B-122859, JUNE 20, 1955, 34 COMP. GEN. 687

B-122859: Jun 20, 1955

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AN EMPLOYEE WHO WAS DEMOTED MAY COUNT CONTINUOUS SERVICE IN THE HIGHER GRADE TOWARD A LONGEVITY STEP-INCREASE IN THE LOWER GRADE. PROVIDED THAT PAY RECOMPUTATIONS INCIDENT TO THE LONGEVITY INCREASE ARE NOT MADE PRIOR TO SEPTEMBER 12. HAVE HAD MORE THAN THREE YEARS' CONTINUOUS SERVICE AT OR ABOVE THE MAXIMUM SCHEDULED RATES OF THE GRADE IMMEDIATELY PRECEDING THE ACT OF SEPTEMBER 1. ARE ENTITLED UNDER SECTION 103 (A) TO COUNT THE SERVICE IN THE HIGHER GRADE TOWARD ONE LONGEVITY STEP-INCREASE IN THE LOWER GRADE. EMPLOYEES WHO ARE DEMOTED BELOW GRADE 11 MAY COUNT ALL PRIOR SERVICE CREDITABLE FOR LONGEVITY PURPOSES IN DETERMINING THE LONGEVITY STEPS IN THE DEMOTED POSITIONS. ARE SPECIFICALLY AUTHORIZED BY LAW AND ARE NOT TO BE VIEWED AS AN EQUIVALENT INCREASE IN COMPENSATION WITHIN THE MEANING OF SECTION 701 OF THE CLASSIFICATION ACT OF 1949 FOR PERIODIC STEP INCREASE PURPOSES.

B-122859, JUNE 20, 1955, 34 COMP. GEN. 687

COMPENSATION - LONGEVITY INCREASES - ACT OF SEPTEMBER 1, 1954 UNDER THE LONGEVITY STEP-INCREASE PROVISIONS OF THE ACT OF SEPTEMBER 1, 1954, AN EMPLOYEE WHO WAS DEMOTED MAY COUNT CONTINUOUS SERVICE IN THE HIGHER GRADE TOWARD A LONGEVITY STEP-INCREASE IN THE LOWER GRADE. AN EMPLOYEE WHO HAD RECEIVED A LONGEVITY STEP-INCREASE IN THE GRADE TO WHICH DEMOTED PRIOR TO THE ACT OF SEPTEMBER 1, 1954, WHICH PERMITS ADDITIONAL STEP-INCREASES BEYOND THE MAXIMUM SCHEDULED RATE OF GRADE, MAY COUNT SERVICE EARNED AT A MAXIMUM OR LONGEVITY STEP IN THE HIGHER GRADE TOWARD THE NEXT LONGEVITY STEP-INCREASE IN THE GRADE TO WHICH DEMOTED, PROVIDED THAT PAY RECOMPUTATIONS INCIDENT TO THE LONGEVITY INCREASE ARE NOT MADE PRIOR TO SEPTEMBER 12, 1954. EMPLOYEES WHO, PRIOR TO DEMOTION WITHIN THE GRADE GS-15 TO GS-11 LEVEL, HAVE HAD MORE THAN THREE YEARS' CONTINUOUS SERVICE AT OR ABOVE THE MAXIMUM SCHEDULED RATES OF THE GRADE IMMEDIATELY PRECEDING THE ACT OF SEPTEMBER 1, 1954, ARE ENTITLED UNDER SECTION 103 (A) TO COUNT THE SERVICE IN THE HIGHER GRADE TOWARD ONE LONGEVITY STEP-INCREASE IN THE LOWER GRADE; HOWEVER, EMPLOYEES WHO ARE DEMOTED BELOW GRADE 11 MAY COUNT ALL PRIOR SERVICE CREDITABLE FOR LONGEVITY PURPOSES IN DETERMINING THE LONGEVITY STEPS IN THE DEMOTED POSITIONS. INCREASES IN COMPENSATION WHICH RESULT FROM THE CONVERSION OF EMPLOYEES FROM CPC SCHEDULE TO GS SCHEDULE, PURSUANT TO SECTION 106 OF THE ACT OF SEPTEMBER 1, 1954, ARE SPECIFICALLY AUTHORIZED BY LAW AND ARE NOT TO BE VIEWED AS AN EQUIVALENT INCREASE IN COMPENSATION WITHIN THE MEANING OF SECTION 701 OF THE CLASSIFICATION ACT OF 1949 FOR PERIODIC STEP INCREASE PURPOSES. THE EFFECTIVE DATE OF THE CONVERSION OF AN EMPLOYEE FROM THE CPC SCHEDULE TO GS SCHEDULE UNDER SECTION 106 OF THE ACT OF SEPTEMBER 1, 1954, MAY BE ADJUSTED TO A DATE SUBSEQUENT TO THE DATE THE EMPLOYEE WOULD HAVE BEEN ENTITLED TO A PERIODIC STEP-INCREASE AS LONG AS THE CONVERSION IS MADE WITHIN THE SIX-MONTH PERIOD PRESCRIBED BY THE ACT.

