B-132844, FEB. 3, 1958

B-132844, FEB. 3, 1958

TO THE SECRETARY OF THE NAVY:

IN A RECENT AUDIT OF THE CIVILIAN PAYROLLS AT THE NAVAL GUN FACTORY OUR AUDITORS QUESTIONED, AS APPARENTLY RESULTING IN EXCESSIVE SALARY RATES, THE METHOD USED TO DETERMINE THE HIGHEST PREVIOUS RATE OF EMPLOYEES TRANSFERRED FROM UNGRADED POSITIONS TO POSITIONS UNDER THE CLASSIFICATION ACT WHERE SALARY RATES ARE BASED UPON THE HIGHEST PREVIOUS RATES ATTAINED BY THE EMPLOYEES IN UNGRADED POSITIONS, PARTICULARLY WHERE CONTINUOUS SERVICE IS INVOLVED.

THE PRACTICE OF THE NAVAL GUN FACTORY IS TO DETERMINE THE PER ANNUM EQUIVALENT OF A PER DIEM SALARY PREVIOUSLY ATTAINED AND TO MATCH IT WITH APPLICABLE SCHEDULED CLASSIFICATION ACT RATES EFFECTIVE AT THE TIME THE UNGRADED SALARY WAS EARNED. IF THE UNGRADED SALARY FELL BETWEEN TWO STEPS OF THE CLASSIFICATION ACT GRADE, THE HIGHER OF THE TWO SCHEDULED STEPS IS CONSIDERED THE HIGHEST PREVIOUS RATE. THIS RATE IS THEN MATCHED WITH CLASSIFIED SCHEDULED RATES CURRENTLY EFFECTIVE AND IF IT FALLS BETWEEN TWO STEPS OF THE APPLICABLE GRADE THE SALARY RATE IS FIXED AT THE HIGHER RATE. OUR AUDITORS WERE ADVISED THAT THIS PRACTICE WAS BASED UPON NAVY CIVILIAN PERSONNEL INSTRUCTIONS 195.3-2C WHICH READS AS FOLLOWS:

"UNGRADED POSITION.--- IF THE HIGHEST PREVIOUS RATE WAS EARNED IN A POSITION NOT UNDER THE CLASSIFICATION ACT, THE EQUIVALENT SALARY STEP FOR CLASSIFICATION ACT POSITIONS WILL BE DETERMINED AS OF THE DATE THAT SALARY RATE WAS ATTAINED. THE SCHEDULED RATE WILL BE USED FOR THIS PURPOSE, EXCLUDING ADDITIONAL PAY ASSIGNMENTS, NIGHT DIFFERENTIALS, ETC. IF THE EMPLOYEE WAS PAID AN HOURLY RATE, IT WILL BE NECESSARY TO MULTIPLY THE HOURLY RATE BY 2080 HOURS AND SELECT THE NEAREST STEP ABOVE THE PER ANNUM EQUIVALENT IN THE LOWEST GRADE UNDER THE CLASSIFICATION ACT AT THAT TIME. SEE (1) BELOW. IF THE EMPLOYEE WAS PAID AN ANNUAL RATE, THE NEAREST STEP ABOVE THAT RATE IN THE LOWEST GRADE UNDER THE CLASSIFICATION ACT AT THAT TIME IS HIS HIGHEST PREVIOUS RATE. SEE (2) BELOW. THE RATE THUS DETERMINED WILL BE INCREASED ONLY BY THOSE AMENDMENTS TO THE CLASSIFICATION ACT OR OTHER APPLICABLE STATUTORY AMENDMENTS WHICH WERE ENACTED DURING A PERIOD WHEN THE EMPLOYEE WAS NOT IN CIVILIAN SERVICE AS DESCRIBED IN NCPI 195.2-21.

"/1) EMPLOYEE HAD PRIOR SERVICE IN AN UNGRADED RATING AT $1.52 PER HOUR, STEP 3, IN APRIL 1945. THE PER ANNUM EQUIVALENT WAS $3161.60. IN APRIL 1945, THIS AMOUNT FELL BETWEEN THE 6TH STEP, $3100 PER ANNUM AND THE 7TH, $3200 PER ANNUM IN GRADE CAF-7. HE HAD BEEN SEPARATED FROM THE SERVICE SINCE APRIL 1945, AND THEREFORE, $5335 PER ANNUM, THE PRESENT PAY FOR THE 7TH STEP IN GRADE GS-7, IS HIS HIGHEST PREVIOUS RATE. IF HE HAD BEEN CONTINUOUSLY EMPLOYED IN UNGRADED RATINGS SINCE APRIL 1945, $3200 PER ANNUM WOULD BE HIS HIGHEST PREVIOUS RATE BASED ON THIS RULE. SEE NCPI 195.3-5.'

