B-150394, JANUARY 16, 1963, 42 COMP. GEN. 380

B-150394, JANUARY 16, 1963, 42 COMP. GEN. 380

COMPENSATION - DOWNGRADING - SAVED COMPENSATION - INCREASES ON SAVED SALARY. COMPENSATION - DOWNGRADING - SAVED COMPENSATION - INCREASES ON SAVED SALARY. COMPENSATION - PERIODIC STEP-INCREASES - SERVICE CREDITS - EFFECT OF FEDERAL SALARY REFORM ACT OF 1962 A GRADE GS-2 EMPLOYEE WHO ON OCTOBER 13, 1962, THE DAY BEFORE THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT, THE 1962 AMENDMENTS TO THE CLASSIFICATION ACT OF 1949, WAS IN RECEIPT OF THE SEVENTH SCHEDULED RATE OF GRADE GS-3, A SAVED RATE OF COMPENSATION GRANTED UNDER THE ACT OF JUNE 18, 1956, SECTION 517 (B) OF THE CLASSIFICATION ACT (5 U.S.C. 1107 (B) ( WHEN THE EMPLOYEE WAS REDUCED IN GRADE FROM GS-3 TO GS-2, AN ACT ALSO AUTHORIZING THE SAVING TO THE EMPLOYEE OF INCREASES PROVIDED BY LAW IN THE SAVED RATE OF BASIC COMPENSATION, IS ENTITLED IN THE INITIAL PAY ADJUSTMENT PROVIDED BY THE FEDERAL SALARY REFORM ACT TO BE ADVANCED TO STEP 8 OF GS-3 UNDER SECTION 602 (B) (1) OF THE ACT (5 U.S.C. 1113 NOTE), THE SAVED RATE OF COMPENSATION BEING BASED UPON THE SEVENTH SCHEDULED RATE OF GS-3, SECTION 602 (B) (1) PROVIDING FOR ADVANCEMENT OF A SEVENTH SCHEDULED RATE BELOW THE GRADE OF GS-4 TO STEP 8 APPLIES. AN EMPLOYEE WHOSE SEVENTH SCHEDULED STEP OF GS-4 WAS SAVED UNDER THE ACT OF JUNE 18, 1956, SECTION 507 (A) OF THE CLASSIFICATION ACT OF 1949 (5 U.S.C. 1107 (A) ( UPON REDUCTION TO GRADE GS-2 AND SUBSEQUENT PROMOTION TO GS-3, AND WHO WAS IN RECEIPT OF SUCH SAVED BASIC RATE OF COMPENSATION ON OCTOBER 13, 1962, THE DAY BEFORE THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT, THE 1962 AMENDMENTS TO THE CLASSIFICATION ACT OF 1949, IS ENTITLED IN ACCORDANCE WITH THE 1956 ACT SAVING TO THE EMPLOYEE THE INCREASES PROVIDED BY LAW IN THE SAVED RATE OF BASIC COMPENSATION TO AN INITIAL PAY ADJUSTMENT UNDER SECTION 602 (B) (3) OF THE FEDERAL SALARY REFORM ACT AND THE EMPLOYEE'S SAVED GS-4 SALARY MAY BE INCREASED TO THE NEW SCHEDULED RATE PROVIDED FOR STEP 7, GRADE GS-4. AN EMPLOYEE WHO UPON PROMOTION TO GRADE GS-4 RETAINED THE TOP LONGEVITY STEP RATE OF COMPENSATION OF THE GS-3 GRADE TO WHICH ADVANCED IN JULY 1961, A RATE OF COMPENSATION IN THE GRADE GS-4 BETWEEN THE TOP SCHEDULED RATE AND THE FIRST LONGEVITY RATE, AND WHO ON THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT, THE 1962 AMENDMENTS TO THE CLASSIFICATION ACT OF 1949, IS GIVEN STEP 8 OF GS-4 UNDER THE INITIAL ADJUSTMENT PROVISION OF SECTION 602 (B) (8), WHICH INCREASE WAS NOT EQUIVALENT TO A WITHIN-GRADE INCREASE, IS ENTITLED IN DETERMINING CREDITABLE SERVICE PERFORMED PRIOR TO THE EFFECTIVE DATE OF THE ACT, PURSUANT TO SECTION 602 (B) (10), TO BEGIN THE 156-CALENDAR WEEK WAITING PERIOD PRESCRIBED BY SECTION 603, WHICH RELATES TO STEP INCREASES, FROM THE DATE OF THE LAST EQUIVALENT INCREASE, JULY 1961.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, JANUARY 16, 1963:

YOUR LETTER OF NOVEMBER 29, 1962, PRESENTS FOR OUR CONSIDERATION TWO QUESTIONS CONCERNING INITIAL PAY ADJUSTMENTS UNDER THE FEDERAL SALARY REFORM ACT OF 1962, 76 STAT. 841, 5 U.S.C. 1171 NOTE, FOR EMPLOYEES RECEIVING RETAINED RATES.

