Source: http://supreme.nolo.com/us/323/557/case.html
Timestamp: 2019-04-25 16:23:47+00:00

Document:
1. Section 23 of the Independent Offices Appropriation Act, 1935, so far as it provides for overtime compensation for services in excess of 40 hours per week, applies to Government employees of the Panama Canal whose compensation is fixed on a monthly basis. P. 323 U. S. 565.
2. In the case of an employee whose normal work week was six 8-hour days, overtime compensation was properly computed by multiplying the employee's monthly salary by twelve and dividing the result by fifty-two to ascertain his weekly salary, then dividing the weekly salary by five to obtain his pay for an 8-hour day, and then multiplying the number of weeks in which he had worked a sixth day by the daily wage plus one-half. P. 323 U. S. 573.
Certiorari, post, p. 686, to review a judgment for the plaintiff in a suit to recover overtime compensation.
The parties agree that the principal question presented is whether Section 23 of the Independent Offices Appropriation Act, 1935, [Footnote 1] insofar as it provides for overtime compensation for services in excess of 40 hours per week, applies to Government employees of the Canal Zone whose compensation is fixed on a monthly basis. The Court of Claims answered in the affirmative. [Footnote 2] If we take the same view, a subsidiary inquiry is whether that court adopted the right method for calculating the overtime compensation.
"The weekly compensation, minus any general percentage reduction which may be prescribed by Act of Congress, for the several trades and occupations, which is set by wage boards or other wage-fixing authorities, shall be reestablished and maintained at rates not lower than necessary to restore the full weekly earnings of such employees in accordance with the full-time weekly earnings under the respective wage schedules in effect on June 1, 1932: Provided, that the regular hours of labor shall not be more than forty per week, and all overtime shall be compensated for at the rate of not less than time and one half."
first time, asserted that, under the Act, he was entitled to compensation at the rate of time and one-half for all hours worked in excess of 40 per week. In prosecution of his claim, he instituted this suit March 14, 1940.
The Court of Claims held that he was engaged in one of the "trades and occupations" whose compensation is "set by wage boards or other wage-fixing authorities" covered by the Act. We think this conclusion is right, and do not understand the petitioner now to contest it. The court further held that the statute embraced those employees of the Canal Zone whose wages are paid on a monthly basis. This the Government contests, relying on the words of the Act, on administrative practice, and on legislative history. A statement of the background of the legislation and its application seems necessary to decision.
In 1923, Congress adopted the "Classification Act," [Footnote 3] classifying the employment and fixing the compensation for different classes of employees of certain departments of the Government. It excluded from the terms of the Act certain occupations, including apprentices, helpers, or journeymen in a recognized trade or craft and skilled or semi-skilled laborers, among others. Admittedly, certain employees of the Panama Canal, including the respondent, were not covered by this Act. Their compensation was to be fixed by the President, or by his authority, under the Act of August 24, 1912; [Footnote 4] specifically it was set by the Governor of the Panama Canal on the advice of a wage board.
and suspension of privileges of federal employees. By the first such Act, approved June 30, 1932, [Footnote 5] a regular schedule of reduction of salaries, by a system of furloughs or reduction of the work week, was established.
By the Act of March 20, 1933, [Footnote 6] Congress superseded the furlough system and provided for a reduction, not to exceed 15%, in the compensation of all employees. By the Act of March 28, 1934, this reduction was cut to 10% for a portion of the fiscal year 1934, and to 5% for the fiscal year 1935. Possible reductions in compensation imposed on federal employees were not, however, limited to those prescribed in the cited statutes. Men were discharged and rehired in lower classifications at the lower wages applicable, and were furloughed without pay in order to keep within appropriations.
no provision concerning hours of work or overtime pay. The draft he submitted was not embodied in the bill as reported.
