A-89369, OCTOBER 18, 1937, 17 COMP. GEN. 348

A-89369, OCTOBER 18, 1937, 17 COMP. GEN. 348

LEAVES OF ABSENCE - FORTY-HOUR WEEK EMPLOYEES - COMPENSATION RATES - PANAMA CANAL AN EMPLOYEE OF THE PANAMA CANAL WHO REGULARLY WORKS 40 HOURS PER WEEK UNDER THE PROVISIONS OF THE 40-HOUR WEEK STATUTE (ACT, MARCH 28, 1934, 48 STAT. 522), IS ENTITLED TO COMPENSATION DURING PERIODS OF AUTHORIZED ANNUAL OR SICK LEAVE OF ABSENCE AT THE SAME RATE HE IS PAID WHILE WORKING, AND ADMINISTRATIVE REGULATIONS FIXING, FOR PERIODS OF LEAVE, A RATE LOWER THAN THE CURRENT RATE OF PAY, BASED UPON THE RATE BEFORE THE DATE OF SAID STATUTE WHEN HIS HOURLY--- BUT NOT WEEKLY--- RATE WAS LOWER, ARE NOT ONLY CONTRARY TO THE GENERAL RULE THAT AUTHORIZED LEAVE OF ABSENCE WITH PAY IS SYNONYMOUS WITH WORK OR A DUTY STATUS, BUT ALSO ARE IN CONFLICT WITH THE 40-HOUR WEEK STATUTE SAVING TO EMPLOYEES THEIR FULL TIME WEEKLY EARNINGS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE GOVERNOR OF THE PANAMA CANAL, OCTOBER 18, 1937:

YOUR LETTER OF SEPTEMBER 30, 1937, IS AS FOLLOWS:

YOUR DECISION IS REQUESTED AS TO WHETHER PAYMENT MAY BE MADE TO MR. LOUIS SCHMIDT, AN EMPLOYEE OF THE PANAMA CANAL, FOR THE DIFFERENCE BETWEEN PAY AT THE RATE OF $1.20 AND AT THE RATE OF $1.44 AN HOUR FOR 16 HOURS ON MAY 27 AND MAY 28, 1937, WHILE IN A SICK LEAVE STATUS.

THE MATERIAL FACTS IN THE CASE INVOLVED, THE REGULATIONS IN FORCE, THE METHOD OF COMPUTING COMPENSATION FOR SICK LEAVE, AND THE ADVERSE EFFECT OF A DECISION AUTHORIZING PAYMENT IN THIS CASE ARE SET FORTH IN A LETTER FROM THE GOVERNOR OF THE PANAMA CANAL, FROM WHICH THE FOLLOWING IS QUOTED:

"PURSUANT TO SECTION 23 OF THE INDEPENDENT OFFICES APPROPRIATION ACT (PUBLIC, NO. 141), WHICH WAS PASSED ON MARCH 28, 1934, MR. SCHMIDT'S RATING OF $1.20 AN HOUR AS WIREMAN ON THE 48-HOUR WEEK BASIS WAS INCREASED TO $1.44 AN HOUR ON THE 40-HOUR WEEK BASIS.

"THE PAYMENT TO WHICH HE REFERS WAS INCLUDED IN PAY-ROLL ITEM NO. 192 ON SHEET 20 OF ROLL 5250 FOR MAY 1937--- D.O. VOUCHER NO. 3442, IN THE JUNE 1937 ACCOUNTS OF MR. R. W. GLAW, PAYMASTER, THE PANAMA CANAL, AS FOLLOWS:

CHART

LOUIS SCHMIDT, WIREMAN, AT $1.44 AN HOUR:

ANNUAL LEAVE 5/1-5/8 (

( 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

"COMPUTATION OF THE PAYMENT WAS MADE IN ACCORDANCE WITH PARAGRAPH 3 (C) OF THE GOVERNOR'S CIRCULAR OF MAY 14, 1934. THIS PARAGRAPH WAS IN EFFECT UNTIL IT WAS SUPERSEDED BY THE CIRCULAR DATED JULY 24, 1937, EFFECTIVE AUGUST 1, 1937, WHICH WAS "APPROVED BY AUTHORITY OF THE ESIDENT," ON AUGUST 12, 1937, BY THE SECRETARY OF WAR.

"PRIOR TO THE LAW OF MARCH 28, 1934, PANAMA CANAL PRACTICE WITH RESPECT TO HOURLY EMPLOYEES MAY BE SUMMARIZED:

" "/A) NORMAL WORK WEEK WAS 6 DAYS OF 8 HOURS. EMPLOYEE WORKING THE NORMAL WEEK RECEIVED 48 TIMES THE HOURLY RATE OF PAY.

