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HEARING

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rq EIGHTY-SEVENTH CONGRESS

arg FIRST SESSION

ON

H.R. 8565 and H.R. 8648

BILLS TO PERMIT CERTAIN GOVERNMENT EMPLOYEES

TO ELECT TO RECEIVE COMPENSATION IN ACCORDANCE

WITH SECTION 401 OF THE FEDERAL EMPLOYEES PAY

ACT OF 1945 IN LIEU OF CERTAIN COMPENSATION AT A

SAVED RATE, AND FOR OTHER PURPOSES

SEPTEMBER 1, 1961

Printed for the use of the

Committee on Post Office and Civil Service

U.S. GOVERNMENT PRINTING OFFICE

74826 WASHINGTON : 1961

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RICHARD H. ICHORD, Missouri

DOMINICK V. DANIELS, New Jersey

COMMITTEE ON POST OFFICE AND CIVIL SERVICE'

TOM MURRAY, Tennessee, Chairman

JAMES H. MORRISON, Louisiana

JAMES C. DAVIS, Georgia

JOHN LESINSKI, Michigan

KATHRYN E. GRANAHAN, Pennsylvania

THADDEUS J. DULSKI, New York

DAVID N. HENDERSON, North Carolina

ARNOLD OLSEN, Montana

JOSEPH P. ADDABBO, New York

RICHARD H. ICHORD, Missouri

G. ELLIOTT HAGAN, Georgia

CATHERINE D. NORRELL, Arkansas

MORRIS K. UDALL, Arizona

DOMINICK V. DANIELS, New Jersey

ROBERT J. CORBETT, Pennsylvania

H. R. GROSS, Iowa

JOEL T. BROYHILL, Virginia

AUGUST E. JOHANSEN, Michigan

GLENN CUNNINGHAM, Nebraska

GEORGE M. WALLHAUSER, New JerseyROBERT R. BARRY, New York

KATHARINE ST. GEORGE, New. York

JOHN H. ROUSSELOT, California

EDWARD J. DERWINSKI, Illinois

SUBCOMMITTEE APPOINTED To CONSIDER H.R. 8565 AND H.R. 8648

CATHERINE D. NORRELL, Arkansas, Chairman

GLENN CUNNINGpIAM, Nebraska

GEORGE M. WALLHAVSER, New Jersey.,
CONTENTS

Statement of— Page

Ellis, L. Neal, legal counsel to the Chief of Industrial Relations,

Department of the Navy, accompanied by Emmet Tobin, consultant to the Office of Industrial Relations 2

Langan, James, operations director, Government Employees' Council_ 10

McCart, John, director of legislation, American Federation of Government Employees 6

Oswald, Rudolph A., research director, International Association of

Firefighters 8

Owen, Vaux, president, National Federation of Federal Employees 10
'03

tic..OC :6 1 .1
AUTHORIZING PREMIUM PAY IN LIEU OF PAY AT

SAVED RATES IN CERTAIN CASES

FRIDAY, SEPTEMBER 1, 1961

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE OF THE COMMITTEE ON

POST OFFICE AND CIVIL SERVICE,

Washington, D.C.

The committee met at 11 a.m., in room 215, House Office Building,

Hon. Catherine D. Norrell (subcommittee chairman) presiding.

Mrs. NORRELL. The committee will come to order.

This subcommittee was appointed, and is meeting this morning, to

consider H.R. 8565, introduced by Chairman Murray, and H.R. 8648,

by Mr. Corbett, identical bills which would permit certain Government employees to elect to receive compensation in accordance with

section 401 of the Federal Employees Pay Act in lieu of certain compensation at a saved rate.

The subcommittee members are Mr. Ichord, Mr. Daniels, Mr. Cunningham, Mr. Wallhauser, and I was designated chairman.

This legislation is the result of an official request of the Department

of Defense and was originated because of a decision of the Comptroller

General of the United States (B-138310) dated September 28, 1959.

Its purpose is to permit firefighters to voluntarily elect to be paid at

the annual premium rate of pay rather than the aggregate rate, otherwise known as saved pay. In addition, it would give legal authority

for conversions from saved pay to premium pay which have already

been made by voluntary election.

