B-122998, JUNE 20, 1955, 34 COMP. GEN. 691

B-122998, JUNE 20, 1955, 34 COMP. GEN. 691

COMPENSATION - CONVERSION OF CPC GRADES TO GS GRADES - LONGEVITY AND PERIODIC STEP INCREASES - ACT OF SEPTEMBER 1, 1954 AN EMPLOYEE WHOSE CPC POSITION WAS CONVERTED TO A GS POSITION PURSUANT TO SECTION 106 (B) OF THE ACT OF SEPTEMBER 1, 1954, MAY HAVE THE TIME SPENT AT THE MAXIMUM SCHEDULED RATE IN THE CPC POSITION COMBINED WITH THE TIME SPENT IN THE FIRST LONGEVITY STEP IN THE GS POSITION SO AS TO BE ENTITLED AT THE END OF THREE YEARS OF CONTINUOUS SERVICE TO THE NEXT LONGEVITY STEP -INCREASE AUTHORIZED BY SECTION 102 (A) (1) OF SAID ACT. INCREASES IN COMPENSATION RESULTING FROM THE CONVERSION OF POSITIONS FROM THE CPC SCHEDULE TO THE GS SCHEDULE IN ACCORDANCE WITH SECTION 106 OF THE ACT OF SEPTEMBER 1, 1954, ARE NOT EQUIVALENT INCREASES IN COMPENSATION FOR PERIODIC STEP OR LONGEVITY INCREASES AND, THEREFORE, SERVICE UNDER BOTH SCHEDULES MAY BE COMBINED AND COUNTED TOWARD THE NEXT PERIODIC STEP OR LONGEVITY INCREASE. THE RULE WITH RESPECT TO THE ADMINISTRATIVE DISCRETION IN FIXING THE SALARY OF EMPLOYEES IN CASES OF TRANSFER, PROMOTION, ETC., TO CORRESPOND TO THE HIGHEST SALARY RATE PREVIOUSLY ATTAINED HAS REFERENCE TO THE SALARY RATE RATHER THAN THE SALARY STEP WITHIN A GRADE SO THAT IN CONVERTING AN EMPLOYEE FROM CPC SCHEDULE TO GS SCHEDULE POSITION UNDER THE ACT OF SEPTEMBER 1, 1954, THERE IS NO AUTHORITY TO FIX THE EMPLOYEE'S SALARY AT A RATE IN EXCESS OF THE HIGHEST PREVIOUSLY ATTAINED SALARY RATE.

COMPTROLLER GENERAL CAMPBELL TO THE ADMINISTRATOR, VETERANS ADMINISTRATION, JUNE 20, 1955:

YOUR LETTER OF FEBRUARY 17, 1955, REQUESTS DECISION UPON A NUMBER OF POINTS THAT HAVE ARISEN INVOLVING PERIODIC AND LONGEVITY STEP-INCREASES UPON CONVERSION OF CPC POSITIONS TO GS POSITIONS PURSUANT TO THE PROVISIONS OF SECTION 106 OF THE ACT OF SEPTEMBER 1, 1954 ( PUBLIC LAW 763), 68 STAT. 1105, 1107.

SECTION 106 OF THE 1954 STATUTE PRESCRIBES THE BEGINNING AND ENDING DATES OF THE PERIOD DURING WHICH THE CONVERSION OF THE CPC POSITIONS TO GS POSITIONS IS TO BE MADE AS WELL AS THE BASES FOR THE INITIAL ADJUSTMENTS OF RATES UPON CONVERSION. IT IS NOTED THAT JANUARY 2, 1955, WAS FIXED BY YOU AS THE EFFECTIVE DATE FOR SUCH CONVERSIONS IN THE VETERANS ADMINISTRATION.

