B-121741, FEBRUARY 17, 1955, 34 COMP. GEN. 385

B-121741, FEBRUARY 17, 1955, 34 COMP. GEN. 385

DISABILITY OR DEATH COMPENSATION - BASIS ON WHICH COMPUTED - DIFFERENTIAL PAID PANAMA CANAL EMPLOYEES THE ADDITIONAL COMPENSATION GENERALLY CALLED A DIFFERENTIAL WHICH IS AUTHORIZED CANAL ZONE EMPLOYEES UNDER SECTION 81, TITLE 2 OF THE CANAL ZONE CODE IS ADDITIONAL PAY WITHIN THE MEANING OF SECTION 12 OF THE FEDERAL EMPLOYEES' COMPENSATION ACT AND, THEREFORE, MAY NOT BE TAKEN INTO ACCOUNT IN DETERMINING THE PAY UPON WHICH DISABILITY OR DEATH COMPENSATION IS COMPUTED UNDER THE ACT.

ASSISTANT COMPTROLLER GENERAL WEITZEL TO THE GOVERNOR, CANAL ZONE GOVERNMENT, FEBRUARY 17, 1955:

YOUR LETTER OF OCTOBER 7, 1954, REQUESTS OUR DECISION "AS TO WHAT PORTION OF THE GROSS SALARIES, PAID CANAL ZONE GOVERNMENT EMPLOYEES ON THE ISTHMUS OF PANAMA, MAY BE CONSIDERED AS AN ELEMENT OF PAY FOR THE PURPOSE OF COMPUTING COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT," AS AMENDED, 5 U.S.C. 751, ET SEQ.

YOUR LETTER RELATES THAT UNDER PRESENT PROCEDURE--- PRESUMABLY INTRODUCED AS A CONSEQUENCE OF THE AMENDMENT IN 1949 OF SECTION 12 OF THE FEDERAL EMPLOYEES' COMPENSATION ACT, 39 STAT. 746, 5 U.S.C. 762--- THE ADDITIONAL COMPENSATION AUTHORIZED BY SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE HAS BEEN CONSIDERED AS A "DIFFERENTIAL" AND HAS BEEN EXCLUDED AS AN ELEMENT OF PAY IN COMPUTING DISABILITY AND DEATH COMPENSATION UNDER THE FEDERAL EMPLOYEES' COMPENSATION ACT. DOUBT CONCERNING THE CORRECTNESS OF THAT POSITION IS STATED TO HAVE ARISEN BECAUSE OF PETITIONS FILED BY AFFECTED EMPLOYEES AND EMPLOYEE GROUPS DEMANDING THAT THE BASIC COMPENSATION FOR COMPUTING UNDER THE EMPLOYEES' COMPENSATION ACT SHOULD INCLUDE BOTH THE BASIC PAY AND THE DIFFERENTIAL. THE ISSUE IS SET FORTH IN YOUR LETTER, AS FOLLOWS:

THE QUESTION RAISED IS WHETHER THE PAY RECEIVED BY CANAL ZONE GOVERNMENT EMPLOYEES UNDER AUTHORITY OF SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE INCLUDES A DIFFERENTIAL WITHIN THE MEANING OF SAID SECTION 12 (B); OR WHETHER SUCH PAY IS BASIC COMPENSATION WITH THE LIMITATION THAT IT SHALL NOT EXCEED BY MORE THAN 25 PERCENTUM THE COMPENSATION FOR THE SAME OR SIMILAR SERVICES RECEIVED BY PERSONS EMPLOYED BY THE GOVERNMENT IN THE CONTINENTAL UNITED STATES.

SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE, AS AMENDED JULY 9, 1937, 50 STAT. 487, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

ALL PERSONS, OTHER THAN THE GOVERNOR OF THE PANAMA CANAL, NECESSARY FOR THE CARE, MANAGEMENT, MAINTENANCE, SANITATION, GOVERNMENT, OPERATION, AND PROTECTION OF THE CANAL AND CANAL ZONE SHALL:

C. RECEIVE SUCH COMPENSATION AS SHALL BE FIXED BY THE PRESIDENT OR BY HIS AUTHORITY UNTIL SUCH TIME AS CONGRESS MAY BY LAW REGULATE THE SAME; * * * PROVIDED, HOWEVER, THAT SALARIES OR COMPENSATION FIXED BY THE PRESIDENT HEREUNDER SHALL IN NO INSTANCE EXCEED BY MORE THAN 25 PERCENTUM THE SALARY OR COMPENSATION PAID FOR THE SAME OR SIMILAR SERVICES TO PERSONS EMPLOYED BY THE GOVERNMENT IN CONTINENTAL UNITED STATES: * * *

AS ORIGINALLY ENACTED, SECTION 12 OF THE FEDERAL EMPLOYEES' COMPENSATION ACT, 39 STAT. 742, 746, READS AS FOLLOWS:

THAT IS COMPUTING THE MONTHLY PAY THE USUAL PRACTICE OF THE SERVICE IN WHICH THE EMPLOYEE WAS EMPLOYED SHALL BE FOLLOWED. SUBSISTENCE AND THE VALUE OF QUARTERS FURNISHED AN EMPLOYEE SHALL BE INCLUDED AS PART OF THE PAY, BUT OVERTIME PAY SHALL NOT BE TAKEN INTO ACCOUNT.

