B-141648, JANUARY 29, 1960, 39 COMP. GEN. 550

B-141648: Jan 29, 1960

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CIVILIAN PERSONNEL - COMPENSATION - RATES - HIGHEST PREVIOUS SALARY RATE - COMPUTATION THE ESTABLISHMENT OF THE SALARY OF A FORMER FOREIGN SERVICE OFFICER WHO IS APPOINTED TO A POSITION UNDER THE CLASSIFICATION ACT OF 1949. BY INCREASING SUCH HIGHEST PREVIOUS RATES BY STATUTORY INCREASES IN SUCH OTHER SYSTEMS PRIOR TO CONVERSION TO CLASSIFICATION ACT RATES WAS WITHIN THE AUTHORITY VESTED IN THE CIVIL SERVICE COMMISSION. HIS ENTRANCE RATE OF COMPENSATION WAS FIXED AT THE LOWEST LEVEL OF THE GRADE. AT THAT TIME IT WAS THE POLICY OF THE BDSA TO FIX AN EMPLOYEE'S ENTRANCE RATE OF COMPENSATION AT THE MAXIMUM PERMISSIBLE RATE. THERE IS NOTHING IN THE FILE TO SHOW WHETHER MR. HUGHES WAS EMPLOYED BY THE FEDERAL GOVERNMENT FROM MAY 22.

B-141648, JANUARY 29, 1960, 39 COMP. GEN. 550

CIVILIAN PERSONNEL - COMPENSATION - RATES - HIGHEST PREVIOUS SALARY RATE - COMPUTATION THE ESTABLISHMENT OF THE SALARY OF A FORMER FOREIGN SERVICE OFFICER WHO IS APPOINTED TO A POSITION UNDER THE CLASSIFICATION ACT OF 1949, AT THE MINIMUM OF THE GRADE RATHER THAN AT THE HIGHEST RATE PREVIOUSLY EARNED, MAY BE RETROACTIVELY CORRECTED TO CONFORM TO ADMINISTRATIVE POLICY WHICH PROVIDES FOR ESTABLISHMENT OF SALARY RATES AT THE MAXIMUM PERMISSIBLE RATE. A REGULATION WHICH WOULD PERMIT THE ESTABLISHMENT OF ENTRANCE SALARY RATES OF POSITIONS UNDER THE CLASSIFICATION ACT OF 1949, ON THE BASIS OF THE HIGHEST PREVIOUS RATE RECEIVED IN POSITIONS UNDER OTHER PAY SYSTEMS, BY INCREASING SUCH HIGHEST PREVIOUS RATES BY STATUTORY INCREASES IN SUCH OTHER SYSTEMS PRIOR TO CONVERSION TO CLASSIFICATION ACT RATES WAS WITHIN THE AUTHORITY VESTED IN THE CIVIL SERVICE COMMISSION, UNDER SECTION 802 (A) OF THE ACT, TO PRESCRIBE RATES OF COMPENSATION OF EMPLOYEES UPON REINSTATEMENT, REAPPOINTMENT AND REEMPLOYMENT; THEREFORE, THE HIGHEST PREVIOUS SALARY RATE OF A FOREIGN SERVICE OFFICER APPOINTED TO A CLASSIFIED POSITION MAY, WITHIN ADMINISTRATIVE DISCRETION, BE COMPUTED AT THE RATE AT TIME OF RESIGNATION, PLUS STATUTORY INCREASES IN THE FOREIGN SERVICE RATES, AND THEN CONVERTING SUCH RATE TO THE CLASSIFIED RATE AT TIME OF APPOINTMENT.

TO MURIEL B. SCOTT, DEPARTMENT OF COMMERCE, JANUARY 29, 1960:

YOUR LETTER OF JANUARY 6, 1960, WITH ENCLOSURES, REQUESTS OUR DECISION WHETHER YOU MAY CERTIFY FOR PAYMENT THE VOUCHER THEREWITH SUBMITTED FOR $1,918.76 IN FAVOR OF H. HERBERT HUGHES, DEPUTY ADMINISTRATOR OF BUSINESS AND DEFENSE SERVICES ADMINISTRATION, DEPARTMENT OF COMMERCE, COVERING A RETROACTIVE ADJUSTMENT OF COMPENSATION.