Section 208(a) of Public Law 763, 83d Congress, authorized the

payment of premium compensation to firefighters in lieu of night

differential, overtime, and holiday pay. However, when this section

was enacted, some firefighters were receiving more pay than they would

under the annual premium rate and, therefore, section 208(b) was

added to protect these employees. This section saved this higher

rate of pay until the employee left his position or until the annual

premium rate exceeded the saved pay through within-grade increases.

While the apparent purpose of Public Law 763 was to convert all

firefighters to the annual premium rate at the earliest possible time

without reducing their pay, several obstacles have developed to thwart

this intent, and, in addition, a number of inequities have arisen which

were not foreseen when the law was enacted.

The proposed legislation is expected to hasten the conversion,

remove the inequities, and ease the administrative burden of the

Navy, which is the Department most affected and which will present

testimony in support of the proposal this morning.

(H.R. 8565 follows:)

1
2 PREMIUM PAY IN LIEU OF PAY AT SAVED RATES

[H.R. 8565, 87th Cong., 1st Bess.]

A BILL To permit certain Government employees to elect to receive compensation in accordance with

section 401 of the Federal Employees Pay Act of 1945 in lieu of certain compensation at a saved rate, and

for other purposes

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

America in Congress assembled, That section 208 of the Federal Employees Pay

Act Amendments of 1954 (title II of the Act of September 1, 1954; 68 Stat. 1111;

Public Law 763, Eighty-third Congress) is amended by adding at the end thereof

the following new subsection:

"(c) (1) Each employee who—

`(A) is on the rolls on the date of enactment of this subsection,

"(B) is within any class of employees described in subparagraph (1) or

subparagraph (2) of section 401 of the Federal Employees Pay °Act of 1945,

as amended (5 U.S.C. 926), and

"(C) is receiving aggregate compensation at a saved rate by reason of

subsection (b) of this section.

may elect in his discretion, by written request to the appropriate authority concerned, to receive basic compensation for his position in accordance with law and

premium compensation under such subparagraph (1) or such subparagraph (2),

as applicable, in lieu of aggregate compensation at a saved rate by reason of

subsection (b) of this section.

"(2) All such elections made by employees prior to the date of enactment of

this subsection, and payments of compensation pursuant to such elections, which

would have been authorized under paragraph (1) of this subsection if such paragraph had been in effect at the times when such elections and payments were

made are hereby authorized and validated to the same extent as if such paragraph

had been in effect at such times.".

Mrs. NORRELL. I am pleased to introduce as our first witness Mr.

L. Neal Ellis, legal counsel to the Chief of Industrial Relations,

Department of the Navy, who is accompanied by Mr. Emmet Tobin,

consultant to the Office of Industrial Relations.

Mr. Ellis.

STATEMENT OF L. NEAL ELLIS, LEGAL COUNSEL TO THE CHIEF

OF INDUSTRIAL RELATIONS, DEPARTMENT OF THE NAVY,

ACCOMPANIED BY EMMET TOBIN, CONSULTANT TO THE

OFFICE OF INDUSTRIAL RELATIONS

Mr. ELLis. I am L. Neal Ellis, legal counsel to Chief of Industrial

Relations, Department of the Navy. I have been designated to represent the Department of Defense at today's hearing on H.R. 8565.

The Department appreciates the opportunity to present its views on

this bill.

The purpose of the bill is to amend section 208(b) of Public Law 763,

83d Congress, to authorize firefighters now being paid at the existing

aggregate rate of compensation, hereafter referred to as the saved rate

of pay, to convert to the annual premium rate of pay upon their

voluntary election.

Section 208(a) of Public Law 763 provides that the head of any

department with the approval of the Civil Service Commission may

compensate an employee who is required to remain at his duty station

longer than ordinary periods of time, a substantial part of which

consists of standby time rather than the performance of actual work,

on an annual premium basis. This annual premium compensation

not to exceed 25 percent of the basic rate of compensation is in lieu

of any other premium compensation provided by the act such as overtime, night differential, and holiday premium pay.

At the time section 208(a) was enacted the overtime, holiday, and

nightwork pay of some employees exceeded the 25 percent premium
PREMIUM PAY IN LIEU OF PAY AT SAVED RATES 3

pay provided by the section. Section 208(b) of the act was enacted

,to protect, or to save to these employees the existing aggregate rate

of compensation they were receiving at the time. They continue to

receive this saved rate so long as they occupy the positions or until

the annual premium rate of pay, through within grade increases,

exceeds their saved rate of compensation. In other words, the

compensation of employees placed under section 208(b) was frozen

as the saved rate received on November 6, 1954.

