B-159121, JUN. 6, 1966, 45 COMP. GEN. 757

B-159121, JUN. 6, 1966, 45 COMP. GEN. 757

COMPENSATION - DOUBLE - EXEMPTIONS - EMPLOYER-EMPLOYEE RELATIONSHIP ABSENT A REGULAR AIR FORCE OFFICER WHO UPON RETIREMENT UNDER 10 U.S.C. 8911 IS EMPLOYED AS A CIVILIAN DENTIST INA FAMILY DENTAL CLINIC AT A MILITARY INSTALLATION ESTABLISHED BECAUSE DENTAL CARE IS EXCLUDED FROM THE DEPENDENTS' MEDICAL CARE ACT, 10 U.S.C. 1077 (D/--- A CLINIC THAT IS NEITHER A GOVERNMENTAL INSTRUMENTALITY NOR A NONAPPROPRIATED FUND ACTIVITY --- DOES NOT HOLD A CIVILIAN OFFICE AT THE CLINIC WITHIN THE MEANING OF SECTION 101 (3) OF THE DUAL COMPENSATION ACT, THE RETIRED OFFICER SERVING AS A CIVILIAN DENTIST WITHOUT A CONTRACT OR TENURE OF EMPLOYMENT, FREE OF FEDERAL CONTROL OR SUPERVISION, AND COMPENSATED ON THE BASIS OF INDIVIDUAL FEES THAT ARE SUBJECT TO THE EMPLOYER'S SHARE OF SOCIAL SECURITY TAXES, AND THE CLINIC'S SHARE OF OPERATING EXPENSES AND NONEXPENDABLE EQUIPMENT COSTS, AND ABSENT A FEDERAL EMPLOYER EMPLOYEE RELATIONSHIP, THE DEDUCTIONS MADE FROM THE OFFICER'S RETIRED PAY PURSUANT TO THE DUAL COMPENSATION ACT MAY BE REFUNDED TO HIM.

TO LIEUTENANT COLONEL J. J. VANYA, DEPARTMENT OF THE AIR FORCE, JUNE 6, 1966:

REFERENCE IS MADE TO YOUR UNDATED LETTER FORWARDED HERE UNDER DATE OF MAY 4, 1966, BY THE DIRECTORATE OF ACCOUNTING AND FINANCING, HEADQUARTERS UNITED STATES AIR FORCE, REQUESTING A DECISION WHETHER THE SUM OF $639.84 DEDUCTED FROM THE RETIRED PAY OF LIEUTENANT COLONEL BERNARD B. MORGAN FOR THE PERIOD NOVEMBER 1, 1965, THROUGH JANUARY 31, 1966, PURSUANT TO THE DUAL COMPENSATION ACT, PUBLIC LAW 88-448, 78 STAT. 484, 5 U.S.C. 3101 NOTE, MAY BE REFUNDED TO HIM. YOUR REQUEST FOR DECISION HAS BEEN ASSIGNED NO. DO-AF-906 BY THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE.