" "/B) EMPLOYEE ON LEAVE HAD EVERY DAY OF ABSENCE INCLUDING SUNDAYS AND HOLIDAYS CHARGED TO LEAVE AND WAS PAID FOR EACH SUCH DAY AT THE RATE OF 8 HOURS PER DAY. FOR A NORMAL WEEK OF LEAVE HE RECEIVED 7 TIMES 8, OR 56, HOURS OF PAY.'

"FOLLOWING THE ENACTMENT OF THE LAW OF MARCH 28, 1934, THE FOLLOWING PREVAILED:

" "/A) FORMER 48-HOUR WORK WEEK BECAME 40 HOURS; RATE OF PAY PER HOUR AT WORK WAS INCREASED BY 20 PERCENT, SO THAT WEEKLY COMPENSATION REMAINED SAME.

" "/B) FOR LEAVE IN EXCESS OF 10 DAYS, EVERY DAY OF ABSENCE WAS CHARGED AGAINST LEAVE AND PAID FOR AT 8 HOURS PER DAY; BUT THE HOURLY RATE OF PAY FOR SUCH LEAVE WAS THAT IN EFFECT PRIOR TO LAW OF MARCH 28, 1934; I.E., 5/6 OF THE NEW RATE PER HOUR OF WORKING TIME, OR IF IT WAS LEAVE ACCUMULATED PRIOR TO MARCH 28, 1934, IT WAS PAID AT THE RATE EARNED UNDER THE RULES. AN EMPLOYEE ON SUCH LEAVE RECEIVED FOR 7 DAYS OF ABSENCE 56 HOURS OF PAY AT 5/6 OF USUAL HOURLY RATE.

" "/C) A RULE WAS ESTABLISHED, EFFECTIVE MARCH 28, 1934, THAT IN CASE OF LEAVE OF 10 DAYS OR LESS, SUNDAYS, HOLIDAYS, AND OTHER NONWORK DAYS WOULD NOT BE CHARGED TO LEAVE AND NOT BE PAID FOR; BUT FOR SUCH TIME AS IS CHARGED TO LEAVE, PAYMENT IS MADE AT RATE OF 8 HOURS PER DAY AT 5/6 OF THE RATE OF PAY FOR WORKING HOURS. THIS RULE WAS ESTABLISHED SO AS NOT TO CHARGE NONWORK DAYS, TAKEN IN CONNECTION WITH A SHORT ABSENCE ON LEAVE, AGAINST THE EMPLOYEE'S LEAVE.'

"ACTION UNDER THE RULE (C) ABOVE WAS TAKEN IN THE CASE CITED BY MR. SCHMIDT. FOR 2 DAYS OF LEAVE HE RECEIVED 16 HOURS OF PAY AT 5/6 OF THE REGULAR RATE. HIS PAY FOR THE WEEK WAS FOR 3 DAYS OF WORK AT $1.44 PER HOUR AND 2 DAYS OF LEAVE AT $1.20 PER HOUR, A TOTAL OF $53.76. FOR 40 HOURS OF WORK AT HIS REGULAR RATE OF $1.44 THE PAY IS $57.60. MR. SCHMIDT CLAIMS HIS WEEKLY COMPENSATION, EVEN IN CONNECTION WITH LEAVE, SHOULD NOT BE LESS THAN THE $57.60 HE RECEIVED FOR A WEEK'S WORK PRIOR TO THE ACT OF MARCH 28, 1934.

