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B-140583, OCTOBER 8, 1959, 39 COMP. GEN. 270

B-140583 Oct 08, 1959
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CIVILIAN PERSONNEL - WAGE BOARD EMPLOYEES - TRANSFER TO CLASSIFICATION ACT POSITIONS - PERIODIC STEP-INCREASES WAGE BOARD INCREASES WHICH ARE ADMINISTRATIVELY GRANTED PURSUANT TO 5 U.S.C. 1052 (7) MAY NOT BE REGARDED AS "INCREASES IN COMPENSATION GRANTED BY LAW" AS THAT TERM IS USED IN SECTION 701 (B) OF THE CLASSIFICATION ACT OF 1949. WAGE BOARD EMPLOYEES WHO RECEIVE WAGE INCREASES PRIOR TO TRANSFER TO POSITIONS UNDER THE CLASSIFICATION ACT OF 1949 ARE REQUIRED TO WAIT THE PRESCRIBED PERIOD FROM THE WAGE BOARD INCREASE BEFORE BECOMING ENTITLED TO A PERIODIC STEP- INCREASE. THE FACTS OF ONE OF THE CASES ARE FURNISHED AS TYPICAL. THE EMPLOYEE'S WAGE RATE WAS ADJUSTED FROM $2.12 PER HOUR TO $2.28.

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B-140583, OCTOBER 8, 1959, 39 COMP. GEN. 270

CIVILIAN PERSONNEL - WAGE BOARD EMPLOYEES - TRANSFER TO CLASSIFICATION ACT POSITIONS - PERIODIC STEP-INCREASES WAGE BOARD INCREASES WHICH ARE ADMINISTRATIVELY GRANTED PURSUANT TO 5 U.S.C. 1052 (7) MAY NOT BE REGARDED AS "INCREASES IN COMPENSATION GRANTED BY LAW" AS THAT TERM IS USED IN SECTION 701 (B) OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1121 (B), TO EXCLUDE SUCH INCREASES FROM CONSIDERATION AS EQUIVALENT INCREASES FOR PERIODIC STEP INCREASES; HENCE, WAGE BOARD EMPLOYEES WHO RECEIVE WAGE INCREASES PRIOR TO TRANSFER TO POSITIONS UNDER THE CLASSIFICATION ACT OF 1949 ARE REQUIRED TO WAIT THE PRESCRIBED PERIOD FROM THE WAGE BOARD INCREASE BEFORE BECOMING ENTITLED TO A PERIODIC STEP- INCREASE.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, OCTOBER 8, 1959:

YOUR LETTER OF AUGUST 24, 1959, ASKS WHETHER A WAGE ADJUSTMENT--- INCREASE--- ACCORDED WAGE BOARD EMPLOYEES SUBSEQUENTLY TRANSFERRED TO POSITIONS UNDER THE CLASSIFICATION ACT OF 1949, CONSTITUTES AN "EQUIVALENT INCREASE IN COMPENSATION" FOR PERIODIC STEP-INCREASE PURPOSES UNDER THE FACTS AND CIRCUMSTANCES HEREINAFTER RELATED.

YOU SAY OUR REPRESENTATIVES IN YOUR AGENCY RAISED INFORMAL INQUIRIES CONCERNING FOUR WAGE BOARD EMPLOYEES. THE FACTS OF ONE OF THE CASES ARE FURNISHED AS TYPICAL, VIZ: EFFECTIVE AUGUST 25, 1957, THE EMPLOYEE'S WAGE RATE WAS ADJUSTED FROM $2.12 PER HOUR TO $2.28, AN INCREASE ON AN ANNUAL BASIS FROM $4,409.60 TO $4,742.40, OR $332.80. ON JANUARY 12, 1958, THE EMPLOYEE WAS TRANSFERRED TO A POSITION IN GRADE GS-7 UNDER THE CLASSIFICATION ACT AND GIVEN A PERIODIC STEP INCREASE TO THE FOURTH STEP OF THE GRADE, $4,930 PER ANNUM. THE THIRD STEP OF GRADE GS-7 IS $4,795, $52.60 PER ANNUM MORE THAN THE EMPLOYEE WAS RECEIVING IN THE BOARD POSITION AT THE TIME OF HIS TRANSFER.

