FEDERAL EMPLOYEES SALARY ACT OF 1965

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67B00446R000600040002-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 338
• Document Creation Date: December 16, 2016
• Document Release Date: July 7, 2005
• Sequence Number: 2
• Publication Date: June 1, 1965
• Content Type: REGULATION

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FEDERAL EMPLOYEES SALARY ACT OF 1965
SUBCOMMITTEE ON COMPENSATION
COMMITTEE ON
POST OFFICE AND CIVIL SERVICE
HOUSE OF REPRESENTATIVES
EIGHTY-NINTH CONGRESS
H.R. 8207 and Similar Bills
BILLS TO ADJUST THE RATES OF BASIC COMPENSATION OF
CERTAIN OFFICERS AND EMPLOYEES 'IN THE FEDERAL
GOVERNMENT, TO ESTABLISH THE FEDERAL SALARY
REVIEW COMMISSION, AND FOR OTHER PURPOSES
JUNE 1, 2, 10, 155, 16, 18, 21, 22, 23, 24, 29, 1965
(Printed for the use of the Committee on Post Office and Civil Service
U.S. GOVERNMENT PRINTING OFFICE
49.691 WASHINGTON : 1965
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COl MIrI'EE ON POST OFFICE AND CIVIL SERVICE
TON MURRAY, Tennessee, Chairman
JAMES IT. MORRISON, Louisiana
THADDEUS J. DULSKI, New York
DAVID N. HENDERSON, North Cart?Iina
ARNOLD OLSEN, Montana
MORRIS K. UDALL, Arizona
DOMINICK V. DANIELS, New Jersey
LINDLEY BECKWORTH. Texas
IIARLEY O. STAGGERS, West Virg- nia
ROBERT I['. C. NIT, Pennsylvania
JOE R. POOL. Texas
WILLIAM J. GREEN, Pennsylvania
SPARK M. MATSUNAGA, IIawati
PAUL J. KREBS, New Jersey
RAYMOND F. CLEVENGER, Illchig.tn
JA ,1ES M. IIANLEY. New York
JOHN V. TUNNEY, California
ROBERT J. CORBETT, Pennsylvania
R. R. GROSS. Iowa
GLENN CUNNINGHAM, Nebraska
EDWARD J. DERWINSKI, Illinois
ROBERT F. ELLSWORTH, Kansas
ALBERT W. JOHNSON, Pennsylvania
JOHN if. BUCHANAN, Ja., Alabama
JAMES T. BROYHILL, North Carolina
CHARLES I,. Joil$aos, Staff Director
B. BrsTus BRAY, Associate Staff Dirccto?
Jon r II. MARTINY, Counsel
WILLIAM A. tavlNE, Assistant Staff Director
SU11COMMITTEE ON COMPENSATION
MORRIS E. UDALL, Arizona, Chairman
JAMES H. MORRISON, Louisiana
ARNOLD OLSEN, Montana
JOE R. POOL, Texas
SPARK M. MATSUNAGA, Hawaii
PAUL J.KREBS, New Jersey
,JAMES T. BROYHILL, North Carolina
EDWARD J. DERWINSKI, Illinois
ROBERT F. ELLSWORTH. Kansas
Ea Ofjtoto Voting Members
TOM MURRAY, Tennessee ROBERT J. CORBETT, Pennsylvania
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CONTENTS
Statement of-
Addabbo, Hon. Joseph P., a Representative in Congress from the
State of New York__________________________________________
Page
312
Brady, John G., legislative chairman, National Association of Internal
Revenue Employees, accompanied by George Bursach, executive
secretary-treasurer___________________________________________
Clague, Hon, Ewan, Commissioner, Bureau of Labor Statistics;
accompanied by Leonard Linsenmayer, Assistant Commissioner,
Office of Wages and Industrial Relations, Bureau of Labor Statis-
tics; and Louis Badenhoop, assistant to Mr. Linsenmayer_ _ _ _ - _ _ _
Cliggett, James J., president, and Edward G. Batty, executive secre-
tary, National Society of Federal Engineers, Scientists and Allied
Professionals, letters to committee_____________________________
316
Cullen, Michael J., president, National Association of Special Delivery
Messengers, AFL-CIO _________________
200
Day, J. Edward, president, National Civil Service League; accom-
panied by Bernard L. Gladieux, chairman of the board of directors;
and Jean Couturier, executive director, National Civil Service
League------------------------------ --------------------
209
Fulton, Hon. James G., a Representative in Congress from the State
of Pennsylvania----- ---------------------------------------
297
Gibson, Everett G., president, National Federation of Post Office
Motor Vehicle Employees, AFL-CIO__________________________
281
Gilbert, Hon. Jacob II., a Representative in Congress from the State
of New York------------------------------------------------
309
Gilligan, Hon. John J., a Representative in Congress from the State
of Ohio-----------------------------------------------------
290
Goodman, Sidney, president, National Postal Union, accompanied by
David Silvergleid,secretary _______________________________-__-_
258
Graybcal, H. L., national president, Naval Civilian Administrators
Association -------------------------------------------------
317
Griner, John F., president, American Federation of Government
Employees; accompanied by George Meagher, director of legislation;
and Dr. W. J. Voss, director of research, American Federation of
Government Employees______________________________________
Gronouski, IIon. John A., Postmaster General; accompanied by Hon.
Richard J. Murphy, Assistant Postmaster General, Bureau of
Personnel; and Herbert Block, Director, Compensation Division,
Bureau of Personnel, Post Office Department___________________
Ifallbeck, E. C., president, United Federation of Postal Clerks,
accompanied by Patrick Nilan, legislative director, United Federa-
tion of Postal Clerks
143
Halpern, IIon. Seymour, a Representative in Congress from the State
of New York
314
Ilarsha, Ron. William II., a Representative in Congress from the
State of Ohio
313
Huffman, Floyd, president, National Rural Letter Carriers Associa-
tion, accompanied by John Emeigh, secretary -------------------
283
Hutchings Paul R., research director, Metal Trades Department,
AFL-C1~O------
203
Jay, Vincent hi., executive vice president, Federal Professional Associa-
tion; accompanied by Dr. Lewis P. McCann, president; and Hon.
Robert Ramspeck,consultant _________________________________
Jones, Woodrow, president, National Association of ASCS County
Office Employees, accompanied by Clyde R. Payne, secretary-
treasurer
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IV CONTENTS
Statement of--Continued Page
Keating, Jerome J., president, National Association of Letter Carriers;
accompanied by James ii. Rademacher, vice president; J. Stanly
Lt' is, secretary-trcasur.,-r; Charles N. Coyle, assistant secretary.
treasurer: George A. Bang, director of life insurance; James P.
Drely, director of health insurance; and J. Don Kerlin, legislative
consultant--------------------------------------------------- 111
Lasseter, Dillard, legislative counsel, Organization of Professional Em-
ployces, Departnunt of Agriculture---------------------------- 272
Macy, Hon. John W., Jr., chairman, C.S. Civil Service Commission;
accompanied by O. Glcrn Stahl, director, Bureau of Programs and
Standards; and Robert S. Hare, chief, Pay Systems Section, Pro-
gram Planning Division. Bureau of Programs and Standards, U.S.
Civil Service Commission------------------------------------ 25,322
.tlcAvoy, Harold, national president, National Association of Post
Office & Postal Transportation Service Mail Handlers, Watchmen,
Messengers & Group L aders, accompanied by Al Darco, national
vice president-----------------------------------------------
151
.llcCart John A., operatio:ts director, Government Employes' Council-
274
Miller, lion. George I'., a Representative in Congress from the State
of California------------------------------------------------
308
:Murphy, John J., president, National Customs Service Association--
191
O'Dwyer, Fred J., nationid president, National Association of Postal
Supervisors; accompanied by Donald N. Ledbetter, national
secretary; and Daniel Jaspan, legislative representative-----------
232
Robbins, Paul H., executive director, National Society of Professional
Engineers---------------------------------------------------
193
Ryan, William H., president, District 44, International Association
of Machinisis & Aerospace W'1'orkers, AFL-CIO ------------------
171
Segal, Bernard G., chairman, Committee on Judicial Selection, Tenure,
and Compensation, American liar Association, and president,
American College of Trial Lawyers; accompanied by Edward W.
Kuhn, president-elect, American Bar Association----------------
248
Snyder, John, executive director, National Association of Postmasters-
'
158
Director, Bureau of the Budget; ac-
Staats, Zion. Elmer B., Deputy
cotiytanied by Roger W. Jones, Special Assistant to the Director; and
David W. McAfee. -Management Analyst, Office of Management
and Organization --------------------------------------------
81
Stephens, Russell M., president., American Federation of Technical
Engineers, AFL-CIO, accompanied by Max Shine, Federal ent-
ltloyee representative o- American Federation of Technical Engi-
neers, AFL-CIO-------------------------- ----------------
197
Stoffer, Henry J. preidet~t, National League of Postmasters, accom-
panied by AN. )F. Vaughn, legislative representative and immediate
past president, National League of Postmasters----------------
165
Warsaw, Benjamin B., tegislative director, New Jersey Federation of
Postal Clerks AFL-CIt.---------------------------------------
320
Wolkomir, Nathan T., president, National Federation of Federal
Employees, accompanied by Harry Johnson---------------------
302
Woolf, IIayvis, O.1)., chairman of the Committee on Administrative
Agencies of the Americe.u Optometric Association----------------
103
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FEDERAL EMPLOYEES SALARY ACT OF 1,965
TUESDAY, JUNE 1, 1965
HOUSE OF REPRESENTATIVES,
SUBCOMMITTTE ON COMPENSATION OF TIIE
COMMITTEE' ON POST OFFICE AND CIVIL SERVICE,
Washington, D.C.
The committee met at 10 a.m., in room 215, Cannon House Office
Building, the Honorable Morris K. Udall (chairman of the sub-
committee) presiding.
Mr. UDALL. The subcommittee will come to order.
The Subcommittee on Compensation is meeting this morning to
begin public hearings on the President's Federal civilian salary pro-
posal, which the Chair has introduced as ILR. 8207, and other general
salary bills which are expected to be introduced in the near future.
As bills dealing with this subject are introduced, they will no doubt
be referred to this subcommittee, and we will consider all of them in
the sessions that are to follow.
I might announce that the schedule of the hearings has been tenta-
tively set. We will meet this morning, and we will meet again to-
morrow morning at 10 a.m., at which time we will hear the Honorable
John Gronouski, Postmaster General. The subcommittee will then
recess until the morning of June 10. Subsequent to that, we will hold
hearings on June 15, 23, and 24.
It will be the hope of the Chair that we can complete public hearings
on the last date that I have just indicated.
Unless there is objection, at this point in the hearing record the
bill now before us, H.R. 8207, will be printed. This will be followed
by the President's special message delivered to Congress May 12, 1965,
on pay increases for certain civilian employees and members of the
uniformed services.
Hearing no objection, it is so ordered.
(The bill, H.R. 8207, and the President's message follow:)
~[H.R. 8207, 89th,Gong., 1st sess.]
A BILL To adjust the rates of basic compensation of certain officers and employees in the
Federal Government, to establish the Federal Salary Review Commission, and for other
purposes
Be it enacted by the Senate and house of Representatives of the United States
of America in Congress assembled,
TITLE I
SECTION 1. This title may be cited as the "Federal Salary Adjustment Act of
1965".
CLASSIFICATION ACT EMPLOYEES
SEc. 2. (a) Section 603(b) of the Classification Act of 1949, as amended (78
Stat. 400; 5 U.S.G. 1113(b)), is amended to read as follows:
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2 FEDERAL EMPLOYEES SALARY ACT OF 1965
I 2 a
$3,495
Gs-1--------------1
3, 800
(IS-2--------------{
0.9-3 -------------- 4, 120
4,120
4,615
(iS-4-------------k
5, 160
GS-5-------------i
3.1170
GS-41 -- ----------- 5, 11-1 0
6,220
as ;---------------
0, 829
GS 8-------------- GS-10--._._.
7,445
8,100
& 92D
GS-11-------------
10 590
(18-12------------
12.490
()S-13---- ---------
14, 640
(18-14-----------
17,020
GS-IS---_--___---I
19,5 6
G8-16-------------
5
(15-17-?-----------
25.235
OS-18-------------
4
5
6
7
8
9
10
83,610
53,725
$3,840
$3,955
$4,070
$4,185
$4,300
$4,415
$4,530
3, 025
4, ON
4,175
4, 800
4.425
4,550
4,675
4,800
4,925
4,200
4,400
4,540
4,680
4,820
4,960
5,100
5,240
5,380
4,770
4,925
5,080
5,235
5,390
5,645
5,700
5,855
6,010
5.320
5, 490
5,600
5, 830
0, WO
0, 170
6,340
6, 510
G. 080
5,8(10
5.050
5,240
6,430
6,620
0,810
7,000
7,190
7,380
0,430
G. 640
5.850
7, 06(1
7,270
7, 480
7,690
7, 900
8,110
7, 060
7, 280
7,510
7,740
7,970
& 200
8,430
8, 050
& 890
7,695
7.945
8,195
&845
8, 695
8,945
9,195
9,445
9, 695
8,430 ,
8, 700
& 970
9,240
9,510
9,780
10, 050
10,320
10, 590
9,220
9.520
9.820
10,120
10, 420
10,720
11,020
11.320
11, 020
10,045
11,300
11,655
12,010
12,365
12,720
13,075
13,430
13,785
12, 905 t
13, 320
13,735
14,150
14, 568
14, 080
15.395
15,810
IQ 225
15,130
15,620
15,110
18, 600
17,090
17,580
18,070
18,560
19, 050
17, 585
18, ISO
18,715
19, 280
10,845
20,410
20, 976
21, 549
22,105
20,225
20,876
21,525
22,175
22,825
23,475
24,125
24,775
-------
22
926
-
-5
-
---
-
--
=
-
---
--
-
-
---
i
--------1
--------
-------
--------
------- -
(b) Except as provided in subsection (d) of section 50.1 of the Federal Salary
Reform Act of 1962, the rates of basic compensation of officers and employees
to whom the compensation seheiule sets forth in subsection (a) of this section
applies shall be initially adjusted as of the effective date of this section, as
follows.
(1) If the officer or emplcyee is receiving basic compensation Immediately
prior to the effective date of this section at one of the rates of a grade
in the General Schedule of the Classification Act of 1949, as amended, he
shall receive a rate of basic compensation at the corresponding rate in effect
on and after such date.
(2) If the officer or empicyce Is receiving basic compensation immediately
prior to the effective date of this section at a rate between two rates of a
grade in the General Schedide of the Classification Act of 1949, as amended,
he shall receive a rate of basic compensation at the higher of the two cor-
responding rates In effect on and after such date.
(3) If the officer or cmplcyea is receiving basic compensation immediately
prior to the effective date of this section at a rate in excess of the maximum
rate for his grade, he shall receive (A) the maximum rate for his grade
in the new schedule, or (B; his existing rate of basic compensation if such
existing rate is higher.
(4) If the officer or emp oyee, immediately prior to the effective date of
this section. Is receiving, pirsunnt to section 2(b) (4) of the Federal En1-
ployees Salary Increase Act: of 1955. an existing aggregate rate of compen-
sation determined under section 20S(b) of the Act of September 1, 195-1
(68 Stat. 1111), pins subsequent increases authorized by law, he shall receive
an aggregate rate of comper cation equal to the sum of his existing aggregate
rate of compensation, on thy' day preceding the effective date of this section.
plus the amount of inereasl made by this section in the maximum rate of
his grade, until (1) he leaves his position, or (11) he is entitled to receive
aggregate compensation at a higher rate by reason of the operation of this
Act or any other provision 3f law :. but, when such position becomes vacant.
the aggregate rate of compensation of any subsequent appointee thereto
.shall be fixed In accordance with applicable provisions of law. Subject
to clauses (1) and (ii) of the immediately preceding sentence of this para-
graph. the amount of the irerease provided by this section shall be held and
considered for the purls of section 205(b) of the Act of September 1,
1947,?1, to constitute a part of the existing rate of compensation of the
employee.
5rc. 3 (a) Section 3542(a) of title 39, United States Code, is amended to read
as follows:
"(a) There is established a -.lnsic compensation schedule for positions In the
postal field service which shall be known as the Postal Field Service Schedule
and for which the symbol shall be 'PFS'. Except as provided in sections 35-13
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FEDERAL 0 S A A
and 3544 of this title, basic compensation shall be paid to all employees in
accordance with such schedule.
"POSTAL FIELD SERVICE SCHEDULE
1
2
3
4
5
6
7
8
9
10
11
12
I-----------
$4,060
$4,195
40
4
$4,330
4
685
$4,465
830
4
$4,600
4
975
$4,735
120
5
$4,870
265
5
$5,005
410
5
$5,140
5
565
$5,275
5,700
$5,410
5,845
$5,545
5,990
2-----------
3
4,395
4
750
,5
4
910
,
070
5
,
5,230
,
.
5,390
,
5,550
,
5,710
,
5,870
,
6,030
6,190
6,350.
6,510
-----------
4-----------
6
,
5,150
505
5
,
5,320
690
5
,
5,490
875
5
5,660
060
6
5,830
245
6
6,000
430
6
6,170
6,615
6,340
6,800
6,610
6,985
6,680
7,170
6,850
7,355
7,020
7,540
-----------
6-----------
______
7
,
5,910
6
330
,
6,105
6,540
,
6,300
6,750
,
6,495
6,060
,
6,690
7,170
,
6,885
7,380
7,080
7,590
7,275
7,800
7,470
8,010
7,665
8,220
7,860
8,430
8,055
------
_____
8 -----------
--------
9
,
6,840
7,410
7,070
7,655
7,300
7,900
7,530
8,145
7,760
8,390
7,990
8,635
8,220
8,880
8,450
9,125
8,680
9,370
8,910
9,615
_______
_______
------
------
---
10 -----------
--------
11
8,076
920
8
8,345
9,220
8,615
9,520
8,885
9,820
9,155
10,120
9,425
10,420
9,696
10,720
0,695
11,020
10,235
11,320
10,505
11,620
_______
.....
------
-----
.......
---
12 -----------
13-----------
,
9,870
10,925
10,200
11,290
10,530
11,655
10,860
12,020
11,190
12,385
11,520
12,750
11,850
13,115
12,180
13,480
12,510
13,845
12,840
14,210
.
-----
-----
------
------
-
-------
14
-
-12
080
12,460
12,860
13,260
13,660
14,060
14,460
14,860
15,260
15,660
-------
-
-
--
16-----------
,
310
14,725
13,755
15,215
14,200
15,705
14,646
16,195
15,090
16,685
15,535
17,175
15,980
17,665
16,425
18,155
16,870
18,645
17,315
19,135
-
-
------
-------
-
-------
-------
17-----------
18 -----------
16,290
18,060
16,835
18,660
17,380
19,260
17,925
19,860
18,470
20,460
19,015
21,060
19,560
21,860
20,105
22,260
20,650
22,860
21,195
23,460
-
-
_______
-----
------
___
19___________
-
-
20,015
20,680
21,345
22,010
22,675
23,340
24,005
24,670
_______
_______
_______
______
20-------- ._
22,185
22,925
23,665
24,405
25,145
-------
-------
-------
-------
-------
-------
------
(b) Section 35543(a) of title 39, United States Code, is amended to read as
follows :
" (a) There is establi shed a basic compensation schedule which shall be known
as the Rural Carrier Schedule and for which the symbol shall be `RCS'.
"Per annum rates and steps
Carrier in rural delivery
service: Fixed com-
pensation per annum.
Compensation per mile
per annum for each
mile up to 30 miles of
route -----------------
For each mile of route
over 30 miles----------
89
25
91
25
107
25".
(c) Section .3544(a) of title 39, United States Code is amended to read as
follows :
"(a) There is established a basic compensation schedule which shall be known
as the Fourth Glass Office Schedule and for which the symbol shall be `F'OS',
for postmasters in post offices of the fourth class which is based on the revenue
units of the post office for the preceding fiscal year. Basic compensation shall be
paid to postmasters: in post offices of the fourth class in accordance with this
schedule.
"FOURTH CLASS OFFICE SCHEDULE
30 but less than 36------
$3, 881
$4,010
14,139
$4, 268
$4, 397
$4,526
$4,655
$4,784
$4,913
$5, 042
$5, 171
$5,300
24 but less than 30------
3,585
3,705
3,825
3,015
4,065
4, 185
4, 305
4, 425
4,546
4, 665
4, 785
4,905
IS but less than 24------
2, 966
3:065
3,164
3, 263
3,362
3,461
3, 560
3,659
3,758
3,857
3,956
4, 055
12 but less than 1S--____
2
320
2
397
2
474
551
2
2
628
2, 705
2,782
2,859
2,936
3, 013
3,000
3, 167
6 but less than 12__
--
,
1
670
,
726
1
,
1
782
,
1
838
,
894
1
1
950
2, 006
2, 062
2, 118
2, 174
2,230
2,286
-
__
Less than 6_____________
,
1,347
,
1, 392
,
1:437
,
1, 482
,
1, 527
,
1,672
1,617
1, 662
1,707
1,762
1,797
1, 842".
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4 FEDERAL E\iPLCYEES SALARY A(T OF 106.
(d) The basic compensation of each employee subject to (he Postal Field
Service Schedule, the Rural Carrier Sehednlc', or the Fourth-Class Office Sched-
ule imluediately prior to the effetive date of this section shall be determined
as follows:
(1) Each employee shall he assigned to the same numerical step for his
position which he had obtained immediately prior to such effective date.
It changes in lei-cis or step:; would otherwise occur on such effective date
without regard to enactment of this title, such changes shall be deemed to
have occurred prior to conversion.
(2) If the existing basic compensation Is greater than the rate to which
the employee is converted tinder paragraph (1) of this subsection, the
employee shall he placed in the lowest step which exceeds his basic com-
pensation. It the existing l?asic compensation exceeds the maximum step
of his position, his existing basic compensation shall be established as his
basic compensation.
EIIPLOTEES IN THE DEi'ARTMENT OF 'MEDICINE AND SURGERY OF TIME VETERANS'
ADMINISTRATION
SEC. 104. Section 4107 of title 38, United States Code, relating to grades and
pay scales for certain positions within the Department of Medicine and Sur-
gery of the Veterans' Administration, is amended to read as follows:
"?4107. Grade and pay scales
"(a) The per annum full-pay scale or ranges for positions provided in sec-
tion 4103 of this title, other than Chief Medical Director and Deputy Chief
Medical Director, shall be as follows:
"SECTS-oN 4103 ScI mwi-F_
"Assistant Chief Medical Dire'!tor, $25,235.
"Assistant Director, $22,185 miliiniunl to $25,145 maximum.
"Director of Nursing Service, $17,020 minimum to $22,105 maximum.
"Director of Chaplain Service. $17,020 miuiinuin to $22,105 maximum.
"Chief Pharmacist, $17,020 minimum to $22,105 maximum.
"Chief Dietitian. $17,020 minimum to $22,105 maximum.
"(b) (1) The grades and per annual full-pay ranges for positions provided in
paragraph (1) of section 4101 of this title shall he as follows :
"PiIYSICIAN AND DENTIST SCHEDULE
"Director grade, $10,575 minimum to $2.1.775 maximum.
"Executive grade, $1Sa?.5:5 minimuln to $23,745 maximum.
"Chief grade. $17,020 minimum Io $22.105 maximum.
"Senior grade, $14,6x10 minimum to $19,050 maximum.
"Intermediate grade, $12,490 minimum to $16,225 maximum.
"Full grade, $10,590 minimum tc $13,785 maximum.
`Associate grade, $8,920 minimum to $11,020 maximuttt.
"NURSE SCHEDULE
"Assistant Director grade. $14,610 minimum to $10,050 maximum.
"Chief grade, $12,490 minlrnuni to $16,225 maximum.
"Senior grade, $10,590 minimum to $13,785 maximum.
"Intermediate grade, $8,920 minimum to $11,620 maximum.
"Pull grade, $7,445 minimum to .19,6595 maximum.
"Associate grade, $6.510 minimum to $8,445 maximum.
"Junior grade, $5,670 minimum -:o $7,380 maximum.
"(2) No person may hold the drector grade unless he is serving as a director
of a hospital, domiciliary, center, or outpatient clinic (independent). No person
may hold the executive grade unless he holds the position of chief of staff at it
hospital, center, or outpatient clinic (Independent), or the position of clinic
director at an outpatient runic, or comparable position."
SEC. 5. (a) The fourth sentence of section 412 of the Foreign Service Act of
1916, as amended (22 U.E.C. 867) is amended to read as follows: "The per
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annum salaries of Foreign Service officers within each of the other classes shall
be as follows :
.Class 1-----------------------
----------------
2
$23,430
18, 915
$24,210
19, 545
$25,235
20,176
-
$20,805
$21,435
$22,065
$22, 695
- ------
-----------------
Class 3
15,365
15,875
16,385
16,895
17,405
17,915
18,425
------
------------
-
Class 4
12,490
12, 905
13, 320
13,735
1.4,150
14, 565
14, 980
----- ----
-
Class 5-----------------------
10,275
10,620
10,965
11,310
11,655
12,000
12,345
Class 6---- -------------------
8, 570
8,855
9,140
9, 425
9, 710
9, 995
10, 280
Class 7-----------------------
Class 8-----------------------
7,225
6,220
7,465
6,430
7,705
6,640
7,945
6,850
8,185
7,060
8,425
7,270
8,665
7,480".
(b) The second sentence of subsection (a) of section 415 of such Act (22
U.S.C. 870(a)) is amended to read as follows.: "The per annum: salaries of staff
officers and employees within each class shall be asp follows :
"Class 1 --------- _
$15,365
$15,876
$16, 385
$16, 895
$17, 405
$17, 915
$18, 425
$18, 935
$19,445
$19.955
Class 2----------
12,490
12,905
13,320
13,735
14,150
14,565
14.980
15,395
15,810
16,225
Class 3----------
10.275
10,620
10,965
11,310.
11,655
12.000
12,345
12,690
13,035
13.380
Class 4- ----------
8,570
8,955
9,140
9, 425.
9,710
9,005
10,280
10,565
10,850
11.135
Class 5----------
7,725
7,980
8,235
8,490
8,745
9,000
9,255
9,510
9,765
10,020
Class 6----------
6,965
7,195
7,425
7,665
7,885
8,115
8,345
8,575
8.805
9,035
Class 7- ----------
6,390
6.595
6,810
7,025
7,240
7,455
7,670
7,885
8,100
8,315
Class 8_ ----------
6,655
6,845
6,035
6,225
6, 415
6,605
6,750
6,985
7,175
7,356
Class 9----------
5,160
6,330
5,600
5,670
5,840
6,010
6,180
6,350
6,520
6,690
"
Class 10 ---------
4, 615
4,770
4,925
5, 080
5,235
5,390
5,545
5,700
5,855
6, 010
.
(c) Foreign Services officers', Reserve officers, and Foreign Service staff
officers and employees who are entitled to receive basic compensation immedi-
ately prior to the effective date of this section at one of the rates provided by
section 412 or 415 of the Foreign Service Act.
. ANNUAL SALARY COMPARISON AND SALARY ADJUSTMENT PROCEDURE
SEC. 6. Section 503 of the Federal Salary Reform Act of 1962, as amended
(76 Stat. 841; 5 U.S.C. 1172), is amended by inserting "(a)" immediately after
"Sec. 503." and by adding at the end thereof the following new subsections :
"(b) The President (1) may direct that annual salary comparison reports
submitted to him under subsection (a) compare the rates of salary fixed by
statute for Federal employees with the rate% of salary paid for the same levels
of work, as determined on the basis, of appropriate annual surveys, in any fields
of non-Federal employment in addition to private enterprise which he may desig:-
nate, and (2) may include in his annual reports to Congress under subsection (a)
comparisons of Federal salary rates with those in any additional fields of,
employment he designates.
"(c) The President's recommendations, to the Congress for revision of statu-
tory salary schedules shall be transmitted not later than January 31, shall be de-
livered to both Houses on the same day, and shall be delivered to each House
while it is in session. The revised statutory salary schedules shall become
effective the first day of the first pay period which begins after expiration of
the first period of sixty calendar days of continuous session of the Congress
following their transmittal to Congress, unless between the date of transmittal
and the expiration of :such sixty-day period there has been passed by either of
the two Houses a resolution stating in substance that that House does not favor
such revised statutory salary schedules.
"(d) For the purposes of subsection (c) of this section-
"(1) continuity of session shall be considered as broken only by an
adjournment of the Congress sine die; but
"(2) in the computation of the sixty-day period there shall be excluded
the days on which either House is not in session because of an adjournment
of more than three days to a day certain.
"(e) The revised statutory salary schedules which become effective (1) shall
have the same effect as if they were statutory enactments, and (2) shall be
printed in the Statutes at Large in the same volume as the public laws, and
shall be printed in the Federal Register."
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1 FEDERAL EMPLOYEES SALARY ACT OF 1065
EFFECTIVE DATE
SEc. S. This title shall become effective on the first day of the first pay periuo
which begins on or after January 1,1'960.
TITLL II
Sec. 201. This title may be cited as the "Federal Salary Review Commission
Act".
SEC. 202. (a) There is hereby established a Commission, to be known as the
"Federal Salary Review Commission" (hereinafter referred to as the "Commis-
sion"), which shall be compose-l of ten members, of whom (1) four shall be
appointed by the President of the United States, one of whom so designated by
him shall be Chairman; (2) two shall be appointed by the President of the
Senate; (3) two shall be appointed by the Speaker of the House of Repre-
sentatives; and (4) two shall be appointed by the Chief Justice of the United
States.
