B-156058, JUN. 15, 1965, 44 COMP. GEN. 793

B-156058, JUN. 15, 1965, 44 COMP. GEN. 793

COMPENSATION - WAGE BOARD EMPLOYEES - CONVERSION TO CLASSIFIED POSITIONS - HIGHEST PREVIOUS RATE - RETROACTIVE SALARY INCREASE EFFECT WHEN AN APPOINTING OFFICER IN THE FIELD SERVICE OF A FEDERAL AGENCY WHO, AUTHORIZED TO APPLY THE HIGHEST PREVIOUS RATE RULE, ON JULY 5, 1964, DURING THE RETROACTIVE PERIOD OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, 5 U.S.C. 1113 (B), PLACES WAGE BOARD SCHEDULE EMPLOYEES EARNING $4,784 AND PROMOTED TO POSITIONS UNDER THE CLASSIFICATION ACT, AT GS-3, RATE 10, $4,900, THE EQUIVALENT ANNUAL RATE UNDER THE FEDERAL REFORM ACT OF 1962, AS PRESCRIBED BY THE APPROPRIATE CIVIL SERVICE REGULATION, THE ACTUAL RATE FALLING BETWEEN TWO RATES, THE EMPLOYEES ARE NOT ENTITLED TO THE NEW RATE 10, GS-3, $5,220, PROVIDED IN THE 1964 ACT, THE FACT THAT THE $4,900 RATE IS THE 10TH STEP OF GS-3 BEING BUT THE CONSEQUENCE OF THE OPTION CHOSEN IN THE SELECTION OF A RATE UNDER THE THEN CURRENT SCHEDULE, AND NO REEMPLOYMENT, TRANSFER, REASSIGNMENT, PROMOTION, OR DEMOTION ACTION OCCURRING UNDER WHICH THE OFFICER COULD AGAIN EXERCISE HIS DISCRETION OR SELECT A DIFFERENT OPTION, THE EQUIVALENT RATE UNDER THE NEW CURRENT SCHEDULE IS $4,815.

TO THE CHAIRMAN, CIVIL SERVICE COMMISSION, JUNE 15, 1965:

YOUR LETTER OF MAY 21, 1965, REFERS TO THE ANSWER TO THE SECOND QUESTION CONSIDERED IN OUR DECISION OF FEBRUARY 26, 1965, B-156058, CONCERNING THE RATE ALLOWABLE TO EMPLOYEES PROMOTED FROM POSITIONS UNDER WAGE BOARD SCHEDULES TO POSITIONS UNDER THE CLASSIFICATION ACT, DURING THE RETROACTIVE PERIOD OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, 78 STAT. 400, 5 U.S.C. 1113 (B).

IN THAT DECISION WE ASKED FOR AN OPPORTUNITY TO CONSIDER SPECIFIC FACTUAL SITUATIONS BEFORE ANSWERING THE SECOND QUESTION THERE PRESENTED. YOUR LETTER OF MAY 21, 1965, RECITES SEVERAL SUCH ACTUAL CASES WHICH WITH YOUR COMMENTS THEREON ARE QUOTED HERE AS FOLLOWS:

"THE AGENCY DOES NOT HAVE A WRITTEN POLICY OR REGULATION WHICH PRESCRIBES HOW THE PAY RATE WILL BE ESTABLISHED WHEN A WAGE BOARD EMPLOYEE IS MOVED INTO A POSITION SUBJECT TO THE CLASSIFICATION ACT.

"THE AGENCY SAYS THAT, AT THE TIMES IN QUESTION, THE APPOINTING OFFICERS IN THE FIELD USED THEIR OWN JUDGMENT IN EXERCISING PROCEDURAL AND REGULATORY OPTIONS PERMITTED BY THE COMMISSION, INCLUDING PAY FIXING DETERMINATIONS. (UNTIL MARCH 1, 1965, THERE WAS NO FORMAL ISSUANCE WITHIN THE AGENCY EVEN SETTING FORTH THIS DISCRETION, PROBABLY BECAUSE OF THE ORIGINALLY SMALL SIZE OF THE ORGANIZATION IN WHICH WORD OF-MOUTH COMMUNICATIONS SUFFICED.)

"GENERALLY, THESE APPOINTING OFFICERS APPLIED THE HIGHEST-PREVIOUS RATE RULE TO THE EXTENT THAT SEEMED REASONABLE IN THE INDIVIDUAL INSTANCE AT THE TIME, KEEPING THE RELATION OF THE EMPLOYEE TO OTHER EMPLOYEES IN MIND.

