B-35403, JULY 12, 1943, 23 COMP. GEN. 19

B-35403, JULY 12, 1943, 23 COMP. GEN. 19

COMPENSATION - ADDITIONAL - FEE BASIS AND INTERMITTENT OR IRREGULAR EMPLOYEES - METHOD OF COMPUTATION THE 15 PERCENT ADDITIONAL COMPENSATION ON SO MUCH OF EARNED BASIC COMPENSATION AS IS NOT IN EXCESS OF A RATE OF $2,900 PER ANNUM TO WHICH FEE BASIS EMPLOYEES ARE ENTITLED UNDER SECTION 3 (C) OF THE WAR OVERTIME PAY ACT OF 1943 MAY BE ADJUSTED, WITH RESPECT TO THE $2,900 PER ANNUM LIMITATION, ON THE BASIS OF THE FISCAL YEAR. THE ADDITIONAL COMPENSATION OF 15 PERCENT OF EARNED BASIS COMPENSATION NOT IN EXCESS OF $2,900 PER ANNUM AUTHORIZED BY SECTION 3 (C) OF THE WAR OVERTIME PAY ACT OF 1943 FOR EMPLOYEES PAID ON A FEE BASIS SHOULD BE COMPUTED ON THE FEES ACTUALLY EARNED DURING EACH PERIOD OVER WHICH FEES ARE USUALLY PERIODICALLY PAID, NOT TO EXCEED 15 PERCENT OF THE PRO RATA AMOUNT OF $2,900 PER ANNUM FOR THAT PERIOD, AND ANY ADJUSTMENT WHICH MAY BE REQUIRED IN ORDER TO PAY ADDITIONAL COMPENSATION ON THE TOTAL FEES ACTUALLY EARNED --- NOT EXCEEDING $2,900 -- DURING A FISCAL YEAR MAY BE EFFECTED AT THE END OF THAT FISCAL YEAR. IN DETERMINING THE DAILY ADDITIONAL COMPENSATION AT THE RATE OF $300 PER ANNUM TO WHICH INTERMITTENT OR IRREGULAR EMPLOYEES WHO ARE PAID ON A DAILY OR HOURLY BASIS, RATHER THAN ON A PER ANNUM BASIS, AND WHOSE EARNED BASIC COMPENSATION IS AT A RATE OF LESS THAN $2,000 PER ANNUM ARE ENTITLED UNDER SECTION 3 (A) OF THE WAR OVERTIME PAY ACT OF 1943, THE $300 PER ANNUM RATE SHOULD BE DIVIDED BY THE NUMBER OF DAYS PER ANNUM WHICH IS EQUIVALENT TO THE NUMBER OF DAYS IN THE WEEKLY TOUR OF DUTY; THUS, THE DIVISOR IS 313, 287, OR 261 IF THE WEEKLY TOUR OF DUTY BE 6, 5 1/2, OR 5 DAYS, RESPECTIVELY.

ACTING COMPTROLLER GENERAL YATES TO THE SECRETARY OF AGRICULTURE, JULY 12, 1943:

I HAVE YOUR LETTER OF JUNE 25, 1943, AS FOLLOWS:

A NUMBER OF PROBLEMS HAVE ARISEN IN COMPUTING OVERTIME COMPENSATION AND ADDITIONAL COMPENSATION IN LIEU THEREOF UNDER THE WAR OVERTIME PAY ACT OF 1943, PUBLIC LAW 49, 78TH CONGRESS, HEREINAFTER REFERRED TO AS THE ACT.

