B-156058, FEB. 26, 1965, 44 COMP. GEN. 518

B-156058, FEB. 26, 1965, 44 COMP. GEN. 518

COMPENSATION - WAGE BOARD EMPLOYEES - CONVERSION TO CLASSIFIED POSITIONS - HIGHEST PREVIOUS RATE - RETROACTIVE SALARY INCREASE EFFECT. DELEGATION OF AUTHORITY - HEADS OF AGENCIES TO SUBORDINATES - PERSONNEL ACTIONS WHEN A WAGE BOARD EMPLOYEE IS PROMOTED TO A POSITION UNDER THE CLASSIFICATION ACT ON AUGUST 2, 1964, DURING THE RETROACTIVE PERIOD OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, 5 U.S.C. 1113 (B), AND UNDER THE HIGHEST-PREVIOUS-RATE RULE POLICY OF THE AGENCY, WHICH HAS THE FORCE AND EFFECT OF A REGULATION, THE INITIAL ADJUSTMENT OF HIS $7,520.60 PER ANNUM WAGE RATE IS TO GS-9, STEP 4, $7,720 PER ANNUM, THE NEAREST RATE IN THE CLASSIFICATION ACT SCHEDULE THAT WOULD NOT RESULT IN A SALARY DECREASE, UPON STEP 4 BECOMING $7,955 PER ANNUM UNDER THE ACT, THE EMPLOYEE'S COMPENSATION RATE PURSUANT TO AGENCY POLICY IS REQUIRED TO BE ADJUSTED FROM GS-9, STEP 4, $7,820 TO STEP 3, $7,710, THE COMPENSATION SCHEDULE IN SECTION 102 (A) BEING THE ONLY ONE IN EFFECT AFTER THE EFFECTIVE DATE OF THE ACT; HOWEVER, ALTHOUGH SECTION 531.203 (D) (4) OF THE CIVIL SERVICE REGULATIONS DOES NOT REQUIRE AN AGENCY TO FOLLOW THE "MAXIMUM BENEFIT" NORM PRESCRIBED, TWO PERIODS, ONE BEFORE AND ONE ON OR AFTER THE EFFECTIVE DATE OF THE ACT ARE EMBRACED WITHIN THE TERM "AS OF THE TIME OF SERVICE," ABSENT AN AGENCY REGULATION, AND THE EMPLOYEE HAS A VESTED RIGHT TO THE $7,720 RATE FOR THE RETROACTIVE PERIOD. WHERE THE INITIAL COMPENSATION FIXED FOR WAGE BOARD EMPLOYEES PROMOTED TO POSITIONS UNDER THE CLASSIFICATION ACT DURING THE RETROACTIVE PERIOD OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, 5 U.S.C. 1113 (B), IS MADE BY APPOINTING OFFICERS AT LOCAL INSTALLATIONS WHO ARE PERMITTED TO MAKE DETERMINATIONS UNDER THE HIGHEST-PREVIOUS RATE RULE, AND AN ADJUSTMENT IN THE RATE OF COMPENSATION IS REQUIRED AFTER THE EFFECTIVE DATE OF THE SALARY ACT UNDER AGENCY POLICY PROVIDING FOR FIXING WAGE BOARD SALARY RATES TO THE NEAREST RATE IN THE CLASSIFICATION ACT SCHEDULE THAT WOULD NOT RESULT IN A SALARY DECREASE, WHETHER THE AUTHORITY TO MAKE SUCH ADJUSTMENTS MAY BE DELEGATED TO THE APPOINTING OFFICERS CANNOT BE ANSWERED CATEGORICALLY IN VIEW OF THE VARIED AND DIVERSE RULES OR NORMS FOLLOWED AT INSTALLATION LEVELS IN FIXING RATES; HOWEVER, UPON SUBMISSION OF SPECIFIC FACTS, THE MATTER WILL BE FURTHER CONSIDERED.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, FEBRUARY 26, 1965:

