B-99246, JANUARY 30, 1951, 30 COMP. GEN. 323

B-99246: Jan 30, 1951

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THE COMPENSATION PAYABLE TO EMPLOYEES WHOSE POSITIONS ARE PLACED UNDER THE CLASSIFICATION ACT IS BASED ON THE RATE OF COMPENSATION THE EMPLOYEES WERE RECEIVING IMMEDIATELY PRIOR TO THE TRANSFER. THEREFORE A CUSTODIAL EMPLOYEE TRANSFERRED FROM THE POSTAL SERVICE TO THE GENERAL SERVICES ADMINISTRATION AT A RATE OF COMPENSATION IN EXCESS OF THE MAXIMUM RATE FOR THE GRADE IN WHICH HIS POSITION IS INITIALLY PLACED MAY NOT CONTINUE TO RECEIVE THAT RATE OF COMPENSATION UPON HIS BEING ASSIGNED A CHANGE IN DUTIES. EVEN THOUGH THE POSITIONS ARE IN THE SAME GRADE. THE COMPENSATION PAYABLE TO EMPLOYEES WHOSE POSITIONS ARE PLACED UNDER THE CLASSIFICATION ACT IS BASED ON THE RATE OF COMPENSATION THE EMPLOYEE WAS RECEIVING IMMEDIATELY PRIOR TO THE TRANSFER AND NOT THE RATE TO WHICH HIS COMPENSATION.

B-99246, JANUARY 30, 1951, 30 COMP. GEN. 323

COMPENSATION - INITIAL SALARY RATE - TRANSFERS BETWEEN UNCLASSIFIED AND CLASSIFIED POSITIONS UNDER THE FEDERAL EMPLOYEES PAY REGULATIONS, THE COMPENSATION PAYABLE TO EMPLOYEES WHOSE POSITIONS ARE PLACED UNDER THE CLASSIFICATION ACT IS BASED ON THE RATE OF COMPENSATION THE EMPLOYEES WERE RECEIVING IMMEDIATELY PRIOR TO THE TRANSFER, AND THEREFORE LONGEVITY INCREASES FOR WHICH THE NECESSARY SERVICE HAD BEEN/COMPLETED BUT WHICH HAD NOT BEEN RECEIVED BY POST OFFICE DEPARTMENT EMPLOYEES PRIOR TO THEIR TRANSFER TO THE GENERAL SERVICES ADMINISTRATION MAY NOT BE INCLUDED IN THE SALARIES TO BE PAID THE EMPLOYEES IN THE POSITION PLACED UNDER THE CLASSIFICATION ACT. THE FEDERAL EMPLOYEES PAY REGULATIONS PROVIDING AGAINST A REDUCTION IN COMPENSATION UPON THE PLACING OF AN EMPLOYEE AND HIS POSITION UNDER THE CLASSIFICATION ACT OF 1949 APPLY ONLY SO LONG AS THE EMPLOYEE CONTINUES TO OCCUPY THE SAME POSITION, AND THEREFORE A CUSTODIAL EMPLOYEE TRANSFERRED FROM THE POSTAL SERVICE TO THE GENERAL SERVICES ADMINISTRATION AT A RATE OF COMPENSATION IN EXCESS OF THE MAXIMUM RATE FOR THE GRADE IN WHICH HIS POSITION IS INITIALLY PLACED MAY NOT CONTINUE TO RECEIVE THAT RATE OF COMPENSATION UPON HIS BEING ASSIGNED A CHANGE IN DUTIES, WHICH INVOLVES A CHANGE IN POSITION, EVEN THOUGH THE POSITIONS ARE IN THE SAME GRADE. UNDER THE FEDERAL EMPLOYEES PAY REGULATIONS, THE COMPENSATION PAYABLE TO EMPLOYEES WHOSE POSITIONS ARE PLACED UNDER THE CLASSIFICATION ACT IS BASED ON THE RATE OF COMPENSATION THE EMPLOYEE WAS RECEIVING IMMEDIATELY PRIOR TO THE TRANSFER AND NOT THE RATE TO WHICH HIS COMPENSATION, MIGHT HAVE BEEN INCREASED HAD HE REMAINED IN HIS ORIGINAL POSITION, AND THEREFORE THE AUTOMATIC ANNUAL INCREASE WHICH POSTAL SERVICE EMPLOYEES WOULD HAVE RECEIVED HAD THEY NOT BEEN TRANSFERRED TO THE GENERAL SERVICE ADMINISTRATION IS NOT FOR CONSIDERATION IN DETERMINING THE COMPENSATION TO BE PAID SUCH EMPLOYEES IN THE POSITIONS PLACED UNDER THE CLASSIFICATION ACT.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, JANUARY 30, 1951:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 30, 1950, REQUESTING DECISION UPON CERTAIN QUESTIONS RELATIVE TO THE PROPER RATE OF COMPENSATION FOR CUSTODIAL EMPLOYEES WHO WERE TRANSFERRED FROM THE POSTAL SERVICE TO THE GENERAL SERVICE ADMINISTRATION IN CONNECTION WITH THE TRANSFER OF CERTAIN BUILDING MANAGEMENT, SPACE ASSIGNMENT, AND LEASE FUNCTIONS FROM THE POST OFFICE DEPARTMENT TO THE GENERAL SERVICES ADMINISTRATION IN CONNECTION WITH THE TRANSFER OF CERTAIN BUILDING MANAGEMENT, SPACE ASSIGNMENT, AND LEASE FUNCTIONS FROM THE POST OFFICE DEPARTMENT TO THE GENERAL SERVICES ADMINISTRATION UNDER REORGANIZATION PLAN NO. 18 OF 1950, EFFECTIVE JULY 1, 1950.

