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carrier salary schedule to place the carriers on a comparative basis.) In contrast, other postal field service employees who perform duties similar to rural carriers are paid on a time basis at a uniform rate of $2.09 an hour (PFS-4, step 1).

The rural delivery service was established in 1896, and from 1896 to 1915 the statutes authorized the maximum annual compensation for rural carriers with no reference to the length of the routes served. However, the Department in 1902 placed in effect, within the maximum compensation established by law, a schedule of compensation related to route length. Effective July 1, 1915 'egislation (Public Resolution 73, 630 Cong., 38 Stat. 1227) established a maximum annual salary for rural routes of 24 miles or more in length, with graduated reduction in salary for routes of less than 24 miles. Starting in January 1925, Public Law 506, 68th Congress (43 Stat. 1064), provided that, in addition to their salaries, carriers would receive an equipment maintenance allowance based on route mileage. In the years between 1915 and 1945, rural carrier pay legislation established minimum and maximum compensation based on the route length. As of January 1, 1925, the maximum limit was discontinued. Effective July 1, 1945, Public Law 134, 79th Congress (59 Stat. 455), provided that rural carrier salaries be based on specific annual rates for each mile of route plus a fixed annual compensation according to years of service. Effective January 1, 1946, the 1945 legislation was amended by Public Law 386, 79th Congress (60 Stat. 203), to provide for an additional fixed compensation regardless of length of route and years of service. The legislation currently covering the basic compensation of rural carriers, the Postal Employees Salary Increase Act of 1960 (39 U.S.C. 3543), is, in principle, generally similar to the laws enacted in 1945 and 1946.

The rural carrier basic salary schedule, which is based in part on fixed compensation per year and in part on specified rates per mile per year, follows:

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$2,053 $2,132 $2,211 $2,290 $2,369 | $2,448

$2,527

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75 24

77
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79
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81
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Carriers in rural delivery service:

Fixed compensation per annum
Compensation per mile per annum for

each mile up to 30 miles of route. For each mile

of route over 30 miles.. Temporary carriers in rural delivery service on routes to which no regular carrier is assigned: Fixed compensation per annum Compensation per mile per annum for

each mile up to 30 miles of route.

For each mile of route over 30 miles. Temporary carriers in rural delivery service

on routes having regular carriers absent

without pay or on military leave.... Substitute carriers in rural delivery service

on routes having carriers absent with pay-

2,053

71 24

(*)

1

(*)

(*)

(3)

1 Longevity steps A, B, and C of $100 each are added to the basic salary after 13, 18, and 25 years of creditable service. : Basic compensation including longevity authorized for the regular carrier.

In addition to basic salary, rural carriers who serve heavily patronized routes not exceeding 60 miles in length receive heavy-duty allowances. The aggregate of basic compensation, exclusive of longevity pay, and heavy-duty allowance is limited to $5,761 a year. Heavy-duty allowance was first authorized in 1938, Public Law 749, 75th Congress (52 Stat. 1206). The purpose of the legislation authorizing heavy-duty allowances was to provide additional compensation to carriers who were required to work an excessive number of hours, considering the length of their routes. However, since carriers serving only 2,207 of the 31,379 rural routes at June 30, 1960, were receiving heavy-duty compensation, and there were wide variances in the hourly earning of rural carriers, it appears that the equalizing effect of the legislation has been limited.

We selected for review 934 of the 9,039 rural routes in the Cincinnati, Dallas, Seattle, and Wichita postal regions, and we estimate that carriers' earnings ranged from $1.47 to $10.22 an hour, and averaged about $2.98 an hour (based on step 1 of the rural carrier salary schedule so as to place them on a compara

tive basis). For the routes tested, the following tabulation shows the employees categorized by their hourly earnings:

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1 Includes 99 percent of the routes less than 30 miles and more than 89 miles in length, and 5 percent of the routes from 30 to 89 miles in length.

* Based on actual hours used to serve the routes during the May 1960 inspection week or during the week of Oct. 14, 1960, for the routes that had changed since the inspection week. Compensation of the rural carriers is based on step 1 of the rural carrier compensation schedule so as to place the carriers on a comparative basis. As shown in the above tabulation, there are significant variances in rural carriers' rates of compensation when computed on the basis of the time required to serve the route.

Our test disclosed also that there are significant variances in the earnings of rural carriers serving similar length routes as demonstrated in the following tabulation showing the range of hourly earnings by route length at increments of 10 miles :

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Carriers serve rural routes either 6 days a week or 3 days a week. At June 30, 1960, there were 31,121 6-day-a-week routes and 258 3-day-a-week routes. For the routes tested, we noted that 89 percent of the carriers worked less than 8 hours a day, 69 percent worked less than 7 hours, 50 percent worked less than 6 hours, 31 percent worked less than 5 hours, 17 percent worked less than 4 hours, and 5 percent worked less than 3 hours a day.

