B-155212, OCTOBER 9, 1964, 44 COMP. GEN. 206

B-155212: Oct 9, 1964

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COMPENSATION - DOWNGRADING - SAVED COMPENSATION - STEP SELECTION AN EMPLOYEE WHO WAS IN A LONGEVITY STEP OF A GRADE WHEN DOWNGRADED TO THE TOP STEP OF THE NEXT LOWER GRADE MUST HAVE THE ACTION REGARDED AS PLACING THE EMPLOYEE IN THE TOP SCHEDULED STEP OF THE LOWER GRADE RATHER THAN THE TOP LONGEVITY STEP OF SUCH GRADE. EVEN THOUGH THE LONGEVITY STEPS WERE SUBSEQUENTLY ELIMINATED UNDER TITLE II OF THE CLASSIFICATION ACT AMENDMENTS OF 1962. YOUR ASSISTANT SECRETARY FOR ADMINISTRATION REQUESTED OUR DECISION CONCERNING THE SALARY RATE TO WHICH AN EMPLOYEE OF THE TREASURY DEPARTMENT WAS ENTITLED AT THE EXPIRATION OF THE 2-YEAR SALARY RETENTION PERIOD APPLICABLE IN HIS CASE UNDER THE PROVISIONS OF SECTION 507 OF THE CLASSIFICATION ACT OF 1949.

B-155212, OCTOBER 9, 1964, 44 COMP. GEN. 206

COMPENSATION - DOWNGRADING - SAVED COMPENSATION - STEP SELECTION AN EMPLOYEE WHO WAS IN A LONGEVITY STEP OF A GRADE WHEN DOWNGRADED TO THE TOP STEP OF THE NEXT LOWER GRADE MUST HAVE THE ACTION REGARDED AS PLACING THE EMPLOYEE IN THE TOP SCHEDULED STEP OF THE LOWER GRADE RATHER THAN THE TOP LONGEVITY STEP OF SUCH GRADE, AND EVEN THOUGH THE LONGEVITY STEPS WERE SUBSEQUENTLY ELIMINATED UNDER TITLE II OF THE CLASSIFICATION ACT AMENDMENTS OF 1962, 5 U.S.C. 1113, SUCH FACT DOES NOT PROVIDE ANY BASIS TO PERMIT THE SELECTION OF ANOTHER STEP AT THE EXPIRATION OF THE SALARY RETENTION PERIOD.

TO THE SECRETARY OF THE TREASURY, OCTOBER 9, 1964:

ON SEPTEMBER 17, 1964, YOUR ASSISTANT SECRETARY FOR ADMINISTRATION REQUESTED OUR DECISION CONCERNING THE SALARY RATE TO WHICH AN EMPLOYEE OF THE TREASURY DEPARTMENT WAS ENTITLED AT THE EXPIRATION OF THE 2-YEAR SALARY RETENTION PERIOD APPLICABLE IN HIS CASE UNDER THE PROVISIONS OF SECTION 507 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 5 U.S.C. 1107.

EFFECTIVE JULY 8, 1962, THE EMPLOYEE IN QUESTION WAS REDUCED IN GRADE FROM GS-15, LONGEVITY STEP "Z," $15,810 PER ANNUM TO GRADE GS 14. THE PERSONNEL ACTION FORM (FORM 50) CONTAINS THE FOLLOWING NOTATION UNDER THE "REMARKS" CAPTION: "EMPLOYEE WOULD HAVE BEEN PLACED IN TOP STEP OF GS-14, $13,510.00 IF SALARY RETENTION ACT DID NOT APPLY.' WE NOTE THAT THE TOP STEP OF GRADE GS-14, $13,510 PER ANNUM, AT THAT TIME WAS THE MAXIMUM SCHEDULED STEP (SIXTH STEP) OF THE GRADE, THERE BEING THREE LONGEVITY STEPS THE HIGHEST OF WHICH CALLED FOR A SALARY RATE OF $14,290.

YOUR ASSISTANT SECRETARY'S LETTER IS IN PART AS FOLLOWS:

* * * THIS DEPARTMENT IS OF THE OPINION THAT THE ACTION TAKEN APPEARS TO BE IN CONSONANCE WITH THE CIVIL SERVICE COMMISSION'S LETTER ADDRESSED TO THE HONORABLE J. S. GLEASON, JR., ADMINISTRATOR, VETERANS ADMINISTRATION, DATED AUGUST 20, 1963, THE QUOTED PORTION OF WHICH READS AS FOLLOWS:

"THE SELECTION OF A RATE AT THE TIME OF THE DEMOTION CANNOT BE CHANGED AT A LATER DATE IN THE ABSENCE OF SOME PERSONNEL OR POSITION CHANGE. FOR EXAMPLE, PRIOR TO THE FEDERAL SALARY REFORM ACT LONGEVITY RATES WERE NOT AVAILABLE UNLESS THE EMPLOYEE HAS PREVIOUSLY EARNED A LONGEVITY RATE. EVEN THOUGH THE HIGHER RATES ARE NOW AVAILABLE AS A RESULT OF THE ELIMINATION OF LONGEVITY RATES AS SUCH, AGENCIES MAY NOT CHANGE THE RATE WHICH WAS SELECTED AT THE EMPLOYEE'S DEMOTION.'

