B-79004, OCTOBER 26, 1948, 28 COMP. GEN. 258

B-79004, OCTOBER 26, 1948, 28 COMP. GEN. 258

COMPENSATION - WITHIN-GRADE SALARY ADVANCEMENTS - RESTORATION FOLLOWING DEMOTION WHERE AN EMPLOYEE WAS REDUCED IN GRADE AND SALARY AS A RESULT OF A REALLOCATION, AND SUBSEQUENTLY, UPON APPEAL, HIS GRADE WAS CHANGED TO AN INTERMEDIATE GRADE, THE RESTORATION OF THE EMPLOYEE TO HIS FORMER SALARY IN A GRADE LOWER THAN THAT ORIGINALLY HELD MAY NOT BE REGARDED AS AN ,EQUIVALENT INCREASE IN COMPENSATION" AS DEFINED IN SECTION 25.223 OF THE PERIODIC WITHIN-GRADE SALARY ADVANCEMENT REGULATIONS, AND, THEREFORE, SUCH AN EMPLOYEE MAY BE RESTORED TO THE SALARY RATE OF HIS FORMER GRADE PLUS ANY PERIODIC ADVANCEMENT HE WOULD HAVE RECEIVED HAD HE NOT BEEN SO REDUCED. IT IS THE DUTY AND RESPONSIBILITY OF ADMINISTRATIVE AGENCIES, EITHER WITH OR WITHOUT AN APPEAL BY AN EMPLOYEE, TO CORRECT PERSONNEL ACTIONS ATTENDED BY SALARY REDUCTIONS WHICH ARE IMPROPERLY TAKEN OR WHICH HAVE ABRIDGED A RIGHT OF THE EMPLOYEE, AND SUCH RESTORATION IN SALARY EVEN WHEN BASED UPON A RULING OF A DEPARTMENTAL GRIEVANCE BOARD OR DEPARTMENTAL EFFICIENCY RATING COMMITTEE NEED NOT BE REGARDED AS AN "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF SECTION 25.223 OF THE PERIODIC WITHIN- GRADE SALARY ADVANCEMENT REGULATIONS, SO AS TO CAUSE THE COMMENCEMENT OF A NEW WAITING PERIOD FOR WITHIN-GRADE ADVANCEMENT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE ARMY, OCTOBER 26, 1948:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JULY 28, 1948, SUBMITTING FOR DECISION CERTAIN QUESTIONS INVOLVING THE EFFECT OF SECTION 25.223 OF THE RULES AND REGULATIONS OF THE CIVIL SERVICE COMMISSION UPON THE GRANTING OF PERIODIC PAY INCREASES; ALSO, YOU DESIRE ANSWERS TO QUESTIONS CONCERNING THE PROVISIONS OF THE ACT OF JUNE 10, 1948, PUBLIC LAW 623, 80TH CONGRESS, 62 STAT. 354, AMENDING THE ACT OF AUGUST 24, 1912, 5 U.S.C. 652, TO PROVIDE FOR PAYMENT OF COMPENSATION TO EMPLOYEES RESTORED TO DUTY FOLLOWING IMPROPER REMOVALS OR SUSPENSIONS FROM THE SERVICE.

SECTION 25.223 OF THE RULES AND REGULATIONS OF THE CIVIL SERVICE COMMISSION SPECIFYING CERTAIN CONDITIONS UNDER WHICH PAY INCREASES ARE NOT TO BE REGARDED AS EQUIVALENT INCREASES IN COMPENSATION WITHIN THE MEANING OF SUBSECTION (B) OF SECTION 7 OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, 55 STAT. 613, SUCH AS ORDINARILY WOULD PRECLUDE AN EMPLOYEE FROM RECEIVING A WITHIN-GRADE SALARY ADVANCEMENT, PROVIDES, IN PERTINENT PART, AS FOLLOWS:

(A) "EQUIVALENT INCREASE IN COMPENSATION" MEANS ANY INCREASE OR INCREASES IN BASIC COMPENSATION WHICH IN TOTAL, AT THE TIME SUCH INCREASE OR INCREASES ARE MADE, ARE EQUAL TO OR GREATER THAN THE SMALLEST COMPENSATION INCREMENT IN THE LOWEST GRADE IN WHICH THE EMPLOYEE HAS SERVED DURING THE TIME PERIOD OF TWELVE OR EIGHTEEN MONTHS, AS THE CASE MAY BE.

