U.S. Department of the Army, 10TH Mountain Division, (Light Infantry) and Fort Drum, Fort Drum, New York (Agency) and National Association of Government Employees, Local R2-61 (Union)
[ v56 p792 ]
56 FLRA No. 132
U.S. DEPARTMENT OF THE ARMY
10TH MOUNTAIN DIVISION
AND FORT DRUM
FORT DRUM, NEW YORK
NATIONAL ASSOCIATION OF GOVERNMENT
EMPLOYEES, LOCAL R2-61
September 28, 2000
Before the Authority: Donald S. Wasserman, Chairman and Dale Cabaniss, Member.
Decision by Member Cabaniss for the Authority
I. Statement of the Case
This matter is before the Authority on an exception to the award of Arbitrator W. Bruce Newman filed by the Agency under section 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exception.
The Arbitrator determined that the Agency owed the grievant additional compensation because the Agency failed to include danger pay as part of the employee's basic pay for the purpose of computing overtime/premium pay. The Arbitrator ordered the Agency to pay the grievant all additional overtime and premium pay owed for work performed while on temporary duty in Bosnia. The Agency's exception contends that the award is contrary to law and Government-wide regulations.
To assist us in resolving this matter, we obtained an advisory opinion from the Office of Personnel Management (OPM) concerning its regulations, and the parties have responded to OPM's advisory opinion. For the reasons that follow, we conclude that the award is deficient. [ v56 p793 ]
II. Background and Arbitrator's Award
The grievant, a maintenance work leader under the Federal wage system, was on temporary duty in Bosnia from March 11, 1998 to May 29, 1998. Award at 2. While serving in Bosnia, the grievant was eligible to receive a 25 percent danger pay allowance pursuant to 5 U.S.C. § 5298. [n1] He was paid the 25 percent danger pay allowance for work performed during his regular 40-hour workweek while in Bosnia.
The Agency also assured the grievant on a number of occasions that he would receive the 25 percent danger pay allowance for both base pay and overtime. Award at 4. The Arbitrator noted that the parties jointly stipulated, "[the grievant] and the others were told, and shown, in writing, that their overtime would also include the [Danger Pay Allowance] of 25%." Id. This position is further supported by a provision of the Department of Defense Pay Manual and an Army Pamphlet that were submitted to the Arbitrator. See Award at 3. [n2]
However, upon the grievant's return to the United States, he was informed that he would not be paid overtime at a rate which included his danger pay allowance. Id. at 2. The Agency stated that since the grievant was already being paid a 25 percent danger pay allowance for his 40-hour workweek, the additional compensation would exceed the maximum amount allowed by the Danger Pay Statute. Agency Final Brief at 6. [n3]
The Arbitrator framed the issue as, "[d]id the Employer violate the collective bargaining agreement by not computing Grievant's overtime and premium pay while he was deployed in accordance with the provisions of the DA Civilian Employee Deployment Guide? If so, what shall be the remedy?" Award at 2.
The Arbitrator found that the grievant was entitled to danger pay while working overtime. He concluded that danger pay is a type of "environmental differential" that can be considered part of basic pay, and therefore danger pay can be considered in computing overtime. Id. at 6 (citing 5 C.F.R. 532.401). The Arbitrator stated that to allow a danger pay allowance during the 40-hour workweek, while at the same time failing to extend such payment into overtime, was illogical. He noted that the grievant worked under the same dangerous conditions regardless of his pay status.
The Arbitrator also found that the danger pay allowance was not specifically excluded from the definition of "basic compensation" under the Department of State Standardized Regulations (DSSR), Paragraph 651. He therefore concluded that it could be included in calculating "basic compensation" for other matters such as overtime. Award at 5.
Finally, the Arbitrator found that the actions of the Agency provided a separate basis for the payment of additional compensation to the grievant. The Arbitrator stated:
In light of the timing of the original and subsequent announcements, Agency promises for Danger Pay on Overtime/premium pay, as well as the personal danger to the [g]rievant and life impacting inconvenience involved, and the fact that the [g]rievant could only learn about the error upon return after the fact; leads the Arbitrator to conclude that this argument lacks fairness.
Award at 4. [n4] He further stated, "[t]his incorrect agency information was in no way the responsibility of the [g]rievant and, had it been known by him at the time, may well have modified his voluntary decision to travel to and work in Bosnia." Id. at 5.
Accordingly, the Arbitrator ordered the Agency to "recalculate and pay the [g]rievant all Overtime and Premium Pay monies due, to include Danger Pay Allowance (DPA) on Overtime and Premium Time worked." Award at 7.
