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a- )FFICE AND CIVIL SERVICE

SE OF REPRESENTATIVES

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SECOND SESSION

UGHTY-SEVENTH CONGRESS

ON

H.R. 10685 and H.R. 10687

BILLS TO PROVIDE FOR THE PAYMENT OF CERTAIN AMOUNTS

AND RESTORATION OF EMPLOYMENT BENEFITS TO CERTAIN

FEDERAL OFFICERS AND EMPLOYEES IMPROPERLY DEPRIVED

THEREOF, AND FOR OTHER PURPOSES

MAY 14, 1962

Printed for the use of the

Committee on Post Office and Civil Service

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1962
COMMITTEE ON POST OFFICE AND CIVIL SERVICE

TOM MURRAY, Tennessee, Chairman

JAMES H. MORRISON, Louisiana

JAMES C. DAVIS, Georgia

KATHRYN E. GRANAHAN, Pennsylvania

THADDEUS J. DULSKI, New York

DAVID N. IIENDERSON, North Carolina

ARNOLD OLSEN, Montana

JOSEPH P. ADDABBO, New York

RICHARD H. ICHORD, Missouri

CATHERINE D. NORRELL, Arkansas

MORRIS K. UDALL, Arizona

DOMINICK V. DANIELS, New Jersey

LINDLEY BECKWORTH, Texas

WALTER H. MOELLER, Ohio

ROBERT J. CORBETT, Pennsylvania

H. R. GROSS, Iowa

JOEL T. BROYHILL, Virginia

AUGUST E. JOHANSEN, Michigan

GLENN CUNNINGHAM, Nebraska

GEORGE M. WALLHAUSER, New Jersey

ROBERT R. BARRY, New York

KATHARINE ST. GEORGE, New York

JOHN H. ROUSSELOT, California

EDWARD J. DERWINSKI, Illinois

ROBERT F. ELLSWORTH, Kansas

SUBCOMMITTEE APPOINTED To CONSIDER H.R. 10685 AND H.R. 10687

ARNOLD OLSEN, Montana, Chairman

MORRIS K. UDALL, Arizona JOEL T. BROYHILL, Virginia

WALTER H. MOELLER, Ohio GEORGE M. WALLHAUSER, New Jersey

II
CONTENTS

Statement of—

Langan, James K., operations director, Government Employes Page

Council, AFL—CIO 21

MacKay, John W., president, National Postal Union, accompanied by

Walter 0. Noreen, executive vice president, National Postal Union,

Washington, D.0 19

Macy, Hon. John W., Jr., Chairman, U.S. Civil Service Commission,

accompanied by 0. Glenn Stahl, Director, Bureau of Programs and

Standards, and Harold H. Leich, Chief, Program Planning Division,

U.S. Civil Service Commission 2

McCart, John, legislative representative, the American Federation

of Government Employees, AFL—CIO 14

Mears, John F., legislative representative, the American Legion 22

O'Connor, John F., legislative director, United Federation of Postal

Clerks 21

Rademacher, James H., assistant secretary-treasurer, National

Association of Letter Carriers 17

Steward, Luther C., Jr., assistant to the president, National Federation of Federal Employees 17

III

BACK PAY FOR FEDERAL EMPLOYEES

MONDAY, MAY 14, 1962

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE OF THE

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,

Washington, D. C.

The subcommittee met, pursuant to notice, at 10:15 a.m., in room

215, House Office Building, Hon. Arnold Olsen (chairman of the

subcommittee) presiding.

Mr. OLSEN. The subcommittee will come to order.

This subcommittee, consisting of Mr. Udall, Mr. Moeller, Mr.

Broyhill, Mr. Wallhauser, and myself as chairman, is meeting this

morning to consider H.R. 10685 and H.R. 10687, identical bills introduced by Mr. Beckworth and Mr. Corbett, respectively, as a result

of an official request of the Civil Service Commission.

Popularly titled the "Back Pay Act of 1962," the legislation would

establish a single general and equitable principle of backpay to be

followed by all Federal agencies in restoring to any employee pay and

other benefits which he may have lost because of an unjustified or unwarranted personnel action which is later corrected by appropriate

authority. The bills are the result of extensive consultation with

employee groups and agencies extending over a period of several years.

The proposal has largely selected the best elements from current

backpay authorities, welded them into a single principle, and proposed

the use of this principle in every backpay case. This principle holds

that an employee is entitled to redress whenever an erroneous personnel action that has stopped or reduced his compensation is corrected

by appropriate authority.

The bills enable such authority, following an administrative determination or timely appeal, to pay the employee the difference between what he earned and what he should have earned for the period.

Backpay protection is also extended to some employees in situations

not now covered. However, the proposal does not extend to any

employee any new rights of tenure, review, or appeal.

Most backpay situations in the Federal service are already covered

in some way by current authorities and the principle of backpay as a

part of corrective action is well established. However, the existing

authorities do not provide an adequate basis for a full solution to the

backpay problem. They have led to a piecemeal approach to the

problem in that they may not be applied uniformly to all situations

and employees and they leave gaps in coverage.

Accordingly, the Civil Service Commission has recommended this

legislation as one of its major legislative goals in this session to assure

that all classes of Federal officers and employees can be treated

equitably and uniformly with respect to backpay.

1
2 BACK PAY FOR FEDERAL EMPLOYEES

(The bill H.R. 10685 follows:)

[H.R. 10685, 87th Cong., 2d sess.]

A BILL To provide for the payment of certain amounts and restoration of employment benefits to certain

Federal officers and employees improperly deprived thereof, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That this Act may be cited as the "Back Pay Act

of 1962".

SEC. 2. For the purpose of this Act the term "agency" means (1) the executive

departments; (2) the independent establishments in the executive branch, including corporations wholly owned or controlled by the United States; (3) the Administrative Office of the United States Courts; (4) the Library of Congress; (5) the

General Accounting Office; (6) the Government Printing Office; (7) the Office of

the Architect of the Capitol; (8) the Botanic Garden; and (9) the government of

the District of Columbia.

SEC. 3. (a) An officer or employee of an agency who, on the basis of an administrative determination or a timely appeal, is found by appropriate authority

under applicable laws or regulations to have been subject to an unjustified or

unwarranted personnel action which has withdrawn or reduced any part of his

pay, allowance, or differential shall be entitled upon correction of the action to

be paid for the period that the action was in effect in an amount commensurate

with the amount he would normally have earned had he not been subject to the

action, less any amounts earned by him through other employment during such

period.

(b) For all purposes

'

including the accumulation of leave not in excess of the

maximum prescribed by law or regulation, he shall be deemed to have rendered

service during the period.

SEC. 4. The United States Civil Service Commission may prescribe regulations

to carry out the provisions of this Act: Provided, however, That such regulations

shall not be applicable to the Tennessee Valley Authority or its employees.

SEC. 5. There are hereby repealed—

(1) section 6(b) of the Act of August 24, 1912, as amended (5 U.S.C. 652(b));

and

(2) that part of the third proviso of the first section of the Act of August

26, 1950 (64 Stat. 477), which reads ", and if so reinstated or restored shall

be allowed compensation for all or any part of the period of such suspension

or termination in an amount not to exceed the difference between the amount

such person would normally have earned during the period of such suspension

or termination, at the rate he was receiving on the date of suspension or

termination, as appropriate, and the interim net earnings of such person".

SEC. 6. This Act applies to personnel actions effected on or after the date of its

enactment. The provisions of law repealed under section 5 of this Act continue

in force with regard to actions taken prior to the effective date of this Act.

Mr. OLSEN. We are pleased to have with us this morning as our

first witness Chairman John W. Macy, Jr., of the Civil Service

Commission.

Mr. Macy is accompanied by Mr. 0: Glenn Stahl, Director, Bureau

of Programs and Standards, and Mr. Harold H. Leich, Chief, Program

Planning Division.

Will you proceed, Mr. Macy, and if you wish you will have seated

with you Mr. Stahl and Mr. Leich.

STATEMENT OF JOHN W. MACY, JR., CHAIRMAN, U.S. CIVIL

SERVICE COMMISSION, ACCOMPANIED BY 0. GLENN STAHL,

DIRECTOR, BUREAU OF PROGRAMS AND STANDARDS, AND

HAROLD H. LEICH, CHIEF, PROGRAM PLANNING DIVISION

Mr. MACY. Mr. Chairman, I want to express the appreciation of

the Commission to you and your subcommittee for your willingness

to take up this important piece of Federal personnel legislation.

I would like to suggest that for the purpose of having a complete

record you may wish to incorporate in the transcript of this hearing
BACK PAY FOR FEDERAL EMPLOYEES 3

my letter of September 8, 1961, to the Speaker transmitting this

legislative proposal along with the section analysis and the statement

of purpose and justification. My written statement is a summarization of that material in order to conserve time, but in my view the

more complete document should be helpful to the subcommittee in

its consideration.

