approximately $35,000. The total rent received from HRT will be approximately 5.9 percent of the gross revenue of H & M, based upon present occupancy, and 4.0 percent based upon a 3 percent vacancy ratio. All the employees of H & M will occupy premises owned by H & M and not under lease. All the employees of HRT in the Hudson Terminal Building will occupy premises leased to HRT. Since the changes contemplated will in no way affect the operation of the railroad, it is concluded that HRT will be an employer under the Railroad Retirement and Railroad Unemployment Insurance Acts and the individuals on its payrolls will be employees under the Acts. (Presumably there will be similar coverage under the Railroad Retirement Tax Act, which is administered by the Internal Revenue Service.) Although H & M will be under common control with HRT and will be performing services in connection with railroad transportation, such services do not appear substantial in relation to H & M's total revenues, and may therefore be considered "casual service" within the meaning of the exception clause pertaining to affiliated companies in section 1 of the Acts. Accordingly, H & M will not be an employer under the Acts and would therefore be covered by the Social Security Act, the Federal Insurance Contributions Act, and the Federal Unemployment Tax Act. Inasmuch as individuals on the payroll of H & M will be performing services for HRT as employees of H & M and individuals on the payroll of HRT will be performing services for H & M as employees of HRT, the status of these individuals as employees of H & M and HRT, respectively, will not be affected by their services for the other company; they will remain exclusively employees of the company on whose payrolls they appear. This will not, of course, be true of the officers on the payroll of H & M who will also be officers of HRT, since as officers of both companies they would be employees of both companies and the fact that they will be paid directly by one company would not mean that they are not "in compensated service"(certainly their service for the other company would not be gratuitous). Their compensation will be creditable under the Acts to the extent attributable to service for HRT. Individuals who have 10 years of creditable service under the Railroad Retirement Act, will, if otherwise qualified, be entitled to the retirement annuities provided thereunder (including disability annuities under the conditions specified), in addition to any retirement benefits they may be entitled to under the Social Security Act. Individuals over the age of 65 who have been employed by the debtor and the trustee for 10 years or more and who will be employed by H & M may not receive retirement annuities under that Act while working for and receiving compensation from H & M. To permit them to do so would defeat the purpose of section 2(d) of the Act, for employment with H & M would be merely the continuation of the same employment, and not new employment such as is permitted under section 2(d). Section 2(d) precludes the payment of annuity for months during which the annuitant works for "the last person" by whom he was employed before his annuity began to accrue. The service and compensation of an individual with less than 10 years of creditable service under the Railroad Retirement Act will be credited under the Social Security Act as if Social Security Act service and compensation in determining eligibility for, and the amount of, social security benefits for himself, his wife, other members of his family and his survivors. A person does not need 10 years of creditable service to be eligible for normal benefits under the Railroad Unemployment Insurance Act, or for temporary extended benefits under the Temporary Extended Railroad Unemployment Insurance Benefits Act of 1961. It is for the purpose of receiving extended or accelerated unemployment insurance benefits under the amendments of May 19, 1959, to the Railroad Unemployment Insurance Act that the number of years of service is relevant. The eligibility of an individual for railroad unemployment insurance benefits depends on whether he has at least $500 earnings in the calendar year preceding the "benefit year" regardless of whether he is working for an "employer" or nonemployer at the time he becomes unemployed. However, generally an individual may not receive benefits for the same days of unemployment under the Railroad Unemployment Insurance Act and under any other public unemployment system. RAILROAD UNEMPLOYMENT INSURANCE ACT-TEMPORARY EXTENDED RAILROAD UNEMPLOYMENT INSURANCE BENEFITS ACT OF 1961 (PUBLIC LAW 87-7, APPROVED MARCH 24, 1961)LIMITATION ON BENEFITS DURING A BENEFIT YEAR L-61-217 Unemployment benefits cannot be paid in the benefit year 1960-1961 under the Temporary Extended Railroad Unemployment Insurance Benefits Act of 1961 (Public Law 87-7) to an individual who has already received in such year unemployment benefits amounting to 195 times his benefit rate for the year. It is contended that, because of an interpretation by the Railroad Retirement Board, certain railroad employees are being denied benefits to which