Opinion ID: 413383
Heading Depth: 2
Heading Rank: 2

Heading: Legislative History of the Mariners' Pay System and the Pay Cap

Text: 14 The present pay system for civilian crews of United States vessels has its origins in the Federal Employees Pay Act of 1945, Pub.L. No. 79-106, 59 Stat. 295, which stated at Sec. 606, 59 Stat. 304 (1945 Pay Act): 15 Employees of the Transportation Corps of the Army of the United States on vessels operated by the United States, ... and vessel employees of the Panama Railroad Company, may be compensated in accordance with the wage practices of the maritime industry. 16 (Emphasis added.) This statute suggested that the government officials should set mariners' pay after comparing prevailing private sector wages, but it did not require comparable pay. However, in the Classification Act of 1949, Pub.L. No. 81-429, 63 Stat. 954 (1949 Classification Act), Congress amended the mariners' pay provision to make the prevailing rate system mandatory 10 : 17 [The compensation of] officers and members of crews of vessels ... shall be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with the prevailing rates and practices in the maritime industry[.] 18 1949 Classification Act, Sec. 202(8), 63 Stat. 955 (emphasis added). 19 The 1949 amendment thus folded the mariners' pay system into that of [t]he major prevailing-rate groups, the trades, crafts, and labor employees. See H.R.Rep. No. 1264, 81st Cong., 1st Sess. 6 (1949) (1949 House Report), U.S.Code Cong.Serv. 1949, p. 2363; 1949 Classification Act, Sec. 202(7)-(9), 63 Stat. 955. For over 120 years these primarily blue-collar federal employees have been paid according to the prevailing rate principle, i.e., their wages are set at levels existing for comparable work within each local wage area. In contrast, the General Schedule and most other federal pay systems fix salaries by job category or grade, regardless of the region in which an employee works. See Rockefeller Report at 4, 27, 107. 20 In 1962, 11 Congress expanded the principle of comparability with private enterprise to guide federal white-collar pay policy as well, although the government performed the white-collar comparisons on a national rather than a local basis. See Rockefeller Report at 7-8. Putting the principle into practice for white-collar employees, however, took several years and a series of congressional pay act adjustments. One such statutory adjustment, the Government Employees Salary Reform Act of 1964, Pub.L. No. 88-426, 78 Stat. 400 (1964 Salary Act), included the pay cap now codified at 5 U.S.C. Sec. 5373. 21 Congress enacted the pay cap as part of Title III of the 1964 Salary Act. Title III itself was known as the Federal Executive Salary Act of 1964. 1964 Salary Act, Sec. 301, 78 Stat. 415. Congress intended Title III both to raise and rationalize the salary structure for the key management and policymaking positions in the Federal Service. First, it establishe[d] an orderly and rational series of five levels of executive compensation, bringing together into 1 system some 19 different pay levels established over the years, many by organic legislation establishing new agencies. S.Rep. No. 1121, 88th Cong., 2d Sess. 5 (1964) (1964 S.Rep.), U.S.Code Cong. & Admin.News 1964, p. 2730, 2734. Next, it abolished much of the old hodgepodge of federal executive pay laws. Section 305 repeal[ed] the Federal Executive Pay Act of 1956 and numerous other provisions of law which establish[ed] rates of compensation of heads of executive departments and other Federal officials. H.R.Rep. No. 1388, 88th Cong., 2d Sess. 32 (1964) (1964 H.R.Rep.). Then Title III employed the GS-18 cap to ensure that the salaries of the new executive ranks remained above the pay of civil servants with special professional skills: [S]ection 306 amend[ed] authority conferred upon heads of various agencies to set rates of compensation for certain positions of their agencies so as to provide that rates fixed by the heads of agencies shall not be in excess of the highest rate for grade 18 of the general schedule. Id. This special GS-18 cap section covered, for instance, U.S. Attorneys and Assistant U.S. Attorneys; some scientific, engineering and administrative personnel at the National Aeronautics and Space Administration; a small number of people at the National Aeronautics and Space Council; and employees of the Advisory Commission on Intergovernmental Relations. H.R.Rep. No. 1647, 88th Cong., 2d Sess. 31-32 (1964) (1964 Conf.Rep.). Finally, Congress appears to have devised Sec. 308 as a catch-all provision to make sure that no other independent pay-setting authority, unless specifically excepted, could break through the GS-18 ceiling and invade the ranks of the new executive schedule: 22 Section 308 prohibits any employee whose salary can be fixed by administrative action from receiving more than a GS-18. Excluded from this limitation are the Central Intelligence Agency, the Tennessee Valley Authority, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Federal Reserve Board. 