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Lines 10 and 11, page 1, and line 1, page 2, provide that military service shall be credited on a day-for-day basis. Since a work year for purposes of pay advancement in the postal service comprises 253 days of work, 8 hours a day, military credit on a day-for-day basis would enable a veteran to receive nearly 144 years' credit for advancement for each year of military service. Postal employees who were reinstated in the postal service after military service receive pro rata or year-for-year credit for their service, enabling them to be advanced one pay grade for each year of military service. It is doubtful if the framers of this measure intended to give postal employees who had not been in the postal service prior to their military service greater benefits than those granted to postal employees who had been in the postal service before they entered the armed forces. To provide equal credit to both groups of employees, the last three words in line 10, all of line 11, page 1, and all of line 1, page 2, could be stricken out and the following substituted, "Such credit shall be on a pro rata basis for each year served in the military forces. On the basis of such credit. each emplovee to whom this section applies shall be

Line 4, page 2, can be construed to limit the benefits of the bill to postal employ. ees whose first appointment to a classified position is to a substitute position. In several branches of the postal service, particularly the custodial service, the substitute system is not used, and employed are appointed directly from civil-service eligible lists to regular full-time classified positions without intervening service as substitutes. The bill can be clarified so as to extend its benefits to such employees by striking out the words “as substitute" in line 4, page 2.

The second major purpose of H. R. 87, as contained in the proviso in section 1, is to provide that postal employees or substitute postal employees who were on active military or naval duty on or before June 30, 1945, should, upon promotion to s regular position, be advanced in grade in the same manner provided in section 3 of Public Law 35, Eightieth Congress, for employees who were substitutes in the postal service prior to July 1, 1945.

Public Law 134, July 6, 1945, granted an increase in pay or $400 or four pay grades to all regular employees who were in the service on June 30, 1945. Public Law 317, March 6, 1946, as amended by Public Law 35, April 15, 1947, extended this increase to apply, upon their promotion to regular employees, to all those who had been substitute employees on June 30, 1945, including those with temporary or war-service appointments when such service is continuous to the date of appointment as a classified substitute or regular employee. It also applies to those veterans who are beneficiaries of the McCormack Act, Public Law 577, but only in those instances in which the eligible standing lower on the eligible list was appointed prior to July 1, 1945. Entitlement to the $400 or four-grade increase in pay granted by Public Law 134 is a matter of date of appointment, and not the veteran or nonveteran status of the employees. There are both veterans and nonveterans among employees who were regulars on June 30, 1945, and who received this increase. There are both veterans and nonveterans who were substitutes on June 30, 1945, and who have received or will receive the increase in pay upon their appointment as regulars. There are both veterans and nonveterans whose original appointment to the postal service was subsequent to June 30, 1945, who are not entitled to the benefits of the McCormack Act, and who are not entitled, under present law, to receive this increase in pay. Finally, those veterans appointed under the McCormack Act receive the increase in pay only if the eligible standing lower on the eligible list was appointed prior to July 1, 1945, so that their own constructive date of appointment was prior to July 1, 1945.

This situation has caused those postal employees not entitled to the $400 or four-grade increase provided in Public Law 134 to seek legislation to grant them the same increase in pay. Numerous bills have been introduced which would accomplish this in one manner or another. The proviso in H. R. 87 would grant the increase in pay to veterans originally appointed after June 30, 1945. The only group of postal employees who would not receive the increase in pay, upon the enactment of H. R. 87, are the nonveterans appointed since June 30, 1915, and veterans appointed since June 30, 1945, directly to regular positions without intervening service as classified substitutes.

It is of interest to notice that increases in pay were granted in 1945, to both regular employees of the postal service and to employees whose positions are subject to the Classification Act. Increases were also granted to both groups in 1946 and 1948. In all instances except the first increase for the postal employees, the increases were accomplished by raising the basic rates of pay so that the increases pertained not only to the employees then in the service, but also to those first employed subsequent to the increases. However, the increases granted to regular postal employees in 1945 under Public Law 134 were not accomplished by increasing the basic rates of pay. In fact, no change whatsoever was made in those rates. For example, the range of pay for clerks and carriers in first- and second-class post offices was $1700 to $2100 prior to 1945. Under Public Law 134 (sec. 12 (a)), the first five pay grades remained at $1,700 to $2,100, and to them were added six automatic pay grades, so that there are now 11 automatic pay grades. There were also established three so-called additional pay grades. The increase in pay of the individual employees was accomplished in fact (al though the adjustment formula in sec. 23 is couched in different language) by assigning employees to the rate of pay four grades above the grade the employee was then receiving. Employees in grade 1, for example. were adjusted to grade 5, and those in grade 5 were converted to grade 9.

