B-197025, AUG 3, 1981

B-197025, AUG 3, 1981

DIGEST: EMPLOYEES, WHO ACCEPTED DOWNGRADE TO GRADE GS-5 WITH SALARY RETENTION, WERE SUBSEQUENTLY PROMOTED TO GRADE GS-7 WITH PAY RATE SET BASED ON HIGHEST PREVIOUS RATE RULE. EMPLOYEES ARE NOT ENTITLED TO RATE IN GRADE GS-7 BASED UPON TWO-STEP INCREASE FROM SAVED RATE, SINCE THERE IS NO STATUTORY OR REGULATORY BASIS FOR SUCH PAY SETTING FORMULA.

BETTY J. BEASLEY, ET AL. - RECONSIDERATION - PROMOTION WHILE RECEIVING SAVED PAY:

THIS DECISION IS IN RESPONSE TO THE REQUEST FROM MR. ALPHONSO BELL FOR RECONSIDERATION OF OUR DECISION IN BETTY J. BEASLEY, ET AL., B-197025, JULY 18, 1980. MR. BELL CLAIMS THAT HE AND THE FOUR OTHER EMPLOYEES WHO WERE THE SUBJECT OF OUR BEASLEY DECISION ARE ENTITLED TO ADDITIONAL COMPENSATION UPON PROMOTION WHILE RECEIVING SAVED PAY.

OUR PRIOR DECISION HELD THAT WHERE EMPLOYEES ARE DOWNGRADED UNDER CIRCUMSTANCES ENTITLING THEM TO SALARY RETENTION UNDER 5 U.S.C. SEC. 5337 (1976), THEIR AGENCY MAY USE THEIR HIGHEST PREVIOUS RATE IN SETTING THEIR RATE OF PAY UPON PROMOTION. BEASLEY, SUPRA.THUS, WHERE THE EMPLOYEES ACCEPTED DOWNGRADES FROM GRADE GS-6, STEP 9, TO GS-5, STEP 10, WITH SALARY RETENTION, AND WERE SUBSEQUENTLY PROMOTED TO GRADE GS-7, WE HELD THAT UNDER 5 U.S.C. SEC. 5334(B) THEY MAY BE PROMOTED TO GRADE GS-7, STEP 5, BASED ON A TWO-STEP INCREASE FROM GRADE GS-5, STEP 10, OR PROMOTED TO GRADE GS-7, STEP 6, BASED ON THEIR HIGHEST PREVIOUS RATE.

ON APPEAL MR. BELL ARGUES THAT HE AND THE OTHER EMPLOYEES ARE ENTITLED TO A TWO-STEP INCREASE FROM THEIR SAVED RATE OF PAY (GRADE GS 6, STEP 9), THAT IS TO THEIR SAVED RATE OF PAY ($14,061) ADD A TWO-STEP INCREASE BASED ON A TWO-STEP INCREASE FOR GRADE GS-5 ($664) OR A TWO STEP INCREASE FOR GRADE GS-6 ($740). IN EITHER CASE, THE EMPLOYEES WOULD BE PROMOTED TO GRADE GS-7, STEP 7 ($14,802). WE DISAGREE WITH THIS ANALYSIS FOR THE FOLLOWING REASONS.

THE STATUTE THEN GOVERNING SALARY RETENTION (5 U.S.C. SEC. 5337, SINCE REPEALED) PROVIDED THAT AN EMPLOYEE'S RATE OF COMPENSATION WOULD BE RETAINED FOR A PERIOD OF UP TO 2 YEARS EVEN THOUGH HIS GRADE WAS ACTUALLY REDUCED, AND IF THE EMPLOYEE WAS NOT PROMOTED DURING THE 2 YEAR PERIOD, THIS SALARY WOULD BE REDUCED AT THE COMPLETION OF THAT PERIOD. SEE B-172195(19), MAY 16, 1974; AND B-178909, AUGUST 6, 1973.

IN THE PRESENT CASE, THE ACTUAL GRADE OF THESE EMPLOYEES FOLLOWING THEIR DOWNGRADES WAS GRADE GS-5, STEP 10. HOWEVER, THE EMPLOYEES RECEIVED COMPARABILITY PAY ADJUSTMENTS ON OCTOBER 10, 1976, AND OCTOBER 9, 1977, BASED UPON THEIR SAVED RATE OF PAY (GRADE GS-6, STEP 9). THIS IS REQUIRED UNDER THE PROVISIONS OF SECTION 5337(A) WHICH STATES THAT AN EMPLOYEE IS ENTITLED TO EACH INCREASE IN THE RATE OF BASIC PAY PROVIDED BY STATUTE.

A DIFFERENT STATUTE GOVERNS PROMOTIONS. UNDER THE PROVISIONS OF 5 U.S.C. SEC. 5334(B), AN EMPLOYEE IS ENTITLED TO A TWO-STEP PROMOTION ABOVE THE RATE THE EMPLOYEE WOULD BE RECEIVING IF SALARY RETENTION WERE NOT APPLICABLE TO HIM (GRADE GS-5, STEP 10) OR HIS EXISTING RATE OF BASIC PAY (SAVED RATE OF $14,061), IF HIGHER. AS WE HELD IN OUR BEASLEY DECISION, THE AGENCY COULD ALSO UTILIZE THE HIGHEST PREVIOUS RATE RULE. SINCE THE HIGHEST PREVIOUS RATE OF THESE EMPLOYEES ($14,061, THEIR CURRENT (SAVED) RATE) FELL BETWEEN STEPS 5 AND 6 OF GRADE 7, THE AGENCY PROMOTED THEM TO GRADE GS-7, STEP 6.

WE KNOW OF NO AUTHORITY UNDER LAW OR REGULATION BY WHICH AN EMPLOYEE MAY RECEIVE UPON PROMOTION A TWO-STEP INCREASE FROM HIS SAVED RATE. ACCORDINGLY, UPON RECONSIDERATION WE HOLD THAT THE RATES OF PAY OF THESE EMPLOYEES HAVE BEEN PROPERLY SET UNDER APPLICABLE LAWS AND REGULATIONS, AND OUR PRIOR DECISION IS AFFIRMED.