IT IS ALSO NOTED THAT CONVERSION AND ADJUSTMENT ACTIONS HAVE BEEN TAKEN WITH RESPECT TO THE CASES CITED BELOW IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTIONS (A) AND (B) OF SECTION 106 AND THAT AS A RESULT THEREOF CERTAIN QUESTIONS HAVE ARISEN UPON WHICH DECISION IS SOUGHT. THE QUESTIONS, WHICH ARE IN THE FORM OF CASES, WILL BE ANSWERED IN THE ORDER PRESENTED.

THE CASE OF EMPLOYEE " A" CONCERNS HIS CONVERSION BEFORE SECURING THE FIRST LONGEVITY STEP-INCREASE IN HIS CPC POSITION, WHICH WAS DUE THE FIRST PAY PERIOD AFTER CONVERSION. UPON CONVERSION HE WAS CHANGED FROM THE MAXIMUM SCHEDULED RATE OF CPC-3 ($3,032 PER ANNUM) TO THE FIRST LONGEVITY STEP IN THE GS-1 POSITION ($3,060 PER ANNUM) AS REQUIRED BY SECTION 106 (B) (3) OF THE 1954 STATUTE, 68 STAT. 1107. HOWEVER, IT IS POINTED OUT THAT HAD HE RECEIVED HIS LONGEVITY STEP INCREASE IN THE CPC POSITION ($3,112 PER ANNUM) PRIOR TO CONVERSION HE WOULD HAVE BEEN PLACED IN THE SECOND LONGEVITY STEP IN THE GS-1 POSITION ($3,140 PER ANNUM). YOU ASK, IN EFFECT, WHETHER THIS EMPLOYEE MAY BE ADVANCED TO THE SECOND LONGEVITY STEP IN GRADE GS-1 ON JANUARY 16, 1955--- THE DATE ON WHICH HE WOULD HAVE COMPLETED THE SERVICE REQUIREMENTS FOR THE FIRST LONGEVITY STEP IN GRADE CPC-3.

SECTION 102 (A) (1) OF THE ACT OF SEPTEMBER 1, 1954, 68 STAT. 1105, WHICH AMENDS SUBSECTION (A) OF SECTION 703 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, PROVIDES, IN EFFECT, THAT A LONGEVITY STEP-INCREASE SHALL BE GRANTED TO OFFICERS AND EMPLOYEES FOR EACH THREE YEARS OF CONTINUOUS SERVICE AT THE MAXIMUM RATE OR A RATE IN EXCESS OF THE MAXIMUM 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, PROVIDES, SO FAR AS CONCERNS THE QUESTION PRESENTED HERE, THAT THE LONGEVITY PERIOD IS THREE YEARS OF CONTINUOUS SERVICE IN A CLASSIFICATION ACT POSITION AT THE MAXIMUM SCHEDULED RATE OR AT A LONGEVITY RATE OF THE EMPLOYEE'S GRADE OR AT A RATE IN EXCESS THEREOF OR A COMBINATION OF SUCH RATES.

SINCE THE CONVERSION OF THE EMPLOYEE TO THE FIRST LONGEVITY STEP INCREASE IN HIS GS-1 POSITION WAS REQUIRED BY THE 1954 STATUTE--- APPLYING GENERALLY TO POSITIONS IN THE CPC SCHEDULE--- AND IN VIEW OF THE PROVISIONS OF SECTION 102 (A) (1), ABOVE, AS WELL AS THE PROVISIONS OF SECTION 25.52 (D), ABOVE, IT APPEARS THAT THE TIME SPENT AT THE MAXIMUM SCHEDULED RATE OF THE CPC POSITION AND IN THE LONGEVITY STEP OF THE GS POSITION MAY BE COMBINED TOWARDS THE NEXT LONGEVITY STEP INCREASE. SECTION 25.54, CITED BY YOU, APPEARS TO HAVE NO APPLICATION TO THIS SITUATION SINCE EMPLOYEE "A" WAS NOT RECEIVING A RATE OF BASIC COMPENSATION IN EXCESS OF THE SCHEDULED RATE FOR THE GRADE AS A RESULT OF A SAVING PROVISION. ACCORDINGLY, THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE.

