Employee's Entitlement to Highest Previous Rate and Transfer of Leave

A Federal employee appealed a Claims Group settlement which denied her claim for credit of unused sick leave and her claim to have her salary set pursuant to the highest previous rate rule. The employee was employed in a non-Federal position with a Federal agency when she was separated from her position due to a reduction in force. Almost 3 years later, she received an appointment with another Government agency at a lower grade. Incident to this appointment, she was credited with the amount of unused sick leave she had to her credit when she was first separatated from the non-Federal position. The employee subsequently tranferred to a position at another agency where her salary was set by the highest previous rate she had earned at her former position. She was subsequently promoted. In processing this promotion action, the agency determined that she had not previously been entitled to have her initial salary computed by using her highest previous rate and that she was not entitled to the unused sick leave because of a 3-year break in service between her employment with the two agencies. The employee appealed the action to GAO, and the Claims Group upheld the agency's action but waived the gross amount of the employee's indebtness. The employee appealed this action. The question of whether the highest previous rate rule will be applied where there has been a break in Federal service is entirely within the discretion of the agency involved. Accordingly, GAO sustained the settlement with regard to the employee's entitlement to have her salary set by the application of the highest previous rate rule. Further, since the employee had a break in service she was not entitled to a recredit of her sick leave balance. Accordingly, GAO upheld the settlement of the Claims Group in denying the claim.