B-211674, MAY 25, 1983

B-211674, MAY 25, 1983

PRECIS-UNAVAILABLE

THE HONORABLE WILLIAM D. FORD, CHAIRMAN COMMITTEE ON POST OFFICE AND CIVIL SERVICE HOUSE OF REPRESENTATIVES:

THIS IS IN RESPONSE TO YOUR LETTER OF APRIL 28, 1983, REQUESTING OUR VIEWS ON THE LEGALITY OF THE PROPOSED REVISION TO 5 C.F.R. SEC. 531.404. IT PROVIDES THAT EMPLOYEES IN STEPS 1 THROUGH 6 OF A GRADE IN THE GENERAL SCHEDULE MUST PERFORM AT THE "FULLY SUCCESSFUL" LEVEL TO BE ELIGIBLE FOR A WITHIN-GRADE STEP INCREASE, BUT EMPLOYEES IN STEPS 7 THROUGH 9 MUST PERFORM AT THE "EXCEEDS FULLY SUCCESSFUL" LEVEL TO BE ELIGIBLE FOR A STEP INCREASE. 48 FED.REG. 13360-61, MARCH 30, 1983.

YOU ASK IF OPM MAY LEGALLY REQUIRE DIFFERENT PERFORMANCE RATINGS AT DIFFERENT STEP LEVELS OR DOES THE LAW REQUIRE THAT THE SAME RATING APPLY TO EACH OF THE TEN STEPS.

WE HAVE REVIEWED THE PROPOSED REVISION, AS WELL AS THE DERIVATIVE STATUTES AND THEIR LEGISLATIVE HISTORY. WE MUST CONCLUDE THAT THE PROPOSED REVISION TO 5 C.F.R. SEC. 531.404 IS CONTRARY TO LAW AND MAY NOT BE LEGALLY IMPLEMENTED. THE GOVERNING STATUTE REQUIRES THAT THE SAME PERFORMANCE STANDARD OR RATING APPLY TO ALL OF THE TEN STEPS OF THE GRADES IN THE GENERAL SCHEDULE.

WITHIN-GRADE STEP INCREASES ARE AUTHORIZED BY 5 U.S.C. SEC. 5335 (1976 AND SUPP. IV 1980) ENTITLED "PERIODIC STEP INCREASES." THE WAITING PERIODS AND THE CONDITIONS FOR STEP INCREASES ARE SET FORTH IN SECTION 5335(A) AS FOLLOWS:

"SEC. 5535. PERIODIC STEP-INCREASES

"(A) AN EMPLOYEE PAID ON AN ANNUAL BASIS, AND OCCUPYING A PERMANENT POSITION WITHIN THE SCOPE OF THE GENERAL SCHEDULE, WHO HAS NOT REACHED THE MAXIMUM RATE OF PAY FOR THE GRADE IN WHICH HIS POSITION IS PLACED, SHALL BE ADVANCED IN PAY SUCCESSIVELY TO THE NEXT HIGHER RATE WITHIN THE GRADE AT THE BEGINNING OF THE NEXT PAY PERIOD FOLLOWING THE COMPLETION OF -

"(1) EACH 52 CALENDAR WEEKS OF SERVICE IN PAY RATES 1, 2, AND 3;

"(2) EACH 104 CALENDAR WEEKS OF SERVICE IN PAY RATES 4, 5, AND 6; OR

"(3) EACH 156 CALENDAR WEEKS OF SERVICE IN PAY RATES 7, 8, AND 9;

SUBJECT TO THE FOLLOWING CONDITIONS:

"(A) THE EMPLOYEE DID NOT RECEIVE AN EQUIVALENT INCREASE IN PAY FROM ANY CAUSE DURING THAT PERIOD; AND

"(B) THE WORK OF THE EMPLOYEE, EXCEPT AN 1945 WAS ENACTED, AGAIN AMENDING THE CLASSIFICATION ACT OF ADMINISTRATIVE LAW JUDGE APPOINTED UNDER SECTION 3105 OF THIS TITLE, IS OF AN ACCEPTABLE LEVEL OF COMPETENCE AS DETERMINED BY THE HEAD OF THE AGENCY."

AS IS READILY APPARENT, THE STATUTE DOES NOT REQUIRE DIFFERENT LEVELS OF PERFORMANCE FOR ADVANCEMENT TO STEPS 8, 9, AND 10. IT APPLIES THE SAME PERFORMANCE STANDARD, NAMELY "AN ACCEPTABLE LEVEL OF COMPETENCE", TO ALL OF THE SCHEDULED STEPS.