YOUR LETTER OF FEBRUARY 1, 1965, REQUESTS OUR DECISION ON TWO QUESTIONS PRESENTED TO THE CIVIL SERVICE COMMISSION REGARDING THE PROPER RATE OF COMPENSATION TO BE PAID AN EMPLOYEE, FORMERLY COMPENSATED UNDER WAGE BOARD SCHEDULES, WHO WAS PROMOTED TO A POSITION UNDER THE CLASSIFICATION ACT OF AUGUST 2, 1964, DURING THE RETROACTIVE PERIOD OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, PUBLIC LAW 88 426, APPROVED AUGUST 14, 1964, 78 STAT. 400, 5 U.S.C. 113 (B).

THE PERTINENT FACTS ARE RELATED IN YOUR LETTER AS FOLLOWS:

IN AN EXAMPLE GIVEN US, AN EMPLOYEE HAD BEEN RECEIVING THE RATE OF $3.60 AN HOUR ($7520.60 PER ANNUM) SINCE SOME TIME BEFORE JULY, 1964. ON AUGUST 2, 1964, HE WAS PROMOTED FROM HIS WB-12 POSITION TO GS-9/4, $7720 PER ANNUM. WITH THE ENACTMENT OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, THE GS-9/4 $7720 RATE BECAME $7955. * * *

THE QUESTION ASKED IS WHETHER THE AGENCY COULD, NEVERTHELESS, MOVE THE EMPLOYEE DOWN TO GS-9/3, RETROACTIVELY AS OF THE DATE OF HIS PROMOTION. THE REASON GIVEN IS THAT THE AGENCY'S POLICY WHEN MOVING AN EMPLOYEE FROM A WAGE-BOARD POSITION TO A CLASSIFICATION ACT POSITION IS TO PLACE HIM IN THE NEAREST RATE WHICH WOULD NOT RESULT IN A DECREASE. THEREFORE, IF THE NEW CLASSIFICATION ACT RATES HAD ACTUALLY BEEN IN EFFECT AT THE TIME OF THE PROMOTION, THE AGENCY CONCLUDED THAT IT WOULD NOT HAVE GIVEN HIM THE FULL BENEFIT OF THE HIGHEST-PREVIOUS RATE RULE BUT WOULD HAVE PLACED HIM IN GS-9/3.

SECTION 531.203 (D) (4) OF THE CIVIL SERVICE REGULATIONS, FEDERAL PERSONNEL MANUAL, SUPPLEMENT NO. 990-1, PART 531, III-122.01, PROVIDES:

IF THE HIGHEST PREVIOUS RATE WAS EARNED IN A CLASSIFICATION ACT POSITION, IT IS INCREASED BY SUBSEQUENT AMENDMENTS OF THE CLASSIFICATION ACT PAY SCHEDULES. IF THE HIGHEST PREVIOUS RATE WAS EARNED IN A POSITION NOT SUBJECT TO THE CLASSIFICATION ACT, IT IS COMPUTED AS FOLLOWS:

(I) THE ACTUAL RATE EARNED AT THE TIME OF SERVICE COMPUTED ON AN ANNUAL BASIS IS COMPARED TO THE ANNUAL RATES UNDER THE ACT AS OF THE TIME OF SERVICE TO SELECT AN EQUIVALENT ANNUAL RATE. WHEN THE ACTUAL RATE IS THE SAME AS A RATE UNDER THE ACT, THE RATE UNDER THE ACT IS THE EQUIVALENT ANNUAL RATE. WHEN THE ACTUAL RATE IS THE SAME AS THE RATE UNDER THE ACT AND THAT RATE OCCURS WITHIN TWO OR MORE GRADES UNDER THE ACT, THE RATE WHICH GIVES THE EMPLOYEE THE MAXIMUM BENEFIT WHEN IT IS CONVERTED UNDER SUBDIVISION (II) OF THIS PARAGRAPH IS THE EQUIVALENT ANNUAL RATE. WHEN THE ACTUAL RATE FALLS BETWEEN TWO RATES WITHIN THE RANGE OF TWO OR MORE GRADES UNDER THE ACT, THE RATE WHICH GIVES THE EMPLOYEE THE MAXIMUM BENEFIT WHEN IT IS CONVERTED UNDER SUBDIVISION (II) OF THIS PARAGRAPH IS THE EQUIVALENT ANNUAL RATE.

