B-175430, JUN 1, 1972

B-175430, JUN 1, 1972

CIVILIAN PERSONNEL - REDUCTION-IN-FORCE - BASIC RATE OF PAY - "HIGHEST PREVIOUS RATE" RULE CONCERNING THE ENTITLEMENT OF JOHN T. MCDONOUGH TO A HIGHER RATE OF PAY INCIDENT TO HIS TRANSFER FROM A WAGE BOARD TO A GENERAL SCHEDULE POSITION AS A CIVILIAN EMPLOYEE OF THE NAVY FOLLOWING A REDUCTION-IN FORCE. UNDER THE "HIGHEST PREVIOUS RATE" RULE, CONTAINED IN SECTION 531.202(F) OF THE CIVIL SERVICE REGULATIONS, NIGHT DIFFERENTIAL WOULD HAVE BEEN INCLUDED AS PART OF THE BASIC PAY OF MR. MCDONOUGH'S WAGE BOARD POSITION. 46 COMP. GEN. 200 (1966). HOWEVER, THE EMPLOYING ACTIVITY IS ONLY REQUIRED TO COMPLY WITH APPLICABLE DEPARTMENTAL REGULATIONS. SINCE THE NAVY'S INTERPRETATION OF CMMI 531.2-4A(2), AS EXCLUDING NIGHT DIFFERENTIAL, APPEARS REASONABLE AND WITHIN ITS ADMINISTRATIVE DISCRETION, MR. MCDONOUGH IS NOT ENTITLED TO THE HIGHER RATE.

TO MR. E. D. JOHNSON:

FURTHER REFERENCE IS MADE TO YOUR ENDORSEMENT OF FEBRUARY 22, 1972, REFERENCE 7230 NFO:BSN EDJ:SMH, BY WHICH YOU FORWARDED THE LETTER OF MR. JOHN T. MCDONOUGH DATED FEBRUARY 9, 1972. MR. MCDONOUGH CLAIMS THAT HE IS ENTITLED TO A HIGHER RATE OF PAY BY VIRTUE OF HIS TRANSFER FROM A WAGE BOARD POSITION TO A GENERAL SCHEDULE POSITION, EFFECTIVE SEPTEMBER 11, 1970. AS REQUESTED BY THE SECOND ENDORSEMENT OF THE COMMANDER, NAVY ACCOUNTING AND FINANCE CENTER, WASHINGTON, D.C; DATED MARCH 8, 1972, REFERENCE 7420/1-1 NAFC-3121, WE HAVE TREATED YOUR ENDORSEMENT AS A REQUEST FOR AN ADVANCE DECISION.

MR. MCDONOUGH WAS REASSIGNED FROM FOREMAN FIRE CONTROL MECHANIC (GRADE 11 -4) TO ELECTRICAL ENGINEERING TECHNICIAN (GS-9, STEP 7) INCIDENT TO A "REDUCTION-IN-FORCE (RIF) NOTIFICATION" DATED JULY 10, 1970. FOR APPROXIMATELY A YEAR AND A HALF PRIOR TO THE RIF NOTIFICATION, MR. MCDONOUGH WORKED IN THE CAPACITY AS A NIGHT SUPERVISOR AND RECEIVED NIGHT DIFFERENTIAL PAY UP TO THE TIME OF HIS TRANSFER. MR. MCDONOUGH'S RATE OF PAY WAS $5.85 PER HOUR, FOR AN ANNUAL EQUIVALENT SALARY OF $12,168. THIS RATE OF PAY WAS BASED ON A SCHEDULED RATE OF $5.62 PER HOUR OR AN ANNUAL EQUIVALENT SALARY OF ABOUT $11,690, TO WHICH WAS ADDED A NIGHT DIFFERENTIAL OF $0.23 PER HOUR. MR. MCDONOUGH BELIEVES THAT NIGHT DIFFERENTIAL SHOULD HAVE BEEN INCLUDED IN THE SALARY USED TO DETERMINE HIS NEW POSITION CLASSIFICATION AND HIS SALARY SET AT GS-9, STEP 8, $12,184 PER ANNUM, INSTEAD OF AT GS-9, STEP 7, $11,855 PER ANNUM.