III. Positions of the Parties
A. Agency's Exception
The Agency asserts that the Arbitrator erred when he found that the grievant was entitled to payment of danger pay while working overtime. The Agency notes that the Arbitrator found danger pay could be included in "basic pay" by determining that it fell under the definition of "environmental differential." Exception at 4. It argues, however, that danger pay, while similar to an environmental differential, is not one. In support, it cites the definition of "environmental differential" contained in 5 C.F.R. Part 532. The Agency argues that [ v56 p794 ] "environmental differential" is a term of art defined by OPM regulation, and does not include danger pay, which is established by the DSSR rather than OPM regulation. According to the Agency, since danger pay and environmental differential "flow from different statutory and regulatory authorities and are administered by different agencies," danger pay is not an environmental differential for purposes of computing "basic pay." Id.
As such, the Agency argues that "[b]y law and regulation, [danger pay] is to be calculated as a differential on top of `basic pay'." Id. The Agency asserts that the grievant should first receive his basic pay and then receive an additional percentage as danger pay. Accordingly, the Agency contends that the Arbitrator erred by finding danger pay was an environmental differential included in the basic pay of the grievant.
B. Union's Opposition
The Union asserts that the award is not contrary to law or Government-wide regulation. According to the Union, danger pay would be added to the grievant's hourly rate which would create the grievant's rate of pay. Opposition at 2. That rate, in turn, would be paid out at time and a half during overtime.
Moreover, the Union asserts that the Agency makes significant errors in interpreting the laws and regulations governing danger pay.
Finally, the Union argues that danger pay is an incentive to compensate employees who work in hazardous locations, and as such, should not abate after eight hours. Id. at 3. The Union differentiates danger pay from allowances that provide reimbursement for living expenses, such as housing, subsistence and per diem, which according to the Union "would have a prohibited and unintended pyramiding effect" on employees' hourly rates if included as part of basic pay. It argues that unlike those allowances, danger pay is a premium that creates a new de-facto rate of compensation applicable to all hours worked. Id.
IV. Analysis and Conclusions
The Award is Contrary to Law
When a party's exception challenges an arbitration award's consistency with law, rule or regulation, the Authority reviews questions of law raised by the award and exceptions de novo. American Federation of Government Employees, Local 2004 and U.S. Department of Defense, Defense Logistics Agency Defense Distribution Region East New Cumberland, Pennsylvania, 55 FLRA 6, 9 (1998)(New Cumberland); National Treasury Employees Union, Chapter 24 and U.S. Department of the Treasury, Internal Revenue Service, 50 FLRA 330, 332 (1995) (citing U.S. Customs Service v. FLRA, 43 F. 3d 682, 686-87 (D.C. Cir 1994)). De novo review requires the Authority to assess whether the arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. New Cumberland, 55 FLRA at 9; National Federation of Federal Employees, Local 1437 and U.S. Department of the Army, Army Research, Development and Engineering Center, 53 FLRA 1703, 1710 (1998). In making that assessment, the Authority defers to the arbitrator's underlying factual findings. New Cumberland, 55 FLRA at 9.
The question presented in this matter is whether danger pay is included in basic pay used to compute overtime. [n5] In this connection, we note that the grievant, a Federal wage system employee, was working in a foreign country, Bosnia, for the entire time frame encompassed by this grievance. Under 5 C.F.R. § 551.209 (b)(2), employees who perform an entire work week in a foreign country are exempt from the Fair Standards Labor Act (FLSA). Accordingly, the grievant was exempt from the FLSA while serving in Bosnia. See also, 5 C.F.R. § 551.104 (definition of "exempt area"). Instead, for the purpose of computing the grievant's overtime entitlement, the grievant was subject to OPM's overtime regulations. See 5 C.F.R. § 532.503(a)(1).
Under those regulations, an employee's overtime pay is computed based upon the employee's basic pay. Basic pay includes such additional compensation as night time and environmental differentials. The Danger Pay Act states that danger pay may not exceed 25 percent of an employees "basic pay." However, while OPM regulation defines "basic pay," the Danger Pay Act does not.
The Arbitrator referred to 5 C.F.R. § 532.401 for a definition of "rate of basic pay." In that regulation, "rate of basic pay" is defined as "the scheduled rate of pay plus any night or environmental differential." The Arbitrator held that danger pay is a type of environmental differential that can be considered a part of basic pay. We find, however, that the Arbitrator's conclusion is not supported by the relevant regulations. [ v56 p795 ]
OPM's advisory opinion states that the regulations governing environmental differentials for Federal wage system employees appear at 5 C.F.R. § 532.511. According to OPM, Appendix A to subpart E of 5 C.F.R. part 532 identifies 35 circumstances under which an environmental differential may be paid. The list, however, does not include danger pay. Therefore, OPM states, danger pay is not among the categories it has approved for the payment of an environmental differential. OPM's interpretation of its own regulation is entitled to deference under these circumstances, since it is neither plainly erroneous nor inconsistent with the underlying regulation. See U.S. Department of Transportation, Federal Aviation Administration and National Air Traffic Controllers Association, 55 FLRA 797, 802 (1999).