"this amendment is offered to help the employees in the navy yards, the arsenals, the Panama Canal Zone, the Government Printing Office, and the Bureau of Engraving and Printing. It simply proposes to put them back on the same status they occupied in July of 1932. . . . [T]he amendment adopted this afternoon restores their pay cut, it is true, provided that amendment remains in the law. This amendment proposes to give the employees of these several bureaus an increase in their pay even though they do not have to work an increased number of hours. At the present time, they work 40 hours and get 44 hours' pay. Under the amendment, it is possible that the board that has control of these employees will let them work 40 hours and they will possibly get 48 hours' pay, provided they get an increase of their hourly pay."
The amendment was adopted without further reference to it in either House of Congress. The President vetoed the bill, which was passed over his veto. On that occasion, a Senator inquired whether certain language in the President's veto message referred to the provisions of Section 23, and the reply was that the Senator interrogated did not know whether this was so. We shall shortly see that the section did substantially more than Senator Thomas stated in his brief explanation.
". . . no change in the monthly or annual rate of compensation other than that required to pay a rate not lower than the rate per annum or per month paid June 1, 1932, less any applicable percentage reductions, would be authorized. That is to say, they are to receive the same monthly or annual compensation, although their regular hours of duty may be reduced."
"to continue the payment of the same monthly rates of compensation even though there may have been a reduction in the number of hours per week and no overtime compensation is authorized,"
and added that "[t]his is the general rule that has been adopted under the 40-hour week statutory provision for all employees paid on a monthly or annual basis." The Governor's submission and the Comptroller General's ruling make it clear that both understood that employees paid on a monthly basis could not be regularly worked more than forty hours a week. Several passages in his decisions also indicate that the Comptroller General was of opinion that monthly employees should not be paid overtime. The rulings were definitely that employees whose weekly wages would be reduced by reducing their work hours must have those wages restored to the 1932 wage level, and that employees who had not had their weekly wages cut, because they were paid by the month and were worked 52 hours per week, should not have their wages cut as a result of § 23 by the reduction of their work week to 40 hours.
could not be worked more than forty hours a week. There is no evidence that the question of the legality of working the respondent overtime without paying him for it was ever submitted to the Comptroller General.
It seems evident that the Governor's action cannot be justified. If § 23 applied in the case of the respondent, his work week should have been forty hours. If, in spite of § 23, his monthly stipend covered every day and every hour of the month, whether service was rendered or not, as the Comptroller General had said, so that respondent could not be paid for overtime, then he should not have been regularly worked overtime.
If the Government is right, § 23 had no application to respondent and those in like case, and the Governor could have maintained a fifty-two hour work week at the old rate of pay, or could have cut the work week, with a corresponding reduction in pay. The result would be, as the court below pointed out, that an Act of Congress, on its face applicable to all employees, including monthly employees, which declared that the weekly wages of employees "shall be reestablished and maintained at rates not lower than" the 1932 rate would, for the first time, have authorized the cutting of the wages of monthly employees below the 1932 level, while the wages of all others were being restored to that level. As we have seen, the Comptroller General ruled that such a cut in respondent's pay was "in contravention of the plain terms of the statute."
at one and one-half straight time pay for the extra hours worked.
The Government seeks to avoid such a construction of the Act by invoking asserted administrative practice and legislative history. It relies heavily on the statement made to the subcommittee, to which we have heretofore referred. With respect to this statement, we think it enough to say that the spokesman was complaining about discriminations against employees paid by the day or the hour, but he nowhere suggests the propriety of distinguishing between such employees and those paid on a monthly basis but worked more than forty hours per week. He advocates setting the June 1, 1932, standard as a minimum subject only to percentage reductions provided by the Economy Act. He envisages the fact that, if the work week is reduced to forty hours and the June, 1932, standard is thus reestablished, the result will be an increase in wages to the employees concerned. The considerations of equity on which he relies apply quite as much to employees paid by the month as to those paid by the day or hour. Moreover, as above stated, the draft he submitted was not adopted. On the contrary, one differently worded became § 23 of the statute.
nearly comparable to those of men employed in private industry. There may therefore have been valid reason for establishing, as respects all of these employees, a different rule from that generally followed in Government departments.