SECTION 25.102 (J) AND SECTION 25.103 (B) OF THE FEDERAL EMPLOYEES PAY REGULATIONS, 2-1-318, FEDERAL PERSONNEL MANUAL READS AS FOLLOWS:

"SECTION 25.102 (J):

"HIGHEST PREVIOUS RATE IS THE HIGHEST BASIC SALARY RATE PREVIOUSLY PAID TO A FEDERAL CIVILIAN EMPLOYEE OCCUPYING A POSITION IN A DEPARTMENT AS DEFINED IN SECTION 201 (A) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, OR IN A MIXED OWNERSHIP CORPORATION, OR IN A POSITION IN THE LEGISLATIVE OR JUDICIAL BRANCH, BEFORE TRANSFER IN ACCORDANCE WITH SECTION 2 (B) OR (C) OF PUBLIC LAW 880, 76TH CONGRESS, AS AMENDED, IRRESPECTIVE OF WHETHER OR NOT SUCH POSITION IS SUBJECT TO THE PAY SCHEDULES OF THE CLASSIFICATION ACT. THE HIGHEST PREVIOUS RATE MUST BE BASED ON A REGULAR TOUR OF DUTY AT SUCH RATE (1) UNDER AN APPOINTMENT NOT LIMITED TO 90 DAYS OR LESS, OR (2) FOR A CONTINUOUS PERIOD OF 90 DAYS UNDER ONE OR MORE APPOINTMENT WITHOUT A BREAK IN SERVICE. IF SUCH HIGHEST PREVIOUS RATE WAS EARNED IN A CLASSIFICATION ACT POSITION, IT SHALL BE INCREASED BY ANY SUBSEQUENT AMENDMENTS TO THE CLASSIFICATION ACT PAY SCHEDULES. IF SUCH HIGHEST PREVIOUS RATE WAS EARNED IN A POSITION NOT SUBJECT TO THE CLASSIFICATION ACT, IT SHALL BE INCREASED ONLY BY THOSE AMENDMENTS TO THE CLASSIFICATION ACT OR OTHER APPLICABLE STATUTORY AMENDMENTS WHICH WERE ENACTED DURING A PERIOD WHEN THE EMPLOYEE WAS NOT IN CIVILIAN SERVICE AS DESCRIBED ABOVE.'

SECTION 25.103 (B) PROVIDES IN PERTINENT PART AS FOLLOWS:

"SUBJECT TO THE MANDATORY REQUIREMENTS OF PARAGRAPH (D) OF THIS SECTION AND SECTION 25.104, AN EMPLOYEE WHO IS REEMPLOYED, TRANSFERRED, REASSIGNED, PROMOTED, REPROMOTED, OR DEMOTED MAY BE PAID AT ANY SCHEDULED RATE FOR HIS GRADE WHICH DOES NOT EXCEED THE EMPLOYEE'S HIGHEST PREVIOUS RATE. IF THE EMPLOYEE'S HIGHEST PREVIOUS RATE FALLS BETWEEN TWO SCHEDULED RATES OF THE NEW GRADE, HE MAY BE GIVEN THE HIGHER RATE. IF THE EMPLOYEE'S EXISTING RATE OF BASIC COMPENSATION IS LESS THAN THE MINIMUM SCHEDULED RATE OF THE NEW GRADE, HIS COMPENSATION SHALL BE INCREASED TO THE MINIMUM RATE. * * *"

AS AN EXAMPLE OF THE ADMINISTRATIVE PRACTICE UNDER THE NAVY REGULATION WE FOUND THE CASE OF AN EMPLOYEE WHOSE HIGHEST RATE WAS EARNED IN AN UNGRADED POSITION (SUPERVISORY PROGRESSMAN) AT $6,344 PER ANNUM. THE UNGRADED SALARY OF $6,344 FELL BETWEEN TWO SCHEDULED STEPS OF THE GS-11 GRADE, THAT IS, BETWEEN $6,340 AND $6,540 PER ANNUM. THE ADMINISTRATION OFFICE DETERMINED THE HIGHEST PREVIOUS RATE WOULD BE CONSIDERED TO BE THE HIGHER OF THE TWO, OR $6,540 PER ANNUM. HOWEVER, THE EMPLOYEE WAS NOT GIVEN THE HIGHER RATE, HE WAS DEMOTED TO THE TOP STEP OF GS-9 AT AN ANNUAL RATE OF $5,810. APPROXIMATELY TWO YEARS LATER THE EMPLOYEE WAS PROMOTED TO GS-11 AND HIS PER ANNUM SALARY ESTABLISHED AT $6,605 ON THE BASIS OF THE CONSTRUCTIVE HIGHEST PREVIOUS RATE OF $6,540 PER ANNUM.

THE EMPLOYEE'S HIGHEST PREVIOUS RATE OF $6,344 PER ANNUM FALLS BELOW THE ENTRANCE RATE OF THE CURRENT GS-11 PAY SCALE. THEREFORE, UNDER THE FEDERAL EMPLOYEES PAY REGULATIONS, THE EMPLOYEE IS ENTITLED TO BE PAID A MAXIMUM OF ONLY $6,390 PER ANNUM, THE ENTRANCE RATE OF GS-11. THE CIVIL SERVICE COMMISSION AGREES THAT OUR INTERPRETATION OF THE FEDERAL EMPLOYEES PAY REGULATIONS AS INDICATED ABOVE IS CORRECT. IN ORDER TO CORRECT THE ERRONEOUS PRACTICE OF THE NAVAL GUN FACTORY, AND ANY OTHER ACTIVITY FOLLOWING A SIMILAR PRACTICE, IT MAY BE THAT YOU WISH TO CLARIFY THE EXISTING NAVY REGULATIONS.