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B-164515, APR 20, 1972, 51 COMP GEN 656

B-164515 Apr 20, 1972
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COMPENSATION - WAGE BOARD EMPLOYEES - CONVERSION TO CLASSIFIED POSITIONS - COORDINATED FEDERAL WAGE SYSTEM - RATE ESTABLISHMENT IN SETTING RATES OF PAY FOR EMPLOYEES WHOSE POSITIONS ARE CONVERTED WITHOUT A CHANGE OF DUTIES FROM THE COORDINATED FEDERAL WAGE SYSTEM TO THE GENERAL SCHEDULE (GS) SYSTEM IN A WAGE AREA WHERE A 15 PERCENT COST OF- LIVING ALLOWANCE IS AUTHORIZED (5 U.S.C. 5941). THE ALLOWANCE IS NOT FOR CONSIDERATION IN COMPARING THE GS RATE RANGE WITH THE WAGE RATE SINCE SECTION 539 OF THE CIVIL SERVICE REGULATIONS AND NOT THE "HIGHEST PREVIOUS RATE" RULE IN SECTION 531 OF THE REGULATIONS IS FOR APPLICATION. 377.60 UNDER SECTION 539.203(C) SHOULD HAVE BEEN SET AT GS-9. IS REQUIRED.

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B-164515, APR 20, 1972, 51 COMP GEN 656

COMPENSATION - WAGE BOARD EMPLOYEES - CONVERSION TO CLASSIFIED POSITIONS - COORDINATED FEDERAL WAGE SYSTEM - RATE ESTABLISHMENT IN SETTING RATES OF PAY FOR EMPLOYEES WHOSE POSITIONS ARE CONVERTED WITHOUT A CHANGE OF DUTIES FROM THE COORDINATED FEDERAL WAGE SYSTEM TO THE GENERAL SCHEDULE (GS) SYSTEM IN A WAGE AREA WHERE A 15 PERCENT COST OF- LIVING ALLOWANCE IS AUTHORIZED (5 U.S.C. 5941), THE ALLOWANCE IS NOT FOR CONSIDERATION IN COMPARING THE GS RATE RANGE WITH THE WAGE RATE SINCE SECTION 539 OF THE CIVIL SERVICE REGULATIONS AND NOT THE "HIGHEST PREVIOUS RATE" RULE IN SECTION 531 OF THE REGULATIONS IS FOR APPLICATION, AS AN AGENCY HAS NO DISCRETIONARY AUTHORITY IN SETTING SUCH CONVERSION RATES. THEREFORE, A WAGE BOARD ANNUAL RATE OF $11,377.60 UNDER SECTION 539.203(C) SHOULD HAVE BEEN SET AT GS-9, STEP 4, $11,517 PER ANNUM, AND NOT AT GS-9, STEP 1, $10,470 PER ANNUM, PLUS THE 15 PERCENT COST-OF-LIVING ALLOWANCE ($12,040.50), AND CORRECTIVE ACTION, INCLUDING THE RETROACTIVE PAYMENT OF ADDITIONAL COMPENSATION, WHERE APPROPRIATE, IS REQUIRED.

TO MAJOR J. S. ZAMPARELLI, DEPARTMENT OF THE AIR FORCE, APRIL 20, 1972:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 28, 1971, WITH ENCLOSURES, REFERENCE ACF, FORWARDED HERE BY LETTER OF JANUARY 25, 1972, FROM THE ASSISTANT COMPTROLLER FOR ACCOUNTING AND FINANCE (HQ USAF), REQUESTING AN ADVANCE DECISION AS TO WHETHER THE DEPARTMENT OF THE AIR FORCE IS EMPLOYING THE PROPER METHOD IN SETTING RATES OF PAY FOR THOSE EMPLOYEES WHOSE POSITIONS ARE CONVERTED, WITH NO CHANGE OF DUTIES, FROM THE COORDINATED FEDERAL WAGE SYSTEM TO THE GENERAL SCHEDULE SYSTEM IN A WAGE AREA WHERE A 15 PERCENT COST-OF-LIVING ALLOWANCE AS AUTHORIZED BY 5 U.S.C. 5941 IS PROVIDED FOR GENERAL SCHEDULE EMPLOYEES.

UNDER THE METHOD EMPLOYED BY THE AIR FORCE, THE GENERAL SCHEDULE RATE IS USED WHICH, WHEN INCREASED BY THE 15 PERCENT COST-OF-LIVING ALLOWANCE, MOST CLOSELY APPROXIMATES THE WAGE BOARD RATE OF THE POSITION PRIOR TO CONVERSION.