THE QUESTIONS ARISE BY REASON OF THE FACT THAT CERTAIN OF THE EMPLOYEES AFFECTED HAD COMPLETED SUFFICIENT SERVICE DURING THE QUARTER ENDING JUNE 30, 1950, IMMEDIATELY PRECEDING THEIR TRANSFER, TO ENTITLE THEM, HAD THEY NOT BEEN TRANSFERRED EFFECTIVE JULY 1, 1950, TO AN ANNUAL AUTOMATIC PROMOTION UNDER THE POSTAL SERVICE PAY ACT OF JULY 6, 1945, PUBLIC LAW 134, 59 STAT. 435, AS AMENDED, 39 U.S.C. 864, OR TO A LONGEVITY INCREASE UNDER THE ACT OF MAY 3, 1950, PUBLIC LAW 500, 64 STAT. 101.

BOTH THE PROVISIONS OF PUBLIC LAW 134, PRESCRIBING ANNUAL AUTOMATIC PROMOTIONS FOR POSTAL SERVICE EMPLOYEES, AND THE PROVISIONS OF PUBLIC LAW 500, PRESCRIBING LONGEVITY PROMOTIONS, REQUIRE THAT THE PROMOTIONS SHALL BE EFFECTIVE AT THE BEGINNING OF THE QUARTER FOLLOWING THE COMPLETION OF THE REQUIRED SERVICE. SINCE THE CUSTODIAL EMPLOYEES HERE INVOLVED, WHO, DURING THE QUARTER ENDING JUNE 30, 1950, HAD COMPLETED THE SERVICE REQUIRED FOR AN ANNUAL OR A LONGEVITY PROMOTION, HAD BEEN TRANSFERRED TO THE GENERAL SERVICES ADMINISTRATION, AND WERE NO LONGER IN THE POSTAL SERVICE ON JULY 1, 1950, THE BEGINNING OF THE QUARTER FOLLOWING THE COMPLETION OF SUCH SERVICE, THERE IS NO AUTHORITY, OF COURSE, FOR THE GRANTING OF SUCH PROMOTIONS UPON THE BASIS OF LEGISLATION APPLICABLE EXCLUSIVELY TO POSTAL SERVICE EMPLOYEES. THUS, THE BASIC QUESTION FOR DETERMINATION IS WHETHER THE EMPLOYEES ARE ENTITLED TO COMPARABLE INCREASES UNDER THE CLASSIFICATION ACT OF 1949 AND THE REGULATIONS ISSUED PURSUANT THERETO WHICH CONTROL THE EMPLOYEES' RATES OF COMPENSATION ON AND AFTER JULY 1, 1950.

