Rate of Pay to Prevailing Rate Employees

GAO answered questions concerning lump-sum leave payments to prevailing rate employees. The questions arose as a result of provisions in recent appropriation acts which limited the amount of wage increases for prevailing rate employees authorized by the U.S. Code (U.S.C.). The pay of prevailing rate employees is adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates. These rates are established by wage surveys and subsequently implemented by an order granting the increase. Since the U.S.C. requires that increases pursuant to these surveys be granted within a period of time after the survey is ordered, a retroactive entitlement is often effected because the implementing order granting the increase is issued later. This provision requires that employees must be in the service of the United States on the date of the issuance of the order granting the increase to be entitled to retroactive pay. The questions concern whether these rules apply to pay increases stemming from the enactment of P.L. 96-369. Specifically, the question is raised concerning whether the increases authorized by this law also authorize an adjustment in lump-sum payments made to employees for unused annual leave at the time of separation. In response, GAO stated that lump-sum annual leave payments made to prevailing rate employees may be adjusted to reflect the increase in new rates of pay commencing after the effective date of P.L. 96-369. This is true if the employee performed service after the effective date of the act as required by subsection 114(c) of the act.