The Government also relies on the prior practice in the Canal Zone, but we think this inconclusive. By the Act of August 24, 1912, [Footnote 11] the President was empowered to appoint employees of the Canal Zone. The Act provided that "the compensation of such persons shall be fixed by the President, or by his authority, until such time as Congress may by law regulate the same" (§ 4). By Executive Order of February 2, 1914, the President established overtime for per diem and hourly workers, but forbade overtime for those paid on a monthly or annual basis. Congress did undoubtedly legislate further on the subject in § 23 of the Act of 1934. The administrative practice prior to the adoption of the section is therefore of no moment.
The Government produced at the trial of the case in the court below certain letters from the Navy Department, the Government Printing Office, and the Bureau of Engraving and Printing of the Treasury Department stating that they had interpreted § 23 as applying only to per diem and hourly employees, and that no overtime had been paid to employees working on a monthly or yearly basis. These letters do not state, however, that these branches regularly worked such employees overtime, as did the Governor of the Canal Zone, without paying for overtime work.
Such evidence as there is in the record would seem to indicate the contrary.
The Secretary of the Navy submitted certain questions respecting § 23 to the Comptroller General immediately after the enactment of the section. One was whether per annum or per month employees who worked in excess of 40 hours a week "because of an extraordinary emergency" should be paid overtime. The Comptroller answered in the negative, referring to his decision rendered the Government Printing Office [Footnote 12] in which he said that the regular hours of work of employees on an annual basis were required by § 23 to be fixed at not to exceed forty per week. In the same opinion rendered to the Public Printer, he had ruled that such employees were not entitled to overtime. There is no evidence that the Secretary of the Navy or the Public Printer conceived that they could work per annum and per month employees more than forty hours a week without extra compensation except in cases of extraordinary emergency, or that they ever pursued a practice like that of the Governor of the Panama Canal. It would seem, therefore, that the hours of monthly paid mechanical employees in the departments in question were reduced to 40 without any pay cut. Such action would be in accordance with the rulings of the Comptroller General. Thus, the administrative construction of the Governor seems to stand alone, and in contradiction to that of other heads of departments and offices of the Government, and, in this respect, worked a discrimination against the respondent and those in his class as contrasted with other employees who stood in the same relation. Certain it is that the Comptroller General never ruled that the standard of 40 hours a week with overtime could be disregarded in practice.
paid by the month or by the year. We think, however, that, on analysis, the course of legislation, considered as a whole, fails to sustain the contention. As we have said, adoption of the principle of limitation of working time and extra pay for overtime, in respect of Government employment, has been of gradual development.
In 1888, Congress prescribed an eight hour day with payment for overtime for letter carriers of the United States Postal Service, [Footnote 15] who receive annual salaries.
In 1911, provision was made for overtime pay of employees of the Customs Service required by the nature of their service to work after 5 P.M. [Footnote 16] Such overtime pay was to be reimbursed the Government by the steamship companies whose business required such services.
In 1919, the Secretary of Agriculture was authorized to pay employees of the Bureau of Animal Industry, employed in industrial establishments in the inspection of meat, for overtime work. [Footnote 17] Here again, the Government was to be reimbursed by the establishment which required the working of overtime, but the compensation paid the inspectors was on an annual salary basis.
In 1940, an Act was passed [Footnote 18] making the regular working hours of the Navy Department and the Coast Guard, and their field services "eight hours a day or forty hours per week" during the period of the national emergency. The Act set a different method of paying the overtime to monthly, per diem, hourly, and piecework employees than that applied to employees paid by the year, but it is to be noted that the forty hour week and the overtime rate of one and one-half times the regular rate was applied to monthly employees.
"In this regard, the provision for the payment of compensation [for overtime] to per annum and per month employees is a departure from the practice heretofore followed. . . ."