YOU HAVE SUBMITTED, AS REPRESENTATIVE OF THE QUESTION HERE INVOLVED, THE CASE OF MR. YOSHIYUKO R. SAKAI. THE RECORD INDICATES THAT PRIOR TO THE CONVERSION OF HIS POSITION FROM WAGE BOARD TO GENERAL SCHEDULE, MR. SAKAI WAS COMPENSATED AT THE RATE OF WB-10, STEP 3, $5.47 PER HOUR, $11,377.60 PER ANNUM. ON CONVERSION, HIS POSITION WAS ESTABLISHED AT GS-9, STEP 1, $10,470 PER ANNUM PLUS 15 PERCENT COST-OF-LIVING ALLOWANCE ($12,040.50).

THE FOREGOING ACTIONS WAS QUESTIONED BY MR. THOMAS FUJIKAWA, ADMINISTRATIVE ASSISTANT TO LOCAL UNION NO. 1186, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, IN A LETTER DATED SEPTEMBER 9, 1971, TO THE UNITED STATES CIVIL SERVICE COMMISSION. IN REPLY THERETO THE BUREAU OF POLICIES AND STANDARDS OF THE COMMISSION, BY LETTER DATED OCTOBER 19, 1971, ADVISED THAT IT WAS UNDERSTOOD THAT CERTAIN POSITIONS, APPARENTLY AS A RESULT OF A CLASSIFICATION DECISION, WERE CONVERTED FROM THE COORDINATED FEDERAL WAGE SYSTEM TO THE GENERAL SCHEDULE SYSTEM, AND THAT IF THIS WAS THE CASE, PART 539 OF THE CIVIL SERVICE REGULATIONS WOULD APPLY IN SETTING THE PAY. APPLYING PART 539, IT WAS STATED THAT MR. SAKAI WOULD BE ENTITLED, UPON CONVERSION TO A GS 9 POSITION, TO HAVE HIS PAY SET AT GS-9, STEP 4, $11,517 PER ANNUM. BY LETTER DATED DECEMBER 17, 1971, THE DIRECTOR, BUREAU OF POLICIES AND STANDARDS OF THE COMMISSION, BROUGHT THIS MATTER TO THE ATTENTION OF MR. W. J. ABERNETHY, DIRECTOR OF CIVILIAN PERSONNEL, DEPARTMENT OF THE AIR FORCE. IT WAS STATED IN SUCH LETTER THAT:

MR. FUJIKAWA PRESENTED US WITH THE SPECIFIC CASE OF A MR. YOSHIYUKO R. SAKAI, ONE OF NINE EMPLOYEES WHO WERE AFFECTED SIMILARLY. MR. SAKAI BEFORE HIS CONVERSION TO A GENERAL SCHEDULE POSITION, HAD AN HOURLY WAGE RATE OF $5.47. WE UNDERSTAND THIS IS A WAGE RATE BASED ON LOCAL PREVAILING WAGES, AND DOES NOT INCLUDE ADDITIONAL PAY OF ANY KIND. IT IS THEREFORE A RATE OF BASIC PAY AS DEFINED BY SECTION 539.202(C) OF THE CIVIL SERVICE REGULATIONS. THIS RATE SHOULD THEN HAVE BEEN CONVERTED TO AN EQUIVALENT ANNUAL RATE BY MULTIPLYING IT BY 2080, THE NUMBER OF HOURS OF WORK IN A WORK YEAR, RESULTING IN AN EQUIVALENT ANNUAL RATE OF $11,377.60. UNDER SECTION 539.203(C) OF THE REGULATIONS, MR. SAKAI WOULD HAVE BEEN ENTITLED, UPON CONVERSION TO A GS-9 POSITION, TO HAVE HIS PAY SET AT GS-9, RATE 4, $11,517 A YEAR. HOWEVER, WE UNDERSTAND THAT MR. SAKAI'S PAY WAS SET INSTEAD AT RATE 1 OF GS-9, $10,470 A YEAR. THIS APPARENTLY RESULTED FROM TAKING THE FIFTEEN PERCENT COST-OF-LIVING ALLOWANCE FOR GENERAL SCHEDULE EMPLOYEES IN HAWAII INTO CONSIDERATION WHEN COMPARING THE GENERAL SCHEDULE RATE RANGE WITH MR. SAKAI'S WAGE RATE.