Mr. OLSEN. Without objection the letter of September 8, 1961,

from the Civil Service Commission to the Speaker of the House of

Representatives is incorporated in the record at this point.

(The letter follows:)

HOB. SAM RAYBURN,

Speaker of the House of Representatives.

DEAR MR. SPEAKER: We are submitting for the consideration of Congress

proposed legislation to establish one general and equitable principle to be followed

by all Federal agencies in restoring to their employees pay and other benefits of

employment which are lost by reason of an unjustified or unwarranted personnel

action subsequently corrected by appropriate authority. There are enclosed:

(1) a draft bill; (2) a section analysis of the proposed bill; and (3) a statement of

purpose and justification.

The proposed bill presents one comprehensive and uniform authority for

backpay entitlement and computation to replace the three current authorities,

because these authorities are neither comprehensive nor uniform in their application. Specifically the bill is intended to supersede the pay provisions of Public

Law 80-623 and Public Law 81-733. In addition this bill provides a more

specific legislative foundation for the Civil Service Commission's authority in this

area now exercised under section 19 of the Veterans' Preference Act.

In brief, the proposed bill enables appropriate authority following an administrative determination or timely appeal to pay an employee who has had his

compensation terminated or reduced because of an unjustified or unwarranted

personnel action the difference between what he earned and what he should have

earned for the period. No entitlement is created, however, without a finding by

appropriate authority that the action was indeed unjustified or unwarranted and

a determination by such authority to take corrective action.

As amplified in the attached statement of purpose and justification, the proposed

bill extends backpay protection to certain employees and situations not covered

by present authorities. Significantly, the proposed bill does not extend to any

employee any rights of tenure, review, or appeal to which he is not otherwise

entitled. It does require, however, that where an employee has a right to seek

corrective action through administrative proceedings, and is successful in doing

so, he will for pay, employment benefit, and other purposes be deemed to have

rendered service at his proper grade during the period. Moreover, the proposal

would strengthen the powers of agencies in making equitable pay and benefit

adjustments following the correction of unjustified or unwarranted personnel

actions which they decide to correct on their own initiative.

Timely processing of appeals should minimize individual retroactive payments.

The cases which would be covered should continue to be largely those which are

already covered by one or the other of the present authorities covering backpay.

While it is not anticipated that the additional costs involved would be great,

however, the principle which this bill would establish is an important one. For

this reason it is hoped that the Congress will be able to act favorably on this

legislation as soon as circumstances permit.

The Bureau of the Budget advises that from the standpoint of the administration's program there would be no objection to the submission of this proposal.

By direction of the Commission:

Sincerely yours,

U.S. CIVIL SERVICE COMMISSION,

Washington, D.C., September 8, 1961.

JOHN W. MACY, Jr., Chairman.

A BILL To provide for the payment of compensation and restoration of employment benefits to certain

Federal officers and employees improperly deprived thereof, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of

• America in Congress assembled, That this Act may be cited as the "Back Pay Act

of 1961".

SEC. 2. For the purpose of this Act the term "agency" means (1) the executive

departments; (2) the independent establishments in the executive branch, includ-
4 BACK PAY FOR FEDERAL EMPLOYEES

ing corporations wholly owned or controlled by the United States; (3) the Administrative Office of the United States Courts; (4) the Library of Congress; (5) the

General Accounting Office; (6) the Government Printing Office; (7) the Office of

the Architect of the Capitol; (8) the Botanic Garden; and (9) the government of

the District of Columbia.

SEC. 3. (a) An officer or employee of an agency who, on the basis of an administrative determination or a timely appeal, is found by appropriate authority under

applicable laws or regulations to have been subject to an unjustified or unwarranted personnel action which has withdrawn or reduced any part of his salary,

wages, or other compensation shall be entitled upon correction of the action to be

paid for the period that the action was in effect in an amount commensurate with

the amount he would normally have earned had he not been subject to the action,

less any amounts earned by him through other employment during such period.

(b) For all purposes, including the accumulation of leave not in excess of the

maximum prescribed by law or regulation, he shall be deemed to have rendered

service during the period.

SEC. 4. The United States Civil Service Commission may prescribe regulations

to carry out the provisions of this Act: Provided, however, That such regulations

shall not be applicable to the Tennessee Valley Authority or its employees.

SEC. 5. Section 6(b) of the Act of August 24, 1912 (chapter 389, 37 Stat. 555, as

amended) (5 U.S.C. 652(b)), and the last seventy-one words of the third proviso

of section 1 of the Act of August 26, 1950 (chapter 803, 64 Stat. 476) are repealed.

SEC. 6. This Act applies to personnel actions effected on or after the date of its

enactment. The provisions of law repealed under section 5 of this Act continue

in force with regard to actions taken prior to the effective date of this Act.

ZECTION ANALYSIS"'

Most of the situations which could give rise to the retroactive payment of

'compensation or employment benefits under the provisions of this draft bill are

already covered by the backpay provisions of Public Law 623, 80th Congress,

Public Law 733, 81st Congress, the powers of the Civil Service Commission under

the Veterans' Preference Act, and a number of decisions of the Comptroller

General interpreting these authorities. The backpay provisions of this draft

bill, however, would be more uniform and in some cases more equitable than

those now available. In addition, the coverage of the draft bill is designed to

encompass all employees of the executive branch and certain other agencies.

Significantly, the draft bill neither requires any agency to review any kind of

personnel action, nor defines or restricts the nature of corrective actions themselves. Moreover, the draft bill does not modify the procedural requirements

of any formal system of appeals. All the draft bill requires is that where a right

of appeal has been specifically granted by law or regulation, or where management

on its own initiative has discovered a personnel action which in all equity should

be reviewed, any corrective action as a consequence extended to a Federal officer

or employee with respect to adjustment of compensation or employment benefits

must be retroactive in its effect, complete in its remedies, and consistent in its

application.

Section 1 of this draft bill authorizes the use of a short or popular title in citing

this legislation.

Section 2 of the draft bill defines "agency" in sufficiently broad terms to include

all parts of the executive branch, the government of the District of Columbia,

and those other establishments of the Federal Government which look to the

executive branch for personnel management leadership.

Section 3(a) of the draft bill covers all officers and employees of the agencies

encompassed by the definition set out in section 2. This would include all

persons in both the competitive and excepted civil service.

Section 3(a) of the draft bill in referring to "administrative determination"

means a decision made by appropriate authority on its own initiative as opposed

to a decision which it has been required to make in order to dispose of a formal

appeal. The purpose of this provision is to grant agencies the right at their own

option to correct any real injustices in the backpay area which they identify

themselves, especially where no avenue of appeal may be open to the individual

involved.
BACK PAY FOR FEDERAL EMPLOYEES 5

A BILL To provide for the payment of certain amounts and restoration of employment benefits to certain

Federal officers and employees improperly deprived thereof, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of

America in Congress assembled, That this Act may be cited as the "Back Pay

Act of 1961".

SEC. 2. For the purpose of this Act the term "agency" means (1) the executive

•departments; (2) the independent establishments in the executive branch, including corporations wholly owned or controlled by the United States; (3) the Administrative Office of the United States Courts; (4) the Library of Congress; (5) the

General Accounting Office; (6) the Government Printing Office; (7) the Office of

The Architect of the Capitol; (8) the Botanic Garden; and (9) the government of

the District of Columbia.

SEC. 3. (a) An officer or employee of an agency who, on the basis of an administrative determination or a timely appeal, is found by appropriate authority

under applicable laws or regulations to have been subject to an unjustified or

unwarranted personnel action which has withdrawn or reduced any part of his

pay, allowances, or differential shall be entitled upon correction of the action to

be paid for the period that the action was in effect in an amount commensurate

with the amount he would normally have earned had he not been subject to the

action, less any amounts earned by him through other employment during such

period. (b) For all other purposes, including the accumulation of leave not in

excess of the maximum prescribed by law or regulation, he shall be deemed to

have rendered service during the period.

SEC. 4. The United States Civil Service Commission may prescribe regulations to carry out the provisions of this Act.

SEC. 5. Section 6(b) of the Act of August 24, 1912, as amended (5 U.S.C.

652(b)), and the last 71 words of the third proviso of section 1 of the Act of August

26, 1950, Ch. 803, 64 Stat. 746, are repealed.

SEC. 6. This Act applies to personnel actions effected on or after the date of

its enactment. The provisions of law repealed under section 5 of this Act continue in force with regard to actions taken prior to the effective date of this Act.

Section 3(a) of the draft bill in referring to "timely appeal" means (1) a request

properly made to an agency or to the Civil Service Commission seeking reconsideration of an official p-rsonnel action which has affected an employee adversely

(2) initiated by an employee or his representative (3) under an appeal system or

procedure established by law or regulation (4) which request has been accepted

by the authority administering the particular appeals system or procedure involved. This provision of itself creates no new concepts of timeliness. On this

point it relies entirely on the practices established in such other laws and regulations dealing with employee appeals as may now exist or later come into being.