THE RECORD SHOWS THAT MR. HUGHES ENTERED ON DUTY IN BDSA ON JANUARY 2, 1958, UNDER A SCHEDULE C APPOINTMENT AS DEPUTY ADMINISTRATOR GRADE GS-17. HIS ENTRANCE RATE OF COMPENSATION WAS FIXED AT THE LOWEST LEVEL OF THE GRADE, $13,975 PER ANNUM. AT THAT TIME IT WAS THE POLICY OF THE BDSA TO FIX AN EMPLOYEE'S ENTRANCE RATE OF COMPENSATION AT THE MAXIMUM PERMISSIBLE RATE. PRIOR TO MR. HUGHES' EMPLOYMENT WITH BDSA HE HAD SERVED IN THE FOREIGN SERVICE AT AN ENTRANCE RATE OF FSR-1, $12,000 PER ANNUM. ON JULY 1, 1950, HE RECEIVED A PERIODIC IN-CLASS PROMOTION (STEP 2) TO $12,400 PER ANNUM AND RESIGNED MAY 21, 1951. THERE IS NOTHING IN THE FILE TO SHOW WHETHER MR. HUGHES WAS EMPLOYED BY THE FEDERAL GOVERNMENT FROM MAY 22, 1951, THROUGH JANUARY 1, 1958.

YOU EXPRESS THE VIEW THAT IN COMPUTING THE ENTRANCE RATE THE FOREIGN SERVICE RATE SHOULD BE CONVERTED TO THE CLASSIFICATION ACT PAY SCHEDULE AS OF MAY 21, 1951, THE DATE MR. HUGHES RESIGNED FROM THE FOREIGN SERVICE AND THEN INCREASED BY STATUTORY INCREASES IN CLASSIFICATION ACT RATES. THE PROPRIETY OF INCREASING THE HIGHEST PREVIOUS RATE BY STATUTORY INCREASES IN THE FOREIGN SERVICE RATES AND CONVERTING SUCH RATE TO A CLASSIFICATION ACT RATE AS OF JANUARY 2, 1958, THE DATE HE ENTERED ON DUTY WITH THE BDSA IS QUESTIONED. SHOULD YOUR VIEW BE CORRECT, YOU SAY THAT THE $12,400 PER ANNUM RATE FOR FSR-1, STEP 2, ON MAY 21, 1951, WAS EQUIVALENT TO THE SECOND STEP OF GRADE GS-17, $12,400 PER ANNUM, SUBSEQUENTLY INCREASED AS FOLLOWS:

$13,200 BY PUBLIC LAW 201, 82D CONGRESS, APPROVED OCTOBER 24, 1951, 5 U.S.C. 113, EFFECTIVE JULY 8, 1951; $14,190 BY PUBLIC LAW 94, 84TH CONGRESS, APPROVED JUNE 28, 1955, 5 U.S.C. 1113, EFFECTIVE JANUARY 12, 1958. UNDER THAT METHOD MR. HUGHES COULD HAVE BEEN APPOINTED AT THE RATE OF $14,190 PER ANNUM. THAT RATE WOULD HAVE BEEN INCREASED TO $15,615 PER ANNUM ON JANUARY 12, 1958, UNDER PUBLIC LAW 85-462, AND FURTHER INCREASED BY A PERIODIC STEP-INCREASE EFFECTIVE JULY 12, 1959, TO THE THIRD STEP OF GRADE GS-17, $15,855 PER ANNUM.

BY THE ALTERNATIVE METHOD USED IN COMPUTING THE VOUCHERED AMOUNT, THE FSR -1 RATE OF $12,400, EFFECTIVE IN MAY 1951, HAD BEEN INCREASED TO $15,000 BY JANUARY 2, 1958. THEREFORE, IN THE VOUCHER TRANSMITTED WITH YOUR LETTER MR. HUGHES' ENTRANCE RATE IS FIXED AT $14,835, THE MAXIMUM SCHEDULED RATE OF GRADE GS-17. THAT RATE WAS INCREASED BY THE 1958 SALARY INCREASE ACT TO $16,335.

BECAUSE OF YOUR DOUBT CONCERNING THE METHOD USED YOU REQUEST A DECISION UPON THE FOLLOWING QUESTIONS:

1. IS MR. HUGHES ENTITLED TO RETROACTIVE ADJUSTMENT IN COMPENSATION DUE TO AN ADMINISTRATIVE ERROR IN FIXING HIS RATE OF SALARY AT TIME OF APPOINTMENT?