THE EMPLOYEE INVOLVED CONTENDS THAT IN VIEW OF THE STATEMENT CONTAINED UNDER THE REMARKS COLUMN WHICH APPEARS ON FORM 50 AND SINCE THE CLASSIFICATION ACT AMENDMENTS OF 1962, TITLE II OF PUBLIC LAW 87 793, 5 U.S.C. 1113, ABOLISHED THE LONGEVITY GRADES HE BECAME ENTITLED, AS A MATTER OF RIGHT, TO BE PLACED IN THE TOP STEP OF GRADE GS-14 ($17,215) UPON THE EXPIRATION OF THE SALARY RETENTION PERIOD.

IN OUR DECISION OF AUGUST 22, 1961, B-146305, WE STATED: "* * * IT IS INCUMBENT UPON AN AGENCY TO SELECT AT THE TIME OF THE DOWNGRADING THE SALARY STEP OF THE GRADE IN WHICH THE EMPLOYEE WOULD HAVE BEEN PLACED HAD IT NOT BEEN FOR THE SALARY SAVINGS PROVISIONS OF PUBLIC LAW 85-737.' THAT IS TO SAY, THE SELECTION OF THE STEP IN THE LOWER GRADE, THE SALARY OF WHICH THE EMPLOYEE WOULD RECEIVE WERE IT NOT FOR HIS ENTITLEMENT TO A HIGHER RETAINED SALARY RATE, IS AN ACTION TO BE TAKEN AT THE TIME OF THE DOWNGRADING. THE PAY ENTITLEMENT OF THE EMPLOYEE IS DEPENDENT UPON WHICH STEP IS SELECTED. IN THE INSTANT CASE THE TOP LONGEVITY STEP COULD HAVE BEEN DESIGNATED AT THE TIME OF THE EMPLOYEE'S TRANSFER AND REDUCTION AS THE STEP IN GRADE GS-14 IN WHICH HE WOULD HAVE BEEN PLACED HAD HE NOT BEEN ENTITLED TO SALARY SAVINGS--- SEE SECTION 25.103 (E) OF THE FEDERAL EMPLOYEES PAY REGULATIONS. HOWEVER, THAT WAS NOT DONE. THE SALARY RATE SO DESIGNATED WAS $13,510, THE RATE PRESCRIBED FOR THE TOP SCHEDULED STEP OF THAT GRADE. HENCE IT CLEARLY APPEARS THAT THE TERM "TOP STEP OF GS 14, $13,510," AS USED UNDER THE REMARKS CAPTION ON THE PERSONNEL ACTION FORM, REFERRED TO THE TOP SCHEDULED STEP OF GRADE GS-14 AND NOT THE TOP LONGEVITY STEP ($14,290 PER ANNUM). THE FACT THAT LONGEVITY RATES WERE ELIMINATED BY THE ACT OF OCTOBER 11, 1962, AFFORDS NO BASIS FOR PERMITTING AN ADDITIONAL SELECTION OF THE STEP IN GRADE GS-14 TO WHICH AN EMPLOYEE IS TO BE ASSIGNED AT THE END OF HIS RETAINED SALARY PERIOD. IN OTHER WORDS, WE ARE IN AGREEMENT WITH THE POSITION OF THE CIVIL SERVICE COMMISSION, AS PREVIOUSLY QUOTED.

THE RECORD SHOWS THAT THE EMPLOYEE IN QUESTION HAD SUFFICIENT CREDITABLE SERVICE FOR ENTITLEMENT TO STEP 7 OF GRADE GS-14 PRIOR TO THE EXPIRATION OF THE PERIOD FOR WHICH HE WAS ENTITLED TO RETAINED SALARY AND WE UNDERSTAND THAT THE EMPLOYEE IN QUESTION WAS, IN FACT, PLACED IN STEP 7 OF GRADE GS-14 AT THE SALARY RATE OF $16,315 AT THE EXPIRATION OF SUCH SALARY RETENTION PERIOD. THIS ACTION IS CONSIDERED TO BE CORRECT. THE QUESTION SUBMITTED BY YOUR ADMINISTRATIVE ASSISTANT SECRETARY FOR ADMINISTRATION IS ANSWERED ACCORDINGLY.