[Claim for Retroactive Salary Adjustment]

B-221525: Apr 23, 1986

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The National Federation of Federal Employees requested a decision concerning an employee's entitlement to a retroactive salary adjustment based on her highest previous rate of pay upon appointment to a Veterans Administration (VA) position. GAO held that: (1) it is within the agency's discretion to fix the initial salary rate of an employee; (2) an employee has no vested right upon transfer or reemployment to receive the highest salary rate previously paid; (3) where an agency exercises its discretion to set an employee's salary rate below the highest previous rate, there may be no retroactive adjustment of the employee's salary in the absence of administrative error; (4) there was no evidence that VA acted arbitrarily in setting the employee's salary rate; and (5) applicable VA regulations are discretionary with respect to applying the highest previous rate rule to an employee whose previous rate of pay was earned in a non-VA position. Accordingly, the claim was denied.