2. IF YOUR ANSWER TO QUESTION 1 IS IN THE AFFIRMATIVE, BASED ON HIS "HIGHEST PREVIOUS RATE" OF $12,400 IN FOREIGN SERVICE, HAS THE PROPER METHOD BEEN FOLLOWED IN ESTABLISHING THE MAXIMUM STEP OF GS-17, $14,835, AS THE CORRECT RATE EFFECTIVE JANUARY 2, 1958; AND MAY THE ATTACHED VOUCHER BE CERTIFIED FOR PAYMENT?

3. IF YOUR ANSWER TO QUESTION 2 IS IN THE NEGATIVE, SHOULD THE EXCEPTED APPOINTMENT ( CORRECTION) EFFECTIVE JANUARY 2, 1958, BE SHOWN AS $14,190 PER ANNUM, THE SECOND STEP OF GS-17; THE PERIODIC STEP- INCREASE EFFECTIVE JULY 12, 1959, BE CORRECTED TO READ FROM $15,615 TO $15,855, AND THE VOUCHER PREPARED ACCORDINGLY?

WE HELD IN 34 COMP. GEN. 380, THAT RETROACTIVE SALARY ADJUSTMENT MAY BE MADE WHEN, INCIDENT TO THE APPOINTMENT OF A FORMER FOREIGN SERVICE OFFICER TO A POSITION IN THE DEPARTMENT OF AGRICULTURE UNDER THE CLASSIFICATION ACT OF 1949, AN ADMINISTRATIVE ERROR IS MADE IN FIXING THE EMPLOYEE'S INITIAL SALARY AT THE MINIMUM INSTEAD OF AT THE HIGHEST RATE HE HAD PREVIOUSLY EARNED, CONTRARY TO THE POLICY OF THE DEPARTMENT OF AGRICULTURE. THEREFORE, YOUR FIRST QUESTION IS ANSWERED IN THE AFFIRMATIVE.

SECTION 25.102 (J) IN EFFECT AT THE TIME MR. HUGHES WAS REEMPLOYED IN A CLASSIFICATION ACT POSITION ON JANUARY 2, 1958, PROVIDED IN PART AS FOLLOWS:

* * * 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. ( ITALICS SUPPLIED.)

WE HAVE NOT HERETOFORE HAD OCCASION TO CONSTRUE THE ABOVE-ITALICIZED LANGUAGE IN ANY DECISION. HOWEVER, UNDER SECTION 802 (A) OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1132 (A), THE CIVIL SERVICE COMMISSION HAS AUTHORITY TO FIX THE BASIC RATE OF COMPENSATION OF ANY OFFICER OR EMPLOYEE WHEN HE IS REINSTATED, REAPPOINTED, OR REEMPLOYED. THE LANGUAGE REFERRED TO FIRST WAS USED IN SECTION 25.102 (J) OF THE FEDERAL EMPLOYEES PAY REGULATIONS, EFFECTIVE OCTOBER 2, 1956 (21 FR 7507). IT WAS DELETED BY AMENDMENT OF SECTIONS 25.102 (J), EFFECTIVE JULY 26, 1959, AND IS NOT IN THE CURRENT REGULATIONS.

WE UNDERSTAND THAT THE PURPOSE OF THE LANGUAGE WAS TO AUTHORIZE CONSTRUCTION OF ENTRANCE SALARY RATES OF POSITIONS UNDER THE CLASSIFICATION ACT FROM HIGHEST PREVIOUS RATES ATTAINED UNDER OTHER PAY SYSTEMS BY INCREASING SUCH HIGHEST PREVIOUS RATES BY STATUTORY INCREASES IN SUCH OTHER SYSTEMS, PRIOR TO CONVERSION TO CLASSIFICATION ACT RATES. IN THE EXERCISE OF ADMINISTRATIVE DISCRETION THE EMPLOYEE COULD BE GIVEN THE RATE MORE BENEFICIAL TO HIM.

IN VIEW OF THE STATUTORY AUTHORITY FOR THE REGULATION, WHICH REGULATION WAS IN EFFECT AT THE TIME OF MR. HUGHES' REEMPLOYMENT, WE FIND NO OBJECTION TO THE METHOD USED IN COMPUTING HIS REVISED ENTRANCE SALARY RATE. THEREFORE, THE VOUCHER WHICH IS RETURNED HEREWITH PROPERLY MAY BE CERTIFIED FOR PAYMENT IF CORRECT IN OTHER RESPECTS.

IN LIGHT OF THE AFFIRMATIVE ANSWER TO QUESTION TWO NO ANSWER IS REQUIRED TO QUESTION THREE.