The purpose of this provision is to prevent employees from pressing stale claims

for backpay where they themselves have slept on their rights.

Section 3(a) of the draft bill in using the phrase "unjustified or unwarranted

personnel action," follows the language of Public Law 623, 80th Congress, the

primary backpay authority at the time this proposal was drafted. All personnel

actions in the administration of the Federal personnel systems are taken under

some authority. Each such personnel action should be intended to be a proper

exercise of the powers established by the particular law or regulation under which

the action is taken. Nevertheless, occasionally errors are made in the exercise

of these powers. Personnel actions which are found to reflect such errors may be

defective on equitable or procedural grounds or both. The ruling interpretation

of the phrase 'unjustified or unwarranted" with reference to adverse actions in

the current administration of Public Law 623, 80th Congress, encompasses both

equitable and procedural considerations following the decisions of the Court of

Claims in Stringer v. U.S., 117 Ct. Cl. 30, and Garcia v. U.S., 123 Ct. Cl. 722,

and of the Comptroller General in 34 C.G. 568.

Section 3(a) of the draft bill in referring to "appropriate authority" means

that agency, office, or official empowered under applicable law or regulation to

correct or direct the correction of the unjustified or unwarranted action. In

some cases this could be the Civil Service Commission as established, for example,

in the Veterans' Preference Act. In many instances, such authority would be

found at some level of agency management as defined in applicable regulations

and delegations of authority thereunder.

Section 3(a) uses the phrase "applicable laws or regulations" to refer to the

laws and regulations which provide the basis for operations under the Federal

83949-62---2
6 BACK PAY FOR FEDERAL EMPLOYEES

personnel systems. The draft bill looks to these laws and regulations which

exist now or may later come into effect—

(1) To provide avenues and procedures for the reconsideration of unjustified or unwarranted personnel actions.

(2) To provide the legal basis for taking proper personnel actions and for

correcting unjustified or unwarranted ones.

(3) To establish the locus of the authority to correct improper actions.

The phrase "under applicable laws and regulations" has been placed as indicated

in the draft bill in order to insure its reference to the word "found" and the phrase

"appropriate authority." It precedes the phrase "unjustified or unwarranted

personnel action" in order to avoid the logical inconsistency which would be

suggested by reference to "an unjustified or unwarranted personnel action under

appropriate laws or regulations." As indicated previously, however, all proper

personnel actions reflect an exercise of authority under an appropriate law or

regulation.

Section 3(a) of the draft bill does not enumerate the specific types of personnel

actions covered because it is not the cause of the action, nor how it is labeled, which

is important here. What is significant is the propriety of the action and whether

or not the employee affected had his compensation reduced as a consequence.

Unjustified or unwarranted separations (including retirements), suspensions, and

demotions will constitute most of the situations involved.

Section 3(a) of the draft bill in the same spirit does not enumerate the specific

types of corrective action which would constitute appropriate correction of the

various types of unjustified or unwarranted personnel actions which may arise.

The general term "correction" in the text of the draft bill has been used deliberately to assure that the proper administrative action whatever it might be consistent with applicable laws or regulations, be taken before a backpay entitlement

is created.

Section 3(a) of the draft bill establishes an entitlement to backpay in any situation where a personnel action which has terminated or decreased the compensation

of a Federal officer or employee is subsequently found unjustified or unwarranted

and corrected by appropriate authority. For clarity the four essentials for an

entitlement to backpay under this act are set out below:

1. An official personnel action must have been taken which reduced or diminished some part of an individual's usual salary, wages, or other compensation from

Federal employment. In other words, in effect, something must have been taken

away.

2. The personnel action in question must have been made the subject of review

by appropriate authority either because of a timely appeal or because appropriate

authority on its own initiative decided to review that action. In other words, the

specific action which precipitated the employee's loss must have been reexamined.

3. The personnel action in question must have been found by appropriate

authority to be unjustified or unwarranted.

4. A corrective action consistent with applicable laws or regulations must have

been authorized by appropriate authority as a consequence of its decision.

Section 3(a) of the draft bill, therefore, establishes for pay purposes the principle that an employee should be made whole following the correction of an unjustified or unwarranted personnel action which reduced his compensation in

some way. As would be defined in detail in the regulations, the adjustment in

compensation would cover everything to which the employee normally would

have been entitled. The regulations necessarily would require that the adjustment in compensation recognize any obvious things in the normal course of events

which would have affected the amount of compensation. With respect to reducing that amount, these would include situations, such as death before final adjudication of an appeal, separation or furlough as a result of reduction in force,

transfer to another agency, and imprisonment for crime. With respect to increasing the amount of compensation, the draft bill assures credit for increments

such as periodic within-grade increases and general pay raises to which the employee would have been entitled had he not been subject to the unjustified or unwarranted action. Public Law 623, 80th Congress, and Public Law 733, 81st

Congress, unfortunately, prevent crediting these increments in computing the

amount of backpay. On the other hand, both Public Law 623, 80th Congress,

and Public Law 733, 81st Congress, are currently interpreted as including in a

backpay computation the premium pay which an employee normally would have

earned. To preserve this interpretation the phrase "would normally have

earned," which appears in Public Law 733, 81st Congress, and which was discussed

by the Comptroller General in 34 Comp. Gen. 382, has been repeated in the

draft bill.
BACK PAY FOR FEDERAL EMPLOYEES 7

Section 3(a) of the draft bill, following the historical precedents in this area,

provides that the amount of backpay to which an employee would be entitled

would be reduced by whatever amount he earned through "other empToyrnetit"

during the period the action was in effect. The term "other employment" is

taken from Public Law 623, 80th Congress, in order to assure a continuity of

interpretation on this point. Both the Court of Claims and the Comptroller

General view "other employment" as encompassing only that employment engaged in to take the place of the employment the employee had prior to the action

against him. This interpretation was discussed by the court in Jackson v. U.S.,

121 Ct. Cl. 405, and by the Comptroller General in 32 Comp. Gen. 408. Therefore,

if an employee had been separated from his position, this amount would be the

difference between what his Government income should have been and what he

actually earned in an employment obtained to take the place of his Government

job. If he had been demoted, the amount to which he would be entitled would

be the difference between what his income should have been in the proper grade

and what it actually was at the lower grade.

Section 3(b) of the draft bill in using the sentence, "For all other purposes,

including the accumulation of leave not in excess of the maximum prescribed by

law or regulation, he shall be deemed to have rendered service during the period,"

provides for the complete restoration of seniority, service credit toward retirement,

life insurance, health insurance, and all other benefits of employment which may

have been affected by the action. This is consistent with the current administration of these matters following a court or Civil Service Commission restoration

order. In addition, leave accumulation, excluded specifically from the backpay

provisions of Public Law 623, 80th Congress, would be authorized uniformly by

this draft bill following the precedent of the more recent Public Law 733, 81st

Congress. The usual ceilings on leave accumulation would be observed, as prescribed by the law or regulation covering the particular leave system to which

the employee is subject.

Section 4 of the draft bill authorizes the Civil Service Commission to make

such regulations as may be necessary to carry out the provisions of this proposal

much as the Commission regulates in certain other pay areas. Day-to-day application of these regulations to individual cases would be the responsibility of the

agencies concerned. The General Accounting Office would resolve specific questions in individual cases as it does other matters involving claims and demands

against the Government of the United States.

Section 5 of the draft bill repeals the backpay provisions of Public Law 623,

80th Congress, and Public Law 733, 81st Congress.

Section 6 of the draft bill provides that the measure shall be effective with

respect to personnel actions taken on or after the date of its enactment. It is

not administratively feasible to make this proposal retroactive without limitation.

However, there is no more reason for making it retroactive to one date than to

another. For these reasons the provisions of the draft bill would be applicable

to cases arising because of unjustified or unwarranted actions taken on or after

its date of enactment. Prior cases would be settled under current authorities.

STATEMENT OF PURPOSE AND JUSTIFICATION OF A DRAFT BILL To PROVIDE FOR

THE PAYMENT OF COMPENSATION AND RESTORATION OF EMPLOYMENT BENEFITS

TO CERTAIN FEDERAL OFFICERS AND EMPLOYEES IMPROPERLY DEPRIVED

THEREOF

PURPOSE

To assure that all classes of Federal officers and employees can be treated

equitably and uniformly with respect to compensation and employment benefits

as a consequence of actions taken to correct unjustified or unwarranted personnel

actions.

JUSTIFICATION

This legislative proposal consolidates what is generally referred to as "backpay" authority into one logical, equitable, and comprehensive statement of

entitlement with respect to compensation and employment benefits. It is more

than a codification of current backpay authorities because these authorities,

while adequate in many respects, may not be applied uniformly to all similar

situations and do not afford completely consistent remedies. The proposal is

not entirely new, however, because it has largely selected the best elements from

these familiar authorities, welded them into one principle, and proposed the use

of that principle in every instance where a question of backpay can be raised.