YOU POINT OUT THAT THE COMPENSATION OF WAGE BOARD EMPLOYEES SHALL BE FIXED AND ADJUSTED FROM TIME TO TIME AS NEARLY AS IS CONSISTENT WITH THE PUBLIC INTEREST IN ACCORDANCE WITH PREVAILING RATES AND THAT SUCH EMPLOYEES ARE EXEMPT FROM COVERAGE OF THE CLASSIFICATION ACT, 5 U.S.C. 1082. ALSO, YOU DIRECT OUR ATTENTION TO THE REGULATIONS OF THE CIVIL SERVICE COMMISSION DEFINING THE TERM "EQUIVALENT INCREASE IN COMPENSATION" IN SECTION 25.11 (E), PAGE Z1-314.01 AND Z1-315, FEDERAL PERSONNEL MANUAL. IN THAT REGARD YOU SAY THAT WHILE THE REGULATION DOES NOT SPECIFICALLY REFER TO WAGE BOARD INCREASES IN COMPENSATION UNDER PREVAILING RATE SYSTEM, YOU BELIEVE THAT THE REGULATION IS BROAD ENOUGH TO INCLUDE SUCH INCREASES AMONG THOSE WHICH EXPRESSLY ARE EXCLUDED BY REGULATION FROM THE DEFINITION OF THE TERM "EQUIVALENT INCREASE.' FURTHER, YOU DIRECT OUR ATTENTION TO THE FACT THAT YOUR OWN REGULATIONS, GSA MANUAL GS 2-3 301.01 ET SEQ. PROVIDES THAT THE "APPLICATION OF A NEW WAGE SCHEDULE" IS NOT AN "EQUIVALENT INCREASE.' YOUR REFERENCE TO SENATE REPORT NO. 560 OF JULY 20, 1951, CONCERNING THE 1951 AMENDMENT (SECTION 1 (E) OF THE ACT OF OCTOBER 24, 1951, 65 STAT. 613, WHICH AMENDED SECTION 701 OF THE CLASSIFICATION ACT OF 1949) 5 U.S.C. 1121 (B), QUOTED HEREINAFTER, POINTS OUT THAT CONGRESS INTENDED TO REGARD INCREASES RESULTING FROM WAGE BOARD SURVEYS THE SAME AS THOSE GENERAL COMPENSATION INCREASES AUTHORIZED BY STATUTE UNDER THE CLASSIFICATION ACT; THAT IS, THEY WERE NO LONGER TO BE VIEWED AS "EQUIVALENT INCREASES.' LASTLY, YOU REFER TO OUR DECISION 36 COMP. GEN. 217, WHICH CONCERNS A SIMULTANEOUS PERIODIC STEP-INCREASE AND PROMOTION, WHEREIN IT WAS DETERMINED SUCH CHANGES SHOULD BE PROCESSED SO AS TO ACCORD THE GREATER BENEFIT TO EMPLOYEES.

5 U.S.C. 1121 (B), THE PROVISION WITH WHICH WE ARE HERE CONCERNED, READS IN PERTINENT PART AS FOLLOWS:

ANY INCREASE IN COMPENSATION GRANTED BY LAW AFTER JUNE 30, 1951, SHALL NOT BE CONSTRUED TO BE AN EQUIVALENT INCREASE IN COMPENSATION * * *

THAT PROVISION IS SECTION 701 (B) OF THE CLASSIFICATION ACT AND PERTAINS TO EMPLOYEES COVERED THEREBY. WHILE THE FOREGOING PROVISION WAS BEING CONSIDERED AS AN AMENDMENT TO THE CLASSIFICATION ACT, THE FOLLOWING COMMENT WAS MADE BY THE COMMITTEE CONSIDERING IT, H. REPORT NO. 959, 82D CONGRESS, ST SESSION:

THE BILL ALSO ADDS A NEW SUBSECTION (B) TO SECTION 701 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED. SECTION 701 PROVIDES FOR WITHIN- GRADE STEP INCREASES IN COMPENSATION FOR EMPLOYEES AT THE EXPIRATION OF CERTAIN STIPULATED PERIODS ON CONDITION THAT "NO EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE WAS RECEIVED DURING SUCH PERIOD.' THIS PROVISION (WHICH WAS ALSO CONTAINED IN THE CLASSIFICATION ACT OF 1923) HAS MADE IT NECESSARY IN THE PAST TO INCLUDE IN EACH ACT PROVIDING AN INCREASE IN RATES OF COMPENSATION FOR EMPLOYEES SUBJECT TO THE CLASSIFICATION ACT OF 1923 AND, SINCE THE REPEAL OF SUCH ACT, THE CLASSIFICATION ACT OF 1949, A DECLARATION THAT SUCH INCREASE IN RATES SHALL NOT BE CONSTRUED TO BE AN "EQUIVALENT INCREASE" IN COMPENSATION WITHIN THE MEANING OF THE APPROPRIATE SECTION OF THE CLASSIFICATION ACT OF 1923 OR THE CLASSIFICATION ACT OF 1949. FURTHERMORE, THE COMPTROLLER GENERAL HAS HELD IN A RULING (B 85380) DATED MAY 13, 1949, THAT AN EMPLOYEE TRANSFERRED FROM THE FIELD SERVICE OF THE POST OFFICE DEPARTMENT TO A POSITION UNDER THE CLASSIFICATION ACT WAS NOT ENTITLED TO RECEIVE A WITHIN-GRADE SALARY ADVANCE BECAUSE THE PAY INCREASE SUCH EMPLOYEE HAD RECEIVED BY LAW LESS THAN A MONTH PRIOR TO HIS TRANSFER WAS CONSIDERED TO BE AN "EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE.' THE NEW SUBSECTION (B) PROVIDES THAT ANY INCREASE IN COMPENSATION GRANTED BY ACT OF CONGRESS AFTER JUNE 30, 1951,"SHALL NOT BE CONSTRUED TO BE AN EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF THE PRESENT SECTION 701. THIS LANGUAGE WILL SAFEGUARD ON A PERMANENT BASIS THE RIGHT OF EMPLOYEES SUBJECT TO THE CLASSIFICATION ACT OF 1949, AS AMENDED (INCLUDING EMPLOYEES WHO TRANSFER, OR ARE TRANSFERRED, TO POSITIONS UNDER SUCH ACT AFTER JUNE 30, 1951), TO WITHIN-GRADE STEP INCREASES IN COMPENSATION WITHOUT REGARD TO ANY INCREASE IN COMPENSATION WHICH THEY MAY HAVE BEEN GRANTED BY LAW.' ( ITALICS SUPPLIED.)

A STUDY OF THAT REPORT LEADS US TO THE VIEW THAT THE COMMITTEE, IN RECOMMENDING THE AMENDMENT, HAD IN MIND THAT THE TERM "ANY INCREASE IN COMPENSATION GRANTED BY LAW" WAS TO BE SYNONYMOUS WITH THE LANGUAGE APPEARING IN THE REPORT AND READING "ANY INCREASE IN COMPENSATION GRANTED BY ACT OF CONGRESS.' HENCE, SINCE THE PREVAILING WAGE ADJUSTMENTS HERE INVOLVED WERE ADMINISTRATIVELY GRANTED UNDER THE PROVISIONS OF 5 U.S.C. 1082 (7), THEY OBVIOUSLY CANNOT BE SAID TO HAVE BEEN GRANTED BY "ACT OF CONGRESS.' HENCE, IN LIGHT OF THE FOREGOING REPORT, NO BASIS EXISTS FOR THE U.S. CIVIL SERVICE COMMISSION BY REGULATION TO SPECIFICALLY DESIGNATE WAGE BOARD INCREASES AS BEING ANY OTHER THAN "EQUIVALENT INCREASES IN COMPENSATION.' NEITHER MAY YOUR REGULATIONS PROPERLY BE TO THE CONTRARY. HENCE, UNDER EXISTING LAW AND REGULATION, WE MUST CONCLUDE THAT THE PREVAILING WAGE INCREASES HERE INVOLVED ARE "EQUIVALENT INCREASES" FOR PERIODIC STEP-INCREASE PURPOSES, SO THAT THE EMPLOYEES CONCERNED, UPON TRANSFER TO CLASSIFICATION ACT POSITIONS, ARE REQUIRED TO SERVE THE PRESCRIBED PERIOD OF TIME FROM THE DATE OF SUCH EQUIVALENT INCREASE BEFORE BECOMING ENTITLED TO PERIODIC STEP-INCREASES UNDER THE CLASSIFICATION ACT. UPON SUCH TRANSFERS THE PROVISIONS OF SECTION 25.103 (B) (1), FEDERAL EMPLOYEES PAY REGULATIONS, PROVIDING THAT IF THE EMPLOYEE'S HIGHEST PREVIOUS RATE FALLS BETWEEN TWO SCHEDULED RATES OF THE NEW GRADE HE MAY BE GIVEN THE HIGHER RATE, WOULD BE FOR APPLICATION. HOWEVER, WHEN IN ANY CASE THE EMPLOYEE COMPLETES THE PRESCRIBED TIME FOR STEP-INCREASE ON THE DATE OF TRANSFER TO A CLASSIFICATION ACT POSITION, THE CHANGES SHOULD BE PROCESSED SO AS TO PROCURE THE MAXIMUM BENEFITS FOR SUCH EMPLOYEE. 36 COMP. GEN. 217.

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