A REVIEW OF THE DERIVATIVE STATUTES AND THEIR LEGISLATIVE HISTORIES CLEARLY DEMONSTRATES THAT CONGRESS INTENDED THE SAME PERFORMANCE STANDARD TO BE APPLIED AS A PREREQUISITE FOR ADVANCEMENT TO EACH HIGHER STEP. THE CURRENT STATUTE CAN BE TRACED BACK TO SECTION 7 OF THE CLASSIFICATION ACT OF 1923, MARCH 4, 1923, CHAPTER 265, 42 STAT. 1488, 1490. THAT SECTION AUTHORIZED THE PAYMENT OF AN INCREASE IN COMPENSATION TO THE NEXT HIGHER RATE WITHIN THE SALARY RANGE OF THE GRADE "UPON THE ATTAINMENT AND MAINTENANCE OF THE APPROPRIATE EFFICIENCY RATINGS ***."

IN 1941 SECTION 7 WAS AMENDED BY SECTION 2 OF THE ACT OF AUGUST 1, 1941, CHAPTER 346, 55 STAT. 613-14. THIS AMENDMENT ADDED SPECIFIC WAITING PERIODS FOR ADVANCEMENT TO THE NEXT HIGHER RATE. THESE 1941 AMENDMENTS ALSO ADDED CONDITIONS WHICH ARE VERY SIMILAR TO THOSE NOW BEING PROPOSED BY THE OFFICE OF PERSONNEL MANAGEMENT. SPECIFICALLY, SUBSECTIONS (B)(2) AND (3) WERE ADDED TO SECTION 7 OF THE CLASSIFICATION ACT OF 1923 TO IMPOSE THE FOLLOWING CONDITIONS AS A PREREQUISITE TO ADVANCEMENT:

"(2) THAT AN EMPLOYEE WHOSE RATE OF COMPENSATION IS BELOW THE MIDDLE RATE OF THE GRADE SHALL NOT BE ADVANCED UNLESS HIS CURRENT EFFICIENCY IS GOOD OR BETTER THAN GOOD;

"(3) THAT AN EMPLOYEE WHOSE RATE OF COMPENSATION IS AT OR ABOVE THE MIDDLE RATE OF THE GRADE SHALL NOT BE ADVANCED UNLESS HIS CURRENT EFFICIENCY IS BETTER THAN GOOD; ***."

FOUR YEARS LATER, THE FEDERAL EMPLOYEES PAY ACT OF 1923. SEE SECTION 402, JUNE 30, 1945, CHAPTER 212, 59 STAT. 295 AT 299-300. THE WAITING PERIODS WERE SHORTENED, BUT MORE IMPORTANTLY THE 1945 AMENDMENT ELIMINATED THE DIFFERENCE IN PERFORMANCE STANDARDS FOR STEP INCREASES THAT HAD BEEN ADDED IN 1941.

AS NOTED IN BOTH THE SENATE AND HOUSE REPORTS ON THE 1945 ACT, UNDER THE PREVIOUS LAW AN EMPLOYEE COULD ADVANCE BEYOND THE MIDDLE RATE OF HIS GRADE ONLY UPON AN EFFICIENCY RATING OF "BETTER THAN GOOD." THE 1945 AMENDMENT DROPPED THIS REQUIREMENT SO THAT AN EMPLOYEE COULD ADVANCE TO THE MAXIMUM RATE OF HIS GRADE WITH A RATING OF "GOOD." S.REP. NO. 265, 79TH CONG., 1ST. SESS. 5 (1945); H.R.REP. NO. 726, 79TH, CONG., 1ST SESS. 15 (1945).

THERE CAN BE NO DOUBT AS TO THE CHANGES INTENDED BY CONGRESS IN THIS 1945 AMENDMENT. THE LANGUAGE OF THE STATUTE AND THE SENATE AND HOUSE REPORTS MAKES IT CLEAR THAT CONGRESS SPECIFICALLY REJECTED THE REQUIREMENT IN THE 1941 AMENDMENTS OF A HIGHER PERFORMANCE RATING FOR A WITHIN-GRADE INCREASE AT THE HIGHER END OF THE PAY RANGE. THUS, IN 1945 CONGRESS SPECIFICALLY REPEALED PROVISIONS SIMILAR TO THE REGULATORY CHANGES NOW BEING PROPOSED BY OPM AS A REVISION TO 5 C.F.R. SEC. 531.404.

