Computation of Severance Pay

B-205459: Jul 13, 1982

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GAO was asked whether a former Government employee who was separated from Government service as a result of a reduction in force was entitled to receive severance pay computed on the basis of a temporary promotion to a higher position or on the basis of his permanent position. The agency argued that the employee's temporary promotion was terminated 1 day prior to his separation, that he was returned to his permanent position, and that his severance pay should be computed on the basis of his permanent position. However, the employee contended that the termination of his temporary promotion was improperly effected because he received no notice of the termination, he continued to function at the higher level until the date of his separation, and he was paid at the higher rate until the last day of his employment. In the opinion of GAO, the agency properly terminated the employee's temporary promotion, and an agency is not required to give an employee express notice of such a termination. The fact that the employee continued to function at the higher level on his last day of employment did not entitle him to a higher salary for that day. The employee's pay was reduced to accurately reflect the termination of the employee's temporary promotion. Since the agency properly terminated the employee's temporary promotion, and since the employee was serving in his permanent position at the time of his separation, his severance pay should be computed on the basis of the lower rate of pay received in his permanent position.