD MR. SCHMIDT HAVE BEEN PAID LESS FOR MAY 1 TO MAY 8, INCLUSIVE, 1937, THAN HE WOULD HAVE RECEIVED FOR A SIMILAR LEAVE OF ABSENCE WITH PAY PRIOR TO JUNE 1, 1932?

19. ATTENTION IS INVITED TO THE LAST PARAGRAPH IN THE LETTER OF THE CHIEF OF OFFICE DATED SEPTEMBER 30, 1937, IN WHICH IT IS STATED THAT THE DECISION IN THE SCHMIDT CASE WILL AFFECT PROBABLY THOUSANDS OF SIMILAR CASES. PENDING THE RECONSIDERATION OF THE QUESTIONS STATED ABOVE, NO ADJUSTMENTS HAVE BEEN MADE FOR LEAVE PAYMENTS PRIOR TO AUGUST 1, 1937. SUBSEQUENT TO AUGUST 1, 1937, LEAVE PAYMENTS AND CHARGES HAVE BEEN MADE AND ARE BEING MADE FROM DAY TO DAY IN ACCORDANCE WITH THE PROVISIONS OF THE CIRCULAR OF JULY 24, 1937, WHICH GIVE AN EMPLOYEE ON LEAVE A WEEKLY COMPENSATION FOR A WEEK OF SEVEN DAYS SLIGHTLY IN EXCESS OF THE WEEKLY LEAVE COMPENSATION FOR A WEEK OF SEVEN DAYS WHICH HE WOULD HAVE RECEIVED PRIOR TO JUNE 1, 1932.

SAID DECISION OF OCTOBER 18, 1937, OF WHICH RECONSIDERATION IS REQUESTED, HELD AS FOLLOWS:

CERTAIN EMPLOYEES OF THE PANAMA CANAL HAVE BEEN HELD TO BE WITHIN THE TERMS OF THE 40 HOUR WEEK STATUTE. 14 COMP. GEN. 156. AUTHORIZED LEAVE OF ABSENCE WITH PAY HAS ALWAYS BEEN REGARDED AS SYNONYMOUS WITH WORK OR A DUTY STATUS. THIS GENERAL RULE HAS BEEN RECOGNIZED IN APPLYING THE 40 HOUR WEEK STATUTE. ANY PERIOD AN EMPLOYEE, WHOSE COMPENSATION IS MEASURED BY TIME, INCLUDING THOSE SUBJECT TO SAID STATUTE, IS REGARDED AS HAVING BEEN ON AUTHORIZED LEAVE WITH PAY, CHARGED AND PAID FOR AS SUCH, IS REQUIRED TO BE CONSIDERED EXACTLY THE SAME AS THOUGH THE EMPLOYEE WERE WORKING. 13 COMP. GEN. 295; ID. 370; 14 ID. 351. THERE IS NOTHING IN THE 40 HOUR WORK WEEK STATUTE WHICH AUTHORIZED OR REQUIRED AN EXCEPTION TO THE GENERAL RULE. ON THE CONTRARY THE SPECIFIC TERMS OF THE STATUTE SAVE TO THE EMPLOYEES "THE FULL TIME WEEKLY EARNINGS UNDER THE RESPECTIVE WAGE SCHEDULES ON JUNE 1, 1932.' IT IS NOT UNDERSTOOD THAT THE LEAVE REGULATIONS IN FORCE ON JUNE 1, 1932, FIXED A LOWER RATE OF COMPENSATION FOR LEAVE PERIODS THAN FOR WORK PERIODS. THE TERMS OF PARAGRAPH 3 (C) OF THE GOVERNOR'S CIRCULAR OF MAY 14, 1937, FIXING A LOWER RATE OF COMPENSATION FOR PERIODS OF AUTHORIZED ABSENCE THAN THAT REQUIRED TO BE FIXED FOR WORK PERIODS NOT ONLY WAS CONTRARY TO THE GENERAL RULE, BUT CONFLICTED WITH THE PROVISION OF THE 40 HOUR WEEK STATUTE SAVING TO THE EMPLOYEES THE FULL TIME WEEKLY EARNINGS. THAT IS, UNDER SAID ADMINISTRATIVE REGULATIONS AN EMPLOYEE ON AUTHORIZED LEAVE DURING THE WHOLE OR PART OF A 40 HOUR WEEK RECEIVED LESS THAN HE WOULD HAVE RECEIVED IF HE HAD WORKED AND LESS THAN THE STATUTE GUARANTEED HIM.

