B-30338, NOVEMBER 23, 1942, 22 COMP. GEN. 491

B-30338, NOVEMBER 23, 1942, 22 COMP. GEN. 491

COMPENSATION DIFFERENTIALS FOR POSITIONS OUTSIDE THE UNITED STATES - ADMINISTRATIVE AUTHORITY TO FIX PURSUANT TO SECTION 2 OF THE BROOKHART SALARY ACT OF JULY 3, 1930, THE HEADS OF EXECUTIVE DEPARTMENTS AND ESTABLISHMENTS ARE REQUIRED TO ADJUST THE COMPENSATION OF CIVILIAN FIELD SERVICE POSITIONS IN THE TERRITORIES AND INSULAR POSSESSIONS OF THE UNITED STATES AND IN FOREIGN COUNTRIES TO THE GRADES AND COMPENSATION SCHEDULES OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, UNLESS SUCH POSITIONS ARE EXPRESSLY EXCEPTED BY STATUTE FROM THE SAID CLASSIFICATION ACT. IN ADJUSTING, PURSUANT TO THE BROOKHART SALARY ACT OF JULY 3, 1930, THE COMPENSATION OF CIVILIAN FIELD SERVICE POSITIONS IN THE TERRITORIES AND INSULAR POSSESSIONS OF THE UNITED STATES AND IN FOREIGN COUNTRIES TO THE GRADES AND COMPENSATION SCHEDULES OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, IT IS WITHIN ADMINISTRATIVE DISCRETION, IF IT BE DETERMINED TO BE OTHERWISE IMPRACTICABLE TO RECRUIT PERSONNEL FOR SUCH POSITIONS, TO FIX A SALARY DIFFERENTIAL OF NOT TO EXCEED 25 PERCENT OF THE SALARY RATE AUTHORIZED TO BE FIXED FOR THE SAME OR SIMILAR POSITIONS IN THE STATES AND THE DISTRICT OF COLUMBIA. THE SALARY DIFFERENTIAL--- OF NOT TO EXCEED 25 PERCENT OF THE SALARY RATE AUTHORIZED TO BE FIXED FOR THE SAME OR SIMILAR POSITION IN THE STATES AND THE DISTRICT OF COLUMBIA--- WHICH MAY BE ADMINISTRATIVELY FIXED IN ADJUSTING, PURSUANT TO THE BROOKHART SALARY ACT OF JULY 3, 1930, THE GRADES AND COMPENSATION SCHEDULES OF CIVILIAN FIELD SERVICE POSITIONS IN THE TERRITORIES AND INSULAR POSSESSIONS OF THE UNITED STATES AND IN FOREIGN COUNTRIES IS NOT REQUIRED TO BE BASED ON THE MINIMUM SALARY RATE OF THE GRADE IN WHICH THE POSITION IS ALLOCATED, BUT MAY BE BASED ON ANY SALARY RATE OF SUCH GRADE TO WHICH THE PARTICULAR EMPLOYEE IS PROPERLY ENTITLED.

COMPTROLLER GENERAL WARREN TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, NOVEMBER 23, 1942:

I HAVE YOUR LETTER OF NOVEMBER 16, 1942, AS FOLLOWS:

THE COMMISSION HAS SEVERAL EMPLOYEES IN ITS BRANCH OFFICE AT HONOLULU, TERRITORY OF HAWAII, ALL OF WHOM ARE ALLOCATED ADMINISTRATIVELY TO SERVICES AND GRADES OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, AS DIRECTED BY SECTION 2 OF THE BROOKHART ACT OF JULY 3, 1930.

A SITUATION HAS RECENTLY ARISEN WHEREBY THROUGH ADMINISTRATIVE ACTION CERTAIN OTHER FEDERAL AGENCIES IN HAWAII HAVE GRANTED TO CIVILIAN EMPLOYEES COMPENSATED UNDER THE CLASSIFICATION ACT OF 1923, AS AMENDED, A SALARY DIFFERENTIAL IN VARYING AMOUNTS UP TO AND INCLUDING 25 PERCENT OF EITHER THE BASE PAY OF AN EMPLOYEE, OR THE MINIMUM SALARY RATE OF THE GRADE IN WHICH HIS POSITION IS ALLOCATED. AS FAR AS WE CAN ASCERTAIN, NO STATUTE EITHER PROVIDES FOR OR SPECIFICALLY PERMITS THE GRANTING OF SUCH DIFFERENTIALS IN HAWAII, EXCEPT BY PRESIDENTIAL ORDER UNDER THE PROCEDURES PRESCRIBED IN TITLE II OF THE RAMSPECK ACT OF NOVEMBER 26, 1940. THE FACTORS OF ISOLATION, PHYSICAL HARDSHIPS, OR HAZARDS WOULD IN GENERAL APPLY EQUALLY TO ALL FEDERAL CIVILIAN EMPLOYEES IN HAWAII AND THE ACTION OF ONE AGENCY IN ADMINISTRATIVELY ESTABLISHING, IN EFFECT, NEW PAY SCALES FOR THE GRADES OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, BY ADDING AN ARBITRARY PERCENTAGE DIFFERENTIAL HAS THE EFFECT OF DISRUPTING THE PREVIOUSLY UNIFORM PAY SCALES FOR WORK OF A GIVEN GRADE.