(b) No person holding any office, appointive or elective, under the United
States (except retired officers or employees) shall be eligible for appointment to
the Commission. The first members of the Commission shall be appointed not
later than January 31, 1966, and shall serve for one year; new members shall be
appointed not later than. January 31 every fourth year thereafter, beginning in
1970, for the same term; members shall not be eligible for reappointment. Mem-
bers shall receive no compensation for their services but shall be reimbursed for
necessary expenses incurred In the performance of their duties.
(c) Appointment of employees may be without regard to the civil service
laws, but compensation shall he in accordance with the Classification Act of
1949, as amended; executive departments and agencies whose employees are
compensated under the statutory salary systems may detail employees for
service with the Commission without reimbursement; the services of experts and
consultants may be obtained by the Commission under the authority of section
15 of the Administrative Expem;es Act of 1940, as amended (5 U.S.C. 55a) at
rates not to exceed $100 per diem. Necessary funds are authorised to be np-
propriated for expenses of the Commission.
SEC. 203. (a) The Commission shall review the compensation, Including
rates of basic compensation and other forms of compensation, of (1) Senators,
Representatives, the Resident Commissioner from Puerto Rico; (2) Justices
and Judges of the United States; and (3) the salary levels established under
the Federal Executive Salary Alt of 19&1, with a view to maintaining proper
levels and relationships among the rates of basic compensation of these officers
and salary levels, and with the salary rates of the Classification Act of 1949.
(b) The Commission shall af3o review the principles, concepts, structures,
and interrelationships of the statutory salary systems governing the com-
pensation of Federal civilian employees of Lite executive departments and agen-
cies and of the members of the uniformed services.
(c) The Commission shall submit to the President not later than January 1,
1907, and January 1 of every fourth year thereafter beginning in 1971, a report
containing Its recommendations concerning rates of basic compensation and
other forms of compensation for the categories referred to In subsection (a) of
this section, concerning the principles, structure, and rates of the statutory
salary systems referred to in subsection (ii) of this section, and concerning such
other matters relating to compensation as it deems pertinent.
Sec. 204. (a) The President. after consideration of such report, shall
transmit to the Congress, not litter than March 31, 1907, and not later than
March 31 of every fourth year thereafter, beginning In 1971-
(1) a compensation plan containing his recommendations as to the
rates of basic compensation for the categories referred to in section 203(a)
above, provided that such recommended rates shall not exceed those
recommended by the Commission, and
(2) his recommendations for such changes as he deems necessary in
the statutory salary systems. and in other elements of compensation for
Federal civilian employees and members of the uniformed services.
(b) The delivery of the recommended compensation plan to both Houses
shall be made on the same day and shall be made to each House while it is in
session. The compensation plan shall become effective on the first day the first
pay period after July 1 following transmittal to the Congress, beginning in 1907,
unless between the date on which the compensation plan is transmitted to the
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FEDERAL EMPLOYEES SALARY ACT OF 1965
Congress and the expiration of the first period of sixty calendar days of con-
tinuous session of the Congress thereafter, there has been passed by either
of the two Houses a resolution stating in substance that that House does not
favor such compensation plan.
(c) For the purposes of subsection (b) of this section-
(1) continuity of session shall be considered as broken only by an ad-
journment of the Congress sine die; but
(2) in the computation of the sixty-day period there Shall be excluded
the days on which either House is not in session because of an adjournment
of more than three days to a day certain.
(d) the compensation plan which becomes effective shall have the same effect
as if it were a statutory enactment; and shall be printed in the Statutes at
Large in the same volume as the public laws, and shall be printed in the
Federal Register.
SEC. 205. Unless the Congress shall otherwise authorize specifically by law,
there shall be no change in the principles and basic structure of Federal salary
systems between a quadrennial review made in accordance with this title and
the next such quadrennial review, except for such periodic adjustments in
civilian salary rates and military pay and allowances as may be recommended
by the President (1) pursuant to the provisions of the Federal Salary Reform
Act of 1962, and (2) in accordance with the policy hereby declared by the
Congress that pay and allowances of uniformed personnel of the United States
shall be kept comparable with pay levels of Federal civilian personnel and in
appropriate relationship with pay levels in non-Federal employment.
MESSAGE FROM TIIE PRESIDENT OF THE UNITED STATES TRANSMITTING RELATIVE
TO PROPOSING PAY INCREASE FOR CERTAIN FEDERAL CIVILIAN EMPLOYEES AND
MEMBERS OF TIIE UNIFORMED SERVICES
To the Congress of the United States:
America expects-and receives--much from her public servants.
In every field of endeavor vital to the security of this Nation, from foreign
affairs to science and technology to national defense, we depend on the career
men and women of the Federal service for competence, devotion, loyalty, and
responsibility.
I have been a part of this service for almost 35 years. I have seen it perform
critical and vital tasks. Most of the time it has performed at its best-and that
is the way we want it to stay.
I believe firmly that the merit system is the keystone of good government.
I believe that the public service is a. profession of dignity, opportunity, and
profound personal achievement.
I reject the proposition that government employment is somehow inferior
to employment in business, in the professions, in university life, or in any other
occupation. There can be no class system separating the. men and women who
are committed to the service of their fellow men or to the defense of their
country.
I also believe strongly in the obligation of the Federal Government to be a
good employer. And I define a good employer as one who-
demands excellence and rewards it ;
is fair and just ;
respects the dignity of his employees ;
insists upon ethical standards and sets a good example ;
practices no discrimination ;
welcomes fresh ideas and new approaches ;
fulfills his responsibilities to the community ;
provides opportunities for growth and challenge ; and
combines prudent business judgment with enlightened policies on coin-
pensation and benefits.
We do not have two standards of what makes a, good employer in the United
States : One standard for private enterprise and another for the Government. A
double standard which puts the Government employee at a comparative dis-
advantage is shortsighted. In the long run, it costs more.
In all respects, save on.e, the Federal Government today is meeting the test
of a good employer. In the last 4 years we have almost-but only almost-
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c FEUF:IiAI, EMPLOYEES SALARY ACT OF 1965
achieved adequate, up-to-date, and fair Pay systems for all categories of Gov-
ernment personnel.
We must not cease our effort; ow.
In my budget message on January 25, 1905, I announced the appointment of a
Special Panel on Federal Salaries to review Federal military and civilian pay
levels.
That Panel Presented its report to me on April 1-5. It is attached to this
message. I have been studying It carefully.
The report contains a series of recommendations concerning adjustment of
Federal pay in the fiscal year 1100.
I endorse the proposals of the Panel and recommend early action by the
Congress to authorize:
An average Increase of 3 lereent in Federal civilian salaries.
An average Increase of 4.1; percent In compensation of all uniformed
personnel, except enlisted :iersonnel with under 2 years of service.
A 2.7 percent increase In base pay of enlisted personnel with less than
2 years of service.
These proposed adjustments will restore the relationships between civilian and
military pay established in 19M.
The adjustments will not bring us to full achievement of the comparability
standard enunciates in the Feirrat Salary Reform Act of 1962, but they will pre-
vent loss of ground already attained.
Before including the full effec: in retirement plans, the proposed increases will
have a total annual cost of aperoxlmately $S5I million---4117 million for uni-
formed personnel and $400 million for civilian personnel. In order to hold the
costs of pay adjustments in the fiscal year 19GG within amounts included in the
budget for that purpose, I recommend that the increases be made effective Jan-
ua ry 1. 196G.
Legisiatlolt to carry out these recommendations is attached I ask that it be
referred to [lie appropriate committee.,; of the Congress for early consideration.
The pay adjustuicnts protxisec in this message emphasize the obligation of the
Federal Government to insist ui ni maximum return from every dollar spent on a
salary.
All agencies of the executive branch are working hard to improve the pro-
ductivity of their employees and to curtail outmoded activities. All agencies
have established personnel control programs which should bring to a halt un-
warraniled increases in average grades and average salaries.
I am continuing my personal ?'ffert:r to hold down employment. The most re-
cent monthly report of the 'C`ars'. Service Commission shows that there are now
about 2'1,000 fewer civilian employees in the executive branch than in Decem-
her 1963.
New employees must replace many who leave, but additional employment will
occur only when our responsibilities permit no other course of action.
I am proud of the progress w' have made toward lean and III competence in
the discharge of Federal responsibilities. Adequate pay will help us to continue
our advance toward that goal.
The report of the Panel proposes new procedures for acting upon compensation
matters in the future,.
The first proposal would establish a permanent mechanism for impartial review
at i-year intervals of the structure and interrelationships of all Government
salary systems. Following these reviews, the President would he authorized to
propose changes to salary schedules for top position-; in the executive, legislative.
and judicial branches.
The charges would go into effect automatically agiven
date, unless disapproved by resolution of either House of time Congress. Other
changes proposed by the President as a result of a quadrennial review would be
acted upon Ihrough the regular processes for the, enactment of legislation.
The second proposal would authorize a procedure for acting, between quadren-
nial reviews, upon such periodic adjustments in pay rates for Federal civilian and
military personnel as piny be warranted to keep pare with changes in pay rates
elsewhere in the economy. Under this proposal, the President would continue
to make nrescrihcd reports annually to the Congress. When any such annual re-
port includes recnniiiiendations for revision of salary rates, these revisions would
go into effect autuauitir?ally at a given date, unless disapproved by resolution of
either House of the Congress.
I concur in (ln'se recomnnendati ins of the Panel.
Legislation to establish the first of these new and improved procedures is
attached.
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Amendments of existing law to make the second recommendation effective
are included in the bills authorizing pay adjustments for civilian and uniformed
personnel.
The civilian pay bill also includes an amendment of the Federal Salary Re-
form Act of 1962 which would carry out another of the Panel's recommendations.
This amendment would give the President,discretionary authority to make salary
surveys and comparisons in additional fields of non-Federal employment.
Existing law limits the annual surveys and comparisons to "private enter-
prise." Collection and analysis of salary rate information in such fields of
employment as State and local governments and nonprofit institutions would
give added assurance that,Federal salary rates are kept in appropriate relation-
ship with salary rates prevailing 'throughout our economy.
Drafts of legislation to carry into effect other important recommendations
contained in the Panel's report will be promptly transmitted to the Congress.
These drafts will propose -to:
Authorize certain civilian employees not now receiving premium pay for
overtime to receive such pay on an equal 'basis with other civilian employees.
Establish a coordinated and equitable system for payment of moving ex-
penses to employees transferred for the convenience and benefit of the
Government.
Authorize payment of readjustment allowances to certain employees
separated involuntarily from Federal employment through no fault of
their own.
The report of the Special Panel and this message largely take the place this
year of the President's annual report to the Congress, as required by the Federal
Salary Reform Act of 1962. Nevertheless, the report and analysis of the Bureau
of the Budget and the Civil Service Commission on the comparison of Federal
and private enterprise salary levels, and the views of employee organizations,
should be available to the Congress. I am transmitting them by separate com-
munication.
With the enactment of the legislation recommended in this message, we 'shall
have taken still another series of steps in the most far-reaching revision of
Federal. compensation laws in'this history of our country.
We shall be much nearer -to full achievement of the comparability standard
adopted by the Congress, in 1962.
We shall have established for the first time sound procedures for maintaining
interrelated salary systems for both civilian and military personnel, which will be
based upon fair, clear, consistent, and up-too-date policies.
And we shall be in a far better position to attract and retain in Federal
service thebest talent in America.
I urge prompt consideration of these proposals. Their results will more than
justify their costs.
LyNDON B. JounsoN,
THE WHITE HousE, May 12, 1965.
[Salary tables and related provisions deleted.]
PRESIDENT'S SPECIAL PANEL ON FEDERAL SALARIES,
EXEC U'rIVE OFFICE OF TIIE PRESIDENT,
Washington, D.C., Al pril 15, 1965.
DEAR MR. PRESIDENT : On behalf of my colleagues on the, Special Panel, on
Federal Salaries, I have the honor to present our report. On January 28, 1965,
you announced the appointment of the Panel and referred to your 1966 budget
message in which you made the following statement :
"In preparing this budget, I have given close attention to the matter of Govern-
ment pay.
"Federal pay raises in the past 3 years have moved us much nearer to realizing
the principle that civilian pay rates should be comparable to those in private
enterprise for the same levels of work and that changes, in pay and allowances
of members of the uniformed forces should keep pace with advances in the general
economy. These policies have been firmly established after careful congressional
review. Taken together, they assure that civilian and military pay are effectively
interrelated and maintained at rates which are fair to taxpayers and to Federal
employees.
"I believe, however, that it is equally essential to assure that any proposals
for further pay adjustments during this calendar year accurately reflect pay
developments in the private economy and be compatible with our national wage
and price objectives."
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FLDI?:R.XL EMP1O1'EES SALARY ACT OF 1965
111 your IPliers of appoint went to us. you said :
"l"our review of the basic polhles under which the Federal Government pays its
civilian employees anti members of the uniformed forces has three purposes:
(1) to provide ncsuranee that the Goveniment is effectively interrelating its
several pay systems: (2) to provide an objective anti independent judgment about
the relationships which should it, tnaintaiued between Government salaries and
those pit!(] in the private evonraay: and (3) to assist me in deciding whether
further pay adjustments should be recommended to (lie Congress during this
session."
TThe more important of the Panel's conclusions and recommendations on the
three tasks assigned to its are summarized in the following several pages of this
report. They are discussed mere at length in the subsequent sections of the
report.
SC]r]r.RY OF PRTNCIPAI. CONCLUSIONS AND RECOMMENDATIONS
5ulary schedules: Structures and interrelationships
1. The principle adopted by the Federal Salary Reform Act of 1962-Chat the
salary rates of the civilian statutory salary systems should be comparable with
salary rates in private enterprise for the same work levels--presumes that the
structures, interrelationships, and rules for use of salary schedules in such Fed-
ernt systems will h e kept up to da .e.
2. Structures. interrelationship, and rules for use can best be kept up to date
by periodic compreliensive revien s Of till related salary systems. -
3. Such periodic reviews should reexamine the lots salary schedules of the
executive, legislative, and judicial branches, the Statutory systems applicable to
civilian and uniformed personnel, the interrelationship among them, and such
other elements of total compensation as may be deemed pertinent.
4. It is Important to establish and maintain effective interrelationships between
Federal civilian and military salary levels.
The needed periodic review:i can best be made by an Impartial body repre-
scrril[ig the public at large anti each of the three branches of the Federal
Government.
to the light of these five ronelusioni, we recommend that:
The President propose lrg'slatiorr establishing a "Salary Review Commis-
sion," with new members appointed every four years beginning in 1966 to
serve for one year, to rcricw and report to the President on all Government
salary schedules and systems.
Further details about the Com:nlsston and its work are set forth on pages 8 to
11 of this report.
('iriliaa salary Comparability
1. The comparability pi'laciple adopted as the standard for salary levels In the
civilian statutory salary system: In the Federal Salary Reform Act of 1962 is
somid.
Establislnnent of comparability means setting the average Federal salary
rates at the private enterprise levels most recently reported by the Bureau of
l.nlrnr Statisties in its National Survey of Professional, Administrative, Techni-
cal. and Clerical Pay [ herehiaf(er referred to as the ILLS Survey),
3. The IILS Survey Is. and should continue to be continuously Improved In all
feasible respect:; to assure that 3nlary data reported annually are fully repre-
scalat ire of salary rates paid In the dominant category of L.S. employment, which
is private enterprise.
4. Extension of the standard of comparability from "private enterprise" to
"nun-Federal employment" might provide useful data for annual salary
comparisons.
In the light of these four eoneluiions, we recommend :
(a) Continued adhercncc to the rurnparahility principle, and
(b) Aniendnient of the Fcarral Salary Reform Act of 1963 to authorize the
President, in his discretion, 'o extend the concepts and methodology of the
i>'LIN Surrey and annual caszparisons of salary levels to such additional
fields of non-Federal cmplorln:cnt as he may designate.
This recommendation Is discussed further on page 12 of this report.
Annual reporting and periodic adjustment
1. Maintenance of full comparaillity involves adjusting Federal civilian salary
rates as necessary, on the basis of the annual IlLS Survey and salary level com-
parisons required by the Federal 'alary Reform At of 1962.
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FEDERAL EMPLOYEES SAL A
2. The present legislative method for reviewing and placing into effect. neces-
sary periodic adjustments in salaries of both civilian and military personnel to
keep pace with salary changes in the private economy: (a) is cumbersome;
(b) tends to confuse executive and legislative responsibility ; (c) contributes
unnecessarily to time lag in making adjustments; and (d) opens the process to
undesirable pressures for legislative changes not based on actual comparative
data.
3. Full responsibility for deciding what adjustments are warranted should be
placed in the President, subject to congressional disapproval.
In the light of these three conclusions, we recommend that :
The President propose amendment of the Federal Salary Reform Act of
1962, and applicable uniformed personnel compensation laws, to provide that
the President's recommendations for such periodic adjustments as he finds
necessary shall be transmitted to the Congress, and shall become effective
without change unless disapproved by resolution of either House of Congress
(the Reorganization Plan procedure).
This recommendation is further discussed on page 13 of this report.
Salary adjustments and establishment of eivilian comparability
1. The gains resulting from recent civilian and military pay legislation could
easily and quickly be lost if Federal salaries, again should be permitted to remain
unadjusted while salaries in private enterprise increase.
2. Establishment of full comparability for all civilian salary grades has not
yet been achieved.
3. The most recent BLS Survey data show that private enterprise salaries
increased by about 3 percent during the year ending March 1904.
4. An upward adjustment in Federal civilian salary rates of 3 percent on
the average is warranted and would hold the advances toward comparability
already achieved.
5. An increase in military compensation sufficient to restore the 1963 relation-
ship with Federal civilian pay is warranted.
6. The proposed adjustments in pay for both military and civilian personnel
would be compatible with national wage and price policies.
In the light of these six conclusions, we recommend that :
(a) The President propose enactment, for Federal civilian salaries paid
under the four statutory systems, on an adjustment in the fiscal year 1966
amounting to 3 percent of payroll, on the average; and complete establish-
ment, at the earliest practicable time, of full comparability between civilian
salaries and salaries paid in private enterprise for the same levels of work.
(b) The President propose enactment of an upward adjustment in com-
pensation of the uniformed services in, the fiscal year 1966, which on the
average would restore the 1963 relationship with Federal civilian pay.
The recommended action on military pay would result in an average compen-
sation increase of 4.8 percent for all uniformed personnel except enlisted person-
nel with under two years' service, who would receive a 2.7 percent increase in
base pay as a cost-of-living increase.
These proposals are discussed further on pages 68 to 71 of this report.
Pending military pay legislation
1. Congressional action in 1962, 1963, and 1964 placed military compensation
at a level, in relation to civilian pay levels, sufficient to attract and retain ade-
quate numbers and quality of personnel in the Armed Forces.
2. It would be unwise, and probably inequitable, to change the established
relationship between military and civilian pay and between military pay and
pay in the private sector of our economy prior to the proposed major structural
review in 1966 of the military compensation system.
Consistent with the other conclusions and recommendations of this report and
in the light of the foregoing two conclusions, we recommend that :
The Administration oppose military pay increases of the kind reflected in
H.R. 5725.
Our position in this matter is further set forth on pages 71 to 74 of this report.
Premium pay for overtime
1. The Federal Government does not have a uniform and equitable policy with
respect to premium pay for overtime work for all its civilian employees.
2. In some Government activities, existing statutes and practices require
scheduling of uneconomical overtime work, and payment for overtime at regular
rates.
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2 FEDERAL !?:t4IPi.OYi;Eti SALARY ACT OF 1985
In the light of these two conclusions, we recommend:
(a) Authorization of suglelent manpower to reduce or eliminate uneco-
noDtical overtime, and
(b) As soon thereafter as is practicable, the enactment of legislation
authorizing all rank and file civilian employees of the statutory salary
systcmns to receive premium pay for overtime on an, equal basis.
These recommendations are further discussed on pages 18 and 19 of this report.
Nonpay matters
1. Some improvements are needed in forms of Federal payments on other
than salary to provide either accessory tools to management or equity to
employees, or both.
2. The most urgent needs a-e fair and adequate reimbursement of moving
expenses, and the authorization of payment of certain readjustment allowances.
In the light these two conclusions, we recommend :
(a) Amendment of existing laws to permit agencies to establish a- coor-
dineled and equitable system. for the payment of moving expenses to em-
ployees transferred for the convenlcnce and benefit of the Government;
and
(b) Enactnicrit of lcgiahition authorizing the payincnt of readjustment
allowances to employees separated involuntarily from Federal employment
through no fault of their oven.
This recommendation is further discussed on pages 76 and 77 of this report.
In addition to Its consideration of the foregoing Issues, the panel has considered
several other niatters which hvi1. he dealt with in the final sections of this report.
ADVICE AND ASSISTANCE PROVIDED TO TILE PANEL
In its studies and review, the panel has had the assistance of staff members
of tine Department of Defense, the rust Ofi cc Dejnirtmcnt., the Department of
Labor, the Bureau of the Eudget, and the United States Civil Service
Coimimisslon.
The panel also has had advice and expressions of opinion from 32 professional
associations and Federal enhplo,:ee organizations. They were unanimous in en-
dorsing the comparability principle, and in urging action which would reflect its
full implementation. One orga:hization expressed the additional view that the
Government should be a model employer, and a leader rather than a follower.
The Bureau of the Budget and the Civil Service Commission will include the
reports of these groups, and further comments on them, In their annual report on
comparison of Federal salaries with salaries in private enterprise. That report
will be separately submitted tc you in accordance with the provisions of the
Federal Salary Reform Act of 1962 and Executive Order No. 11073.
The panel acknowledges a debt of gratitude to the more than 19,000 individual
Federal civilian employees and n?en?bers of the uniformed services who responded
to our request, made in Your behalf, for the views of all categories of Federal
personnel. Their letters have acded much to our perspective and understanding.
We think it is signiflcant to note that civilian employees and uniformed per-
sonnel at almost every grade and rank took the [line and trouble to respond to
our invitation for their views, to express apprecintiun for the opportunity to
write, and to set fort][ their view;: with clarity and great sincerity.
Limitations of time, and the late date of reveipt of many letters, made It
possible for the panel to reviewr only a representative sample of the personal
communications addressed to It. It would be impossible for us to respond to
each letter by individual acknowledgment. We take this means to express our
thanks to all who wrote to us.
A substantial number of tlhough(ful suggestions advocated changes In com-
pensation which would affect relatively few of the more than 5 million Federal
c_iviiinn employees and members of the Armed Forces. In general, these sugges-
tions pertain to special prtfbleiTS of small groups or classes of employees. So
far as we can determine, few of these special problems have been overlooked
by the departments anti agencies even though it has not been possible to find
easy and equitable answers to the problems presented. We think this fact is
a testimonial to the alertness aid Integrity of the Government's personnel man-
agement system.
To the panel's regret, our request for views was interpreted by many Federal
employees as indicating that the panel had been given authority to consider
appeals for attention to individual cases. Lack of response to such letters may
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FEDERAL EMPLOYEES SALARY ACT OF 1965
result in disappointment. We believe, however, that the limits of our jurisdiction
are generally understood, and that there will be no widespread criticism of our
decision neither to answer these letters nor to refer them to various Federal
agencies for further attention. In our judgment, presentation of personal ap-
peals outside of the regular channels for handling such matters would be im-
proper and unfair both to employees and to their agencies.
SALARY SCHEDULES : STRUCTURES AND INTEliRRELATIONSIIIPS
During the past three years, the Congress and the executive branch have-
worked together in a series of reviews of Federal salary matters. These reviews
were more extensive than any similar undertakings in a great many years. As a
result, the Congress enacted: (a) basic civilian salary reform measures, includ-
ing a revised structure and a new policy and method for determining salary levels
for Federal civilian employees ; (b) military pay legislation establishing a revised
base line for the pay and allowances of members of the uniformed services; and
(o) new top salary structures and levels of compensation in all three branches
of the Government without overlap between top executive salaries and those paid
to career employees under the statutory salary systems.
In summary, the salary fixing principles enunciated in the Federal Salary
Reform Act of 1962 are that-
(a) there shall be equal pay for substantially equal work, and. pay dis-
tinctions shall be maintained in keeping with work and performance dis-
tinctions ; and
(b) Federal salary rates shall be comparable with private enterprise sal-
ary rates for the same levels of work..
Through the enactment of military pay legislation last year, effective eleven
months after enactment of a major structural adjustment of such pay, the Con-
gress effectively endorsed a policy of maintaining the interrelationships between
military and civilian pay established in 1963 until both pay systems are re-
studied and further structural reforms proposed. Our recommendation for
adjustment in pay of uniformed personnel in the fiscal year 1966 is designed
solely for this purpose.
All of the members of the panel have been concerned in varying degrees in the
development of the pay policies which have been the goal of the executive branch
in the past four years. It is our belief that these policies do not require extensive
review this year. The more critical need during the present session of the Con-
gress is for legislation to hold the gains already achieved in the direction of
keeping Government pay levels and private enterprise pay levels in appropriate
balance.
For the long term, however, the comparability principle and continuing sound
interrelationship of all Government salary systems require periodic updating of
principles, concepts and structures of those systems. It is our opinion that
updating should occur at regularly established intervals and after comprehensive
and impartial review conducted under clear statutory standards.
The panel believes that lack of an established mechanism for this purpose has
serious effects. All three branches of the Government, and particularly the
executive branch, are hampered in effective salary administration. Agencies and
the Congress are subjected to pressure for piecemeal changes which often have
the tendency to depart from a rational and consistent salary structure. flit or
miss attention to salary matters is not a process in which either Federal personnel
or the public at large can have full confidence.
The panel proposes, therefore, both the enunciation of review policies and the
establishment of a mechanism to make the review. To this end we shall discuss
in more detail the recommendation appearing on page 2 of this report.
We recommend that the President propose enactment of legislation which
would :
(1) Establish a four-year cycle for review of the principles, concepts, and
structure of all Government compensation systems for all three branches of
the Government by a Salary Review Commission, supported by adequate
funds and a small staff of its own choosing ;
(2) Provide for the appointment of the first such commission early in the
calendar year 1966, with new members appointed each fourth year
thereafter ; the commission to be composed on a nonpartisan basis of 10
representatives from the public at large of persons knowledgeable in salary
matters-four appointed by the President, one of whom shall be chairman ;
two by the Speaker of the House of Representatives ; two by the President
of the Senate ; and two by the Chief Justice of the United States ;
49-591-65-2
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14 FEDERAL EMPLOYEES SALARY ACT OF 1965
(3) Authorize the commission within the calendar year of its appoint-
ment (a) to perform a searching review of Government salary systems.-
including principles, concepts, structure, and other matters relating to com-
pensntion, and (b) to prepnre and file with the President before the end of
the year a report and recominendtltlons for such changes as the commission
believes to be in the national nterest;
(4) Provide, after review if the commission's report by the President, for
transmittal by hits of his recommendations to the Congress for changes in
the Government's salary systems and other matters affecting compensation,
either directly or indirectly;
(5) Provide that the President's recommendations respecting compensa-
tion of Members of the Congress, members of the Federal judiciary, and top
positions in the executive branch, shall lie before the Congress for a period
of GO days and, unless disc.pproved by resolution of either House of the
Congress, shall thereafter automatically go into effect, and remain in effect
until the next quadrennial review; '
(t;) Provide that the President's recommendations for changes in the
principles, concepts of interrelationship and structure of Federal salary
systems applicable to civili in employees and members of the uniformed
forces shall be handled through the normal legislative processes for the
enactment of legislation ;
(7) Provide that the Presldent's recommendations with respect to other
matters directly or indirectly relating to compensation shall be handled in
accordance with the normal legislative processes for the enactment of
legislation ;
(8) Provide that unless th.! Congress shall otherwise authorize specifically
by law, no further changes In the principles, concepts of Interrelationship
and basic structure of Federal salary systems shall again be considered until
the next quadrennial review, except for such periodic adjustments in civilian
and military salary rates as are necessary to keep Government pay in line
with pay levels in non-Federal employment.
Xotc
The non-Government members of the panel. Messrs. Folsom, MIeany, Price,
Stein, and General Bradley, visa to restate and reemphasize views and recom-
mendations to which they subscribed as members of the earlier President's Advi-
sors Panel on Federal Salary Systems. These views and recommendations were
contained in the report of that pancl, which was presented to the President by
the panel chairman, Clarence R. 11andail, on June 12, 1903.
The Government members of the present panel have not been asked to join in
these supplemental views and recommendations.
The 1963 report of the Advisor:. Panel on Federal Salary Systems recommended
fixing top salaries in the executive brunch in it range moving downward from
$50.000 a year for the Cabinet secretaries to $30.000 a year for the smaller agen-
cies and boards and for second or third level officers of the larger agencies. The
Cabinet salary of $35,000 established in the 100-1 Salary Reform Act is not ade-
quate. Similarly, a bottom executive salary of $26.000 restricts the attractive-
ness of Government service, and continues to place a demand of sacrifice which
will cut short the service of many able people when they do accept public office.
We repeat two conclusions of the 1903 report: "Our country cannot afford to de-
pend only upon rich men to run Its affairs" and "* * * independent means and
the honor of office are not appropriate substitutes fur proper compensation."
Furthermore. the differential )etwcen $26,000 at the low end of the executive
salary schedule and the $24,500 figure fixed for top career salaries does not leave
enough room for the upward adjustment of career salaries. Persons holding top
enreer rank are its much entitled to share in the productive gains of our economy
as are their subordinates. They will be able to do so only for a very limited period
of time in the future. After not more than three years they must either advance
into the range of the executive salary schedule or be frozen at a salary figure
which will once again create th'! kind of salary compression that the executive
salary scale was designed to precude.
