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Computation of Pay Rates for Alaska National Guard Technicians

B-193977 Jun 09, 1980
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Highlights

Alaska National Guard technicians alleged that their pay rates were improperly set pursuant to legislation which converted the various State National Guard technicians to Federal employee status. Although the technicians were State employees prior to the effective date of the law, their pay was set by the Secretary of the Army at Federal salary rates. This pay rate was equal to that of technicians in the 48 contiguous States plus a 25 percent cost-of-living allowance. Upon conversion to Federal employee status, the cost-of-living allowance was excluded in determining the basic pay rates. Prior to the conversion, the cost-of-living allowance was subject to Federal income tax while the cost-of-living allowance to Federal employees was exempt from Federal tax. The technicians argued that since the cost-of-living allowances were treated as basic pay for Federal tax purposes, they also should be treated as basic pay for the purpose of establishing their General Schedule rates. GAO found that the law controlled the conversion of the technicians to Federal status and the establishment of their compensation in the General Schedule. It was held that the Alaska National Guard technicians may not include the cost-of-living allowances received prior to the effective date of the law in setting their basic pay rates in the General Schedule. With respect to the contention that the cost-of-living allowance was basic compensation because taxes were paid on it, it was held that the taxability of the allowance had no effect on the pay rate the technicians were entitled to receive under the General Schedule. Thus, the General Schedule compensation of the Alaska National Guard was correctly computed by excluding the cost-of-living allowance the technicians received prior to the effective date of the law.

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