COLONEL MORGAN, A REGULAR AIR FORCE OFFICER, WAS RETIRED MAY 1, 1964, UNDER THE PROVISION OF 10 U.S.C. 8911. HE SERVED AS A CIVILIAN DENTIST IN THE FAMILY DENTAL CLINIC AT SCOTT AIR FORCE BASE, ILLINOIS, DURING THE PERIOD FROM JUNE 15, 1965 TO JANUARY 31, 1966. IN AN OPINION DATED JANUARY 11, 1966, OF THE STAFF JUDGE ADVOCATE AT SCOTT AIR FORCE BASE IT IS STATED THAT THE FAMILY DENTAL CLINIC AT SCOTT AFB IS NOWHERE SPECIFICALLY PROVIDED FOR BY STATUTE, REGULATION, OR OFFICIAL DIRECTIVE, AND IS NOT A NORMAL TYPE OF GOVERNMENTAL INSTRUMENTALITY OR NONAPPROPRIATED FUND ACTIVITY, BUT WAS ESTABLISHED IN JULY 1957 AS AN EXPERIMENTAL FACILITY TO TEST THE FEASIBILITY OF PROVIDING LOW-COST DENTAL SERVICE TO MILITARY FAMILY MEMBERS FOR WHOM FREE MILITARY OR GOVERNMENTAL DENTAL SERVICE WAS NOT AVAILABLE. AS SUCH IT WAS ESTABLISHED AS A PART OF THE CENTRAL BASE FUND (MILITARY WELFARE FUND), A NONAPPROPRIATED FUND UNDER AFR 176-1, ADMINISTERED BY THE SCOTT AFB CENTRAL BASE WELFARE COUNCIL, AND NOT AS A PART OF THE SCOTT AFB DENTAL SERVICE, ALTHOUGH THE OPERATION WAS TO BE UNDER THE GENERAL SUPERVISION OF THE BASE DENTAL SURGEON, WHO SERVED AS A MEMBER OF THE WELFARE COUNCIL AS AN ADDITIONAL DUTY. ALTHOUGH NOT SPECIFICALLY AUTHORIZED BY LAW OR REGULATION, IT IS REPORTED THAT THE FAMILY DENTAL CLINIC WAS APPROVED AS BEING "LEGALLY UNOBJECTIONABLE" AND "IN ACCORD WITH" MILITARY REGULATIONS IN LEGAL OPINIONS ISSUED BY THE JUDGE ADVOCATE GENERAL, UNITED STATES AIR FORCE, AND THE OFFICE OF THE GENERAL COUNSEL, DEPARTMENT OF DEFENSE, EARLY IN 1958.

THE OPINION FURTHER STATES THAT WHEN FIRST ESTABLISHED IN 1957 THE FAMILY DENTAL CLINIC WAS OPERATED UNDER VERY CLOSE AND DIRECT SUPERVISION AND CONTROL OF THE BASE DENTAL SURGEON AND THE CENTRAL BASE FUND COUNCIL AND THAT INITIALLY A CLEAR EMPLOYER-EMPLOYEE RELATIONSHIP WAS INTENDED AND ESTABLISHED BETWEEN THE CENTRAL BASE FUND AND THE CIVILIAN DENTISTS, WHO WERE HIRED WITH A DEFINITE MONTHLY SALARY AND ROUTINE, CIVIL-SERVICE TYPE EMPLOYMENT CONTRACTS. AT THAT TIME ALL FEES COLLECTED BY THE CLINIC WERE PROPERTY OF THE CENTRAL BASE FUND AND WERE COMMINGLED WITH THE OTHER LIQUID ASSETS OF THE FUND, THROUGH WHICH SURPLUS GOVERNMENT-OWNED FACILITIES, FURNISHINGS AND DENTAL EQUIPMENT WERE PROVIDED FOR THE USE OF THE CLINIC. THE CENTRAL BASE FUND ALSO PAID FOR ALL UTILITIES, SUPPLIES, AND OPERATING EXPENSES OF THE CLINIC AND ESTABLISHED THE FEE SCHEDULE FOR DENTAL SERVICES AS WELL AS PERFORMING ALL BOOKKEEPING SERVICES FOR THE CLINIC.

THE BASIS OF THE DENTISTS' COMPENSATION HAS SUBSTANTIALLY CHANGED FROM A GUARANTEED MONTHLY SALARY AT THE TIME OF THE CLINIC'S ESTABLISHMENT IN 1957 TO WHAT IN EFFECT NOW IS A NET FEES-EARNED BASIS. UNDER THE PRESENT SYSTEM A RECORD IS KEPT OF ALL FEES CHARGED AND COLLECTED BY EACH INDIVIDUAL DENTISTS. TEN PERCENT IS DEDUCTED FROM EACH DENTIST'S FEE INCOME FOR THE EMPLOYER'S SHARE OF SOCIAL SECURITY TAXES, THE CLINIC'S SHARE OF THE COST OF ACCOUNTING SERVICES AND FOR NONEXPENDABLE EQUIPMENT, FURNISHINGS, AND ANY DENTAL EQUIPMENT REQUIRED. BASED ON THE RATIO OF INDIVIDUAL FEE EARNINGS THE FUND THEN ALLOCATES AMONG THE CIVILIAN DENTISTS THE COMPENSATION PAID TO HOURLY PAID CLINIC PERSONNEL, GENERAL CLINIC SUPPLIES, AND TELEPHONE EXPENSES. THE COST OF SPECIAL DENTAL SUPPLIES AND PROSTHETIC DEVICES ORDERED BY EACH DENTIST IS DEDUCTED FROM HIS INDIVIDUAL REMAINING FEE INCOME RECEIVED; DEDUCTIONS ARE THEN MADE FOR SOCIAL SECURITY AND INCOME TAXES, BASED ON THE NET FEE INCOME.