THIS SITUATION IS FURTHER AGGRAVATED WHEN OTHER AGENCIES ADMINISTRATIVELY ESTABLISH STILL OTHER RATES OF PAY DIFFERENTIAL. WE ARE INFORMED THAT IN ONE ESTABLISHMENT IN HAWAII THE DIFFERENTIAL ALLOWED EMPLOYEES RANGES FROM 3 TO 15 PERCENT; IN ANOTHER, THE DIFFERENTIAL ADDED TO SALARIES OF LESS THAN $2,000 IS 15 PERCENT, AND TO SALARIES OF MORE THAN $2,000 IS ADDED 12 1/2 PERCENT. ONE ESTABLISHMENT, WE ARE INFORMED, ADDS A DIFFERENTIAL OF 25 PERCENT TO THE BASE SALARY RECEIVED BY EACH EMPLOYEE, WHILE ANOTHER AGENCY PROPOSES TO PAY A DIFFERENTIAL OF 25 PERCENT ADDED TO THE MINIMUM RATE OF THE GRADE TO WHICH ITS POSITIONS ARE ALLOCATED. SOME AGENCIES ADD NO ARBITRARY PERCENTAGE DIFFERENTIAL WHATEVER, WHILE OTHERS HAVE REVISED THE CLASSIFICATION GRADES UPWARD IN ORDER TO INCREASE COMPENSATION. IF IT IS PERMISSIBLE TO ADD A 3, 12 1/2, 15 OR 25 PERCENT DIFFERENTIAL FOR HAWAII OR OTHER EXTRA-CONTINENTAL SERVICE, THE COMMISSION FEELS THAT IT WOULD BE EQUALLY POSSIBLE TO PAY A SUBSTANTIALLY LARGER DIFFERENTIAL IF, ADMINISTRATIVELY, IT WAS DETERMINED TO BE WARRANTED. ON THE OTHER HAND IF THIS IS CORRECT, IT SEEMS TO FOLLOW THAT THE RATES OF THE COMPENSATION SCHEDULES OF THE CLASSIFICATION ACT COULD ALSO BE REDUCED ON THE BASIS OF ADMINISTRATIVE NECESSITY.

THESE ADMINISTRATIVE ACTIONS, UNRESTRAINED BY A LACK OF STATUTORY AUTHORITY FOR SUCH DETERMINATIONS, ARE RAPIDLY LEADING TO A CHAOTIC SITUATION FOR THE VARIOUS FEDERAL AGENCIES IN HAWAII. AS HAWAII IS A CRITICAL WAR AREA WHERE THE SUPPLY OF QUALIFIED EMPLOYEES AND POTENTIAL APPOINTEES IS VERY LIMITED, SUCH A DISRUPTION HAS A PRONOUNCED EFFECT UPON MORALE AND UPON THE DIFFICULTIES EXPERIENCED IN RECRUITING AND RETAINING EMPLOYEES.

THE COMMISSION HAS HELD THE OPINION THAT THE COMPENSATION SCHEDULES OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, MUST BE FOLLOWED IN THE FIELD SERVICE, AND THAT UNLESS PERMITTED BY SPECIFIC STATUTE THERE IS NO AUTHORITY FOR CHANGING THE RATES OF THAT ACT ADMINISTRATIVELY BY MEANS OF SUCH DEVICES AS SALARY, DIFFERENTIALS AND FURTHER THAT THE MATTER OF SALARY DIFFERENTIALS AND THE ADJUSTMENT OF BASIC PAY SCHEDULES IS FOR CONGRESSIONAL ACTION ONLY.

CLARIFICATION OF THIS ISSUE IS URGENTLY NEEDED, AND THEREFORE AS THE COMMISSION IS NOT AWARE OF ANY DECISIONS BY YOUR OFFICE ON THIS MATTER, IT HAS ADMINISTRATIVELY DETERMINED TO PAY A DIFFERENTIAL OF 25 PERCENT OF THE MINIMUM RATE OF THE GRADE TO ALL OF ITS EMPLOYEES IN THE TERRITORY OF HAWAII. A PREAUDIT OF THE ENCLOSED PAYROLL AND A DECISION ON THE FOLLOWING QUESTIONS IS REQUESTED.

1. ARE HEADS OF DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS REQUIRED TO ADJUST THE COMPENSATION OF CIVILIAN POSITIONS IN THE FIELD SERVICE TO THE GRADES AND COMPENSATION SCHEDULES OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, WHERE SUCH POSITIONS ARE OUTSIDE THE STATES OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA AND (A) ARE IN THE TERRITORIES AND INSULAR POSSESSIONS OF THE UNITED STATES; OR (B) ARE IN FOREIGN COUNTRIES?

2. IF THE ANSWER TO THIS QUESTION IS IN THE AFFIRMATIVE, IS IT PERMISSIBLE FOR THE HEAD OF A DEPARTMENT OR INDEPENDENT ESTABLISHMENT TO ADMINISTRATIVELY ESTABLISH A SALARY DIFFERENTIAL TO BE ADDED TO AN EMPLOYEE'S PAY?

3. IF THE ANSWER TO QUESTION 2 IS IN THE AFFIRMATIVE, IS IT PERMISSIBLE TO ESTABLISH ANY RATE OF DIFFERENTIAL, FOR EXAMPLE, 3, 12 1/2, 25 OR 30 PERCENT?

4. IF THE ANSWER TO QUESTION 2 IS IN THE AFFIRMATIVE, WHAT CRITERIA ARE TO BE FOLLOWED IN DETERMINING THE PERCENTUM RATE OF SALARY DIFFERENTIAL?

5. IF THE ANSWER TO QUESTION 2 IS IN THE AFFIRMATIVE, WHAT IS THE MAXIMUM RATE OF SALARY DIFFERENTIAL WHICH CAN BE ESTABLISHED?