We defer to our Government colleagues, and accept their view, that this is not
the year in which to make further adjustments In the salary structure for top
position+ In the executive, legis olive, and judicial branches. Nevertheless, we
t In connection with this part of the panel's recommendation, see note following for addi-
tional views of the nun-Government ioembers of the panel.
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FEDERAL EMPLOYEES SALARY ACT OF 1965 15
believe that we would not be discharging our responsibility to the President, and
to the. country, if we (lid not express regret and disappointment in the action of
the Congress to limit last year's adjustments. The structural adjustments
enacted in 1994 fell far below the recommendations of the Advisory Panel on
Federal Salary Systems.
Wo call particular attention to the action of the Congress in denying to the
Supreme Court of the United States salary increases equal to those granted to
other members of the Judiciary, to executivebranch officers below the Cabinet
level, and to Members of Congress. When compared to the general executive
level increase of $7,500, the increase of $4,500 a year granted to the justices of the
Supreme Court can only be described as unfair.
The non-Government members of the panel recommended that the President
propose early action to remedy this deficiency. A minimum increase of $'3,000 a
year above the rates provided in the 1964 Act should be promptly enacted for the
Supreme Court in order to provide the members of the Court treatment com-
parable to all other top positions in all three branches of Government.
We also recommend that the next revision of the salary structure of the Federal
Government, which we join our Government colleagues in recommending be
authorized to take place in 1960, again focus upon the problem of top salaries.
At this time we are not prepared to suggest what changes would be appropriate.
But we do state our belief that the base line should be at least that of our 1963
report-namely, a cabinet salary of $50,000, a congressional salary of $35,000
(of which $5,000 should be deductible for income tax purposes to offset living
expenses), a salary of $60,000 for associate justices of the Supreme Court, and a
salary of $60,000 for the Speaker and the Vice President (with allowances of an
additional $15,000). The interrelationships and percentage differentials of those
figures should be established and maintained.
Salary alone will never provide the chief attraction for service to country,
nor should it. Salary, however, is an appropriate measure of the importance
which the people of the United States attach to the discharge of the public's
business. Salary can and should be a positive force for encouraging the ablest
men and women in America to accept public office. The expectation of all
Americans for the highest competence in the conduct of national affairs cannot
be met if Federal salaries at the top levels are not at least equal to those paid for
the top positions in any of the 60 State governments.
The need for excellence in all three branches of our Government is not in
dispute. That excellence requires compensation on a basis commensurate with
the complex and difficult role assigned to the principal officers of our Government.
Upon them rests responsibility for continuing effort to obtain better and more
efficient ordering of national affairs in a world of change.
CIVILIAN SALARY COMPARABILITY
The comparability principle, adopted by the 1.962 Salary Reform Act, was in-
tensively studied for a number of years before it was proposed to the Congress.
Its implications and effects have been carefully reviewed twice since 1962. The
panel is convinced that it is a fair, effective, and sound principle. Adherence
to it should be continued.
The view has been expressed, however, that the standard of comparability
should be broadened. Studies conducted for the Bureau of the Budget and the
Civil Service Commission show that extension of the BLS Survey to additional
fields of non-Federal employment would have little effect upon the national
salary averages, since private enterprise clearly dominates non-Federal employ-
ment. Nevertheless, extension of the standard of comparability in the Salary
Reform Act from "private enterprise" to "non-Federal employment" would make
it possible to apply the concepts and methodology of the BLS Survey to such
non-Federal white collar employment categories as State and local governments
and nonprofit institutions. Both of these fields of employment cover activities
similar to many Federal activities, and interest has been expressed in comparing
their prevailing salary levels with Federal salary levels. We assume that in
any such extension the high standards of the present BLS Survey would be
followed.
For these reasons, the panel recommends amendment of the 1962 Salary Reform
Act to give the President discretionary authority (a) to extend the concepts and
methodology of the BLS Survey to such additional fields of non-Federal employ-
ment as he may designate, and (b) to use the data collected in the annual com-
parisons of salary levels. Assuming enactment of legislation authorizing ap-
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pointnncnt of a Salary Review i nmmission in MG, we believe that it would be
useful and appropriate for this :natter to be reviewed again by that Commission.
In connection with current improvemeiit in the lLS Survey the panel has been
informed that work is underwsy, and additional funds requested, to test feasi-
bility of collecting private enterprise salary data in smaller communities and in
smaller employing c:stablishuteuts than previously Included In the BLS Survey.
\t'esupport this action,
The panel also endorses the periodic survey of salary supplements or fringe
benefits payments made by prRaue enterprise for comparison with similar pay-
ments nude by the Federal Government. We have been informed that the first
of such periodic surveys will shortly he released by the Bureau of Labor Sta-
tistics. It. appears that no additional authorization is needed to continue this
work, and we express the hope -hat it will be repeated at regular Intervals.
ANNUAI, REPORTING AND PERIODIC SALARY ADJUSTMENT
The panel believes that periodic adjustments in Government civilian pay can
effectively and equitably he made only on the basis of known facts about com-
pt'nsation levels outside the Federal Government. In other words, pay adjust-
ments must rest upon a solid base of experience, statistically measured as of a
definite time, and property reported. This means, in our opinion, that the
Government should not attempt to forecast probable changes In non-Government
salary rates after the time period applicable to (lip ilLS Survey. Neither should
the Government use. or accept the use of, such forecasts in salary adjn tment
lee slation. This will haplK'ni if procedures and standards for annual review and
adjustment of Covernucent lnrv systems and pay rates are not formalized and
maintained in accordance with the Intent of existing law. Similarly, between
quadrennial structural reviews, adjustments In military pay should parallel
adjustments in civilian pay.
The present requirement for tie enactment of substantive legislation to effect
adjustments is cun[hersome and tends to confuse executive and legislative respon-
sibility. In the panel's opinion, it also contributes unnecessarily to time lags
in making adjustments. Finally, It opens the process to undesirable pressures
for legislative changes not based on actual comparisons between Government
and non-Government pay.
The panel Ix lieves that responsibility for periodic adjustment of Federal
military and civilian pay should be clearly placed in the executive branch, sub-
ject only to disapproval by the Congress. All uniformed personnel and the over-
whe_lnling preponderance of civilian employees are In the executive branch. It
has the facilities lit conduct necessary factual studies, to keep pay systems inter-
relaled, and to (To tine technical work necessary to construct rational, balanced
and consistent pay schedules.
Therefore, as set forth on page 3 of this report, the panel recommends amend-
ment. of the Salary Reform Ac-: of 1962, and applicable uniformed personnel
compensation laws, to apply the reorganization plan procedure to the President's
recommendations concerning periodic adjustment action.
SALARY Al,] sr][ENTS AND EiTAnrJSIT\TF.NT OF CIVILIAN COMPARARIT.TTY
The national surveys of private enterprise salary levels which were made by
the Bureau of Labor Statistics It 1962, i963. and 19f11 provided the basis for the
handl`s review of the need for s; Lary adjustments In the fiscal year 1'JCC. The
IIi,S Surveys provide an acceptable basis for determining whether Government
civilian pay rates need adjustme it in the next few months in order to meet the
standard of comparability with I rivate enterprise pay rates. A lesser standard
will not keep Government agencies in a reasonably competitive position to attract
and retain competent personnel.
The gains wl'ich the Governuent has made under recent salary legislation
could be rapidly lost if Government pay once again were allowed to remain
unadjusted while salaries In private enterprise Increase. The policy enunciated
in the Salary Reform AN is Intruded to preclude such an eventuality. We be-
lieve that this policy should be adhered to and we endorse the comparability
principle.
The panel cannot stress too st ?ongly the fact (lint full adherence to the com-
parability principle involves, first, attaining comparability at all grades, and,
second, making necessary periodic adjustments to keep Government pay levels
comparable with private enterprise pay levels. i'p to the present time. efforts
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FEDERAL EMPLOYEES SALARY ACT OF, 1965 17
to obtain across, the-board comparability for all grades have not been successful.
We express deep concern at this failure to carry into effect a uniform and
equitable salary policy.
The panel does not support the view that because recent Government civilian
pay raises have been substantial, attainment of comparability across the board
can be indefinitely deferred. It is unfair to the employees affected and also
an impediment to good government to permit the middle and higher grades to
lag behind rates paid in private enterprise two, three, and four years ago. We
earnestly recommend that the President again call this problem to the attention
of the Congress and urge remedial action at the earliest practicable time.
The comparability principle also requires regular periodic adjustments to
assure that Federal salary rates will be comparable to private enterprise salary
rates for the same levels of work, The most recent BLS Survey takes as its
reference period the months of February and March 1964. It shows that private
enterprise salary levels increased about 3 percent during the year ending in
March 1964. The panel accepts the accuracy and adequacy of the survey, and
recommends a salary adjustment in the fiscal year 1966 averaging 3 percent of
the overall payroll for civilian employees and a corresponding increase in com-
pensation for uniformed personnel.
The purpose and the effects of such adjustments would be threefold: (a). to
hold existing gains in the direction of comparability already achieved for civilian
salaries ; (b) to restore the 1963 relationship between civilian salaries and the
compensation of uniformed personnel; and (c) to grant increases which would
be compatible with the Administration's national wage and price policies,
As indicated on page 4 of this report, we recommend that the President propose
legislation for these purposes.
Failure to support and achieve such an increase would not only lose ground
which should not be lost, but it would also be construed as an attempt to negate
the statutory principles and policies laid down in recent salary.reform legislation
and the legislative history accompanying it.
There are two alternatives for handling Federal pay matters. The Govern-
ment must either proceed in accordance with a rational system such as that
described above, or it must revert to the old, highly unsatisfactory practice of
adjusting Federal pay only when political pressure, or actual deterioration and a
growing failure to get and keep good people, results in demands for corrective
action. The panel believes that the executive branch should continue to support
the first alternative as the clear intent of the Congress and the only fair means of
keeping Federal pay in step with gains in the economy as a whole,
In recommending an average increase of 3 percent of payroll for civilian em-
ployees and a corresponding appropriate increase for uniformed personnel, the
panel recognizes that there are several alternatives for distribution of the dollars
involved. Judgments, however, may differ as to which alternative should be
chosen at this time. The panel, therefore, believes that the detailed plan should
be left to the executive branch to develop in a manner most consistent with the
President's policies and with maintaining satisfactory internal alignment of the
resulting salary schedules.
To illustrate, the present Classification Act pay line does not represent the
attainment of uniform comparability with private enterprise pay for any recent
year. Because of a number of factors, different grades and levels in the civilian
pay systems have attained comparability relating variously to private enterprise
salary rates reported for each of the years 1961, 1962, 1963, and 1964. Taken in
reverse order, the two lowest Classification. Act grades, in which there is only a
minor fraction of Federal employment, have already reached 1064 private enter-
prise rates. The next several higher grades have almost reached 1963 private
enterprise rates. (The difference is 1 percent or less.) Salaries currently paid
from approximately $6,600 to $9,500 per annum approximate 1962 private enter-
prise rates. Salaries from about $11,000 to the top Classification Act salary of
$24,500 per annum lag behind even 1902 rates in varying percentages. In brief,
the middle grades may be generally related to 1062 and the higher grades to
1.961 private enterprise rates. These facts automatically suggest a variety of
ways to distribute a 3 percent average increase in pay for civilian employees.
The salary rates now existing for military compensation cannot be directly
related to salary rates in private enterprise. The panel, therefore, expresses the
opinion that adjustments in military pay should be so distributed among grades
and ranks as to be most effective in attracting and retaining the necessary skills
needed in the Armed Forces.
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Tile panel rxiints out that it,; recommendations for pay adjustments in the
fiscal year 1;it;ti tlo not apply to retired pay of either military or civilian personnel.
Retired pay Is now linked to movement in the annual average of the consumer
price index.
The panel also points out that it makes no recommendation with respect to
adjustment of the salary schedules now applicable to employees of the legislative
and judicial branches of the Uov armnent. Any changes which the Congress may
wish to make to keep those saia -y schedules in step with adjustments in pay of
executive branch employees should be handled through the regular legislative
process.
Finally, as Indicated on page 0, the panel believes that the 1966 adjustment
should not extend to top executive branch positions contained In the Executive
Salary Schedule of the 1004 Se ary Reform Act, or to salaries of Members of
Congress and the Federal judiciary.' Any proposals for changes in these salary
levels should await the quadrennial review of Federal salary structures recom-
mended earlier in this report.
On March 1965, you asked that the panel review and evaluate the proposal
for a military pay increase (H.R. 5725) introduced in the House of Representa-
tives on March 3, 1005.
This bill provides for an average Increase of approximately 10.7 percent in
basic pay for members of the uniformed services. The proposed increases are
distributed unevenly throughout the grades and ranks of officer and enlisted
personnel. The largest percentage Increases for enlisted men go to those with
under two years of service who are performing periods of obligated service.
These increases range from 13 percent for a recruit (E-1) to 33.8 percent for
Corporals (E-4) and Sergeants (B-5). Percentage Increases for enlisted men
with over two years of service average 11.2 percent. The largest percentage
Increases for officers, from 21 percent to 22.2 percent, also go to the group ful-
filling their periods of obligated service. For officers with over two years of serv-
iee, the percentage Increases average 0.4 percent.
The annual additional cost of the prolxtsal is $1.005 billion, plus $204 million
in Increased annual accrued costi for retirement. It will also add $3.7 billion
to the unfunded past service liability of the military retirement system. Amor-
tized over the remaining service of the typical member of the Armed Forces, this
Is equivalent ttr an additional cost of approximately- $355 million per year.
Despite the substantial cost of the bill, there Is little supporting factual mate-
rial available to indicate the basis for the Increases. A summary analysis of the
bill printed by the House Armed Services Committee states that since 1952 in-
creases in military pay to those w_th over two years of service total 30.0 percent,
whereas pay increases during the same period for classified civil servants aver-
aged 46.3 percent. The panel Is unable to determine the basis for these figures.
Data supplied by the Department of Defense indicate that the increase over this
period for classified civil servants averaged 52.7 percent, and 57.1 percent for
officers with greater than two years of service, and 34.1 percent for enlisted
personnel with more, than two years of service.
The statement to the press released with the bill asserts that the legislation
for the first time attempts to link uniformed services and Federal civilian em-
ployees pay levels and identified "in precise amounts the value of so-called major
traditional military fringe benefits." It is stated that the rates of basic pay
proposed in the bill are based on the salaries of civilian Federal employees per-
forming comparable tasks, reduces to accommodate military quarters and sub-
sistence allowanees, the tax adva Itage on such allowance and the 01,(l percent
contribution that civilian personnel make to their retirement system. The
specific linkages between military and Classification Act grades have not been
made available. So far as the panel has been able to determine, no satisfactory
"comparability linkage" for military compensation has been developed.
In further support of the propornl, the House Committee's stuff analysis of
H.R. 5725 maintains that the Military Departments are unable to attract and
retain "high quality" personnel. No supporting data are provided.
2Un page 11, the non-Government toembers of the panel express their views that the
provisions of the 1964 Act for salaries of the members of the Supreme Court of the United
States are unsatisfactory and should be corrected.
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A large number of factors affect the ability of the Military Departments to
attract and retain quality personnel, and the Department of Defense does not
maintain. that current pay levels account for recent trends. However, the fact
is that in recent years, the Armed Services have met with increasing success in
attracting and retaining high quality military personnel. Data supplied by the
Department of Defense show that in the years 1952 through 1959, 78.2 percent of
the men entering enlisted service were in the top three mental groups. In the
period 1960 through 1964, 87.9 percent of enlisted personnel were in these groups.
In 1956, approximately 55.2 percent of enlisted men were high school graduates,
compared with 72.8 percent in 1963.
In recent years, these has been a marked increase in the experience levels of the
force. This has been particularly true in the critical electronic occupations, where
career manning has increased between 1956 and 1964 from 18 percent to 41 percent
in Army, and in Air Force from 28 percent in 1956 to 55 percent in 1964. With
respect to officers, the percent of college graduates rose from 55.5 percent in 1956
to the present level of over 70 percent.
The panel's attempts to obtain additional. information from the House Arined
Services Committee have been unsuccessful. On March 5, 1965, Mr. Folsom,
} Chairman of the panel, wrote to, Chairman Rivers of the House Armed Services
Committee and asked for materials developed by the staff, particularly the
analysis supporting linkages between military and civilian pay, and the evaluation
of relative military and civilian fringe benefits. In a letter dated March 8, 1965,
the Chairman indicated that the information was not in such form that it could
be sent to the panel but said he would be happy to meet with Mr. Folsom. At-
tempts by Mr. Folsom to arrange such a meeting have been unsuccessful.
Based on its analysis of the bill, the panel has concluded:
(1) No justification is offered for the 10.7 percent increase recommended
to restore comparability, since no evidence is presented to establish a satis-
factory "comparability linkage."
(2) Although the principal purpose of the bill is stated to be to remedy the
Services' inability to attract and retain high-quality personnel the largest
increases are proposed for those serving obligated service, and the smallest
percentage increases apply to- the grades at which the career commitment is
normally made.
(3) The Committee proposal purports to, take precise account of military
fringe benefits. In fact, the only adjustment made to reflect the, differences
in supplementary benefits available to military and civilian employees is the
exclusion of 61/2 percent of basic pay, to take into account the noncontribu-
tory retirement system. The adjustment is erroneous. Liabilities for the
military retirement system now accrue at a rate of 24.4 percent of basic pay.
(4) The Congress, by its actions in 1962, 1963, and 1964, when it enacted
legislation which, in total, raised military compensation for those with over
two years of service by an average of 18.4 percent, placed military compensa-
tion at a level, in relation to civilian pay levels, sufficient to. attract and retain
sufficient numbers and quality of personnel. We see no need to, change this
relationship before the next major structural review.
The panel has recommended adoption of a policy for structural review of all
salary systems at four-year intervals. Between such reviews, we recommend
continuing the policy which the Department of Defense inaugurated in 1963 of
reviewing and adjusting military pay annually to reflect increases of salaries
and wages in the economy as a whole.
In summary, the panel recommends that the Administration oppose H.R. 5725.
Overtime
The question of premium pay for overtime wotk long has commanded the
attention of the Federal Government and of other governmental jurisdictions.
Many statutory changes have occurred over a period of more than sixty years.
Generally, these have rested upon the principle of premium pay as a, financial
deterrent to long hours and on the belief that such a deterrent would encourage
,the creation of new jobs. At present there is discussion of whether premium
rates should be increased to serve again as a substantial financial deterrent to
long hours. This issue was not before the panel, but there was brought to our
attention the facts that Federal overtime pay practices are not consistent and that,
because of certain statutory restrictions, employees in some Government activities,
and particularly in the Post Office Department, have work schedules which result
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22 FEDERAL EMPLOYEES SALARY ACT OF 1965
in uneconomical overtime, as well as In far too long hours of work for certain
categories of employees. This i3 unduly costly to the Government and unfair to
I he employes.
The panel, therefore, makes two recommendations-.
First, we urge acceleration of present plans to hire a sufficient number of etti-
ployees to reduce or eliminate uneconomical overtime.
Second, as soon as practicable thereafter, we recommend the enactment of
legislation authorizing all rank mud file civilian employees Bald ender the Statu-
tory Salary `ystenis to receive pretniunc pay equally and on a basis comparable
with hidusl ry pine i ico s when overtime work Is necessary.
In general, we believe that sufficient manpower should be authorized to regu-
larize employment to the mtnxinum extent possible on the basis of 40 hours per
week with no scheduled overtime.
As indicated above, the need for action is particularly acute In the Post Office
I)eprsrtlnent.
The ir;age board pay system.
At the request of the United tats Civil Service Commission and the Bureau
of the Budget. the panel made a brief review of a draft report on a study of the
Government wage board system recently prepared by those two agencies. The
panel believes that it is not within its jurisdietiot to assume responsibility for full
review of that study. Accordingly, we present no comments upon the specific
proposals for changes contained in the draft report.
Ilowever, as a matter of pay policy. the panel recommends that the executive
branch take effective steps at the earliest possible time ( a) to bring about
equitable coordination of wage board practices, and (b) to eliminate pay dif-
ferences now existing between aid among Government agencies employing wage
board personnel in essentially the same positions In the same localities.
llotving expenses
At the present time, military i.nd civilian personnel are severely penalized be-
cause of inadequate authority it. reimburse them fairly for legitimate expenses
of transfers to new duty stutioni ordered for the benefit and convenience of the
Government. The panel had substantial evidence presented to it that many cli-
ployees who responded to the Government's rtvluest to transfer to new duties in
a different location incurred losses ranging up to Homy hundreds of dollars.
This situation should not be px?rmitted to continue.
The panel recouunends enactment of legislation which will grant sufficiently
broad and flexible authority for a Government agency to defray the costs of
moving in such a manner that there will be uo unfair out-of-pocket costs to the
employees involved.
We believe that the legislatiot should permit either the gaining or the losing
agency to pay moving costs. life also recommend that moving expenses of
Presidential appointees be defri.yed by the Government at [lie time of initial
appoitdu,eut and when leaving Government to return to private life.
Readjustment allowances
Another matter indirectly rela-ed to compensation concerns the handicap now
placed upon the executive braves by a lack of statutory authority to deal
equitably with civilian emplnycrs separated from the service through no fault
of their own. The rapidly changing nature of Government programs, and the
needs which they are intended -a fulfill, will continue to call for elimination
of activities. closing of military vases and other Installations, and major changes
in program emphasis and direction resulting in substantial reductions in force or
changes in required skills. Thep inel recommends enactment of legislation which
would authorize payment of a coordinated package of readjustment allowances
applicable in situations such as those just outlined. The new elements involved
appear to be severance pay ( or terminal ion allowances) probably based on length
of service and salary. and retraining costs under some circumstances. The
element of moving costs, where pertinent could be handled as referred to above.
Life insurance
Some of the views presented to the panel suggested that authorization of more
life insurance for Government enployces was just as important as pay increases.
The panel was impressed by the fact that the highly beneficial Government life
insurance program enacted same= years ago is badly out of date. It supplies
inadequate protection for youngt-r and lower-paid employees who need the pro-
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FEDERAL EMPLOYEES SALARY ACT OF 1965 21
tection most. However, since this matter has a direct relationship to the review
of retirement systems now under way, the panel recommends that it be studied
by the Cabinet Committee on Retirement Systems with a view to recommending
such changes as appear warranted,
The concept of total compensation
In the future, and not later than the next basic review of Government salary
system interrelationships, the panel recommends that all non-salary elements
in Federal compensation be analyzed and taken into account. This will involve
thorough consideration of the growing role of fringe benefits in compensation
patterns throughout our economy. Here again the panel believes that there
should be substantial equality between Federal and non-Federal employees,
particularly those in private enterprise employment.
On the basis of data collected by the Department of Labor, there now appears
to be approximate overall equality between Government expenditures and private
enterprise expenditures for fringe benefits for white collar employees. There are,
however marked differences in individual categories. For example, the Govern-
ment cannot provide such fringe benefits as payments toward savings and thrift
plans, nor in the form of stock options or yearend or other bonuses. A substantial
offset, however, is found in greater Government expenditures for annual and
sick leave.
There are also differences in fringe benefits applicable to civilian employees and
uniformed personnel. Payments to Federal civilian employees in the form of
fringe benefits now approach 25 percent of straight-time base pay, and those to
military personnel have been estimated at approximately 35 percent of the ele-
ments of military compensation which are equivalent to civilian straight-time base
pay. Expenditures of these dimensions should be kept under careful and
continuous examination.
CONCLUSION
The assignment which you asked the panel to undertake may be looked upon
by those who tend to be critical of the career services of the Federal Govern-
ment as a cut and dried proposition. We have not considered our work to
be a routine review. We have attempted to take a fresh look at the concepts
and principles upon which civilian and military salaries are based. We are
convinced that the concepts are sound and that the principles are both sound
and fair. The only basic failure is that the principles have not been fully
carried into effect. There are still deficiencies to be corrected if Federal
civilian personnel and our military forces are to be compensated in accord-
ance with their skills and in keeping with the performance expected of them.
Government can be effective in the complex world in which we live only if
those who administer it and defend its very foundation are the peers in every
way of persons performing like levels of work outside Government service.
The panel hopes that its deliberations and this report will be helpful to you,
to the Congress, and to the American people. We are grateful to you for the
opportunity we have had to perform our assignment, and we stand ready
individually and collectively to assist you in any way you deem appropriate in
carrying our recommendations into effect.
There are attached supplemental statements by Mr. Meany and General
Bradley commenting upon certain aspects of our report upon which they wish
you to have their personal views.
Respectfully,
MARION B. FOLSOM, Chairman..
For and on behalf of : Omar Bradley, General of the Army ; Kermit
Gordon, Director, Bureau of the Budget; John A. Gronouski,
Postmaster General; John W. Macy, Jr., Chairman, United
States Civil Service Commission; Robert S. McNamara, Secre-
tary of Defense ; George Meany, President, American Federation
of Labor and Congress of Industrial Organizations ; Don K.
Price, Dean, Graduate School of Public Administration, Harvard
University ; Sydney Stein, Jr., Partner, Stein Roe & Farnham ;
W. Willard Wirtz, Secretary of Labor.
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22 FEDERAL E1IPLCYEES SALARY ACT OF 1945
AMERICAN FEDERATION OF LAaon AND
CONGRESS OF INDUSTRIAL ORGANI:/.ATIONS,
Washington, D.C., April 11f, 1965.
TIIE PRESIDENT,
The White House,
Washington, D.C.
DEAR MR. PRESIDENT: While I am in general agreement with my colleagues
on the President's Special Panel on Federal Salaries, I must In good conscience
dissent from several of their specific findings.
The report carries a positive ieaflirmation of the need for full comparability
between salaries of Federal employees and those paid for similar work in pri-
vate industries--a concept which originated with the Randall Commission and
which is now the law of the laud under the Federal Pay Act of 1962. But all we
have is a concept for, as the report points out, full comparability has not been
achieved. In much of government employment, In fact, we have not even
approached comparability.
What is even worse, the majalrity on the Special Panel has failed to urge
immediate achievement of full comparability. In lily opinion, this Is a grave
disservice to government employees and to the nation.
The Report recommends a 3 percent overall increase in the classified pay-
roll but it fails to specify that this should be applied across the board. The
Panel Implies that some formula other than a straight across-the-board increase
would be acceptable. This is a judgment in which I cannot join and from
which I would vigorously dissent
The 3 percent figure relates r.o the increase in wages and salaries in this
country from 1963 to 1964. If it were applied unevenly, It would do even more
damage to the concept of comparability. In my opinion, now Is the time for
the government to step out boldly, eliminate all discrepancies in comparability,
and reject the half-hearted atten pt at reaching this concept which have marked
federal salary increases in the past.
The same observations apply to the panel's proposal of a 4.8 percent general
increase for military personnel. I further question the merit of limiting the in-
crease to 2.7 percent. for those with less than two years' service---primarily, the
draftees. A young man who is culled frolll civilian life to the service of his coun-
I ry surely has no less a financial ,roblem than those who make the armed services
a career. Let us remember that men in uniform are on "peacetime service" only
in a technical sense. Today's draftees not only deserve an equal pay raise: they
should be given education benefits of the kind proposed by Senator Yarborough's
Cold War GI Bill of Rights.
With respect to both the civilian and military pay proposals, I dissent from the
language equating these with "national wage and price policies." As you know,
Mr. President, it is the position oi' the AFL-CI() that there are in fact no national
wage and price policies. nor should there be in the absence of a war emergency.
We believe wage and salary Clete'mInatinns, both private and government should
be made on the basis of objective facts, not on the theoretical projections of
academic economists.
Finally, In relation to wage boards for tlse so-called "blue collar" workers, it
is my firm belief that the spirit of I;secutive Order 1t1t1`;9, which you have en-
dorsed, oast 1 applied. This Evoul.d, of course, require fall consultation with
cmployce organizations on any rroposed changes in the present wage board pay
system.
With these except ions, I am pleased to join in this report. I believe the panel's
recommendations are generally in line with the spirit of your instructions. and
swill make a substantial contribution to the objectives you set in your budget
asessage.
Sincerely yours,
STATEMENT OF GENE.RAl. OF TIII: ARHY (1uuAR N. BRADLEY. A MIEMIIFR OF TIIE
PAY 1'ANFI. .LPPOtNiED BY THE PRESIDENT ON JANUARY 2S, 1t1G.,
I concur with the report of tile Panel except for One point. The report
implies that full comparability for the uniformed services was reached in the
Military Pay Act of ltXi3 and that the pay is now sufficient to attract and retain
qualified personnel.
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I am not convinced that this is true.
(I want to point out that my pay would not be affected by any increase. All
recent service pay legislation for active or retired officers has specifically ex-
cluded Generals of the Army and Admirals of the, Fleet.)
Unlimited liability is inherent in the mandate from the people of the United
States charging each person in uniform to stand ready to defend this nation, when
necessary, at the risk of his life. This charge exists for no other walk of life,
profession, or calling.
Military professionalism requires long training, rigid discipline, a high degree
of versatility, and unflagging dedication. The need of the military services is
more than a matter of numbers ; it is the preservation and encouragement of
excellence. For this, reason, I am concerned that past failures to keep service
pay abreast of civilian wage and salary increases are reflected in the quality of
personnel in the armed services. Service pay scales should be adequate not only
to attract but also to retain the quality and, quantity of personnel required, and
to motivate members of all ranks to strive for higher responsibilities throughout
their careers. Few military personnel enter the profession of arms in search of
financial gain. Yet, the standard of living the military is expected by the, Ameri-
can people to maintain, coupled with, the increased educational requirements
caused by the complexity of the modern military machine, causes today's mili-
tary professionals to be increasingly aware of the necessity for providing ade-
quate estates' for their families. The head of any military family must now
evaluate his military pay in relationship to the demands for education of his
children in an increasingly competitive society where his federal civilian counter-
parts have a continuing advantage. The head of a military household finds he
lacks the financial resources to afford his growing children opportunity to attain
a level of education similar to his own. It should be also pointed out that the
military man knows no normal 40-hour week. Indeed, the military profession is
a 24-hour-a-day calling, without the benefit of overtime pay compensation.
