B-151055, APR. 16, 1963

B-151055: Apr 16, 1963

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THE PROPOSED REGULATIONS ARE DESIGNED TO GIVE EFFECT TO CHANGES IN THE CLASSIFICATION ACT OF 1949. SECTION 604 (B) OF THE AMENDING ACT ADDS A NEW SUBSECTION (D) TO SECTION 802 OF THE CLASSIFICATION ACT AS FOLLOWS: "THE COMMISSION MAY ISSUE REGULATIONS GOVERNING THE RETENTION OF THE RATE OF BASIC COMPENSATION OF AN EMPLOYEE WHO TOGETHER WITH HIS POSITION IS BROUGHT UNDER THIS ACT. IF ANY SUCH EMPLOYEE SO ENTITLED TO RECEIVE A RETAINED RATE UNDER REGULATIONS ISSUED PURSUANT TO THIS SUBSECTION IS LATER DEMOTED TO A POSITION UNDER THIS ACT. EXCEPT THAT SERVICE IN THE POSITION WHICH WAS BROUGHT UNDER THE ACT SHALL. THE IMPLEMENTING REGULATION PROPOSED BY THE COMMISSION IN REGARD TO THE FOREGOING IS TO BE EFFECTIVE ON THE EFFECTIVE DATE OF PUB.L. 87 793 AND TO THAT EXTENT WILL BE RETROACTIVE IN OPERATION.

B-151055, APR. 16, 1963

CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION:

YOUR LETTER OF MARCH 12, 1963, ENCLOSING COPIES OF PROPOSED FPM LETTER NO. 531--- AND CERTAIN PROPOSED CHANGES IN SUBPARTS A AND D OF PART 25 OF THE FEDERAL EMPLOYEES PAY REGULATIONS, ASKS OUR COMMENTS OR SUGGESTIONS REGARDING THE CONTEMPLATED REVISIONS.

THE PROPOSED REGULATIONS ARE DESIGNED TO GIVE EFFECT TO CHANGES IN THE CLASSIFICATION ACT OF 1949, AS AMENDED BY SECTION 604 (A) AND AS ADDED BY SECTION 604 (B) OF THE CLASSIFICATION ACT AMENDMENTS OF 1962, TITLE II, PUB.L. 87-793, 76 STAT. 847.

SECTION 604 (B) OF THE AMENDING ACT ADDS A NEW SUBSECTION (D) TO SECTION 802 OF THE CLASSIFICATION ACT AS FOLLOWS:

"THE COMMISSION MAY ISSUE REGULATIONS GOVERNING THE RETENTION OF THE RATE OF BASIC COMPENSATION OF AN EMPLOYEE WHO TOGETHER WITH HIS POSITION IS BROUGHT UNDER THIS ACT. IF ANY SUCH EMPLOYEE SO ENTITLED TO RECEIVE A RETAINED RATE UNDER REGULATIONS ISSUED PURSUANT TO THIS SUBSECTION IS LATER DEMOTED TO A POSITION UNDER THIS ACT, HIS RATE OF BASIC COMPENSATION SHALL BE DETERMINED IN ACCORDANCE WITH SECTION 507 OF THIS ACT, EXCEPT THAT SERVICE IN THE POSITION WHICH WAS BROUGHT UNDER THE ACT SHALL, FOR PURPOSES OF SECTION 507, BE CONSIDERED AS SERVICE UNDER THIS ACT.'

THE IMPLEMENTING REGULATION PROPOSED BY THE COMMISSION IN REGARD TO THE FOREGOING IS TO BE EFFECTIVE ON THE EFFECTIVE DATE OF PUB.L. 87 793 AND TO THAT EXTENT WILL BE RETROACTIVE IN OPERATION. PREVIOUS AND CURRENT REGULATIONS LIMIT SALARY RATES IN SUCH CONVERSION CASES TO THE MAXIMUM RATE OF THE GRADE IN WHICH THE POSITION IS PLACED.