6. IF IT IS PERMISSIBLE TO ESTABLISH A DIFFERENTIAL, HOW SHOULD IT BE APPLIED--- TO THE MINIMUM RATE OF THE GRADE OF THE EMPLOYEE, OR TO THE BASE SALARY WHICH THE EMPLOYEE RECEIVES?

THE CLASSIFICATION ACT OF 1923 AND ITS AMENDMENTS CONTAIN NO LANGUAGE WHICH RESTRICTS OR PURPORTS TO RESTRICT ITS APPLICATION TO ANY GEOGRAPHIC AREA OR TO EXCLUDE FROM ITS APPLICATION POSITIONS IN ANY GEOGRAPHIC AREA. "FIELD POSITIONS ARE TO BE ALLOCATED TO SERVICES AND GRADES BY THE DEPARTMENTS CONCERNED, ON THE BASIS OF THEIR DUTIES AND RESPONSIBILITIES, AND THE CORRESPONDING SCALES OF PAY PLACED IN EFFECT. 9 COMP. GEN. 229, 231, DECEMBER 2, 1929; 10 COMP. GEN. 216, 218, NOVEMBER 13, 1930; 10 COMP. GEN. 349, FEBRUARY 10, 1931; 14 COMP. GEN. 448, DECEMBER 11, 1934.' SECTION 2 OF THE BROOKHART ACT MAKES SUCH ALLOCATION MANDATORY, 10 COMP. GEN. 20, 25, JULY 16, 1930.

YOUR OFFICE HAS UNIFORMLY HELD THAT "IN THE ABSENCE OF STATUTORY EXEMPTION, THE SALARY RATES OF PERSONNEL OF ALL FEDERAL AGENCIES, BOTH IN THE DEPARTMENTAL AND FIELD SERVICES, ARE REQUIRED TO BE FIXED IN ACCORDANCE WITH THE SCHEDULES OR RATES PRESCRIBED IN THE CLASSIFICATION ACT, AS ENDED.' 20 COMP. GEN. 211, 212; 14 COMP. GEN. 420; 16 COMP. GEN. 1107, 1109, AND OTHERS. AS STATED IN YOUR DECISION B-22862, OF JANUARY 8, 1942,"* * * THE CONGRESS HAS SHOWN A CLEAR PURPOSE AND INTENT THROUGHOUT THE CLASSIFICATION LEGISLATION (1) TO MAKE THE DISTINCTION BETWEEN THE DEPARTMENTAL SERVICE WHEREVER LOCATED AND THE FIELD SERVICE WHEREVER LOCATED * * * AND (3) TO VEST IN THE HEADS OF THE VARIOUS DEPARTMENTS AND ESTABLISHMENTS THE FINAL AUTHORITY TO APPROVE ALLOCATIONS IN PROPER GRADES OF ALL FIELD POSITIONS WHEREVER LOCATED. OF COURSE, THERE ARE EXCEPTED SUCH DEPARTMENTAL AND FIELD POSITIONS AS ARE EXPRESSLY EXCEPTED BY LAW FROM THE CLASSIFICATION ACTS, AS AMENDED.' THE POSITIONS IN HAWAII REFERRED TO ARE IN THE FIELD SERVICE. THEY HAVE NOT BEEN EXPRESSLY EXCEPTED BY LAW FROM THE PROVISIONS OF THE CLASSIFICATION ACT; THE POSITIONS HAVE BEEN ALLOCATED TO SERVICES AND GRADES BY THE DEPARTMENTS CONCERNED AND THE CORRESPONDING SCALES PLACED IN EFFECT AS APPARENTLY REQUIRED IN THE DECISIONS REFERRED TO ABOVE.

IN A DECISION OF YOUR OFFICE, A-32811, MAY 12, 1931, IT IS STATED THAT THE ALLOCATION OF PANAMA CANAL EMPLOYEES IN THE CANAL ZONE, "WHICH IS A FIELD SERVICE," ( ITALICS SUPPLIED), IS MANDATORY BY SECTION 2 OF THE BROOKHART SALARY ACT OF JULY 3, 1930. "THUS THE PRINCIPLES OF CLASSIFICATION ARE NOW REQUIRED TO BE APPLIED IN THE FIELD, INCLUDING PANAMA CANAL EMPLOYEES IN THE CANAL ZONE, BY ACTION OF THE ADMINISTRATIVE OFFICE.' THERE DOES NOT APPEAR TO BE A LINE OF DEMARCATION BETWEEN THE REQUIREMENTS UNDER THE BROOKHART ACT FOR ALLOCATING POSITIONS IN HAWAII, PUERTO RICO, THE PANAMA CANAL ZONE OR ANY OTHER TERRITORY AND INSULAR POSSESSION OF THE UNITED STATES.

THE REQUIREMENT AS TO THE NECESSITY OF ALLOCATING CIVILIAN FIELD POSITIONS LOCATED IN FOREIGN COUNTRIES, THE INCUMBENTS OF WHICH WERE RECRUITED IN THE UNITED STATES, MAY BE SOMEWHAT DIFFERENT FOR IN THE DECISION OF OCTOBER 6, 1925, 5 COMP. GEN. 235, YOUR OFFICE RULED THAT:

"WITH RESPECT TO THE FIELD POSITIONS IN THE FOREIGN SERVICE UNDER THE DEPARTMENT OF COMMERCE, MENTIONED IN YOUR LETTER OF SEPTEMBER 19, 1925, THE PERSONNEL CLASSIFICATION BOARD STATES IN LETTER TO YOU OF ITS CHAIRMAN DATED SEPTEMBER 17, 1925, AS FOLLOWS:

" "IN RESPONSE TO A VERBAL REQUEST FROM YOUR OFFICE, I AM WRITING TO CONFIRM THE STATEMENT MADE ORALLY THAT FOREIGN-SERVICE POSITIONS UNDER THE DEPARTMENT OF COMMERCE WERE NOT COVERED BY THE SURVEY OF FIELD- SERVICE POSITIONS MADE BY THE PERSONNEL CLASSIFICATION BOARD UNDER THE PROVISIONS OF SECTION 5 OF THE CLASSIFICATION ACT, AND THAT THE COMPENSATION SCHEDULES AND POSITION LISTS SUBMITTED BY THE BOARD TO CONGRESS INCLUDED NO PROVISION FOR SUCH POSITION.'"

