[Effect of Quality Step Increase on Pay Entitlement]

The Army requested a determination of the effect of a quality step increase on the backpay entitlement of an Army employee who was retroactively promoted from GS-11 to GS-12 as a result of an equal employment opportunity settlement. GAO held that: (1) an employee who is awarded a retroactive promotion incident to the settlement of a discrimination complaint is entitled to backpay based on the salary of the position to which he is promoted, less the amounts earned in the lower grade position; and (2) a quality step increase received in the lower grade position can not be taken into account to increase the rate of pay to which an employee is entitled in the higher grade position. Accordingly, the amounts attributable to the quality step increase are to be deducted from the pay of the higher-grade position to determine the backpay entitlement and the employee may not be awarded a quality step increase retroactive to the date 1 year after the effective date of his retroactive promotion to GS-12.