IN COMMENTING ON THIS CHANGE IN THE LAW, S.REPT. NO. 2120, 87TH CONG., 2D SESS. OF THE COMMITTEE OF POST OFFICE AND CIVIL SERVICE READS, AS FOLLOWS:

"SUBSECTION (B) OF SECTION 604 ADDS A NEW SUBSECTION (D) TO SECTION 802 OF THE CLASSIFICATION ACT. THERE IS NO PRESENT AUTHORITY FOR SAVING THE BASIC COMPENSATION OF AN EMPLOYEE WHO, TOGETHER WITH HIS POSITION, IS BROUGHT UNDER THE CLASSIFICATION ACT FROM SOME OTHER FEDERAL PAY SYSTEM (SUCH AS THE WAGE BOARD SYSTEM), IF HIS SALARY RATE IS IN EXCESS OF THE MAXIMUM RATE OF THE CLASSIFICATION GRADE IN WHICH HIS POSITION IS PLACED. THE NEW SUBSECTION WOULD AUTHORIZE THE CIVIL SERVICE COMMISSION TO ISSUE REGULATIONS TO PERMIT THE RETENTION OF SALARY IN SUCH INSTANCES. INCLUDES SPECIAL PROVISIONS APPLICABLE IN CASE OF SUBSEQUENT DEMOTION IN GRADE.'

THUS, IT IS CLEAR THAT IT WAS BY THE ENACTMENT OF SECTION 604 (B) THAT THE COMMISSION WAS GIVEN THE AUTHORITY TO PROVIDE, BY REGULATION, FOR THE RETENTION OF A SALARY RATE IN EXCESS OF THE MAXIMUM RATE OF THE CLASSIFICATION GRADE IN THE CLASS OF CASES IN QUESTION. IN POINT OF TIME, THIS BROADENED AND NEW SAVED PAY AUTHORITY OF THE COMMISSION COULD HAVE BEEN EXERCISED CONTEMPORANEOUSLY WITH THE EFFECTIVE DATE OF THE ACT; AND HAVING REGARD FOR WHAT IS SAID IN THE SENATE REPORT WE BELIEVE THAT SUCH ACTION WOULD HAVE BEEN, AND THE PRESENT RETROACTIVELY EFFECTIVE PROPOSAL IS, IN CONSONANCE WITH THE INTENT OF THE CONGRESS. THEREFORE, WE HAVE NO OBJECTION TO THE REGULATION CONCERNING SUCH CONVERSIONS ON GROUNDS OF ITS RETROACTIVITY. CF. 32 COMP. GEN. 315, 317.

THE REGULATION CHANGES AFFECTING THE HIGHEST PREVIOUS RATE RULE AS APPLIED IN SALARY RETENTION CASES UNDER SUBPART D ARE VIEWED AS FALLING INTO A DIFFERENT CATEGORY. THE PROPOSED AMENDMENTS COVER THE SAME REGULATORY AREA AS THE EXISTING REGULATIONS, AND A MINIMUM RATE RESTRICTION SIMILAR TO THAT PROPOSED COULD HAVE BEEN INCLUDED IN THE REGULATIONS EVEN PRIOR TO THE 1962 PAY ACT. ALSO, WE BELIEVE THAT IT IS PERTINENT TO NOTE HERE THAT AS TO EMPLOYEES DEMOTED SUBSEQUENT TO THE EFFECTIVE DATE OF THE 1962 PAY ACT, AGENCIES, UNDER THE CURRENT REGULATIONS, HAVE AUTHORITY TO SELECT ANY OF THE SCHEDULED RATES. OUR OPINION IS THAT THE GENERAL RULE WHICH PROHIBITS THE RETROACTIVE AMENDMENT OF REGULATIONS IS FOR APPLICATION HERE. THEREFORE, WE ARE OF THE VIEW THAT ANY SUCH AMENDMENT SHOULD BE PROSPECTIVE FROM THE DATE OF ITS PROMULGATION. WE SHOULD POINT OUT THAT WE HAVE NOT OVERLOOKED THE FACT THAT WHILE THE PROPOSED REGULATION IS IN MANDATORY TERMS, THE TRANSMITTAL LETTER SUGGESTS AN INTENT THAT AGENCY ACTION UNDER THE REGULATIONS WAS TO BE A PERMISSIVE BASIS AS TO EMPLOYEES DEMOTED BEFORE THE EFFECTIVE DATE OF THE PAY ACT.

IF APPROPRIATE, WE SUGGEST THAT THE ANNUAL REFERENCE TO THE PROPOSED SECTION 25.103 (C) OF THE REGULATIONS DIRECT ATTENTION TO OUR DECISION OF AUGUST 16, 1962, B-149353, 42 COMP. GEN. - , PERTAINING TO CONSULTANTS.

WE APPRECIATE HAVING HAD THE OPPORTUNITY TO COMMENT ON THE PROPOSED REVISIONS OF THE REGULATIONS.