Claim for Grade Retention

An employee appealed an action of the GAO Claims Group which denied his claim for grade retention. The employee filed a claim for backpay and salary adjustment on the basis that his transfer involved a reduction in grade that entitled him to grade retention. The agency denied his request on the basis that he was not entitled to grade retention since his transfer was at the same grade level and did not constitute a reduction in grade. The Claims Group disallowed his claim since he was not reduced in grade as the result of a reduction in force or a reclassification action. The employee cited a regulation which provides that an employee who becomes entitled to grade retention, or moves to another position during a period of grade retention, is entitled to the rate of basic pay from the applicable rate schedule for the grade and step held before the movement. Since the employee's change in position was not the result of a reduction in force or a reclassification action, he was not entitled to grade retention even if his transfer had involved a reduction in grade. Thus, the agency properly refused to apply the provisions of grade retention in this case. However, where his new position is at the same grade but at a lower rate of pay, he is entitled to pay retention benefits. The allowable rate of basic pay which is to be retained is the lower of the rate of basic pay payable to the employee before the reduction in pay or 150 percent of the maximum rate of basic pay payable for the grade of the employee's position immediately after such a reduction in pay. The agency set his pay at 150 percent of the rate of pay allowable in the new wage area since it was lower than the rate of pay the employee received at his prior post. Thus, the Claims Group's disallowance of the employee's claim for backpay and an increase in his rate of pay was sustained.