"IT MAY BE CONCLUDED THAT THE ACTS OF DECEMBER 6, 1924, AND JANUARY 22, 1925, WERE ENACTED WITHOUT REFERENCE TO POSITIONS IN THE FOREIGN SERVICE UNDER THE DEPARTMENT OF COMMERCE.' (ATTENTION IS INVITED TO THE FACT THAT THIS DECISION WAS ONE AMONG THE EARLY LINE OF DECISIONS OF YOUR OFFICE HOLDING THAT CLASSIFICATION HAD NOT BEEN EXTENDED TO THE FIELD SERVICE GENERALLY AND THAT ONLY THOSE DEPARTMENTS OR AGENCIES FOR WHICH FUNDS WERE EXPRESSLY PROVIDED BY THE ACT OF DECEMBER 6, 1924, WERE REQUIRED TO MAKE ADJUSTMENTS OF SALARIES OF FIELD POSITIONS.)

THE POSITION EXCLUSIONS FROM THE 1924 SURVEY DIFFERED, HOWEVER, FROM THOSE OF THE SURVEY CONDUCTED BY THE PERSONNEL CLASSIFICATION BOARD UNDER PROVISIONS OF SECTION 2 OF THE ACT OF MAY 28, 1928 ( PUBLIC 555 - 70TH CONG.). STATUTORY EXCLUSIONS FROM THE SURVEY WERE SPECIFIED IN SECTION 2 OF THAT ACT AS CIVILIAN EMPLOYEES "OF THE POSTAL SERVICE, FOREIGN SERVICE, AND EMPLOYEES IN THE MECHANICAL AND DRAFTING GROUPS WHOSE WAGES ARE NOW, OR HAVE HERETOFORE BEEN, FIXED BY WAGE BOARDS OR SIMILAR AUTHORITY * * *.' ON ITS OWN MOTION THE PERSONNEL CLASSIFICATION BOARD DIRECTED THE VARIOUS ESTABLISHMENTS ALSO TO EXCLUDE FROM THEIR ALLOCATION LISTS:

"POSITIONS WHICH ARE FINANCED JOINTLY BY THE UNITED STATES AND A STATE, COUNTY, MUNICIPALITY, OR COOPERATING PERSONS OR ORGANIZATIONS OUTSIDE OF THE FEDERAL SERVICE, WHERE THE PAY OF SUCH POSITIONS IS FIXED UNDER A COOPERATIVE AGREEMENT WITH THE UNITED STATES.

"POSITIONS, NONE OR ONLY PART OF THE COMPENSATION OF WHICH IS PAID FROM THE FUNDS OF THE UNITED STATES.

"POSITIONS FILED BY INMATES, PATIENTS, OR BENEFICIARIES IN GOVERNMENT INSTITUTIONS.

"EMERGENCY, SEASONAL, OR OTHER POSITIONS WHICH ARE OF PURELY TEMPORARY DURATION AND WHICH ARE REQUIRED ONLY FOR VERY BRIEF PERIODS AT INTERVALS.

"POSITIONS FILLED BY PERSONS LOCALLY ON A FEE, CONTRACT, PART-TIME OR PIECE-WORK BASIS, WHO MAY LAWFULLY PERFORM THEIR DUTIES CONCURRENTLY WITH THEIR PRIVATE PROFESSION, BUSINESS, OR OTHER EMPLOYMENT, AND WHOSE DUTIES REQUIRE ONLY A PORTION OF THEIR TIME, WHERE IT IS IMPRACTICABLE TO ASCERTAIN THE PROPORTION OF TIME DEVOTED TO THE SERVICE OF THE UNITED STATES.

"POSITIONS FILLED BY CITIZENS OR NATIVES OF FOREIGN COUNTRIES AT RATES THERE PREVAILING.'

IT IS OF INTEREST TO NOTE THAT EMPLOYEES IN THE " FOREIGN SERVICE" WERE DESCRIBED BY THE BOARD, ( P.C.B. FORM NO. 18, P. 9), AS "OFFICERS AND EMPLOYEES OF THE FOREIGN SERVICE, OF THE STATE DEPARTMENT OR OF THE FOREIGN COMMERCE SERVICE OF THE DEPARTMENT OF COMMERCE.'