IT IS STATED FURTHER THAT THE BASE DENTAL SURGEON AND THE CENTRAL BASE FUND COUNCIL NO LONGER EXERCISE A SUBSTANTIAL DEGREE OF DIRECT SUPERVISION OR CONTROL OVER THE DAY-TO-DAY OPERATION OF THE FAMILY DENTAL CLINIC AND ITS PERSONNEL, BUT THAT THE CIVILIAN DENTISTS THEMSELVES EXERCISE PRIMARY CONTROL OVER BOTH THE OPERATION OF THE CLINIC AND THE CLINIC EMPLOYEES, DETERMINE THEIR OWN WORK SCHEDULE, AND CAN MODIFY THE HOURS OF CLINIC OPERATION. THE CIVILIAN DENTISTS ORDER DIRECTLY WHAT SUPPLIES THEY REQUIRE FROM CIVILIAN DENTAL SUPPLY HOUSES OR LABORATORIES OF THEIR OWN CHOOSING; SUPPLIERS' INVOICES ARE SENT DIRECTLY TO THE CLINIC, WHERE THEY ARE APPROVED BY THE CIVILIAN DENTISTS, ALTHOUGH THEY ARE SENT TO THE CENTRAL BASE FUND FOR PAYMENT OUT OF CURRENT CLINIC RECEIPTS.

THE DENTISTS HAVE NO WRITTEN CONTRACT OF EMPLOYMENT WITH THE CENTRAL BASE FUND, HAVE NO DEFINITE UNDERSTANDING REGARDING TENURE OR TERM OF EMPLOYMENT, NO JOB CLASSIFICATION OR PAY GRADE, NO WRITTEN JOB DESCRIPTION, NOR ANY PAY SCHEDULE; THEY RECEIVE NO WRITTEN PERFORMANCE OF EFFICIENCY RATING, NO PAID ANNUAL OR SICK LEAVE, AND ARE NOT ELIGIBLE FOR PARTICIPATION IN THE NONAPPROPRIATED FUND EMPLOYEES' GROUP LIFE INSURANCE AND ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE COVERAGE OR IN THE NONAPPROPRIATED FUND EMPLOYEES' MEDICAL EXPENSE BENEFIT PLAN COVERAGE. CONTRAST, SCOTT AFB REGULATION 34-5 MAKES SUCH BENEFITS APPLICABLE TO ALL CENTRAL BASE FUND EMPLOYEES, INCLUDING THE DENTAL ASSISTANTS, RECEPTIONIST, AND JANITOR EMPLOYED AT THE CLINIC. THERE IS NO PROVISION FOR RETIREMENT OR PENSION PROTECTION AS AN EMPLOYEE AVAILABLE TO THE CLINIC DENTISTS.