We noted that, in contrast to rural carriers, city delivery carriers are paid on a time basis at a uniform rate of $2.09 an hour (PFS-4, step 1). We recognize that there are differences between the functions of a city delivery and a rural delivery carrier. For example, rural carriers are required to handle money orders and registered mail and to sell stamps, as well as to deliver and collect mail. In this connection, the duties of a rural carrier, beyond those of collection and delivery of mail, are similar to those usually performed in post offices by window clerks who are paid at the same salary level as city delivery carriers.

We noted that the Department, also, has expressed doubt as to the reasonableness of the rural carrier compensation system. In August 1960, the Bureau of Personnel initiated a regional study to determine the relationship between the

work requirements and the salaries of rural carriers. Regional Letter No. 60– 152, which requested the study, pointed out that the present rural carrier compensation schedule is based on the presumption that a 42-mile rural route is the equivalent of a 40-hour city delivery route and that this norm of equivalency was established at a time when the average rural route was about 42 miles in length. The letter stated, further, that the average route today is much longer than 42 miles with the result that the rural carrier's average compensation is greater than that of the average city carrier. We were advised by an official of the Department that in November 1961 the Bureau of Personnel had completed and submitted its study to Department officials.

The basic rate of compensation for rural carriers appears to have little relationship to the time required to perform service except that consideration is given to time required to perform service when heavy duty allowances are granted. The salaries of most postal employees, other than rural carriers, are usually related to time required to perform their duties. We believe that the rural carrier pay scale should give adequate consideration to the time required to serve the route. Many factors other than the length of a route, such as number of patrons and pieces of mail and road and weather conditions, influence the time required to serve rural routes. Therefore, we believe that a pay rate structure that gives adequate cognizance to time required to serve a route would be more realistic and more equitable than the system now used.

Substitute and certain temporary carriers' salaries based on creditable years of service of the regular rural carriers they are replacing.–Substitute carriers and certain temporary carriers receive the basic salary authorized for the regular rural carriers they are replacing, including longevity compensation to which the regular carriers may be entitled (39 U.S.c. 3543) rather than a salary based on their own creditable service. This method can result in as much as $1,134 a year additional compensation that substitute or certain temporary carriers may receive when the regular carriers have 25 years of creditable service. In contrast, salaries of other temporary rural carriers serving routes on which there are no regular carriers assigned and salaries of other substitute employees in the postal field service are based on the years of creditable service they earn,

The provision that a substitute carrier shall receive the same salary as the absent regular rural carrier was first established by the act of March 2, 1907 (34 Stat. 1215). The apparent purpose of this provision was to provide a schedule of compensation for substitute rural carriers. Originally substitute carriers were employed at the expense of the regular rural carrier. Until July 1945, the provision that the substitute receive the same pay as the replaced regular carrier had no adverse effect to the Government because the regular carrier's salary was based only on route mileage. Public Law 134, 79th Congress (59 Stat. 455), however, provided that, in addition to specified annual rates for each mile of route, rural carriers would receive fixed annual compensation according to their years of service. The recognition of carriers' years of service in this and subsequent rural carrier pay legislation has resulted in substitute and certain temporary carriers' receiving compensation for creditable years of service which they have not earned.

During fiscal year 1960 the Department paid $20,165,000 in salaries for 3,688 substitute rural carrier man-years. Also, at June 30, 1960, 69 percent of the regular and temporary rural carriers were in step 7 (6 years' creditable service), and 68 percent of these were in longevity steps (13 to 25 years' creditable service). The distribution of regular and temporary rural carriers by pay step at June 30, 1960, follows:

Number of employees in longevity steps

Pay step

Total number of employees

А

B

1,868

84 65

7. 6. 5. 4. 3. 2. 1.

21,572
1, 298
2, 382
1, 316
1,308
1, 235
2, 185

4, 822

63 49 51 24 26 13

8,081

33 26 27 16 10

38 33 26

Total

31, 296

2, 157

5,048

8,201

In that most regular rural carriers' salaries are near the top of the pay scale, the basing of substitute and certain temporary carriers' salaries on the absent regular carriers' creditable service results in paying these employees on the basis of creditable years of service that they have not earned, and is costly to the Government. Moreover, this method is inconsistent with the treatment of other postal field service employees.

We believe that payment on the basis of creditable years of service earned would be more equitable and less costly to the Government,

Inequities in method of compensating substitute and certain temporary rural carriers for holidays. The provision that substitute and certain temporary carriers should receive the same salary as the absent regular rural carrier authorizes payment to the substitute or temporary carrier, in addition to the regular carrier for a holiday when the substitute or temporary carriers serves the same route on the day before and after the holiday. In contrast, when this condition is not met they do not receive holiday pay. Also, other substitute postal field service employees' hourly rates of pay include a pro rata factor for holidays. That is, the annual rate of the PFS grade is divided by 2,016 hours so as to give consideration to holidays in determining the hourly rate for substitutes, whereas a regular employee's hourly rate is determined by dividing the annual rate by 2,080 hours. This provides for consideration of eight holidays in establishing the hourly rate of pay of other substitute postal field service employees. However, for a substitute's pay to include an amount equal to the pay for one holiday, the substitute must work about 30 days.