EMPLOYEE "B" WHO WAS IN THE SIXTH STEP OF HIS CPC-7 POSITION ($3,935 PER ANNUM) WAS CONVERTED TO A GS-5 POSITION AT THE SIXTH STEP ($4,035 PER ANNUM) REPRESENTING A $100 INCREASE. THIS ACTION WAS REQUIRED BY SECTION 106 (B) (3). THE EMPLOYEE'S SCHEDULED ANNIVERSARY DATE FOR PERIODIC STEP- INCREASE IN THE CPC-7 GRADE WAS JANUARY 16, 1955. YOU ASK, IN EFFECT, WHETHER THE $100 INCREASE RESULTING FROM THE CPC-7 POSITION, REPRESENTS "AN EQUIVALENT INCREASE" AND, IF NOT, WHETHER THE EMPLOYEE MAY BE ADVANCED TO THE SEVENTH STEP OF THE GS-5 POSITION UPON COMPLETION OF 52 WEEKS' COMBINED SERVICE IN THE SIXTH STEP OF THE CPC AND GS POSITIONS.

SECTION 701 (A) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 63 STAT. 967, PROVIDES, IN EFFECT, THAT EACH OFFICER OR EMPLOYEE COMPENSATED ON A PER ANNUM BASIS AND OCCUPYING A PERMANENT POSITION WITHIN THE SCOPE OF THE COMPENSATION SCHEDULES FIXED BY THE ACT WHO HAS NOT ATTAINED THE MAXIMUM STEP OF HIS GRADE SHALL BE ADVANCED TO THE NEXT HIGHER STEP FOLLOWING COMPLETION OF EACH 52 CALENDAR WEEKS OF SERVICE IF HIS POSITION IS IN A GRADE WHICH THE STEP-INCREASES ARE LESS THAN $200 PROVIDED HE HAS RECEIVED NO EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE DURING THE PERIOD. IN OUR DECISION OF TODAY, B-122859, 34 COMP. GEN. 687, TO THE SECRETARY OF AGRICULTURE (ANSWER TO QUESTION 5), IT WAS HELD THAT THE INCREASE IN COMPENSATION RESULTING FROM CONVERSIONS REQUIRED BY SECTION 106 OF THE 1954 STATUTE SPECIFICALLY IS AUTHORIZED BY LAW AND THAT SUCH INCREASE IS NOT TO BE VIEWED AS AN EQUIVALENT INCREASE IN COMPENSATION FOR PERIODIC STEP INCREASE PURPOSES. CONSEQUENTLY, THE INCREASE HERE INVOLVED IS NOT AN "EQUIVALENT INCREASE" AND THE COMBINED SERVICE IN GRADES CPC-7 AND GS-5 PROPERLY SHOULD BE COUNTED TOWARD THE PERIODIC STEP-INCREASE IN GS-5.

EMPLOYEE "C" WAS CONVERTED FROM THE FIRST LONGEVITY STEP OF HIS CPC-2 POSITION ($2,910 PER ANNUM) AFTER CONTEMPLATING TWO YEARS' SERVICE THEREIN TO A GS-1 POSITION AT THE MAXIMUM STEP ($2,980 PER ANNUM) WITH A RESULTING INCREASE OF $70--- EQUAL TO A WITHIN-GRADE SALARY INCREMENT IN GRADE CPC- 2. THIS ACTION WAS REQUIRED BY SECTION 106 (B) (3). YOU ASK WHETHER EMPLOYEE "C" IS REQUIRED, BECAUSE OF THE SALARY INCREASE UPON CONVERSION, TO BEGIN A NEW LONGEVITY PERIOD. IN LINE WITH THE HOLDING RESPECTING EMPLOYEES "A" AND "B" ABOVE, THIS QUESTION IS ANSWERED IN THE NEGATIVE.