(B) THE FOLLOWING, AMONG OTHERS, ARE NOT "EQUIVALENT INCREASES IN COMPENSATION: "

(4) AN INCREASE UPON THE RESTORATION OF AN EMPLOYEE TO THE GRADE AND SALARY FROM WHICH HE WAS PREVIOUSLY REDUCED OR DEMOTED, WHEN THE RESTORATION IS EFFECTED TO CORRECT AN ERROR IN THE REDUCTION OR DEMOTION, OR IS THE RESULT OF A DECISION OF A STATUTORY EFFICIENCY RATING BOARD OF REVIEW, A REDUCTION-IN-FORCE APPEAL, THE REALLOCATION OF HIS POSITION TO ITS FORMER GRADE ON APPEAL, OR AN APPEAL UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944.

YOUR FIRST QUESTION UNDER THAT REGULATION INVOLVES AN EMPLOYEE WHOSE POSITION WAS REALLOCATED FROM THE THIRD STEP IN CAF-10 ($4,776.60 PER ANNUM) TO THE TOP STEP IN CAF-8 ($4,525.80 PER ANNUM), BUT WHICH, UPON APPEAL, WAS CHANGED TO CAF-9. YOU DESIRE TO KNOW WHETHER THE EMPLOYEE MAY BE RESTORED TO THE SALARY RATE IN CAF-9 CORRESPONDING WITH THE SALARY RATE HE PREVIOUSLY ATTAINED IN CAF-10, PLUS ONE WITHIN-GRADE SALARY ADVANCEMENT WHICH ORDINARILY HE WOULD HAVE RECEIVED HAD HE NOT BEEN IN THE TOP STEP OF CAF-8; OR, WHETHER A FULL RESTORATION TO THE PREVIOUS GRADE AND SALARY IS NECESSARY BEFORE THE REGULATIONS MAY BE APPLIED TO DISMISS RESTORATION TO A FORMER SALARY RATE AS AN "EQUIVALENT INCREASE IN COMPENSATION.'

IT APPEARS THAT THE REGULATION IN QUESTION WAS PREDICATED, IN PART, UPON OFFICE DECISION OF JANUARY 4, 1944, 23 COMP. GEN. 486, WHICH HELD AS FOLLOWS (QUOTING THE SECOND PART OF THE YLLABUS):

IN THE CASE OF AN EMPLOYEE WHO WAS REDUCED IN GRADE AND SALARY AS THE RESULT OF AN APPEAL TO AN EFFICIENCY RATING BOARD, THE RESTORATION OF THE EMPLOYEE TO HIS FORMER POSITION NEED NOT BE REGARDED AS AN "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF THE WITHIN GRADE SALARY- ADVANCEMENT STATUTE OF AUGUST 1, 1941, AND, THEREFORE, SUCH AN EMPLOYEE MAY BE RESTORED TO THE SALARY RATE OF HIS FORMER GRADE PLUS ANY AUTOMATIC PROMOTION HE WOULD HAVE RECEIVED HAD HE NOT BEEN SO REDUCED.

THE REASON UNDERLYING THAT DECISION, AS STATED THEREIN, WAS THE FACT THAT IT WAS BELIEVED THE APPLICABLE LAW AND REGULATIONS INTENDED THAT THE EMPLOYEE THERE INVOLVED BE RESTORED IN THE SALARY RATE WHICH HE WOULD HAVE RECEIVED IF HE HAD BEEN GIVEN THE PROPER EFFICIENCY RATING IN THE FIRST INSTANCE.

