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I am going to presume that PP1 is the proper file name. And Rec1 is correct.
Most code that I have encountered would read by file name. I always specify the what I am checking when I use %EOF().
C EMPID READE PP1
C DOW NOT %EOF(PP1)
But really, I don't think that should make a difference in your results.
You did not indicate which OS release you are on. I am on V7.1 and have a file I get unpredictable results with using Reade with an alpha key.
One thing that strikes me as very unusual in your sample data is that you have two employees with the same employee ID. Perhaps you did that for the purpose of illustration, but not something I would expect to see. In various processing that might be done, how do you know which employee is which.
Does this code compile successfully? if not what are the errors. Does it compile, but not run? Run but not yield expected results?...
There appears to be one important line missing prior to your first READE:
C EMPID SETLL REC1