Since the basic rates of pay remained unchanged, new appointees still receive $1,700 per year as did those appointed prior to July 1, 1945. These pay rates have all been increased $850 by Public Law 386, Seventy-ninth Congress, and Public Law 900, Eightieth Congress. In effect this means that postal employees in the service on June 30, 1945, have received three increases in pay, and those appointed after June 30, 1945, have received two increases in pay.

Before commenting upon either of the purposes of section 1, it is suggested that certain clarifying amendments be made to the proviso to more clearly carry out its purposes. The proviso does not relate to the main portion of section 1, and should more properly be made a separate section, to be numbered "2.” Its benefits should be limited to classified employees, so as to exclude temporary employees. It should apply to those appointed directly to classified positions without intervening service as substitutes. To preclude the possibility of duplicating increases to those who were appointed prior to July 1, 1945, it should be limited to such appointments made subsequent to June 30, 1945, and to those who have not already received the $400 or four-grade increase in pay. These revisions can be accomplished by substituting a period for the colon in line 4, page 2, striking out the entire proviso in section 1, and substituting in lieu thereof the following:

"Sec. 2. Classified postal employees or classified substitute postal employees who were on active military or naval duty on or before June 30, 1945, shall, upon appointment or promotion to a regular position subsequent to June 30, 1945, be advanced in the same manner as provided in section 3 of Public Law 35, Eightieth Congress, for employees who were substitutes in the postal service prior to July 1, 1945, if they have not already been so advanced.”

Section 2 should be renumbered "section 3.” While the Commission does not have information as to the merits of this section, it is suggested that its apparent meaning can be clarified by revising lines 12, 13, and 14, page 2, as follows:

“Sec. 3. Substitute postal employees who failed of promotion to regular because they were in the military or naval forces during the World War II shall, for the purpose of determining

To preclude retroactive payments in connection with adjustments in pay grade resulting from the application of section 1, including the proviso, it is suggested that there be added a new section 4, to cover section 1 and the suggested new section 2. It is the apparent intention that the present section 2, to be renumbered section 3, shall be retroactive as to pay adjustments, both because of the nature of the action and the fact that there are so few cases coming under that section. Accordingly, it is suggested that there be added a new section to read as follows:

"SEC. 4. No person shall, by reason of the enactment of section 1 or section 2 of this Act, be entitled to any compensation for'any period prior to the effective date of this Act."

The Commission does not favor the enactment of H. R. 87 with respect to either of the two purposes of section 1, as discussed above. Although there is precedent from World War I for giving credit for military service to postal employees who had not been in the postal service prior to entering the armed forces, the enactment of H. R. 87 would establish the principle of granting increases in pay solely because of service in the armed forces. ' Advancement in pay from one rate to another is historically based upon the performance of satisfactory service. It is both an incentive and a reward for such service. It is proper to give credit for military service to those who left the postal service to enter the armed forces, because there is more than a presumption that they would otherwise have remained in the postal service. However, where a veteran had never before been in the postal service, there is no reason to assume that, except for the war, he would have entered the postal service on the date that he entered the armed forces. Those who had intended to enter the postal service, and had demonstrated this intention by being on eligible lists between certain dates, and who lost opportunity for appointment because of military service are entitled by the McCormack Act, Public Law 577, Seventy-ninth Congress, to appointment as of the earliest date on which an eligible standing lower on the list received a probational appointment. To the extent that the period subsequent to this constructive date of appointment overlapped with military service, beneficiaries of the McCormack Act have received credit for their military service in determining their present pay grade. They would not have received an appointment earlier than such date had they not entered the armed forces. They are now in as high a grade as if they had never been in the armed forces. It is difficult to understand the merits of a proposal to grant them credit for any period prior to their constructive date of appointment under the McCormack Act. There is even less reason to grant credit for military service to those who were not on eligible lists and who, before entering the armed forces had not indicated in any way their intention of entering the postal service.

Under these circumstances, giving such veterans credit for their military service is to grant them a monetary reward for having been in the armed forces, an award which, in the event of the enactment of this bill. would be received by only & relatively small number the veterans in Federal employment and of all veterans of the armed services. So far as Government service is concerned, the present laws have granted to veterans extensive preferences in appointment and retention in Federal civilian positions.

