B-212990, JUL 23, 1984

B-212990: Jul 23, 1984

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OFFICERS AND EMPLOYEES - PROMOTIONS - RETROACTIVE - ENTITLEMENT - ERRONEOUS CLASSIFICATION DIGEST: AN EMPLOYEE WAS REASSIGNED FROM A MERIT PAY POSITION TO A GENERAL SCHEDULE POSITION. THE GENERAL SCHEDULE POSITION WAS PLACED IN THE MERIT PAY SYSTEM. THE AGENCY ASKS IF THE EMPLOYEE'S MERIT PAY STATUS SHOULD BE MADE RETROACTIVE TO THE TIME HE WAS FIRST PLACED IN THE GENERAL SCHEDULE POSITION. AGENCIES HAVE AUTHORITY TO DETERMINE COVERAGE UNDER THE MERIT PAY SYSTEM. WE WILL NOT REQUIRE RETROACTIVE CORRECTION OF DESIGNATIONS WHERE THERE WAS NO ADMINISTRATIVE ERROR WHICH WOULD WARRANT CORRECTION OF THE PERSONNEL ACTION. SALAMANDRA - MERIT PAY: ISSUE WE HAVE BEEN ASKED WHETHER AN EMPLOYEE WHO WAS REASSIGNED FROM A POSITION IN THE MERIT PAY SYSTEM TO ONE IN THE GENERAL SCHEDULE SHOULD BE RETROACTIVELY PLACED IN A MERIT PAY POSITION BECAUSE THE NEW POSITION TO WHICH HE WAS REASSIGNED WAS SUBSEQUENTLY DETERMINED TO HAVE BEEN PROPERLY IN THE MERIT PAY SYSTEM.

B-212990, JUL 23, 1984

OFFICERS AND EMPLOYEES - PROMOTIONS - RETROACTIVE - ENTITLEMENT - ERRONEOUS CLASSIFICATION DIGEST: AN EMPLOYEE WAS REASSIGNED FROM A MERIT PAY POSITION TO A GENERAL SCHEDULE POSITION. WITHIN 2 MONTHS, THE GENERAL SCHEDULE POSITION WAS PLACED IN THE MERIT PAY SYSTEM, AND THE AGENCY ASKS IF THE EMPLOYEE'S MERIT PAY STATUS SHOULD BE MADE RETROACTIVE TO THE TIME HE WAS FIRST PLACED IN THE GENERAL SCHEDULE POSITION. AGENCIES HAVE AUTHORITY TO DETERMINE COVERAGE UNDER THE MERIT PAY SYSTEM, AND WE WILL NOT REQUIRE RETROACTIVE CORRECTION OF DESIGNATIONS WHERE THERE WAS NO ADMINISTRATIVE ERROR WHICH WOULD WARRANT CORRECTION OF THE PERSONNEL ACTION.

BENEDICT C. SALAMANDRA - MERIT PAY:

ISSUE

WE HAVE BEEN ASKED WHETHER AN EMPLOYEE WHO WAS REASSIGNED FROM A POSITION IN THE MERIT PAY SYSTEM TO ONE IN THE GENERAL SCHEDULE SHOULD BE RETROACTIVELY PLACED IN A MERIT PAY POSITION BECAUSE THE NEW POSITION TO WHICH HE WAS REASSIGNED WAS SUBSEQUENTLY DETERMINED TO HAVE BEEN PROPERLY IN THE MERIT PAY SYSTEM. SINCE NO ADMINISTRATIVE ERROR OCCURRED WHEN THE EMPLOYEE WAS ORIGINALLY PLACED IN THE GENERAL SCHEDULE POSITION, NO RETROACTIVE ACTION SHOULD BE TAKEN TO PLACE HIM IN A MERIT PAY POSITION, EVEN THOUGH HIS ANNUAL PAY RATE WAS INCREASED NEARLY $400 DUE TO PAY CONVERSION RULES.

BACKGROUND

MR. ROGER D. CURRAN, ACTING DIRECTOR, DIVISION OF PERSONNEL, HEALTH RESOURCES AND SERVICES ADMINISTRATION, PUBLIC HEALTH SERVICE (PHS), DEPARTMENT OF HEALTH AND HUMAN SERVICES, SUBMITS THE CASE OF MR. BENEDICT C. SALAMANDRA, A PHS EMPLOYEE WHO WAS REASSIGNED ON JUNE 26, 1983, FROM THE MERIT PAY POSITION OF SUPERVISORY PUBLIC HEALTH ANALYST, GM-685-14, TO THE GENERAL SCHEDULE POSITION OF PUBLIC HEALTH ANALYST, GS-685-14, IN THE BUREAU OF HEALTH CARE DELIVERY AND ASSISTANCE (BHCDA).

