Matter of: Caesar A. Langston Promotion While Receiving Retained Pay - Highest Previous Rate Rule File: B-247190 Date: June 4, 1992

B-247190: Jun 4, 1992

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Whose position was changed and downgraded to grade GS-9 incident to a reduction in force. Was entitled to grade and pay retention under 5 U.S.C. The claim is denied. DECISION This action is in response to a request from the Deputy Administrator. For the following reasons we conclude that he is not so entitled. Whose wage grade position was changed to grade GS -9. Was entitled to grade retention for a 2-year period under 5 U.S.C. He was promoted from grade GS-9 to grade GS-11. Was $27. His retained pay at that time was $27. The employee is entitled to the higher step of the promotion grade. The agency established that the step differential for grade GS-9 in 1984 was $702. When twice that amount was added to the salary of grade GS-9.

Matter of: Caesar A. Langston Promotion While Receiving Retained Pay - Highest Previous Rate Rule File: B-247190 Date: June 4, 1992

CIVILIAN PERSONNEL Compensation Rates Determination Highest previous rate rule An employee, whose position was changed and downgraded to grade GS-9 incident to a reduction in force, was entitled to grade and pay retention under 5 U.S.C. Secs. 5362 and 5363. On subsequent promotion to grade GS-11, the employee claims the right to use his pre-promotion rate of retained pay for promotion purposes under 5 U.S.C. Sec. 5334(b). The claim is denied. The provisions of 5 U.S.C. Sec. 5334(b)(A) and (B) specifically provide that retained pay cannot be used in lieu of the basic pay of the downgraded position for the purpose of applying the two step-increase rule under 5 U.S.C.Sec. 5334(b). See Betty J. Beasley, et al., B-197025, Aug. 3, 1981.

DECISION This action is in response to a request from the Deputy Administrator, Food and Nutrition Service, Department of Agriculture. It involves the entitlement of an employee to receive compensation at step 6 of grade GS-11 on promotion effective August 5, 1984. For the following reasons we conclude that he is not so entitled.

BACKGROUND

Mr. Caesar A. Langston, whose wage grade position was changed to grade GS -9, effective January 25, 1981, as a result of a reduction in force, was entitled to grade retention for a 2-year period under 5 U.S.C. Sec. 5362 (1988), and then pay retention under 5 U.S.C. Sec. 5363 (1988), until his basic salary entitlement could be accommodated within the basic salary range of his grade under the General Schedule.

Effective August 5, 1984, he was promoted from grade GS-9 to grade GS-11. At the time of his promotion the salary for grade GS-9, step 10, was $27,384. In contrast, his retained pay at that time was $27,733. The agency recognizes that an employee's salary entitlement in the grade to which promoted shall reflect a two equivalent step increase in the lower grade. If the resultant amount falls between two steps of the grade to which promoted, the employee is entitled to the higher step of the promotion grade. The agency established that the step differential for grade GS-9 in 1984 was $702. When twice that amount was added to the salary of grade GS-9, step 10, it resulted in a protected salary of $28,788. Since that amount fell between steps 4 and 5 of grade GS-11, Mr. Langston's salary on promotion was established at step 5 of grade GS-11 ($28,889).

Mr. Langston, through counsel, contends that his salary on promotion should be set at step 6 of grade GS-11. He argues that the salary to be used in the calculation should have been his retained pay ($27,733), rather than the grade GS-11, step 10, pay of $27,384. Thus, when the two equivalent step increases are added to the retained pay, the resultant basic pay would fall between steps 5 and 6 of grade GS-11. He further contends that use of the highest previous rate rule would also result in a pay rate of grade GS-11, step 6.

OPINION

Section 5334 of title 5, United States Code, provides, generally, in subsection (b) that the basic pay of an employee who is promoted shall not be less than two step increases above his pre-promotion rate of basic pay. However that subsection goes on to provide:

". . . If an employee so promoted or transferred is receiving basic pay at a rate saved to him under subchapter VI of this chapter [5 U.S.C. Secs. 5361 to 5366] on reduction in grade, he is entitled to--

"(A) basic pay at a rate two steps above the rate which he would be receiving if subchapter VI of this chapter were not applicable to him; or

"(B) his existing rate of basic pay, if that rate is higher." (Underscoring supplied.)

The phrase "existing rate of basic pay" as used in 5 U.S.C. Sec. 5334(b)(B) is defined in 5 C.F.R. Sec. 531.202(d) (1991) to mean the rate of pay received immediately before the effective date of transfer, promotion, demotion, or within-grade increase and, thus, includes pay saved to an employee under 5 U.S.C. Sec. 5362 and Sec. 5363.

In our decision Betty J. Beasley, et al., B-197025, Aug. 3, 1981, which construed the provisions repealed and replaced by 5 U.S.C. Sec. 5362 and Sec. 5363, we considered the effect that entitlement to saved pay would have on the two step increase rule on promotions. We ruled in that case that the rate of saved pay could not be used as the basic pay of the downgraded position for the purposes of applying the two-step increase rule under 5 U.S.C. Sec. 5334(b) since there was no statutory or regulatory basis for such pay setting formula. Since 5 U.S.C. Sec. 5334(b) has not been changed, the Beasley decision is equally applicable to an employee receiving pay retention under 5 U.S.C. Sec. 5363. In the present case, Mr. Langston was receiving $27,733 under 5 U.S.C. Sec. 5363 immediately before his promotion. But for that pay entitlement, his rate of basic pay would have been $27,384 (GS-9, step 10). Using the two-step formula of 5 U.S.C. Sec. 5334(b), on promotion his basic pay would be at least $28,788. Since this amount fell between steps 4 and 5 of his grade GS-11 and exceeded his existing rate of basic pay ($27,733), his salary was properly set on promotion at the rate for step 5 ($28,889).

Mr. Langston also argues that the use of the highest previous rate would permit his salary to be set at step 6 of grade GS-11. He states that, since his pre-promotion rate of basic pay ($27,733), fell between steps 3 and 4 of grade GS-11, step 4 of that grade would apply and adding two step increases would place his salary at grade GS-11, step 6.

We do not agree. The two step formula used to establish a rate of pay under the promotion provisions of 5 U.S.C. Sec. 5334(b) is not used under the provisions of 5 C.F.R. Sec. 531.203(c) involving use of the highest previous pay rate to establish an employee's current rate of pay. To the extent that the highest previous rate rule may be applicable here, the rate of pay previously earned is compared directly, without step adjustments, with the promotion rate of pay established under 5 U.S.C. Sec. 5334(b). As previously noted, Mr. Langston's salary on promotion was set at grade GS-11, step 5 ($28,889) under the pay setting formula of 5 U.S.C. Sec. 5334(b). Since his pre-promotion higher rate of pay ($27,733) did not exceed that amount, it would not permit him to receive basic pay above step 5 of grade GS-11 on promotion.