A similar statement was made in the House report. [Footnote 20] The difficulty that arises in giving weight to these statements of the Congressional Committees is that the facts already recited show the reports were wrong in fact, and apparently were based upon an inaccurate statement which was credited by the Committees.
per diem, hourly, and piecework employees of the field services of the War Department and the field services of the Panama Canal whose wages are set by wage boards or other wage fixing authorities. . . ."
"The Secretary of War and the Assistant Secretary of War . . . say that they have the legal authority now to pay overtime to certain employees of the War Department in the arsenals and at the Panama Canal, but, as to others, they have not this authority, and this creates a bad administrative situation. They have recommended this bill, which has passed the Senate, and it is my understanding we have given the same authority to the Navy Department as to the Navy yards."
"those whose wages are fixed on a daily or hourly basis and adjusted from time to time in accordance with prevailing rates by wage boards or similar administrative authority serving the same purpose. . . ."
those whose monthly compensation was fixed by wage boards had not been entitled to overtime, and that the resolution granted it to them for the first time. Whatever Congress may have thought or intended in respect of the proviso, we cannot ignore the fact that § 23 of the Act of March 28, 1934, on its face, applied to such monthly employees, that the Comptroller had so ruled, and that, so far as appears, the departments concerned had acted with that understanding, save only the Governor of the Panama Canal, who, although so advised, had acted in the teeth of the statute.
The same misapprehension with respect to the effect and administration of the Act of 1934 seems to have prevailed when the War Overtime Pay Act of 1943 [Footnote 24] was adopted. That Act, by a sweeping provision, granted overtime pay to all civil employees of the Government and all employees of Government-owned or controlled corporations, except those in the Government Printing Office and the Tennessee Valley Authority. It specifically included officers and employees whose wages are fixed on a monthly or yearly basis by wage boards or similar authorities, and excluded employees whose wages are fixed on a daily or hourly basis by wage boards.
We think this summary of the legislation on the subject is not conclusive or even strongly persuasive as an aid to the construction of the Act under consideration as of the time when Congress adopted it. It seems that there was no very clear and general policy with respect to the payment of overtime until the exigencies of the war called for compensation of Government employees as a class on a basis similar to that adopted in private industry. When the time came to make such general provision, the more or less haphazard dealing with the subject theretofore seems not to have been clearly in mind.
We conclude that the Court of Claims properly held that § 23 applies in respondent's case, and that he is entitled to recover for the overtime he was required to work.
Act of March 28, 1934, c. 102, 48 Stat. 522, 5 U.S.C. § 673c.
42 Stat. 1488, 5 U.S.C. § 661 et seq.
c. 390, 37 Stat. 561, 48 U.S.C. § 1305.
Compare Overnight Motor Transp. Co. v. Missel, 316 U. S. 572; Walling v. Helmerich & Payne, Inc., 323 U. S. 37; St. John v. Brown, 38 F.Supp. 385; Allen v. Moe, 39 F.Supp. 5; Nelson v. St. Joseph & G.I. R. Co., 199 Mo.App. 635, 205 S.W. 870.
See 44 U.S.C. § 40.
Act of May 24, 1888, 25 Stat. 157; cf. United States v. Post, 148 U. S. 124. See also 39 U.S.C. § 117.
Act of Feb. 13, 1911, § 5, 36 Stat. 901. See United States v. Myers, 320 U. S. 561.
Act of July 24, 1919, 41 Stat. 241, 7 U.S.C. § 394.
Act of June 28, 1940, 54 Stat. 676, 678. This Act expired June 30, 1942.
S.Rep. No. 1863, 76th Cong., 3d Sess., pp. 11, 12.
H.Rep. No. 2257, 76th Cong., 3d Sess., pp. 3, 4.
Act of October 21, 1940, 54 Stat. 1205. This Act expired June 30, 1942.
Act of May 7, 1943, 57 Stat. 75, § 1.
The Government relies on the Act of June 30, 1906, 34 Stat. 763, 5 U.S.C. § 84. That statute, however, was not addressed to the problem of a standard work week of a limited number of hours and the calculation of overtime for hours worked in excess of the limit.

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