WHILE YOUR QUESTION INVOLVES THE RESTORATION TO AN INTERMEDIATE GRADE FOLLOWING AN APPEAL FROM A REALLOCATION, THERE APPEARS NO COGENT REASON WHY THE ABOVE DECISION IN 23 COMP. GEN. 486, SHOULD NOT BE APPLICABLE TO THE INSTANT MATTER, THERE BEING INVOLVED THE SAME UNDERLYING PRINCIPLES. ACCORDINGLY, THE RESTORATION OF THE EMPLOYEE TO HIS FORMER SALARY, EVEN THOUGH IN A GRADE LOWER THAN THAT FORMERLY HELD, IS NOT TO BE REGARDED AS AN "EQUIVALENT INCREASE IN COMPENSATION," AND HE WAS ENTITLED TO A WITHIN- GRADE SALARY ADVANCEMENT OF THE NEXT STEP IN GRADE CAF-9 EFFECTIVE THE SAME DATE AS THE RESTORATION, PROVIDING ALL OTHER CONDITIONS OF THE WITHIN -GRADE PROMOTION STATUTE HAVE BEEN MET. CF. 27 COMP. GEN. 278.

YOUR SECOND AND THIRD QUESTIONS, STATED AS RELATING TO PERSONNEL ACTIONS ATTENDED BY SALARY REDUCTIONS WHICH ARE IMPROPERLY TAKEN OR WHICH HAVE ABRIDGED A RIGHT OF AN EMPLOYEE, ARE AS OLLOWS:

2. IS IT NECESSARY THAT AN APPEAL BE SUBMITTED BY THE EMPLOYEE, OR MAY THE DEPARTMENT CORRECT IMPROPER ACTIONS OF ITS OWN MOTION, WITHOUT CONSIDERING THE SALARY RESTORATION AS AN "EQUIVALENT INCREASE?

3. DOES THE EXCEPTION AS TO "EQUIVALENT INCREASE" APPLY IN THE EVENT THAT A GRIEVANCE BOARD OR AN EFFICIENCY RATING COMMITTEE OF THIS DEPARTMENT ACTS AS THE ADJUDICATING BODY FOR AN APPEAL IN THOSE INSTANCES WHERE THE INITIAL APPEAL IS NOT MADE TO THE CIVIL SERVICE COMMISSION'S BOARD OF APPEALS AND REVIEW OR EFFICIENCY RATING BOARD OF REVIEW?

IN REGARD TO THOSE TWO QUESTIONS YOUR ATTENTION IS INVITED TO THE ADDITIONAL WORDING NOW APPEARING IN SECTION 25.223 OF THE REGULATIONS, PREVIOUSLY QUOTED, WHICH DOES NOT APPEAR IN THAT SECTION AS QUOTED IN YOUR LETTER, NAMELY, THAT A RESTORATION EFFECTED TO CORRECT AN ERROR IN A REDUCTION OR DEMOTION IS INCLUDED AS ONE OF THE ACTIONS WHICH IS NOT TO BE REGARDED AS AN ,EQUIVALENT INCREASE IN COMPENSATION.' THAT WORDING WAS ADDED BY AN AMENDMENT TO THE REGULATIONS DATED JANUARY 16, 1948, EFFECTIVE FEBRUARY 1, 1948. SEE CHAPTER Z1-319 OF THE FEDERAL PERSONNEL MANUAL.