The enactment of such provisions for veterans who have entered the postal service would discriminate against veterans in all other branches of the civil service, including those in positions subject to the Classification Act of 1923, as amended, and those in blue-collar positions paid on the basis of local prevailing wages. Under existing law, veterans who first entered Government service in Classification Act or wage-board positions after their military service do not receive credit for their military service in determining their rate of pay.

While the promotional system in the postal field service is somewhat different in its detailed provisions than the promotional system for employees subject to the Classification Act, both systems are similar in their essential character, namely, that promotion from one rate of pay for a particular position to a higher rate of pay for the same position is based upon the performance of satisfactory service. Public Law 134, covering postal employees, states that such employees *** shall be promoted successively at the beginning of the quarter following one year's satisfactory service

*.” Section 7 of the Classification Act, as amended, provides that employees "shall be advanced in compensation successively to the next higher rate within the grade at the beginning of the next pay period” following the completion of 12 or 18 months (depending upon the amount of pay increments in the grade) when their current efficiency is "good" or better than "good", and providing their service and conduct are certified as being otherwise satisfactory. Somewhat similar provisions have been administratively adopted by most agencies for the advancement in pay of blue-collar employees in those instances in which more than one rate of pay has been established for a particular position.

Granting the additional benefits of Public Law 35 to veterans, in accordance with the proviso in section 1 of H. R. 87 also appears to be a reward of the same type. As indicated in the above analysis of the proviso, entitlement to the four extra grades upon becoming a regular employee is at present based upon the date of employment and not on the veteran or nonveteran status of the individual employees. To receive the benefits of Public Law 35 at the present time, an employee must have been a substitute on June 30, 1945, or must have been a veteran appointed under the McCormack Act with a constructive date of appointment on or before June 30, 1945. The presumption of the present law, as contained in Public Law 35 and in the McCormack Act, appears to be that if a veteran, prior to his entry into the armed forces, had intended to seek a position in the postal field service, he would have demonstrated that intention by securing an eligible rating in an open competitive examination. If he had not thus demonstrated his intentions, a veteran is considered by present legislation to have no more rights to the four extra grades provided by Public Law 35 than a nonveteran whose first appointment to the postal service was after June 30, 1945. Where a veteran had never before been in the postal service, and had not demonstrated his intention of entering the postal service by successfully passing a civil-service examination, there is no reason to assume, that, except for the war, he would have entered the postal service.

The extension of the benefits of Public Law 35 to veterans who are appointed to regular positions from status as classified substitutes would discriminate against other veterans who also had not been in the postal service before entering the armed forces, and who, under the proviso in section 1, would not receive the four extra grades for the reason that they have been or will be appointed directly to regular positions without intervening service as classified substitutes.

The four grade increase granted to those who were in the postal service on June 30, 1945, was an increase in pay for those particular employees. If it is & matter of legislative policy to extend this increase to employees appointed after June 30, 1945, it should be extended to all such employees. It should not be restricted to veterans, and it should not be restricted to a particular group of veterans.

This report replaces our previous report of May 23, 1949.

We have been advised by the Bureau of the Budget that the enactment of this bill would not be in accord with the program of the President. By direction of the Commission: Sincerely yours,

HARRY B, MITCHELL, President.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington 25, D. C., April 1, 1949. Hon. Tom MURRAY, Chairman, Committee on Post Office and Civil Service,

House of Representatives, Washington 25, D. C. MY DEAR MR. MURRAY: This is in response to your invitation of March 23, 1949, to report upon H. R. 87, relating to the promotion of veterans of World War II in the field service of the Post Office Department.

The purpose of this measure is to grant credit for service with the armed forces during World War II to those postal employees who entered the postal service within 3 years of the date of the enactment of the bill, and who have not reached the maximum grade of salary, or otherwise received credit for such military service in determining their salary grade.

I find that the Bureau joined with the Post Office Department and Civil Service Commission in reporting adversely upon S. 2167, a bill of similar purpose in the Eightieth Congress. It was felt that this proposal would confer unwarranted and discriminating advantages to the special and limited class of employees embraced by the bill--advantages over veterans of World War I, nonveteran career employees, and even other veterans of World War II also employed in the postal service--and that legislation of such character could only be detri. mental and harmful in its over-all effect upon the Federal employment systems. In addition, the Post Office Department called attention to the fact that approval of this legislation would increase its expenditures by many millions of dollars. Consideration to this potential cost would seem to be even more compelling today, in the light of the recently expressed concern of the President over the postal deficit and his recommendation that postal rates be increased in the interests of removing the deficit in postal operations.