With respect to firefighter personnel on a 72-hour workweek, which

consists of an average of 24 hours or more of actual work, the Civil

Service Commission has established a rate of annual premium compensation of 20 percent. Thus, a firefighter on a 72-hour workweek

whose basic rate of pay plus overtime, night, and holiday premium

pay on November 6, 1954, exceeded his basic rate of pay plus 20 percent was frozen in his saved pay rate under section 208(b) of the act.

This firefighter continues to receive his saved pay rate of compensation until such time as he leaves the position or until his saved pay

is less than the annual premium compensation he would receive under

section 208(a). The proposed amendment would give legal authority

for the conversion of firefighters from the saved pay rate of compensation to the annual premium rate of compensation under section 208(a)

for conversions already made upon their voluntary lectione and for

such conversions in the future.

In applying the saved pay provisions to actual cases, it was observed that the saved pay rate operated to the disadvantage of some

employees. This occurs because; (a) the difference between the

saved pay rate and the annual premium rate is almost always less

than $100 annually, and, in many cases, it is less than $25 annually,

and (b) firefighters on the saved pay rate are paid at that rate only

for overtime, night, and holiday duty performed.

For example, if the firefighter works less than 16 hours' overtime

or less than 48 hours' nightwork in a pay period, his actual pay is less

than that provided by the saved pay rate formula. If the employee

fails to work on a holiday, he receives straight time pay for that day

and not holiday premium pay. These factors tend to reduce the

actual pay of the firefighter on the saved pay rate to a figure below the

annual premium rate.

In addition, adjustments in the pay scales of the Classification Act

of 1949, as amended, which have been enacted since Public Law 763,

83d Congress, was enacted, have tended to reduce the number of

employees continued on the saved rate, and to reduce the dollar

difference between that rate and the annual premium rate.

Accordingly, in January 1958, the Department of the Navy by

regulation provided that a firefighter would be permitted to change

from the saved rate of compensation under section 208(b) to the

annual premium rate under section 208(a) upon his voluntary request

in writing. It was considered that the purpose of section 208 (b)

was to protect the firefighter or to save to him compensation under

the section only so long as it was to his advantage. Therefore, this

regulation was considered within the spirit and intent of the law.

In Comptroller General decision, B-138310, of September 28, 1959,

it was held that a firefighter being paid under section 208(b) could not

elect to convert to the annual premium rate of compensation under

section 208(a) if his saved rate of compensation under section 208(b)
4 ;PRENJOInd PAY IN LIEU OF PAY AT SAVED RATES

was more than his annual premium rate. It was held that the firefighter could not elect to convert to the annual premium rate even

though his actual pay under the saved-pay provision of the law was

less than he would receive under the annual premium pay provision..

Upon receipt of this decision the Navy stopped all voluntary conversions of firefighters from the saved rate to the annual premium rate.

In the decision, the Comptroller General advised that he would not,

at that time, question elections for conversion to the annual premium

rate under the regulations of the Navy provided that no future elections were permitted and provided further that action was taken by

the Department of the Navy to request the Congress to amend section.

208(b) to authorize an election by employees if such election is administratively deemed appropriate.

The Department of the Navy strongly supports H.R. 8565 in order

to give legal authority for the conversions already made as a result of

the elections of employees between January 1958 and October 1959.

Adjustments in pay of the firefighters affected would present a difficult

administrative problem and probably would result in greater administrative costs than the amount gained by the firefighters who were

converted to the annual premium rate. While section 208(b) of

Public Law 763 was intended to protect those firefighters who were

receiving a higher rate of pay on November 6, 1954, than they would

receive under the annual premium rate, in some cases, as explained

above, the effect of the law has been the opposite.

Accordingly, it is requested that H.R. 8565 receive favorable

consideration.

I will be happy to answer any questions if I may.

I have with me Mr. Tobin, the author of the pending regulations,

so if you have any other questions, he likewise will be happy to answer.

Mrs. NORRELL. This does not do a thing in the world except

equalize something that has been out of kilter.

Mr. ELLis. I think that is a fair statement.

Mrs. NORRELL. It also puts on the statute books what the Navy has

already made a decision to do.

Mr. ELLis. That is correct.

Mrs. NORRELL. In other words, this is legalizing your action?

Mr. ELLis. Yes, ma'am.