We believe that payment of substitute and temporary rural carriers for holidays on a pro rata basis would be more equitable. Moreover, we estimate that the cost to the Government would have been about $150,000 less than the $619,000 paid to substitute and temporary rural carriers for holidays during fiscal year 1960 if they had been paid on a pro rata basis.

Recommendation to the Department.-We recommend that, in connection with the Department's evaluation of the relationship between the work requirements and the salaries of rural carriers, the Postmaster General consider the inequities of the rural carrier pay rate structure disclosed by our review and on the basis of such consideration and evaluation propose to the Congress legislation to correct the inequities. In this connection, the Department should give consideration (1) to compensating rural carriers on a basis that gives adequate cognizance to the time required to serve the route, (2) to compensating substitute and certain temporary rural carriers on the basis of their own years of creditable service earned, and (3) to compensating substitute and temporary rural carriers for holidays on a pro rata basis.

The Deputy Postmaster General has informed us, by letter dated January 4, 1962, that the Bureau of Personnel completed its study of rural carrier compensation and that the study group's findings and recommendations, designed to correct the inequities of the rural carrier pay rate structure, were being reviewed with the employee organization concerned. He has informed us also that resulting proposed legislative changes would be coordinated within the Department to assure a system equitable for all carriers and one which would be simpler to administer than the present salary schedules.3 Need for improved administration of rural route consolidation program

There is a need for more effective administration of the Department's program for determining whether rural delivery routes, on which vacancies occur, should be consolidated with other nearby rural routes. We noted that the Department disapproved some proposed rurla route consolidations without adequate operational justifications although studies showed that consolidations were feasible and that the Department directed that some vacant rural carrier positions be filled before feasibility studies had been made to determine whether the routes could be consolidated. We noted also that the Department's criteria for use by the regions for determining the practicability of rural route consolidation are not sufficient and do not take into consideration important factors that affect the operational feasibility of rural routes. Because rural route conso

* On Feb. 20, 1962, subsequent to the preparation of this report, the President of the United States proposed to the Congress legislation regarding salary systems of the Federal Government including the rural carrier salary system. Among other things, the President proposed to compensate (1) rural carriers on a work requirement rather than on a mileage basis, (2) substitute rural carriers on the basis of their own years of creditable service, and (3) substitute rural carriers for holidays on a pro rata basis.

lidations are prohibited by law unless the regular carrier leaves the service, future opportunities for making consolidations, with resultant savings in cost of operations of about $3,200 a year for each consolidation, on these routes may not occur for a considerable period of time. Specific comments on this matter follow.

Department disapproved proposed rural route consolidations without adequate operational justifications.-Because of improved road conditions, improved vehicle equipment, and the more expeditious transportation of mail to and from postal installations throughout the country, it is frequently possible to consolidate rural routes that were established when these conditions did not exist. Consolidation of two or more rural routes emanating from the same or contiguous post offices results in increased income for the carriers serving the consolidated routes and in significant savings in operating costs without impairing service to the patrons, because of the nature of the carrier's salary and equipment compensation schedules. The Department made 99 rural route consolidations during fiscal year 1960 at an estimated saving, exclusive of leave and other fringe benefits, of $315,000 a year. Although a rural route can only be consolidated upon the resignation, death, retirement, or dismissal from the service of a regular carrier (39 U.S.C. 3339), the Department has numerous opportunities to make such consolidations.

During fiscal year 1960 vacancies occurred on 1,856 rural routes. Within 3 days after the receipt of a postmaster's report of a rural carrier vacancy, the region is required by the Department regulations to determine from the regional files whether consolidation of the vacated route with other nearby routes may be practicable. If the region determines that the consolidation is not feasible, the Department fills the vacancy. If the region determines that consolidation might be practicable, the regional director is required to request the Postal Inspection Service to conduct an on-site investigation of feasibility and to work out the consolidation details. If the Inspection Service report favors consolidation, the region submits its recommendation and the related file to the Department. After reviewing this data along with a political adviser's comments about the proposed consolidation, the Department either approves or disapproves the proposed consolidation.

During fiscal year 1960, the Department disapproved 152 of 251 consolidations recommended by the regions. For the 152 disapproved, the available Departmunt records show that consolidation of these routes would have resulted in a recurring annual saving of $498,600 a year, exclusive of fringe benefits. Of the 84 consolidations recommended by the 4 regions we visited, 29 consolidations were approved by the Department and 55 were disapproved, as follows:

Consolidations recommended by regions

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We noted that the Department had kept no record and did not inform the regions of the reasons for disapproving proposed consolidations. After we discussed the absence of documentation with responsible Department officials, they furnished us with the reasons for disapproval of the 55 cases. We believe that 20 of the 55 disapproved cases, representing possible recurring annual savings of at least $66,000, appeared practicable for consolidation. There were no operational reasons shown in the files nor did Department officials give us any valid operational reasons—such as service to patrons would be impaired or carriers serving the consolidated routes would incur hardships-as to why the proposed consolidations were disapproved. For example, one of the regions visited by us

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