B-153880, APR. 28, 1964

B-153880: Apr 28, 1964

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WELFARE: REFERENCE IS MADE TO YOUR LETTER OF MARCH 31. HER SALARY RATE FOR GS-4/X) WAS READJUSTED ON OCTOBER 14. YOU ASK WHETHER THE "HIGHEST PREVIOUS RATE RULE" IS STILL IN EFFECT IN VIEW OF THE 2-STEP PROMOTION REQUIREMENT SET FORTH IN THE FEDERAL SALARY REFORM ACT OF 1962. THE SALARY OF AN EMPLOYEE MAY BE SET AT A RATE IN EXCESS OF THE MINIMUM OF THE GRADE TO WHICH HE IS PROMOTED ON THE BASIS OF THE FACT THAT HE HAS EARNED A HIGHER RATE OF PAY IN PRIOR FEDERAL EMPLOYMENT. YOU SAY THAT SINCE IT IS THE POLICY OF THE HOSPITAL AND THE PUBLIC HEALTH SERVICE TO FOLLOW THE "HIGHEST PREVIOUS RATE RULE. " IT WAS YOUR INTENT TO RETROACTIVELY CORRECT THE SALARY RATE OF THE EMPLOYEE TO STEP 10 OF GRADE GS-5.

B-153880, APR. 28, 1964

TO MR. M. BERDOU, AUTHORIZED CERTIFYING OFFICER, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 31, 1964, REQUESTING OUR ADVANCE DECISION AS TO THE PROPRIETY OF CERTIFYING FOR PAYMENT A VOUCHER IN FAVOR OF MRS. EVELYN LEA STARKS, AN EMPLOYEE OF THE U.S. PUBLIC HEALTH SERVICE HOSPITAL AT CARVILLE, LOUISIANA.

THE RECORD SHOWS THAT MRS. STARKS PREVIOUSLY HAD OCCUPIED A POSITION CLASSIFIED AT GS-8, STEP 7, IN ANOTHER AGENCY PRIOR TO HER APPOINTMENT ON MARCH 23, 1958, TO A POSITION IN THE U.S. PUBLIC HEALTH SERVICE HOSPITAL AT GS-3, STEP 7. SUBSEQUENTLY SHE RECEIVED A PROMOTION TO GS 4, STEP 7, AND ON OCTOBER 15, 1961, SHE RECEIVED THE FIRST LONGEVITY STEP IN GRADE 4. HER SALARY RATE FOR GS-4/X) WAS READJUSTED ON OCTOBER 14, 1962, UNDER THE FEDERAL SALARY REFORM ACT, OCTOBER 11, 1962, PUB.L. 87-793. SEPTEMBER 29, 1963, MRS. STARKS RECEIVED A PROMOTION TO GS-5, STEP 7.

YOU ASK WHETHER THE "HIGHEST PREVIOUS RATE RULE" IS STILL IN EFFECT IN VIEW OF THE 2-STEP PROMOTION REQUIREMENT SET FORTH IN THE FEDERAL SALARY REFORM ACT OF 1962, AND IF SO WHETHER MRS. STARKS' SALARY MAY BE INCREASED TO STEP 10 OF GRADE GS-5 RETROACTIVELY EFFECTIVE AS OF THE DATE OF HER PROMOTION TO THAT GRADE ON SEPTEMBER 29, 1963.

OUR DECISION OF JANUARY 14, 1964, B-151483, INDICATES THAT THE "HIGHEST PREVIOUS RATE RULE" MAY STILL BE APPLIED WHEN THE RATE THUS OBTAINED EXCEEDS THE RATE OBTAINED BY THE 2-STEP INCREASE RULE OF THE 1962 FEDERAL SALARY REFORM ACT. SECTION 604 (A) OF THE FEDERAL SALARY REFORM ACT OF 1962, PUB.L. 87-793, AMENDED 5 U.S.C. 1132 (B) AND HAD NO EFFECT ON SECTION 1132 (A) WHICH GIVES THE CIVIL SERVICE COMMISSION THE AUTHORITY TO GOVERN RATES OF BASIC COMPENSATION UPON PROMOTION OR OTHER CHANGE OF STATUS.

THEREFORE, THE SALARY OF AN EMPLOYEE MAY BE SET AT A RATE IN EXCESS OF THE MINIMUM OF THE GRADE TO WHICH HE IS PROMOTED ON THE BASIS OF THE FACT THAT HE HAS EARNED A HIGHER RATE OF PAY IN PRIOR FEDERAL EMPLOYMENT.

YOU SAY THAT SINCE IT IS THE POLICY OF THE HOSPITAL AND THE PUBLIC HEALTH SERVICE TO FOLLOW THE "HIGHEST PREVIOUS RATE RULE," IT WAS YOUR INTENT TO RETROACTIVELY CORRECT THE SALARY RATE OF THE EMPLOYEE TO STEP 10 OF GRADE GS-5, IF AND WHEN REGULATIONS OR OUR DECISION WERE RECEIVED IN CLARIFICATION OF THAT POINT, THAT IS, WHETHER THE "HIGHEST PREVIOUS RATE RULE" WAS STILL IN EFFECT. TO CARRY OUT THAT INTENT THE FOLLOWING STATEMENT WAS INSERTED ON SF-50 (PRESUMABLY THE PERSONNEL ACTION EFFECTING THE PROMOTION TO GS-5): "IT IS THE INTENT TO SET THE SALARY AT THE HIGHEST RATE THE EMPLOYEE CAN RECEIVE UNDER THE REGULATIONS. CURRENT REGULATIONS ARE UNCLEARAS TO THE APPLICABILITY SINCE THE PAY ACT OF OCTOBER 1962, AND ARE IN PROCESS OF REVISION.'

FROM THE FOREGOING IT IS CLEAR THAT THE FIXING OF THE EMPLOYEE'S SALARY RATE IN STEP 7 OF GRADE GS-5, AT THE TIME OF HER PROMOTION THERETO ON SEPTEMBER 29, 1963, WAS TENTATIVE AND SUBJECT TO CORRECTION RETROACTIVELY UPON RECEIPT OF FURTHER INFORMATION. ACCORDINGLY, WE HAVE NO OBJECTION TO INCREASING MRS. STARKS' RATE TO STEP 10 OF GRADE GS-5 RETROACTIVE TO SEPTEMBER 29, 1963.

THE VOUCHER IS RETURNED HEREWITH AND MAY BE CERTIFIED FOR PAYMENT, IF OTHERWISE CORRECT.