Based on the guidance in 5 C.F.R. Part 532 and OPM's advisory opinion, we conclude that the Arbitrator misapplied 5 U.S.C. § 5928 in terms of defining "basic pay" under OPM regulation. We find, instead, that "basic pay" as that term is applied to the computation of overtime under OPM's regulations does not include danger pay.
Finally, the Arbitrator appears to have based his award on equitable principles as much as on his analysis of the relevant statutes and regulations. Those equitable concerns, however, provide no basis for failing to set aside an award that is contrary to law, and the Union has made no such argument in support of upholding the Arbitrator's award. Case law makes it clear that such equitable principles would not be controlling in any event. In denying monetary claims where there was no underlying congressional authorization for such payment, the Supreme Court noted:
If agents of the Executive were able, by their unauthorized oral or written statements to citizens, to obligate the Treasury for the payment of funds, the control over public funds that the [Appropriations Clause] reposes in Congress in effect would be transferred to the Executive.
U.S. Office of Personnel Management v. Richmond, 496 U.S. 414, 428; 110 S. Ct. 2465 (1990) (OPM). Further stated, absent a statutory remedy, "judicial use of the equitable doctrine[s] . . . cannot grant [a claimant] a money remedy that Congress has not authorized." United Services Automobile Association v. United States, 105 F.3d 185, 188 (4th Cir. 1997) (quoting OPM, 496 U.S. at 426).
The Arbitrator's award of a danger pay allowance to the grievant for the period that he was receiving overtime/premium pay is set aside.
DA Civilian Employee Deployment Guide -Pamphlet 690-47 Civilian Personnel (Page 22, paragraph 6)
Danger Pay - DPA is not subject to the GS pay cap (See Maximum Salary Limitations (Pay Cap)). DPA is not part of the basic compensation for computation of within-grade step increases: however, for wage grade employees it is part of the employee's basic rate of pay, the computation of overtime, holiday, Sunday premium pay, retirement, Federal Employee's Group Life Insurance, Federal Income Tax, Federal Insurance Compensation Act or Medicare State and City, or local taxes.
Department of Defense(DoD) Civilian Pay Manual, Volume 8, Chapter 3(f)
Danger Pay Allowance (DPA) - . . . The DPA is not subject to any ceiling that would provide less than the full percentage rate authorized for the post. DPA is included as part of the FWS employee's basic rate of pay for computation of overtime, holiday, Sunday premium pay, retirement, and life insurance.
5 U.S.C. § 5928. Danger pay allowance
An employee serving in a foreign area may be granted a danger pay allowance on the basis of civil insurrection, civil war, terrorism, or wartime conditions which threaten physical harm or imminent danger to the health or well-being of the employee. A danger pay allowance may not exceed 25 percent of the basic pay of the employee, except that if an employee is granted an additional differential under section 5925(b) of this title with respect to an assignment, the sum of that additional differential and any danger pay allowance granted to the employee with respect to that assignment may not exceed 25 percent of the basic pay of the employee. The presence of nonessential personnel or dependents shall not preclude payment of an allowance under this section. In each instance where an allowance under this section is initiated or terminated, the Secretary of State shall inform the Speaker of the House of Representatives and the Committee on Foreign Relations of the Senate of the action taken and the circumstances justifying it.
Footnote # 1 for 56 FLRA No. 132
Footnote # 2 for 56 FLRA No. 132
Footnote # 3 for 56 FLRA No. 132
Footnote # 4 for 56 FLRA No. 132
The Arbitrator refers to the Agency's argument that "while it is unfortunate that [the grievant] was given incorrect information while being deployed, that does not create an enforceable obligation on the U.S. Treasury." Award at 4 (citing Agency Final Brief at 5).
Footnote # 5 for 56 FLRA No. 132
The Agency argues that overtime pay should not be considered a part of basic pay, and thus, the grievant's danger pay would be limited to 25 percent of his basic pay. Exception at 3. It also argues that the Arbitrator erred by determining that danger pay should have been included in the grievant's basic pay used to calculate his overtime pay. We will resolve the latter question, which more accurately reflects the applicable legal framework.