SUBSEQUENT AMENDMENTS TO THE WITHIN-GRADE STATUTE DEMONSTRATE THAT CONGRESS HAS CONTINUED TO REQUIRE THE SAME PERFORMANCE STANDARD FOR ALL STEPS.

ON OCTOBER 28, 1949, CONGRESS ENACTED THE CLASSIFICATION ACT OF 1949, CHAPTER 782, 63 STAT. 954, 967-68. SECTION 701(A) OF THAT LAW REENACTED THE SAME PROVISIONS FOR WITHIN-GRADE INCREASES CONTAINED IN THE 1945 ACT, EXCEPT THAT THE TWO WAITING PERIODS THEN REQUIRED WERE CONVERTED FROM MONTHS TO THE PRESENT PRACTICE OF WEEKS, I.E., FROM 12 MONTHS TO 52 CALENDAR WEEKS AND FROM 18 MONTHS TO 78 CALENDAR WEEKS. 5 U.S.C. SEC. 1121 (1952). THE 1949 ACT AGAIN REQUIRED ONLY A PERFORMANCE RATING OF "GOOD" OR "BETTER THAN GOOD" IN ALL STEPS, AND CERTIFICATION BY THE AGENCY THAT THE EMPLOYEE'S PERFORMANCE WAS OTHERWISE SATISFACTORY. FN1

IN ADDITION, SECTION 703 OF THE CLASSIFICATION ACT OF 1949 ADDED LONGEVITY STEP INCREASES WITH A WAITING PERIOD OF 3 YEARS, WHICH CORRESPOND TO THE CURRENT PROVISIONS FOR STEPS 8, 9 AND 10. THAT SECTION, AS CODIFIED AT 5 U.S.C. SEC. 1123 (1952), PROVIDED, IN PERTINENT PART, AS FOLLOWS;

"SEC. 1123. LONGEVITY INCREASES.

"(A) SUBJECT TO SUBSECTION (B) OF THIS SECTION, AND AS A REWARD FOR LONG AND FAITHFUL SERVICE, EACH DEPARTMENT SHALL GRANT AN ADDITIONAL STEP-INCREASE (TO BE KNOWN AS A LONGEVITY STEP-INCREASE) BEYOND THE MAXIMUM SCHEDULED RATE OF THE GRADE IN WHICH HIS POSITION IS PLACED, TO EACH OFFICER OR EMPLOYEE FOR EACH THREE YEARS OF CONTINUOUS SERVICE COMPLETED BY HIM AT SUCH MAXIMUM RATE OR AT A RATE IN EXCESS THEREOF AUTHORIZED BY THIS SECTION WITHOUT CHANGE OF GRADE OR RATE OF BASIC COMPENSATION EXCEPT SUCH CHANGE AS MAY BE PRESCRIBED BY ANY PROVISION OF LAW OF GENERAL APPLICATION. ***

"(B)(1) NO OFFICER OR EMPLOYEE SHALL BE ENTITLED TO A LONGEVITY STEP-INCREASE WHILE HOLDING A POSITION IN ANY GRADE ABOVE GRADE 10 OF THE GENERAL SCHEDULE.

"(2) NO OFFICER OR EMPLOYEE SHALL RECEIVE A LONGEVITY STEP-INCREASE UNLESS HIS CURRENT PERFORMANCE RATING IS "SATISFACTORY" OR BETTER.

"(3) NO OFFICER OR EMPLOYEE SHALL RECEIVE MORE THAN ONE LONGEVITY STEP-INCREASE FOR ANY THREE YEARS OF CONTINUOUS SERVICE.

"(4) EACH LONGEVITY STEP-INCREASE SHALL BE EQUAL TO ONE STEP-INCREASE OF THE GRADE IN WHICH THE POSITION OF THE OFFICER OR EMPLOYEE IS PLACED.

"(5) NOT MORE THAN THREE SUCCESSIVE LONGEVITY STEP-INCREASES MAY BE GRANTED TO ANY OFFICER OR EMPLOYEE. ***."

WE NOTE, IN PARTICULAR, THAT THESE NEW THREE-YEAR WITHIN-GRADE INCREASES WERE REFERRED TO AS LONGEVITY INCREASES, THAT THE STATUTE SPECIFICALLY STATES THEY WERE A REWARD FOR LONG AND FAITHFUL SERVICE, AND THAT THE PERFORMANCE RATING SPECIFIED IN SUBSECTION (B)(2) WAS IDENTICAL TO THAT REQUIRED FOR THE STEP INCREASE AT THE LOWER END OF THE PAY RANGE. COMPARE 5 U.S.C. SEC. 1121 (1952).