Briefly this principle holds that an employee is entitled to be made whole when-
8 BACK PAY FOR FEDERAL EMPLOYEES

ever an erroneous personnel action which has terminated or reduced his compensation is corrected by appropriate authority. Significantly this proposal is

not concerned with the substance of appeal rights, the structure of the appeals

process, or the precise nature of corrective actions.

This proposal could justify itself with principles of fair play or philosophical

concepts of equity and justice. Fortunately for purposes of brevity, this is not

necessary. It is also unnecessary to recount how the concept of backpay has

been widely accepted in industry. The simple fact is that the trend in law,

regulation, and interpretation demonstrates clearly that the Congress, the courts,

the agencies, and the Comptroller General have been thinking along these lines

for a long time with particular emphasis on the past 15 years.

Background of current authorities

In 1947 it was pointed out in Congress, according to the legislative history,

that a "glaring loophole in the present law" existed if an employee in the competitive service who successfully availed himself of a right of appeal could not

always be reimbursed for the compensation he lost while his appeal was pending.

In 1948, after consulting the Civil Service Commission and others, Congress responded to this need by enacting Public Law 623, 80th Congress, as an amendment to the Lloyd-LaFollette Act.

Public Law 623, 80th Congress, authorizes backpay in nonsecurity cases involving improper separations and suspensions of nonveterans with civil service status

in the competitive service and all veterans who have completed their trial or probationary period. The amount of pay is computed at the rate the employee was

receiving at the time of the improper action and covers the entire period the

action was in effect. Leave accumulation covering the same period, however,

was excluded from the other remedies to which an employee was entitled under

the act.

In 1950, with the passage of Public Law 733, 81st Congress, Congress acted

again in the backpay area, this time protecting executive branch employees suspended or terminated in erroneous security actions. The amount of backpay is

computed as under Public Law 623, 80th Congress; however, agency heads are

authorized to determine whether the employee will be paid for all or part of the

period of erroneous suspension or removal. Interestingly, agency practice under

this law has been to authorize payment for the entire period almost without

exception. More complete as to benefits, Public Law 733, 81st Congress, has

been interpreted to permit leave accumulation covering the period of the erroneous

action.

The third major source of backpay authority is the Veterans' Preference Act

of 1944, as amended. This act has been interpreted as authorizing backpay in

cases involving improper demotions of veterans who have completed a trial or

probationary period and in cases arising as a result of erroneous reduction in force

actions whether or not the employees concerned are veterans.

In recent years the trend of Comptroller General's decisions interpreting these

authorities has been toward greater flexibility. This trend notwithstanding, however, it is apparent that these authorities, as now stated, provide an inadequate

basis for a full solution to the backpay problem. If the problem is to be corrected,

new legislation must be the answer.

The need for change

Most backpay situations in the Federal service are already covered in some

way by current authorities. This factor itself tends to demonstrate that the

principle of backpay as a part of corrective action is well established. It suggests

further that the reason the backpay picture is not complete today is more a matter

of oversight than intentional arrangement. It is apparent that whenever Congress has faced the problem of backpay, it has never intended its action to discriminate against any employee who could build an equitable claim. Circumstances, unfortunately, have led to a piecemeal approach to the backpay problem.

As a consequence, veterans are now afforded broader backpay benefits than

nonveterans and at any given moment there are still many veterans and nonveterans alike who could not be awarded backpay at all except in the correction

of erroneous reduction in force actions. This number would include all employees

serving probationary or trial periods many nonveterans who are employed by

their Government outside the competitive civil service, and all nonveterans in

the competitive service in actions of demotion for cause.

Private relief legislation in individual cases cannot answer the problem, because

it tends to discriminate against the person who does not seek special consideration

beyond the remedies available to all. In the interests of both uniformity and
BACK PAY FOR FEDERAL EMPLOYEES 9

equity, therefore, there is a strong case for improving the present backpay authorities. The case is particularly strong when it is recognized that the step toward

a better backpay authority is a small one in terms of costs and administrative

adjustments. No great number of cases should add appreciably to current costs

and the handling of all backpay cases would be little different from current

procedures.

Impact of the current proposal

There are four features to this legislative proposal which should be kept in

mind in order to understand what it is designed to accomplish and, just as important, what it is not designed to do:

1. The comprehensive nature of this authority.—The proposal assures that backpay protection would be available to a Federal employee whenever an unjustified

or unwarranted personnel action which diminished his pay is corrected in his

favor. The proposal does not attempt, however, to specify the precise nature of

corrective actions. It requires only that the unjustified or unwarranted action

be corrected before an entitlement is created. It is inherent in the use of the term

"correction" that the administrative action referred to must be one which is 

consistentwith applicable laws and regulations. The protection does not hinge

on the operation of any particular systems of appeals, but would be available as

a consequence of the operation of any system of appeals. In addition, where no.

avenue of appeal is available, an agency itself may award backpay to an employee

merely by acknowledging that its action affecting the employee adversely was.

unjustified or unwarranted and correcting it.

2. The test of diminished income.—Many things may happen to the disadvantage

of the employee on the job which may have a real or potential effect on his finances—a hoped-for promotion or job classification upgrading may be denied or

delayed, a transfer to a new location may be more expensive than anticipated, a

free official parking space may be lost, etc. This proposal does not deal with situations of this sort. The purpose of this proposal is only to permit an agency to makean employee whole from a pay and benefits point of view following its decision

to correct an unjustified or unwarranted personnel action against him.

To accomplish its purpose this proposal uses the "test of diminisished income"

which must be applied in every potential backpay situation before an entitlement

is established under this authority. The unjustified or unwarranted personnel

action, in effect, must have taken away some part of the normal salary, wages, or

other compensation of the employee affected. In other words, if no part of the

employee's salary, wages, or other compensation as a Government employee was

actually diminished by the improper action, there can be no claim to backpay

when that action is corrected.

3. The requirement for timely action.—In order to preserve his right to backpay,.

the employee under this proposal would be required to exercise the rights of appeal

open to him in a timely manner. For example, an employee whose position was

downgraded would lose his right to demand backpay unless he made a timely and

successful effort to appeal the downgrading action. Should that employee be

promoted sometime later in a routine reallocation of his position, such reallocation would have no backpay implications.

4. The advantages of agency initiative.--By permitting an agency to authorize

backpay on its own determination in correcting an unjustified or unwarranted

personnel action, this authority introduces two new elements of flexibility which

strengthen the corrective powers of management. First, when an agency discovers it has inadvertently taken an unjustified or unwarranted action, it would be

free to correct the action immediately on its own initiative with an appropriate

pay adjustment. This avoids the loss of time and resources involved in an appeal

over a matter which the agency may feel in advance should be settled in the employee's favor. Second, when an agency desires to extend back pay adjustments

uniformly to all persons in the same circumstances when an appeal is won by any

one of the persons involved, it would be free to do so on its own initiative.

In a recent case, for example, a group of veterans in wage board jobs successfully

appealed to the Civil Service Commission their demotions as a result of job classification downgradings and were awarded backpay. A nonveteran worker in

the same group, who had no right to appeal to the Commission, benefited by the

subsequent reinstatement to grade but was denied the backpay adjustment his

associates received, because the agency had no authority to pay him. This

proposed authority would have permitted the agency, had it desired, to authorize

the same kind of adjustment to all of the employees involved.
10 BACK PAY FOR FEDERAL EMPLOYEES

Cost estimate

It is very difficult to assess the cost involved in this proposed bill. This is not

because these costs would constitute a major expenditure. Instead it is because

"added" cost is the information needed while readily available information

unfortunately reveals little about current cost. Today agencies generally absorb

the costs of compensating employees entitled to backpay. Under the proposed

bill, no change in this is envisioned.

Potentially some agencies may have a somewhat larger number of cases involving backpay entitlement than they have at present. On the other hand with

such clear-cut and comprehensive entitlement established, agencies would have

an added incentive to conduct their appeal and review activities in a timely and

expeditious manner in order to minimize the cost of such entitlements. Moreover,

the draft bill would tend to limit the size of retroactive payments because employees who neglect to use their appeal rights, if any, in a timely manner would

lose their right to demand backpay.

In the benefits area it would be virtually impossible to "cost" the accumulation

of leave covering periods of improper separation or suspension as authorized by

the draft bill. Taken at different times, leave has different values. In addition,

while terminal lump-sum annual leave payments can represent a cash expense,

sick leave should have no actual value unless the employee is ill. It would seem

reasonable to assume, therefore, that this legislative proposal would create no

new costs or inconveniences in the leave area more burdensome than those agencies

are adjusting to now.