Comparison of military pay scales with civilian pay scales is extremely difficult
since there are significant differences between military specialties, particularly in
the combat elements of the armed forces, and civilian occupations. The unique
demands of military service and the total responsibilities of military command
have no counterparts in civilian life. Nevertheless, in line with President John-
son's statement that he wants "our uniformed citizens to be first-class citizens
in every respect" and "their wives and children to know only first-class lives,"
it is appropriate that a determination of reasonable comparability be made.
Complete comparability of the military profession to any other calling is not
possible because of the unlimited liability in defense of the nation which I have
mentioned.. Nevertheless, an attempt at comparison is useful for two reasons.
First, the members of the Armed Forces of a democracy are true members of its
society and should take their appropriate place in its structure. Second, qualified
individuals look upon the military profession as one of several possible career
pursuits and. assess its advantages and penalties accordingly. If a life in the
Services falls short in this comparison then the law of supply and demand will
operate to reduce the quality of our. fighting men.
Comparison must be made not at a single point in time, but must consider total
lifetime accrual of benefits and penalties. It is when this long view is taken that
the lack of compensation to military personnel is most obvious. Equity dictates
that an individual who has chosen the military profession. should, as he success-
fully advances through its hierarchy, take on the same stature in. society as his
running mate in other callings-equal energy,. equal 'devotion, equal intellect,
equal responsibility should bring equal compensation. But even if this require-
ment for equality rdere met-and it certainly is not when private soldiers earn
less than the national minimum wage scale-even so the principle of compara-
bility would require more compensation to military members to recompense them
for the erosion of their estates caused by the three aspects of military life that
severely discount present earnings. These three negative factors are: the
ponderous inertia and inflexibility of military compensation caused by the re-
quirement that it be established in law ; the career-long transient status of the
military and their families ; and the short full-earning period caused by early
mandatory retirement. Most men in civilian pursuits draw substantial salaries
for many years after reaching responsible positions in their professions. Mili-
tary men have very short periods to serve after reaching responsible positions and
attaining salaries approaching those of business executives.
The first of these penalties denies to the soldier the flexible compensation
advantages and retention incentives of his civilian counterpart-the Christmas
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boit.us, the cash award for suggestions, the profit-,haring plan, the stock options
for (lie elnpioyce, the quick adapti Lion to it change In cost-of-living.
Frequent movement hetwcen military posts in the United States and remote
locations overseas denies to both ofih?er and soldier the opportunity to establish
a permanent home, to build a pnrumuent equity of maieriatl goods or of l,x-al
reputation or to root his family in a social structure of confidence and security.
The prospect (if forced retirentcut before an estate can be established--par-
ticularly before children can be tducated --- is the most serious of the imponder-
able penalties that face the earl 'r military man. Beginning a second career
above the age of 50 is extrvinel diffieuIL-particularly in view of the severe
limitations placed by law ulx,n a 'mired persona activities, This contrasts with
other government servants who lave a lifetime career until age 70.
In any dtscussfon of pay, we have in mind total comliensauion inclueliii
fringe benefits and retired pay. 1"any? years ago the uniformed services had more
fringe benefits and a better retirement system than most. of their counterparts.
Now all workers have social security benefits, and most industries have fine
retirement plans, :Most workers have annual leave (and only work days count,
whereas in the uniformed services every calendar day counts) ; sick leave; a
Christmas bonus which in ninny cases includes up to a month's extra salary;
profit sharing plans; company stcres which in some cases rival post exchanges;
health plans Including hospitalization ; and life insurance plans.
Usually when dlseussitig any increase in service pay, the chance of such increase
Is tempered by mentioning how much such increase will add to later costs of the
retired list. I don't recall hearing any such statements when considering in-
creases for Civil Service employees---or when giving an increase to someone in
industry.
In any study of comparability, all fringe and retirement benefits must be
Included in the pay of the industrial or Civil Service worker, as well as of the
man In the uniformed service.
One may argue that job security partially offsets a lesser pay. I doubt that
job security for a service man Is any greater than that of a Civil Service worker.
or of an Industrial worker who Is protected by his union, and the rules of the
National Labor Relations Board. In contrast a career officer cannot take
advantage of the right to go from one company to another one which would give
him a better job..
On page 17 of the Panel report certain percentages are quoted, indicating im-
provements In qualifications of officers and enlisted men. The report states that
many factors affect the ability to t.ttract and retain quality personnel, but a hur-
ried reading might lead one to jump to the conclusion that adequate pay was the
primary factor. In fact, these improvements each had a very definite cause other
than pay. For example, the Army raised its mental standards for acceptance In
1900; the total of high school grt,duating classes in 19113 was some 37 percent
greater than in 19.16; In 195G we still had many officer call-ups from World War II
and the Korean War, who have now been replaced largely by recent college grad-
uates. (Most services have raised the educational requirements for new officers.)
I am not as concerned about the number of officers we can attract as I am about
our ability to attract and retain enough outstanding ones--men such as Marshall,
MacArthur, Eisenhower. lIalsey, Nimltz, Rickover, etc. Statistics comparing
the salaries offered by Industry to :nemhers of the university and collegegraduat-
ing classes with those offered to second lieutenants and ensigns would show a big
difference.
Taking all these things into consideration indicates that real comparability
demands some form of additional compensation for the man who chooses the
military life. Raising his earning-perfod income considerably is one clear method
to do so. It is not the only wily-elahorate scholarship plans, liberalized home-
loan schemes, less rigid empb,ymviit rules following retirement-these and many
other such suggestions would help. But they would be ponderous to enact into
law and selective in their applicability. Substantial Increase in current pay at
this time appears to be the siniplest, most effective, and in the long run, cheapest
solution if the Services are to retau the hard-core professionals which the nation
so desperately needs.
I recommend that such Increases be granted at an early date.
O\MAR X. BRADLEY.
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FEDERAL EMPLOYEES SALARY ACT OF 196
Mr. UDALL. I commend to the attention of the members the Presi-
dent's special message recommending adjustments in the statutory
civilian salary systems, printed as House Document No. 170. A copy
is on each member's desk. This proposal, designed to implement and
further strengthen the principle of comparability between Federal. and
private enterprise salaries, was first laid down by the Congress as a
permanent policy in the Federal Salary Reform Act of 1962.
As recommended by the President, title I of H.R. 8207 provides
upward adjustments averaging 3 percent in the grades and levels
of the major Federal civilian statutory salary systems. More spe-
cifically, in terms of the General Schedule of the Classification Act
of 1949 and the postal field service schedule, the increase is 3 percent
in the fourth step salary rate. The other step rates are increased in
appropriate amounts to preserve uniform differences between all of
the step rates.
Title II of II.R. 8207 is the Federal Salary Review Commission Act
proposed by the President. This title would establish an independent,
"quadrennial" commission, to review the salary structure as well as
the statutory salary systems, for Members of Congress, Federal judges,
and employees of the executives branch. This Commission would also
recommend appropriate adjustments to the President every fourth
year. The President, after considering the Commission's recommen-
dations, would submit to the Congress his proposals for changes or
adjustments in Federal civilian salaries. If neither I-louse within 60
days approves a resolution stating that it does not favor the proposals,
they would take effect as law.
The first witness this morning represents the administration. He is
the Honorable John W. Macy, Jr., Chairman of the Civil Service
Commission, and is accompanied this morning by Mr. Stahl and. Mr.
Ilare.
STATEMENT OF H'ON. JOHN W. MACY, JR., CHAIRMAN, CIVIL SERV-
ICE COMMISSION; ACCOMP'ANIED BY 0,. GLENN STAHL, DIRECTOR,
BUREAU OF PROGRAMS AND STANDARDS; AND ROBERT S. HARE,
CHIEF, PAY SYSTEMS SECTION, PROGRAM PLANNING DIVISION,
BUREAU OF PROGRAMS AND STANDARDS, CIVIL SERVICE
COMMISSION
Mr. M-AOY. Mr. Chairman, I appreciate very much the action you
have taken in introducing H.R. 8207 and the action you have taken
in calling this early hearing with respect to the salary program for
Federal employees.
This is a very important piece of legislation that relates to a very
large number of men and women who work for the Federal Govern-
ment. It has great significance in terms of carrying forward the
salary reform program that was inaugurated in. the statutes 'that you
referred to earlier.
Mr. Chairman, in the interest of following the expedition that you
cited, I would like to depart from the usual procedure of reading my
prepared statement and instead, place it in the record if I may, and
then speak briefly about the high points in this program, and. then
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FEDERAL EMPLOYEES SALARY ACT OF 1965
be plepa.red to respond to any questions that you and Congressman
Olsen may have with respect to all of the issues presented.
Mr. UDALL. That will be agreeable.
I know of few witnesses rho come before the committee better able
to handle themselves in giv} and take I think this is sometimes the
most effective way of present-ing testimony.
Unless there is objection, the statement of Mr. Macy will be inserted
in tlie record at this point.
(The statement referred ti,_follows:)
STATEMENT OF JOIN W. MIACY, JR., CIIAIHSIAN, U.S. CIVIL SERVICE Cohi]IlssIo.i
Mr. Chalrtnan and members of the subtromnlpttee. I appreciate this oppor-
tunity to appear today In supped t of the President's 1965 civilian pay proposals.
Fair, up-to-date salary systems are essential instruments in the maintenance of
a competent, productive career civil service.
The President's proposals, transmitted to Congress with his message of May 12,
support the basic policy prescribed by the Federal Salary Reform Act of 1962
calling for-
Equal pay for substantially equal work, and pay distinctions in keeping
with work and performance distinctions; and
Salary rates comparable with private enterprise salary rates for the
same levels of work-
With his proposals the President also transmitted the report dated April 15,
1965, of a Special Panel on Federal Salaries which at his request had reviewed
Federal military and civilian pa^ levels. The proposals are based on carefully
considered recommendations of the Panel.
The report of the Special Panel and the President's message largely take the
place of the annual report required by the Salary Reform Act to provide the
comparison of Federal and private enterprise salary rates and any recommenda-
tions the President deems adailable. To make full information available to
Congress. the President on May IT transmitted the report and analysis of the
Director of the Bureau of the budget and the Chairman of the Civil Service
Commission on the comparison cf Federal and private enterprise salaries and
the views of Federal employee organizations.
I assume that these reports will be Included in the record of these hearings.
Consequenily, I shall concentrate my discussion on only the key features of the
proposals.
TILE PIESIOENT's INTEREST
Let me first, however, emphacizo the high interest of the President In the meas-
ure which is before you. You will recall that in his message of May 12 he
reasserted In unmistakable language his concern for the "dignity, opportunity,
and profound personal achievcmtnt" In the public service as a profession. lie
further emphaslzed his concern for the quality of the service in his demonstra-
tion of prowess toward economy and a lean and fit body of civil servants and
his emphasis on the importance of adequate pay as a means to continue to advance
the Government toward such goals, Interested as he is in the necessity for this
S'ear's particular salary adjustments. President Johnson is especially concerned
with the more durable features of this pay bill and the methods by which we may
continue to insure a rational salary system for the future. He believes firmly
that, with the enactment of this legislation, we shall be on sounder ground to
maintain equitable, conslctent, and up-to-date compensation policies and as he
put It in his closing words: "shall be in a far better position to attract and retain
in Federal service the best talent In America."
HATS fly REF Omr ACCOMPI.IS II JIF\TS
In Its nearly 3 years of operation, the salary reform law has brought about a
remarkable improvement in the Federal salary picture. Pull comparability with
private enterprise levels has not yet been achieved, but the Government's position
now is vastly superior to Its situation in 1961,
Just before the 1962 reform nleaiure. national average private enterprise levels
were, for example, 6.8 percent above (riasslflea Lion -let rates at GS-5. 13.1 per-
cent at GS-11, and 24.3 percent at GS-15. Comparisons based on the latest
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FEDERAL EMPLOYEES SALARY ACT OF 1965
BLS survey findings, for 1964, show private enterprise rates 3.5 percent above
Classification Act salaries at GS-5, 8.9 percent at GS-11, and 10.7 at GS-15. The
proposals before you do not reduce the remaining gap substantially, but neither
do they permit it to become larger. The extent to which Federal salaries have
been brought closer to prevailing business levels becomes even more notable when
it is observed that private enterprise salaries themselves rose 10 percent during
the period.
Although Classification Act rates form the basis for the annual comparison
with private enterprise salaries, linkage of other statutory systems to Classifica-
tion Act levels has resulted in parallel improvements in salaries of the postal
field service, Veterans' Administration medical service, and the Foreign Service.
PRINCIPAL REMAINING PROBLEMS
But our experience under the 1962 and 1964 acts has disclosed that some prob-
lems remain and that further improvements are needed.
Present Federal schedules, as shown by the examples of salaries mentioned,
not only continue to lag behind but also are unequally related to private enter-
prise levels. The. remaining gap is much wider at the middle and upper grades
than at the lower grades. Expressed another way, current Classification Act
salaries for grades up through GS-5 approximate or exceed private enterprise
levels for 1963; salaries for the next several grades are close to private enterprise
levels in 1962, and grades from GS-11 or GS-12 to the top of the schedule equate
most nearly with the private enterprise levels of 1961.
To overcome the remaining gap in an enduring way requires more than current
salary adjustments. It requires solution of two major problems :
The excessive lapse of time between completion of the annual survey of
private enterprise salaries by the Bureau of Labor Statistics and the reflec-
tion in Federal pay schedules of the changes that have taken place in pay
rates in the private economy, and
The relatively static character of Federal salaries for offices at ranks above
those of the four career, statutory schedules.
GENERAL NATURE OF PROPOSALS
The President's 1965 pay proposals recognize and propose solutions for these
two problems, as well as others of lesser magnitude that have been encountered in
administration of the reformed statutory systems. The improvements thus pro-
posed would also apply to the pay systems of the uniformed military services
which have been troubled by similar problems. The proposals would, further-
more, adjust current salary schedules to take into account the most recent Bureau
of Labor Statistics findings on private enterprise pay levels and would add bene-
fits necessary to modernize other forms of Federal compensation.
Today I shall focus primarily on civilian salaries and salary systems and
specifically on those proposals of the President which have been introduced by
Mr. Udall in H.R. 8207. Because salary adjustments being proposed are better
understood in the light of the improvements proposed in the systems, I shall first
discuss these improvements even though they do not occur first in the bill.
ANNUAL SALARY COMPARISON AND SALARY ADJUSTMENT PROCEDURE
While the principles enunciated in the Federal Salary Reform Act are emi-
nently sound, experience has shown that there is room for improvement in exist-
ing procedures for salary reviews and adjustments. The two problems already
mentioned are closely associated with the annual salary review and adjustment
procedure for statutory schedules and with the absence of any formalized, regu-
larly recurring procedure for reviewing upper Federal salaries.
The reform act requires the President to report annually to Congress, at no
fixed time, the comparison of Federal and private enterprise levels and any
recommendations he deems advisable. To carry out this procedure requires ex-
tensive analyses of salary survey findings and their translation into appropriate
pay lines and pay schedules. Employee organizations are provided an oppor-
tunity to review the findings and comparisons and their views are obtained.
The Director of the Bureau of the Budget and I then prepare and submit to the
President a report with recommendations. The President determines his recom-
mendations to Congress, which are then drafted into the form of a proposed
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bill, the other documents necessary in a legislative proposal are carefully pre-
pared, and the legislative proposal is transmitted to both Houses.
Each house of Congress then studies the proposals, through hearings like this
anti commiuce reviews of fa ctual information, often detailed and technical,
filrnlhecl on their own initiative or at the request of committees by the executive
hraw-li or other interested parties. Comprehensive reports are prepared by the
coiinnittees, proposals are debated on the floor, and adjustments are then acted on.
This is a valuable but cumbersome and timctaking process for salary-setting
lantr'1?Ives. it becomes particuarly burdensome when a rising economy requires
amnuat salary adjustments and repetition of the process each Fear. IL results
inescapably in an excessively long interval of time between a salary survey
and tile resultant salary adj Istmcnts. The initial schedules under the com-
pairabilit,y principle that took otlrrt in October 1902, for example, were based on
a Bureail of Labor Statistics survey report published in the fall of 1001 and
recommcudlltions of I lie President transmitted to Congress on February 20, 1002.
Although the circumstances were unusual In this particular instance, the current
statutory pay schedules which became effective in July 11101 were based on the
April 1963 recommendations of the President. Those recommendations reflected
a Bureau of Labor Statistics report published In October 1002, showing data
collected in the winter of 1001-62. The July 19GI adjustment took some account
of the Bureau of Labor Statistics findings in 1003, to be sure, but only at a few
lower grades.
The process for adjusting statutory salaries is much more cumbersome and
tioaetuking than that for adjusting tiny rates for other groups of Federal
employees under a statutory pr-tvalling rate policy. notably the more than GOO,000
employees under wage board systems and the salaried as well as wage employees
of such agencies as the Atomic Energy Commission and the Tennessee Valley
Authority. To improve pay adjustment procedures for the statutory salary
systems, however, it is not necessary to place as great a degree of authority in
the executive branch as that exercised by the individual employing agencies
for the two groups mentioned.
Section G of H.R. fl;'07, by acding new subsections (c), (d), and (c) to section
,03 of the 1.102 Reform Act, would permit, with ImtKrrtant safeguards, the opera-
tion of a simplified and shortened salary adjustaaent procedure. The President
would be required to transmit his annual recommendations to Congress by Jan-
uary 31. If neither House in the meantime passed a resolution expressing dis-
favor of the proposed rates, the salary schedules transmitted by the President
could become effectivo as early as the pay period following the next GO days of
continuous session. During this year, for example, schedules recommended by
the President could have become effective in the middle of April for most
employees.
Under the proposed procedure, Congress would retain the review of the Presi-
dent's salary adjustment re cart nmend ations and no new schedules could become
effective if either House objcceted. If there were no objection, however, the
schedules would take effect promptly, and with the saying of a great deal of the
time of Members of Congress that now must be devoted to highly technical pay
matters.
Further, Congress would retain exactly the same control it now exercises over
Federal salary structures and policies. The proposed periodic adjustment pro-
cedure would extend only to c} angel in statutory schedules necessary to reflect
changes in prevailing salary levels since the last adjustment and to maintain the
same structural relationships between Federal and private enterprise salaries that
Congress had most recently fixed.
Any changes in the structure or other features of Federal systems would be
accomplished only by the normal legislative process. Changes of this-kind would
generally be considered only at I-year intervals, In connection with reviews made
by the proposed Federal Salary Review Commission which I shall discuss later.
A procedure of the kind proposed for interim adjustments is the only prompt,
and at the same time sound. means yet devised for reducing the lag between survey
reports and salary adjustments. The alternative of projecting most recent survey
findings, perhaps one year ahead, Is a dangerous one. A wrong guess could be en-
tirely too expensive, overestimating a projected Increase by as little its 1 per-
centage point. would cost ill(- Government, about $13.i million.
One other change In the aim-ml review prixedure is also proposed in section
G of ill(, bill. A new subsection (b) to be added to section 303 of the Reform Act
would give the President discretionary authority to have salaries surveyed and
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FEDERAL EMPLOYEES SALARY ACT OF 1965 29
comparisons made in additional fields of non-Federal employment beyond the
present private enterprise salary surveys and comparisons. Thus, surveys and
comparisons could be extended to State and local governments; and to nonprofit
-organizations, for example. This would assure that Federal salaries are appro-
priately related to those prevailing in the U.S. economy at large.
For another major and durable procedural reform, title II of H.R. 8207 would
establish a Federal Salary Review Commission composed of 10 members; 4 app
pointed by the President of the United States, 2 by the President of the Senate,
2 by the Speaker of the House, and 2 by the Chief Justice. Anyone holding
office at the time would be ineligible for. appointment.
The first Commission would be appointed not later than January 1966 and serve
for 1 year. A new 1-year commission would be appointed not later than January
31 of every fourth year thereafter.
The Commission would make a twofold, comprehensive review of Federal ci-
vilian and military compensation, consisting of-
A review of the compensation of Senators and Representatives, Federal
Justices and judges, and individuals under the Federal Executive Salary Act
of 1964, with a view to maintaining proper levels and relationships among
the rates of compensation of these officers and between their rates and those
of the Classification Act.
A review of the principles, concepts, structures, and interrelationships of
statutory salary systems for civilian employees and members of the uni-
formed services.
The first Commission report would go to the President by January 1, 1967, and
there would be a report by the same date of each fourth year afterward. The
President would transmit to Congress not later than March 31 of each of these
years (1) a compensation plan containing the rates he recommends for Senators
and Congressmen, the Federal judiciary, and those under the Federal Executive
Salary Act; and (2) his recommendations as to changes lie deems necessary in
the structure of statutory salary systems and other elements of compensation for
civilian employees and the uniformed forces. From this point on, the course of
the two types of proposals would be quite different.
The rates of compensation which he would propose-which could not exceed
those recommended by the Salary Review Commission-would take effect on the
first pay period after July 1, unless within the first 60 calendar days of continuous
session. after its transmittal either House has passed a resolution expressing
disfavor. This process, we believe, would have wide public acceptance as a more
objective way to set pay rates for Members of Congress and other top officers
than now exists. Reticence of Congress to consider its own pay slows down con-
sideration of top pay in all three branches to longer intervals than are equitable.
We believe the proposal is sound. It would relieve Congress of the embarrass-
inent of initiating proposed rates for pay of its own Members, and it would have
the advantage of making changes on the basis of a studied and balanced system
of relationships among all pay schedules.
Recommendations for changes in the systems or structure for, or interrelation-
ships among, career salaries and those features of civilian or military compen-
sation other than the pay rates themselves would, on the other hand, follow the
normal course of legislative proposals and would take effect only to the extent
of affirmative enactment. Section 205 of the bill specifies further that unless
Congress otherwise authorizes by law, there shall be no change in the principles
and basic structure of Federal salary systems between quadrennial reviews, ex-
cept for the periodic adjustments in pay levels necessary to maintain previously
established relationships with prevailing salary levels.
The proposed procedure would maintain the same degree of control that Con-
gress now exercises over all features of statutory systems except the interim
adjustments based an measured changes in prevailing salary levels. Rather than
reviewing systems to some extent nearly every year, however, the legislative re-
view would be concentrated in every fourth year, and would be aided by the
findings of a responsible, disinterested body which had given its attention to
these matters over a period of a year.
Taken together, the quadrennial reviews of upper Federal salaries and of career
salary structures and policies should contribute to increased effectiveness of
the salary comparability principle. Periodic reviews and adjustments of upper
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30 FEDERAL EMPLOYEES SALARY ACT OF 1965
salaries would permit the top rates of career schedules to be increased as neces-
sary to maintain proper relationships with outside salaries and with those of
lower grades. By enactment of Congress, the structures of statutory salary
schedules could be reallned to eliminate or to reduce, to the extent Congress
deemed appropriate, the exceptionally large gap between salaries at upper grade
levels and outside rates.
Equally important, the quadrennial reviews would provide for consideration
of military compensation levein in relation to those of the civilian service. Inc
this way, changes in salary levels and relationships in the national economy
could be reflected In military compensation, and other improvements could be
introduced in the military pay and allowance structure.
In effect then, the President Is proposing two major procedural reforms:
1. An improved method for annual salary comparison and salary adjust-
ment, largely eliminating the danger of a continuation of serious and in-
defensible timeings but preserving ultimate congressional sanction of Execu-
tive action on civilian and military compensation.
2. Establishment of a nevi mechanism for quadrennial review of legislative,
judicial, and top executive salaries through the means of a Federal Salary
Review Commission.
The remaining features of the bill concern the adjustment of current statutory
schedules for career civilian and military employees.
Sections 2, 3, 4, and 5 of the bill would adjust, respectively, the present statu-
tory schedules of the Classification Act. the postal field service, the medical serv-
ice of the Veterans' Administration, and the Foreign Service. In each case, a
general adjustment averaging 3 percent Is proposed.
This increase corresponds with the rise in private enterprise salary levels,
over those for the previous year, as shown by the most recent Bureau of Labor
Statistics survey report publiebed in November 19Gi, subsequent to the July
1964 adjustment of statutory schedules. The 3-percent adjustment would not
bring Federal salaries closer to private enterprise levels than had the 196#
increase, but It would maintain recent gains and preserve the relationship most
recently fixed by Congress.
The new schedules would b-come effective the first pay period on or after
January 1, 1968. This date in proposed in order to bold the 1966 fiscal year
costs within amounts included in the budget for salary Increase purposes.
II.R. 8207 would thus make fundamental long-range improvements In salary
review and adjustment procedures and would preserve for the immediate future
the gains achieved up to this time under the comparability principle. A full-
scale review of the relatlonsh p of Federal pay to compensation levels In the
national economy would be carried out In 1968 by the first Salary Review Com-
mission.
The new adjustment procedure and the quadrennial reviews by a Federal
Salary Review Commission should result in reduction of the timelag in statutory
schedule adjustments, substantial saving of the time of Congress, and more
orderly relationships among top Federal salaries, career-level civilian rates, and
compensation of the uniformed services.
Thus enactment of this bill will represent further significant progress toward
the objective of adequate, up-to-date, and fair pay systems for all categories of
Government personnel.
Mr. UD ALL. I might say c l this point that the subcommittee may well
wish to consider a number of subjects, including severance pay, when
we finally decide what bill, if any, to report. I think this would be
an expeditious way of handling some of these matters.
We will be glad to have you comment on this new excellent proposal
on severenco pay in connection with your general testimony this
morning.
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FEDERAL EMPLOYEES SALARY ACT OF 1965 31
Mr. MACY. I will be happy to do that.
You have already introduced in the record the President's message
of May 12 on salary policy. This message in itself provides ample
and forceful testimony to indicate the position of the administration
with respect to the legislation that is before you.
I would like to point out that accompanying the President's message
is a report of the President's Special Panel on Federal Salaries, a group
of officials of the executive branch and augmented by distinguished
persons from outside who reviewed the entire salary picture, military
and civilian, for the President earlier this year and submitted a report
on April 15. I will refer to that document as Igo along.
Mr. UDALL. I would observe for the record this has been printed as
House Document No. 170, and that the President's message, together
with the Panel's report, is available in very handy form.
Mr. MACY. There is also available, Mr. Chairman, in an equally
handy form, Document No. 174 which was submitted by the President
on May 17 and contains the joint report of the Director of the Bureau
of the Budget and the Chairman of the Civil Service Commission to
the President in accordance with the requirements of the Salary Re-
form Act of 1962. That joint report is the analysis of the Bureau of
Labor Statistics' survey released last November 1964, and the conver-
sion of that survey into a salary line and salary schedules.
This report was one of the documents considered by the Special
Panel, and the recommendations from the Director of the Bureau and
the Chairman of the Commission are incorporated in that report.
But this document contains a great deal of very valuable and detailed
information.
Let me also say, it contains the comments of virtually all of the
Federal employee organizations, and I am certain you will wish to
read their comments in that report as well as to hear the testimony they
will present before the committee.
One of the important features of the 1962 statute was the provision
for consultation with employee groups in the workings of the salary
system.
Mr. Chairman, I would like to discuss the major features of the
legislation in capsule form, this is legislaton which is designed for the
further improvement of the Federal salary systems. It is a Presi-
dential program which constitutes a third phase in a continuing effort
to establish a sound, responsive, and equitable salary system for the
Federal employees covered by the statutory salary authorizations.
I think it is important to point out in considering salaries that they
are a very essential part of a total program designed to achieve the
necessary accomplishments in terms of the Federal programs author-
ized by Congress and administered by the executive branch.
The purpose of this particular plan is to achieve, with Congress, a
salary system which is appropriately balanced, balanced so the in-
terests of three very important groups, or forces, are fully recognized.
The balance to be achieved should be one that provides salaries that
are fair to employees and constitute a proper compensation for their
efforts; secondly, it should provide such levels of salary as to be ade-
quate to attract and retain the skills that are necessary for the ac-
complishment of Federal programs; and thirdly, the salary levels
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FEDERAL E,1fPLOY) I:S SALARY ACT OF 1965
should be those that do not place an undue or unfair burden upon the
taxpayer who provides the resources for this system.
It is also important, Mr. Chairman, to realize that the salary sys-
tem is only one of a number of features that makes up an effective
program of personnel policies that. are reflective of the interests of a
good employer. It is aaece,;sary, along with salaries, to assure that
there is a system that provides for merit appointment and promotion,
means for constructive employee relationships with individuals and
groups, that there are means for assuring that the working conditions
in whit-la Federal employees labor are of a safe and proper standard,
and it is important that. there be systems to assure opportunities for
the placement- and adjudicat-on of grievances and appeals.
Likewise. it is essential there be systems of recognition in incentive
to assure high performance, and finally, that salary programs be sup-
plemented to provide certain benefits that are necessary to assure ap-
propriate economic security 'or Federal employees.
I would like to call your attention, if I may, to the definition that
the President ]provides in his message with respect to the standards
fora good employer in Document 170, and this commences at the bot-
tom of the first page. It stay:;
And I define a good employer is one who demands excellence and rewards it;
is fair and just; respects the dignity of his employees; insists upon ethical
standards and sets a good exanil?le; practices no discrimination; welcomes fresh
ideas and new approaches; fulfills his responsibilities to the community; pro-
vides opportunities for growth and challenge; and combines prudent business
judgmnent with enlightened policies on compensation and benefits.
And so the program that is embodied in II.1. 8207 is a means for
fulfilling that definition as it relates to salaries.