MR. MCDONOUGH'S SALARY ENTITLEMENT SUBSEQUENT TO HIS TRANSFER TO A GENERAL SCHEDULE POSITION IS GOVERNED BY SECTION 531.203(C) OF THE CIVIL SERVICE REGULATIONS, WHICH PROVIDES IN PERTINENT PART:

" *** WHEN AN EMPLOYEE IS REEMPLOYED, TRANSFERRED, REASSIGNED, PROMOTED OR DEMOTED, THE AGENCY MAY PAY HIM AT ANY RATE OF HIS GRADE WHICH DOES NOT EXCEED HIS HIGHEST PREVIOUS RATE; HOWEVER, IF HIS HIGHEST PREVIOUS RATE FALLS BETWEEN TWO RATES OF HIS GRADE, THE AGENCY MAY PAY HIM AT THE HIGHER RATE. *** "

"HIGHEST PREVIOUS RATE" IS DEFINED IN SECTION 531.202(F) OF THE REGULATIONS AS:

" *** THE HIGHEST RATE OF BASIC PAY PREVIOUSLY PAID TO AN INDIVIDUAL WHILE EMPLOYED IN A POSITION IN A BRANCH OF THE FEDERAL GOVERNMENT *** , IRRESPECTIVE OF WHETHER OR NOT THE POSITION WAS SUBJECT TO THE GENERAL SCHEDULE."

THE "RATE OF BASIC PAY" IS DEFINED IN SECTION 531.202(I) OF THE REGULATIONS AS:

" *** THE RATE OF PAY FIXED BY LAW OR ADMINISTRATIVE ACTION FOR THE POSITION HELD BY AN EMPLOYEE BEFORE ANY DEDUCTIONS AND EXCLUSIVE OF ADDITIONAL PAY OF ANY KIND."

AS A GENERAL RULE, NIGHT DIFFERENTIAL IS CONSIDERED PART OF BASIC PAY OF WAGE BOARD POSITIONS. SEE 46 COMP. GEN. 200 (1966); 36 ID. 482 (1957); 34 ID. 708 (1955). IN 50 COMP. GEN. 332 (1970), WE HELD THAT THE PHRASE, "RATE OF BASIC PAY," AS IT IS USED IN SECTION 539.203 OF THE REGULATIONS TO COMPUTE THE SALARY OF AN EMPLOYEE WHOSE WAGE BOARD POSITION IS CONVERTED TO A GENERAL SCHEDULE POSITION, DOES INCLUDE NIGHT DIFFERENTIAL. ALTHOUGH THE PROCEDURE USED FOR COMPUTING THE NEW SALARY IN CONVERSIONS UNDER SECTION 539.203 IS NOT EXACTLY THE SAME AS THE PROCEDURE USED IN TRANSFERS UNDER SECTION 531.203, THE DEFINITIONS OF "RATE OF BASIC PAY" USED IN THE TWO CASES ARE IDENTICAL. SEE SECTIONS 531.202(I) AND 539.202(C) OF THE REGULATIONS. SINCE THE SAME LANGUAGE IS USED IN BOTH SITUATIONS AND SINCE THE SITUATIONS ARE SIMILAR TO THE EXTENT THAT THE SALARY UNDER A WAGE BOARD POSITION IS USED AS THE BASIS FOR ESTABLISHING EITHER A PERMISSIBLE OR A REQUIRED SALARY UNDER A GENERAL SCHEDULE POSITION, WE CONCLUDE THAT THE PHRASE "RATE OF BASIC PAY," AS USED IN SECTIONS 531.202(I) AND 539.202(C) SHOULD BE GIVEN A CONSISTENT INTERPRETATION. THEREFORE, FOR THE PURPOSES OF DETERMINING THE HIGHEST PREVIOUS RATE IN A WAGE BOARD POSITION WHERE THE EMPLOYEE IS TRANSFERRING FROM THE WAGE BOARD POSITION TO A GENERAL SCHEDULE POSITION, THE NIGHT DIFFERENTIAL OF THE WAGE BOARD POSITION SHOULD BE INCLUDED AS PART OF THE RATE OF BASIC PAY. IN MR. MCDONOUGH'S CASE, THIS WOULD MEAN THAT THE AGENCY HAD AUTHORITY TO PLACE MR. MCDONOUGH AT A SALARY OF GS-9, STEP 8, RATHER THAN STEP 7.