Those benefits to which employees are entitled on a contributory basis, such as

retirement, life insurance, and health insurance, would not constitute added costs

under the draft bill. The employee would continue to be required to make up

his back contributions, along with his taxes, for any period during which they

were not withheld. This requirement stems from the fact that where an employee is granted the benefits of the administrative fiction of having "rendered

service" he also assumes a responsibility for the obligations which that service

would have imposed.

It is about as difficult to estimate the number of new backpay entitlements

which would arise under this proposal as it is to assess the value of these entitlements. The size of the new groups covered in some instances is very large.

Conversely, however, the potential number of backpay cases likely to arise from

these groups, experience tells us, is surprisingly small. For example, the new

proposal would protect career nonveterans in cases of demotion for cause. On

appeal, the Commission reviews the procedural adequacy of such actions in the

competitive service. Although there are about 1 million nonveterans in the competitive service, there was not one appellant in these circumstances between

July 1, 1959, and June 30, 1960, who would have been entitled to backpay because of Commission action. We do not know how many such cases were handled

at agency levels under circumstances which would have involved backpay under

this proposal. We would have to assume though that the number was fairly

smell because the Commission so rarely receives appeals of this kind.

Nonveteran employees in excepted positions for the first time would be entitled

to backpay if they lost compensation as a consequence of unjustified or unwarranted suspensions, separations, or demotions for cause. At present, these

employees, and there are about 100,000 of them, have no appeal to the Civil

Service Commission in such actions, and agencies have considerable flexibility

in actions affecting their tenure. Under this proposal, therefore, there would be

only as many new backpay entitlement cases involving these employees as procedures under agency control would generate.

This proposal would also cover, for the first time, employees serving probationary or trial periods. At any one time, there are probably between 100,000

and 175,000 such persons throughout the service. The proposal requires, however, that there can be no entitlement to backpay without a finding that the adverse action involved was unjustified or unwarranted. Compared to persons

who have completed their trial period, the appeal rights of probationary employees

are very limited. Naturally this would tend to keep down the number of entitlement cases.

Under section 2.301(c) (2) of the Commission's regulations, the Commission

considers appeals of terminations based on conditions arising prior to the appointment of probationers in the competitive service. In less than 100 cases last year

were Commission determinations such that an employee would have been entitled

to backpay. A probationary or trial period employee who is terminated for

reasons occurring after employment generally does not have a right to appeal

to the Commission.
BACK PAY FOR FEDERAL EMPLOYEES 11

In conclusion, the Commission is unable to estimate the costs of this proposal

precisely without an expensive and detailed study going into the experience of

each Federal agency. With the facts which are available, however, it seems

safe to estimate that less than $400,000 per year in additional costs would be

involved Government-wide and that most of these costs would be of the type

which agencies customarily absorb in the normal course of operations. The proposed legislation will not involve additional expenditures for personnel services

to administer its provisions.

Mr. MACY. Mr. Chairman, I am appearing here today as you

indicated in your opening statement to urge the support of the subcommittee of H.R. 10685 introduced by Congressman Beckworth, and

H.R. 10687 introduced by Congressman Corbett.

These are identical bills "to provide for the payment of certain

amounts and restoration of employment benefits to certain Federal

officers and employees improperly deprived thereof, and for other

purposes."

The purpose of H.R. 10685 is to establish a single backpay authoritywhich will apply following the correction of an unjustified or unwarranted personnel action which diminished an employee's pay or

employment benefits. Under the proposed authority the Federal employee involved in such actions would be made whole financially.

The underlying principle in the proposal is simple, comprehensive,

and easy to apply. It contains the essence of Justice and equity.

It is designed to put the affected employee back exactly where he was

as if nothing untoward had happened to him. This is the elementary

fair play called in the language of the law "making a person whole"

for the injuries he has suffered.

The proposal as embodied in H.R. 10685 and H.R. 10687 was

presented to the Congress by the Civil Service Commission following

discussion with and favorable reaction from employee groups and veterans' organizations consulted during the drafting stage.

H.R. 10685 supersedes the back pay provisions of Public Laws

80-623 and 81-733, and provides a more specific legislative foundation

for the Civil Service Commission's authority in this area under the

Veterans' Preference Act. These current authorities, while adequate

in many respects, have led to a piecemeal approach to backpay in that

the authorities may not be applied uniformly to all situations and

employees. This proposed enactment is desirable and necessary to

replace a patchwork of existing legislation which leaves gaps in coverage and which applies slightly different principles of reimbursement

to different circumstances. In an area such as this equal justice

resulting from uniform treatment is most important.

But H.R. 10685 is much more than a codification of current backpay authorities. H.R. 10685 extends backpay protection to some

employees in situations not now covered. More specifically, the gaps

in employee coverage that would be closed by enactment of H.R.

10685 are:

1. Employees serving probationary or trial periods cannot be

authorized backpay unless an erroneous reduction-in-force action is

involved, or unless the erroneous action was handled as a security

case under the provisions of Public Law 733.

2. Nonveterans in the excepted service who have been improperly

removed, suspended, or demoted cannot be authorized backpay unless

the erroneous adverse action was taken as a result of reduction in

force.
12 BACK PAY FOR FEDERAL EMPLOYEES

3. Nonveterans in the competitive service who have been improperly demoted cannot be authorized backpay unless the erroneous

demotion was taken as a result of reduction in force.

4. Backpay authorized under the provisions of Public Law 623 does

not provide credit for leave accumulation to cover the period involved.

5. Under the provisions of Public Law 733, agency heads are

authorized to pay for all or any part of the period of suspensions or

terminations in erroneous security cases.

6. Neither Public Law 733 nor Public Law 623 provides for crediting

for increments such as periodic within-grade increases and general pay

raises to which the employee would have been entitled had he not

been subject to the unjustified or unwarranted action.

It is apparent that the current authorities may not be applied

uniformly to all similar situations and do not afford completely

consistent remedies.

Private relief legislation in individual cases not covered by current

authorities is not an appropriate solution to the problem. While

this remedy is open to all who seek to pursue it—and a fair number

do—it must be admitted that this process tends to discriminate in favor

of those who are unusually knowledgeable, persistent, and patient.

Moreover, reliance on this remedy is burdensome to the committees of

the Congress and their staffs and to the agencies involved in preparing

recommendations. While no one balks at the work that justice

requires or intends to demean the importance of each bill to the

individual concerned, it must be admitted that the work required tends

to be disproportionate to the good that is done. It is entirely possible

that the total cost to the Government of granting this relief can equal

or exceed the cost of the relief itself. Therefore, a major justification

for this bill is that it should reduce the requests for private bills and

the work of processing them. We are not able to produce cost estimates of savings in an area such as this but we do suggest that the

savings will be a major offset against the costs of more extensive

coverage.

While H.R. 10685 closes gaps in existing legislation and may be

somewhat more generous than the least liberal of existing backpay

authorities, it is basically perfecting legislation. It does not create

any new rights of tenure, review, or appeal. It is concerned only with

the backpay consequences of corrective actions that may now be taken.

It has nothing to do with the substance of appeal rights, the structure

of the appeals process, or the precise nature of corrective actions. It

requires only that when an erroneous action has been corrected by the

appropriate authority, the employee be given backpay. This bill

enters the picture only when it has finally been decided officially, and

through whatever means may be authorized now or in the future, that

a wrong has been done that should be set right. Then this bill comes

forward and says "never mind whether the injured party is a veteran

or not, never mind whether the injury resulted from an improper removal, or an incorrect demotion, never mind whether the person hurt

was in the competitive service or in the excepted service, put him back

where he would have been had this error not occurred." To preserve

his right to backpay, the employee, under H.R. 10685, would be required to exercise appeal rights available to him within prescribed

time limits. However, where no appeal channel is available, an agency

could award backpay to an employee by acknowledging and correcting

its erroneous action.
BACK PAY FOR FEDERAL EMPLOYEES 13

• By permitting an agency to authorize backpay on its own decision

to correct an erroneous personnel action, the proposed authorityintroduces two new elements of flexibility which strengthen management's corrective powers.

First, upon discovering an erroneous personnel action, the agency

would be free to correct it immediately with an appropriate pay

adjustment. It would not be necessary for the employee to initiate

a time-consuming and costly appeal to the Civil Service Commission.

Second, when it wishes to extend backpay adjustments uniformly

to all employees in the same circumstances when an appeal is won by

any one of the persons involved, the agency would be free to do so on

its own initiative.

H.R. 10685 refers to unwarranted personnel action which has

withdrawn or reduced any part of his "pay, allowance, or differential * * *." Both Public Laws 623 and 733 are currently interpreted as including in a backpay computation the premium pay,

including overtime pay, which an employee normally would have

earned, and such allowances and differentials as:

(1) differentials for hardship oversea posts;

(2) cost-of-living allowances paid in certain nonforeign areas,

for example, Alaska; and

(3) living quarters allowance authorized for foreign areas if

free Government quarters are not provided.