IN DECISION OF JUNE 1, 1965, 44 COMP. GEN. 761, WE SAID THAT THE EXISTENCE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP DEPENDS NOT UPON THE NATURE OF THE WORK TO BE DONE BUT UPON THE METHOD CHOSEN TO ACCOMPLISH THAT WORK, AND THAT THE GENERALLY ACCEPTED TEST OF FEDERAL EMPLOYER EMPLOYEE RELATIONSHIP INCLUDES THREE REQUIREMENTS: FIRST, PERFORMANCE OF A FEDERAL FUNCTION; SECOND, APPOINTMENT OR EMPLOYMENT BY A FEDERAL OFFICER; AND THIRD, SUPERVISION AND DIRECTION BY A FEDERAL OFFICER. SECTION 103 (H) (4) OF THE DEPENDENTS' MEDICAL CARE ACT, 10 U.S.C. 1077 (D), EXCLUDES GENERAL CARE FOR DEPENDENTS FROM THE MEDICAL AND DENTAL CARE PROVIDED FOR DEPENDENTS OF MEMBERS OF THE UNIFORMED SERVICES. HENCE, IT DOES NOT APPEAR THAT THE DENTAL CARE PROVIDED BY THE FAMILY DENTAL CLINIC AT SCOTT AFB SHOULD BE REGARDED AS A FEDERAL FUNCTION WITHIN THE MEANING OF THAT GENERALLY ACCEPTED TEST. OF COURSE, THERE IS ALSO FOR CONSIDERATION THE GENERAL TEST OF THE SOURCE OF COMPENSATION. IN THE USUAL EMPLOYER- EMPLOYEE RELATIONSHIP THE COMPENSATION IS PAID BY THE EMPLOYER. HERE THE SOURCE OF COMPENSATION IS THE FEE PAID BY THE PERSON WHO RECEIVES THE DENTAL SERVICES PROVIDED BY THE CIVILIAN DENTISTS RATHER THAN THE CENTRAL BASE FUND (MILITARY WELFARE FUND), ALTHOUGH THAT FUND PROVIDES COLLECTION AND ACCOUNTING SERVICES FOR THE CLINIC AND ITS INDIVIDUAL CIVILIAN DENTISTS.

THE FACTS AS RELATED IN THE OPINION OF THE STAFF JUDGE ADVOCATE INDICATE THAT THERE IS NO APPOINTMENT IN THE GENERALLY ACCEPTED SENSE, ALTHOUGH DOUBTLESS ADMINISTRATIVE CONTROL IS EXERCISED OVER THE SELECTION OF CIVILIAN DENTISTS WHO PRACTICE THEIR PROFESSION IN THE FAMILY DENTAL CLINIC. LIKEWISE, THERE DOES NOT APPEAR TO BE ANY DIRECT SUPERVISION OR CONTROL OVER THE SERVICES OF THE CIVILIAN DENTISTS, ALTHOUGH PRESUMABLY THE PROFESSIONAL SERVICES AND PRACTICES OF THE DENTISTS GENERALLY MUST AT LEAST CONFORM TO A LEVEL OF COMPETENCE AND OTHER GENERAL STANDARDS THAT MAY BE PRESCRIBED BY THE BASE DENTAL SURGEON OR OTHER COGNIZANT LOCAL AUTHORITY, SUCH AS WOULD ORDINARILY BE REQUIRED OF A CONCESSIONAIRE OR INDEPENDENT CONTRACTOR. IN OTHER WORDS, WHAT SUPERVISION EXISTS PRESUMABLY RELATES TO THE RESULTS TO BE ACCOMPLISHED RATHER THAN CONSISTING OF ACTIVE DIRECTION AND CONTROL OVER THE DAY-TO-DAY ACTIVITIES OF THE CIVILIAN DENTISTS. THE DENTISTS IN EFFECT PROVIDE THEIR OWN EXPENDABLE SUPPLIES AND ARE CHARGED FOR THE FURNISHINGS AND EQUIPMENT FURNISHED BY THE CENTRAL BASE FUND. COMPARE 26 COMP. GEN. 468, 469. THEIR COMPENSATION IS BASED ON THEIR INDIVIDUAL FEES FOR THE DENTAL SERVICES RENDERED TO THE PATIENTS WHICH ARE PAID BY THE PATIENTS AND NOT BY THE CENTRAL BASE FUND.

THE CIRCUMSTANCES AS A WHOLE REASONABLY SUPPORT THE VIEW THAT THE CIVILIAN DENTISTS ARE NOT EMPLOYEES OF THE CENTRAL BASE FUND. THEREFORE IT IS OUR OPINION THAT COLONEL MORGAN DID NOT HOLD A CIVILIAN OFFICE WITHIN THE MEANING OF THAT TERM AS DEFINED IN SECTION 101 (3) OF THE DUAL COMPENSATION ACT, 5 U.S.C. 3101 (3) DURING THE PERIOD NOVEMBER 1, 1965 THROUGH JANUARY 31, 1966. ACCORDINGLY, THE SUM OF $639.84 DEDUCTED FROM HIS RETIRED PAY DURING THAT PERIOD MAY BE REFUNDED TO HIM, AND PAYMENT ON THE ENCLOSED VOUCHER IS AUTHORIZED.