to the reimbursement of cost-plus-a-fixed-fee contractors of the full amount of wages due and payable to their employees at the time the pay roll deductions for the purchase of defense bonds are made and deposited, provided, as suggested in your letter, there be attached to each pay roll involved a deposit slip signed by an official of the bank in which the deposits have been made showing that the amount deducted has been credited in the contractor's "Account for the Purchase of National Defense Bonds." However, the pay rolls should contain, also, a statement of the contracting officer, or his duly authorized representative, that deposit of the deductions has been verified. Furthermore, it is to be understood that necessary steps will be taken by your Department to insure that the Government will receive the benefit of any amounts remaining in the special account which have not been used either for the purchase of defense bonds or for making refunds to the employees, and that, upon completion of each contract, there will be furnished a statement showing what disposition was made of any such unexpended balance which remained in the special account. See 20 Comp. Gen. 865, supra.

(B-23577)

COMPENSATION-WITHIN-GRADE PERIODIC AND MERITORIOUS

PROMOTIONS

The vested right of an employee to retain a periodic or meritorious within-grade salary advancement granted pursuant to the act of August 1, 1941, maintains only so long as he remains in the position in which the advancement was granted, but, upon the transfer, promotion, or reduction of an employee from one position to another with different duties and responsibilities, whether in the same or different grade, it is within administrative discretion under section 10 of the Classification Act of 1923 to fix his initial salary in the new position at such prescribed rate of the grade as will save to him the benefit of a within-grade salary advancement to which he previously had become entitled.

Where during the period of delay between the effective date-October 1, 1941of the first periodic within-grade salary advancements under the act of August 1, 1941, and the actual payment of such advancements, employees who were entitled to the advancements as of October 1, 1941, were transferred at the same or reduced salaries to other positions, either in the same or different grade, with different duties and responsibilties, it is within administrative discretion to fix at this time their initial salaries, effective on the date of the transfer, in the new positions at such prescribed rate of their grades as will save to them the benefits of the salary advancements to which they previously had become entitled.

A prospectively effective meritorious-as distinguished from periodic-withingrade salary advancement of one step may be granted an employee under the act of August 1, 1941, and Executive Order No. 8882 issued pursuant thereto, even though the employee may not as yet have attained eligibility for his first pericdic within-grade salary advancement under the act by serving 18 or 30 months without an equivalent increase in compensation. An employee who was in a leave without pay status for more than 30 days, but less than a year, immediately prior to the effective date-October 1, 1941– of the within-grade salary-advancement statute of August 1, 1941, but who had had 18 or 30 months' continuous service without an "equivalent increase in compensation" prior to such leave without pay status has had the neces470350m-42-52

sary service, computed in accordance with section 2 of the Executive Order No. 8882 issued pursuant to said statute, to entitle him, if otherwise qualified, to a within-grade salary advancement as of October 1, 1941. 21 Comp. Gen. 285, distinguished.

In computing the service that may be credited under section 2 of Executive Order No. 8882 to the 18 or 30 months' service necessary to entitle employees to within-grade salary advancements under the act of August 1, 1941, there may be included 30 days of any periods aggregating more than 30 days, but less than a year, that employees are in a nonpay status, that is, only the excess over 30 days need be excluded.

Where, effective at the close of business on October 1, 1941, from and after which date the first within-grade salary advancements under the act of August 1, 1941, became effective, an employee resigned his permanent position under the classification act in one Government agency in order to accept, without break in service, another permanent position under the classification act in another agency, the employee should be considered for a salary advancement under the act as of October 1, 1941, by the agency from which the employee resigned. 21 Comp. Gen. 369, 376, relating to an employee who was completely separated from the service on October 1, 1941, distinguished. Public Health Service field physicians who render part-time service at irregular periods and whose compensation is paid on an annual basis pursuant to the act of May 14, 1937, may continue to be paid in accordance with said act without the application to them of the uniform within-grade salary-advancement plan prescribed by the act of August 1, 1941. Decision B-22683, January 7, 1942, 21 Comp. Gen. 644, relating to part-time physicians of the District of Columbia, distinguished.