I indicated this was the third phase in a continuing effort to build
a constructive salary system. The first phase was the act of 1062,
which established for the first time two fundamental principles as
guidelines for the setting of salaries in the Federal Government. One
was that such salaries should be at a level comparable to salaries paid
in private enterprise for like services at a like level and called for
regular adjustment to assure that this comparability principle was
sustained.
A second principle, that of maintaining internal alinement within
the Federal Government so that various jobs were ranked and ordered
in accordance with their difficulty and responsibility.
In the 1962 statute ther3 were basic structural changes in the
Classification Act in order to assure that internal alinement was
maintained.
The second step in the improvement of the salary systems in the
Federal Government was enacted by Congress in the Salary Reform
Act of 1961. The principal accomplishment in that enactment was
the raising of toff salaries cn a rational and interrelated basis so it
was possible to have within time career salary structure the kind of
internal alinement that. was necessary to reward relative responsibili-
ties and at the same time to keep pace with salaries paid on the
out side.
Last winner at the time when the required report on comparability
was submitted to the President by the Budget Director and the
Commission Chairman, the President desired further counsel as to
how certain continuing issues with respect to salaries could be most
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FEDERAL EMPLOYEES SALARY ACT OF 1965
effectively resolved in order to formulate a program that could be
presented to the Congress in 1964.
Basically there were three issues that were identified at that time.
The first issue was that of the relationship of civilian salaries and
compensation with that of the military. Through the years, action
has been taken separately for civilian personnel and for uniformed
personnel. At times it has been claimed that the two were in rea-
sonable parity and at other times there have been serious morale
problems because one group or the other appeared to be out of line
in relation to the other system.
In view of the fact we have a very significant percentage, nearly
one-half, of the civilian employees of the Federal Government work-
ing for the Department of Defense and in close proximity to many
individuals in uniform., it was viewed as most. important that there
be a logical and sound relationship between the two compensation
systems.
Secondly, there was a view that there was need for some additional
refinement in the procedures carrying out the comparability prin-
ciple in order to reduce the timelag and in order to reduce the
burden on both the executive and legislative branches.
Third, as a result of the experience in 1963 and 1964 with respect to
the upward adjustment of top :salaries in the Government, those for
Members. of Congress, members of the judiciary and the top levels
of the executive branch, it was thought there should be built into
the salary system a means for regular review and potentially regular
adjustment.
Further, there should be built into the system an assured, regular
review of the structure and relationships, that it should not be neces-
sary to review structures and relationships every time there was an
adjustment, but it was important that it be done periodically to as-
sure there were not significant departures from practice that was
equitable to employees and assured the accomplishment of the Gov-
ernment's work.
With those three issues in mind, the President designated the
Special Panel on Federal Salaries, and that group met on several
occasions and reviewed these issues, as well as the report submitted
by the Budget Bureau and the Civil Service Commission with respect
to the current indicated adjustments based upon the Bureau of
Labor Statistics nationwide survey.
The report that accompanies the President's message sums up the
recommendations coming from that group, and those recommenda-
tions in turn constitute the basic issues that are incorporated in
H.R. 8207.
The first of the proposals for further reform that appears in title
I of II.R 8207 is a device whereby the timelag presently existing
in the system can be reduced, and more expeditious consideration
can be given to adjustments on an annual basis.
The proposal is that as an extension of the annual review process
there be ? a proposal from the President prior to January 31 of each
year presented to the Congress in the form of a proposed set: of salary
schedules which, if not acted upon by the Congress; would then
within the ensuing 60 days have the effect of law. If the Congress
was disposed to reject such a set of schedules, such rejection 'would be
accomplished by a majority vote in one of the other Houses. This,
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FEDERAL EMPLDYEES SALARY ACT OF 1965
would provide an orderly, regular, and more expeditious means for
the Congress to review the product of the survey and analysis and
the proposal for adjustment.;.
It would still permit. congressional review; it would permit a
hearing such as this at which time the executive branch would
present the facts on which the proposed adjustments were to be
based; and it would, of course, at all times continue the appropria-
tions process as a means fc,r regulating increased expenditures for
sal cries.
This is the first proposal that is offered in this program.
The second proposal is one of a longer range nature, and is de-
signed to meet the need of keeping the military and civilian salaries
in harmony; to provide for a systematic review of structure and
relationships among the ei%ilian salary systems and in relation to
salaries in the outside sector by the appointment. of a group to be
known as a Salary Review Commission to be appointed jointly by
the President, the Speaker, and the Vice President and the Chief
Justice, a group of 10 individuals, none of whom would be involved
in the salaries being )aid, and such a Commission would be appointed
starting in 1966 and on a quadrennial basis subsequent to that so
there would be a review in 1070, 1974, and every 4 years thereafter,
and that the Commission would be required to report in sufficient
time for the President to ~:ubmif. his recommendations from that
report early in the next congressional session.
The review of that Comm ssion would cover two basic areas-one
would be the review of salary structures and relationships, and any
changes in salary structure; or relationships that were proposed
would be sent to the Congress for consideration through the regular
legislative process.
The second area would be the review of the top level salaries in the
Federal Government-legislative, judicial, and executive.
The recommendations oftli Csnnmission with respect. to adjustments
in those salaries would be submitted to the President, and the
President in turn would submit them to the Congress in whatever
form he recommended, but. not at a higher rate than the recommenda-
tion of the Commission, and t iat would be handled in the same fashion
as the annual adjustment , in other words, in accordance with the Re-
organization Act principle. They would lay before the two Houses
of Congress for CO days and if there were no negative action by either
House, they would go into effect.
The view would be that, such a procedure would make it possible
for these higher level salaries to be reviewed on a regular basis and it
would relieve both the executive and the legislative branch of the in
herent embarrassment of proposing increases in its own salaries.
So these are two proposals that are procedural in nature, but they
are very important procedures, and relate very directly to future ad-
justments in salary levels.
It should also he pointed out that both of these devices relate to both
civilian and military personnel so that if your action in 1965 on civilian
pay and the action of other committees on military compensation bring
about the relationship that is proposed in this message of the Presi-
dent., the future adjustments would preserve that relationship.
That brings me to the specific recommendations with respect to
salary.
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FEDERAL EMPLOYEE S A
The review was made of the data that was submitted by the Bureau
of Labor Statistics and analyzed by the Civil Service Commission and
the Budget Bureau. This was reviewed by the salary committee and
by the President, and the conclusion was reached it was desirable this
year to preserve the level of salaries established by the 1964 act through
an increase averaging 3 percent; that the :increase in salaries in the
private sector as revealed by the Bureau of Labor Statistics report
showed there had been a general. improvement of 3 percent, and that
the objective of the legislation this year should be to preserve the re-
lationship that was established last year and the pay level that was
established last year until such time as there was a further structural
review in 1966.
The President's message also proposes that the increase in rates be
effective on January 1, 1966, which. brings the total amount of military
and civilian salary increases within the funds available in the Presi-
?dent's budget.
In title I of H.R. 8207, there is also another perfecting amendment
proposed, and that is that in the future the review of comparability be
extended to lover other non-Federal salaries in addition to those in
private enterprise. This would permit a coverage of State and local
government salaries and those of the nonprofit corporations.
The Salary Panel, Mr. Chairman, also added three other related
recommendations which I also offer at this time for your attention,
although they will undoubtedly be discussed in greater detail by other
witnesses, -or in the case of one of them, they may actually come up
before another committee.
The first proposal was that legislation be introduced to authorize car-
tain civilian employees in the Post Office Department who are not now
receiving premium pay for overtime to receive such pay on an equal
-basis with other civilian employees.
The Postmaster General will undoubtedly testify further on this
point. Suffice it for me to say, the President desires to see this kind of
across-the-board equality of treatment for all Federal employees.
The second related. recommendation called for the establishment of a
coordinated and equitable system for the payment of moving expenses
to employees transferred for the convenience and benefit of the Gov-
ernment.
For a number of years, Mr. Chairman, the Civil Service Commission
has been concerned about the necessity for Federal employees who were
moved from one geographic location to another to suffer an out-of-
pocket financial loss. The Salary Panel shared that concern and rec-
ommended that legislation be introduced which would make it possible
for the Government to reimburse such individuals who were moved be-
cause of the Government's desires to use their services at some other
location.
The Civil Service Commission has sent forward to the Congress a
legislative proposal along these lines.
It is my understanding this proposal has now been referred to the
House Government Operations Committee.
The final recommendation is for the authorization of payment of
readjustment allowances to certain employees separated involuntarily
from Federal employment through no fault of their own.
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It may be that at this point, Mr. Cllairinan, you would like to have
the statement with respect to severance pay introduced and bill II.R.
8424.
Mr. Unw. Unless there is objection, the bill II.P. 8424 will be
printed in the record at this point.
(The bill, MR.. 8424, follows:)
[11.n. 8124, 89th Cong., let sess.l
A BILL To provide severance pay to certain officers and employees of the Federal
Governmt-nt, and for other purposes
Be it enacted by the Senate and House of Rcprcacntatitrca of the Vatted States
of America in Congress assembled, That this Act may be cited as the "Severance
Pay Act of 19(15."
SEC. 1. (a) Except as provided in subsection fbi, this Act applies to every
civilian officer and employee in or under the executive branch of the Govern-
ment of the United States, ineh-ding an officer and employee of a corporation
wholly owned or controlled by the United States,
(b) This Act does not apply to--
(1) an officer or employee whose rate of basic compensation Is at a rate
provided for (lie levels of the Federal Executive Salary Schedule or Is in ex-
cess of the highest rate of grade 18 of the General Schedule of the Classiflea-
tion Act of 1949. as amended ;
t2) an officer or employee serving under an appolntwcnt with a definite
time limitation ;
13) an alien employee who occupies a position outside the several States
and the District of Columbia ;
(4) an officer or employee who is subject to the Civil Service Retirement
Act, as amended, or any other retirement ]aw or system applicable to Fed-
eral officers or employees or members of the uniformed services, and who,
at the time of separation from the service, has fulfilled the requirelnents for
i-a-ilediate annuity under any such a law or system ;
(5) an officer or employee who, at the time of separation from the service,
is receiving compensation under the Federal Employees' Compensation Act,
as amended, except one receiving this compensation concurrently with sal-
ary or on account of the death of another person ;
(11) an officer or employee who, at the time of separation from the service,
is entitled to receive other severance pay from the Government; or
(7) such other officers or employees as may be excluded by rules and
regulations of the President, or such officer or agency as be may designate.
SEC. 3. (a) An officer or empioy2e to whom this Act applies who is involuntar-
ily separated from the service, or or after the effective date of this Act, not by
removal for cause on charges of misconduct, delinquency, or inefficiency, shall,
under rules and regulations prescribed by the President or such agency as he
may designate, be paid severance pay in regular pay periods by the department
or independent establishment from which separated.
(b) Severance pay shall consist of two elements, a basic severance allowance
and an age adjustment allowance. The basic severance allowance shall be com-
puted on the basis of one week's basic compensation at the rate received Im-
mediately before separation for each year of civilian service up to and Including
ten years for which severance pay has not been received under this or any other
authority and two weeks' basic compensation at such rate for each year of
civilian service beyond ten years fox which severance pay has not been received
under this or any other authority. The age adju.stn,ent allowance shall be
computed on the basis of 10 per cPf turn of the total basic severance allowance for
each year by which the age of the recipient exceeds forty years at the time of
separation. Total severance pay received under this section shall not exceed
one year's pay at the rate received immediately before separation.
(c) An officer or employee may be paid severance pay only after having been
employed currently for a continuous period of at least twelve months.
(d) If an officer or employee Is reemployed by the Federal Government before
the expiration of the period covere'i by payments of severance pay, the payments
shall be discontinued beginning w:tb the date of reemployment and the service
representecl by the unexpired porti ni of the period shall be reeredited to the offi-
cer or employee for use in any sulsequent computations of severance pay. For
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FEDERAL EMPLOYEES SALARY ACT OF 1965 37
the purposes of subsection (c), reemployment which causes severance pay to be
discontinued shall be considered as employment continuous with that serving as
the basis for the severance pay.
(e) Severance pay under this Act shall not be a basis for payment, nor be
included in the basis for computation, of any other type of Government benefits,
and any period covered by severance pay shall not be regarded as a period of
Government service or employment.
Snc. 4. There are hereby authorized to be appropriated such sums as may be
necessary to carry out the purposes of this Act.
Mr. M,,.cy. This feature of providing severance pay is new to most
of the categories of employees that aro covered by the statutory salary
systems.
There are today, however, severance pay provisions for military
personnel and foreign service personnel where individuals are dropped
from the service through the workings of their career plan.
In private industry, severance pay has been used to an increasing
extent since 1944. The Bureau of Labor Statistics shows an expan-
sion of benefits of this kind primarily designed to assist employees
in their readjustment in the event their jobs are eliminated through
causes which are beyond their control.
It was the view of the salary panel, and it was the view of the
President, that the Federal Government should be equally humani-
tarian in its concern about those employees who are dropped for
reasons of change in Government program, through the consolidation
.of activities, through the closing of bases, or other means.
The formula in H.R. 8424 calls for the payment of 1 week's salary
for each year of service up to 10 years, and then for 2 weeks' pay per
year after 10 years, and for a 10-percent increase in the amount of pay
for those over 40.
As you can see, the formula is designed to provide extra financial
assistance to those employees of longer service and older age who
normally have greater difficulty in finding other work. The system
would be controlled so in the event the individual was reemployed
prior to the completion of the severance pay allowance, that the pay
would be cut off and the allowance would be continued to run on a
weekly basis rather than being paid in a lump sum in order to take
care of situations such as that.
This would not apply to top level employees, to those employees
on a fixed term assignment, or to those who are separated through
inefficiency, or misbehavior.
I believe this is a very important supplement to the total array of
Federal programs. In the past, the Federal Government has looked
to some extent upon the accumulated annual leave as a cushion for
those who depart, but basically that is not the purpose of the leave.
The leave is provided by the Congress to give the employee time in the
course of his employment to be away from his work and to refresh
himself for future work.
In 1954 the Congress extended coverage of the unemployment com-
pensation provisions to Federal employees. Those provisions are
available to those separated, but as in private industry, it is frequently
found that these benefits are not sufficient and the level of benefits
,do not match the definition of the "good employer."
In conclusion, Mr. Chairman, let me say that the President's program
,on salary policy for 1964 is an effort to move ahead as a good employer,
to further extend the reform refinement and improvement in salary
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38 FEDERAL EMPLOrEES SALARY ACT OF 1965
system that occurred during he past. 4 years. These adjustments in
procedure and adjustments in rates involve a total of 1,736,000 em-
ployees as of March 31, 19G5.
The cost of the 3-percent r,djustiuent on the basis of a full year is
$406 million, and one-half oil that on the basis recommended by the
President and the administration of an effective date on January 1,
1966.
The coverage includes not only the Classification Act, but, through
the linkage authorized in the 1963 statute, it includes the entire Postal
Field Service, the doctors and medical personnel of the Veterans'
Administration and the personnel covered by the Foreign Service Act.
Let me reemphasize the importance of this program as a means of
establishing equity and harmony with compensation for more than 2
million military personnel who also serve their Government in very
important programs. This :s historic legislation in the sense it is
designed to bring these two large groups of Federal workers into a
harmonious salary relationship.
That concludes my coninneatary, Mr. Chairman. As it turned out,
it was probably longer than my written statement, but I hope it was
helpful in providing an interpretation of the President's message,
and in indicating the earnestness of the administration in urging
eariv and favorable consideration of 11.11.8207.
Mr. L'n.-r.L. Thank you, Mr. Macy. Your excellent statement was
very helpful, I shall read your prepared statement in detail this
evening. I have a few inquiries of my own, but before beginning, I
-would like to remind the members of the committee that the Chair is
anxious to have these hearings conducted expeditiously and fairly.
We are going to take all the time we need and provide due process.
However, the rules of the. committee state that. each member shall not
interrogate a witness, including the time of his answer and time
yielded, for more than 10 minattes.
Because Mr. Macy is the only witness this morning, we will have
time for second rounds of questioning, but the Chair proposes that
these hearings will operate under this 10-minute rule. The Chair will
apply this rule to himself as well as to the other members.
Mr. PooL. At this point., I would like to compliment you for that.
Mr. Ito.Nra.. I want, to say E have been tremendously impressed and
pleased with the attitude of the President toward the civil service
employees and toward those who work for the. Government in all
capacities. I think it has been n long time since we have seen this
degree of enthusiasm and interest in the pay, working conditions, and
morale of people in the civil service. I think it is due in no small
part-and I am sure the witr.ess cannot comment on this-on the kind
of advice the President has been getting.
I am tremendously impressed with the message and the general
thrust of what you are trying to do. I am happy to have had a chance.
to introduce and sponsor the legislation before us this morning.
I know members of this committee are sometimes criticized as
going overboard in proposals for salary adjustments for the Federal
civil service. I think you make the point in your statement. that the
proposal before us will not reduce the remaining gap. There is still
a gap. Even if this bill were passed today, there would be a gap in
common practicability between positions of responsibility in private
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FEDERAL EMPLOYEES SALARY ACT OF 1965 3
enterprise and State and city governments and comparable positions
in the Federal service. All we do in this bill, assuming it is passed, is
to make sure that lag does not get any bigger. Would you care to
comment?
Mr. MAcy. That is exactly the case, Mr. Chairman; there is a recog-
nition that insofar as the private enterprise rates are concerned, this
proposal does not bring the Federal Government all the way up at all
levels to comparability. We believe that by the congressional action
in 1964 a fair level was achieved and a reasonably sound relationship
was achieved, and before further review is made the desirable action
is to maintain the level that was established last year, plus the increase
that has taken place in the marketplace.
It is very important to recognize that we are in a period in our
history where, due to productivity, due to competition for skills, sala-
ries have been rising over a span of time at a rate of about 3 percent
a year. This 3 percent is what is reflected in this particular proposal.
Mr. UDALL. In this connection, right above the sentence that I re-
ferred to, you indicate there is a 6.8 percent lag between private enter-
prise, a 13 percent at GS-11, and a somewhat greater disparity in
higher levels.
The question may well be raised that if there are different lags in
these different grades, why is the proposed salary adjustment about
3 percent in all grades? Why does not the proposal provide that
greater emphasis and greater pay raises be given in these grades fur-
ther behind rather than the overall 3 percent increase?
Mr. MAcy. That is a very valid question and one that has been
raised a number of times. These figures can be expressed in compari-
sons on point of time as well as percentage.
I think we can say that in the lower grades the 1964 enactment
brings comparability as of 1963 to that level. At the middle, its com-
parability as of 1962, and at the top, comparability as of 1961. We
feel, those of us who have been very close to the analysis of this data-
and we have studied it a great deal in the course of the now near?y
3 years since this legislation has been on the books-that it would be a
mistake to propose a plan that would overcome all these differences
at one time.
We are very much aware of the. substantial costs involved in any
salary adjustment. You might be interested to know we now apply a
rule-of-thumb with respect to all of the jobs that are covered by these
salary systems, that to increase salaries jobs 1 percent costs about $135
million. So really, the 1 percent, or a fraction of 1 percent constitutes
a very substantial dollar increase in the payroll..
We feel that although we have confidence in the quantitative meas-
ures that are involved in the BLS survey, and the analyses we make of
that survey, it is important that we continue to gain improvement and
continue to have refinements in that system.
We believe this year the proper action is to maintain the level
achieved in 1964, plus the 3 percent, which represents the 1 year's
increase in private enterprise.
Mr. UDALL. I suppose that you as well as the President have to deal
in all these things with the Bureau of the Budget and that larger
raises in wiping out this lag would have a substantial bearing on hold-
ing the budget in line.
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4R FEDERAT. EMPLOYEES SALARY ACT OF 1865
lfr. 3Lu:-. The l,udget Bureau is an active partner in this whole
rnteipri;e. We feel as an administration an obligation to be certain
we are not moving fortvar,I too fast, and that the increases that are
proposed are suhstautially supported by the evidence received.
Mr. 17"n.1JJ,. Let me hit a couple o? more points before my time
expires.
I want to say I am irn rtssed with tilt' action of the administration
not only in seefring to make rational and orderly adjustments in salary,
but also in recognizing that a. good employer must consider a number
of ot.herthings,
I know in pri rut e industry such things as fringe benefits often are as
important to an employee organization as the actual rate of pay. So
it has been heartening to m3 to see that separate proposals have been
submitted on overtime for certain special employees, the postal enl-
plovees. In myy opinion there never has been any rational excuse for
working these people long I outs without some consideration of over-
time, pay.
The moving expense proposal which you have touched upon is good.
I know I had a coast it dent that was moved by the FAA from the east
coast to _lrizona, and he showed me lie had lost some $SOO by making
this move, I think an enlightened employer certainly does take care
of thissort, of thin=r.
Concerning the severance pay proposal, you indicated this is tie-
simied to give a larger degrte of help to the employees in their forties
or fifties, who are separate:.. Because it. would be more difficult for
them to find employment, wo give them 2 week'' severance pay per
year after 10 years. I think this is very meritorious,
You mentioned unemployment compensation. How does this tie
in -wit.h file severance liay to~~al? For example, supjpose that my ship-
yard is closed in Brooklyn and that although I had worked for many
years, my employment is terminated. Would I get severance pay and
unemployment compensatior or would my unemployment compensa-
tion rights begin when my severance pay ran out?
mr.:Ni_scy. This would depend, Mr. Chairman, on the State in
which the employment actui-lly occurred. I do not know -what the
New York provisions are, so I am not able to respond with respect. to
Brooklyn, but, generally the. States are divided on this.
In some instklnces, if a. private employer has a severance pay plan,
unemployment compensation is not paid until after the severance pay
has been exhausted.
In other cases, they can be received concurrently.
It was the view of the administration that even if unemployment
compensation was provided, the. benefits are at such a level they are not
of sufficient. ausistanoe to help an individual of long service and of
higher age. In fact, [lie prig-ate employers have recognized (leis, and
in many collective bargaining agreements there are now supplemen-
t a rv unemployment- compensation benefits as well as severance pay.
There is a rising concern on the part. of employers, partially moti-
vated by the impact, of automat ion, to do more to assist the employee
who is displaced with interiri financing until he is able to find some
ether work. 'We feel the Federal Government really needs to do this.
I think it is important to recognize this is not an inconsequential
number of employees involved. Our research shows last year the
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FEDERAL EMPLOYEES SALARY ACT OF 1965
Federal Government laid off through reductions in force a total of
18,482 employees. Now, all of those employees would not be eligible
for severance pay. Many of them would not have had enough service-
Some would have been temporaries. Some would have been eligible
for immediate retirement, and if that is the case they would not be
eligible.
This does not represent the total universe that would be covered
by this legislation, but it shows the magnitude of the program.
If the Federal Government is going to keep up with technology and
with the changes in public mission, it is very important that it not be,
inhibited in making these changes because of a natural humanitarian
concern.
Mr. UDALL. This is a very excellent point. As I indicated earlier,
I am going to suggest to the subcommittee that when we begin to
consider writing the bill we may well wish to take up some of these
provisions. As long as we will be considering a more or less omnibus
bill for this year, perhaps we might. write these three proposals into
any legislation we might report.
Mr. MAOY. That would be excellent.
Mr. UDALL. The time of the gentleman from Arizona has expired:
The gentleman from Louisiana.
Mr. MoRRisoN. I certainly want to join with the chairman of the
committee in complimentinthe witness, the Chairman of the Civil
Service Commission. Both-his statement and his presentation were
excellent and well prepared. Over the years he has been most helpful
to the Post Office and Civil Service Committees of both the House
and Senate on so many matters that have come up affecting the Fed-
eral employees of our Nation.
I, like the Chairman,, am very pleased that Mr. Macy himself feels
that the Federal employees deserve a full and comprehensive study of
the very vital field of pay legislation. I am also pleased that his.
statement is an expression of the President's sentiments.
If we go back a few years we realize that the Federal employee
understood that his pay was 20 percent below the going wage of a
person in a comparable job in private enterprise. He, had to feel
that perhaps he did not have the opportunity to voice his opinion
as did a comparable employee in private industry. I think this had
a very serious effect upon the morale of our employees.
I know that in the largest city of the district that I have repre-
sented since 1943 the employees were quitting the Post Office Depart-
ment and going to work in private industry. They were giving up
their rights in the retirement program as well as other fringe bene=
fits to which they had contributed. So many people were leaving that
in order to fill a job the Post Office Department had to advertise not
only on the radio and in the paper, but even on television-
I think that has been brought out to a very marked degree. It
certainly gave the people as a whole a feeling and understanding of
the problems we faced in the Federal establishment as far as pay
legislation was concerned.
I have heard, and I am sure other members have, about economy in
Government. I have always maintained the position that practically
every member, in fact all the members of our committee and cer-
tainly the Members of Congress, have been for economy in Govern-
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FEDERAL EMPLOYEES SALARY ACT OF 1965
meat. We all feel that no one has a monopoly on being for economy
in Government. On the oth'.r hand, I think we certainly have to face
a very important obligation that Congress owes to the Federal em-
ployees, since we have the responsibility for the amount of compensa-
tion they receive for their labors.
I am sure that all of us on this committee have heard complaints
about various pay leislation enacted in the, past, I have heard some
things not too complimentary.
Now, blr. Macy, when a 1~ederal pay raise is enacted by Congress,
does not a substantial amount of that pay go back into the Treasury
through direct and indirect Federal taxes
In other words, although x number of dollars leaves the Treasury
of the United States for salaries, in effect some of it comes back. Is
that not correct?
Mr. MACY. Yes, a portion would come back in income tax, depend-
ing on the income level of the individual employee. The withholding
now is 16 percent. This is withheld and in most cases this covers the
income tax liability of the individual. So I think we could compute
that that percent, or rough'y that eerccnt., would be the minimum
amount that would be returned out of any increase we provide.
Also, we have to recognize that accompanying every pay increase
there are additional costs to the Government such as the increase in
insurance, and the increase in retirement benefits. One of the points
you have been concerned about in one of the subcommittees is the in-
crease in the unfunded liabi'ity that accompanies every pay increase.
We have to recognize that an increase will be reflected in subsequent
retirement benefit increases. But you are right that there are some
limited returns that will ccme back in the form of additional tax
revenues.
Mr. Mon nisow. You use the word "limited." But heretofore when
we have had a pay raise an employee who bought an automobile paid
a certain amount of taxes on that automobile. Similarly, an employee
who had been renting a house might decide he coulown his own
home after a pay increase.. "If this new home were farther from work
he would have to pay a litiJe more in gasoline taxes. Thus it is a
wrong premise to say the pay raise cost x number of dollars and that
the Federal Government is out that much. As you have stated, and
as I am sure the facts front. a comprehensive study would bear this
out, a lot. of these pay increases have come back to the Treasury
through direct taxes and indirect taxes.
I think the actual great reward to the Govermnent has been in the
better morale of its employes. They feel that they are being con-
sidered and appreciated and. that they have someone who will listen
to their side, They can certainly, as the old saying goes, petition their
feelings to Congress as they' have done on so many occasions. So I
believe that all in all the 'ede--ral Government came out best in the
past pay increases. Better morale has engendered better and more
productive work. I certainly feel that the mere fact. that you are here
today making a contribution to the problems that face these Federal
employees will be helpful to further morale building in the
Government.
I certainly am glad to have had this opportunity to hear your
testimony. I know it will oe very valuable to our committee when
we undertake final action on the bill.
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FEDERAL EMPLOYEES SALARY ACT OF 1965 43
Mr. MACY. I appreciate your support on this matter of productivity.
I think this is a point that should be. well recognized not only in these
Halls but across the country. Federal employees have become more
productive. We have seen instance after instance where, there has
been an increase in workload in the Bureau of Internal Revenue, the
FAA, the GSA, where the same employees are accomplishing greater
workloads than ever before, and I think there should be compensation
for this increased productivity.
Also, as a supplement to your brief, I would say there is evidence of
reduced turnover as a result of the better salary levels that have been
provided by the Congress in the last 4 years. This is difficult to pin-
point, but we see a lesser turnover as a result of salary increases and
the assurance that there will be regular consideration in the future
of salary adjustments. Before the last few years it was only occa-
sionally there were proposals for salary adjustments. Now the Presi-
dent has an obligation to review this annually, and the machinery we
are providing here gives an added assurance that it will be given
,consideration.
Mr. UDALL. The time of the gentleman from Louisiana has expired.
The gentleman from Illinois.
Mr. DERwINSKI. I, too, want to compliment you, Mr. Macy, on your
very fine prepared statement as well as your oral remarks. I do not
wish to expand on this eulogy because it might increase your ego
slightly.
Mr. MACY. That is impossible.
Mr. DERWINSKI. You have given us a broad outline of your posi-
tion and you have given the philosophy behind the proposal more
than the details of the proposal. Could you give us more specifics on
how the figure proposed in this bill was reached and soave additional
background?
Mr. MACY. Yes. Let me say, Mr. Derwinski, that in the Bureau
of Labor Statistics study which was released last November 3-and
it may be, Mr. Chairman., that this is another document that may very
well be made apart of the record-entitled "National Survey of Pro-
fessional, Administrative, Technical, and Clerical Pay," Bulletin
1422, this document shows on the basis of a survey of positions similar
to those in the Federal 'dovernment in 80 cities across the country,
that there was approximately a 3-percent increase in salaries in those
particular occupations and locations from 1963 to 1964. There is
some variation in the 3-percent margin depending on the different
,occupations, but the average increase worked out about that way.
Mr. PooL. Will the gentleman yield?
Mr. DERWINSI{I. Yes.
Mr. PooL. Did they 'analyze the equipment the employees used and
things like that?
Mr. MACY. You mean the equipment used by employees in private
enterprise?