THE EFFECT OF THESE EXCLUSIONS, HOWEVER, WAS NOT TO REMOVE FROM THE SCOPE OF THE SURVEY ALL POSITIONS LOCATED OUTSIDE THE STATES OF THE UNITED STATES. IN DESCRIBING THE SCOPE OF THE FIELD SURVEY, THE CLOSING REPORT OF THE BOARD (P. 13), STATED THAT,"THE POSITIONS COVERED ARE LOCATED * * * IN CANADA, MEXICO AND 27 OTHER FOREIGN COUNTRIES.' QUESTIONNAIRES WERE SECURED DESCRIBING THE DUTIES AND RESPONSIBILITIES OF ALL POSITIONS LOCATED IN FOREIGN COUNTRIES EXCEPT THOSE SPECIFICALLY EXCLUDED AS DESCRIBED ABOVE. THEY WERE INCLUDED IN THE CLASS SPECIFICATIONS PREPARED AS AUTHORIZED BY SECTION 2 (C), AND IN THE ALLOCATION LISTS SPECIFIED IN SECTION 2 (D) OF THE WELCH ACT. IN ITS REPORT TO THE CONGRESS, (PAGE 301 OF THE CLOSING REPORT), THE BOARD DID NOT RECOMMEND THAT POSITIONS LOCATED OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES BE EXCLUDED FROM THE UNIFORM COMPENSATION SCHEDULES. THE ONLY RECOMMENDATION OF THIS TYPE MADE BY THE BOARD WAS THAT IT BE AUTHORIZED TO EXCLUDE FROM THE UNIFORM COMPENSATION SCHEDULES POSITIONS OUTSIDE THE CONTINENTAL UNITED STATES FILLED BY NATIVE CITIZENS OR FOREIGN NATIONALS. ( PAGE 364 IBID.)

TITLE II, SECTION 3 (A) OF THE RAMSPECK ACT OF NOVEMBER 26, 1940, AUTHORIZED THE PRESIDENT TO EXTEND THE PROVISIONS OF THE CLASSIFICATION ACT, AS AMENDED, TO ALL EXCEPT CERTAIN ENUMERATED GROUPS OF CIVILIAN EMPLOYEES. POSITIONS OCCUPIED BY CITIZENS OF THE UNITED STATES LOCATED OUTSIDE THE STATES OF THE UNITED STATES WERE NOT INCLUDED IN ONE OF THESE EXCLUDED GROUPS. THE IMPLICATION OF THESE PROVISIONS IS THAT THE PRESIDENT HAS THE AUTHORITY TO EXTEND THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, TO SUCH POSITIONS. SECTION 3 (C) OF THE ACT OF NOVEMBER 26, 1940, PROVIDES THAT IN ACCORDANCE WITH CERTAIN PROCEDURES AND UNDER CERTAIN CIRCUMSTANCES THE PRESIDENT MAY ESTABLISH SALARY DIFFERENTIALS IN THE COMPENSATION OF POSITIONS WHICH ARE LOCATED OUTSIDE THE STATES OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA, WITHOUT ANY GEOGRAPHIC LIMITATION. SECTION 4 OF THE ACT OF NOVEMBER 26, 1940, AUTHORIZES THE PRESIDENT TO EXCLUDE FROM THE PROVISIONS OF THE CLASSIFICATION ACT, AS AMENDED AND EXTENDED, CERTAIN TYPES OF POSITIONS. AMONG THESE ARE POSITIONS LOCATED OUTSIDE THE STATES OF THE UNITED STATES FILLED BY NATIVES OF TERRITORIES OR POSSESSIONS OF THE UNITED STATES OR BY FOREIGN NATIONALS. THIS POWER TO EXCLUDE IS DISCRETIONARY AND THE PRESIDENT MAY DECIDE THAT SUCH POSITIONS SHOULD BE COMPENSATED IN ACCORDANCE WITH THE UNIFORM COMPENSATION SCHEDULES OF THE CLASSIFICATION ACT. HOWEVER, ALTHOUGH THE PRESIDENT MAY EXTEND THE PROVISIONS OF THE CLASSIFICATION ACT TO SUCH POSITIONS, REGARDLESS OF THEIR OCCUPANTS, HE MAY EXCLUDE SUCH POSITIONS ONLY WHEN THEY ARE OCCUPIED BY NATIVES OF TERRITORIES AND POSSESSIONS OR BY FOREIGN NATIONALS.

AS STATED PREVIOUSLY, YOUR OFFICE HAS HELD UNIFORMLY THAT "IN THE ABSENCE OF STATUTORY EXEMPTION, THE SALARY RATES OF PERSONNEL OF ALL FEDERAL AGENCIES, BOTH IN THE DEPARTMENTAL AND FIELD SERVICES, ARE REQUIRED TO BE FIXED IN ACCORDANCE WITH THE SCHEDULES OR RATES PRESCRIBED IN THE CLASSIFICATION ACT, AS AMENDED; " IT ALSO HAS HELD, IN 16 COMP. GEN. 1107, JUNE 24, 1937, THAT "NO SIGNIFICANCE IS NOW GIVEN TO THE WORDS OF SECTION 2 OF THE ACT PURPORTING TO LIMIT THE SALARY ADJUSTMENT OF FIELD POSITIONS TO THOSE THE COMPENSATION OF WHICH WAS ADJUSTED BY THE ACT OF DECEMBER 6, 1924. ...'

HAVING IN MIND THESE DECISIONS, AND IN VIEW OF THE CONDITIONS ATTENDANT UPON THE SURVEY OF CIVILIAN POSITIONS IN THE FIELD SERVICE UNDER THE ACT OF MAY 28, 1928, WHICH DIFFERED ESSENTIALLY FROM THOSE LEADING TO YOUR DECISION OF OCTOBER 6, 1925, 5 COMP. GEN. 235, AND IN THE ABSENCE OF ANY GENERAL STATUTE WHICH EXCLUDES CIVILIAN POSITIONS LOCATED OUTSIDE THE STATES OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA FROM THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, THE COMMISSION ADMINISTRATIVELY HAS ALLOCATED POSITIONS IN ITS BRANCH OFFICE IN HAWAII TO GRADES AND SERVICES UNDER THAT ACT.