"ON JULY 5, 1964, ONE OF THE AGENCY'S FIELD INSTALLATIONS MOVED SIX EMPLOYEES FROM TRUCK DRIVER (MESSENGER), WB-3, STEP 2 AT $2.30 PER HOUR ($4784 PER ANNUM) TO MAIL CLERK, GS-3, RATE 10, AT $4900 PER ANNUM. FOLLOWING THE APPROVAL OF PUBLIC LAW 88-426, WITH AN EFFECTIVE DATE OF JULY 5, 1964, THEIR PAY RATE WAS ADJUSTED TO $5220 PER ANNUM, THE NEW RATE OF 10 FOR GS-3.

"IT MAY BE SURMISED THAT IF THE NEW PAY RATES HAD ACTUALLY BEEN IN EFFECT AT THE TIME OF THE ACTIONS, THE USUAL COURSE OF EVENTS OR USUAL PRACTICE (AS OPPOSED TO "POLICY" OR "REGULATION") MIGHT HAVE LED TO THE EMPLOYEES' BEING PLACED AT RATE OF $4815 PER ANNUM. HOWEVER, THE AGENCY SAYS: "* * * IT WOULD APPEAR AN INEQUITY TO REDUCE THE PAY OF EMPLOYEES WHO HAVE BEEN CONTINUOUSLY ON THE ROLLS AND YET TO PERMIT PERSONS TO BE REINSTATED AT A HIGHER PAY RATE, UNDER THE HIGHEST PREVIOUS RATE RULE. ACCORDINGLY, IT IS REQUESTED THAT FAVORABLE CONSIDERATION BE GIVEN TO PERMIT THESE EMPLOYEES TO RETAIN THEIR PRESENT RATE OF PAY.'

"THE SAME QUESTION IS ASKED WITH RESPECT TO AN EMPLOYEE WHO WAS MOVED ON AUGUST 2, 1964, FROM A WB-4 POSITION AT STEP 3, $2.55 PER HOUR ($5304 PER ANNUM) TO A POSITION IN GS-4, RATE 9, $5335 PER ANNUM, AND AN EMPLOYEE WHO WAS MOVED ON THE SAME DATE FROM A WB-10 POSITION AT STEP 2, $3.18 AN HOUR ($6614.40 PER ANNUM) TO A POSITION IN GS-7, RATE 6, $6770 PER ANNUM.'

THE QUESTION UPON WHICH A DECISION IS ASKED IS:

"* * * WHETHER IT WAS ILLEGAL FOR THE AGENCY TO GIVE CERTAIN EMPLOYEES THE BENEFIT OF THE 1964 GENERAL PAY INCREASE, BY CHANGING THEIR RATE OF PAY TO THE NEW RATE OF THE STEP IN THE GRADE THEY WERE OCCUPYING WHEN THE PAY INCREASE WAS ENACTED, WHEN THEY HAD BEEN MOVED TO THEIR CLASSIFICATION ACT POSITIONS FROM WAGE-BOARD POSITIONS DURING THE PERIOD COVERED BY THE RETROACTIVE PROVISION OF THE PAY INCREASE ACT.'

THE FACTS PRESENTED INDICATE THAT THE APPOINTING OFFICERS WERE AUTHORIZED TO AND APPLIED THE HIGHEST PREVIOUS RATE RULE, USING VARIOUS OPTIONS UNDER THAT RULE TO THE EXTENT THAT THEY APPEARED TO BE REASONABLE IN INDIVIDUAL CASES.

YOUR LETTER SUGGESTS THAT IT MAY BE SURMISED THAT IF THE GENERAL SCHEDULE AUTHORIZED BY SECTION 102 (A) OF PUB.L. 88-426 ACTUALLY HAD BEEN IN EFFECT ON JULY 5, 1965, AND THEREAFTER, THE APPOINTING OFFICERS WOULD HAVE EXERCISED THE SAME OPTIONS THAT GUIDED THEM IN INITIALLY APPLYING THE HIGHEST PREVIOUS RATE UNDER THE FORMER SCHEDULE II. CONCERNING THE FIRST CASE MENTIONED IN YOUR LETTER YOU INDICATE THAT UNDER THIS VIEW THE EMPLOYEE MIGHT HAVE BEEN PLACED IN THAT STEP OF GRADE GS-3, THE RATE OF WHICH IS $4,815. SINCE FROM A PRACTICAL ASPECT, IT NOW MAY BE IMPOSSIBLE TO DETERMINE PRECISELY WHAT OPTIONS THE APPOINTING OFFICER HAD IN MIND IN FIXING THE RATE UNDER SCHEDULE II, WE WILL BE GUIDED BY THE SURMISE OR ASSUMPTION REFERRED TO IMMEDIATELY ABOVE IN REPLYING TO THE QUESTIONS PRESENTED.

