B-128256, AUG. 7, 1956

B-128256, AUG. 7, 1956

TO MRS. ZELMA R. KIRK, AUTHORIZED CERTIFYING OFFICER, INTERNAL REVENUE SERVICE:

YOUR LETTER DATED JUNE 11, 1956, REQUESTS OUR DECISION AS TO WHETHER MR. GERALD M. MCGRAW IS ENTITLED TO A PERIODIC STEP-INCREASE UNDER THE FACTS AND CIRCUMSTANCES HEREINAFTER RELATED.

ON FEBRUARY 16, 1955, MR. MCGRAW WAS CONVERTED TO A CAREER CONDITIONAL APPOINTMENT, GS-4, $3,415 PER ANNUM AND ON MARCH 6, 1955, HE WAS GIVEN A PROMOTION TO GS-5, $3,535 PER ANNUM. DURING AN INSPECTION, THE CIVIL SERVICE COMMISSION FOUND THAT THE PROVISIONS OF SECTION 2.502 (A) OF THEIR REGULATIONS HAD NOT BEEN FOLLOWED, IN THAT THREE MONTHS HAD NOT ELAPSED FROM THE TIME OF MR. MCGRAW'S LATEST COMPETITIVE APPOINTMENT. IN ORDER TO COMPLY WITH THE CIVIL SERVICE COMMISSION REGULATIONS, MR MCGRAW WAS DEMOTED TO GS-4, $3.670, ON FEBRUARY 26, 1956, AND COMPLETED THE THREE MONTHS REQUIREMENT. AS OF MAY 6, 1956, HE WAS AGAIN PROMOTED TO GS-5, $3,805, THE POSITION TO WHICH HE HAD FORMERLY BEEN ASSIGNED. THE OPERATING OFFICE HAS NOW SUBMITTED A STANDARD FORM 1126 APPROVING A PERIODIC STEP-INCREASE TO $3,940, GS-5, TO BE EFFECTIVE AS OF MAY 20, 1956. YOU SPECIFICALLY INQUIRE WHETHER THE PROMOTION OF MAY 6, 1956, WOULD BE AN EQUIVALENT INCREASE WITHIN THE MEANING OF SECTION 701 (A) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 63 STAT. 967, 5 U.S.C. 1121 (A), SO AS TO PROHIBIT THE PERIODIC STEP-INCREASE.

SECTION 25.11 (E) OF FEDERAL EMPLOYEES' PAY REGULATIONS, 5 CFR 25.11 (E), DEFINES "EQUIVALENT INCREASE" AS FOLLOWS:

" "EQUIVALENT INCREASE IN COMPENSATION" IF THE TOTAL OF ANY INCREASE OR INCREASES IN BASIC COMPENSATION WHICH IS EQUAL TO OR GREATER THAN THE SMALLEST STEP-INCREASE IN ANY GRADE IN WHICH THE EMPLOYEE HAS SERVED DURING A PERIOD UNDER CONSIDERATION. STEP INCREASES RESULTING FROM THE APPLICATION OF SECTIONS 703 AND 802 (B) OF THE ACT ARE EQUIVALENT INCREASES IN COMPENSATION. THE FOLLOWING AMONG OTHERS, ARE NOT "EQUIVALENT INCREASES IN COMPENSATION: "

"/1) ANY INCREASE IN RATES OF BASIC COMPENSATION PROVIDED BY TITLE VI;

"/2) AN INCREASE MADE FOR THE SPECIFIC PURPOSE OF CORRECTING AN ERROR IN A PREVIOUS DEMOTION OR REDUCTION IN PAY;

"/3) PAYMENT OF A FOREIGN OR A TERRITORIAL POST DIFFERENTIAL OR COST-OF- LIVING ALLOWANCE.

"/4) AN INCREASE RESULTING FROM THE ESTABLISHMENT OF ANY MINIMUM RATE PURSUANT TO SECTION 803 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED.'

IN THIS CONNECTION, SECTION 25.104 (A) OF SUCH REGULATIONS, 5 CFR 25.104 (A), PROVIDES THAT:

"AN EMPLOYEE PROMOTED, REPROMOTED OR TRANSFERRED TO A HIGHER GRADE BETWEEN CLASSIFICATION ACT POSITIONS OR GRADES SHALL RECEIVE BASIC COMPENSATION AT THE LOWEST RATE OF SUCH HIGHER GRADE WHICH EXCEEDS HIS EXISTING RATE OF BASIC COMPENSATION BY NOT LESS THAN ONE-STEP INCREASE OF THE GRADE FROM WHICH HE IS TRANSFERRED OR PROMOTED, UNLESS A HIGHER RATE IS AUTHORIZED UNDER THE PROVISIONS OF SEC. 25.103 (B) OR (C). * * *"

UNDER THE ABOVE PROVISIONS IT SEEMS CLEAR THAT A SALARY INCREASE RECEIVED AS A RESULT OF A REPROMOTION FROM A LOWER GRADE TO A HIGHER GRADE IS AN EQUIVALENT INCREASE WITHIN THE MEANING OF THE CITED STATUTE, EXCEPT UNDER CIRCUMSTANCES NOT HERE INVOLVED. SEE, IN THIS CONNECTION, 27 COMP. GEN. 59, 34 ID. 209. COMPARE 30 COMP. GEN. 82, 31 ID. 135, 32 ID. 292. THUS, MR. MCGRAW'S REPROMOTION OF MAY 6, 1956, MUST BE CONSIDERED TO BE AN EQUIVALENT INCREASE WITHIN THE MEANING OF THE CITED STATUTE, AND IT WILL BE NECESSARY THAT HE COMPLETE A WAITING PERIOD OF 52 CALENDAR WEEKS FROM THAT DATE IN ORDER TO BECOME ELIGIBLE FOR THE PERIODIC STEP-INCREASE. PAYMENT OF MR. MCGRAW'S SALARY AT THE RATE SHOWN ON THE STANDARD FORM NO. 1126, WHICH IS BEING RETURNED HEREWITH, IS NOT AUTHORIZED.