THE 40-HOUR WEEK STATUTE QUOTED IN YOUR LETTER SAVED TO EMPLOYEES WITHIN ITS PROVISIONS "THE FULL-TIME WEEKLY EARNINGS UNDER THE RESPECTIVE WAGE SCHEDULES IN EFFECT ON JUNE 1, 1932.' COMPENSATION PAYABLE FOR DAYS OF LEAVE DURING A REGULAR TOUR OF DUTY CONSTITUTE A PART OF THE FULL-TIME WEEKLY EARNINGS. SEE DECISION OF THE COURT OF CLAIMS IN THE CASE OF GREENE V. UNITED STATES, DATED JUNE 7, 1937, NO. 43280, AND THE DECISIONS OF THIS OFFICE CITED IN THE DECISION OF OCTOBER 18, 1937, SUPRA. THE STATUTE PERMITS, BUT DOES NOT REQUIRE, INCREASES IN FULL-TIME WEEKLY EARNINGS, BUT, BECAUSE OF THE SAVING CLAUSE THERE MAY BE NO REDUCTION IN THE FULL-TIME WEEKLY EARNINGS RECEIVED AS OF JUNE 1, 1932. THE PANAMA CANAL HAS NO AUTHORITY TO ADJUST RATES OF PAY EITHER FOR WORK OR FOR LEAVE DURING THE REGULAR TOUR OF DUTY OF 40 HOURS SO AS TO NET THE EMPLOYEES COMING WITHIN THE TERMS OF THE ACT LESS EARNINGS FOR ANY WEEK OR CONTINUOUS PERIOD OF SEVEN DAYS THAN THEY WOULD HAVE RECEIVED FOR THE SAME PERIOD AS OF JUNE 1, 1932, IN THE SAME POSITION.

REFERRING TO THE CASE OF LOUIS SCHMIDT CONSIDERED IN THE DECISION OF OCTOBER 18, 1937, OF WHICH RECONSIDERATION IS REQUESTED, IT IS UNDERSTOOD (1) THAT ON JUNE 1, 1932, THE RATE OF COMPENSATION FOR HIS POSITION WAS $1.20 PER HOUR FOR 48 HOURS PER WEEK, OR $57.60, CONSTITUTING THE FULL- TIME WEEKLY EARNINGS IF HE WAS ACTUALLY ON DUTY; (2) THAT THE SAME WEEKLY EARNINGS WOULD HAVE BEEN PAID IF HE HAD BEEN ON DUTY A PART OF THE WEEKLY TOUR AND ON LEAVE A PART THEREOF; BUT (3) THAT IF HE HAD BEEN ON EXTENDED LEAVE INCLUDING A WEEK, HE WOULD HAVE BEEN PAID MORE AS FULL-TIME WEEKLY EARNINGS, VIZ, $1.20 PER HOUR FOR 56 HOURS OR SEVEN DAYS, INCLUDING NONWORK DAYS, SATURDAYS, AND SUNDAYS, OR $67.20.

THE 40-HOUR STATUTE SAVED THE FULL-TIME WEEKLY EARNINGS DURING A REGULAR TOUR OF DUTY OF 40 HOURS UNDER CONDITIONS DESIGNATED ABOVE AS (1) AND (2), LEAVE WITH PAY BEING SYNONYMOUS WITH WORK DURING THE 40 HOURS, BUT NOT NECESSARILY OUTSIDE OF THE REGULAR TOUR OF DUTY OF 40 HOURS WHEN THE EMPLOYEE WOULD NOT WORK, AND FOR WHICH HE WOULD NOT BE PAID IF IN A DUTY STATUS, UNDER CONDITIONS DESIGNATED AS (3) ABOVE. IN OTHER WORDS, THE STATUTE HAD NO EFFECT ON THE RATE OF PAY FOR LEAVE GRANTED AND PAID FOR ON SATURDAYS AND SUNDAYS IN ADDITION TO THE 40 HOUR WEEKLY TOUR OF DUTY. HENCE, PARAGRAPH 3 (C) OF THE GOVERNOR'S CIRCULAR LETTER DATED MAY 14, 1934, TO THE EXTENT THAT IT FIXED A LOWER RATE OF COMPENSATION FOR DAYS OF AUTHORIZED LEAVE DURING REGULAR TOUR OF DUTY OF 40 HOURS, VIZ, THE 5/6 OF THE RATE THE EMPLOYEES RECEIVED WHILE WORKING, WAS UNAUTHORIZED FOR THE REASONS STATED IN THE DECISION OF OCTOBER 18, 1937. HOWEVER, THE SAME IS NOT TRUE WITH REGARD TO A LOWER RATE FOR LEAVE GRANTED AND PAID FOR ON SATURDAYS AND SUNDAYS IN ADDITION TO THE 40 HOURS. WHILE SUCH A REGULATION DIFFERS FROM THE ESTABLISHED PRACTICE THROUGHOUT THE FEDERAL SERVICE AND WOULD APPEAR TO BE CONDUCIVE TO CONFUSION AND UNCERTAINTY, THERE IS NOTHING IN THE 40-HOUR WEEK STATUTE PRECLUDING THE PANAMA CANAL FROM FIXING A LOWER RATE OF COMPENSATION FOR LEAVE GRANTED AND PAID FOR ADDITION TO THE 40-HOUR WEEK, ON NONWORK DAYS, USUALLY SATURDAYS AND SUNDAYS, OR FROM FIXING THE FULL-TIME WEEKLY EARNINGS FOR AN ENTIRE WEEK OF LEAVE OF SEVEN DAYS AT A HIGHER RATE THAN FOR A WEEK'S WORK AS OF JUNE 1, 1932.