UNDER SECTION 1101 OF THE CLASSIFICATION ACT OF 1949, PUBLIC LAW 429, 63 STAT. 971--- AUTHORIZING THE CIVIL SERVICE COMMISSION TO ISSUE SUCH REGULATIONS AS MAY BE NECESSARY FOR THE ADMINISTRATION OF THE ACT- - THE COMMISSION ISSUED SECTION 25.102 (D) OF THE FEDERAL EMPLOYEES PAY REGULATIONS, WHICH MAKES THE PROVISIONS OF SECTION 25.104 (B) (1) TO (5) OF SUCH REGULATIONS APPLICABLE IN DETERMINING THE INITIAL RATE OF BASIC COMPENSATION OF AN EMPLOYEE WHO, TOGETHER WITH HIS POSITION, IS BROUGHT UNDER THE CLASSIFICATION ACT OF 1949 PURSUANT TO THE REORGANIZATION ACT OF 1949, 63 STAT. 203, SUCH AS IN THE CASE OF THE CUSTODIAL EMPLOYEES HERE INVOLVED. THE REGULATIONS UNDER THE SAID SECTION 25.104 (B) AND UNDER 25.104 (C) WERE ISSUED TO COVER CASES SIMILAR TO THE INSTANT CASE, INVOLVING EMPLOYEES INITIALLY BROUGHT UNDER THE CLASSIFICATION ACT. THE FORMER CASES AROSE UNDER SECTION 604 (B) (11), 63 STAT. 967, AND SECTION 1105 (B), 63 STAT. 972, WHICH PROVIDED, IN EFFECT, THAT AN EMPLOYEE WHO HAS RECEIVING COMPENSATION AT A RATE IN EXCESS OF THE MAXIMUM SCHEDULED RATE FOR THE GRADE IN WHICH HIS POSITION IS PLACED AND WHO RECEIVES AN INITIAL SALARY ADJUSTMENT UNDER THE CLASSIFICATION ACT OF 1949 SHALL NOT SUFFER A REDUCTION IN THE RATE OF BASIC COMPENSATION SO LONG AS HE CONTINUES TO OCCUPY THE SAME POSITION AND GRADE.

SECTION 25.104 (B) OF THE SAID REGULATIONS PROVIDES IN PART AS FOLLOWS:

(3) IF THE EMPLOYEE IS RECEIVING A RATE OF BASIC COMPENSATION WITHIN THE RANGE OF SALARY PRESCRIBED FOR THE GRADE IN WHICH HIS POSITION IS PLACED, BUT NOT AT ONE OF THE RATES FIXED THEREIN, HIS COMPENSATION SHALL BE INCREASED TO THE NEXT HIGHER RATE.

(4) IF THE EMPLOYEE IS RECEIVING A RATE OF BASIC COMPENSATION IN EXCESS OF THE MAXIMUM SCHEDULED RATE FOR THE GRADE IN WHICH HIS POSITION IS INITIALLY PLACED, NO CHANGE SHALL BE MADE IN HIS EXISTING RATE.

THE "EXISTING RATE" OF BASIC COMPENSATION, AS THAT TERM IS USED IN THE PROVISIONS QUOTED ABOVE, IS DEFINED BY SECTION 25.102 (I) OF THE REGULATIONS AS THE RATE RECEIVED IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE TRANSFER, PROMOTION, REPROMOTION, DEMOTION, OR STEP INCREASE.

YOUR FIRST QUESTION IS AS FOLLOWS:

1. WOULD THE COMPTROLLER GENERAL FEEL OBLIGED TO OBJECT TO THIS AGENCY'S INCLUDING THE LONGEVITY INCREASES PROVIDED UNDER PUBLIC LAW 500, FOR WHICH THE NECESSARY SERVICE HAD BEEN COMPLETED DURING THE QUARTER IMMEDIATELY PRECEDING JULY 1, 1950, IN THE SALARIES TO BE PAID TO POST OFFICE EMPLOYEES UPON THEIR TRANSFER TO GENERAL SERVICES ADMINISTRATION, EVEN THOUGH SUCH EMPLOYEES ARE RECEIVING A BASIC RATE OF COMPENSATION IN EXCESS OF THE MAXIMUM SCHEDULED RATE OF THE GRADE IN WHICH THEIR POSITIONS WERE CLASSIFIED AT THE TIME OF THE TRANSFER?