MR. SALAMANDRA'S SALARY PRIOR TO REASSIGNMENT HAD BEEN AT THE MERIT PAY RATE OF $51,891 PER YEAR. ON HIS REASSIGNMENT HIS SALARY WAS SET AT THE NON-MERIT PAY RATE OF GRADE GS-14, STEP 9, $52,285 PER YEAR, IN ACCORDANCE WITH 5 C.F.R. SEC. 531.203(C) (1983), SINCE HIS SALARY RATE FELL BETWEEN STEPS 8 AND 9 OF GRADE GS-14. WHEN THE EXECUTIVE OFFICER OF BHCDA BECAME AWARE THAT THE POSITION TO WHICH MR. SALAMANDRA WAS REASSIGNED WAS A NON- MERIT PAY POSITION, HE DISCUSSED THIS WITH THE DIVISION OF PERSONNEL AND INDICATED THAT THE INCUMBENT OF THE POSITION, MR. SALAMANDRA, WOULD BE VERY ACTIVELY AND CONSISTENTLY INVOLVED IN A POLICY-SETTING ROLE. SUBSEQUENTLY, AFTER REVIEW BY PERSONNEL STAFF, IT WAS DETERMINED THAT MR. SALAMANDRA'S POSITION MET THE DEFINITION OF MANAGEMENT OFFICIAL AND THEREFORE SHOULD BE PLACED IN THE MERIT PAY SYSTEM. EFFECTIVE AUGUST 21, 1983, MR. SALAMANDRA'S POSITION WAS CHANGED FROM THE GENERAL SCHEDULE TO THE MERIT PAY SYSTEM, AND HIS SALARY REMAINED AT $52,285 PER YEAR. SEE 5 C.F.R. SEC. 531.204(C) (1983). IN ACCORDANCE WITH SECTION 531.204(C), AN EMPLOYEE WHO IS CONVERTED TO MERIT PAY STATUS MUST RECEIVE AT LEAST THE SAME RATE OF PAY AS WAS PAID PRIOR TO ENTRY INTO MERIT PAY STATUS.

MR. CURRAN ASKS, IN LIGHT OF THESE FACTS, WHICH OF TWO PROCEDURES SHOULD BE FOLLOWED IN CHANGING MR. SALAMANDRA'S POSITION. FIRST, SHOULD THE PERSONNEL ACTION WHICH EFFECTED THE REASSIGNMENT ON JUNE 26, 1983, BE CANCELLED AND REPLACED BY A PERSONNEL ACTION, EFFECTIVE THE SAME DATE, REASSIGNING MR. SALAMANDRA FROM HIS ORIGINAL MERIT PAY POSITION TO HIS CURRENT MERIT PAY POSITION? IF THIS COURSE OF ACTION IS TAKEN, MR. SALAMANDRA WOULD BE OVERPAID FOR THE PERIOD FROM JUNE 26, 1983, SINCE HIS RATE OF BASIC PAY WOULD NOT HAVE INCREASED UPON REASSIGNMENT FROM ONE MERIT PAY POSITION TO ANOTHER.

THE SECOND ALTERNATIVE IS TO PROCESS A PERSONNEL ACTION CHANGING MR. SALAMANDRA FROM THE GENERAL SCHEDULE TO THE MERIT PAY SYSTEM EFFECTIVE ON THE DATE IT WAS ADMINISTRATIVELY DETERMINED TO PLACE HIS NEW POSITION IN THE MERIT PAY SYSTEM. THIS COURSE OF ACTION WOULD NOT CHANGE HIS BASIC PAY RATE FROM THE RATE AT WHICH IT WAS SET WHEN HE WAS REASSIGNED ON JUNE 26, 1983. 5 C.F.R. SEC. 531.204(C). UNDER THIS PROCEDURE, THEREFORE, MR. SALAMANDRA WOULD NOT HAVE BEEN OVERPAID AND NO FURTHER ACTION WOULD BE NEEDED AS TO HIS PAY.

THE PERSONNEL SPECIALIST WHO DESIGNATED THE POSITION TO WHICH MR. SALAMANDRA TRANSFERRED MADE HIS DETERMINATION THAT THE POSITION WAS NOT A MERIT PAY POSITION BECAUSE THE HOWEVER, BASED ON SUBSEQUENT INFORMATION THAT THE DUTIES OF THE POSITION WOULD ACTIVELY AND CONSISTENTLY INVOLVE POLICY-SETTING, THIS PERSONNEL SPECIALIST REDETERMINED THAT THE POSITION SHOULD BE A MERIT PAY POSITION. THE ISSUE PRESENTED, THEREFORE, IS WHETHER THE ORIGINAL ACTION WHICH DID NOT PUT THE POSITION WITHIN THE MERIT PAY SYSTEM WAS ERRONEOUS AND MUST BE RETROACTIVELY CORRECTED.

