Human Capital:

Mid-Atlantic Area Exchange Pay Conversion

FPCD-78-8: Published: Dec 5, 1977. Publicly Released: Dec 5, 1977.

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An investigation was undertaken of claims by the American Federation of Government Employees (AFGE) 2nd District that the Mid-Atlantic Area Exchange, Army and Air Force Exchange Service, did not properly pay its employees at Fort Dix and McGuire Air Force Base, New Jersey, on implementing a new pay system. The AFGE was referring to provisions of Public Law 92-392, which placed under a new federal wage system all federal nonappropriated fund employees considered to be "prevailing rate employees" (those in a craft or trade or in a manual labor occupation).

AFGE's claim that employees should have been placed in the same step in the new wage schedules that they occupied previously had no valid basis. Employees were to be placed in the step that corresponded to their existing hourly rate. AFGE's claim that the Exchange delayed implementation of the new wage schedules had no apparent validity. Retroactive payments for the 3-month delay in implementing the new wage schedules were made to all employees who were entitled to payment. There was a problem associated with the second stage conversions performed by the Exchange. Some employees had been placed in too high a step while others had been placed too low. The errors resulted from misinterpretation of Civil Service Commission regulations dealing with waiting periods between steps and determinations of base dates for steps. The accuracy of the check made by the Exchange on 268 employees, including the calculation of underpayments and overpayments, was tested by examining 84 selected on a random basis. High error rates, 33 percent of the employees and 40 percent of the value of underpayments and overpayments, indicated that the Exchange's check of conversions was of questionable reliability.

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