Mrs. NORRELL. Any questions?

Mr. ICHORD. Mr. Ellis, I would like to have some idea of what the

overtime, night, and holiday premium pay is at the present time.

Mr. ELLis. At the present time, the saved pay for a typical GS-4

firefighter would be $5,810.96. That is calculated in the following

fashion: The frozen base pay of the firefighter as of November 6,

1954, was $3,575. Then the elements of night differential pay for 26

pay periods per a number came to a total of $214.76. A third item

would be 16 hours overtime per pay period, 26 pay periods per year,

which comes to a total of $848.64 per year. Holiday premium pay

for 6 holidays yearly came to a total of $82.56. You then add to that

amount the pay increase that was provided by the act of 1955 for a

total of $285, the pay increase provided by the increase of 1958, $430,

the pay increase provided by the act of 1960, $375, makg up the total

of $5,810.96.

Mr. 'CHORD. What is the overtime pay per hour?

Mr. ELLIs. Time and a half of the hourly rate.
PREMIUM PAY IN LIEU OF PAY AT SAVED RATES 5

Mr. ICHORD. Time and a half for overtime?

Mr. Ews. Yes.

Mr. ICHORD. What does he get for nighttime?

Mr. Ews. He gets a 10-percent night-shift differential for the

hours worked at night added to his base pay.

Mr. 'CHORD. Does he get time and a half for holidays?

Mr. Ews. Double time for holidays, sir.

If you would care for the figures, an employee under the premium

rate at the present time, a typical employee as in the example I just

gave you, would earn a total during the year of $5,730. This is calculated on a current base pay of $4,775, to which is added the 20 percent

premium as provided by the Civil Service Commission of $955 to

arrive at this total.

Mr. ICHORD. What do you anticipate the cost of this bill will be?

Mr. Ews. That is a difficult question to answer.

It could be calculated in a variety of ways, I suppose. Actually,

the take-home pay of the saved pay firefighter may, in some instances,

be less because within-grade increases have been credited to him although he does not receive those during the period of time, and from

those the deductions for various things that are deducted are taken,

which means every time he receives a within-grade increase, a greater

reduction for retirement is taken from his pay.

So the actual take-home would probably be less, and under some

methods of calculation, it could be said the Government would save

money as a result of this bill.

Mr. ICHORD. IS this going to affect the number of hours a firefighter

works?

Mr. Ews. No, sir. It is not directed at that at all. It is merely

in the method of calculating his pay.

Mr. lcHoRn. Do you have a limit on the number of hours he works

now?

Mr. Ews. We do have.

Mr. ICHORD. What is that?

Mr. Ews. The typical firefighter is on the station, three 24-hour

periods per week.

I do not like to use the word "work" because actually a firefighter

does not work the full 24-hour period he is aboard the station. That

is normally divided up into 8 hours duty time, 8 hours standby time

and 8 hours for sleeping and eating. He is paid a total of 16 hours

for each of the 24 hours spent aboard the station.

Mr. 'CHORD. Do you say this may actually result in a savings to

the Government, the passage of this bill?

Mr. Ews. It is possible.

I am informed by accounting people it is possible that enactment

of this legislation could result in dollar savings, although if an employee is getting greater credit for retirement under the saved-pay

rate, and later is paid a higher retirement rate over a long period of

time, a slight cost to the Government could result.

Mr. ICHORD. What bearing does this have upon retirement?

Mr. Ews. None, other than the fact the saved-pay-rate employee

at the present time has his retirement deductions taken on his base

pay at the time of the enactment of the 1954 statutes, plus any

within-grade promotions he may have had during that period.

OCT J6L
6 PREMIUM PAY IN LIEU Or PAY AT SAVED RATES

Mrs. NORRELL. I would like to read the statement from Mr. Johni

B. Conley to the Speaker. He said:

The costs or savings which would be attributable to the proposal is not known.

No increased costs have been included in any estimate for appropriations. Since

the Navy authorized such conversion from January 31, 1958, until October 29,

1959, it does not appear this proposal would present a budgetary problem for this

Department. The best information available at this time indicates that the military departments have approximately 11,400 firefighters on the roll, of whom

about 400 are being paid at saved-pay rates.

Mr. ICHORD. How many firefighters does the Navy have?

Mr. ELLis. 5,281. That is the last information I have.

Mr. ICHORD. The other 6,000 are with the Air Force?