COMPTROLLER GENERAL CAMPBELL TO THE SECRETARY OF AGRICULTURE, JUNE 20, 1955:

BY LETTER DATED FEBRUARY 7, 1955, THE ADMINISTRATIVE ASSISTANT SECRETARY PRESENTED FOR DECISION SEVERAL QUESTIONS REGARDING THE COMPUTATION OF LONGEVITY STEP-INCREASES UNDER THE PROVISIONS OF SECTIONS 102 AND 103 OF THE ACT OF SEPTEMBER 1, 1954 ( PUBLIC LAW 763), 68 STAT. 1105, AND THE APPLICABLE CIVIL SERVICE REGULATIONS. ALSO, TWO QUESTIONS WERE PRESENTED WITH RESPECT TO SITUATIONS RESULTING FROM THE CONVERSION OF CERTAIN EMPLOYEES FROM CPC GRADES TO GS GRADES AS AUTHORIZED BY SECTION 106 OF THE 1954 AMENDATORY STATUTE, 68 STAT. 1107.

THE FIRST QUESTION ASKS, IN EFFECT, WHETHER, UNDER THE PROVISIONS OF SECTION 102 (A) (1) OF THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1105, AN EMPLOYEE WHO WAS DEMOTED IN DECEMBER 1953 MAY COUNT TWO YEARS OF CONTINUOUS SERVICE AT THE MAXIMUM STEP OR A LONGEVITY STEP IN THE HIGHER GRADE PRIOR TO DEMOTION TOGETHER WITH THE TIME SPENT AFTER DEMOTION AT THE MAXIMUM STEP OR A LONGEVITY STEP IN THE LOWER GRADE TOWARDS A LONGEVITY STEP-INCREASE SO AS TO ENTITLE HIM TO A LONGEVITY STEP IN THE LOWER GRADE, EFFECTIVE DECEMBER 1954.

SECTION 102 (A) (1) AMENDED SUBSECTION 703 (A) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, TO READ AS FOLLOWS--- THE ITALICIZED PORTION REPRESENTING THE AMENDATORY LANGUAGE:

SUBJECT TO SUBSECTION (B), 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 INCREASE IN GRADE OR RATE OF BASIC COMPENSATION EXCEPT SUCH INCREASE AS MAY BE PRESCRIBED BY ANY PROVISION OF LAW OF GENERAL APPLICATION.

SECTION 25.52 (D), Z1-316.01, FEDERAL PERSONNEL MANUAL, AS REVISED AFTER THE PASSAGE OF THE ABOVE AMENDMENT TO SECTION 703 (A), READS AS FOLLOWS:

LONGEVITY PERIOD IS THREE YEARS, OF THE AGGREGATE PERIOD, OF CONTINUOUS SERVICE IN A CLASSIFICATION ACT POSITION: (1) AT THE MAXIMUM SCHEDULED RATE OF THE EMPLOYEE'S GRADE; OR (2) AT A LONGEVITY RATE OF THE EMPLOYEE'S GRADE; OR (3) AT A RATE IN EXCESS OF SUCH MAXIMUM SCHEDULED RATE IN ACCORDANCE WITH A PROVISION OF LAW; OR (4) AT ANY OF THE RATES SPECIFIED IN (1), (2), OR (3) OF THIS PARAGRAPH, IN A GRADE HIGHER THAN HIS CURRENT GRADE. INTERVENING MILITARY SERVICE INTERRUPTING CONTINUOUS SERVICE AT ONE OF THE ABOVE RATES IS CREDITABLE FOR LONGEVITY STEP INCREASES. CHANGE OF GRADE OR RATE OF BASIC COMPENSATION PRESCRIBED BY ANY LAW OF GENERAL APPLICATION DOES NOT BEGIN A NEW LONGEVITY PERIOD. ANY PERIOD OF CREDITABLE SERVICE IN EXCESS OF ONE OR TWO COMPLETE LONGEVITY PERIODS (EXCEPT AS OTHERWISE PROVIDED IN SECTION 25.54 (C) (, SHALL BE CREDITED TOWARD THE COMPLETION OF THE EMPLOYEE'S NEXT LONGEVITY STEP PERIOD. * *

THE PURPOSE OF THE AMENDMENT TO SECTION 703 (A) IS TO PERMIT AN EMPLOYEE UPON DEMOTION IN GRADE TO RETAIN IN HIS NEW GRADE THE SERVICE CREDIT TOWARDS A LONGEVITY STEP-INCREASE THAT HE HAS EARNED IN THE GRADE FROM WHICH REDUCED. IT REMEDIES AN INEQUITY FLOWING FROM THE PHRASE "WITHOUT CHANGE OF GRADE OR RATE OF BASIC COMPENSATION" PREVIOUSLY APPEARING IN SECTION 703 (A) OF THE CLASSIFICATION ACT OF 1949. THE CIVIL SERVICE COMMISSION REGULATIONS ON LONGEVITY STEP INCREASES, QUOTED ABOVE, ALLOW THE CREDITING OF PRIOR SERVICE FOR EMPLOYEES IN GRADES BELOW GS-11. THE REGULATIONS PLACED NO MAXIMUM LIMITATION UPON THE AMOUNT OF PRIOR SERVICE THAT MAY BE CREDITED. ACCORDINGLY, YOUR FIRST QUESTION IS ANSWERED IN THE AFFIRMATIVE.

QUESTION 2 CONCERNS A SITUATION SIMILAR TO THAT IN QUESTION 1, EXCEPT THAT THE DEMOTION OCCURRED THREE OR MORE YEARS AGO AND THE EMPLOYEE INVOLVED HAS RECEIVED A LONGEVITY STEP-INCREASE IN THE LOWER GRADE AS A RESULT OF MEETING THE THREE-YEAR CONTINUOUS SERVICE REQUIREMENT.

SINCE THE AMENDATORY LANGUAGE HAD AS ITS PURPOSE THE RETENTION OF SERVICE CREDITS EARNED AT A MAXIMUM OR LONGEVITY STEP IN A HIGHER GRADE UPON DEMOTION, IT WOULD APPEAR THAT IN THIS QUESTION THE SERVICE RENDERED AT THE MAXIMUM STEP OR A LONGEVITY STEP IN THE HIGHER GRADE PRIOR TO THE DEMOTION TO THE LOWER GRADE IS CREDITABLE TOWARDS THE EMPLOYEE'S NEXT LONGEVITY STEP-INCREASE IN THE GRADE TO WHICH DEMOTED. QUESTION 2 IS ANSWERED IN THE AFFIRMATIVE WITH THE UNDERSTANDING THAT SUCH RECOMPUTATION FOR PAY PURPOSES WILL NOT BE EFFECTED PRIOR TO SEPTEMBER 12, 1954.

QUESTIONS 3 AND 4 ARE DIRECTED TO MATTERS COVERED BY THE PROVISIONS OF SECTION 704 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, AND AS AMENDED FURTHER BY SECTION 103 (A) OF THE ACT OF SEPTEMBER 1, 1954 ( PUBLIC LAW 763). THESE QUESTIONS CONCERN THE RIGHT OF EMPLOYEES IN GRADES GS-11 THROUGH GS-15 WHO HAVE HAD MORE THAN THREE YEARS' CONTINUOUS SERVICE AT THE TOP OF THEIR GRADES TO COUNT SUCH SERVICE FOR LONGEVITY STEP-INCREASE PURPOSES UPON THEIR DEMOTION TO POSITIONS WITHIN THOSE GRADES OR TO POSITIONS BELOW GRADE GS-11 AT OR ABOVE THE MAXIMUM SCHEDULED RATES OF SUCH POSITIONS. SECTION 704, AS AMENDED BY SECTION 103 (A), READS AS FOLLOWS:

IN THE CASE OF OFFICERS AND EMPLOYEES IN GRADES 11 TO 15, INCLUSIVE, OF THE GENERAL SCHEDULE WHO ARE RECEIVING COMPENSATION AT OR ABOVE THE MAXIMUM SCHEDULED RATES FOR THEIR RESPECTIVE GRADES ON THE DATE IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF THIS AMENDATORY SECTION, NOT TO EXCEED THREE YEARS OF SERVICE PERFORMED IMMEDIATELY PRECEDING SUCH EFFECTIVE DATE SHALL BE COUNTED TOWARD LONGEVITY STEP-INCREASES UNDER SECTION 703. * * *

THE LANGUAGE OF THAT SECTION IS CLEAR THAT EMPLOYEES IN GRADES GS-11 THROUGH GS-15 MAY RECEIVE ONLY ONE LONGEVITY STEP-INCREASE AT THE BEGINNING OF THE FIRST PAY PERIOD FOLLOWING THE DATE OF ENACTMENT OF THE 1954 STATUTE, AS PROVIDED BY SECTION 103 (B), 68 STAT. 1106, FOR THREE OR MORE YEARS OF SERVICE PERFORMED IMMEDIATELY PRECEDING THE EFFECTIVE DATE OF THE ACT AT OR ABOVE THE MAXIMUM SCHEDULED RATES OF THEIR RESPECTIVE GRADES. THUS, UPON DEMOTION WITHIN THE GRADE GS-15 TO GS-11 LEVEL, EMPLOYEES ARE ENTITLED TO COUNT THE SERVICE IN THE HIGHER GRADE FOR ONE LONGEVITY STEP-INCREASE IN THE GRADE TO WHICH DEMOTED. WITH RESPECT TO THOSE EMPLOYEES WHO ARE DEMOTED TO POSITIONS BELOW GRADE GS-11, IT SEEMS CLEAR THAT THEY ARE ENTITLED TO COUNT ALL PRIOR SERVICE WHICH WOULD BE CREDITABLE FOR LONGEVITY STEP-INCREASES, IN DETERMINING THEIR LONGEVITY STEP-INCREASES TO THE POSITIONS IN THE GS-1 TO GS-10 GROUP TO WHICH DEMOTED. COMPARE THE ANSWER TO QUESTION ONE.

QUESTION 5 IS AS FOLLOWS:

5. IN THE PROCESS OF CONVERTING MESSENGER POSITIONS FROM THE ABOLISHED CPC SCHEDULE PURSUANT TO SECTION 106 (A) OF PUBLIC LAW 763, WE SHALL MOVE SOME EMPLOYEES FROM $2420 PER ANNUM, THE FIRST STEP OF CPC-2, TO $2500 PER ANNUM, THE FIRST STEP OF GS-1. OUR ASSUMPTION IS THAT THE $80-A-YEAR INCREASE OBTAINED AS A RESULT OF THIS CHANGE NEED NOT BE REGARDED AS "AN EQUIVALENT INCREASE IN COMPENSATION" FOR STEP INCREASE PURPOSES, SUCH AS TO REQUIRE THE EMPLOYEE TO BEGIN A NEW WAITING PERIOD FOR ADVANCEMENT TO THE NEXT STEP OF GS-1, AS WOULD OTHERWISE BE THE CASE. THIS WOULD SEEM TO BE THE APPLICATION TO MAKE IN THIS CONTEXT OF SECTION 701 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED BY SECTION 1 (E) OF THE ACT OF OCTOBER 24, 1951 (5 U.S.C. 1121), WHICH PROVIDES: " ANY INCREASE IN COMPENSATION GRANTED BY LAW AFTER JUNE 30, 1951, SHALL NOT BE CONSTRUED TO BE AN EQUIVALENT INCREASE IN COMPENSATION WITHIN THE MEANING OF SUBSECTION (A).' ( ITALICS SUPPLIED.) IS THIS ASSUMPTION CORRECT?