THE NEXT RELEVANT CHANGE IN THE WITHIN-GRADE STATUTE WAS MADE BY THE POSTAL SERVICE AND FEDERAL EMPLOYEES SALARY ACT OF 1962, PUBLIC LAW 87-793, OCTOBER 11, 1962, 76 STAT. 832, 847. SECTION 603 OF THAT ACT IS THE BASIS FOR THE CURRENT STRUCTURE OF THE GENERAL SCHEDULE (GS) SALARY SCHEDULE OF PER ANNUM RATES AND STEPS. THE WAITING PERIODS FOR STEP INCREASES WERE REVISED AND CORRESPOND TO THE CURRENT REQUIREMENTS. THE THREE LONGEVITY INCREASES FIRST AUTHORIZED BY THE 1949 ACT WERE INCORPORATED INTO THE REGULAR RATE RANGE FOR THE RESPECTIVE GRADES. AND LASTLY, THE PREREQUISITE PERFORMANCE RATING OF SATISFACTORY OR BETTER WAS CHANGED TO THE CURRENT LANGUAGE, "ACCEPTABLE LEVEL OF COMPETENCE."

THE SENATE, HOUSE AND CONFERENCE REPORTS ALL INDICATE THAT THE LONGEVITY INCREASES DESIGNATION WAS DROPPED ONLY BECAUSE THEY HAD BEEN INCORPORATED AS THE LAST THREE STEPS INTO THE NEW GS SCHEDULE OF 10 STEPS PER GRADE. THE PURPOSE OF THESE LAST THREE STEPS WITH THE THREE YEAR WAITING PERIOD REMAINED THE SAME, I. E., TO REWARD EMPLOYEES FOR LONG AND FAITHFUL SERVICE AND TO MOTIVATE CONTINUED GOOD PERFORMANCE. THE PERFORMANCE RATING REQUIRED FOR EACH OF THE 10 STEPS WAS IDENTICAL: I. E., AN ACCEPTABLE LEVEL OF COMPETENCE. THERE IS NO SUGGESTION THAT CONGRESS INTENDED TO AUTHORIZE A RETURN TO THE PRACTICE IT HAD SPECIFICALLY REJECTED IN 1945 OF REQUIRING A HIGHER PERFORMANCE LEVEL FOR THE LATER STEPS. H.REP. NO. 2509, 87TH CONG. 2D SESS. 10, 28-29 (1962); S.REP. NO. 2120, 87TH CONG, 2D SESS. 7, 8, 24 (1962); H.REP. NO. 2532 CONFERENCE REPORT 87TH CONG. 2D SESS. 60-61 (1962).

OUR VIEW IS THAT CONGRESS SPECIFICALLY INTENDED THE SAME PERFORMANCE RATING TO APPLY AS A PREREQUISITE FOR ADVANCEMENT TO EACH HIGHER STEP. THE CONGRESS IN 1945 CLEARLY AND SPECIFICALLY REJECTED THE CONCEPT OF HIGHER PERFORMANCE RATING FOR THE HIGHER STEPS. THEREFORE, AND SINCE WE ARE NOT AWARE OF ANY SUBSEQUENT LEGISLATION DEALING WITH THE ISSUE, WE CONCLUDE THAT THE REGULATIONS IMPLEMENTING 5 U.S.C. SEC. 5335 MAY NOT LAWFULLY REQUIRE A DIFFERENT PERFORMANCE RATING FOR ADVANCEMENT TO STEPS 8 THROUGH 10 OF A GENERAL SCHEDULE GRADE.

ACCORDINGLY, AND CONSISTENT WITH THE ABOVE DISCUSSED LEGISLATIVE HISTORY OUR VIEW IS THAT THE REVISION PROPOSED BY OPM TO 5 C.F.R. SEC. 531.404 IS ILLEGAL AND MAY NOT BE IMPLEMENTED WITHOUT APPROPRIATE LEGISLATION.

FN1 SECTION 9 OF THE PERFORMANCE RATING ACT OF 1950 CHANGED THE TERM "GOOD" TO "SATISFACTORY." SECTION 6 OF THAT STATUTE SPECIFICALLY PROVIDED THAT THE RATING OF "SATISFACTORY" CORRESPONDS TO THE PREVIOUSLY USED EFFICIENCY RATING OF "GOOD." SEPTEMBER 30, 1950, CHAPTER 1123, 64 STAT. 1098-1100.