AS AN EXAMPLE UNDER THAT QUESTION, THERE ARE RECITED THE CASES OF A GUARD AND AN ELEVATOR OPERATOR, BOTH OF WHOM HAD COMPLETED 13 YEARS OF SERVICE-- - THE AMOUNT OF SERVICE REQUIRED FOR THE FIRST LONGEVITY INCREASE FOR POSTAL SERVICE EMPLOYEES UNDER PUBLIC LAW 500--- DURING THE QUARTER ENDING JUNE 30, 1950. THE GUARD AND THE ELEVATOR OPERATOR CURRENTLY ARE RECEIVING COMPENSATION AT THE RATES OF $3,170 AND $2,970 PER ANNUM, THE RATES WHICH THEY WERE RECEIVING AS POSTAL SERVICE EMPLOYEES ON JUNE 30, 1950, UNDER SECTIONS 14 (G) AND 14 (H), RESPECTIVELY, PUBLIC LAW 134, AS AMENDED, 39 U.S.C. 864. SAID RATES ARE EQUAL TO OR IN EXCESS OF THE MAXIMUM SCHEDULED WITHIN-GRADE AND LONGEVITY RATES FOR THE GRADES OF THE POSITIONS IN WHICH THEY WERE PLACED UNDER THE CLASSIFICATION ACT OF 1949, CPC-4 AND CPC-2.

UNDER THE TERM "EXISTING RATE" OF BASIC COMPENSATION AS DEFINED IN SECTION 25.102 (I) OF THE REGULATIONS ABOVE, THE EXISTING RATES FOR CONSIDERATION IN DETERMINING THE PROPER RATES OF COMPENSATION FOR THE GUARD AND THE ELEVATOR OPERATOR ARE THE RATES THE EMPLOYEES WERE RECEIVING ON JUNE 30, 1950, AND NOT THE RATES TO WHICH THEIR COMPENSATION MIGHT HAVE BEEN INCREASED ON JULY 1, 1950, BY REASON OF A LONGEVITY PROMOTION HAD THEY REMAINED IN THE POSTAL SERVICE. ACCORDINGLY, IN ANSWER TO YOUR FIRST QUESTION, YOU ARE ADVISED THAT, IN VIEW OF THE PROVISIONS OF THE FEDERAL EMPLOYEES PAY REGULATIONS ABOVE, THIS OFFICE WOULD BE REQUIRED TO OBJECT TO THE INCLUSION OF THE LONGEVITY INCREASE AS A PART OF THE "EXISTING RATE" OF COMPENSATION SAVED TO THE GUARD AND ELEVATOR OPERATOR UPON TRANSFER TO THE GENERAL SERVICES ADMINISTRATION.

THE SECOND QUESTION PRESENTED IS WHETHER THERE WOULD BE ANY OBJECTION FOR AN EMPLOYEE WHO, BEFORE TRANSFER, WAS RECEIVING LESS THAN THE MAXIMUM RATE OF COMPENSATION PRESCRIBED FOR THE GRADE IN WHICH HIS POSITION IS PLACED UNDER THE CLASSIFICATION ACT OF 1949 TO HAVE HIS RATE OF COMPENSATION CONVERTED TO THE COMPARABLE RATE IN GRADE AFTER THE ADDITION OF A LONGEVITY INCREASE. AS AN EXAMPLE UNDER THAT QUESTION YOU CITE THE CASE OF A CHIEF TELEPHONE OPERATOR RECEIVING COMPENSATION ON JUNE 30, 1950, AT THE RATE OF $3,470 PER ANNUM, UNDER SECTION 14 (E) OF PUBLIC LAW 134, 59 STAT. 448, AS AMENDED, 39 U.S.C. 864, WHOSE RATE OF COMPENSATION WOULD BE CONVERTED TO GS-5, STEP 4, $3,475 PER ANNUM, IF THE LONGEVITY INCREASE UNDER PUBLIC LAW 500 WERE NOT INCLUDED, OR TO GS-5, STEP 5, $3,600 PER ANNUM, IF THE LONGEVITY INCREASE WERE INCLUDED. THE WITHIN-GRADE RATES OF COMPENSATION FOR GS 5, RANGE FROM THE MINIMUM OF $3,100 PER ANNUM TO THE MAXIMUM OF $3,850 PER ANNUM, AND THE MAXIMUM LONGEVITY OF $4,225 PER ANNUM.