IN THE COMMISSION'S JUDGMENT, SALARY DIFFERENTIALS CAN ONLY BE AUTHORIZED PURSUANT TO EXPRESS AUTHORITY OF CONGRESS. FOR EXAMPLE, THE ACT OF MAY 25, 1938, 52 STAT. 442, AS AMENDED, ALLOWS, UNDER CERTAIN CONDITIONS, A 50 PERCENT DIFFERENTIAL TO GOVERNMENT EMPLOYEES DETAILED TO ANOTHER AMERICAN REPUBLIC, THE GOVERNMENT OF THE COMMONWEALTH OF THE PHILIPPINE ISLANDS, OR THE GOVERNMENT OF LIBERIA. THE PUBLIC ROADS ADMINISTRATION MAY, UNDER THE CONDITIONS PRESCRIBED IN SECTION 15 OF THE FEDERAL HIGHWAY ACT OF 1940 (54 STAT. 871), INCREASE THE COMPENSATION OF ANY EMPLOYEE ASSIGNED TO PERFORM ENGINEERING SERVICES BEYOND THE CONTINENTAL UNITED STATES BY NOT TO EXCEED TWENTY FIVE PERCENTUM OF HIS BASE PAY. FOR SEVERAL YEARS THERE HAVE BEEN INCLUDED IN THE ANNUAL APPROPRIATION ACTS FOR THE NAVY DEPARTMENT AND THE MILITARY ESTABLISHMENT PROVISIONS AUTHORIZING THE PAYMENT OF A 25 PERCENT DIFFERENTIAL TO CITIZENS OF PANAMA AND THE UNITED STATES OCCUPYING ,SKILLED, TECHNICAL, CLERICAL, ADMINISTRATIVE, EXECUTIVE, OR SUPERVISORY" POSITIONS ON THE CANAL ZONE IN ANY BRANCH OF THE GOVERNMENT.

IN CONNECTION WITH THE EXTENSION OF THE PROVISIONS OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, TITLE II OF THE RAMSPECK ACT OF NOVEMBER 26, 1940, PROVIDES THAT THE PRESIDENT MAY UNDER CERTAIN CONDITIONS AND IN ACCORDANCE WITH A PRESCRIBED PROCEDURE ESTABLISH SCHEDULES OF DIFFERENTIALS IN THE COMPENSATION RATES OF POSITIONS WHICH ARE LOCATED OUTSIDE THE STATES OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA; SUCH DIFFERENTIALS MAY NOT EXCEED 25 PERCENTUM OF THE MINIMUM RATE OF THE GRADE TO WHICH SUCH OFFICE OR POSITION IS ALLOCATED. THE PRESIDENT HAS EXERCISED THIS AUTHORITY ON ONLY TWO OCCASIONS. IN THE COMMISSION'S JUDGMENT IT WAS THE INTENT OF CONGRESS THAT SALARY DIFFERENTIALS COULD ONLY BE AUTHORIZED (1) BY THE PRESIDENT FOR GROUPS OF POSITIONS TO WHICH THE OTHER PROVISIONS OF THE CLASSIFICATION ACT HAS BEEN APPLIED BY EXECUTIVE ORDER UNDER SECTION 3 (A) OF TITLE II OF THE ACT OF NOVEMBER 26, 1940, AND (2) WHERE SPECIFICALLY AUTHORIZED BY LAW. IF THIS IS NOT TRUE, THEN THERE WOULD APPEAR TO BE NO POINT IN THE ENACTMENT OF SUCH LAWS BY THE CONGRESS.

ALTHOUGH THE CIVIL SERVICE COMMISSION HAS HAD EMPLOYEES STATIONED IN HAWAII FOR SEVERAL YEARS, THE GRANTING OF A PAY DIFFERENTIAL AS PROPOSED WOULD INAUGURATE A NEW ADMINISTRATIVE PRACTICE INSOFAR AS IT IS CONCERNED. ON THE OTHER HAND IT WOULD APPEAR TO BE UNFAIR TO PENALIZE AN AGENCY FOR NOT ADOPTING AN ADMINISTRATIVE PRACTICE FOR WHICH THERE APPEARED TO BE NO STATUTORY AUTHORITY WHILE OTHER AGENCIES, WITH LESS RELUCTANCE, BUT OPERATING UNDER THE SAME CONDITIONS, ADMINISTRATIVELY ESTABLISHED A POLICY OF PAYING A SALARY DIFFERENTIAL TO THEIR EMPLOYEES.

IF IT IS PERMISSIBLE FOR AN AGENCY TO ESTABLISH A PAY DIFFERENTIAL WITHOUT SPECIFIC STATUTORY AUTHORITY THEN THERE APPEARS TO BE NO REQUIREMENT AS TO UNIFORMITY OF AMOUNT OR RATE OF DIFFERENTIAL.

THE COMMISSION HAS NO FURTHER COMMENTS TO MAKE ON THE QUESTIONS RAISED. IT DOES DESIRE TO AGAIN POINT OUT THE IMPLICATIONS OF THIS ENTIRE PROBLEM, NOT ALONE FROM THE STANDPOINT OF THE COMMISSION'S OWN ORGANIZATION, BUT FROM THE STANDPOINT OF ALL GOVERNMENT AGENCIES WHICH ARE HAVING A RAPIDLY INCREASING NUMBER OF CIVILIAN EMPLOYEES WORKING BEYOND THE CONTINENTAL LIMITS OF THE STATE OF UNITED STATES AND THE DISTRICT OF COLUMBIA.