EMPLOYEE "D" WAS IN THE FIRST LONGEVITY STEP OF HIS CPC-7 POSITION ($4,135 PER ANNUM) WHEN CONVERTED TO GS-5 AT THE MAXIMUM STEP THEREOF ($4,160 PER ANNUM) AS REQUIRED BY SECTION 106 (B) (3). YOU ASK, IN EFFECT, WHETHER THE EMPLOYEE MAY COUNT THE TIME SERVED AT THE LONGEVITY STEP IN GRADE CPC-7 TOWARD THE FIRST LONGEVITY STEP IN GRADE GS-5. THIS QUESTION IS ANSWERED IN THE AFFIRMATIVE.

EMPLOYEE "E" WHO WAS IN THE SECOND LONGEVITY STEP OF GRADE CPC-2 ($2,980 PER ANNUM) WAS CONVERTED TO GRADE GS-1 AT THE MAXIMUM STEP THEREOF ($2,980 PER ANNUM) IN ACCORDANCE WITH SECTION 106 (B) (2) 68 STAT. 1107. YOU QUOTE SECTION 25.103 (C) OF THE FEDERAL EMPLOYEES PAY REGULATIONS, Z-1- 318, FEDERAL PERSONNEL MANUAL, WHICH READS AS FOLLOWS:

AN EMPLOYEE WHO HAD EARNED A RATE ABOVE THE MAXIMUM SCHEDULED RATE OF HIS GRADE AS THE RESULT OF ONE OR MORE LONGEVITY STEP INCREASES IN THE SAME OR HIGHER GRADE, MAY, AT THE DISCRETION OF THE DEPARTMENT, BE GIVEN ANY SCHEDULED RATE OF HIS GRADE, OR A COMPARABLE STEP ABOVE THE MAXIMUM RATE FOR HIS GRADE, WHEN HE IS REEMPLOYED OR TRANSFERRED IN THE SAME OR A LOWER GRADE REASSIGNED OR DEMOTED.

YOU ASK, IN EFFECT, WHETHER, IN VIEW OF THE ABOVE REGULATIONS, IT WOULD BE WITHIN ADMINISTRATIVE DISCRETION TO SET HIS RATE AT THE SECOND LONGEVITY STEP OF HIS GS-1 POSITION ($3,140 PER ANNUM) SINCE HE PREVIOUSLY HAD ATTAINED THE SECOND LONGEVITY STEP IN HIS CPC-2 POSITION. YOU ALSO POINT OUT THAT THE SAME QUESTION APPEARS TO APPLY TO OTHER EMPLOYEES ON LONGEVITY STEPS OF CPC-2 AND CPC-7 POSITIONS.

THE QUOTED REGULATION CONCERNS THE APPLICATION OF THE "HIGHEST PREVIOUS RATE" RULE AND THE ADMINISTRATIVE DISCRETION THAT EXISTS WITH RESPECT THERETO. THAT RULE IS DIRECTED TO THE MATTER OF THE ADMINISTRATIVE DISCRETION IN FIXING THE SALARY RATE OF AN EMPLOYEE WHO IS TRANSFERRED, PROMOTED, DEMOTED, ETC., SO AS TO CORRESPOND, AS NEARLY AS POSSIBLE, WITH THE HIGHEST SALARY RATE PREVIOUSLY ATTAINED BY THE EMPLOYEE DURING HIS FEDERAL SERVICE. IT REFERS TO THE SALARY RATE PREVIOUSLY ATTAINED RATHER THAN TO THE RELATIVE SALARY STEP WITHIN A GRADE. THEREFORE, IN THE EXAMPLE GIVEN, NO BASIS EXISTS FOR PLACING EMPLOYEE "E" IN THE SECOND LONGEVITY STEP OF GRADE GS-1 ($3,140 PER ANNUM) UPON TRANSFER OR REASSIGNMENT SINCE THAT SALARY RATE IS IN EXCESS OF THE HIGHEST SALARY RATE PREVIOUSLY ATTAINED. SEE 26 COMP. GEN. 368 AND CASES CITED THEREIN. YOUR QUESTION IS, THEREFORE, ANSWERED IN THE NEGATIVE.