Comptroller General Warren to the Federal Security Administrator, February 21, 1942:

I have your letter of February 2, 1942, as follows:

Your decision is requested on certain questions that have arisen in the administration of the Classification Act of 1923, as amended by Public Law 200, 77th Congress, approved August 1, 1941, as follows:

1. Although initial payments authorized and required to be made as of October 1, 1941, under the above-stated law, were delayed until additional funds could be appropriated by Congress to meet the general operating expenses of the government agencies as expressed in the Bureau of the Budget Circular No. 381, dated September 27, 1941, it became necessary in the meantime to effect changes in status and transfers of certain employees with the result that numerous technical questions developed. Assuming that these employees were entitled under the law to the initial advances referred to, and that they are now being advanced retroactively from October 1, 1941, also that there is no administrative desire for a reduction in salary, some of these questions are:

a. Will an employee who was transferred on October 16, 1941, from a position in CAF-2 at $1,440 to another position in the same grade and at the same salary, be entitled to the salary increase only from October 1 to October 15, 1941, inclusive, or will he be entitled to it thereafter as well?

b. Will an employee who was transferred on October 16, 1941, from CAF-2 at $1,620 to CAF-3 at $1,620 be entitled to the increase only to October 15, 1941, inclusive, or will he be entitled to it thereafter as well?

c. Will an employee who was transferred on October 16, 1941, from CAF-2 at $1,440 to CAF-1 at $1,440 be entitled to the increase only to October 15, 1941, inclusive, or will he be entitled to it thereafter as well?

d. An employee was transferred on October 16, 1941, from CAF-2 at $1,560 in the departmental service to CAF-1 at $1,440 in the field service. He is entitled, under the law, to a salary advancement to $1,620 in CAF-2, and when his promotion is received it is desired to have him receive at the same time $1,500. Can the latter rate be fixed under the law cited above, or was it necessary to have set the salary administratively at $1,500 at the time of transfer in order to safeguard that salary to the employee?

2. It is the general policy of the Social Security Board, when transferring its employees to duty in its field service, to transfer them at the same salary if transferring at the same grade; and, if transferring to a lower grade, to transfer them at the middle salary rate of that grade. Requests for transfer to our field offices are numerous and many employees are willing to go at a decrease in salary and/or grade in order to secure such changes of station. In your decision of

October 14, 1941 (B-20911), you state “* on and after October 1, 1941, January 1, 1942, or April 1, 1942, the only legal rate of salary payable under the existing law, to employees who qualify as of those dates is the advanced salary required by the statute to be paid." Is this to be interpreted that we must pay an employee, upon transfer to the field, the same salary he was receiving in the departmental service if transferring at the same grade, and that he must be paid all earned administrative promotions if transferred to a lower grade? It should be noted that for budgetary reasons there will be instances where the latter course cannot be followed.

3. Section 7 (f) of the Classification Act, as amended by Public Law 200, supra, provides that "Within the limit of available appropriations, and in recognition of especially meritorious services, the head of any department or agency is authorized to make additional within-grade compensation advancements, but any such additional advancements shall not exceed one step and no employee shall be eligible for more than one additional advancement hereunder within each of the time periods specified in subsection (b). *." Section 3 of

66

Executive Order 8882, September 3, 1941, implementing this amendment, states, # * An additional within-grade compensation advancement authorized by the said section 7 (f) may be granted simultaneously with, or at any time prior to, the periodic increase to which the employee may be eligible under the said section 7 (b).

*

Your decision is requested as to whether under the above-quoted authorities a "meritorious" promotion may be granted currently to an employee prior to his attaining eligibility for a statutory within-grade salary advance under section 7 (b). For example, may an employee who was last promoted on February 1, 1941, from P-1, $2,000 to P-2, $2,600 be given a meritorious within-grade compensation advance at this time?