IN VIEW OF THE URGENT NEED FOR CLARIFICATION OF THIS MATTER, AN EARLY DECISION WILL BE GREATLY APPRECIATED.

WHILE IN THE SIXTH PARAGRAPH OF YOUR LETTER, YOU REFER TO "THE ENCLOSED PAYROLL," NO PAYROLL WAS RECEIVED WITH YOUR LETTER.

SECTION 2 OF THE ACT OF JULY 3, 1930, 46 STAT. 1005, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

THE HEADS OF THE SEVERAL EXECUTIVE DEPARTMENTS AND INDEPENDENT ESTABLISHMENTS ARE AUTHORIZED AND DIRECTED TO ADJUST THE COMPENSATION OF CERTAIN CIVILIAN POSITIONS IN THE FIELD SERVICES, THE COMPENSATION OF WHICH WAS ADJUSTED BY THE ACT OF DECEMBER 6, 1924 (43 STAT. 604 (704) (, TO CORRESPOND, SO FAR AS MAY BE PRACTICABLE, TO THE RATES ESTABLISHED BY THE ACT OF MAY 28, 1928 ( U.S.C. SUPP. 3, TITLE 5, SEC. 673), AND BY THIS ACT FOR POSITIONS IN THE DEPARTMENTAL SERVICES IN THE DISTRICT OF COLUMBIA: * * *

AS STATED IN YOUR LETTER, THE DECISIONS OF THIS OFFICE HAVE HELD THAT IN THE ABSENCE OF A STATUTE EXPRESSLY EXEMPTING FIELD POSITIONS FROM THE CLASSIFICATION ACT, 42 STAT. 1488, THE VARIOUS ADMINISTRATIVE OFFICERS ARE "AUTHORIZED AND DIRECTED" TO ADJUST THE SALARY RATES OF FIELD POSITIONS TO CORRESPOND TO THE SALARY RATES PRESCRIBED BY THE CLASSIFICATION ACT FOR THE SAME OR SIMILAR POSITIONS IN THE DEPARTMENTAL SERVICE. THIS OFFICE HAS HELD THAT THE WORDS APPEARING IN THE STATUTE "SO FAR AS MAY BE PRACTICABLE" DO NOT VEST IN AN ADMINISTRATIVE OFFICE ANY AUTHORITY TO FIX THE SALARY RATES OF FIELD POSITIONS WITHOUT REGARD TO THE CLASSIFICATION ACT, BUT DO RECOGNIZE SOME ADMINISTRATIVE DISCRETION IN RESPECT THERETO. 14 COMP. GEN. 420.

IN VIEW THEREOF AND HAVING REGARD FOR THE LIVING CONDITIONS WHICH HERETOFORE HAVE EXISTED--- AND STILL EXIST--- AT LOCATIONS OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, MAKING IT IMPRACTICABLE FOR VARIOUS ADMINISTRATIVE OFFICES TO RECRUIT PERSONNEL FOR SUCH POSITIONS WITHOUT PAYING HIGHER SALARY RATES THAN THOSE PRESCRIBED BY THE CLASSIFICATION ACT FOR THE SAME OR SIMILAR POSITIONS IN THE DEPARTMENTAL SERVICE, AND AS THE FIXING OF SALARY RATES IN THE FIELD SERVICE PRIMARILY IS AN ADMINISTRATIVE DUTY AND RESPONSIBILITY WITHIN REASONABLE LIMITATIONS, THIS OFFICE HAS NOT OBJECTED, IN THE AUDIT OF PAYROLL ACCOUNTS, TO THE FIXING OF A DIFFERENTIAL BY ADMINISTRATIVE ACTION FOR FIELD EMPLOYEES WHO OCCUPY POSITIONS OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, EITHER IN THE POSSESSIONS OF THE UNITED STATES OR IN FOREIGN COUNTRIES, SO LONG AS THE DIFFERENTIAL DOES NOT EXCEED BY MORE THAN 25 PERCENT THE SALARY RATE AUTHORIZED TO BE FIXED FOR THE SAME OR SIMILAR POSITIONS IN THE STATES. SAID MAXIMUM IS AN ARBITRARY ONE BUT DEEMED REASONABLE AS A LIMITATION ON WHAT MAY BE REGARDED AS A "PRACTICABLE" DIFFERENTIAL AND CORRESPONDS WITH THAT AUTHORIZED BY LAW IN THE CANAL ZONE. SEE SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE AS AMENDED BY SECTION 3 OF THE ACT OF JULY 9, 1937, 50 STAT. 487. SUCH ADMINISTRATIVE PRACTICE HAS LONG BEEN IN FORCE IN ALASKA, AND FOR SHORTER PERIODS AT OTHER LOCATIONS OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES. IN THAT CONNECTION, YOUR ATTENTION IS INVITED TO MY DECISION OF NOVEMBER 3, 1942, B-29923, 22 COMP. GEN. 432, TO THE POSTMASTER GENERAL, WHEREIN THE LONG EXISTING ADMINISTRATIVE PRACTICE IN ALASKA WAS GIVEN SPECIFIC CONSIDERATION AND IT WAS THEREIN CONCLUDED:

* * * THAT UNLESS AND UNTIL THE PRESIDENT BY EXECUTIVE ORDER EXTENDS ALL THE PROVISIONS OF THE CLASSIFICATION ACT TO POSITIONS IN THE CUSTODIAL SERVICE UNDER THE POST OFFICE DEPARTMENT IN ALASKA, THIS OFFICE IS NOT REQUIRED TO OBJECT TO ADMINISTRATIVE ACTION BY THE POST OFFICE DEPARTMENT IN ALLOCATING SUCH POSITIONS IN ALASKA ONE OR MORE GRADES HIGHER THAN THE GRADES IN WHICH THE SAME OR SIMILAR POSITIONS ARE ALLOCATED IN THE CONTINENTAL UNITED STATES, PROVIDED THE SALARY RATE FIXED FOR THE POSITION IN THE HIGHER GRADE IN ALASKA DOES NOT EXCEED BY MORE THAN 25 PERCENT THE SALARY RATE AUTHORIZED TO BE FIXED FOR THE SAME OR SIMILAR POSITION IN THE STATES. IN THAT SAME DECISION, WITH RESPECT TO THE APPLICATION OF TITLE II OF THE ACT OF NOVEMBER 26, 1940, 54 STAT. 1212, IT WAS SAID:

TITLE II OF THE ACT OF NOVEMBER 26, 1940, 54 STAT. 1212, TO WHICH YOU REFER, AUTHORIZES BUT DOES NOT REQUIRE, THE PRESIDENT, UNDER CERTAIN CONDITIONS, TO EXTEND THE CLASSIFICATION ACT TO ANY OFFICES OR POSITIONS IN THE FIELD SERVICE. THE PROVISION IN SAID STATUTE RELATIVE TO THE FIXING OF A DIFFERENTIAL IS MERELY INCIDENTAL TO--- AND APPLICABLE ONLY IN THE EVENT OF--- THE EXTENSION OF THE CLASSIFICATION ACT IN ALL ITS PHASES TO THE FIELD SERVICE, INCLUDING THE FINAL JURISDICTION AND AUTHORITY OF THE CIVIL SERVICE COMMISSION, RATHER THAN OF THE ADMINISTRATIVE OFFICE CONCERNED, TO APPROVE THE ALLOCATIONS OF POSITIONS. SEE 21 COMP. GEN. 947. THAT STATUTE IS NOT SELF-EXECUTING; AND IT IN NOWISE OPERATES TO DISTURB THE LONG RECOGNIZED ADMINISTRATIVE PRACTICE OF FIXING A DIFFERENTIAL FOR POSITIONS IN ALASKA WHEN SUCH POSITIONS ARE ADMINISTRATIVELY ALLOCATED -- AS DISTINGUISHED FROM ALLOCATIONS DIRECTLY BY THE CIVIL SERVICE COMMISSION PURSUANT TO AN EXECUTIVE ORDER UNDER THE AUTHORITY OF SAID STATUTE. IT APPEARS THAT ONLY ONE EXECUTIVE ORDER HAS BEEN ISSUED UNDER SAID STATUTE, TO WIT, NO. 8955, DATED DECEMBER 1, 1941, AND IT DOES NOT APPLY TO POSITIONS UNDER THE POST OFFICE DEPARTMENT BECAUSE, IN SCOPE, IT IS SPECIFICALLY LIMITED TO CERTAIN CIVILIAN POSITIONS UNDER THE WAR AND NAVY DEPARTMENTS LOCATED NOT ONLY IN ALASKA BUT AT A NUMBER OF OTHER OUTLYING STATIONS OF THE UNITED STATES.

IN VIEW OF WHAT IS STATED ABOVE, YOU ARE ADVISED THAT THIS OFFICE IS NOT REQUIRED TO OBJECT TO THE FIXING OF SALARY DIFFERENTIALS BY THE ADMINISTRATIVE ACTION OF THE CIVIL SERVICE COMMISSION UPON A PERCENTAGE BASIS AS PROPOSED FOR EMPLOYEES SERVING AT ANY LOCATION OUTSIDE THE CONTINENTAL LIMITS OF THE UNITED STATES, INCLUDING HAWAII, IF IT BE ADMINISTRATIVELY DETERMINED TO BE OTHERWISE IMPRACTICABLE TO RECRUIT PERSONNEL FOR SUCH POSITIONS, PROVIDED THE SALARY RATE FIXED FOR AN EMPLOYEE WITH POST OF DUTY OUTSIDE OF THE CONTINENTAL LIMITS OF THE UNITED STATES DOES NOT EXCEED BY MORE THAN 25 PERCENT THE SALARY RATE AUTHORIZED TO BE FIXED FOR THE SAME OR SIMILAR POSITION IN THE STATES AND THE DISTRICT OF COLUMBIA.

QUESTIONS 1 (A) AND (B) ARE ANSWERED IN THE AFFIRMATIVE PROVIDED SUCH POSITIONS ARE NOT EXPRESSLY EXCEPTED BY STATUTE FROM THE CLASSIFICATION ACT.

QUESTION 2 IS ANSWERED IN THE AFFIRMATIVE.

REFERRING TO QUESTIONS 3, 4, 5, AND 6, THE SALARY DIFFERENTIAL MAY NOT EXCEED BY MORE THAN 25 PERCENT THE SALARY RATE AUTHORIZED TO BE FIXED FOR THE SAME OR SIMILAR POSITION IN THE STATES AND THE DISTRICT OF COLUMBIA. THE BASIS FOR DETERMINING THE AMOUNT OF THE DIFFERENTIAL NEED NOT BE LIMITED TO THE MINIMUM SALARY RATE OF THE CORRESPONDING GRADE, BUT MAY BE BASED ON ANY SALARY RATE OF A GRADE TO WHICH THE EMPLOYEE WOULD BE ENTITLED WERE HE SERVING IN THE STATES OR THE DISTRICT OF COLUMBIA. IT IS WITHIN ADMINISTRATIVE DISCRETION TO FIX SUCH A SALARY DIFFERENTIAL AT LESS THAN THE MAXIMUM AUTHORIZED.