Mr. PooL. Yes.
Mr. MACY. The comparison, Mt. Pool, is made on a very careful job
comparison. In other words, there is % ,description of what is done
in the Federal Government and then a matching of that set of duties
in private enterprise, so that we do not just compare job descriptions
-but the particular functions.
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44 FEDERAL EMPLOYEES SALARY ACT OF 1065
So, in answer to your question, if the equipment involved was a
computer on which the individual employee was doing programing
work, we would have to have a similar function with similar equip-
ment in making the comparison in private enterprise.
Mr. POOL. Thank you. 1. will get into that. more when I have my
turn.
Mr. %cy. This informa;ion was turned over in this form to the
professional staff of the Budget Bureau and the Civil Service Com-
mission and t.liey analyzed this and produced a statistical pay line
which showed the average salary at each of the grade levels within
the Classification Act and then projected a line.. Since we do not
collect data through the Bureau of Labor Statistics above grade 15,.
for grades 16, 17, and 18 there was a straight line projection of the
curve to cover the total range. of grades in the Classification Act.
Then a schedule was constaaicicd for each grade using the average
rate as the fourth step. 'hen, once that was constructed for the
Classification Act., by using the linkage points in the 19G2 act a similar
projection was made for the postal service, Veterans' Administration,
and Foreign Service.
These schedules which are now included in II.R. 8207 are those
-which carry over [lie 3-percent increase that was reported in the year
under study.
Mr. 1)Erwi rsicr. In your prepared statement you emphasize your
principal remaining problems, and you seem most. concerned with
vvhat you call the static chary Ater of salaries at the middle- and upper-
grade levels. It is your inter;tion, then, over a period of time, to cradi-
cato this problem?
Mr. MACY. Yes. I think there has been decided progress in the
two recent. Salary Acts for providing a better relationship between the
lower end of the scale and the middle and upper ends of the scale.
'What. we have found is that over a period of time, as there are adjust-
ments in career salaries:, we r?un into a situation of compression at the
top because of the fixed nature of congressional and executive salaries.
So one of the purposes in this quadrennial review would be to evaluate
the relationship of fop sala.rie:: to top positions outside and to determine
what changes should be made, because those changes will influence- our
;ability to maintain pace with the market, particularly at. the middle
and itp1per steps of the Classificn.t.ion Act..
1fr. DraIWINSxt. In the past. we have had difficulty filling some
Positions at the lower levels. I have not noticed any lack of interest
in congressional positions because of salary considerations. Is the
President. having difficulty filling Cabinet and sub-Cabinet positions
because of the salaries?
Mr. MAcv. There is decided difficulty, particularly in the sub-
Cabinet and lower levels of t1 e executive pay scale when the Govern-
inent approaches someone, in a top executive position in private in-
dustry. The salary and gross compensation of executives in large
corporations has reached such a high level that it, is doubtful we
shall over become comparable or within range. This means that an
individual who accepts such a post in Government has to accept. a very
substantial reduction. We have found since the, passage of the 196-1
act, which substant-ially imprc-ved the Cabinet, and sub-Cabinet rates
of pay, there has been a reater willingness to serve because the differ-
In
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FEDERAL EMPLOYEES SALARY ACT OF 1965 45,
ence is not of such magnitude. I do not think we will ever meet the
salaries of top executives positions in General Motors, even though
the comparable positions in the Federal Government may carry greater
responsibilities than those in General Motors.
Mr. DERWINSKI. Inasmuch as Congress has produced substantial
proper adjustments of Federal salary schedules, it seems to me this
weakens your argument that C'ongress in the future might not effec-
tively work in this field.
Mr. MACY. This is a very valid question. Let me see if I can be
responsive to it.
I believe our experience in 1963 and 1964-which is really our first
2 years under the Salary Reform Act-indicated the difficulty that
the Congress had in enacting an adjustment in rates even when the
principles were rather precisely spelled out. It took the better part of
2 years to actually accomplish this, which means there was a farther
falling behind as far as the rates are concerned. And it has been
expressed by Members of Congress as well as people in the executive
branch that it would be effective to reduce the amount of legislative
action called for in order to bring about the adjustments, and the feel-
ing of the panel is that an existing device which has been tested, and
tested just recently, could effectively be used to achieve the adjustments
now that Congress has spelled out such a comprehensive framework
of principles within which the adjustments should be made, and there
would be an opportunity within the 60 days to have just as extensive
hearings in reviewing the data used in establishing those rates, but it
means there would not be such an. extensive consideration of alterna-
tive proposals. Congress would still be free, if it rejected the Presi-
dent's plan, to come up with something else.
Mr. UDALL. The time of the gentleman from Illinois has expired.
The gentleman from Montana.
Mr. OLSEN. It is a pleasure to see you here again, Mr. Macy, and
I concur with the chairman and my colleagues that you always make a
very excellent statement and contribute greatly to the solution of all
problems of Federal employment, especially the salary problem.
Mr. MACY. Thank you.
Mr. OLSEN. But with respect to this problem of timelag-and when
we talk about timelag we mean lagging behind private employment
in pay-do you. think the Congress materially or greatly contributes
to that timelag?
Mr. MACY. Yes, I do. I believe that if the proposal incorporated in
H.R. 8207 were enacted it would be possible to put scales into effect
in about 12 months after the reference month of the survey and that
this would substantially reduce the timelag.
Mr. OLSEN. The reason I asked that, it seems to me the Congress,
in the three pay acts that I have seen, has been willing to go further in
closing the gap between private employment and Federal employ-
mentthan has the Commission or the recommendations of the Presi-
dent. I think that is demonstrated again today. I wonder why it is
you do not want to close the gap with the recommendations that the
'resident sends up here today?
Mr. MACY. In answer to your first point, I think the Congress has
been eager to see greater comparability achieved quicker at the lower
end of the scale, but it has been slower in achieving comparability at
the middle and upper ends of the scale.
49-591-,s5- 4
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66 FEDERAL EMPLOYEES SALARY ACT OF 1885
Mr. OLSEN. Do you not think it would have been virtually impos-
sible to pass a pay raise bill here at all if we had not listened to the
people representurg individuals at the lower end of the pay scale?
Mr. MAcv. I would feel that under the principles in the Salary
Reform Act, for which I believe there was universal support at the
time of the hearings in 1962, it would mean that once we have reached
a comparable scale at. all levels it would be possible to put this into
effect in a more expeditious fashion than in the past..
Mr. OLSEN. In this recommendation the President sends up here
today, you do not recommend full comparability?
-Air. MACY. No. The President is recommending that we maintain
the position that the Congress established in 1961 for this year plus
3 percent.
Mr. OLSEN.
Is this not a violation of our comparability law estab-
lislied in 1962?
Mr. M tcr. No, I do not think it is a violation of the law.
Mr. OL.sFN . It is not. compliance.
Mr. MAcv. This is a continuation of what Congress considered to be
comparability last year. This is a continuation of what Congress, fol-
lowing its own principles, applied last year by adding on the 3 percent
difference which is revealed by the survey.
,Air. Or.,sEN. Would the CDmmision have any objection to the com-
mittee here attempting to improve on II.R. 8207 and bring it up com-
pletely to comparability?
Mr. MACY. es. The acsninistration's position is that 3 percent
represents the maximum amount desirable for this year.
Mr. OLSEN. They do not recommend that we have full compare-
bility this year?
Air. MAOY. No. We frankly say there are still some gaps in com-
parability, but we think we should maintain pace with what Congress
set last. year until we tithe a further look at the structure and relation-
ship of the pay systems.
Mr. OLSEY. I3o you have any opinion on what percents would remain
lagging under this act?
Mr. 1ACY. Well, it will preserve the present patterii of lag that was
enacted by the Congress in 196-1, which would be, at the lower level 1
year behind, at the middle level 2 years behind, and at the top level
3 years behind.
Sir. OLSEN. Who were the people on the special panel on Federal
salaries?
Mr. MACY.. The Government members were the Secretary of Defense,
the Secretary of Labor, thE: Postmaster General, the Director of the
Bureau of the Budget., and the Chairman of the Civil Services Com-
mission. The outside members were Don K. Price of the Litta.uer
School at Harvard; Marion Folsom, an executive of Eastman Kodak,
served as chairman; General Bradley served and provided the benefit
of his long experience with the military ; President ieany of the AFL-
CIO; and Sydney Stein, a businessman from Chicago.
Mr. Or SFx. how often did they meet?
Mr. MAcY. I believe they had four full-days meetings and they did a
lot of individual work between meetings and materials were provided
to them similar to those I have provided to the committee, and the
report you see attached to Document No. 170 was the final product of
their work.
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FEDERAL EMPLOYEES SALARY ACT OF 1965 :fT
Mr. OLSEN. Was their recommendation unanimous?
Mr. MACY. There are some supplementary comments by President
=Meany and General Bradley that appear on pages 24, 25, 26, and 27 of
Document No. 170. These supplementary views primarily related to
.military personnel. a
Mr. OLSEN. That is with respect to General Bradley's statement?
Mr. MAOY. Yes; and to some extent President Meany's statement as
well, although he also expresses his views with respect to the 3-per-
=cent increase and feels that it should be greater than that.
Mr. OLSEN. Have you any figures at hand that would reflect what
the increase should be at grade PFS-4 or grade 5 to obtain full com-
-parability, say, for January 1, 1966?
Mr. MACY.. We do not have any data more recent than the 1964
:report. Based on that report, full comparability at grade 5 and
.PFS-47 as I recall it, would be an increase of about 5 percent. Is
that right, Mr. Stahl?
Mr. STAHL. I do not recall the percentage.
Mr. MACY. Do you have that, Mr. Hare?
Well, I will correct the record. My recollection is it is about 5
;percent or about 2 percent more than what is proposed here. (NOTE:
`The correct figure is 3.5 percent.)
Mr. OLSEN. Do you have any information on what increases have
,,occurred'in private industry since the study of 1964?
Mr. MACY. No. The 1965 report will not be in our hands until the
fall. It is still in process at the present time.
Mr. OLSEN. Mr. Chairman, do you expect to have the Chief of the
Bureau of Labor Statistics testify?
Mr. UDALL. They are willing and able. We have not scheduled
.them as yet.
Mr. OLSEN. In this regard I would like to have them testify, be-
-cause Mr. Ewan Clague gave very valuable. testimony at our last pay
hearing regarding the increase in pay that occurred subsequent to the
report made m the last pay hearings.
Mr. UDALL. I think it is an excellent suggestion and we will take
it up
The time of the gentleman from Montana has expired. The gentle-
man from Texas.
Mr. PooL. Mr. Macy, first I want to compliment you on your testi-
mony. I always enjoy listening to you because you know your sub-
ject better, I suppose, than any witness we have ever had before this
subcommittee.
Mr. MACY. 'Thank you.
Mr. PooL. I do want to agree with my colleague, Mr. Olsen, when
he says we should have complete comparability if we are to use com-
parability as a principle to go on.
It seems to me this Advisory Committee has overlooked one point,
and that is if you are to have complete comparability you will have to
go from the top down. Maybe I should not bring this out today, but
as long as Congressmen are getting $30,,000, that is your top and you
work down from that.
Mr. MACY. That is correct.
Mr. PooL. I voted for the pay raise for Congressmen and for every-
body else, on the comparability theory, and I thought I would probably
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FEDERAL EMPLOYEES SALARY ACT OF 1985
catch criticism, but. I did all right. Actually, I do not see how you will
accomplish this elirniccation of rile lag if you do not tackle the congres-
sional pay. I would have been willing to vote for $35,000 for Congress-
men last time.
M1lr. _AL icy. Good for You.
Mr. UDALL. if the gecitlecnan Will yield, this is precisely the point
I raised :Why don't you have full comparability? The answer is that
if you did, a Gs--18 would be getting $27,500. The Indians would be
getting more than the chiefs. The devise of a 4-year review would take
care of this problem so you could have full comparability.
Mr. Poor,. In rim future will they tackle congressional pray again?
Mr. 3lacr. Yes. In title 11 of 1I.1'. 8207 there is a provision whereby
the proposed Federal Salary Review Commission will, on a 4-year
basis, take a look at congressional pay so we will not have to go for 10
years, as we did last time, or more than 30 years before the last. time.
So it needs to be reviewed and adjustments made if we Will maintain
comparability, or we Will get- to compression at the top.
If this legislation were enacted it would mean the President of the
United States, the President of the Senate, the Speaker of the House
of Representatives, and the Chief Justice of the United States would
name people to this Commission prior to January 1 of next year. They
would study congressional salaries, executive salaries and judicial
salaries during the course of the Year and come up with a. proposal
the President would have to submit to the Congress before the first
of the following year. So 2 years hence there will be an opportunity to
take a look at. a specific proposal as to how the top salary proposals
should be handled.
Mr. PooL. There is one other thing I have not heard discussed. Does
this cover rural route posta' employees?
Mr. itLAcy. Yes. This covers all postal employees.
Mr. PooL. I have heard the suggestion that instead of having the
rural route people furnish their own cars, that cars would be furnished
by the General Services Administration. Does this mean they would
have to have considerably more pay than at. present because now they
furnish their own cars and do the work on their cars themselves.
Mr. MACy. No. The proposal to have them use GSA cars is based
on a cost study that shows several cents a mile can be saved for the
Federal Government if this is done.
Mr. POOL. But it directly af?ects their pay?
Mr. MAcy. Yes, but allowa-ice for cars is not considered as compen-
sation. The view is that thi~ is a factor that should not be included
as a. part. of compensation.
Mr. POOL. As a practical natter it is a part of compensation.
Mr. M:kcv. That is why tliece jobs are so attractive.
Mr. POOL. I do not. think they will be so attractive under this other
proposal.
Mr. MAcv. I believe they wall.
Mr. PooL. I disagree with you.
Mr. L-D.%,LL. Tile time of the gentleman from Texas has expired.
We, have a limited amount of time left. Tim chairman will impose
a 4-minute rule for the second round.
I have a. couple of inquiries.
Mr. llfaey, I have noted the statement. here this morning has dis
cussed two devices in the bill before us. One is that the annual Com-
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FEDERAL EMPLOYEES SALARY ACT OF 1965
mission or Board would submit proposals for pay to the President,
who would then submit these proposals to the Congress.
Mr. MACY. In that instance it is not a Board. This is an additional
step in the procedure already embodied in the 1962 statute by adding
the Reorganization Act device for enactment.
Mr. UDALL. I am wrong about that.
The other is the quadrennial adjustment of congressional, execu-
tive, and judicial pay. Would you agree this is similar in its purpose,
although different in its mechanism, to the proposal submitted by me
a year ago which would have made an automatic adjustment?
Mr. MACY. This is a close cousin to your proposal last year. The
intent is to provide, as I believe your amendment did, that a. disin-
terested group make the actual study and make the recommendation to
the President. I do not think your amendment that the Reorganization
Act device in it. I think it was to be controlled by appropriation or
the budget?
Mr. UDALL. That is right.
Mr. MACY. We have also added to this a feature which it seems to us
now is most appropriate, and that is that there be a total review of
.structure and relationship. This is an added protection, if you will, to
the Congress so the proposals they get on an annual basis will be ac-
cording to the principles of the act and that changes in principles will
come in the quadrennial review.
Mr. UDALL. I find great support for the quadrennial proposal. I
believe I am in the majority on this. But Congress is very jealous
of its prerogative under the annual principle.
Mr. OLSEN. If the chairman will yield, I believe the chairman is in
the minority.
Mr. UDALL. There seems to be a long gestation period in Congress.
It seems to me the function of Congress is to make broad policy. For
example it cannot decide what should be done in the military on a
day-to-day basis. It seems to me that if Congress sets the broad
policy of comparability, we could spend the limited time we have on
other matters and let this semiautomatic device go into effect.
I simply wanted to take the time I had to say there is at least one
member of this committee that thinks the idea has some merit. I do
not low how far it will go. Mr. Olsen has indicated I am in the
minority
Mr. MACY. Let me say even though gestation periods are long,
you have a precedent 103 years old. on the wage board system, which
covers some 600,000 employees, where Congress laid down the prin-
. ciple in 1862 that rates of pay should be set in accordance with pre-
vailing rates for similar work in the community. That has been
operating very successfully ever since. In this proposal there is a
great deal more in the way of congressional review that is involved
in that.
Mr. UDALL. According to counsel my time has expired. The gentle-
man from Louisiana?
Mr. Momxisox. I have no further questions.
Mr. UDALL. The gentleman from Illinois?
Mr. DERWINSKT. I assume if the Congress tries to enact legislation
that would advance the effective data before 1966 this would have an
:adverse effect on the budget calculations. Would the President then
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50 FEDERAL EMPLOYEES SALARY ACT OF 1965
be supporting us in mainta ping the January 1 date rather than an
earlier date?
Mr. 11LLcv. Very definitely.
I fr. Draiwix8KI. On the question Mr. Udall raised of the policy-
making authority that the Congress might maintain in contrast to
the surrender of authority in this field I recall the 1964 congressional
debate on the salary bill. The big problem, as I saw it, was that Con-
gress was torn between two conflicting forces. The press concen-
trated almost entirely on the congressional salary structure. I con-
sidered this poor reporting and yellow journalism. On the other
hand, being an election ye,-.r, Congress was under pressure by the
employee groups who were beating Congress over the head for ab-
normal pay increases. One fact of life in politics is if you cannot
stand the heat, get out of tie kitchen. It seems to me Congress ad-
justed admirably to the pressures, so I am not inclined to be pessi-
mistic on the ability of Congress to meet its reslxonsibility. Therefore
I feel congressional defense of this prerogative might. well be the
main issue in this year's discuision.
Mr. MACv. I appreciate this is a departure. It is the objective of
this not only to expedite, bu; to regularize. I think it is significant
that the dates of previous pa V adjustments have been 1964, 1962. 1960,
and 1958. I suppose there is more than it coincidence to the fact that
the even years seem to be tho years of adjustment.. It is the view of
the Executive that the orderly and regular way would be to have
an annual review and annual action and, frankly, to try to take the
setting of salaries out of politics and to establish some rational basis
for making these adjustments. The Congress has extremely impor-
tant policy considerations it must face and yet in the last few years
pay has been a dominant. and time-consuming feature. So it seems it
is a responsibility for both b--anehes without eliminating the congres-
sional authority to make the basic review.
Mr. L'DALL. The time of the gentleman from Illinois has expired.
The gentleman from Montana.
Mr. OLSEx. Thank; you. Like my colleague, Mr. Derwinski, I am
not pessimistic of the ability of Congress to cope with these pay prob-
lems and I am not as worrieul as the chairman is that we would have
all chiefs and no Indians. My observation is that every time one of
these pay bills comes up, here the greater emphasis by the panels is
on larger increases in the higher grades. Looking at the President's
recommendation, 3 percent o.' $5,000 is only $150 a year increase, and
I do not see much steam for that kind of a ply increase. I do not
think you can pass this bill at all with that kind of a pay increase,
for the rank and file. We certainly will not. ,get support for this pay
bill or any pay bill unless the Pr 8-4's and CGS--5's get more dollars
to take home My calculation is this would give a PPS-4 an increase
of $5 per pay period. They will not fight very hard for that kind of
pay increase and unless it Is bigger this bill will not see the light of
day at all.
Mr. MAcr. This is the reason for the administration's proposal that
other machinery be devised, because the fact that action depends on
this kind of steam indicates we still have not set the pattern.
Mr. OLsax. You have a point., and it is not a bad one, except., as
Mr. Derwinski said, we copeI with it and got a pay bill passed and
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FEDERAL EMPLOYEES SALARY ACT OF 1965 11
a 'big one. 'The trouble with turning it over to a committee dominated
by the President is that they would pay more attention to the Presi-
dent's budget than comparability. I think the President ought to
have confidence in the Congress that we will go along with him and
pay attention to the budget and pay atten ion to the lower pay grades
and that we will do a pretty responsible job as I have observed we
have done in the past.
Mr. MACY. I think certainly the 1964 act, which was strongly sup-
ported by the administration, was a fine enactment. In fact, we think
it was sufficiently sound that we propose a 3-percent increase on that
without making further changes at this time.
Mr. OLSEN. My observation there, again, is that the administration
came along rather slowly to do anything about the lower pay grades.
Mr. MAOY. The lower pay grades are already and always have been
far closer to comparability because Congress, through the years, has
always provided greater increases at the lower grades.
Mr. OLSEN. The reason is, that is where the steam is.
Mr. MAOY. Will you do this on principle or on steam? It seems
that is what we are debating.
Mr. OLSrN. I think we try to do it on comparability and based on
principle but we have to face the facts of life and the facts are we
pass a bill because it has some steam behind it as well as principle.
But it sure has to have some steam.
Mr. UDALL. The gentleman from Montana has a lot of principle and
a lot of steam., but his time has expired. The gentleman from Texas.
Mr. PooL. Mr. Macy, I would like you to furnish the committee in-
formation on this comparability study, how you arrived at your figures.
Mr. MACY. As a matter of fact, Mr. Pool, this is spelled out in Docu-
ment No. 174.
Mr. PooL. I am thinking along this line: Maybe these lower eche-
lons the gentleman from Montana is talking about possibly could jus-
tify more than a $150 pay raise a year. I do not know.
Mr. MAcv. I would be happy to sit down with you and go over the
'material in detail and show how we arrived at it.
Mr. OLSEN. Will the gentleman yield? That is why I would like
the Bureau of Labor Statistics to come up and discuss this timelag.
Mr. MAcv. I tried to answer that.
Mr. OLSEN. I think it would be 5 percent.
Mr. MACY. In answer to your earlier point let me give you specific
figures. In H.R. 8207 the proposed fourth rate for GS-5 and PFS-4
would be $5,660. If you took absolute comparability, the fourth rate
would be $5,690. The present rate is $5,495. That would be $30 more
to be absolute comparability. In other words, this bill, as it stands,
brings the fourth rate of PFS-4 within $30 of annual salary com-
parability.
I was in error when. I said 5 percent. It is 3.5 percent.
Mr. PooL. 0.5 percent is the lag?
Mr. MACY. Yes.
Mr. POOL. As of what date?
Mr. MAcy. As of the 1964 report, and the reference month is March.
Mr. POOL. March of 1964?
Mr. MACY. Yes.
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FEDERAL EMPLOYEES SALARY ACT OF 1965
Mr. OLSEN. So for January 19GG we will have a great
the 3.5 deal more than
Mr. 1Lcy. You would have more than 3.5; that is right.
MIr. PooL. Mr. Chairman, I am not quite through.
Mr. 1JDALL. You have about 30 seconds left..
Mr. POOL. have you taken into considirrat loll the saving you will
have on the ZIP code?
Mr. MIACF. Mr. Pool, I will yield on that to nay good friend, Mr.
Gronouski. I have plenty of steam and no "ZIP."
_MLr. I.-DALL. Unless there ).re further quest ions we will conclude the
hearing. As always, Mr. Macy, you have been very helpful.
We Will recess until 10 o'clock tomorrow morning. We will start
promptly and will hear the Honorable John A. Gronouski, the Post-
master General.
Mr. MIAcr. And if you desire any further information from me,
please call me.
(Thereupon, at 11:55 a.m., the subcommittee adjourned, to recon-
vene Wednesday, June 2, 19(;5.)
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FEDERAL EMPLOYEES SALARY ACT OF 1965
WEDNESDAY, JUNE 2, 1965
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON COMPENSATION OF THE
COMMITTEE ON POST OFFICE AND CIVIL SERVICE,
Washington, D.C.
The subcommittee met at 10 a.m., in room 205, Cannon House Office
Building, Ilon. Morris K. Udall (chairman of the subcommittee),.
presiding.
Mr. UDALL. The subcommittee will come to order.
We will continue this morning with further hearings on the bill,
H.R. 8207, the Federal Salary Adjustment Act of 1965, and on a num-
ber of related bills dealing with compensation of employees of the
Federal Government.
Before beginning the testimony this morning the Chair would
announce that yesterday I introduced H.R. 8693. This is a bill to
provide premium pay under specified conditions to certain employees.
in the postal field service. This bill has been referred to the full.
committee and will be referred to this subcommittee. This bill was
discussed yesterday by Mr. Macy of the Civil Service Commission
and in a colloquy between Mr. Macy and the members of the sub-
committee.
Without objection, the bill H.R. 8693 will be printed in the record'
at this point so that we will have it before us as a part of the hearing:
record.
(The bill, H.R. 8693, follows:)
[H.R. 8693, 89th Cong., 1st less.]
A BILL To provide premium pay under specified conditions to certain employees in the
postal field service, 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 3571 of title 39, United States
Code, is amended to read as follows :
3571. Maximum hours of work
"(a) Except as otherwise provided in this title, employees may not be required
to work more than eight hours a day. The work schedule of employees shall be
regulated so that the eight hours of service does not extend over a longer period.
than 10 consecutive hours.
"(b) The Postmaster General shall establish work schedules in advance for
annual rate regular employees consisting of five eight-hour days in each week."
SEC. 2. Section 3573 of title 39, United States Code, is amended to read as,
follows
"?3573. Compensatory time, overtime, and holidays
"'(a) In emergencies or if the needs of the service require, the Postmaster Gen-
eral may require employees to perform overtime work or to work on holidays..
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54 FEDERAL EMPLOYEES SALARY ACT OF 1965
Overtime work is any work officially ordered or approved which is performed
by-
"(1) an annual rate regular employee in excess of his regular work sched-
ule determined after deduction of any absence without pay ;
"(2) an hourly rate regular employee in excess of eight hours in a day or
forty hours in a week ; and
"(3) a substitute employee In excess of forty hours in a week.
The Postmaster General shall determine the day and week used in computing
overtime work.
"(b) For each hour of overtime work the Postmaster General shall compen-
sate an employee in the PIPS schedule as follows :
"(1) Ile shall pay each Employee in or below salary level PFS-7 premium
compensation at the rate of 150 per centum of the hourly rate of basic com-
pensation for his level and step computed by dividing the scheduled annual
rate of basic compensation by 2050.
"(2) He shall grant each employee in or above salary level PFS-8 com-
pensatory time equal to the overtime worked, or in his discretion in lieu
thereof pay such employee premium compensation at the rate of 150 per
centum of the hourly rate of basic compensation of the employee or of the
hourly rate of the basic compensation for the highest step of salary level
PFS-7, whichever Is the le:;ser.
"(c) For officially ordered or approved time worked on a day referred to as
a holiday in the Act of Decemter 26, 1041 (55 Stat. 862; 5 U.S.C. 87b), or on a
day designated by Executive order as a holiday for Federal employees, each
employee, under regulations pr. scribed by the Postmaster General, shall either
be granted compensatory time In an amount equal to the time worked within
thirty working days, or be paid for the time so worked a premium compensation
at a rate equal to his hourly basic compensation. For work performed on Christ-
mas Day, premium compensation shall be paid at a rate equal to 150 per centum
of the employee's hourly basic compensation.
"(d) The Postmaster General shall establish conditions for the use of com-
pensatory time earned and the payment of premium compensation for unused
compensatory time.
"(e) If an employee Is entitled under this section to unused compensatory
time at the time of his death, the Postmaster General shall pay at the rate pre-
scribed in this section, but not less than a sum equal to the employee's hourly
basic compensation, for each lour of such unused compensatory time to the
person or persons surviving at Cie date of such employee's death.. Such payment
shall be made in the order of arccedenee prescribed in the first section of the
Act of August 3, 1[)Z0 (5 U.S.C. 61f), and shall be a bar to recovery by any other
persons of amounts so paid.
"(f) Notwithstanding any provision of this section other than subsection (e),
no employee shall be paid overtime or premium compensation for a pay period
which when added to his basic compensation for the pay period exceeds one
twenty-sixth of the annual rate of basic compensation for the highest step of
salary level PFS-17.
"(g) For the purposes of this section and section 3571 of this title-
"(1) 'Annual rate regul[:r employee' mean an employee for whom the
Postmaster General has established a regular work schedule consisting of
five 8-hour days In accordance with section 3571 of this title.
"(1) 'Annual rate regular employee' means an employee for whom the
Postmaster General has established a regular work schedule consisting of
not more than 40 hours a week.
"(3) 'Substitute employee' means an employee for whom the Postmaster
General has not established it regular work schedule."
SEC. 3. Section 3575 of title 39, United States Code, Is amended to read as
follows :
'% 3575. Exemptions
"(a) Sections 3571, 3573, and 3574 of this title do not apply to postmasters,
rural carriers, postal inspectors, and employees in salary level PYS-15 and above.
"(b) Sections 3571 and 3573 of this title do not apply to employees referred
to In section 3581 of this title
"(c) Sections 3571 and 3578(c) of this title do not apply to substitute em-
ployees.
"(d) Section 3571(b) of this title does not apply to hourly rate regular
employees."
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FEDERAL EMPLOYEES SALARY ACT OF 1965 55
SEC. 4. This Act shall become effective on the first day of the first pay period
which begins on or after the date of enactment of this Act.
Mr. UDALL. The chairman will have to attend another subcommittee
meeting shortly. I will leave Mr. Morrison and Mr. Olsen, who are
highly renowned as presiding officers, to take my place.
I would like to announce that at the conclusion of today's testi-
mony we will adjourn until June 100, a week from today. At that time
we will hear' Mr. Elmer B. Staats, of the Bureau of the Budget, and,
at the suggestion of the gentleman from Montana, Mr. Olsen, we
will hear Mr. Ewan Clague, of the Bureau of Labor Statistics. Follow-
ing that, the next meeting will be on June 15, when we will begin hear-
ing from representatives of various employee organizations. The first
will be Mr. Jerome Keating, representing the National Association of
.Letter Carriers.