4. Section 7 of the Classification Act of 1923 as amended by Public Law 200, supra, provides, under subsections (b) and (e), as follows:

"(b) All employees compensated on a per annum basis, and occupying permanent positions within the scope of the compensation schedules fixed by this act, who have not attained the maximum rate of compensation for the grade in which their positions are respectively allocated, shall be advanced in compensation successively to the next higher rate within the grade at the beginning of the next quarter, following the completion of: (1) Each eighteen months of service if such employees are in grades in which the compensation increments are $60 or $100; or (2) each thirty months of service if such employees are in grades in which the compensation increments are $200 or $250, subject to the following conditions:

*

*

"(e) Employees eligible under subsection (b) for compensation advancement by reason of service immediately preceding the effective date of this amendment shall be advanced to the next higher rate of compensation within the grade to which their positions are respectively allocated at the beginning of the next quarter immediately following the effective date of this amendment."

Executive Order No. 8882, September 3, 1941, supra, provides, under section 2 (c) and (d), as follows:

"In computing the periods of service required by the said section 7 for withingrade advancements there shall be credited to such service:

"(c) Time elapsing in a non-pay status (including break in service) not exceeding thirty days within any one time period of eighteen or thirty months, as the case may be.

"(d) Service rendered prior to absence on furlough or leave without pay where such absence is in excess of thirty days but not exceeding one year."

Your decision is requested as to whether, under the above-quoted sections, an employee of the Agency who was on leave without pay for four months immediately preceding October 1, 1941, and who prior to that period of leave without pay had eighteen or thirty months or more of continuous service, as the case may be, is eligible for a within-grade compensation advance as of October 1, 1941.

Also, your decision is requested as to whether, when leave without pay during an eighteen or thirty-month period is in excess of thirty days but less than one year, the period required for eligibility is automatically extended for the equivalent period of leave without pay or only for the excess of leave without pay over thirty days. The following case is one in point: Employee received last promotion May 1, 1940; eighteen months of service completed November 1, 1941; eligible for promotion on January 1, 1942, except that sixty-five days of leave without pay were taken during eighteen-month period. Employee is

eligible for promotion on January 1, 1942, if allowed credit for thirty days. However, if eligibility period is extended for full amount of leave without pay taken, it will not be completed until January 5, 1942, thus making April 1, 1942, the effective date of the next promotion.

5. In your decision, B-20925, of October 27, 1941 (21 Comp Gen. 369), you state under "Seventh question." as follows: "If the employee was separated from a permanent position on October 1, 1941, from and after which date the first periodic increase of compensation is payable, the employee should not be considered for promotion as of that date. However, if the employee was not separated from his permanent position until after October 1, 1941, he should be considered for promotion for the period from October 1, 1941, to the date he is separated from such permanent position.

Under the above interpretation, should an employee be considered for promotion as of October 1, 1941, by this Agency if the employee was separated by resignation at the close of business October 1 to go to another agency without break in service?

6. In the United States Public Health Service, certain physicians work part time and are paid annually less than the basic salaries for their respective grades. Their appointment is provided for under schedule A, section XIX, paragraph 6, Civil Service Rules, as follows: "Any local physician or dentist employed on a fee basis or a part-time basis when, in the opinion of the Commission, the establishment of registers is impracticable." No mention is made in the appointment of the amount of time to be served. There are, for example, a number of acting assistant surgeons, appointed to care for specific groups of beneficiaries, whose annual compensation is based on the number of persons to be served. There is another group of acting assistant surgeons, attached to relief stations or to immigration stations, "subject to call" at all times and whose actual services rendered cannot be proportioned with any full-time employee's tour of duty. These physicians have their own private offices and carry on their private practices, but when they receive calls, whether from the officer in charge of a hospital or from a chief quarantine officer, to make examinations, they are required, regardless of their private practices, to report immediately and to render such service as is necessary to the Public Health Service at the moment. The compensation of these men is determined administratively upon an estimated proportion of time to be required and is increased or decreased from time to time in accordance with the varying demands upon their time, throughout a given period.