IN LINE WITH THE ANSWER TO THE FIRST QUESTION, THE LONGEVITY INCREASE FOR WHICH THE REQUIRED SERVICE HAD BEEN COMPLETED AS A POSTAL SERVICE EMPLOYEE DURING THE QUARTER ENDING JUNE 30, 1950, IS NOT FOR CONSIDERATION AS A PART OF THE BASIC COMPENSATION WHICH, UPON TRANSFER, IS SAVED TO THE EMPLOYEE UNDER SECTION 25.104 (B) (3) OF THE REGULATIONS, QUOTED ABOVE, WHERE, AS HERE, THE RATE OF COMPENSATION AS A POSTAL SERVICE EMPLOYEE IS WITHIN THE RANGE OF SALARY PRESCRIBED FOR THE GRADE IN WHICH HIS POSITION IS PLACED BUT DOES NOT CORRESPOND TO ANY OF THE RATES ESTABLISHED THEREFOR. YOUR SECOND QUESTION IS ANSWERED ACCORDINGLY. HOWEVER, IN THE CASE OF THIS EMPLOYEE, WHO HAS NOT REACHED THE MAXIMUM RATE FOR HIS GRADE, YOUR ATTENTION IS INVITED TO THE PROVISIONS OF SECTION 701 (A), PUBLIC LAW 429, 63 STAT. 967, RELATIVE TO PERIODIC BENEFITS UPON TRANSFER TO THE GENERAL SERVICES ADMINISTRATION. CF. 21 COMP. GEN. 313.

THE THIRD QUESTION WHICH YOU PRESENT IS STATED AS FOLLOWS:

3. WOULD THE COMPTROLLER OBJECT TO PRESERVING THE COMPENSATION OF PERSONNEL SO TRANSFERRED UNDER REORGANIZATION PLAN NO. 18, WHEN, IN THE INTEREST OF INCREASED EFFICIENCY, A PERSON DRAWING COMPENSATION IN EXCESS OF THE MAXIMUM RATE, BE ASSIGNED A CHANGE IN DUTIES WITHIN THE SAME GRADE?

THIS QUESTION IS ILLUSTRATED IN YOUR LETTER BY THE REASSIGNMENT OF A LABORER, CPC-2, RECEIVING COMPENSATION IN EXCESS OF THE MAXIMUM SCHEDULED RATE IN THE GRADE, TO PERFORM THE DUTIES OF AN ELEVATOR OPERATOR, WHICH IS IN THE SAME GRADE, CPC-2. AS POINTED OUT IN YOUR LETTER, THE PROVISION OF THE FEDERAL EMPLOYEES PAY REGULATIONS PROVIDING AGAINST A REDUCTION IN COMPENSATION UPON TRANSFER, SUCH AS HERE INVOLVED, APPLY, UNDER SECTION 25.103 (D),"ONLY SO LONG AS THE EMPLOYEE CONTINUES TO OCCUPY THE SAME POSITION.' IT IS URGED IN YOUR LETTER THAT THE WORDS "THE SAME POSITION," AS USED IN THE REGULATIONS, WERE INTENDED TO MEAN "AN EQUIVALENT RATED POSITION.'

THE TERM "POSITION" IS DEFINED BY SECTION 301 (1) OF THE CLASSIFICATION ACT OF 1949, 63 STAT. 957, AS "THE WORK, CONSISTING OF THE DUTIES AND RESPONSIBILITIES, ASSIGNABLE TO AN OFFICER OR EMPLOYEE.' IT IS PRESUMED THAT THE CIVIL SERVICE COMMISSION USED THE WORD "POSITION" IN THE FEDERAL EMPLOYEES PAY REGULATIONS WITHIN THE MEANING OF THAT WORD AS DEFINED BY THE CLASSIFICATION ACT OF 1949. UNDER THAT DEFINITION, IT IS CLEAR THAT AN EMPLOYEE WHO IS REASSIGNED FROM THE DUTIES PRESCRIBED FOR ONE POSITION TO THE DUTIES PRESCRIBED FOR ANOTHER POSITION WOULD NOT CONTINUE TO OCCUPY THE SAME "POSITION" WITHIN THE MEANING OF THAT WORD AS USED IN THE REGULATIONS, EVEN THOUGH THE CHANGE IN DUTIES DOES NOT INVOLVE A CHANGE IN GRADES. THE DEFINITION OF THE WORD "POSITION," AS MEANING "EQUIVALENT GRADED POSITION," AS PROPOSED IN YOUR LETTER, IS MORE NEARLY WITHIN THE DEFINITION OF THE WORDS "CLASS," OR "CLASS OF POSITIONS," AND "GRADE," AS THOSE WORDS ARE DEFINED BY SUBSECTIONS (2) AND (3) OF SECTION 301 OF THE CLASSIFICATION ACT OF 1949, 63 STAT. 957.