UNDER THE GIVEN ASSUMPTION AND THE OTHER CIRCUMSTANCES RECITED ABOVE THE CASES APPEAR TO FALL WITHIN THE PURVIEW OF THAT PART OF SECTION 531.203 (D) (4) OF THE CIVIL SERVICE REGULATIONS, FEDERAL PERSONNEL MANUAL, SUPPLEMENT NO. 990-1, PART 531, III-122.01, WHICH READS AS FOLLOWS:

"* * * 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 FALLS BETWEEN TWO RATES UNDER THE ACT, THE HIGHER RATE IS THE EQUIVALENT ANNUAL RATE. * * *"

IN THE FIRST CASE THE WAGE BOARD HOURLY RATE OF $2.30 COMPUTED ON AN ANNUAL BASIS WAS FOUND TO BE $4,784 PER ANNUM. SO FAR AS THE RECORDS SHOW THE ONLY ANNUAL RATES IN EFFECT AT THE TIME OF SERVICE WERE THOSE CONTAINED IN SCHEDULE II OF PUB.L. 87-793, 76 STAT. 843. UNDER THE COMMISSION'S REGULATION THE EQUIVALENT ANNUAL RATE WAS THE NEXT HIGHER RATE IN GRADE GS-3 OR $4,900. ALSO, SINCE THE SAME SCHEDULE WAS THEN THE CURRENT SCHEDULE NO FURTHER ADJUSTMENT WAS REQUIRED UNDER SECTION 531.203 (D) (4) (II) OF THE REGULATIONS. THE FACT THAT THE $4,900 RATE WAS THE RATE FOR THE 10TH STEP OF THE GRADE WAS MERELY A CONSEQUENCE OF THE OPTION CHOSEN AND FOLLOWED BY THE APPOINTING OFFICER IN THE SELECTION OF RATE. THE STEP DETERMINATION AS SUCH INVOLVED NO EXERCISE OF DISCRETION ON THE PART OF THE APPOINTING OFFICER.

WITH THE ENACTMENT OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, 78 STAT. 400, THE SCHEDULE UNDER WHICH THE EMPLOYEES' EQUIVALENT RATES HAD BEEN FIXED WAS ABOLISHED, EFFECTIVE ON THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGAN ON OR AFTER JULY 1, 1964, AND A NEW SCHEDULE WAS ESTABLISHED.

THE APPOINTING OFFICER ALREADY HAD EXERCISED HIS DISCRETION IN THE SELECTION OF THE OPTION UNDER WHICH THE HIGHEST PREVIOUS RATE RULE WOULD BE APPLIED TO THE CASE IN QUESTION AND THERE WAS NO REGULATORY BASIS, I.E., NO REEMPLOYMENT, TRANSFER, REASSIGNMENT, PROMOTION OR DEMOTION ACTION UNDER WHICH HE COULD AGAIN EXERCISE HIS DISCRETION OR SELECT A DIFFERENT OPTION. NEITHER IS THERE A SPECIAL STATUTORY PROVISION SUCH AS SUBSECTION 102 (B) (6) OF PUB.L. 88-426, WHICH WOULD REMOVE THE CASE FROM THE OPERATION OF OUR DECISION IN 31 COMP. GEN. 166.

THEREFORE, IN ACCORDANCE WITH THE SURMISE OR ASSUMPTION ABOVE STATED, IN COMPUTING THE RATE TO WHICH THE EMPLOYEES WERE ENTITLED UNDER THE GENERAL SCHEDULE OF PUB.L. 88-426, THE APPOINTING OFFICER AGAIN WAS REQUIRED TO APPLY THAT OPTION WHICH PROVIDES THAT WHEN THE ACTUAL RATE (PER HOUR RATE CONVERTED TO A PER ANNUM RATE) FALLS BETWEEN TWO RATES UNDER THE ACT IN THE GRADE IN WHICH HE IS PLACED, THE HIGHER RATE IS THE EQUIVALENT RATE. THE EQUIVALENT RATE UNDER THE NEW CURRENT SCHEDULE THUS BECAME $4,815, WHICH IS THE ONLY LEGAL RATE. SEE OUR ANSWER TO QUESTION 1, IN DECISION OF FEBRUARY 26, 1965, B-156058, TO WHICH YOUR LETTER REFERS, PARTICULARLY OUR REFERENCE TO THE APPLICATION OF THE RULE IN 38 COMP. GEN. 103. THE QUESTION IS ANSWERED ACCORDINGLY.

THE CASES PRESENTED IN THE NEXT TO LAST PARAGRAPH OF YOUR LETTER APPEAR TO BE ESSENTIALLY THE SAME AND CONSEQUENTLY WOULD REQUIRE THE SAME ANSWER.