B-148334, JUN. 28, 1963

B-148334, JUN. 28, 1963

TO MR. LAWRENCE P. O-BRIEN:

YOUR LETTER OF JUNE 17, 1963, PRESENTS SEVERAL QUESTIONS CONCERNING THE BACK PAY ALLOWED YOU UNDER OUR DECISION OF APRIL 15, 1963, B 148334, FOR A PERIOD OF UNWARRANTED LEAVE WITHOUT PAY AND SEPARATION FROM THE SERVICE. THE AMOUNT FOUND DUE YOU WAS DETERMINED BY THE GENERAL ACCOUNTING OFFICE AND NOT THE DEPARTMENT OF THE NAVY AS MIGHT BE INFERRED FROM YOUR LETTER.

PAYMENT OF THE AMOUNT DUE WAS AUTHORIZED BY OUR OFFICE SETTLEMENT OF APRIL 22, 1963. SALARY WAS FOUND DUE YOU FOR THE PERIOD JUNE 1, 1961, TO AUGUST 18, 1962, IN THE AMOUNT OF $8,363.15, FROM WHICH THERE WAS DEDUCTED THE SUM OF $763.80 REPRESENTING INTERIM EARNINGS AS REPORTED TO US BY YOU IN YOUR LETTER OF FEBRUARY 12, 1963, LEAVING A BALANCE DUE YOU OF $7,599.35. FROM THIS AMOUNT THE FOLLOWING ITEMS WERE WITHHELD IN ACCORDANCE WITH LAW:

TABLE

CIVIL SERVICE RETIREMENT, EMPLOYEES' $ 452.60

FEDERAL WITHHOLDING TAX 1,367.88

GROUP LIFE INSURANCE, EMPLOYEES' 45.00

THIS RESULTED IN A NET AMOUNT BEING PAID TO YOU OF $5,733.87.

YOU WERE FOUND TO BE ENTITLED TO BACK PAY UNDER THE PROVISIONS OF SECTION 6 OF THE ACT OF AUGUST 24, 1912, 37 STAT. 555, AS AMENDED BY THE ACT OF JUNE 10, 1948, 62 STAT. 354, 5 U.S.C. 652 (B) (2), WHICH PROVIDES:

"ANY PERSON WHO IS DISCHARGED, SUSPENDED, OR FURLOUGHED WITHOUT PAY, UNDER SECTION 863 OF THIS TITLE, WHO, AFTER ANSWERING THE REASONS ADVANCED FOR SUCH DISCHARGE, SUSPENSION, OR FURLOUGH OR AFTER AN APPEAL TO THE CIVIL SERVICE COMMISSION, AS PROVIDED UNDER SUCH SECTION, IS REINSTATED OR RESTORED TO DUTY ON THE GROUND THAT SUCH DISCHARGE,SUSPENSION, OR FURLOUGH WAS UNJUSTIFIED OR UNWARRANTED, SHALL BE PAID COMPENSATION AT THE RATE RECEIVED ON THE DATE OF SUCH DISCHARGE, SUSPENSION, OR FURLOUGH FOR THE PERIOD FOR WHICH HE RECEIVED NO COMPENSATION WITH RESPECT TO THE POSITION FROM WHICH HE WAS DISCHARGED, SUSPENDED, OR FURLOUGHED, LESS ANY AMOUNTS EARNED BY HIM THROUGH OTHER EMPLOYMENT DURING SUCH PERIOD, AND SHALL FOR ALL PURPOSES, EXCEPT THE ACCUMULATION OF LEAVE BE DEEMED TO HAVE RENDERED SERVICE DURING SUCH PERIOD.'

SINCE 5 U.S.C. 652 (B) (2) PROVIDES THAT A PERIOD OF REMOVAL, SUSPENSION OR FURLOUGH MAY NOT BE CONSIDERED SERVICE FOR THE ACCUMULATION OF LEAVE, A PERSON ENTITLED TO COMPENSATION THEREUNDER MAY NOT RECEIVE CREDIT FOR LEAVE WHICH WOULD HAVE ACCUMULATED DURING THE PERIOD HAD HE BEEN EMPLOYED.