(II) THE EQUIVALENT ANNUAL RATE DETERMINED UNDER SUBDIVISION (I) OF THIS PARAGRAPH IS CONVERTED TO THE EQUIVALENT RATE UNDER THE CURRENT CLASSIFICATION ACT PAY SCHEDULE AND THAT RATE IS THE EMPLOYEE'S HIGHEST PREVIOUS RATE.

YOUR LETTER PRESENTS THE VIEW THAT SINCE THE EMPLOYEE HAD RECEIVED THE SAME WAGE BOARD HOURLY RATE PRIOR TO THE EFFECTIVE DATE OF THE SCHEDULE AUTHORIZED BY PUBLIC LAW 88-426, SECTION 531.203 (D) (4) (I) OF THE CIVIL SERVICE COMMISSION REGULATIONS AUTHORIZES AGENCY REFERENCE TO COMPENSATION SCHEDULE II OF PUBLIC LAW 87-793, 76 STAT. 843, EFFECTIVE DURING THE PERIOD IMMEDIATELY PRIOR TO PUBLIC LAW 88-426, FOR THE PURPOSE OF DETERMINING, AS OF THE TIME OF SERVICE, AN EQUIVALENT ANNUAL RATE AND ITS STEP IN GRADE. UNDER REGULATION 531.203 (D) (4) (II), THE EQUIVALENT ANNUAL RATE WOULD BE CONVERTED TO THE EQUIVALENT RATE UNDER THE CURRENT SCHEDULE BY REFERENCE TO THE GRADE STEP DETERMINED BY THE APPLICATION OF REGULATION 531.203 (D) (4) (I).

IN THE LIGHT OF THE FOREGOING THE FOLLOWING QUESTIONS ARE PRESENTED FOR CONSIDERATION.

1. ASSUMING THAT AN AGENCY HAD AN ESTABLISHED AND STATED POLICY THAT IN MOVING A WAGE-BOARD EMPLOYEE TO A CLASSIFICATION ACT POSITION HIS SALARY RATE WOULD BE INITIALLY ADJUSTED TO THE NEAREST RATE IN THE CLASSIFICATION ACT SCHEDULE WHICH DID NOT RESULT IN A DECREASE, UNDER THE ABOVE EXAMPLE WOULD IT BE ILLEGAL FOR THE AGENCY TO USE THIS POLICY, AFTER THE ENACTMENT OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, TO ADJUST THE EMPLOYEE'S SALARY FROM GS-9/4, $7955, TO GS-9/3 $7710, RETROACTIVELY TO THE DATE OF THE PROMOTION?

2. ASSUMING THAT AN AGENCY HAD A STATED POLICY THAT PERMITTED ITS LOCAL INSTALLATIONS TO MAKE WHATEVER DETERMINATION THEY WANTED TO MAKE UNDER THE HIGHEST-PREVIOUS-RATE RULE AT THE TIME THE INITIAL ACTION WAS TAKEN, WOULD IT BE ILLEGAL UNDER THE SAME EXAMPLE FOR AN INSTALLATION TO ADJUST AN EMPLOYEE'S SALARY FROM GS-9/4, $7955, TO GS-9/3, $7710, RETROACTIVELY TO THE DATE OF THE INITIAL ACTION?