To preserve this interpretation, the phrase "normally would have

earned," which appears in Public Law 733, has been repeated in our

proposal.

In the interests of both uniformity and equity, therefore, the Civil

Service Commission believes there is a strong case for improving the

present backpay authorities through enactment of H.R. 10685. The

case is particularly strong when it is recognized that the step toward

a better authority is a small one in terms of cost and administrative

adj ustments.

It is very difficult to assess the costs involved in H.R. 10685. How

ever, it seems safe to estimate that less than $400,000 per year in additional costs would be involved governmentwide, and that most of these

costs would be of the type of which agencies normally absorb in the

normal course of operations.

Speaking on behalf of the Civil Service Commission, I recommend

that your committee give H.R. 10685 its favorable consideration.

I wish to thank you and your colleague for your attention. I will

be glad to answer any questions you may have. Mr. Stahl and Mr.

Leich will join me.

Mr. OLSEN. Thank you, Mr. Macy.

Do you have any questions, Mr. Broyhill?

Mr. BROYHILL. NO, thank you.

Mr. OLSEN. I have no questions. This seems to be something we

are all agreed about.

Mr. MACY. I think so. It is one of those issues where there appears

to be no controversy and where this is an equitable move to bring

existing authorities up to date.

Mr. OLSEN. Thank you very much for being with us this morning.

Mr. MAcy. Thank you, sir.
14 BACK PAY FOR FEDERAL EMPLOYEES

Mr. OLSEN. Our next witness is Mr. John McCart, legislative representative, the American Federation of Government Employees,

AFL-CIO.

Mr. BROYHILL. Mr. Chairman, on the record, before Mr. McCart

starts here.

In view of the fact that this is noncontroversial legislation, I am

wondering if the witnesses who follow Mr. McCart, including Mr.

McCart, would prefer to have their statements included in the record

and just to hit the highlights. We may be able to finish consideration

of this legislation today within this subcommittee.

STATEMENT OF JOHN McCART, LEGISLATIVE REPRESENTATIVE,

THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,

AFL—CIO

Mr. MCCART. Mr. Chairman, I am John A. McCart, director of

legislation of the American Federation of Government Employees.

As nearly complete justice as can be achieved by a legislative enactment which seeks to correct injustices is the objective of the

bills—H.R. 10685 sponsored by Representative Beckworth and H.R.

10687 by Representative Corbett.

When the payment of compensation and restoration of employment benefits lost because of improper or erroneous personnel actions

were originally authorized, the purpose was the same as that of the

bills presently before this committee. It was recognized then that

these earlier laws were intended to close loopholes in the then existing law. However, subsequent events proved that these earlier enactments fell short of their objectives in various ways and to varying

degrees.

The Beckworth and Corbett bills are designed to close the loopholes still remaining. We commend their sponsors and emphatically

approve the legislative proposal they have developed.

Three laws which authorize the payment of compensation or restoration of employment benefits lost through erroneous actions are involved in these two bills. They are laws of very great benefit to

Federal employees to the extent they now afford positive advantages.

Inasmuch as they fail to enable the employee who has been unjustly

treated "to be made whole" is enough to charge them with serious

failure. It is to correct such failure that H.R. 10685 and H.R. 10687

are acutely needed.

Public Law 623, amending the Lloyd-LaFollette Act of 1912, was

passed in 1948, to authorize payment of compensation to an employee

in the classified service who was improperly separated without pay,

either by reason of suspension or attempted final removal. It was

pointed out in the Senate report of the bill to that body July 2, 1947,

that "despite the desire of the (Civil Service) Commission to reimburse the employee for the period lost through no fault of his own,

the Commission is powerless to act."

Although the act represented a studied effort to right a wrong, it

failed to go all the way. Later it became apparent that it restored

backpay but did not authorize the restoration of accumulated leave.
BACK PAY FOR FEDERAL EMPLOYEES 15

Two years after Public Law 623 became law, another statute included provisions governing certain phases of this area of backpay

and related benefits. That statute was Public Law 733, 81st Congress, approved August 26, 1950. But again it missed the complete

objective. Whereas the preceding statute had excluded restoration

of annual leave, Public Law 733 provided for recrediting the employee

with his annual leave, but something was still overlooked. It was

not made entirely certain that the employee wrongly terminated or

suspended would be paid all his compensation lost during a period of

erroneous suspension. The law authorized agency heads to determine

whether the employee would be paid for all or part of the period of

erroneous suspension. Thus he could legally have been paid, for

example, for 91 days or for only 1 of those 91 days of a period of

erroneous suspension. Despite the latitude allowed in the law, agencies have made a practice of paying for entire periods almost without

exception. However, full payment is not required and the lack of

such provision constitutes one of the "Oaring loopholes" referred to

in the Senate report on the bill enacted into law in 1948.

Neither of these laws provides credit for periodic within-grade salary

increases or for pay raises which occur during the time an employee

is off the active duty roll. This is a serious defect and should be

remedied.

The third statute which has been interpreted as authorizing backpay is the Veterans' Preference Act of 1944, as amended. Such

authority covers cases involving improper demotions of veterans who

have completed a trial or probationary period and in cases arising

because of erroneous reduction-in-force actions whether an employee

involved is or is not a veteran.

It is unfortunate, but solution to the backpay problem has been

developed so far on a piecemeal basis. As a result, coverage of employees in different status groups has lacked uniformity. Veterans

are afforded broader backpay benefits than nonveterans, but there

are still many veterans and nonveterans who may not be awarded

backpay except in instances of correction of erroneous reduction-inforce actions. Included in this group are (1) all employees serving

probationary or trial periods, (2) many nonveterans employed outside

the competitive civil service, and (3) all nonveterans in the competitive service who are demoted for cause. These nonveterans may

be compensated when restored to duty after a period following improper separation or suspension.

This variance of treatment of employees having different employment status most certainly points to the need for amending these laws

so that the inequities already indicated may be eliminated.

If an agency has corrected an erroneous personnel action, the treatment of the employee affected should be the same in every case.

Study of the statutes bearing on this matter of compensation and of

restoration of lost benefits leads one to believe that Congress intended

to accord all employees equal treatment. These bills bring that intent

more nearly to complete achievement.

The bills accomplish that objective, first, by stating agency coverage on a broad basis. Then it seeks to make certain that an unjustified or unwarranted personnel action will entitle the affected employee

to be paid for his loss of compensation, leave or other benefits. Fur-
16 BACK PAY FOR FEDERAL EMPLOYEES

thermore, this payment or restoration is to take place either at the

instigation of the employee or by the voluntary action of the agency.

An important provision in section 3(a) of the bills is that payment

would be made "in an amount commensurate with the amount he

would normally have earned had he not been subject to the action."

This provision is significant. It would have the effect of compensating an employee for overtime or night differential which he would

have ordinarily earned had he not been suspended or erroneously

separated. It would extend also to such a benefit as oversea allowance, even if the employee had meanwhile returned to this country.

.The number of employees who may be affected by this legislation

within a year probably would be small, although an estimate of numbers or of cost is not within the realm of practical accomplishment.

However, be it large or small, one cannot overlook the fact that the

issue is simply that of eliminating injustice so far as possible from all

types of personnel action falling within the scope of the existing law

that would be amended.

It is difficult to find a more compelling reason for early enactment

of any legislative proposal.

Now to proceed to summarize the inequities that we feel will be

corrected under this legislation.

Before doing that I would like to express our appreciation to the

subcommittee and to the authors of the bills, Congressmen Beckworth

and Corbett.

As we see it, H.R. 10685 and H.R. 10687 will do these things: Under

Public Law 623, the original pay restoration statute, there was no provision for the accumulation or for crediting leave which was accumulated during the period of an employee's separation or suspension.

Public Law 733 permits agency heads to pay all or part of the pay

that should be credited to an employee who is erroneously or wrongfully separated or suspended. In other words, the authority is flexible

with the agency as to the amount of money which an emlpoyee will

receive upon his restoration.

Probationary employees, both veterans and nonveterans, are not

entitled to restored pay upon a finding that they were erroneously or

wrongfully separated. Nonveterans outside of the competitive service do not have the protection of the current laws. Nonveterans who

are demoted for cause are not protected under the present statutes.

All of these things would be corrected in the legislation under consideration by the subcommittee.

In addition, the bills would reaffirm the existing authority for the

payment of overtime and premium pay, night differential, and various

allowances to which an employee would have been otherwise entitled

had he not been separated or suspended.

These, then, are the things that the legislation will accomplish in

our view.

We think they are meritorious. Each time that Congress has been

confronted with legislation to make employees whole when they have

been erroneously or wrongfully separated or suspended they have

acted. Since these matters have been brought to your attention in

the current legislation, we feel that you will want to act on them also.

We heartily endorse, Mr. Chairman, H.R. 10685 and H.R. 10687.