"THE REASON WHY THE $1.20 RATE IS PAID FOR LEAVE AND THE $1.44 RATE FOR WORK TIME IS THAT THE ,THOMAS AMENDMENT" CHANGED THE WORKING HOURS BY DECREASING THEM IN THE CANAL SERVICE FROM 48 TO 40 PER WEEK, THEREBY INCREASING THE HOURLY PAY CORRESPONDINGLY BY 20 PERCENT,BUT THE LEAVE HOURS OR DAYS WERE NOT CHANGED AND WE CONTINUED TO GRANT LEAVE ON THE OLD BASIS OF 56 HOURS PER WEEK FOR HOURLY EMPLOYEES, OR ONE DAY'S PAY AT THE OLD RATE FOR EACH DAY'S ABSENCE. THIS EXPEDIENT WAS ADOPTED BECAUSE OUR LEAVE REGULATIONS CONTAINED IN EXECUTIVE ORDER OF FEBRUARY 2, 1914, ALLOWED A DEFINITE NUMBER OF DAYS OF LEAVE WITH PAY AND REQUIRED THAT THIS LEAVE SHOULD BE BASED ON A DAY OF HOURS. WHEN WE WERE FORCED TO ADOPT THE 40-HOUR SCHEDULE, SOME OF OUR MEN WORKED 8 HOURS PER DAY, SOME 7 HOURS, AND SOME 6 2/3 HOURS. IT SIMPLIFIED THE LEAVE PROBLEM TO CONTINUE TO GRANT THE LEAVE UNDER THE RULES EXISTING WITHOUT CHANGE IN PAY OR NUMBER OF DAYS ALLOWABLE PER ANNUM, ON THE ASSUMPTION THAT THERE IS NO LEGAL BASIS FOR PAYING THE INCREASED RATE (NECESSITATED BY THE CHANGED WORK WEEK) FOR LEAVE TIME WHERE THE CONDITIONS WERE NOT CHANGED. LEAVE TIME, THEREFORE, WAS COMPENSATED AT THE SAME DAILY PAY AS BEFORE THE THOMAS AMENDMENT. IN OTHER WORDS, WORK TIME WAS PAID THE SAME WEEKLY COMPENSATION AS BEFORE, BY A 20 PERCENT HIGHER RATE FOR A 40-HOUR WEEK. LEAVE TIME WAS PAID THE SAME DAILY COMPENSATION WITHOUT CHANGING THE NUMBER OF DAYS OR HOURS PER DAY OF LEAVE TIME. WHETHER THE LEAVE TIME WAS USED A DAY AT A TIME OR IN LONG PERIODS DOES NOT AFFECT THE PRINCIPLE.'

WHILE THE AMOUNT INVOLVED IN THIS CASE IS SMALL, IT MERITS CAREFUL CONSIDERATION IN VIEW OF THE FACT THAT THERE ARE THOUSANDS OF SIMILAR CASES. IN THE EVENT THAT YOU DECIDE THAT PAYMENT IS AUTHORIZED THERE WILL BE FOR ADJUSTMENT SIMILAR PAYMENTS FOR LEAVE TAKEN DURING THE PERIOD FROM MARCH 26, 1934 TO JULY 31, 1937, THE PERIOD DURING WHICH PAYMENTS WERE MADE IN ACCORDANCE WITH THE CIRCULAR OF MAY 14, 1934.

THE CLAIMANT'S LETTER TO YOU DATED JULY 29, 1937, IS AS FOLLOWS:

THE WEEK BEGINNING MAY 24, I WORKED 3 DAYS 24, 25, 26 THIS YEAR AND WAS PAID FOR AT THE RATE OF $1.44 PER HR. AND MAY 27 AND 28, OF THE SAME WEEK I WAS OFF SICK WITH A HEAVY COLD AND I WAS COVERED BY A FORM 484. FOR THESE TWO DAYS I WAS PAID AT THE RATE OF $1.20 PER HOUR, WHICH REPRESENTS A LOSS OF $1.92 PER DAY. I AM MAKING A CLAIM FOR THE DIFFERENCE IN PAY DUE ME. MY INTERPRETATION OF THE 40 HR. LAW IS AS FOLLOWS, THAT THE WEEKLY COMPENSATION SHALL NOT BE REDUCED, AND IN THE ABOVE CLAIM IT HAS BEEN, AS WELL AS OTHER CASES. AND IN VIEW OF THE RECENT RULING OF THE COURT OF CLAIMS IN WASH., D.C., AN EMPLOYEE LEAVE IS PART OF HIS COMPENSATION. AM OF THE OPINION THAT MY CLAIM IS LEGAL AND JUST.

SECTION 23 OF THE ACT OF MARCH 28, 1934, 48 STAT. 522, PROVIDES 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 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.

PARAGRAPH 3 (C) OF THE GOVERNOR'S CIRCULAR DATED MAY 14, 1934, ISSUED BY REASON OF THE ABOVE QUOTED ENACTMENT, WAS AS FOLLOWS:

(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.

IT IS UNDERSTOOD THIS REGULATION WAS IN FORCE UNTIL AUGUST 1, 1937, HAVING BEEN SUPERSEDED AND RENDERED INOPERATIVE EFFECTIVE THAT DATE BY CIRCULAR DATED JULY 24, 1937.

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.

ACCORDINGLY, LOUIS SCHMIDT, WHOSE CASE HAS BEEN PRESENTED, SHOULD HAVE BEEN PAID WHILE ABSENT 5 DAYS ON AUTHORIZED ANNUAL LEAVE AND 2 DAYS ON AUTHORIZED SICK LEAVE AT THE RATE OF $1.44 PER HOUR, THE SAME RATE HE WAS PAID WHILE WORKING, FIXED PURSUANT TO THE 40-HOUR-WEEK STATUTE, INSTEAD OF $1.20 PER HOUR THE RATE IN FORCE PRIOR TO SAID STATUTE.