Mr. ELLis. Some would be with the Army, and some with the Air

Force.

Mrs. NORRELL. I know in Pine Bluff, Ark., we have an arsenal, and

I know this would take care of any firefighters down there.

Mr. 'CHORD. Thank you, Madam Chairman.

Mr. CUNNINGHAM. Do we have an administration report on this?

Mrs. NORRELL. Yes.

Mr. CUNNINGHAM. From the Bureau of the Budget?

Mrs. NORRELL. Yes.

If there are no further questions, I want to thank you so much.

We are very glad to have Mr. John McCart, director of legislation,

American Federation of Government Employees.

STATEMENT OF JOHN MeCART, DIRECTOR OF LEGISLATION,

AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES

Mr. MCCART. Madam Chairman and members of the subcommittee

we are highly gratified at the action of the subcommittee in arranging

these hearings, and we want to express our appreciation also to Representatives Murray and Mr. Corbett for their sponsorship of H.R.

8565 and H.R. 8648.

We are particularly pleased that the subcommittee has arranged

the subcommittee meeting this morning because this has been a

matter of concern to us since 1955. From time to time we have

conferred with various Members of the House and with the executive

agencies involved. We have not been able to find a solution, and, in

that connection, it could very well be that the decision of the Comp-.

troller General is a boon because it helped to bring to the forefront

the problem this legislation entails.

If I may, Madam Chairman, since our statement is tremendously

short, I would like to read most of it into the record.

Mrs. NORRELL. You may proceed.

Mr. MCCART. Prior to November 6, 1954, the rates of pay of

Federal firefighters were fixed by Congress under the crafts, protective,

and custodial schedule in the Classification Act. Because of the long

periods of standby duty they were required to spend at their posts of

duty, the firefighters were paid under the two-thirds rule. The

Comptroller General agreed many years before that it was appropriate to consider two-thirds of all the hours spent at their stations

in computing their biweekly pay. In addition, I might interpolate,

they received compensation for holiday and nightwork.
PREMIUM PAY IN LIEU OF PAY AT SAVED RATES 7

. In September 1954, Congress approved Public Law 763, commonly

recognized as the Fringe Benefits Act. The statute affected the pay

of firefighters in two ways.

First, it abolished the crafts, protective, and custodial schedule in

the Classification Act. Firefighters were transferred to the general

schedule in the classification law.

Second—and this is the feature with which we are concerned today—the Fringe Benefits Act changed the methods of computing

firefighters' pay for overtime, nightwork, holidays and standby assignments. The earlier two-thirds rule was replaced by a percentage

differential to compensate for all premium work.

Recognizing that immediate implementation of this change could

cause loss of pay to some employees, Congress stated wisely that the

new law would not serve to decrease the existing aggregate rate of

compensation of any present employee. For practical purposes a,

firefighter's aggregate rate includes his base annual pay plus the additional compensation he received prior to 1954 for night, overtime and

holiday work under the old law plus the general pay increases approved by Congress for all classified employees in 1955, 1958, and 1960.

Under the Federal pay system covering firefighters, employees are

entitled to small periodic step-increases in their pay upon completion

of fixed periods of satisfactory service. After meeting the necessary

requirements they may receive three longevity steps also.

The Comptroller General decided in November 1954 that awarding

of these step and longevity increases could not serve to increase an

employee's aggregate rate, the pay which was saved under the 1954

law; that could not be changed. In effect, then, the law operates as

a ceiling on pay as well as a savings clause. An individual's aggregate

rate could remain fixed. While step and longevity increases were to

be processed on paper, thus giving the individual a higher paper

salary, an employee could very well suffer a slight loss in take-home

pay. This has occurred because greater retirement and life insurance

deductions are made from his higher salary of record, but his actual

salary remains his aggregate rate.

.This situation applies to the Army, Navy, and Air Force. To

simplify our presentation, however, the AFGE will allude only to the

experience in the Department of the Navy.

Regulations of the Navy Department in Naval Civilian Personnel

Instruction 610 (p. 13) outline the procedure quite clearly—

(1) Except where specifically provided for by law, periodic step and other pay

increases will not be applied to increase the amount of pay an employee received

under the saved rate system. However, such increases will be processed for

employees paid under the saved rate system, the same as for other employees.

This results in firefighters paid under the saved rate system having two basic

rates of pay: a "frozen" base rate (the basic rate in effect on November 6, 1954)

and a "current" base rate (the current basic rate of his present step).