Our witness this morning is the Postmaster General., the Honorable
John A. Gronouski, who is accompanied by Mr. Richard J. Murphy,
Assistant Postmaster General, Bureau of Personnel, and Mr. Herbert
Block, Director, Compensation Division, Bureau of Personnel.
General Gronouski, we are happy to have you and your associates
with us this morning. I understand you have a prepared statement
which you wish to present. We will be delighted to have you proceed
in that fashion, and you may go ahead with that testimony, sir.
STATEMENT OF HON. JOHN A. GRONOUSKI, POSTMASTER GENERAL;
ACCOMPANIED BY H:ON. RICHARD J. MURPHY, ASSISTANT POST-
MASTER GENERAL, BUREAU OF PERSONNEL; AND HERBERT
BLOCK, DIRECTOR, COMPENSATION DIVISION, BUREAU OF PER-
SONNEL, POST OFFICE DEPARTMENT
Mr. GRONousKI. Thank you, Mr. Chairman.
I appreciate this opportunity to present to this committee our views
both on the proposed pay bill and on the need for modernizing the
laws covering premium pay for overtime work in the postal service.
It is an exhilarating experience to be part of an administration
which has dedicated itself to an active and constructive approach to
personnel and labor relations. It is easy to talk about needed reforms.
It is far more difficult to follow through on them.
Congress acted in 1962, when the basic reforms on Federal pay ad-
ministration were conceived. And again last year Congress followed
through when it became clear that action was needed to adjust con-
gressional salaries as well as those of the judicial and executive
branches at the top policy level. I commend the Congress for its
courage in facing up to situations that demanded action.
I am happy to say that this administration, as well as that of the late
President Kennedy, has supported salary increases for postal work-
ers which, since 1962, have averaged 16.8 percent and added up to
some $613 million. Pay setting, however, should not be merely a
stopgap procedure. As long as we have a growing, changing, and
competitive economy, the Federal Government must be prepared to
adjust its salary rates .accordingly in order to attract and retain compe-
tent personnel.
This was the keystone of the initial reform measure enacted in
1962. It was not just another pay increase, as enacted so often in
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FEDERAL [:MP ,OYEES SALARY ACT OF 1965
the past. It set forth some extremely important principles on pay
setting and pay relationships, togetlier with a methodology for their
execution. Now, after 3 wars under the act, and after lt$ first test
in 19ti4, its techniques ana) concepts have become widely accepted by
both Federal and employee union officials.
In other areas where' corrective legislation was needed to assure
progressive aeasonanel policies and procedures, we have sought con-
gressional adjustment.. Last. year, for example, we either initiated
or concurred in legislation whicli-
1. Permitted fees from money order sales to be counted as revenue,
enabling us to increase the 3.aalaries of postmasters in the lower grades.
2. Increased fees for th,3 delivery of spacial delivery mail in the
small towns -where it is delivered on a. fee basis,
3. Corrected situations where. some seniors were receiving less
money than their juniors.
4. Established an extra pay step for the bulk of our supervisors
(PFS-,).
:a. Authorized annual salary increments in each level to step 7.
While our proposal to adjust the salaries of postmasters in fourth-
class offices was not accepted, their revised schedules and sizable pay
increase can be considered real progress.
This year we have again proposed some needed legislative changes.
We asked to be excluded from the eau ~loyment. ceiling` imposed by
the W'1'hitten amendment. We testified in favor of the 5-day work-
week for postmasters who work at least. 40 hours within 5 days.
And we strongly urged both Appropriations Committees to give us
sufficient manpower to eliminate excessive and uneconomical over-
time, and to peanut regularizing postal employment over a 40-hour
week.
Our objective, as I have said, is to assure sound and progressive
personnel practices. It. we 3 also the objective of the. President's Spe-
cial Panel on Federal Salaiies, of which I was happy to be ,-L member.
The Panel comprised a balanced cross section of leaders in the fields
of education, labor, government, and industry. While they repre-
sented a viewpoint hardened by experience, they had sufficient breadth
and wisdom to take a broac:, constructive, and long-range view of the
entire scope of Federal salaries.
Frankly, I was impressed with the opportunity afforded all of u,
to learn something about the special pay problems of other services.
to think about the national economic. implications of Federal pay,
and to participate in reaching a consensus as to what ought to be
recommended for the national welfare.
Perhaps more than anything else, the work of the Panel convinced
me of the need for a pperiodic review of the Federal pay structure by
people of varying backgrounds who are not limited in their outlook to
special overriding considerations, I urge dais committee to approve
the President's recommendations for a Federal Salary Review.- Com-
mission which will meet every 4 Tears to make a fresh'current evalua-
tion of the. total salary requirements to operate the Federal Govern-
ment efficiently, economically, and competitively.
One of the most pressing issues before the Sala ' Panel. and before
the President, was the question of what kind of pay adjustment-if
any-was appropriate during the next fiscal year. As you know the
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FEDERAL EMPLOYEES SALARY ACT OF 1965 57-
Panel' recommended an average increase of 3 percent. This recom-
mendation was reached after much debate. We realized that past
adjustments, while most commendable, did not achieve full compara-
bility for each of the levels on the same scale. The goal of full com-
parability seems right and necessary. We were more concerned,
however, with the long-range goal of achieving what I might: call
"systematic comparability."
We decided to take care of the immediate problem by making a
"productivity" pay adjustment of 3 percent. This would not cause any
lost ground in pay standing already achieved..
We also decided to recommend a method for attaining "systematic
comparability." This would permit Congress to focus on some pro-
posed structural changes which we believe are imperative if we are
to establish a permanently sound wage scale. The first of these
changes would be the quadrennial review of which I spoke earlier, and
second, an annual review and implementation procedure which could
be activated on a systematic basis.
The quadrennial review would, in effect, give Congress an oppor-
tunity to review the entire pay structure for all branches of the Gov-
ernment and set ceilings under which career salary rates could be
established. These rates would be adjusted annually, based on an
analysis by the Bureau of Labor Statistics of the wage rates generally
prevailing in the private sector, using the concept of "comparability."
If we accept that concept, together with the standards and guide-
lines set by Congress, I think we will have reached a sound working
relationship between the Congress and the executive branch for expe-
diting pay adjustments as needed.
I recognize that the 3.-percent productivity increase still does not
dive full comparability .to employees in the middle and higher
hrackets=otir supervisors and postmasters. But I am hopeful this
will be remedied by the,Salary Commission under the quadrennial
review proposal.
It is our hope and intent to achieve full comparability for all levels
at an early date. That objective, however, should not divert us from
the larger goal of developing a defensible and lasting pay structure.
Another proposal before Congress would permit the President to
establish a new, pay rate annually-subject to a veto by either House
of Congress. This is the process the President is authorized to use
for reorganizing the executive branch. It has proved to be an expe-
clit.ious and efficient technique.
This would shorten the timelag for achieving comparability. It
would enable Congress to bypass, some of the time-consuming process
of legislative hearings. At the same time, it will not vitiate any of
the constitutional powers and authority now vested in the Congress.
In addition to the annual veto power, Congress also has the unre-
stricted right to initiate any pay legislation it considers necessary.
I have spoken only in the broadest terms about the structural
changes proposed by the President and about the average increase of
3 percent since other administration spokesmen have gone into the
specifics of those proposals. The matter I wish, to spend most of my
time on-and the one of extreme importance to the Post Office De-
partment-is the whole question of premium pay and compensatory
time for overtime work in the postal service.
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ERAL EMPLOYEES SALARY ACT OF 1885
Early in my tenure as Postmaster General, I learned to my amaze=ment that:
1. We were regularly working large numbers of employees for ex-
cessively long periods of time over the commonly accepted 40-hour
week.
2. Our substitutes received straight time rates regardless of the
number of hours worked.
3. Our regulars, ostensibly assigned Monday through Friday sched-
ules, were getting only compensatory time for working many Satur-
days and Sundays.
These antiquated, unsatisfactory practices basically stemmed from
an ever-increasing work load, accompanied by only a token increase in
manpower. Since the law m quires a compensatory day off for regulars
within 5 days after working- a Saturday or Sunday, substitutes became
the workhorses of the Department, working many hours of overtime
at straight pay. Correction of this inequity has become the No. 1 goal
of major postal unions as well as of the Department.
The practice of working employees 50, 60, and 70 hours a week must
be stopped. Obviously we must reduce the work hours of our em-
ployees. But this cannot be done administratively. We cannot add
now employees because of manpower ceilings, nor can we alleviate the
situation by shitting the work from substitutes to regulars. Each
group is now accumulating the equivalent of 12,000 man-years over the
normally accepted 40-hour week.
The solution calls for an attack on two fronts. The first is legisla-
tive approval for a drastic increase in personnel strength. As this
committee knows, we requested 15,000 more positions to cope with our
overtime problem. Unfortunately only a small fraction of this re-
quest was granted by the House. We hope it will be restored in full
later, when the Senate and House have had an opportunity to confer
jointly on the matter.
As I mentionel earlier, we also requested Congress to exempt the
Department from the Whitten amendment. This will permit us to
convert thousands of temporaries to the status of permanent em-
ployees. Too call them "temporaries," after they have worked week
after week and when continuing work is available, is at best a mis-
nomer.
The second front of our attack centers on the question of premium,
pay. We started with some elementary premises:
1. Postal operations are continuous. Unlike the typical Govern-
ment agency, we must operate 24 hours a day, 7 days a week. It is as
important to move the mail on Saturday as on a Monday, even though
the volume is down somewhat. And I think you have a chart which
illustrates the average straight time hours of postal regulars from
Monday through Friday and on Saturdays and Sundays. As you
will see, from Monday through Friday our average straight time hours
are 108.3 million compared to 75.7 million on Saturdays and substan-
tially less, 16.8 million, on Sundays.
Mr. tTDALL. This is a chart consisting of three bars or shafts attached
to your statement I
Mr. GnoNOUSHI. That is correct.
Mr. UDALL. Without objection it will be made a part of the record
at this point.
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FEDERAL EMPLOYEES SALARY ACT OF 9
(The chart referred to follows:)
POSTAL REGULARS DAILY
EMPLOYMENT
(Average Straight Time Hours)
108.3 Mil.
75.7 Mil.
MONDAY THRU
FRIDAY
16.8 Mil.
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FEDERAL EMPLOYEES SALARY ACT OF 1985
Mr. GrtoNOUSKI, The cl-.art, shows postal operations are conthiu-
ous. We are on a 7-day-a-s, eek operation.
2. Cash for overtime instead of compensatory time is by far the
prevalent practice for rank and rile em rloyces in industry.
3. Pay at the rate of time and a half for overtime, and the 40-hour
week, arc basic under various Federal laws for rank and file personnel.
4. Premium pay conditions, such as time and a half for rank and
file regulars on Christmas Day, should be continued as part of postal
tradition and history.
5. Personnel above the rank and file level should receij e the same
overtime pay or compensatory tune as other Federal employees on the
same level.
6. Since substitutes are really a kind of auxiliary "on call" work
force, overtime pay should -)e measured not in terms of a daily sched-
ulebut the total hours of work in any week.
The proposed legislation for postal premium pay was drafted with
these premises in niinci. Here are some of its features:
Regular employees should have a work schedule of 40 hours a week,
consisting of five 3-hour days. For work in excess of that schedule-
more tban S hours in 1 clay or, duty on a 6th or 7tlr day1wemium pay
will be required for all employees in salary levels PPS-7 or below.
There would be no compentintory time for employees in PFS-7 and
below. (It, should be noted that while Saturday and Sunday should
rot be treated differently from any other workday, we have no inten-
tion of expanding weekend duty for employees. In fact, we will con-
tinue our present policy of limiting weekend duty as much as pos-
sible.)
The 5-day workweek within a 7-day period would make no basic
change in the hours and days actually worked by regulars, but they
would derive additional benefits. Any work on a scheduled offday
would he paid at. the rate of time and a half in cash rather than com-
pensatory time. Also, a regular assigned to work on a weekend could
use annual leave or sick leave for that day.
Furthermore, by eliminating the compensatory system for rank and
file personnel, we would eliminate much dissension during the Christ-
mas period over the question of how regulars are to be compensated
for work performed on weekends in December. Three bills also deal-
ing with this problem are now before this committee. II_R.. 101 by
Mr. Morrison, ILR.. 429 by Mr. Daniels, and 1I.11. 2462 by Mr. Olson.
We propose to end their "second class" status by paying them time
and a half for all hours of work in excess of 40 in any 1 week. This
arrangement was proposed ?.fter considering various Federal laws on
the subject, as indicated by another chart which I believe you have
before You and which I would like to have inserted in the record. It
shows drat under existing hours and overtime practices in Govern-
ment and in industry only for the postal field service substitutes is the
standard workweek other than 40 hours.
Mr. TJDAr.L. Without objection the chart referred to will be made a
part of the record at this point.
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FEDERAL EMPLOYEES SALARY ACT OF 1965 61
(The chart follows:)
HOURS, OVERTIME PRACTICES
IN GOVERNMENT, INDUSTRY
(Rank 8r File Employees)
Law and/or
Hours in
Time & %x over
Time &'/z
Required
Employees
Standard
40 Hours
Over 8 Hours
Compensatory
Covered
WorK WeeK
Per WeeK
in Day
Time
WALSH-HEALEY
40
YES
YES
NO
ACT
WORK HOURS
40
YES
YES
NO
STANDARDS ACT
FAIR LABOR
4 O
YES
NO
NO
STANDARDS ACT
WAGE
40
YES
YES
NO
BOARD
CLASSIFICATION
40
YES
NO(But hours
over 8 normally
NO
ACT
boost total over40)
POSTAL FIELD
40
NO
YES
YES
SVC.REGULARS
SATURDAY&SUNDAY
POSTAL FIELD
SERVICE SUBS.
UNLIMITED
NO
NO.
NO
CAREER e. TEMPORI.RY
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Mr. Groxousar. Only in the postal service, in the whole gamut of
employment in the country, is compensatory time rather than payment
in cash used for Saturday and Sunday work. It is against the back-
ground of this information on Government and industry practices
involved that we are proposing the premium pay proposal Here today.
We also propose under tl:is bill premium pay for both regulars and
substitutes at the same base rate.
3. HOURLY RATE, RFAitLARS
These are employees about whom very little has been said. Their
work, while recurring, does not normally extend over an 8-hour tour.
Cleaners, for example, guenurally clean and dust executive offices for
about. 4 hours a day, starting at. 5 p.m., for 6 days a week.
The proposed bill would give them overtime pay for work in excess
of 40 hours a week as well as over 8 hours in 1 day.
At the option of iilanagement, employees up to salary level PFS-15
would receive cash premium pay or compensatory time for working on
a holiday.
5. SUPERVISORY PAY
Currently, premium pay for overtime by supervisors stops at salary
level PFS-7. The proposed legislation would give supervisors above
level 7 additional pay not to exceed 150 percent of the top salary rate
of PFS-7, or at nianagemer.t's option, compensatory time. That. level
was selected because it represents the majority of our firstline. super-
visors. We believe it is right and proper for n first-line supervisor to
receive a full. measure of pay for overtime. Otherwise some of his
subordinates would earn more in some weeks than lie does. This is not
a problem, however, for supervisors above PFS-7, who enjoy a suffi-
ciently high base wage in this context.
Section 3 of the proposed bill bars overtime premium pay for officials
with managerial responsibilities and certain other employees, such as
rural carriers who are paid on a mileage basis.
Substitutes are excluded from the section relating to schedules since
by definition they are "on call" employees. They are also excluded
from the section on holiday benefits because they already have built
into their basic hourly pay . pro rata amount for holiday work.
Hourly rate regulars are excluded from the section on arrangement
of a 5-day 40-hour week schedule. There may be a need to schedule
some of these employees, as -'s now done in many instances.
These provisions sum up the principal features of the proposal on
postal overtime pay. It haF. been a privilege to discuss them with you.
am sure that we have not covered all the points of interest to you,
and Assistant Postmaster General Richard Murphy and I will be glad
to answer any questions this committee may have.
Thank you.
Mr. UDALL. Thank yon, :t[r. Gronouski, for a helpful statement.
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FEDERAL EMPLOYEES SALARY ACT OF 1965 63
The bill which I introduced yesterday will be before this subcom-
mittee. The subcommittee might end up writing an omnibus bill in-
cluding this bill in any we report. You refer to bills by Mr. Morrison,
Mr. Daniels, and Mr. Olsen, dealing with premium pay.
Mr. GRowousKI. These bills just relate to the question of Saturday
and Sunday work in December, but that would be taken care of by
our time-and-a-half provision.
Mr. UDALL. There is no difference in that feature of overtime pay
and compensatory pay.? There is no difference in the approach taken
in these bills and the larger bill. I have introduced?
Mr. GR0NOUSKI. As I understand, our bill includes the objective of
these three bills.
Mr. UDALL. In your statement-item No. 3-you indicated that the
legislative actions in the past couple years had corrected. certain situa-
tions where some seniors were receiving less money than their juniors.
Are there still instances of this in the postal. service?
Mr. GRONOUSKI. I will ask Mr. Murphy to answer that.
Mr. MURPHY.-Congressman, you will recall last time there was the
so-called Dulski amendment which, according to our cost calculations,
would have cost $41 million additional to.the Post Office Department.
It had two features. One objective was to take care of a situation
where an employee who had been senior to another employee turned
out junior to him because of the step and conversion structure in the
1962 bill. We thought this was a legitimate objective to take care of
and we went along with the. committee and they put in a provision to
take care of that. Since that time some 900 adjustments have been
made in the Post Office Department to take care of the junior-senior
relationship.
The other feature would have had the objective of moving forward
to the very top of the level a number of employees based on a recal.cu-
lation of their total postal service. We felt this was an extremely
costly feature and we did not go along with it.
But in answer to your question, we have made some 900 such
adjustments.
Mr. UDALL. Are there some remaining?
Mr. MUrmiT.Y. There may be a few remaining. If there is a special
case, we have asked them to bring it to our attention and we will
judge it on its merits. We have been liberal in this respect.
Mr. UDALL. I want to commend Mr. Gronouski for the emphasise
he has placed on the status of temporaries. I think the present
situation is unfair to temporaries. They do not have proper status.
For my part, I want to see that action along the line suggested by
Mr. Gronouski be taken at the earliest possible time.
The gentleman from Louisiana is recognized for 10 minutes.
Mr. MortrusoN. I will not take 10 minutes but I do have a few
questions.
General Gronouski, I think that the field of postal supervisors
is another area where there is quite a discrepancy in the pay rates
to various individuals. I was not here to hear your full testimony,
and I would like to ask you if Your testimony or your position includes
the correction of this situation?
Mr. GRONOLTSKI. My testimony supported the President's pay pro-
posal which is roughly a 3-percent across-the-board increase to ac-
count for the productivity increase between 1.964 and 1965.
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FEDERAL EMPLOYEES SALARY ACT OF 1963
Mr. U1)zra,. Excuse me. I have to leave now, I am turning over
the gavel to Mr. Morrison.
Mr. GitoNorsrcr, My tostitnony recognized the discrepancy to
which you referred and painted out it. was the objective of this ad-
ministration and the Post Office Department to correct that dis-
crepancy in the inunediate years ahead and that the structure of
pay adjustments which are proposed in the President's bill would
give the framework, both in the every 4-year review by Congress
and the intervening year adjustments under the reorganization prin-
ciple, to correct whatever discrepancy exists here.
Mr. Momusox (acting chairman). I take it you endorse the recom-
mendation of the President for it 3-percent. across-the-board increase,
but that does not take into consideration those differences. I gave
the example of supervisors, some of whom are getting a much higher
pay raise than others; their salaries have been shown to be not
comparable.
Are ,} ou in favor of an additional amendment to the President's
salary bill to work out something to bring about comparability here
and wherever else this discrepancy may exist ?
Mr. Growousxr. I think the President's proposal does provide the
framework for making that adjustment. I am in favor of the Presi-
dent's proposal of it 3-percent increase effective January 1, 1966,
and also t-Ilie proposal for a Commission in 1966 to study the whole
problem between industry and Government. Under the proposal,
this would be the first ofs, series of 4-year structural evaluations of
the pay structure by the Congress. I think this is the proper context
in which to correct any inequities and also to bring up to date the
basic comparability principle that was enacted in 1962 by Congress.
Mr. Momn tsox:. "INfliat would be your present. position if an amend-
ment were offered to bring about comparability?
Mr. Groxorsrr. At this time my position is identical to the posi-
tion that is expressed in the President's pay bill.
Mr. Mutrizrsn~ . I do not think if is spelled out exactly there. I
think it is a, little ambiguous. Would you therefore be opposed to
anything added to this bill to bring about comparability?
Mr. Grto:dorsxr. My position with respect to supervisory em-
ployees---- -
Mr. Mortrrsoti. Let us rot limit. it to supervisory employees. I
think there are other employees similarly affected. I just gave that
as an example. That example was given to us, and I believe they
had some figures on it. Tout. I understand there are cases of employees
other than supervisors whore there is a difference in comparability.
It is like. many bills that are enacted. After a bill is enacted a lot of
times, it- has to be corrected at a later date. It is impossible to get
a bill out dealing with millions of employees that is perfect. I think
that perhaps it is necessary to take this opportunity to see if some
of these inequities can he .;traiglrtened out. Where that is possible,
would you be in favor of working it out?
Mr. Grtt}xuusKt. This wis very carefully considered by the Pay
Panel, of which I was a member. and also by the President and mem-
bers of the executive in discussing the President's pay proposal. The
Pay Panel and the President have recognized that, particularly as
we get into the higher level:;, the discrepancy becomes greater between
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FEDERAL EMPLOYEES SALARY ACT OF 1965
full comparability and what we have. But in the context of budget-
ary considerations and in the context of the proposal to have a
complete study next year on the whole structure of Government pay,
both internally and vis-a-vis the private economy, we concluded-
and I concurred in the conclusion-that we should this year attempt
to maintain the status quo, in other words, not retrogress over what
we had last year, and provide for the productivity increase, which
is 3 percent since last year; and that we should look at the quadren-
nial pay study, which would occur in 1966, and the action of Congress
as a result of this study, to rectify inequities which we recognize
have existed since 1962.
Mr. MORRISON. At the same time we have this bill under considera-
tion would you object, if wherever possible, the committee works out
a system or amendment that would place some of these jobs in a more
comparable status with each other?
Mr. GRowousiu. I have this concern : In terms of the overall
budgetary problems from the President's point of view certainly we
are operating in the range of money available for pay increases. If
we were to try to make adjustments internally that would rectify the
more serious cases of comparability within the framework of the
money available, it would result in a reduction below the 3-percent
increase for the lower grades, and I would not be in favor of that.
Mr. MORRISON. While we are not discussing ZIP code legislation
today, I am also a member of Mr. Olsen's subcommittee which will
consider that field. I am concerned, as are other members of this.
committee, about the way many of these employees will retire from
the service or change location. I have no desire to take the prerogative
away from the chairman, Mr. Olsen, who is doing an outstanding
job. However, I would like to make a-request to you and to the heads
of various departments that you be prepared to tell us exactly how
the Department intends to bring this about. Having heard some of
the employees in. connection with their problems, the members feel
that it is certainly necessary for the Department to give us an idea
of how those adjustments will. be brought about. Hopefully this
report will be avail able in the near future.
Mr. GRONOUSKi. Mr. Chairman, may I respond?
Mr. MORrrsON. Certainly.
Mr. GRONousiii. I have two points to make. First, I have said
flatly and categorically and say now that no employees, substitute or
regular, will lose their jolts resulting from the ZIP code.
Mr. Poor. Will. you repeat that?
Mr. GRONOUSKI. No career employee, whether substitute or regular,
will lose his job as a result of any adjustments resulting from the ZIP
code or any other program of this Department.
And the second point is, I have accepted the kind invitation of Mr.
Olsen to appear before his subcommittee on the 9th of June to discuss
this and relal ed questions, so at. that point we will get it on the table.
Mr. MoRRZsov. Any questions, Mr. Olsen?
Mr. OLSEN. Thank you, Mr. Chairman. I want to thank the Post-
master General for being here today and for his splendid outline of the
plans, so far as the Post Office Department is concerned, on pay. .
I might say at the outset I very much support all. the positions taken
by the Postmaster General.. However, I do not think that the 3 per-
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i6 FEDERAL EMPLOYEES SALARY ACT OF 1985
cent increase provided in the President's proposal goes far enough.
I leave just a few questions:
Do you recollect the pay ,ncreases of 1962?
Mr. GRoNousia. 1 was not a Federal employee at that time but I do
generally.
Mr. OLSE r. And that the Corn ess increased the pay of employees,
especially those in the lower grades, substantially more than the Press
dent recommended?
Mr. GnoNousi i. Dick Murphy was here and he has a fresher
recollection than I, so I will ask hint to comment on that.
Mr.OLSE r. 111 right,;4Ir. Murphy.
Mr. Muiwinr. That is correct. They added an additional step upon
conversion to the pay bill of 1962.
Mr. OLSEN. -- nd the percentage of increase in the lower grades was
higher than the President recommended?
Mr. l4ivitPiil. That is correct.
Mr. OLSEN. And again in 1964 the percentage increase in the lower
grades was greater than the President recommended'?
Mr. Muitrnr. Yes. We had a strange situation in 1964 in that the
bill was based on the President's recommendation of 1963, but a year
had gone by and we had the assassination of President. Kennedy in
between, but as R. matter of fact the bill was based on the study made
in 1963 but upgraded so full comparability was voted in the lower
grades in 1964 but not full comparability in the middle and upper
grades.
Mr. OLBEN. It was developed from the testimony of the Bureau of
Labor Statistics that the recommendations of the President had to be
updated by this committee.
Mr. Muitriir. I think thus situation was that the recommendation of
the President came forth in the spring of 1963. The hearings were
in therrocess of being held. Then we had the assassination of Presi-
dent Kennedy and there w2.s a further delay and at the time we got to
the hearings we had the statistics for 1964 and on the basis of this the
committee did add to the dower grades virtually full comparability,
but not to the middle and upper grades.
Mr. OL SEN. In any event, we here in Congress made the adjustments
in comparability?
Mr. Mono i r. Yes, sir.
Mr. OLSEN. What is the shortcoming of Congress that is being cited
by the President's report? In other words, why is the President's
report recommending that she send the authority for fixing pay down-
town to the executive department ?
Mr. Muiwin,-. Shall I answer that? I do not think he is exactly
doing that.
fr. GiioNousii:i. I might respond to that.
In the first place, the proposal of the President calls for Congress
to fully review every 4 years the whole structure of pay both between
private industry and Government employees as a group, and also be-
tween various grades of this Government sector, so that every 4 years
there would he a complete review by Congress. It. is only in the inter-
mediate Years where the President, following the basic comparability
principle adopted by Congress in 1962, would recommend adjust-
ments to Congress on the basis of Bureau of Labor Statistics informa
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FEDERAL EMPLOYEES SALARY ACT OF 1965 67
tion, and even at that point, in this intermediate period between the
4-year congressional reviews, Congress, of course, would have complete
option to reject it and come up with its own pay proposal. So I do
not think the President's proposal is taking away any prerogative of
the Congress. Rather it is providing a very systematic wad
Mr. OLSEN. Why did you not come up with the recommendation now
of full comparability ?
Mr. GizoNOUSicl. The President's Pay Panel very carefully studied
this whole question and concluded that for a variety of reasons, in-
cluding the budgetary consideration, this year we should think in
terms of retrogressing none from where we were last year, but rather
maintaining the productivity increase in private industry, which was
3 percent, but not try this year to correct all the inequities that de-
veloped since 1962, and to leave it to the Study Commission next year
to study the entire structure and come up with recommendations at
that time.
Mr. OLSEN. Next year a Presidential panel would be fixing the
salaries and we would have only 60 days to do anything about it. Is
that right?
Mr. GRONOUSKI. This is not true on this one. It is only in the
intervening 4 years that the President would make adjustments on
the basis of Bureau of Labor Statistics data.
Mr. OLSEN. So this year the considerations of the budget would,
in effect, veto the provision for comparability ?
Mr. GRONOUSKr. It is not only budget. It is national pay policy,
which is within the guideline of 3 percent for private industry; it is a
recognition that compared to 1964 the 3-percent increase maintains
comparability with private industry in the gains from 1964 to 1965,
which is about 3 percent. There are many factors, but what the Pay
Panel concluded and what the President followed was that in terms
of correcting inequities in comparability that have developed since
1962, this should wait for a full review by the appointed Commission
next year and the results presented to Congress at that time.
Mr. OLSEN. If I could direct this to Mr. Murphy, what is the com-
parability date?
Mr. MURPHY. The comparability date as proposed in this bill was
based on figures gathered in 1964 and were actually gathered in
February, March, April, and May of 1964 and were made available
to us in late September or early October of 1964. So that what you
are talking about here are figures that are about 1 year old.
Mr. OLSEN. They are 1 year old, and is not the figure actually 3.5
percent rather than 3 percent?
. Mr. MURPHY. That is correct, 3.5, because the President's proposal
would bring level 4 within five-tenths of 1 percent of comparability
based on 1964 figures.
Mr. OLSEN. So in addition to a 1-year timelag we are also five-tenths
of 1 percent behind?
Mr. Munriiy. At level 4. It goes up to 7.3 at level 20. Level 4 is
almost 100 percent of comparability and then you come down to 92.7
and so on.
Mr. GRONOUSKI. PFS-7, which includes most of our line super-
visors, after the 3-percent pay increase would be at a level of 96.6 of
1964 compared to 99.5 of 1964 for PFS-4 employees.
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F EMPLOYEES SALARY ACT OF 1965
1Ir. Oi.sn;. Mr. 1111rpbv, there is an agency of (he Federal Gov-
ernnaent. tluat. estimates the amount of income necessary for aI family
of husband and wife and two children to maintain a standard of liv-
ing compatible with decency and health. What agency is that?