REFERRING SPECIFICALLY TO QUESTION NO. 2, SECTION 25.251 OF THE RULES AND REGULATIONS OF THE CIVIL SERVICE COMMISSION PROVIDES AS FOLLOWS:

SEC. 25.251. EFFECT OF EFFICIENCY-RATING CHANGES. IN THE EVENT A CHANGE OR ADJUSTMENT IS MADE IN AN OFFICER'S OR EMPLOYEE'S CURRENT EFFICIENCY RATING, EITHER BY ADMINISTRATIVE ACTION OR AS THE RESULT OF A REVIEW AND DETERMINATION BY A BOARD OF REVIEW IN ACCORDANCE WITH THE PROVISIONS OF SECTION 9 OF THE CLASSIFICATION ACT OF 1923, AS AMENDED, THE EMPLOYEE'S ELIGIBILITY FOR SALARY ADVANCEMENT SHALL BE DETERMINED ACCORDING TO THE EFFICIENCY RATING AS CHANGED OR ADJUSTED AND OTHER CONDITIONS OF THE SALARY ADVANCEMENT PLAN, AND ANY PERIODIC WITHIN GRADE SALARY ADVANCEMENT TO WHICH HE MAY BE ENTITLED SHALL BE MADE EFFECTIVE AS OF THE DATE HE WOULD HAVE RECEIVED THE ADVANCEMENT HAD NO ERROR BEEN MADE IN THE ORIGINAL RATING.

THERE IS NO REQUIREMENT IN THE FOREGOING REGULATIONS THAT AN EMPLOYEE INITIATE THE ACTION FOR CORRECTION OF AN ERROR IN THE REDUCTION OF HIS GRADE OR SALARY. MOREOVER, THE ADJUSTMENT OF SUCH ERRORS BY THE DEPARTMENT WITHOUT AN APPEAL FROM AN EMPLOYEE WOULD APPEAR TO BE AN ADMINISTRATIVE DUTY AND RESPONSIBILITY.

IN THE LIGHT OF THE FOREGOING, THE FIRST PART OF QUESTION 2 IS ANSWERED IN THE NEGATIVE AND THE LAST PART THEREOF, IN THE AFFIRMATIVE; ALSO, QUESTION 3 IS ANSWERED IN THE AFFIRMATIVE.

THE QUESTIONS PRESENTED IN YOUR LETTER ARISING UNDER PUBLIC LAW 623, SUPRA, ARE (1) WHETHER THE PROVISIONS OF THAT ACT ARE APPLICABLE TO CASES OF CHANGES IN GRADE COUPLED WITH A SALARY REDUCTION, AND (2) WHETHER THE COMPENSATION PROVISIONS THEREOF ARE RETROACTIVE IN ANY RESPECT.

THE ACT OF JUNE 10, 1948, PUBLIC LAW 623, AMENDING THE ACT OF AUGUST 24, 1912, SETS FORTH CERTAIN PROCEDURES TO BE FOLLOWED IN THE REMOVAL OR SUSPENSION WITHOUT PAY OF PERSONS IN THE CLASSIFIED CIVIL SERVICE OF THE UNITED STATES AND PROVIDES FOR PAYMENT OF COMPENSATION UNDER VARIOUS CIRCUMSTANCES TO EMPLOYEES RESTORED OR REINSTATED AFTER IMPROPER REMOVALS OR SUSPENSIONS FOR THE PERIODS OF SUCH REMOVALS OR SUSPENSIONS WITHOUT PAY, LESS AMOUNTS EARNED BY SUCH EMPLOYEES DURING THOSE PERIODS.

IN DECISION OF SEPTEMBER 28, 1948, TO THE PRESIDENT, UNITED STATES CIVIL SERVICE COMMISSION, B-79027, 28 COMP. GEN. 200, IT WAS HELD THAT THE ACT OF AUGUST 24, 1912, AS AMENDED BY THE ACT OF JUNE 10, 1948, DID NOT APPLY TO DEMOTIONS. ALSO, IT WAS HELD THAT NO RETROACTIVE EFFECT WHATSOEVER MAY BE GIVEN TO THE STATUTE SO AS TO COVER REMOVALS OR SUSPENSIONS ACCOMPLISHED PRIOR TO ITS EFFECTIVE DATE. YOUR QUESTIONS UNDER PUBLIC LAW 623, THEREFORE, ARE FULLY COVERED BY THAT DECISION, A COPY OF WHICH IS ENCLOSED FOR YOUR CONVENIENCE.