Mr. OLSEN. Thank you, Mr. McCart.

Do you have any questions, Mr. Broyhill?
BACK PAY FOR FEDERAL EMPLOYEES 17

MT. BROYHILL. NO.

Mr. OLSEN. Thank you for being with us this morning.

Mr. MCCART. Thank you.

Mr. OLSEN. The next witness is Mr. Luther C. Steward, Jr., assistant to the president, National Federation of Federal Employees.

STATEMENT OF LUTHER C. STEWARD, JR., ASSISTANT TO THE

PRESIDENT, NATIONAL FEDERATION OF FEDERAL EMPLOYEES

Mr. STEWARD. I am Luther C. Steward, Jr., National Federation

of Federal Employees.

To quote and paraphrase Administrator Halaby, who appeared before this committee last week, I am not here to read to you, and I

don't think I have to convince you as to the merit of these two bills.

The National Federation of Federal Employees is happy to support

this legislation, and I should like to commend this committee for its

prompt consideration of this legislation.

It might be pointed out for the record that this is 1962 and the need

for this legislation first really began to develop in 1921 when the first

Comptroller General, J. Raymond McCarl, began to issue a series of

rulings overturning former decisions of the Comptroller of the Treasury. So, while we have waited 41 years for this perfecting legislation,

it was worth waiting for.

I would like to commend the Civil Service Commission for taking the

initiative in introducing this legislation, and I urge your committee

to take prompt and favorable action.

Thank you for the opportunity to appear.

Mr. OLSEN. Thank you, Mr. Steward.

The next witness is Mr. James H. Rademacher, assistant secretary--

treasurer, National Association of Letter Carriers.

Mr. Rademacher.

STATEMENT OF JAMES H. RADEMACHER, ASSISTANT SECRETARYTREASURER, NATIONAL ASSOCIATION OF LETTER CARRIERS

Mr. RADEMACHER. Thank you, Mr. Chairman.

Mr. Chairman and members of this subcommittee, my name is

James H. Rademacher. I am assistant secretary-treasurer of the

National Association of Letter Carriers which is located in Washington, D.C., and which represents 155,000 letter carriers and other

Federal workers.

Our purpose of being represented before this subcommittee today

is to wholeheartedly endorse H.R. 10685 by Congressman Beckworth

and H.R. 10687 by Congressman Corbett, both bills having to do with

backpay and restoration of all lost benefits when an employee has

been reinstated to his former position after corrective action has been

taken following a hearing or a review by authorized agencies.

We are particularly concerned about the inequities in existing laws

wherein certain employees of the Federal Government are not included and are denied benefits which were lost due to suspensions,

removals, or other adverse action. We have particular reference to

the probationary or temporary employee who is not included in the

provisions of public laws which protect career employees who are restored to their positions following this adverse action.
18 BACK PAY FOR FEDERAL EMPLOYEES

Case in point which emphasizes the need for coverage of temporaryindefinite employees is that of Postal Worker John Zucconi, of Hollywood, Fla. Following a letter of charges for alleged disorderly conduct, Mr. Zucconi was removed from his position as a temporary letter

carrier at the Hollywood Post Office on March 17, 1961. He had been

appointed into Federal service from an eligible register pending a

vacancy in the career complement. In the postal service from time

to time it has been necessary to appoint temporary employees from

the register to handle the abnormal mail volume, especially in areas

of tremendous growth.

Mr. Zucconi filed a request for a hearing with the regional director

of the Post Office Department and the hearing was held on April 3,

1961. Under date of April 26, 1961, Mr. Zucconi was notified that

in the opinion of the regional director the removal action should be

sustained. He then appealed to the Post Office Department for a

departmental hearing. On June 21, 1961, he was notified that his

appeal for a hearing had been received and that his case was placed

on the official docket in Washington, D.C. On December 13, 1961,

the Assistant Postmaster General notified Mr. Zucconi that the Postmaster General had made the deci§ion that the carrier be reinstated

to his former position at the Hollywood Post Office.

Mr. Zucconi was restored to his position in January 1962, without

the benefit of retroactive pay. He was unemployed for more than 9

months and in having been removed from the rolls he lost the benefit

of annual and sick leave, the benefit of credit toward his annual step

increase and the loss of service credit under the Social Security Act

under which he was included because of his temporary status.

It is our understanding that the measures now under discussion

would provide Mr. Zucconi with: (1) retroactive pax to the date of

his removal, (2) service credit toward his next step increase, and (3)

because of returning to a salary status his social security status will

continue from the date of separation.

The above case is one of many similar incidents where Federal

employees have not been treated equitably because of their particular

status. We understand that the bills now being considered by this

committee would provide equal benefits for all Federal employees including probationary and nonveterans; and further allowing full restoration benefits to employees who are removed for security reasons and

are subsequently restored to their positions.

It appears what is needed is a positive legislative approach such as

recommended in H.R. 10685 and H.R. 10687 so that an employee

would not be dependent upon agency policies or Comptroller General

decisions. If enacted this legislation would have each restored employee treated in the same manner and allow them complete retroactive effects so that their employment benefits would be consecutive

just as though no adverse action had even been taken.

The backpay policies in the Federal service are covered in one way

or another by current authorities. Generally after legislation is placed

into practice, determinations of oversights are made and it is felt the

legislation being considered today would actually indicate the desire

of Congress to consolidate existing legislation on the subject. In their

continuous and constant keen desire to maintain equitable and realistic

laws governing such facets of Federal employment, Congress should

take immediate steps to see that the oversights are corrected and that

one firm law relative to this subject matter be adopted.
BACK PAY FOR FEDERAL EMPLOYEES 19

A Federal worker who is restored to his position should be provided

with the benefits of this legislation irrespective of his position in Government service, whether he be a veteran, whether he be a career employee, and regardless of the reasons for the adverse action having

been taken. This legislative body will find that the costs of this legislation, if enacted, would be insignificant to the overall morale value

which would be established by a policy of equitable treatment of all

those who have selected the Federal Government as an employer.

Congressmen Beckworth and Corbett are to be commended for their

apparent desire to consolidate policies, laws, and decisions relative to

a most important subject.

We appreciate the opportunity of presenting testimony in behalf of

these bills 4nd do urge favorable action by this committee.

We realize, Mr. Chairman, that this bill would not be retroactive.

We don't see how it could be. But the case that was just mentioned

to you is a clear indication of the importance of this legislation, and

we certainly trust that the subcommittee will recommend concurrence

to the full committee.

Mr. OLSEN. Thank you, Mr. Rademacher. We appreciate your

coming this morning.

Mr. BROYHILL. Do you know whether there is any provision in

existing law for restoring this backpay to Mr. Zucconi?

Mr. RADEMACHER. There is no provision, sir, under existing law.

Mr. BROYHILL. Mr. Macy pointed out in his testimony that there

were a lot of existing laws that could be used, but this would compile

them all together.

Mr. RADEMACHER. Since this concerns a temporary or a probationary employee, there are no laws which would affect him favorably.

Mr. BROYHILL. The only relief, then, that Mr. Zucconi could have

is a private bill.

Mr. RADEMACHER. I doubt, sir, that this is the type of matter that

a private bill would correct.

Mr. BROYHILL. A bill could correct any type of matter.

Mr. RADEMACHER. I am happy to note your interest, and I'm

going to refer Mr. Zucconi to your attention.

Mr. BROYHILL. Refer it to his Congressman.

Mr. RADEMACHER. That's all, sir.

Mr. OLSEN. Thank you very much, Mr. Rademacher.

The next witness is Mr. John MacKay, president of the National

Postal Union.

Mr. MacKay.

STATEMENT OF JOHN W. MacKAY, PRESIDENT, NATIONAL POSTAL

UNION; ACCOMPANIED BY WALTER 0. NOREEN, EXECUTIVE

VICE PRESIDENT, NATIONAL POSTAL UNION, WASHINGTON,

D.C.

Mr. MACKAY. Mr. Chairman and members of the subcommittee, I

am accompanied here this morning by our executive vice president,

Mr. Walter O. Noreen.

My name is John W. MacKay. As president of the National Postal

Union, I am privileged to represent approximately 40,000 postal workers affiliated in over 400 local unions in 43 States, the island of Puerto

Rico and the District of Columbia.
20 BACK PAY FOR FEDERAL EMPLOYEES

We are grateful, Mr. Chairman and members of this subcommittee,

for these hearings on H.R. 10685, as introduced by Hon. Lindley

Beckworth, and H.R. 10687, by Hon. Robert J. Corbett. These

identical measures, which we hope will become the "Back Pay Act of

1962," are designed to provide a long-overdue benefit to postal and

Federal employees.