The Bureau, therefore, can find no reason to change the view reported to the committee last year that the enactment of this proposal would not be in accord with the program of the President. Sincerely yours,

FRANK PACE, Jr., Director.

COMPTROLLER GENERAL OF THE UNITED STATES,

Washington 25, February 24, 1949. Hon. Tom MURRAY, Chairman, Committee on Post Office and Civil Service,

House of Representatives. MY DEAR MR. CHAIRMAN: Further reference is made to your letter of January 7, 1949, acknowledged January 24, 1949, requesting a report in triplicate upon H. R. 87, Eighty-first Congress,

entitled "A bill relating to the promotion of veterans of World War II in the field service of the Post Office Department."

Under date of March 19, 1948, a report was made by this office to the chairman of the Senate Committee on Post Office and Civil Service on S. 2167, Eightieth Congress, and on March 25, 1948, a copy of that report was transmitted to the chairman of the House Committee on Post Office and Civil Service for use in considering H. R. 4991, Eightieth Congress. The provisions of S. 2167 and H. R. 4991 are practically identical with those of H. R. 87 now under consideration.

In the report of March 19, 1948, it was pointed out that section 1 of the proposed legislation, if enacted into law, would require credit to be given on account of the time served in the military or naval forces of the United States to persons who were not in the postal service, or who had not even contemplated entering the postal service, prior to their entering the military or naval forces of the United States. Also, it was suggested that its benefits be confined to persons whose military or naval service was honorable or satisfactory, and that the benefits be based only upon service during World War II and the period of emergency which immediately preceded the entrance of the United States into that war. Further, it was suggested that, since reemployment benefits similar to those provided for persons entering the land and naval forces also have been provided for the merchant marine, consideration be given to the advisability of extending the benefits of the proposed legislation to such persons.

This office recommended against the enactment of the proposed section I, DOG only because it would confer a benefit that does not appear to be either necessary or desirable from the Government's standpoint, but because it is discriminatory in favor of veterans employed in the field service of the Post Office Department, as against other veterans employed by the Government generally.

The purpose of the proposed section 2 apparently is to overcome a decision of this office, dated April 30, 1947, B-65127, 26 Comptroller General 839, to the Postmaster General which held that there is no authority for the retroactive promotion after military duty of postal-service employees from substitute to regular positions on the basis that they would have been promoted from substitute to regular because of their seniority had they not entered the military service.

In view of that decision-copies of which are enclosed, for your informationit is clear that there existed no administrative error where substitute postal employees were not promoted while in the military or naval forces, rather the administrative error existed where there was an attempt to effect a promotion while the employee was in the military or naval service. Such administrative attempts to effect promotions while the employees were in the military service have since been ratified by the provisions of section 1 of the act of March 25, 1948 (Public Law 458, 62 Stat. 87).

This office did not recommend against the enactment of section 2 but suggested that the section be revised to read in substance as follows:

“Sec. 2. Any substitute employee of the field service of the Post Office Department who entered upon active military or naval service in the land or naval forces of the United States subsequent to May 1, 1940, and who thereafter was reemployed in the field service of the Post Office Department in accordance with the provisions of section 8 of the Selective Training and Service Act of 1940, as amended (50 U. S. C. 308), section 7 of the Service Extension Act of 1941, as amended (50 U.S. C. 357), or section 3 of the Public Resolution No. 96, approved August 27, 1940, as amended (50 U. S. C. 403), and effective upon the date of such reemployment, shall, for the purpose of determining his rate of compensation and his seniority rights in the field service of the Post Office Department, be held to have been promoted to a regular position as of the date a vacancy occurred to which such employee, as senior substitute, would have been promoted if he had not been serving in the land or naval forces of the United States."

While, for the reasons indicated, I recommend against the enactment of the proposed section 1, I am not inclined to recommend against the purposes which I believe section 2 is intended to accomplish. Sincerely yours,

LINDSAY C. WARREN, Comptroller General of the United States.

The bill, as amended, meets most of the objections made in the reports of the departments with two exceptions. The first is that it applies only to postal employees and not to all Federal employees. This question was raised in the committee when the matter was being considered and a decision was reached that the bill should be reported applying only to postal employees. The second was the question of cost. The cost has been reduced materially from the bill as introduced by eliminating from the provisions of the bill all temporary employees such as those employed at Christmas time. This repre

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