UNDER THE STATEMENT OF ACCOUNT FOR MAY 1937, SET FORTH IN YOUR LETTER, MR. SCHMIDT WAS PAID PROPERLY UNDER THE PANAMA CANAL REGULATIONS FOR THE WEEK OR PERIOD OF SEVEN DAYS OF LEAVE BEGINNING SUNDAY, MAY 2, AND ENDING SATURDAY, MAY 8, A TOTAL OF $67.20 (8 TIMES $1.20 TIMES 7), WHICH WAS NOT LESS THAN THE "FULL-TIME WEEKLY EARNINGS" HE WOULD HAVE RECEIVED AS OF JUNE 1, 1932, FOR THE WEEK'S WORK. HE WAS ALSO PROPERLY PAID AT THE SAME RATE FOR MAY 1, 1937, WHICH WAS IN THE PRIOR WEEK OF EXTENDED LEAVE.

HOWEVER, FOR THE WEEK BEGINNING SUNDAY, MAY 23, 1937, AND ENDING SATURDAY, MAY 29, 1937, DURING WHICH HE WAS ON DUTY THREE DAYS AND ON AUTHORIZED LEAVE TWO DAYS (MAY 27 AND 28) HE WAS PAID (3 TIMES 8 TIMES $1.44) $34.56 PLUS (2 TIMES 8 TIMES $1.20) $19.20, A TOTAL OF $53.76, OR $3.84 LESS THAN $57.60 HE WOULD HAVE RECEIVED AS "FULL-TIME WEEKLY EARNINGS" AS OF JUNE 1, 1932. HENCE, THE EMPLOYEE IS ENTITLED TO BE PAID FOR THIS WEEK AN ADDITIONAL AMOUNT OF $3.84.

REFERRING TO PARAGRAPH 18 OF YOUR LETTER, QUESTION (A) IS ANSWERED IN THE NEGATIVE UNDER THE REGULATIONS; QUESTION (B), THE RATE SHOULD HAVE BEEN $1.44 PER HOUR; AND QUESTION (C) IS ANSWERED IN THE NEGATIVE.

AS AMPLIFIED HEREIN THE DECISION OF OCTOBER 18, 1937, 17 COMP. GEN. 348, IS AFFIRMED.

WHILE THE MATTER OF GRANTING LEAVE OF ABSENCE WITH PAY TO PANAMA CANAL EMPLOYEES UNDER REGULATIONS APPROVED BY THE PRESIDENT AS PROVIDED BY LAW IS PRIMARILY ADMINISTRATIVE, SINCE THE PAY ACCOUNTS OF PANAMA CANAL EMPLOYEES, INCLUDING PERIODS OF LEAVE, HAVE BECOME SO INVOLVED DUE TO CHANGES IN THE REGULATIONS AND THE EFFECT OF THE 40 HOUR WEEK STATUTE THEREON, PARTICULARLY THE REGULATION AUTHORIZING PAYMENT TO PER HOUR EMPLOYEES ON THE 40-HOUR WEEK OF COMPENSATION FOR NONWORK DAYS DURING AN EXTENDED LEAVE PERIOD, BUT NOT WHILE ON DUTY, THERE IS SUGGESTED FOR CONSIDERATION A PRACTICAL REVISION OF THE REGULATIONS BE MADE ALONG THE LINES OF THE PRESIDENT'S REGULATIONS FOR EMPLOYEES IN THE CONTINENTAL UNITED STATES, MAINTAINING, IF REQUIRED, A DIFFERENTIAL AS TO THE AMOUNT OF LEAVE GRANTED. SUCH CHANGES COULD BE MADE IN THE PRESENT REGULATIONS AS TO CONDUCIVE TO SIMPLICITY IN ACCOUNTING AND AT THE SAME TIME NOT JEOPARDIZE EITHER THE INTEREST OF THE GOVERNMENT OR THE EMPLOYEES.

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