(2) Retirement and insurance benefits are based on the current base rate, and

retirement and insurance deductions are made from the current base rate. When,

a periodic step or other pay increase is processed, the increased cost of the retirement deductions, and where appropriate, insurance deductions, is taken from the

saved pay, with the result that the firefighter receives a small reduction in pay.

This situation will continue to exist as long as the firefighter is paid under the

saved rate system.

Exception: If the total of the saved basic pay items (the frozen basic rate plus

the 1955, 1958 and 1960 increases) is greater than the current base rate, retirement

and insurance deductions will be made from these saved basic pay items.
8 PREMIUM PAY IN LIEU OF PAY AT SAVED RATES

So that in effect, Madam Chairman, the regulations of the Navy

did spell out quite clearly the problem we are attempting to deal with

in this legislation.

The Navy attempted to correct this inequity by permitting employees to request transfer from the saved aggregate rate to the percentage differential for premium work where it would eliminate this

loss in take-home pay. In 1950, however, the Comptroller General

(B-138310, September 28) decided that an employee could not make

such an election if his aggregate rate was more than his annual base

salary plus differential.

He stated choices made previously by employees on this score would

not be questioned provided the Navy Department sought a legislative

remedy.

H.R. 8565 and H.R. 8648 supply this remedy by permitting the

employees involved to select the annual premium differential method

of payment to preserve their full pay status. We are confident that

Congress in its justified desire to prevent a loss of pay to employees

affected by the 1954 law did not intend to reduce their take-home

pay because of the paculiar language of the statute. For that reason

we wholeheartedly support enactment of this legislation.

That concludes our presentation, Madam Chairman. We shall be

happy to answer any questions.

Mrs. NORRELL. Do you have any questions, Mr. Ichord?

Mr. ICHORD. No.

Mrs. NORRELL. Mr. Cunningham?

Mr. CUNNINGHAM. Mr. McCart, the Navy Department, in January 1958, provided by regulation that this change could be made.

Did any other departments do this?

Mr. 'MCCART. Not to my knowledge. I think the problem has

arisen more so in the Navy and the Navy has been looked upon by

the other military departments as the designated representative of

the Defense Establishment.

Mr. CUNNINGHAM. That is all, Madam Chairman.

Mrs. NORRELL. We thank you so very much, Mr. McCart.

The next witness is Mr. Rudolph A. Oswald, research director,

International Association of Fire Fighters. Mr. Oswald, we will be

glad to hear from you at this time.

STATEMENT OF RUDOLPH A. OSWALD, RESEARCH DIRECTOR,

INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS

Mr. OSWALD. Thank you, Madam Chairman.

I am Rudolph A. Oswald, research director of the International

Association of Fire Fighters, and in behalf of the International Association of Fire Fighters and its membership in Federal installations

throughout the country, I would like to speak in favor of H.R. 8565.

This bill would allow those firefighters who have been on a saved pay

basis since 1954 to elect the changeover to the premium pay rates

presently covering the majority of firefighters.

Originally the saved rate was a means to protect these men in the

changeover from the old CPC system to the Classification Act. In

its intention, the saved rate was desirable, but in practice it-has resulted

in some employees actually receiving less pay. In order to make the

conversion to the Classification Act, the Defense Department has
PREM11TM PAY IN LIEU OF PAY AT SAVED RATES 9

established a formula for the -determining of the saved rate that makes

no deduction for night differential, overtime, or holiday premium

pay during periods of leave. This formula is purely theoretical.

It provides the highest saved rate a firefighter could receive not what

he actually will receive during the year. Thus, a Federal employee

under the present system, may not be changed to the annual premium

rate system merely because his actual earnings under the saved rate

system are less than the pay he would have received under the annual

premium rate system.

The present system may actually penalize and discriminate against

the long service employee. Two firefighters performing the same

tasks may be paid differently because the theoretical saved pay is

higher than the premium pay, even though the annual take -home

pay is less.

Those firefighters under the saved pay plan are also denied other

benefits that have been voted by Congress since 1954. Examples

of such benefits are pay for callback overtime and the minimum 2

hours callin pay on holidays.

A firefighter on saved pay never sees his "in grade" pay increases.

He just receives a notice from the personnel office that he was credited

with such an increase, but his paycheck instead of increasing, decreases because larger amounts are deducted for retirement and

insurance.