IN ANSWER TO QUESTION ONE, WE ARE REQUIRED TO REGARD THE COMPENSATION SCHEDULE PROVIDED BY SECTION 102 (A) OF PUBLIC LAW 88 426, AS THE ONLY SCHEDULE IN EFFECT AFTER THE EFFECTIVE DATE OF THE ACT. 31 COMP. GEN. 166. THEREFORE, UNDER THE COMMISSION'S REGULATIONS THERE APPEAR TO BE AT LEAST TWO PERIODS, I.E., ONE BEFORE AND ONE ON OR AFTER THE EFFECTIVE DATE OF PUBLIC LAW 88-426, EMBRACED WITHIN THE TERM "AS OF THE TIME OF SERVICE," EITHER OF WHICH, IN THE ABSENCE OF AN AGENCY REGULATION OTHERWISE, LAWFULLY COULD BE A BASE OF REFERENCE FOR THE AGENCY IN DETERMINING THE EQUIVALENT ANNUAL RATE. WHILE OTHER PROVISIONS OF THE PERTINENT CIVIL SERVICE REGULATIONS SUGGEST THAT AN AGENCY OUGHT TO BE GUIDED BY WHAT EVENTUATES IN THE MAXIMUM BENEFIT TO AN EMPLOYEE, SUCH REGULATIONS DO NOT SPECIFICALLY REQUIRE THAT THE "MAXIMUM BENEFIT" NORM BE FOLLOWED IN THE PARTICULAR FACTS RECITED IN QUESTION ONE. THEREFORE, ON AND AFTER THE EFFECTIVE DATE OF PUBLIC LAW 88-426,THE AGENCY, UNDER ITS POLICY WHICH WE UNDERSTAND WOULD HAVE THE FORCE AND EFFECT OF A REGULATION AND WHICH PROVIDED FOR GRANTING THE NEAREST RATE IN THE CLASSIFICATION ACT SCHEDULE WHICH DID NOT RESULT IN A DECREASE, WOULD BE REQUIRED TO GRANT THE RATE OF $7,710. HOWEVER, FOR THAT PART OF THE RETROACTIVE PERIOD THAT A LOSS OF PAY WOULD HAVE OCCURRED, AUGUST 2 TO AUGUST 14, 1964, THE EMPLOYEE HAD A VESTED RIGHT TO PAY AT THE RATE OF $7,720. SEE 38 COMP. GEN. 103.

WE ARE AWARE THAT THE APPLICATION OF THE ABOVE RULE UNDER THE MANDATORY AGENCY REGULATION INVOLVED IN QUESTION ONE MAY REQUIRE DIFFERENT RATES BEING PAYABLE TO EMPLOYEES REEMPLOYED OR REINSTATED AFTER A BREAK IN SERVICE THAN TO THOSE PROMOTED, CONVERTED, TRANSFERRED TO REASSIGNED.

REGARDING YOUR SECOND QUESTION, WHICH CONTEMPLATES DELEGATION OF DISCRETION TO FIX RATES TO APPOINTING OFFICERS AT LOCAL INSTALLATIONS, WE BELIEVE THAT THE RULES OR NORMS FOLLOWED AT INSTALLATION LEVELS CONCERNING INDIVIDUAL APPOINTMENTS ARE SO VARIED AND DIVERSE THAT A CATEGORICAL ANSWER BY US IS NOT POSSIBLE. SEE, FOR EXAMPLE, DEPARTMENT OF THE ARMY CIVILIAN PERSONNEL REGULATIONS, CPR P3--- BASIC PAY RATES, SECTION 1. HOWEVER, IF THE SPECIFIC FACTS ARE ASCERTAINABLE AND SUBMITTED FOR CONSIDERATION WE WILL, OF COURSE, GIVE FURTHER CONSIDERATION TO THE MATTER.

SINCE THE PROBLEM TO WHICH OUR ATTENTION HAS BEEN DIRECTED BY YOUR LETTER APPEARS TO BE ONE WHICH MAY CONTINUE TO ARISE, IT MAY BE THAT A CLARIFICATION OF SECTION 531.203 OF THE COMMISSION'S REGULATIONS, AFFORDING A MORE SPECIFIC GUIDE TO AGENCIES IN THEIR SELECTIONS OF "EQUIVALENT ANNUAL RATES," WOULD BE APPROPRIATE.