23 1964 S.Rep. at 20, U.S.Code Cong. & Admin.News 1964, 2749. 24 We conclude from this complex legislative context, which spawned the pay cap provision, that Congress wanted to streamline its pay system for key executives and to fasten that system above the top rungs of the various civil service pay ladders. Apparently, Congress never focused directly on the relationship of its new executive pay system, protected by the GS-18 pay cap, and the mariners' prevailing wage rate system. This oversight is probably due to the fact that no one expected that the wages of these prevailing rate employees would ever be high enough to match the pay of top federal officials, most of whom are Presidential appointees. 12 25 While obviously we cannot know if Congress would have wanted the pay cap to apply to the mariners had it considered the matter, we discern such an intent from the language of Sec. 308 itself. First, Sec. 308 begins [e]xcept as provided by this Act and notwithstanding the provisions of any other law. This suggests that Congress wanted the pay cap to cut a wide swath. Second, Congress deliberately and expressly carved out certain exceptions to Sec. 308 for certain pay-setting authorities, but did not exempt the mariners. Indeed, the legislative history of these exceptions reveals that Congress took up the subject of pay-cap exclusions at numerous times during passage of the 1964 Salary Act; the MM & P's ultimate failure to achieve exclusion of the mariners' pay certainly cannot be attributed to lack of opportunity to raise the issue. 26 Thus, in 1963, when the House Committee on Post Office and Civil Service reported the predecessor bill to the one enacted as the 1964 Salary Act, the Sec. 308 cap contained only an exception for the Central Intelligence Agency. H.R.Rep. No. 899, 88th Cong., 1st Sess. 33 (1963). Six months later, the same House committee reported a successor bill and this time Sec. 308 contained three more exceptions: for the pay-setting authorities of the Tennessee Valley Authority (TVA), the Federal Deposit Insurance Corporation, and the Comptroller of the Currency. 1964 H.R.Rep. at 34. The Senate added the Federal Reserve Board as a fifth exception, see 1964 S.Rep. at 20, to which the House acceded in conference, see 1964 Conf.Rep. at 36, 48. Of the five exemptions, the TVA is particularly noteworthy because the exception cites a statute, 16 U.S.C. Sec. 831b, that requires the TVA to pay laborers and mechanics wages that are at least at the prevailing rate for work of a similar nature in the vicinity. 13 Therefore, Congress exempted from the pay cap some workers whose pay was set in a manner similar to that employed for the mariners. 27 Even after the passage of Sec. 308, Congress did not hesitate to add new exceptions to the GS-18 cap. In 1964, less than two months after Congress passed the pay cap, it added another exception for Panama Canal Zone employees. Act of Oct. 6, 1964, Pub.L. No. 88-631, Sec. 3(e), 78 Stat. 1007, 1008. 14 This exception is also significant because Congress had often associated vessel employees of the Panama Railroad Company (later the Panama Canal Company, and now the Panama Canal Commission) with the mariners' pay system, beginning as far back as 1945. See 1945 Pay Act, Sec. 606, 59 Stat. 304. Although the subsequent treatment of the two types of vessel employees had not been exactly parallel, Congress often considered their pay at the same time. 15 Therefore, Congress may have assumed that the cap applied to other government vessel employees when it removed the limit for Panama Canal employees. 28 Finally, Congress has very recently exempted a special pay system from the GS-18 cap. When it created the Senior Executive Service in 1978, it stated expressly that [t]he payment of rates [for the Senior Executive Service] shall not be subject to the pay limitation of section ... 5373 [the GS-18 cap] of this title. Pub.L. No. 95-454, Sec. 407(a), 92 Stat. 1111, 1171 (1978) (codified at 5 U.S.C. Sec. 5382(b)). 29 In sum, since Congress acted explicitly to except so many groups of employees, one (and possibly two) of which includes prevailing rate employees like the mariners, it is unlikely that Congress silently intended an implicit exception from the same cap for the mariners. Thus, these exceptions, coupled with Congress' apparent intent to use the cap to protect the relative rank of its new executive salaries, lead us to conclude that Congress intended the mariners' pay to be subject to the GS-18 limitation. 30