SUBSECTION (B) (1) OF SECTION 106 OF THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1107, SPECIFICALLY PROVIDES, WITH RESPECT TO THE SALARY ADJUSTMENT UPON THE CONVERSION TO THE GS SCHEDULE IN A SITUATION AS DESCRIBED ABOVE, THAT:

IF THE EMPLOYEE IS RECEIVING A RATE OF BASIC COMPENSATION IN THE CRAFTS, PROTECTIVE, AND CUSTODIAL SCHEDULE WHICH IS LESS THAN THE MINIMUM SCHEDULED RATE OF THAT GRADE IN THE GENERAL SCHEDULE IN WHICH HIS POSITION IS PLACED, HIS COMPENSATION SHALL BE INCREASED TO SUCH MINIMUM RATE;

THE INCREASE IN COMPENSATION RESULTING FROM THE CONVERSION IN SUCH CASES SPECIFICALLY IS AUTHORIZED BY LAW. CONSEQUENTLY, BY VIRTUE OF THE PROVISIONS OF SECTION 701 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, QUOTED IN THE ABOVE QUESTION, SUCH INCREASE IS NOT TO BE VIEWED AS AN EQUIVALENT INCREASE IN COMPENSATION FOR PERIODIC STEP INCREASE PURPOSES.

QUESTION 6 DEALS WITH A SITUATION IN WHICH AN EMPLOYEE, BECAUSE OF ADMINISTRATIVE ERROR, WAS CONVERTED ON DECEMBER 19, 1954, TO THE GS SCHEDULE A FEW WEEKS PRIOR TO THE EFFECTIVE DATE OF A PERIODIC STEP INCREASE WHICH WOULD HAVE TAKEN HIM TO THE MAXIMUM SCHEDULED RATE FOR CPC- 3. AS A RESULT OF THE ADMINISTRATIVE ACTION, THE EMPLOYEE WAS CONVERTED TO THE TOP SALARY STEP OF GS-1, WHEREAS, HAD THE CONVERSION BEEN EFFECTED AFTER PROCESSING THE PERIODIC STEP-INCREASE, THE EMPLOYEE WOULD HAVE BEEN CONVERTED TO THE FIRST LONGEVITY STEP OF GS-1. CONSEQUENTLY, BECAUSE OF THE TIMING OF THE ADMINISTRATIVE ACTION, THE EMPLOYEE MUST NOW SERVE THREE CONTINUOUS YEARS AT THE TOP SALARY STEP BEFORE HE IS ELIGIBLE FOR THE FIRST LONGEVITY STEP-INCREASE IN GS-1. IT IS NOW ASKED WHETHER AN ADJUSTMENT IN THE EFFECTIVE DATE OF CONVERSION IS PERMISSIBLE IN ORDER NOT TO DEPRIVE THE EMPLOYEE OF THE BENEFITS WHICH OTHERWISE WOULD HAVE ACCRUED TO HIM.

SECTION 106 OF THE 1954 STATUTE PRESCRIBES THE BEGINNING AND ENDING DATES OF THE APPROXIMATELY SIX-MONTH PERIOD DURING WHICH THE CONVERSIONS THERE AUTHORIZED ARE TO BE MADE. AS POINTED OUT IN THE LETTER OF FEBRUARY 7, 1955, THE CONVERSION IN THIS CASE PROPERLY COULD HAVE BEEN POSTPONED UNTIL AFTER THE EFFECTIVE DATE OF THE PERIODIC INCREASE. IT IS STATED THAT THE ACTION TAKEN WAS DUE TO ADMINISTRATIVE INADVERTENCE IN OVERLOOKING THE EMPLOYEE'S SITUATION AND, HAD THE MATTER BEEN BROUGHT TO ATTENTION, THE CONVERSION WOULD HAVE BEEN DELAYED. IN VIEW OF THE REPORTED FACTS IN THIS CASE AND CONSIDERING THE LATITUDE GIVEN BY THE STATUTE RESPECTING THE TIMING OF THE CONVERSION ACTIONS, THERE APPEARS NO OBJECTION TO AN ADMINISTRATIVE ADJUSTMENT OF THE EFFECTIVE DATE OF CONVERSION AS REQUESTED. QUESTION 6 IS ANSWERED ACCORDINGLY.