they are entitled under the Temporary Extended Railroad Unemployment Insurance Benefits Act of 1961, Public Law 87-7, approved March 24, 1961. Specifically, reference is to the case of an employee who has at least 10 but less than 15 years of service; who has been unemployed continuously since July 1, 1960; who received normal unemployment benefits under the Railroad Unemployment Insurance Act for 26 weeks, exhausting his rights thereto by the first week in January, 1961; and who received regular extended unemployment benefits under section 2(c) of that Act as amended by Public Law 86-28, approved May 19, 1959, for an additional 13 weeks, exhausting his rights to such benefits by the first week of April, 1961. There is a complaint that such an employee, though still unemployed, is being denied temporary extended unemployment benefits under Public Law 87-7. The denial of temporary extended unemployment benefits under the circumstances described is required by the specific provisions of section 2 of Public Law 87-7. The second proviso of that section reads as follows: Provided further, That payment of benefits otherwise provided for in this Act shall not be made with respect to any individual for any day of unemployment to the extent that such payment, when added to the sum of the benefits under the Railroad Unemployment Insurance Act and under this Act paid such individual with respect to prior days in the benefit year, would exceed one hundred and ninety-five times such individual's daily benefit rate for such benefit year. It is apparent that in the benefit year July 1, 1960-June 30, 1961, the employee to whom reference has been made has received normal unemployment benefits for 130 days and regular extended unemployment benefits under section 2(c) of the Railroad Unemployment Insurance Act for 65 days. Since he has thus received benefits which equal 195 times his daily benefit rate for that benefit year, the proviso quoted above forbids the Board to pay him temporary extended unemployment benefits under Public Law 87-7 for any day in that benefit year. The manner in which the proviso operates is explained in the following excerpt from the Committee on Interstate and Foreign Commerce, House of Representatives, on the bill H.R. 5075: An employee who has already received benefits under the Railroad Unemployment Insurance Act in the current benefit year for 195 days or more would not be entitled to receive the temporary benefits provided in this section during the remainder of the current year. However, he would be so entitled in the benefit year beginning next July 1 to the extent that he has not been paid benefits otherwise for 195 days under the Railroad Unemployment Insurance Act during the benefit year beginning on that date. (Report No. 54, 87th Congress, 1st Session, page 5.) The provisions of the proviso are similar to those contained in the Temporary Extended Unemployment Compensation Act of 1961, Public Law 87-6, approved March 24, 1961. Section 5(b) of that Act provides that: Payment of temporary extended unemployment compensation (and reimbursement of State unemployment compensation) shall not be made with respect to any individual for any week of unemployment, to the extent that such payment or reimbusement, when added to the sum of State unemployment compensation and temporary extended unemployment compensation paid to such individual with respect to prior weeks in the compensation period, would exceed 39 times such individual's weekly benefit amount for such compensation period. Thirty-nine times the individual's weekly benefit amount under a State unemployment compensation law corresponds to benefits for 195 days under the Railroad Unemployment Insurance Act, since benefits under this Act are paid for days of unemployment in excess of four in each 14-day registration period. SECTION 12 OF THE RAILROAD RETIREMENT ACT-COMPLIANCE L-61-219 The Railroad Retirement Board has no authority under which it can comply with a court order directing it to pay the employee's former wife "one-half (1⁄2) of all sums deposited in the Railroad Retirement Fund" on his behalf. The question under consideration is whether the Railroad Retirement Board has the authority to comply with a court order directing it to pay to the employee's former wife, H, one-half of "all sums deposited in the Railroad Retirement Fund" on behalf of the employee, F. Section 12 of the Railroad Retirement Act provides: Notwithstanding any other law of the United States, or of any State, Territory, or the District of Columbia, no annuity or pension payment shall be assignable or be subject to any tax or to garnishment, attachment, or other legal process under any circumstances whatsoever, nor shall the payment thereof be anticipated. In a court order granting a divorce to the plaintiff, H, the court directed, inter alia, that "plaintiff shall have one-half (2) of all sums deposited in the Railroad Retirement Fund on behalf of the defendant herein to the date of this divorce." There is no basis in the law for compliance with this order. While in practical effect the taxes imposed by the Railroad Retirement Tax Act on railroad