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The Federal Employees Pay Act of 1945
Excerpts from a review by Ismar Baruch in Pziblic Personnel Review (O ctober)
Effective Ju ly 1, 1945, the Congress
of the United States, through the pro
visions of the Federal Employees Pay
A ct of 1945, made comprehensive
changes in existing pay policies affect
ing, white-collar employees who are
subject to the general position-classifi
cation and pay policies expressed in the
Classification A ct of 1923, as amended.
The new law, among other things,
(a) raises the level of the basic-rate
schedules of the Classification A ct, (b)
fixes 40 hours as the length of the basic
workweek, (c ) required overtime pay
at true time and one-half rates for
work in excess of 40 hours in any one
workweek, (d ) liberalizes the granting
of merit pay-increases, (e) introduces
some flexibility in the fixing of mini
mum or hiring rates, ( f ) provides a
pay differential for those whose regular
work is at night, and (g ) establishes a
postwar policy of premium pay for holi
day work.
Basic Rate Schedules^
The problem of revising basic rate
schedules for white-collar or salaried
officers and employees in the public
service, who are engaged. in a great
variety of clerical, supervisory, admin
istrative, technical, professional, and
scientific occupations, is in broad out
line essentially the same in all govern
ments— national, state, and local. T ra
ditionally, such schedules are established
legislatively and are. not quickly respon
sive to changes in economic conditions.
Historically, too, they are conservative
in level and do not permit effective re
cruiting in competition with private in
dustry from the standpoint of the fi
nancial inducements that can be o f
fered.
According to the national cost-of-liv
ing index of the Bureau of Labor Sta
tistics, the cost o f living had risen at
lease 26 per cent since January, 1941,
the base date for application of the
Little Steel formula of the National
W ar Labor Board. Other workers, both
in the federal government and in indus
try, had enjoyed basic wage increases
up to the 15 per cent limit established
by that formula, to compensate, at
least in part, for this considerable in
crease in living expenses. The Federal
Employees Pay A ct o f 1945 was de
signed to establish a reasonable rela
tionship between the statutory pay
schedules of the Classification A ct and
the changes that had taken place in
economic conditions and in the pre
vailing wage schedules o f government
employees in crafts, trades, and labor
occupations.
The device for determining the new
basic rates assured a continuous slid
ing percentage scale of increases, grad
ually diminishing from 20 per cent in
the lowest brackets to 8.9 per cent at
the highest point. U p to and including
the existing rate o f $1,200 a year, the
increase was 20 per cent; at 2,400, 15
per cent; at $4,000, 13 per cent; at
$5,000, 12 per cent; at $7,000, 10 per
cent; and at $9,000, 8.9 per cent. The
over-all average increase above prior
rates was about 15.9 per cent.
Forty-H our Basic Workweek
A regular 40 -hour basic workweek
had been established by Congress in
1934 for prevailing rate crafts and
trades, and in 1935 for many employees
of the Postal Service. N ot until the
passage of emergency or war legislation
in 1940-43, was a similar policy recog
nized for salaried employees under the
Classification A ct, and this policy was
temporary in character. The laws had
definite expiration dates.
The Federal Employees Pay A ct ol
1945 makes this policy permanent. It
requires heads of agencies to establish a
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