IN 30 COMP. GEN. 468, IT WAS RULED IN RESPONSE TO A QUESTION SIMILAR TO THAT RAISED IN YOUR LETTER THAT, UNDER A STATUTE THEN APPLICABLE TO THE PANAMA CANAL, THE TERM "MONTHLY PAY" MUST BE CONSTRUED TO BE THE MONTHLY PAY THE EMPLOYEE WAS RECEIVING AT THE TIME OF THE ACCIDENT.

THE PERTINENT PART OF SECTION 12 OF THE FEDERAL EMPLOYEES' COMPENSATION ACT, AS AMENDED, READS:

(A) IN COMPUTING MONETARY COMPENSATION FOR DISABILITY OR DEATH UPON THE BASIS OF MONTHLY PAY, SUCH PAY SHALL BE DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION.

(B) THE VALUE OF SUBSISTENCE AND QUARTERS, AND OF ANY OTHER FORM OF REMUNERATION IN KIND FOR SERVICES IF ITS VALUE CAN BE ESTIMATED IN MONEY, SHALL BE INCLUDED AS PART OF THE PAY. OVERTIME PAY, OR ADDITIONAL PAY OR ALLOWANCE AUTHORIZED OUTSIDE THE UNITED STATES BECAUSE OF DIFFERENTIAL IN COST OF LIVING OR OTHER SPECIAL CIRCUMSTANCE, OR BONUS OR PREMIUM PAY FOR EXTRAORDINARY SERVICE (INCLUDING AMOUNTS PAID AS BONUS FOR PARTICULARLY HAZARDOUS SERVICE IN TIME OF WAR) SHALL NOT BE TAKEN INTO ACCOUNT. * * *" (ITALICS SUPPLIED.)

IN LIGHT OF THE PROVISIONS OF SECTION 12 JUST QUOTED IT WOULD APPEAR THAT THE ULTIMATE ISSUE TO BE DETERMINED IS NOT WHETHER COMPENSATION FIXED PURSUANT TO SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE IS SUSCEPTIBLE OF ITS BEING SEPARATED INTO ITS ORIGINAL COMPONENTS OF BASE SALARY AND DIFFERENTIAL, BUT RATHER WHETHER THE ADDITIONAL COMPENSATION THEREIN AUTHORIZED IS "ADDITIONAL PAY * * * AUTHORIZED OUTSIDE THE UNITED STATES BECAUSE OF DIFFERENTIAL IN COST OF LIVING OR OTHER SPECIAL CIRCUMSTANCE" AS THOSE WORDS ARE USED IN THE COMPENSATION ACT.

THE ADDITIONAL COMPENSATION AUTHORIZED BY SECTION 81 OF TITLE 2 OF THE CANAL ZONE CODE CONSISTENTLY HAS BEEN REFERRED TO IN OUR DECISION AS A "DIFFERENTIAL.' 10 COMP. GEN. 519; 21 ID. 205; AND 28 ID. 402. IT WAS TERMED A "25 PERCENT DIFFERENTIAL ALLOWED FOR TROPICAL SERVICE" BY FORMER GOVERNOR H. BURGESS IN HIS LETTER OF SEPTEMBER 9, 1931, TO A FORMER COMPTROLLER GENERAL. ALSO, IT HAS BEEN DESCRIBED AS A PAYMENT SOMEWHAT IN THE NATURE OF A RECRUITMENT INCENTIVE. WHATEVER ITS PRECISE NATURE AS CONTEMPLATED BY SECTION 81 OF THE CODE, THAT SALARY DIFFERENTIAL INESCAPABLY IS ADDITIONAL COMPENSATION AUTHORIZED TO COMPENSATE EMPLOYEES FOR SERVICES RENDERED UNDER THE CONDITIONS PECULIAR TO AND PREVAILING IN THE CANAL ZONE.

THE CONCLUSION IS WARRANTED, THEREFORE, THAT THE ADDITIONAL SALARY OR COMPENSATION AUTHORIZED BY SECTION 81 IS "ADDITIONAL PAY * * * AUTHORIZED OUTSIDE THE UNITED STATES BECAUSE OF DIFFERENTIAL IN COST OF LIVING OR OTHER SPECIAL CIRCUMSTANCE," WITHIN THE MEANING OF THOSE WORDS AS USED IN SECTION 12 OF THE FEDERAL EMPLOYEES' COMPENSATION ACT, AS AMENDED. ACCORDINGLY, IT IS AN ELEMENT OF COMPENSATION WHICH, UNDER SECTION 12 QUOTED ABOVE, MAY NOT BE TAKEN INTO ACCOUNT IN DETERMINING THE PAY UPON WHICH DISABILITY OR DEATH COMPENSATION IS COMPUTED UNDER THE EMPLOYEES' COMPENSATION ACT.

IN VIEW OF THE FOREGOING CONCLUSION, IT BECOMES UNNECESSARY TO DECIDE THE CONTINGENT QUESTION CONTAINED IN THE LAST PARAGRAPH OF YOUR LETTER RELATIVE TO THE RETROACTIVE ADJUSTMENT OF COMPENSATION PAYMENTS IN THE EVENT OUR DECISION HERE SHOULD HOLD THAT THE "DIFFERENTIAL" IS AN ELEMENT OF PAY FOR PURPOSE OF COMPUTING THE COMPENSATION UNDER THE EMPLOYEES' COMPENSATION ACT.