DISCUSSION

THE DETERMINATION AS TO WHETHER A CERTAIN EMPLOYEE SHOULD BE COVERED BY MERIT PAY IS PRINCIPALLY WITHIN THE AUTHORITY OF THE HEAD OF EACH AGENCY. SEE 5 C.F.R. SEC. 540.102(C) AND FEDERAL PERSONNEL MANUAL (FPM) LETTER NO. 540-1, JUNE 24, 1981, ATTACHMENT 1, PARA. 1.A. THE OFFICE OF PERSONNEL MANAGEMENT (OPM) WILL NOT REVIEW AGENCY DETERMINATIONS OF COVERAGE. FPM LETTER NO. 540-1, ATTACHMENT 1, PARA. I.F. IN ITS GUIDANCE TO AGENCIES, OPM HAS SAID THAT IN DETERMINING COVERAGE UNDER MERIT PAY, "*** AGENCIES SHOULD EXAMINE THE ACTUAL DUTIES AND RESPONSIBILITIES ASSIGNED TO THE EMPLOYEE RATHER THAN JOB TITLES OR WRITTEN JOB DESCRIPTIONS WHICH MAY NOT BE UP TO DATE." FPM LETTER NO. 540-1, ATTACHMENT 1, PARA. I.D. IN MR. SALAMANDRA'S CASE, AN INITIAL DETERMINATION WAS MADE BASED ON THE JOB DESCRIPTION, BUT A LATER EXAMINATION OF MR. SALAMANDRA'S ACTUAL DUTIES REQUIRED A CHANGED DETERMINATION. WE THINK, HOWEVER, THAT THE FACT THAT THE AGENCY CHANGED ITS DETERMINATION AS TO THE STATUS OF MR. SALAMANDRA'S POSITION DOES NOT MEAN THAT IT COMMITTED AN ADMINISTRATIVE ERROR WHICH IT MUST RETROACTIVELY CORRECT.

IN THIS CONNECTION, OUR DECISIONS HAVE GENERALLY HELD THAT PERSONNEL ACTIONS CANNOT BE RETROACTIVELY EFFECTIVE UNLESS CLERICAL OR ADMINISTRATIVE ERRORS OCCURRED THAT (1) PREVENTED A PERSONNEL ACTION FROM TAKING EFFECT AS ORIGINALLY INTENDED, (2) DEPRIVED AN EMPLOYEE OF A RIGHT GRANTED BY STATUTE OR REGULATION, OR (3) WOULD RESULT IN FAILURE TO CARRY OUT A NONDISCRETIONARY ADMINISTRATIVE REGULATION OR POLICY IF NOT ADJUSTED RETROACTIVELY. 55 COMP.GEN. 42 (1975). IN MR. SALAMANDRA'S CASE, THE INITIAL PLACEMENT OF HIS POSITION UNDER THE GENERAL SCHEDULE SYSTEM EFFECTED THE INTENT OF THE APPROPRIATE AGENCY OFFICIAL AT THAT TIME. THE SUBSEQUENT CHANGE TO A MERIT PAY STATUS DID NOT VITIATE THAT ACTION. THE ACTION OF ASSIGNING MERIT PAY STATUS DEPENDS ON THE FACTS OF EACH CASE, AND THE NATURE OF THE EMPLOYEE'S ACTUAL DUTIES AND RESPONSIBILITIES MAY CHANGE OVER TIME. THE EMPLOYING AGENCY IS BEST SUITED TO MAKE THE DETERMINATION OF MERIT PAY STATUS, AND THE FACT THAT THE AGENCY MAY CHANGE ITS DETERMINATION DOES NOT MEAN ITS PRIOR DETERMINATION MUST BE RETROACTIVELY AMENDED.

MOREOVER, WE ARE UNAWARE OF ANY STATUTORY, REGULATORY OR NONDISCRETIONARY ADMINISTRATIVE POLICY WHICH WAS VIOLATED WHEN MR. SALAMANDRA WAS INITIALLY PLACED IN THE GENERAL SCHEDULE POSITION. HIS AGENCY HAD DISCRETION TO ASSIGN THE POSITION UNDER THE GUIDELINES OF THE STATUTE, AND WE WILL NOT OVERRULE THE AGENCY'S ACTION UNLESS IT CAN BE SHOWN TO BE ARBITRARY OR CAPRICIOUS. SINCE NO ADMINISTRATIVE ERROR OCCURRED, THERE IS NO NEED TO RETROACTIVELY ADJUST MR. SALAMANDRA'S PAY RATE WHICH WAS INCREASED NEARLY $400 ON AN ANNUAL BASIS DUE TO THE PAY CONVERSION RULES.

CONCLUSION

ACCORDINGLY, WE HOLD THAT MR. SALAMANDRA SHOULD BE RECONVERTED TO MERIT PAY STATUS ON AUGUST 21, 1983, WHEN HIS POSITION WAS CONVERTED TO MERIT PAY STATUS.