SECTION 3 (C) OF THE ACT PROVIDES THAT OFFICERS OR EMPLOYEES TO WHOM THE ACT APPLIES AND WHOSE HOURS OF DUTY ARE LESS THAN FULL TIME OR WHOSE COMPENSATION IS BASED UPON OTHER THAN A TIME PERIOD BASIS, SHALL BE PAID, IN LIEU OF OVERTIME COMPENSATION, AT A RATE OF 15 PERCENTUM OF SO MUCH OF THEIR EARNED BASIC COMPENSATION AS IS NOT IN EXCESS OF A RATE OF $2,900 PER ANNUM. PART II, SECTION 4 OF CIVIL SERVICE DEPARTMENTAL CIRCULAR NO. 424, WHICH CIRCULAR CONSTITUTES THE REGULATIONS UNDER THE ACT, PROVIDES THAT PIECE WORKERS AND FEE BASIS EMPLOYEES INCLUDE ALL EMPLOYEES WHOSE COMPENSATION IS BASED UPON OTHER THAN A TIME PERIOD BASIS. THE QUESTION ARISES AS TO HOW THE PER ANNUM EQUIVALENT SHOULD BE COMPUTED FOR EMPLOYEES COMPENSATED ON A FEE BASIS FOR THE PURPOSES OF DETERMINING WHETHER THE BASIC COMPENSATION IS IN EXCESS OF $2,900 PER ANNUM. WE HAVE EXAMINED THE DECISION IN 22 COMP. GEN. 720, WHICH RELATES TO THE COMPUTATION OF ADDITIONAL COMPENSATION IN LIEU OF OVERTIME UNDER PUBLIC LAW 821, 77TH CONGRESS, FOR UNITED STATES COMMISSIONERS WHOSE FEES ARE FIXED BY THE PROVISIONS OF 28 U.S.C. 597. INASMUCH AS PUBLIC LAW 821 AUTHORIZED A 10 PERCENT INCREASE OF SO MUCH OF THE EARNED BASIC COMPENSATION OF EMPLOYEES ON A FEE BASIS AS WAS NOT IN EXCESS OF $2,900 PER ANNUM, WITH THE PROVISO THAT IN NO CASE SHOULD THE AGGREGATE COMPENSATION EXCEED THE RATE OF $5,000 PER ANNUM, THE QUESTION AROSE AS TO WHAT PERIOD SHOULD BE USED IN COMPUTING THESE MAXIMUM LIMITATIONS. IT WAS HELD, IN THE CASE CITED, THAT AN INCREASE IN THE TOTAL AMOUNT OF FEES ALLOWED WOULD BE INCREASED BY 10 PERCENT, SUBJECT TO A MAXIMUM INCREASE OF $24.16 ( 1/12 OF 10 PERCENT OF $2,900 PER ANNUM) FOR EACH MONTH, PROVIDED THAT ONLY SO MUCH OF THE INCREASES OF $24.16 FOR EACH MONTH WOULD BE ALLOWED AS WOULD NOT INCREASE THE AGGREGATE COMPENSATION (FEES PLUS 10 PERCENT INCREASE) FOR EACH MONTH TO MORE THAN $416.66 (1/12 OF $5,000 PER ANNUM). IT WOULD APPEAR THAT THE SAME GENERAL PRINCIPLE WOULD APPLY IN DETERMINING THE BASIC COMPENSATION OF EMPLOYEES PAID ON A FEE BASIS FOR PURPOSES OF THE WAR OVERTIME PAY ACT OF 1943. IT WOULD APPEAR, HOWEVER, THAT THE DEPARTMENT MAY CHOOSE ANY PERIOD ADMINISTRATIVELY DETERMINED TO BE PRACTICABLE FOR ANY CLASS OF FEE BASIS EMPLOYEES IN COMPUTING THE EARNED BASIC COMPENSATION FOR SUCH PERIOD. IF A MONTH IS USED AS THE PERIOD FOR COMPUTATION, THE MAXIMUM ADDITIONAL COMPENSATION WOULD BE 1/12 OF 15 PERCENT OF $2,900 OR $36.25. YOUR ADVICE IS REQUESTED ON THIS POINT.

A SECOND QUESTION ARISES IN COMPUTING THE DAILY RATE OF ADDITIONAL COMPENSATION FOR INTERMITTENT AND IRREGULAR EMPLOYEES. PART IV, SECTION 2, OF THE REGULATIONS PROVIDES THAT INTERMITTENT AND IRREGULAR EMPLOYEES SHALL BE PAID, IN LIEU OF OVERTIME, ADDITIONAL COMPENSATION AT THE RATE OF (A) $300 PER ANNUM, IF THEIR EARNED BASIC COMPENSATION IS AT THE RATE OF LESS THAN $2,000 PER ANNUM, OR (B) 15 PERCENT OF SO MUCH OF THEIR EARNED BASIC COMPENSATION IS AT A RATE OF $2,000 PER ANNUM OR MORE, SUBJECT TO THE LIMITATION THAT THE ADDITIONAL COMPENSATION SHALL NOT EXCEED 25 PERCENT OF THE EARNED BASIC COMPENSATION OF THE EMPLOYEE FOR SUCH PERIOD. PART IV, SECTION 4, PROVIDES:

"IN THE CASE OF AN EMPLOYEE WHO RECEIVES IN LIEU OF OVERTIME COMPENSATION ADDITIONAL COMPENSATION UNDER SECTION 2 OF PART IV AT A RATE OF $300 PER ANNUM, THE DEDUCTION FROM SUCH ADDITIONAL COMPENSATION SHALL BE 1/360 OF $300 FOR EACH DAY OF LEAVE WITHOUT PAY.'

THIS REGULATION APPARENTLY APPLIES TO EMPLOYEES PAID ON A PER ANNUM BASIS, ALTHOUGH IT IS NOT EXPRESSLY SO LIMITED. IF THE COMPENSATION OF AN INTERMITTENT OR IRREGULAR EMPLOYEE IS COMPUTED ON A PER ANNUM BASIS, IT IS CLEAR, UNDER THE ABOVE REGULATION, THAT THE EMPLOYEE SHOULD RECEIVE 1/360 OF THE RATE OF $300 PER ANNUM AS THE DAILY RATE OF ADDITIONAL COMPENSATION, ASSUMING THAT THE SALARY RATE IS $1,200 OR MORE BUT LESS THAN $2,000. SIMILARLY, IF THE PER ANNUM RATE IS LESS THAN $1,200, THE ADDITIONAL DAILY COMPENSATION RATE WOULD BE 1/360 OF 25 PERCENT OF THE PER ANNUM RATE. IT WOULD APPEAR THAT INTERMITTENT OR IRREGULAR EMPLOYEES, PAID ON A DAILY OR HOURLY BASIS, WHOULD RECEIVE ADDITIONAL COMPENSATION IN LIEU OF OVERTIME ON THE BASIS OF THE ACTUAL TOUR OF DUTY OF EMPLOYEES SIMILARLY SITUATED. APPLYING THIS PRINCIPLE, IF AN INTERMITTENT OR IRREGULAR EMPLOYEE PAID ON A DAILY OR HOURLY BASIS IS WORKING WITH EMPLOYEES WHOSE WEEKLY TOUR OF DUTY IS SIX DAYS, THE ADDITIONAL COMPENSATION SHOULD BE 1/313 OF THE ADDITIONAL ANNUAL RATE FOR THE SIX-DAY WEEK TOUR OF DUTY.

IT IS NOTED THAT, IN THE DECISION OF MAY 19, 1943, B-34456, ADDRESSED TO THE LIBRARIAN OF CONGRESS, IT WAS HELD THAT FULL TIME PER DIEM EMPLOYEES ENTITLED TO A MINIMUM OF $300 PER ANNUM IN LIEU OF OVERTIME COMPENSATION OF A LESS AMOUNT, PURSUANT TO SECTION 3 (B) OF THE ACT, ARE ENTITLED TO BE PAID 1/313 OF $300 FOR EACH DAY THAT THEY ARE IN A PAY STATUS. IT IS APPARENT THAT THIS REFERS TO FULL TIME EMPLOYEES WHO REGULARLY WORK A SIX- DAY, 48-HOUR WEEK, SINCE THE DECISION, B-31623, OF MARCH 5, 1943, WHICH RELATES TO SUCH EMPLOYEES, WAS CITED IN THE SUBMISSION OF THE LIBRARIAN OF CONGRESS. IT WOULD APPEAR THAT EMPLOYEES WHO REGULARLY WORK 5 1/2 AND 5- DAY WORKWEEKS SHOULD RECEIVE 1/287 AND 1/261, RESPECTIVELY, OF $300 AS ADDITIONAL DAILY COMPENSATION IN LIEU OF OVERTIME. (SEE, IN THIS CONNECTION, 22 COMP. GEN. 589, 595.)

PLEASE ADVISE WHETHER OUR INTERPRETATION OF THE PROVISIONS OF THE ACT AND REGULATIONS REFERRED TO HEREIN IS CORRECT. AN EARLY REPLY TO THIS SUBMISSION WILL BE APPRECIATED.