Mr. 1ltul it t. That. is tbo Bureau of Labor Statistics, I believe,
Congressman.
Mr. Oisia. In the city of Seattle they fignne. the amount. of income
necessary is $6,300.
_Mr. -Aiuiiriiay. 1 aatll not acquainted with Seattle, but I think it is in
that. range on a national basis.
1T r. OLSEN. _11id what is it for cities of 100.000 population or more,
do You know ?
IFr.ML?xrtr-i-. I do not. have that figure with tae. I could get it.
Mr. OLsI.N. Wo will get. 't from 1[r. Clagrue When lie comes up.
1Ir. Mt it eiiy. [f I could make one comment on that: I tliitk the
problem is flint. the comparability formula is not based ou that concept.
lie-fore. we had comparability in 10G2, past administrations used to
debate these things before the committee and it, was always the lactic
to come in and cite all the low-wage categories of employees and say
"`This is what tho wages are." Then the employee organizations tic oulcl,
`once in and cite all the high wages and high'ly unionized crafts and
say, "This is what itshould he."
We tried to do away wits flint in 1962 and tried to maintain a set
relationship front that time. on. and what, we are basing our pay on
here is what the basic skill would bring in private industry. For ex-
ample, if you were to attempt to base iton the pay in Seattle we would
hai e to :rive a $1.200 inereals at the. eat ranee st elr at level [. Obviously
we could not beu-in to set par on that basis. ketually the average pay
of a.city letter carrier under H.P.8207 will be $G,3?5.
1Ir. Ot.sl,x. Then, is no specifiv skill comparable to aI letter carrier
in private industry. There are many skills, of course, out. in industry
that I would compare
carpetiers or other skilled craftsmen ; and like-
wise postal clerks. But we -I-Ill ask Ewan Clap to to continent. oil that.
I wait, to demonstrate when we talk about 3 percent being the Jaroduc-
tivirv anc?rease or the amount of increase i1ecessarv to InaiIlt4iii1 coni-
paraabilit_v with private indistry ott i- he level of l9G-f, T think we are
in error. I think it should be. a.le rent deal more and T believe we will be
able to demonstrate it when we get (lie Bureau of Labor Statistics up
here.
Mr. Muir1iY. I think the important doing to remember is, first, the
administration strongly supported the view that there was no com-
paarability in private. induct r:: with a distribution clerk or letter carrier.
And in 1962 we strong*ly supported linking Pry with GS-5. the
college entrance rate. We were very strong on that. That was a
rather favorable level at which to link them. We established a fixed
relationship and we said there is no comparable job to a letter carrier
oi? distribution clerk in pri-.ate industry. We attain our compara-
bility through linkage.
iTr. OLnEti. Thank you. 'Mr. Murphy. One other thing. I think
there is one inconsistency here, and I would like to address this ques-
tion to the Postmaster (general: Is there not an inconsistency when
you do not pay higher for Saturday and Stmday as in private in-
dustry ?
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FEDERAL EMPLOYEES SALARY ACT OF 1965 69
Mr. GRONOUSxI. In the first place, we do plan to pay time and a
half for the sixth and seventh day, but we do not plan to treat Satur-
day and Sunday as different days because we have the kind of
business where we are on a 7-day work basis. But we do propose in
this bill that in any 7-day period, the sixth and seventh days will
be time-and-a-half days, regardless of which day they are.
Mr. OLSEN. Do you not recognize that in industry an employee who
works the seventh day receives compensatory extra time or extra pay
in cash?
Mr. GRONOUsKr. It depends on the kind of a situation the industry
is in.
Mr. OLSEN. Even those industries that operate 7 days, three shifts
a day.
Mr. GRONOUSxr. They treat the sixth and seventh days but not
Saturday and Sunday especially.
Mr. OLSEN. Is not the trend in industry to treat the. Sabbath day
as a day for time and a half ?
Mr. GRONOUSxr. I think Mr. Block can answer that.
Mr. BLOCK. In many industries where they have a continuous oper-
ation the sixth and seventh days~of the calendar week are treated as
ordinary work days. The, sixth and seventh days of work in a sched-
uled workweek are overtime days.
Mr. OLSEN. I realize that has been the history, but what is the trend
today?
Mr. BLOCK. The current automobile workers' contract for "7-day
operations" says the sixth day of work is a straight overtime day;
that is, time and one-half.
Mr. OLSEN. And what about Saturday?
Mr. BLOCK. I do not know, but the sixth day could be a Saturday
or a Sunday depending on how the day fell.
Mr. OLSEN. In any event, they have a 6-day week. The seventh
day would be an extra time day.
Mr. BLOCK. Yes. But if the Saturday or Sunday falls within the
span of 5 days in a continuous operation, typically it is treated as an
ordinary day.
Mr. MoRRISON. You could do away with all overtime if you did that.
You can stagger the week to take out Saturday and Sunday.
Mr. GRONousKI. If it is the sixth or seventh day of work, he would
be paid overtime under our bill.
Mr. OLSEN. What you are going to restrict yourself to is 40 hours?
Mr. GRONOUSxr. With the substitutes, 40 hours.
Mr. OLSEN. Forty hours of eight. hour days ; is that what you are
talking about ?
Mr. GRONOUSIcT. With our regulars, 40 hours with 8-hour days. With
the substitutes, it is 40 hours a week. Right now, the substitutes can
work 60 or 70 hours a week and they are working straight time. Under
this proposal., if they work 1 hour over 40 hours, they get time and a
half. Regulars now work Saturday and Sunday. This proposal pro-
vides for cash payment, time and a half if Saturday or Sunday is their
sixth day.
Mr. O>-SEN. The dominant reason that the administration does not
recommend more than a 3-percent increase is the budget consideration?
Mr. GRoNousxr. I mentioned several factors. One has to do with
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the fact that 3 percent is the productivity increase between 1964 and
1965 in industry and therefore is comparaljle.
Mr. Ou 5nx. It is 3.5 per?east. You are not coming up to the 3.5.
Mr. GIto\OL'siji. I think it. is 3 percent. That is my recollection.
Mr. Oi.srv. I think the ttstiiuony yesterday was 3.5.
Mr. GitoNoushi. I am talking about the overall productivity in-
crease in industry. I am petty sure between 1904 and 1905 it is 3 per-
cent. X ou can correct me if I ain wrong.
Secondly, that the overall national pay policy is in the range of a
3-percent uieret se for private industry, and therefore this is the basic
policy of this Government..
Thirdly, a.lso budgetary considerations enter in. I will not say that
budgetary considerations are either the sole or dominant reason.
It. was the judgment of the pay panel, and of the administration,
coming from the pay panel basically, that we have two problems here.
One is the problem of ntiiintaiunig pay with the productivity in-
crease between 1964 and 1966 so we do not retrogress.
Second, the problem which has accumulated since 1902 of correct-
ing past discrepancies that have developed. These discrepancies are
all along the way-, but prin. arily are in the higher supervisory levels,
for levels 7 and above.
It was the judgment of the Pay Panel and the. President, and it is
my judgment, that the proper program this year is to maintain Fed-
eral pay with the productivity increase of private industry between
1964 and 1965, which is tho 3-percent figure, and to look toward
Mr. UI.sE 7. You do not mean between 1904 and 1905.
Mr. GROG;oesui. Since the last pay raise and this one.
Mr. OLsEN. You mean until March of 1965; is that not right?
Mr. friusit . I think the General is correct, we would maintain
the same relationship between the pay raise that was voted in 1964 as
between the various levels and the adjustment. we would make now.
The relationship between a supervisor and a rank-and-file person
would not be changed by our proposal.
Mr. GaoNousur. And then look toward the Commission that would
be appointed in the first part of 1966 which will study the full struc-
ure of our Goverment pay plan vis-a-vis the private sector, and within
(lie public sector, study the whole structure with a recommendation to
Congress to revise ands reconstitute the whole pay structure as a result
of that study coming out of the quadrennial study that would come
about next year.
This would be the time, in our judgment, to make a correction of the
iiiequities that have developed since 1962 rather than this year.
lr. OLSEN. Thank you, M~ r. Chairman.
Mr. DsitwiNsui. You support the specific proposal before us which
would remove congressional jurisdiction over future salary increases.
At the same time, you do not recommend that we surrender our control
over postal rates. Is it not inconsistent to then develop a olicy
whereby there will be periodic increases in salary which will thenbe
followed by periodic increases in postal rates?
1y will [lien be served with the facts of life and have no control over
111' phase of the operation.
i-1I'. GRONousxi. Two points.
I do not support any proposal that. would have Congress surrender
its coat rol over pay. I am proposing every 4 years the Congress con-
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sider in its wisdom the basic pay structure and:there would be a'thor-
ough review of the pay structures by Congress and decisions by Con-
gress, but in between these years we have a systematic way of carrying
out the will of Congress, which is maintaining comparability.
Even in this case, Congress would have two alternatives, one, reject
whatever the President suggests and on its own initiative it could
take whatever action it wishes. I am not saying that Congress should
abrogate its authority in this field.
Mr. DEEWINSKI. This year you are not specifically recommendm
an increase in salaries over and above those contained in H.R. 8207
Mr. GRONOUSxt. That is right. That is the President's bill.
Mr. BROYIIILL. I have just one or two questions.
In your statement you listed some steps that were taken to assure
more equitable treatment was given to the postal workers, and one was
in point No. 5, "authorized annual salary increments in each level
to step 7."
That means, of course, as I understand it, every postal worker
through step 7 receives an annual increase in pay, or goes up a step,
without any action by management.
Mr. 'GRoNOUSKi. Management has the right to deny it for cause.
Mr. BRaYI-ILL. For cause?
Mr. GRONOUSxi. You are right.
Mr. BRoyrtnLL. This is automatic?
Mr. GRONOUSKI. It would be quite automatic, but there are excep-
tions.
Mr. BROYHILL. I certainly do not object to the formation or the
continuation, you might say, of this Panel for a periodic review of
Federal pay, but I certainly personally would oppose this granting of
the authority to the President to then submit these increases to the
Congress for a congressional veto. I think this is sort of backward
from the way it is written out in the Constitution. We usually write
the legislation here and submit it for his approval or veto.
Mr. 'GRoNousxi. I think what we are talking about here is Congress
setting up a basic policy on pay. Every 4 years Congress completely
reviews the whole pay structure and establishes its policy and what-
ever comparability principle it, wants to establish. All the President
would be doing then. in the intervening years would be adjusting on
the basis of what Congress has set forth as the basis for adjustment.
During those 4 years it would be in terms of a rather systematic
carrying out of what Congress as a result of the basic quadrennial
study has determined to be appropriate.
Assuming there is a possibility the salaries can get out of whack in
4. years, the Congress would review the whole structure again in 4
years. In no way is this depriving Congress of any authority.
Mr. BROYIIILL. The President can. submit the pay increases annually
as I understand this.
Mr. GRONousxl. That is correct. Every year .in the intervening
periods between the quadrennial studies, he would be obligated to
submit whatever in his judgment fitted the needs. In fact,. right now
he has to make a report every year.
Mr. BRoYIIILL. If the economy got started downhill and the statis-
tics would show the Federal workers and postal workers were receiving
more than industry, would that mean they would get a. pay cut?
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72 FEDERAL EMPLOYEES SALARY ACT OF 1965
Mr. GRONorb'rir. 1A4'1-ate. er happened would depend on what Con-
gress decided. I expect thc: economy to be blossoming, especially under
it Democratic administration, but whatever the President in his best
judgment. submits would be up for review or rejection and Congress
could bring forth any new Legislation it wanted.
Mr. BRoyrrjLL. I note in your testimony you said that one of the
considerations for recomm.!trding it ;-percent increase was budgetary
considerations. You said this was only one. of the reasons.
Could you briefly go info the budgetary consideration?
Mr. GaoNousKI. I think Mr. Stints could go into it better when
he testifies before you.
11'lrat I was referring to is the fact that in looking over the total
budget of this Government (he President ended up with a realm of
consideration for rate increases, and this 3 percent fits into that realm
of considerations. It is a judgment (hat is made in connection with
snaking judgments on national defense, or judgments on all kinds
of other things-the poverty program, the education bill, and medi-
care and all other factors that enter into the budget.
I cio not wan( to overemphasize that point.
`['here is also the question of the produrtivi(y increase again in the
last year since our lastpay increase.
All these factors, including many more than I cannot think of now,
affected the judgment of b-)1li the committee and the President. that
3 percent this year was the desirable level of pay increase in order
to prevent, any retrogression from the structure picture of our wages,
both l,etween private industry and the Government between 106I and
l (1165),
'Mr. Bau,-ttu.-.. What von are saying is this administration is ree-
onuuemdi--g a number of new programs all of which have pressures
upon the budget, and naturally all of (hem have to be reviewed and
looked at iii total f o see i hey are i n balance.
Afr. Gifox;o- s-,-, That is precisely right, sir.
Mr. B-tm-rtrr.i,. This, pay increase is to take effect on January 1 of
19GG. is (lrat correct?
lfr. Guoxor?srn. Yes.
Mr. Brtoyinn,r.. You would not support making this- effective say
July 1, 11)6 5?
Mfr. G-u,xousm. All I sa s here is. I support (lie hill as hit roduced.
January 1, 106(1.
NIr. B-:c,w-n-.-., Call you tell us how much (his bill will cost the
Post Office Dcparm urea( ?
lfr. (InoNor stet. .khout$126million.
Let me check -with 1fr. ,\lurphy. The full-rear cost for the bill
Fc? the full year ctf IOGG wo mld be ~1'?G milli:n
for tlae pay part of time
bill. Pv,ides that. we have time overt mimic provision which is not tecl;-
nir:ally part of (lie bill, hilt you have to consider it along with it.
How nturh that rest is cfepeads on what -uv appropriation couumiifces
do. I hare asked for 15.000 additional 'en-plgvees to take rare of
sonic of flat, excess overt rove. I am hopeful we will gel most of them.
If we vet none of there. or very little of tlaeua.. the overtime provision
-rill cost about $58 million per year. If we get (lie 15,000 so we can
reduce excess overtime :and ineffiicien( overtime, the overtime bill would
hr :u?m-nd i4() million.
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If in subsequent years we request additional employees, as I intend
to further reduce and eliminate inefficient use of overtime, then the
cost of the overtime bill will come down to about $28 million. So it
just depends how the balls are juggled. You have to add that to the
$126 million, whatever that figure turns out to be.
Mr. BrtoYrrmLL. For fiscal year 1966 then, the bill would cost $126
million?
Mr. GRONousKi. Plus either $40 or $58 million for the overtime-
for the fiscal year it would be half of that. If it starts January 1,
1966, to June 30, 1966, it would cost half of $126 million, and half of
$40 or $58 million.
Mr. Poor.. Mr. Postmaster General, these 15,000 extra workers you
requested, are they going to just take care of the overtime?
Mr. GRoNOusKI. They are not adding any additional hours work to
the Post Office, but rather to absorb excessive and I think highly in-
efficient overtime now being worked by our employees.
Mr. POOL. I noticed in your earlier statement you said that you
were limiting weekend work as much as possible.
I have had numerous complaints about the Saturday service ren-
dered by post offices around the country. People cannot buy money
orders and they cannot get registered mail.. Is that correct?
Mr. GroNouSrir. It depends on the post office. In some cases the
postmasters within their manpower allotments have been able to give
the service, and in some cases they have not been able to give the
Saturday service on these items.
Mr. POOL. As I see the picture, people want services rendered by the
post office, and if the post office is open until noon Saturday they ex-
pect to get these services, and it is frustrating to go down there to mail
registered mail or buy a money order when the post office is open and
cannot do it.
I am going to suggest very urgently you consider asking for enough
employees to man the post offices to give that service.
Mr. GRoNousKi. As a matter of fact, I am as concerned about some?
of these questions as you. I am giving serious consideration to a re-
view of the whole Saturday picture.
Mr. PooL. Most people look upon their post office as the Govern-
ment in their community. It is rather disconcerting to find out you
cannot get the service, especially in view of the fact that postal rates:
have gone up, first-class mail and parcel post. Still, they do not get,
as much service as they used to. I want to bring that out.
I do want to ask about the rural carriers. If you go through with.
your plans to lease these cars, do you have any proposal in here about;
raising the rural carriers' pay?
Mr. GRoNOusxr. With respect to the rural carriers, of course, from
everything I get from the leadership and talking to rural carriers,,
not only are they not making any money on the mileage allowance,,
but I have been told that at least a quarter of them are losing money
on the present mileage allowance to the point they file with the Federal'
Income Tax Division all expenses out of their pocket.
Mr. POOL. You mean the rural carriers are in favor of leasing cars?'
Mr. GruoNousKT. That is not, the question you. asked me. The ques-
tion was asked me whether I should raise their pay, and I have re-
ceived no testimony from the leadership of the rural carriers, or the
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FEDERAL EMPLOYEES SALARY ACT OF 1965
rural carriers, that they are making any monev on their mileage allow-
Miele rrow, and I ani going to trust them as being honest.
Mr. Poor? I know they make a little on their own cars, but do they
have to make their own repairs?
Mr. Grw iouslu. I have been told that a quarter of them actually
lose cash out of pocket, oil it. I hate to see them lose that cash.
I might also point out that the average rural carrier on a 36-hour
week makes about $700 more than a city letter carrier on a 40-hour
week. I have not made any calculations on it, but I would say that
$700 would bring them into comparability on any basis.
Mr. PooL. Where do you got your figures 'l
Mr. GRONOL7SKr. From our payroll records.
Mr. PooL. I am talking abo.it the loss.
Mr. Grrorrorsrrr. I discussed this problem, as you properly suspect.
Mr. PooL. You did not look at the income tax returns, did you?
Mr. GRONOUSTEr. I have not done that since 1963 when I was Tax
Commissioner, and I was not. looking at rural carriers at the time, I
might add. They are a very honest and honorable group, and I
would not think of looking it their income tax returns.
Actually, it is from testimony of the leadership of the rural car-
riers which indicates they get out forms every year to provide an
orderly way for rural carrrars to take income tax deductions for
expenses in excess of their raileage allowance, and they indicate to
me, and you can check this with their leadership, that about a quarter
of the carriers make available to themselves these forms so about a
quarter of them lose money on it.
Mr. MoRRrsm.r. The rural carriers that make more money than the
letter carriers do not live in my district. The ones in my district
that. I have talked to think they are below the letter carriers.
I think we should hear from the head of the rural carriers and let
him bring in his statistics.
Mr. POOL. I think that would be a good idea.
Mr. OLSF\. I understand -:hey are invited in on the 15th day of
.Tune. We will hear from the president of the rural carriers at that
time.
Mr. MORRTso-N. I think our main purpose here is not to get into a
squabble as to who makes th,3 most here or there, this individual or
that individual. The idea is to bring about the greatest amount of
compparability.
Mr. GROxo> aKs. I agree.
The only point I would make
Mr. lionRTsaN. I am glad ycu are for comparability.
Mr. Gntorr-oussr. T have alw r.vs been for comparability.
Mr. POOL. The solution of the whole thing would be to drop this
leasing deal.
Mr. AIoRRrso r. Let's not get into that. in this legislation.
Air. GROSOn'RIir. We will shortly get into that.
Mr. Poor.. That is all the questions I have, Mr. Postmaster. I think
you have done a good job. Sometimes I do not agree with what you
are doing, but I think you are trying to go a good job.
The main gripe I have right now, and the one I get from the people
is regarding these Saturday services, and I know you can work that
out. I know you want to. You are running a good deal over there
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FEDER,AL,EMPLOYEES SALARY ACT 1965
and you want to do a good job. That is about the only thing I know
of that I am getting any letters on.
Mr. C'ORBETT. No questions.
Mr. MATSUNAGA. No questions.
Mr. KREBS. First, I want to compliment the Postmaster General
and his assistants on the comprehensive statement he made. I want
at, the outset to be on the record as being in complete agreement with
my colleague, Mr. Olson from Montana, with respect to his feelings
about the adequacy of the 3-percent increase. I do not believe it is
nearly enough.
I am sure if you check the productivity figures, you will find that
they are substantially higher on the average, nationally, than was indi-
cated here today.
One thing I would like someone to clear up for me is the termi-
nology; I heard references to the concept of comparability. I believe
I know what it is, but then we start talking about full comparability
and systematic comparability and I begin to get confused, and I think
other people might.
I would appreciate your straightening that out.
Mr. GRONousKi. I used systematic to designate the method used
between the quadrennial reviews-tho method by which the compara-
bility would be achieved, the President sending systematically over
to Congress the adjustment for comparability since last year, and Con-
gress judging it on the basis of veto power.
Mr. KREBS. Am I, right in assuming when you talk about compara-
bility, you are talking about the way wages said postal employees com-
pared to wages paid to workers in private industry ?
Mr. GroNOUSgi. With respect to postal employees, as has been
brought out by the chairman, it is very difficult to find a comparable
job. So in 1962, the postal employee, at the PFS-4 level, clerk and
carrier, was arbitrarily regarded asbeing linked toy the GS-5 pay level.
Mr. KREBS. That I understand.
Mr. GroNousKI. The comparability then for the PFS-4 in the Post
Office Department is the private industry pay that is given people
working in jobs in private industry comparable to the GS-5 jobs.
Mr. KREBS. So we, are comparing postal workers' wages and condi-
tions to those found in private industry, and in the case where there
is not a comparable job in existence, you take what you think is the
most closely related civil service job and compare that job to the job
in private industry; is that the way it works?
Mr. GrwNousiii. It is the skill represented in this case by the GS-5
Government worker.
Mr. KREBS. Let me ask this other question.
I, for the life of me, cannot understand what is equitable about pay-
ing a regular employee time and a half for overtime for work in
excess of 40 hours in a week and work in excess of 8 hours in a day,
and then not paying the substitute working in excess of 8 hours in a
day. He cannot go into the butcher shop and say "I am a substitute,
and I do not get time and ,a half for work in excess of 8 hours a day,
so you give me a price below what the regular worker is paying because
he is making more money on the basis of the overtime schedule."
Mr. GroNOUSKT. In the first place, you have to remember right now
anything over a 40-hour week is straight time. We are making a big
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jump forward and an important one by calling for time and a half
over 40 hours in any week. So that is the lust point.
Second, by the nature of :lie postal business, there is it need to have
some employees and the srbstitutes fall in [his category, that work
varying hours during the week. Some days they will work longer
hours, some clays shorter hours, in terms of the necas. We do not reg-
ulate our production. It. comes in from the customers. So we vary
it. We think we, can achieve equity for the substitute who is on this
kind of an on-call arrangement, but most of them are working well
in excess of 40 hours now a w.>ek.
Mr. ltar:Bs. It is difficult. to convince me there. is any. justification
for doing that., but there is no sense in pursuing it any further.
The next: point. I would like to raise is the question of what happens
in private industry current.l~ with respefit to time and a. half for Satur-
day and double time for Sunday versus time and a half for this sixth
day worked and double time for the seventh day worked.
I want to disagree completely. I think if you did fined that Mr.
Block, ire a UAW contract, you have taken it out of context.. I am
not saying you did it. deliberately. I would say this probably refers
to powerhouse operation, the powerhouse operation being those few
employees who are responsible for keeping the plant heated and the
electrical power available.
For the of-her employees, it is inappl icable.
Mr. BLOCK. That is what I: said.
For the continuous operation phrases premium pay would be paid on
the sixth and seventh day of work. I tried to distinguish between the
ordinary production operaticn.
Mr. lirtFars. I do not think it was clear enough and that is why I
raise it now. You might, find in a plant. with 5,000 employees 10
people working in the powerhouse. It was to those 10 people the
special rate applied, not. I he other 4,000.
:fir. Grtoxousrcr. I might- 4ay we have to look from where we are
starting here. We have been paying regulars no overtime on Satur-
days and Sundays at all. [_nder this proposal, regulars will for the
first time in the postal service be paid time and a half on their sixth
and seventh day Of work, which I think is at big step forwad.
.Air. Ktterss. 1 do too. But. I think it has taken too long. I think
it is past (Inc., and I do not think it justifies settling for less tiin what
other employees are. get ling at this juncture.
I do want to say I ant glad Mr. Block agrees with me. This
was a reference. to a very minute percentage of the employees in the
total plant where concessions were made that they have a different
overtime schedule because of their continuous I-ay, 24-hour-a-day
operation.
lfr. BLOCr. The basic law, the Fair Labor Standard Act, only
requires overtime after 40 hours.
Mr. I(rums. I ani talking about comparability with what the actual
facts are in industry. The Fair Labor Standard Act applies to a
small percentage of the total workers of the. country. The important.
thing is, you are dealing with teal substantive problems that working
people have, and I think you acre applying an outmoded and antiquated
yardstick in your attempts to resolve these.
The only other quest ion f have is the reference made in the. Post-
master General's statement : "Increased fees for the delivery of special
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FEDERAL EMPLOYEES SALARY ACT 19
delivery mail in the small towns where it is delivered on a fee basis."
Does that mean that this is a piecework arrangement?
Mr. GRONOUSKI. Yes.
In terms of the total number of special delivery employees, it is
a very small number. What happens, in some of the small offices,
especially fourth class, there may come one special delivery letter a
week, or one a day, and you just have the postmaster there. You do
not have anyone that can go out and some school kid or someone is
hired on a piece basis to take it out. But the pattern in the Depart-
ment is salaried employees for special delivery.
Mr. KREns. I just want to state for the record, in my judgment
the concept-and I have to emphasize this because I think it is most
important-the concept of time and a half for the sixth day worked
and double time for the seventh day worked actually does not exist
in very many cases in private industry today.
For the last 10 years, in major industry in America, it has gone
down the drain, and has not been nearly as important as you suggest,
Mr. Block. That is all.
Mr. UDALL. The gentleman from Montana is recognized for 5
minutes.
Mr. OLSEN. I want to say that I very strongly agree with Mr. Krebs
about the overtime.
I would like to ask this: Do you find any precedent for having
workers work longer than 8 hours in a 24-hour period as a general
rule?
Mr. GRowousKI. Right now, the precedent is to have workers work
60 or 70 hours a week on straight time, and I am trying to fight
that precedent and make it very substantial contribution toward good
decent labor policy by calling for time and a half over 40 hours.
We do have a precedent in the case of the postal. service which is
deplorable.
Mr. OLSEN. In industry in general, do you.find for substitutes, or
temporary employees, a rule of working them longer than 8 hours
a day?
Mr. GRONOUSKI. I do not know of any industry that has the same
kind of business.
Mr. OLSEN. You get to your kind of business. You say the Post
Office Department does not regulate production, and that is true. But
with the experience of the. Post Office Department in each community,
should you not be able to predict what the postal load is going to
be?
Mr. GRONOUST-U. I wish we could, but we cannot. Not with the
degree of precision that you are talking about.
A postmaster sometimes will get a call at 7 o'clock saying, "An hour
from now we are coming in with three truckloads of third-class mail."
It is entirely unpredictable at the margins.
Mr. OLSEN. I find real fault with working anyone, substitutes, tem-
poraries, as well. as regulars, more than 8 hours in a 24-hour period.
In some of our States, we have constitutional provisions that 8 hours
shall constitute a day's labor for that 24-hour period. We find in the
trucking industry and in the air industry there is a limitation on the
number of hours that any employee can be permitted to work, never
mind required to work, in a 24-hour period.
49-591-65---6
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FEDERAL EMPLOYEES SALARY ACT OP 1965
I think, certainly, the Government-the U.S. Government-ought
to boa leader rather than a follower in setting that kind of standard.
Mr. GaoNausxr.. I think his year if we make the giant, step of re-
ducing substitutes from 60 hours'
ours a week down to 40, we are making a
big step, and also making the step of getting time and a half for over-
time over 40 hours.
Mr. OLSE:ti. TtTould you object strongly if we went. a step further and
restricted the number of hours that substitutes and temporaries could
be permitted. or required, to work in it 24-hour period ?
Mr. Gro.\-ousm. As a matter of fact, I will say what many Congress-
men say to tire, "Let inc see your bill."
Secondly, if we lost the flexibility of scheduling varying hours for
substitutes during the workweek, I cannot guess, but. I know your em-
ployment ceilings would go wayupp. I do not know where we would
]rave to go. I would have to study the bill..
Mr. Oisrx. I do not know why there would be any objection to that,
of lifting the employment ceilings. I think we should, I think we
ought to recognize that the Post Office Department is a growing indus-
try, and the need for manpower grows.
Mr. GrioxousKr. I am stare you realize from my seat, there is a dif-
ference of opinion in Congress on this matter. I also go before the
Appropriations Committee.
Mr. Or,sEx. I want to say that I strongly agree with Mr. Krebs as
he says he agrees with me, that 3 percent is not adequate as an increase;
we should go to full comparability. In my opinion it is more like 7
percent.
I think if there is an atte_npt to hold it at 3 percent, especially in
the lower grades, we are attempting to, or the administration is at.
tempting to, balance the budget by restricting the deserved increase in
pay of these Federal employes.
Mr. GrioNousxr. I might stay, if we went to relative comparability
along the way, it would call for higher increases in the middle brackets
of our levels.
Mr. OrsEN. And I would riot object to that. That is all right..
However, it hurts more at, the lower levels to hold it to 3 percent
than it hurts at a higher grade. There is a great deal of difference be-
tween 3 percent of $20,000 and 3 percent of $5,000.
Mr. (htoxoi?tir:r, lain not sure now whether we are talking about
coi spa ability, or hurt.
Mr. Of SF . The hill is not talking about full comparability. That
is rue point.. If it were. niv ugruiient would not be so strong for the
people in the lower grades.' I t is more stroncr when we consider we are
not talking re l comparability and then what is more.
Mr. T'r,->