IT APPEARS THAT WHAT MAY HAVE HAPPENED IN THIS CASE IS THAT THE COMMISSION'S "HIGHEST PREVIOUS RATE" RULE (SECTION 531.203(C) OF THE REGULATIONS) WAS APPLIED INSTEAD OF THE PART 539 CONVERSION REGULATIONS THAT SHOULD HAVE BEEN USED. UNDER THE HIGHEST PREVIOUS RATE RULE, UNLIKE THE PART 539 REGULATIONS, AN AGENCY IS ALLOWED CONSIDERABLE DISCRETION IN SETTING AN EMPLOYEE'S RATE OF PAY. THE COMPTROLLER GENERAL HAS RULED (45 COMP. GEN. 88) THAT IT IS APPROPRIATE FOR AN AGENCY TO TAKE A COST-OF- LIVING ALLOWANCE INTO CONSIDERATION WHEN AN EMPLOYEE MOVES FROM A WAGE POSITION TO A GENERAL SCHEDULE POSITION AND HIS PAY IS SET UNDER THE AGENCY'S DISCRETIONARY AUTHORITY UNDER THE HIGHEST PREVIOUS RATE RULE. THIS DOES NOT APPLY, HOWEVER, TO THE SETTING OF PAY UNDER THE REGULATIONS IN PART 539, WHERE NO SUCH DISCRETION IS ALLOWED AGENCIES.

WE WOULD APPRECIATE BEING INFORMED OF HOW THIS MATTER IS RESOLVED.

AS SURMISED IN THE ABOVE-QUOTED PORTION OF THE CIVIL SERVICE COMMISSION LETTER, THE FILE SHOWS THAT MR. SAKAI'S GS RATE WAS ESTABLISHED PURSUANT TO REGULATIONS SET FORTH IN AIR FORCE MANUAL (AFM) 40-1, SECTION 5211, WHICH SUPPLEMENTS FEDERAL PERSONNEL MANUAL (FPM) SUPPLEMENT 990-2, AND AIR FORCE SUPPLEMENT S2-4A(2), SECTION 531-8.02 TO FPM SUPPLEMENT 990-2. THESE ARE BASED ON PART 531 OF THE CIVIL SERVICE REGULATIONS.

PART 539 OF THE COMMISSION'S REGULATIONS PROVIDE IN PERTINENT PART:

SEC. 539.201 APPLICABILITY. THIS SUBPART APPLIES IN FIXING THE RATE OF BASIC PAY OF EACH EMPLOYEE INITIALLY BROUGHT INTO A POSITION SUBJECT TO THE GENERAL SCHEDULE BY CONVERTING HIS POSITION TO A POSITION SUBJECT TO THE GENERAL SCHEDULE.

SEC. 539.202 DEFINITIONS. ***

(C) RATE OF BASIC PAY MEANS 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.

SEC. 539.203 RATE OF BASIC PAY IN CONVERSION ACTIONS. WHEN AN EMPLOYEE OCCUPIES A POSITION NOT SUBJECT TO THE GENERAL SCHEDULE AND THE EMPLOYEE AND HIS POSITION ARE INITIALLY BROUGHT UNDER THE GENERAL SCHEDULE PURSUANT TO A REORGANIZATION PLAN OR OTHER LEGISLATION, AN EXECUTIVE ORDER, A DECISION OF THE COMMISSION UNDER SECTION 5103 OF TITLE 5, U.S.C. OR AN ACTION BY AN AGENCY UNDER AUTHORITY OF SECTION 511.202 OF THIS CHAPTER, THE AGENCY SHALL DETERMINE THE EMPLOYEE'S RATE OF BASIC PAY AS FOLLOWS:

(A) WHEN THE EMPLOYEE IS RECEIVING A RATE OF BASIC PAY BELOW THE MINIMUM RATE OF THE GRADE IN WHICH HIS POSITION IS PLACED, HIS PAY SHALL BE INCREASED TO THE MINIMUM RATE.

(B) WHEN THE EMPLOYEE IS RECEIVING A RATE OF BASIC PAY EQUAL TO A RATE IN THE GRADE IN WHICH HIS POSITION IS PLACED, HIS PAY SHALL BE FIXED AT THAT RATE.

(C) WHEN THE EMPLOYEE IS RECEIVING A RATE OF BASIC PAY THAT FALLS BETWEEN TWO RATES OF THE GRADE IN WHICH HIS POSITION IS PLACED, HIS PAY SHALL BE FIXED AT THE HIGHER OF THE TWO RATES.

WE AGREE WITH THE VIEW OF THE CIVIL SERVICE COMMISSION THAT THE COMPENSATION OF THE EMPLOYEES HERE INVOLVED SHOULD HAVE BEEN FIXED UNDER PART 539 OF THE COMMISSION'S REGULATIONS RATHER THAN PART 531. THEREFORE, CORRECTIVE ACTION SHOULD BE TAKEN, INCLUDING THE PAYMENT OF RETROACTIVE ADDITIONAL COMPENSATION, WHERE APPROPRIATE.

THE FILE FORWARDED WITH YOUR SUBMISSION IS RETURNED HEREWITH.

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