During the many years of our experience, in representing postal

workers charged with a violation of law and regulations, we have

become familiar with the many complications that prevail. Ofttimes

the accused employee is subjected to long and frustrating delay in the

existing appeal procedures and it is not unusual for such appeals to be

considered by two and sometimes three different governmental agencies. The Post Office Department, the Civil Service Commission, the

Government Accounting Office, and even the Department of Justice

all may become involved in the proposed dismissal or termination from

Federal service. Having experienced such a long and protracted consideration and having been subsequently declared "Not guilty," we

believe the accused should be entitled not only to payment of lost

compensation but also restitution of sick and annual leave as well as

credits for advancement and/or retirement that would otherwise have

accrued to his credit had the unjust accusations never been made.

We have long advocated an employee, accused of wrongdoing or

issued a letter of charges, should retain employment until the appeal

procedure has been fully utilized and a final decision rendered. Obviously, it would not be practicable to retain an employee unquestionably guilty of a major offense involving theft, destruction of Government property, or some criminal or injurious act detrimental to the

safety or welfare of his fellow employees. However, in all too many

instances, disciplinary actions are threatened, charges issued with resultant appeals and hearings over minor irregularities that should

have no validity in determining an employee's retention in the service.

We realize the intent of the proposals under consideration is to

correct a deficiency prevailing after a final determination of unwarranted charges. However, we believe it appropriate to suggest to

the committee consideration be given a further amendment to the

act of August 24, 1912, as amended (5 U.S.C. 652(a)), to provide

that an employee shall be retained on active duty status pending a

final decision on the charges unless positive evidence exists the

employee was responsible for damage to. Government property or loss

of funds or action detrimental to the interests of the Government

and/or injurious to fellow workers, to the extent such retention on

active duty could result in further damage and/or injurious action.

We wish to convey our gratitude to the authors of these measures

and to the members of this subcommittee for their efforts to correct

this inequity. We hope the committee will recommend prompt

action and passage of these proposals. We thank you for this

opportunity to testify thereon.

Mr. OLSEN. Thank you very much, Mr. MacKay; and thank you,

Walter Noreen, for being here with us this morning.

We are all agreed on this, apparently, and we will certainly take

into consideration your expert recommendation.

Mr. MACKAY. We would like to have you consider the recommendation for amendment that we have offered. We feel that it is something that is very greatly needed throughout the Federal service as

far as disciplinary actions are concerned.
BACK PAY FOR FEDERAL EMPLOYEES 21

Mr. OLSEN. I certainly want to assure you of its consideration, but

unless there is substantial unanimity on the committee, we don't

want that additional suggestion to hold up the bill, but it will

certainly be considered.

Mr. MACKAY. Thank you, sir.

Mr. OLSEN. Thank you.

The next witness is Mr. James Langan, operations director, Government Employes' Council, AFL—CIO.

STATEMENT OF JAMES K. LANGAN, OPERATIONS DIRECTOR,

GOVERNMENT EMPLOYES' COUNCIL, AFL—CIO

Mr. LANGAN. Thank you.

Mr. Chairman and members of the subcommittee, my name is

James K. Langan, operations director, Government Employees'

Council, AFL—CIO, a federation of unions representing some 23

affiliates with approximately 650,000 members. I wish to express

the appreciation and thanks of the council to the chairman and

members of this subcommittee for scheduling these hearings.

The council is pleased to acknowledge its appreciation to Representatives Beckworth and Corbett for the introduction of H.R. 10685

and H.R. 10687, respectively. The provisions of the bills will correct

an obvious injustice to Federal employees who have been reduced in

salary, suspended, or separated in an action that was later found

improper. We also want to commend the chairman and members of

the subcommittee for their interest and consideration in scheduling

early hearings.

Private enterprise and the courts of the land have long recognized

that a worker is entitled to receive benefits and recompense when it

was found that their denial was not proper. These bills will establish

this principle in Federal Government personnel actions.

The Government Employees' Council endorses the purpose of the

bills and hopes that this subcommittee will report one of them out

favorably.

Mr. OLSEN. The next witness is John F. O'Connor, legislative

director, United Federation of Postal Clerks.

STATEMENT OF JOHN F. O'CONNOR, LEGISLATIVE DIRECTOR

UNITED FEDERATION OF POSTAL CLERKS, WASHINGTON

D.C.

Mr. O'CONNOR. Mr. Chairman and members of the committee, for

the record and for purposes of identification, I am John F. O'Connor,

legislative director of the United Federation of Postal Clerks. This

organization represents in excess of 145,000 members.

At the outset we desire to express our appreciation to Representative Beckworth for the introduction of H.R. 10685 and to Representative Corbett for the introduction of H.R. 10687. We believe this

legislation is highly proper and very timely.

Both H.R. 10685 and H.R. 10687 provide that an officer or .employee

of an agency who has been found by appropriate authority to have

been subjected to an unwarranted personnel action which has caused

the withdrawal or reduction of his pay, allowances, or differential shall
22 BACK PAY FOR FEDERAL EMPLOYEES

be repaid for the period that action was in effect commensurate with

the amount he would normally have earned, less any amounts earned

by him through employment during such period.

The language of the bills is such that in our opinion there should be

no question as to the entitlement to such pay, allowance, or differential by an employee who has been wrongfully accused and found not

guilty.

We also believe that the language of the bills providing as they do

that an employee shall accumulate both annual and sick leave as

though he had rendered service during the period is a proper action.

The bills will correct injustices, and we, as an organization, highly

endorse the proposed legislation.

We also appreciate the opportunity of presenting our viewpoint.

Mr. OLSEN. I have received a letter from Mr. John S. Mears,

legislative representative of the American Legion, which I will insert

in the record at this time.

(The letter follows:)

THE AMERICAN LEGION,

Washington, D.C., May 15, 1962.

Hon. ARNOLD OLSEN,

Chairman, Special Subcommittee to Consider H.R. 10685 and H.R. 10687, House

Post Office and Civil Service Committee, House Office Building, Washington, D.C.

DEAR CONGRESSMAN OLSEN: The American Legion supports H.R. 10685 and

H.R. 10687, the two bills presently under consideration by your subcommittee.

This legislation would provide for the payment of certain amounts of backpay and

the restoration of employment benefits to Federal employees who have been

improperly deprived of same.

The American Legion has had long experience with this problem in connection

with its efforts to assist veterans with their appeals to the U.S. Civil Service Commission under the Veterans' Preference Act of 1944.

It is inconceivable that Congress would provide for a system of appeals from

adverse actions on the part of the employing agency without intending, once an

appeal is won by the individual, that he not only be restored to his position, but

that he be made "whole" so to speak by an award of backpay and restoration of

benefits lost by reason of the unjustified or unwarranted personnel action. It has

always been the opinion of the American Legion that to do less falls far short of

our concepts of equity and fair play.

To the best of our knowledge, the courts have been unanimous in awarding

judgments for retroactive pay in these situations. But this seems to us to force

a hardship on an individual and this legislation would eliminate such recourse to

the courts which should have been unnecessary in the past.

We would like to suggest that the language of the bill be amended to make it

crystal clear that the agency concerned must restore the individual to the position

(or one of like stature and pay) from which he was removed. In our experience,

agencies have refused to restore a person, even though section 14 of the Veterans'

Preference Act, in the next to last proviso, states that: "It shall be mandatory

for such administrative officer (who has improperly discharged the veteran) to

take such corrective action as the (Civil Service) Commission finally recommends." (5 U.S.C. 863.) See also section 19, which states: "Any recommendation by the Civil Service Commission * * * shall be complied with by such

agency." (5 U.S.C. 868.) In the face of this clear language, agencies have

refused to restore veterans to their positions and the Civil Service Commission

has felt it has no power to enforce its recommendations. As an example, see the

recent decision of the U.S. Court of Appeals for the District of Columbia in the

case of Born v. Allen, No. 15450, decided November 28, 1960.

Since agencies have refused to abide by such clear language, we have suggested

this legislation be amended to specifically include the requirement that an individual be restored to his job, as well as being compensated for the period he was

illegally or unjustifiably separated and having other benefits restored.

It may be well to consider what further power the Civil Service Commission

needs to enforce its recommendations. The American Legion has always been

Of the opinion that the clear intent of Congress, as expressed in the Veterans'

Preference Act, was sufficient, but evidently we are in error. We have brought
BACK PAY FOR FEDERAL EMPLOYEES 23

this to your attention so that this legislation, which covers all employees, will

not suffer the same flagrant rebuffs. Naturally, it will strengthen our position

under the Veterans' Preference Act.

We appreciate this opportunity to express our views and if there is no objection

we would appreciate it if this letter is incorporated in the printed record of the

hearings.

Sincerely yours,

JOHN S. MEARS,

Legislative Representative.

Mr. BROYHILL. Mr. Chairman, if that is all the witnesses, I would

move we go into executive session.

Mr. OLSEN. Without objection, it is so ordered. We will go into

executive session.

(Whereupon, at 10:45 a.m., the subcommittee was adjourned.)