HOWEVER, SECTION 531.203(C) DOES NOT REQUIRE THAT AN EMPLOYEE BE GIVEN THE HIGHEST PREVIOUS RATE; IT ONLY REQUIRES THAT HE BE GIVEN A RATE OF HIS GRADE THAT DOES NOT EXCEED HIS HIGHEST PREVIOUS RATE. BEYOND THIS, THE EMPLOYING ACTIVITY IS REQUIRED ONLY TO COMPLY WITH APPLICABLE DEPARTMENTAL REGULATIONS.

THE APPLICABLE DEPARTMENTAL REGULATION IN THIS CASE IS CMMI 531.2 4A(2) WHICH PROVIDES:

"RIF OR TRANSFER OF FUNCTION PLACEMENT. AN EMPLOYEE OF THE DEPARTMENT OF DEFENSE WHO IS SEPARATED OR IS SCHEDULED FOR SEPARATION BY REDUCTION IN FORCE OR FAILURE TO ACCOMPANY A FUNCTION AND WHO IS PLACED ELSEWHERE IN THE DEPARTMENT OF DEFENSE BY REASSIGNMENT OR TRANSFER, OR REEMPLOYMENT WHILE ON A REEMPLOYMENT PRIORITY LIST, WILL HAVE HIS PAY FIXED IN THE NEW POSITION AT A STEP RATE WHICH PRESERVES TO HIM SO FAR AS POSSIBLE, HIS LAST EARNED RATE. FOR THIS PURPOSE, "LAST EARNED RATE" DOES NOT INCLUDE THE RATE EARNED IN A POSITION OR RATING TO WHICH TEMPORARILY PROMOTED. THIS REQUIREMENT DOES NOT PRECLUDE THE USE OF THE HIGHEST PREVIOUS RATE UNDER THESE CIRCUMSTANCES."

WE HAVE BEEN ADVISED BY THE LEGAL COUNSEL FOR THE OFFICE OF CIVILIAN MANPOWER MANAGEMENT THAT IT HAS BEEN NAVY PRACTICE TO INTERPRET "LAST EARNED RATE" AS USED IN THIS REGULATION TO MEAN THE "SCHEDULED" RATE FOR THE WAGE GRADE AND STEP, EXCLUSIVE OF NIGHT DIFFERENTIAL AND/OR ENVIRONMENTAL PAY. THIS INTERPRETATION OF THE REGULATION QUOTED ABOVE APPEARS TO BE REASONABLE AND WITHIN THE ADMINISTRATIVE DISCRETION ALLOWED BY THE CIVIL SERVICE REGULATIONS. MR. MCDONOUGH WAS GIVEN A RATE OF PAY AT GS-9, STEP 7, IN ACCORDANCE WITH THIS REGULATION. IN CMMI 531.2-4A(1), THE NAVY HAS ESTABLISHED A GENERAL POLICY AGAINST THE USE OF HIGHEST PREVIOUS RATE EXCEPT WHERE AUTHORIZED BY WRITTEN POLICIES OF THE EMPLOYING ACTIVITY. WE HAVE BEEN ADVISED THAT THE BOSTON NAVAL SHIPYARD HAS NO DIRECTIVE TO ESTABLISH LOCAL POLICY ON THE USE OF THE HIGHEST PREVIOUS RATE. ACCORDINGLY, ALTHOUGH MR. MCDONOUGH'S RATE OF PAY WAS NOT FIXED ON THE BASIS OF THE HIGHEST PREVIOUS RATE, IT WAS FIXED IN ACCORDANCE WITH DEPARTMENTAL REGULATIONS, AND POLICIES AND WITHIN THE ALLOWABLE ADMINISTRATIVE DISCRETION.

IN VIEW OF THE ABOVE WE FIND THAT MR. MCDONOUGH IS NOT ENTITLED TO A HIGHER RATE OF PAY.