IN THE DECISION OF JANUARY 30, 1943, 22 COMP. GEN. 720, TO WHICH YOU REFER, IT WAS HELD (QUOTING FROM THE SYLLABUS):

IN THE SETTLEMENT BY THIS OFFICE OF THE QUARTERLY ACCOUNTS OF UNITED STATES COMMISSIONERS, INVOLVING ANY FEE EARNED DURING THE PERIOD DECEMBER 1, 1942, THROUGH APRIL 30, 1943, THE EFFECTIVE PERIOD OF THE OVERTIME AND ADDITIONAL COMPENSATION ACT OF DECEMBER 22, 1942, THE TOTAL AMOUNT OF THE FEES ALLOWED WILL BE INCREASED BY 10 PERCENT--- THE PERCENTAGE INCREASE AUTHORIZED BY THE ACT, PROVIDED THAT ONLY SO MUCH OF THE MONTHLY INCREASE WILL BE ALLOWED AS WILL NOT INCREASE THE MONTHLY "AGGREGATE COMPENSATION" BEYOND $416.66 (1/12 OF THE $5,000 PER ANNUM LIMITATION OF THE ACT) ANY NECESSARY ADJUSTMENT TO BE MADE AS OF APRIL 30, 1943, SO THAT THE PROPER AMOUNT OF INCREASE MAY BE RECEIVED FOR THE FIVE MONTHS INVOLVED.

THAT PORTION OF THE RULE ABOVE QUOTED RELATING TO THE CEILING RATE OF $5,000 PER ANNUM IS, OF COURSE, FOR DISREGARDING IN CONSIDERING UNDER THE WAR OVERTIME PAY ACT OF 1943, 57 STAT. 76, THE FIRST QUESTION PRESENTED IN THE SECOND PARAGRAPH OF YOUR LETTER. ONLY THAT PORTION OF THE RULE RELATING TO THE CEILING RATE OF $2,900 PER ANNUM IS REQUIRED TO BE CONSIDERED HERE.

THE STATUTE (SECTION 3 (C), 57 STAT. 77) AUTHORIZES AN INCREASE OF 15 PERCENT OF $2,900 OF FEES ACTUALLY EARNED DURING THE YEAR AND THE "YEAR," FOR THE PURPOSE OF THIS CASE, MAY BE REGARDED AS THE FISCAL YEAR. FOR EACH PAY PERIOD--- THAT IS, THE PERIOD OVER WHICH FEES ARE USUALLY PERIODICALLY PAID --- THE ADDITIONAL COMPENSATION PAID SHOULD BE 15 PERCENT OF THE FEES ACTUALLY EARNED DURING THAT PERIOD BUT NO MORE THAN 15 PERCENT OF THE PRO RATA AMOUNT BASED ON THE RATE OF $2,900 PER ANNUM. FOR EXAMPLE, IF FEES USUALLY ARE PAID SEMIMONTHLY THE MAXIMUM ADDITIONAL COMPENSATION FOR THE PAY PERIOD WOULD BE LIMITED TO 15 PERCENT OF 1/24 OF $2,900, OR $18.12. HOWEVER, AS THE RIGHT OF AN EMPLOYEE TO THE TOTAL ADDITIONAL COMPENSATION BASED ON $2,900 FOR THE FISCAL YEAR MAY NOT BE DEFEATED WHILE THE LAW IS IN OPERATION, AN ADJUSTMENT, WHEN REQUIRED TO PRESERVE SUCH RIGHT, MAY BE EFFECTED AT THE END OF EACH FISCAL YEAR (IN THIS INSTANCE, JUNE 30, 1943, TO COVER THE MONTHS OF MAY AND JUNE, 1943), SO AS TO PAY THE EMPLOYEE 15 PERCENT ADDITIONAL COMPENSATION ON THE AMOUNT OF FEES, NOT TO EXCEED $2,900, ACTUALLY EARNED DURING THE FISCAL YEAR.

REFERRING TO YOUR SECOND QUESTION, THE FORMULAS STATED IN YOUR LETTER FOR COMPUTING THE ADDITIONAL COMPENSATION OF INTERMITTENT OR IRREGULAR EMPLOYEES ARE CORRECT.