WITHHOLDING OF FEDERAL INCOME TAX FROM BACK PAY SETTLEMENTS IS MADE IN ACCORD WITH INTERNAL REVENUE SERVICE RULING 57-603, C.D. 1957 2,705, THAT SUCH WITHHOLDING IS REQUIRED UNDER SECTION 3402 OF THE 1954 INTERNAL REVENUE CODE. OUR ACTION IN WITHHOLDING THE TAX IS NOT AN ADJUDICATION OF YOUR TAX LIABILITY. ANY QUESTIONS YOU MAY HAVE REGARDING YOUR TAX LIABILITY SHOULD BE ADDRESSED TO THE INTERNAL REVENUE SERVICE.

IN REGARD TO DEDUCTION OF INTERIM EARNINGS, 5 U.S.C. 652 (B) (2) PROVIDES THAT THE COMPENSATION PAYABLE THEREUNDER SHALL BE "LESS ANY AMOUNTS EARNED BY HIM THROUGH OTHER EMPLOYMENT DURING SUCH PERIOD.' ALL EARNINGS EXCEPT ADDITIONAL EARNINGS WHICH AN EMPLOYEE WOULD HAVE MADE REGARDLESS OF HIS SUSPENSION OR REMOVAL MUST BE DEDUCTED FROM RETROACTIVE COMPENSATION. 150550, JANUARY 28, 1963, COPY ENCLOSED. THE RECORD DOES NOT SHOW THAT YOU HAD INCOME FROM OUTSIDE EMPLOYMENT DURING THE TIME YOU WERE EMPLOYED AT GUANTANAMO BAY, CUBA, THAT CONTINUED DURING THE PERIOD OF LEAVE WITHOUT PAY AND SEPARATION, NOR DOES IT SEEM POSSIBLE THAT OUTSIDE EMPLOYMENT WOULD HAVE BEEN AVAILABLE. THEREFORE, THE DEDUCTION OF ALL THE INTERIM EARNINGS REPORTED BY YOU IS REQUIRED UNDER 5 U.S.C. 652 (B) (2) AND IS CORRECT.

AS YOU HAVE INDICATED IN YOUR LETTER, SECTION 1 OF THE ACT OF AUGUST 26, 1950, PUB.L. 81-733, 64 STAT. 476, 5 U.S.C. 22-1, PERTAINS TO SUSPENSIONS FOR SECURITY REASONS, AND, THEREFORE, IS NOT APPLICABLE TO YOUR CASE. WHILE BACK PAY RIGHTS VARY UNDER EXISTING LEGISLATION,THE BILL REFERRED TO IN THE CLIPPING ATTACHED TO YOUR LETTER, H.R. 4837, WILL, IF ENACTED, PROVIDE BROADER COVERAGE AND A MORE UNIFORM APPROACH TO BACK PAY RIGHTS.

YOU CLAIM INTEREST ON THE AMOUNT OF YOUR BACK PAY. INTEREST ON CLAIMS AGAINST THE UNITED STATES CANNOT BE RECOVERED IN THE ABSENCE OF AN EXPRESS PROVISION TO THE CONTRARY IN THE RELEVANT STATUTE OR CONTRACT. 40 COMP. GEN. 286. NO SUCH PROVISION HAS BEEN MADE FOR THE PAYMENT OF INTEREST ON COMPENSATION PAYABLE UNDER 5 U.S.C. 652 (B) (2). THEREFORE, YOU ARE NOT ENTITLED TO INTEREST ON THE AMOUNT FOUND DUE YOU. THE CASE REFERRED TO BY YOU CONCERNED INTEREST PAYABLE BY A PRIVATE, NON-GOVERNMENTAL EMPLOYER, AND PROVIDES NO AUTHORITY FOR PAYMENT BY THE UNITED STATES OF INTEREST ON THE AMOUNT ALLOWED YOU.