This bill would allow employees to elect a change in compensation

from the saved rate to the premium rate. It places in the employee's

hands a right which would help fulfill the basic concept of the saved

pay—the protection of the earnings of the individual employee.

Furthermore, this bill is necessary to protect those firefighters

who voluntarily converted to the premium pay, but whom the Comptroller General stated could not make such a voluntary conversion.

This bill would safeguard their prior choice and prevent their losing

the minor sums of money that they may have received over and above

what they would have received under the saved-pay plan.

We urge you to give this legislation your prompt and favorable

attention so that the intent of the saved-pay protection will be

provided.

Mrs. NORRELL. The bill as we have it written would merely be an

election?

Mr. OSWALD. Yes.

Mrs. NORRELL. They would not have to accept this election unless

they themselves wanted to convert?

Mr. OSWALD. We would be against any compulsory changeover.

Mrs. NORRELL. Do you anticipate there will be some who would

not elect to convert?

Mr. OSWALD. There would be some. The majority of comments

we have received from our members have been that many would have

liked to have changed in the past but did not have the opportunity,

but there are apparently some whose saved pay would be higher than

the premium pay and it would not be desirable for them to change

over.

Mrs. NORRELL. Any questions?

Mr. 'CHORD. No questions.

Mr. CUNNINGHAM. NO questions.
10 PREMIUM PAY IN LIEU OF PAY AT SAVED RATES

Mrs. NORRELL. Thank you very much for your testimony, Mr.

Oswald.

Mr. OSWALD. Thank you, Madam Chairman.

Mrs. NORRELL. I believe we have no other witnesses this morning,

but I do have two statements for the record, one by Mr. James

Langan, operations director, Government Employes' Council; and one

by Mr. Vaux Owen, president of the National Federation of Federal

Employees. The statements will be made a part of the record at

this point.

(The statements follow:)

STATEMENT BY JAMES K. LANGAN, OPERATIONS DIRECTOR, GOVERNMENT

EMPLOYES' COUNCIL, AFL-CIO

Mr. Chairman and members of the subcommittee. My name is James K.

Langan, operations director of the Government Employes' Council, AFL-CIO,

which is a federation of 24 unions representing employees in Federal service in all

categories. The Government Employes' Council wish to commend Chairman

Murray of this committee and Mr. Corbett the ranking member for introducing

this equitable legislation.

This bill corrects a situation created when Federal employees under the custodial

pay classification were changed to the jurisdiction of the Classification Act at a

saved rate and under the provisions of the Classification Act some favorable

conditions existing under the original custodial pay class were lost. This bill will

permit any employee who is on the rolls on the date of its enactment, to choose at

the employees option the manner under which their salary would be administered.

The Government Employes' Council heartily endorses the principle in this bill

and urge its adoption by the Congress.

We wish to thank the committee for its time and kindness in holding these

hearings and we urge a favorable recommendation to the full committee.

STATEMENT OF VAITX OWEN, PRESIDENT, NATIONAL FEDERATION OF

FEDERAL EMPLOYEES

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

am president of the National Federation of Federal Employees. Our headquarters

office is located at 1729 G Street NW., Washington, DC.

The purpose of H.R. 8565 and H.R. 8648, is to give a small grou.p of Federal

employees, mostly firefighters, a right to elect to receive basic compensation plus

the premium compensation provided under section 208(a) of Public Law 83-763

in lieu of the aggregate compensation provided in subsection (b) of section 208.

Since a very small number of Federal employees would be affected by this

legislation the 'cost would be negligible. It is an equitable proposal calculated

to improve the morale of the limited number involved because it will provide an

opportunity for such employees to elect to receive small increases in pay due to

pay increase acts which otherwise have not benefited them.

The National Federation of Federal Employees supports this proposed legislation.and urges a favorable report by this subcommittee.

I thank the chairman and members of this subsection for the opportunity to

present the views of the National Federation of Federal Employees and also

express appreciation to the chairman of the House Post Office and Civil Service

Committee and the ranking minority member of the committee for introducing

this legislation.

Mrs. NORRELL. .If there is no one else who wishes to speak on this

subject we will conclude these hearings this morning.

Thank you very much, gentlemen, for giving us the benefit of your

views on this legislation.

(Thereupon, Friday, September 1, 1961, the hearing was adjourned.)

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r OCT 

1964

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