Are the above-mentioned physicians considered to be regular employees or are they the equivalent of contract employees? If the former, are they entitled to increases in salary under the terms of Public Law 200, supra? If they are eligible for the increase, what is the amount of a one-step increase, and would increased compensation for increased demands be disqualifying for a mandatory salary advance?

Section 2 of the act of August 1, 1941, Public Law No. 200, 55 Stat. 613, providing a plan for making within-grade salary advancements amends section 7 of the original Classification Act of March 4, 1923, 42 Stat. 1490. The portion of section 7 of the original statute now constitutes subsection (a) of the section and the portion appearing in the amendatory act of August 1, 1941, now comprises subsections (b) to (h) of the section. Subsection (a) appearing in the original statute contains the following sentence which has not been superseded or rendered inoperative by the amendatory statute:

Nothing herein contained shall be construed to prevent the promotion of an employee from one class to a vacant position in a higher class at any time in accordance with civil service rules, and when so promoted the employee shall receive compensation according to the schedule established for the class to which he is promoted. [Italics supplied.]

The word "class" as used in this statute has been construed as synonymous with the word "grade." 4 Comp. Gen. 333, 334. See, also, section 10 of the original statute, 42 Stat. 1491, which has not been

superseded or rendered inoperative by the act of August 1, 1941said section 10 of the basic statute providing as follows:

That, subject to such rules and regulations as the President may from time to time prescribe, and regardless of the department or independent establishment in which the position is located, an employee may be transferred from a position in one grade to a vacant position within the same grade at the same rate of compensation, or promoted to a vacant position in a higher grade at a higher rate of compensation, in accordance with civil-service rules, any provision of existing statutes to the contrary notwithstanding: Provided, That nothing herein shall be construed to authorize or permit the transfer of an employee of the United States to a position under the municipal government of the District of Columbia, or an employee of the municipal government of the District of Columbia to a position under the United States.

It may be stated, therefore, that the terms and conditions of the amendatory act of August 1, 1941, as well as the rules stated in the President's Regulations, Executive Order No. 8882, dated September 3, 1941, and in the decisions heretofore rendered by this office construing said statute, relate only to advancements in salary within the grade or position held by an employee at the time he is eligible for such advancement in salary, either periodic or meritorious, and do not control the fixing of initial salary rates upon the transfer, promotion, or reduction of employees from one grade or position to another, or modify or supersede rules stated in other decisions of this office for fixing initial salary rates upon transfer, promotion, or reduction between grades or positions. See the last sentence of the decision of October 13, 1941, 21 Comp. Gen. 326, 329. As the within-grade salary advancements, either periodic or meritorious, are required to be based on the "permanent positions within the scope of the compensation schedules fixed by this act" (quoting from section 7 (b) of the classification act, added by the act of August 1, 1941), occupied at the time the employee becomes eligible for such advancement in salary; and as one of the conditions of eligibility thereto is an efficiency rating based upon the performance of the duties of such position, there is nothing apparent in the law, as amended, or the regulations thereunder, vesting in an employee the absolute right to retain a periodic or meritorious within-grade salary advancement acquired in one permanent position after he is transferred, promoted, or reduced to another permanent position with separate and distinct duties and responsibilities, whether in the same or a different grade. The vested right of an employee to retain the within-grade salary advancement under the act of August 1, 1941, and the regulations pursuant thereto, maintains only so long as the employee remains in the same position in which the advancement is properly granted.

In decision of August 6, 1941, 21 Comp. Gen. 113, 114, it was stated:

This office, in a long line of decisions, has held that the transfer, reappointment, or reinstatement of an employee from a classified or unclassified position to a classified position does not constitute a "new" appointment within the meaning of rule 6 of section 6 of the Classification Act of 1923, approved March 4, 1923, 42