ACCORDINGLY, A CUSTODIAL EMPLOYEE TRANSFERRED FROM THE POSTAL SERVICE TO THE GENERAL SERVICES ADMINISTRATION UNDER REORGANIZATION PLAN NO. 18 AT A RATE OF COMPENSATION IN EXCESS OF THE MAXIMUM RATE FOR THE GRADE IN WHICH HIS POSITION IS INITIALLY PLACED MAY NOT CONTINUE TO RECEIVE COMPENSATION AT A RATE IN EXCESS OF THE MAXIMUM RATE FOR THE GRADE UNDER SUBSECTION (B) (4) OF SECTION 25.104 OF THE FEDERAL EMPLOYEES PAY REGULATIONS UPON HIS BEING ASSIGNED A CHANGE IN DUTIES WHICH INVOLVES A CHANGE IN POSITION AS DEFINED BY THE CLASSIFICATION ACT OF 1949, EVEN THOUGH THE POSITIONS ARE IN THE SAME GRADE.

YOUR LAST QUESTION IS WHETHER AUTOMATIC ANNUAL GRADE INCREASES OF $100 EACH PRESCRIBED FOR POSTAL SERVICE EMPLOYEES UNDER PUBLIC LAW 134, WHICH THE CUSTODIAL EMPLOYEES HERE INVOLVED WOULD HAVE RECEIVED EFFECTIVE JULY 1, 1950, HAD THEY NOT BEEN TRANSFERRED, MAY BE INCLUDED IN DETERMINING THE COMPENSATION TO BE PAID SUCH EMPLOYEES NOT IN THE GENERAL SERVICES ADMINISTRATION, EVEN THOUGH THESE EMPLOYEES ARE RECEIVING COMPENSATION IN EXCESS OF THE MAXIMUM RATE FOR THE GRADE IN WHICH THEIR POSITIONS ARE INITIALLY PLACE UNDER THE CLASSIFICATION ACT OF 1949.

PUBLIC LAW 134 PRESCRIBES, IN GENERAL, ANNUAL AUTOMATIC PROMOTIONS FROM ONE GRADE TO ANOTHER "AT THE BEGINNING OF THE QUARTER FOLLOWING ONE YEAR'S SATISFACTORY SERVICE IN EACH GRADE.' FOR EXAMPLE, SEE SECTIONS 14 (B) THROUGH 14 (K), PUBLIC LAW 134, 59 STAT. 447, 449.

AS INDICATED ABOVE, THE EXISTING RATE OF BASIC COMPENSATION SAVED TO AN EMPLOYEE UNDER SECTION 25.104 (B) (4) OF THE FEDERAL EMPLOYEES PAY REGULATIONS IS THE RATE THE EMPLOYEE WAS RECEIVING ON JUNE 30, 1950, AND NOT THE RATE TO WHICH HIS COMPENSATION MIGHT HAVE BEEN INCREASED ON JULY 1, 1950, HAD HE REMAINED IN THE POSTAL SERVICE. ACCORDINGLY, AN ANNUAL AUTOMATIC INCREASE FOR WHICH THE REQUIRED SERVICE HAD BEEN COMPLETED DURING THE QUARTER ENDING JUNE 30, 1950, AS A POSTAL SERVICE EMPLOYEE, IS NOT FOR CONSIDERATION AS A PART OF THE "EXISTING RATE" OF COMPENSATION SAVED TO THE EMPLOYEE UPON TRANSFER TO THE GENERAL SERVICES ADMINISTRATION. THIS IS TRUE WHETHER THE EMPLOYEE IS RECEIVING COMPENSATION AT A RATE IN EXCESS OF THE MAXIMUM RATE OR AT A RATE WITHIN THE RANGE OF SALARY PRESCRIBED FOR THE GRADE IN WHICH HIS POSITION IS PLACED INITIALLY UNDER THE CLASSIFICATION ACT OF 1949. HOWEVER, IN THE LATTER EVENT, THE EMPLOYEE MAY HAVE BECOME ENTITLED TO A PERIODIC STEP- INCREASE UNDER THE PROVISIONS OF SECTION 701 (A), PUBLIC LAW 429, AS INDICATED ABOVE IN THE ANSWER TO QUESTION 2.