employers and their employees (sections 3201 and 3221 of the Internal Revenue Code of 1954) supply the funds through congressional appropriation from the U.S. Treasury required for the payment of benefits under the Railroad Retirement Act, in legal theory these taxes have no relationship to the benefits (cf. Helvering v. Davis, 301 U.S. 619, 640 (1947)). The Railroad Retirement Act provides, as direct statutory rights, gratuitous benefits allowable under the general welfare clause of the U.S. Constitution. The Railroad Retirement Board's authority to expend funds of the Railroad Retirement Account is limited to the payment of the special benefits authorized by the Railroad Retirement Act. There is no authority under which the Railroad Retirement Board can comply with this court order. SECTION 2(d) OF THE RAILROAD RETIREMENT ACT-EFFECT OF NEGLIGIBLE REMUNERATION AS PUBLIC OFFICER ON PROVISION FOR LOSS OF DISABILITY ANNUITY BECAUSE OF EARNINGS IN EXCESS OF SPECIFIED AMOUNT L-61-222 Remuneration as public officer where individual's motive in serving is a desire to render public service and remuneration is in a negligible amount is to be included in determining earnings which cause the withholding of disability annuity for certain months. A question has arisen as to the withholding for certain months of the disability annuity of S, because of earnings of over $1,200 a year. S was a member of the City Council of Portsmouth, Va., in 1956 when he retired from railroad service and was awarded an annuity under the Railroad Retirement Act on the grounds of disability. The ruling to which the inquirer refers was that a public officer who continued in office after retiring from railroad service, receiving money remuneration in a negligible amount (as in the usual case of remuneration of $100 a month or less) and whose motive for serving is the desire to render public service, is not serving for money, and is therefore not rendering "compensated service to any person" which would otherwise preclude the allowance of an annuity to him under section 2(a) of the Railroad Retirement Act and its continued payment without regard to that part of section 2(d) of the Act which bars payment when the annuitant renders "compensated service he was employed." to the last person by whom An annuitant who receives his annuity under section 2(a)4 and 2(a)5, however, because of disability, is subject to the further limitation in section 2(d) that he may not, under the amendment to section 2(d) enacted in 1954 (Public Law 746, 83rd Cong.), receive the disability annuity for "any month in which [he] the individual is under age sixty-five and is paid more than $100 in earnings from employment or self-employment of any form” (emphasis supplied), with that limitation narrowed by the amendments of 1959 (Public Law 86-28, 86th Cong.). Under the later amendment the disability annuitant under age 65 who earns more than $100 in any month but whose total earnings in the calendar year do not exceed $1,200 receives a return of the annuities he had to give up, but if his earnings exceed $1,200 in the calendar year he loses his annuity for not to exceed one month for each $100 of the excess over $1,200 counting the last $50 or more of the excess as $100. It has been held (Associate General Counsel's opinion L-55-46) that the statutory language, "earnings from employment or self-employment of any form" which precludes payment of the annuity when the "earnings" exceed the specified amount is broader than and different in meaning from the term "compensated service to any person" or "to the last person" in sections 2(a) and 2(d), respectively, of the Railroad Retirement Act, which terms have been held not to apply in the case of a public officer when the remuneration is not a motivating factor in his acceptance of the office and performance of its duties (General Counsel's opinion L-42-300). It is considered, however, that this new language would include earnings from a public office, particularly since the "earnings" provision serves as a test of disability (Senate Report No. 2222, 83rd Congress, page 14; House Report 1890, 83rd Congress, page 17) and obviously is not confined in its application to status akin to employer-employee, or master-servant, relationship, or to the form of remuneration, as is the term "compensated service to a person" or "to the last person by whom he was employed." Rather this new language refers to "earnings" from any kind of disability-testing employment. In this respect, it is believed, nothing about a public officer's employment distinguishes it from other forms of employment, whether for hire or selfemployment. SECTION 5(a) AND (1)(1) OF THE RAILROAD RETIREMENT ACTSTATUS AS WIDOW-VALIDITY OF COMMON-LAW MARRIAGE L-61-232 Evidence of record shows that a valid marriage under common-law principles was effected. The question presented is whether M who lived with S, an employee under the Railroad Retirement Act during the last several years of his life, in Kansas, did so in the capacity and status of a common-law wife, or in the capacity of housekeeper. If she was his wife she could qualify for annuity as his "widow". |