THE TWO QUESTIONS READ AS FOLLOWS:

1. AN EMPLOYEE WAS REDUCED IN GRADE FROM GS-3 ($3,685, THE TOP SCHEDULED RATE OF GS-3) TO GS-2 ($3,470, THE TOP SCHEDULED RATE OF GS 2) ON DECEMBER 4, 1955. SHE WAS RETROACTIVELY GRANTED SALARY RETENTION BENEFITS UNDER THE SALARY RETENTION ACT OF 1956 AND HER SALARY WAS ADJUSTED UPWARD TO HER PREVIOUS RATE OF $3,685. SUCCESSIVE PAY INCREASES BROUGHT HER SALARY TO $4,390 ON OCTOBER 13, 1962, STILL BASED ON THE TOP SCHEDULED STEP OF GS- 3.

SECTION 507 (B) OF THE CLASSIFICATION ACT PROVIDES THAT SUCH AN EMPLOYEE SHALL CONTINUE TO RECEIVE THE RATE OF BASIC COMPENSATION TO WHICH HE WAS ENTITLED PRIOR TO THE DEMOTION,"INCLUDING EACH INCREASE PROVIDED BY LAW IN SUCH RATE OF BASIC COMPENSATION.' ARE WE CORRECT IN THE CONCLUSION THAT SECTION 602 (B) (1) OF THE FEDERAL SALARY REFORM ACT SHOULD BE APPLIED TO THIS EMPLOYEE'S RATE AS A GS-3 RATE, SO THAT HER RETAINED RATE WOULD BECOME $4,580?

THE POSSIBLE ALTERNATIVE SUGGESTED IS TO APPLY SECTION 602 (B) (8) AND 602 (B) (2), TREATING THE RATE OF $4,390 AS BETWEEN THE SECOND AND THIRD LONGEVITY RATES OF GS-2, SO THAT THE ADJUSTED RATE WOULD BE $4,610.

2. AN EMPLOYEE WAS REDUCED IN GRADE FROM GS-4 TO GS-2 ON NOVEMBER 17, 1957. SHE WAS GRANTED SALARY RETENTION BENEFITS UNDER THE SALARY RETENTION ACT OF 1956 AND RETAINED HER SALARY OF $3,685 (THE TOP SCHEDULED STEP OF GS-4). ON NOVEMBER 1, 1959 SHE WAS PROMOTED FROM GS 2 TO GS-3, STILL RETAINING THE TOP SCHEDULED RATE OF GS-4. SUCCESSIVE SALARY INCREASES BROUGHT HER SALARY TO $4,670 BY OCTOBER 13, 1962.

SECTION 507 (A) OF THE CLASSIFICATION ACT HAS THE SAME LANGUAGE WITH RESPECT TO EMPLOYEES DEMOTED AFTER JUNE 17, 1956, AS SECTION 507 (B) HAS WITH RESPECT TO EMPLOYEES DEMOTED IN THE PERIOD FROM JULY 1, 1954 THROUGH JUNE 17, 1956. ARE WE CORRECT IN THE CONCLUSION THAT THE RETAINED RATE SHOULD BE TREATED AS A GS-4 RATE AND SECTION 602 (B) (3) OF THE FEDERAL SALARY REFORM ACT APPLIED, MAKING THE RATE AS OF OCTOBER 14 $4,950?

THE POSSIBLE ALTERNATIVE SUGGESTED IS TO APPLY SECTION 602 (B) (8) AND 602 (B) (2), TREATING THE RATE OF $4,670 AS BETWEEN THE SECOND AND THIRD LONGEVITY RATES OF GS-3, SO THAT THE ADJUSTED RATE WOULD BE $4,955.

SECTION 507 (B) OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1107 (B), AS ADDED BY THE ACT OF JUNE 18, 1956, PUBLIC LAW 594, 70 STAT. 291, READS, IN PERTINENT PART, AS FOLLOWS:

EACH * * * EMPLOYEE SUBJECT TO THIS ACT---

SHALL BE GRANTED * * * THE RATE OF BASIC COMPENSATION TO WHICH HE WAS ENTITLED IMMEDIATELY PRIOR TO SUCH RECLASSIFICATION OF HIS POSITION * * * INCLUDING ANY INCREASES IN SUCH RATE OF BASIC COMPENSATION PROVIDED BY LAW AT ANY TIME WHILE SUCH * * * EMPLOYEE IS IN SUCH POSITION * * *.

THE EMPLOYEE IN QUESTION 1 WAS REDUCED FROM GRADE GS-3 TO GS-2 ON DECEMBER 4, 1955, AND ADMINISTRATIVELY WAS GRANTED SAVED SALARY UNDER PUBLIC LAW 594, WHICH SAVED SALARY ON OCTOBER 13, 1962, THE DAY BEFORE THE FEDERAL SALARY REFORM ACT OF 1962 BECAME EFFECTIVE, WAS $4,390. THAT RATE IS BASED UPON THE HIGHEST SCHEDULED RATE OF GRADE GS-3 AT THE TIME. SECTION 602 (B) (1) OF THE CLASSIFICATION ACT AMENDMENTS OF 1962 WHICH IS TITLE II OF THE FEDERAL SALARY REFORM ACT OF 1962, 76 STAT. 844, 5 U.S.C. 1113 NOTE, READS, IN PERTINENT PART, AS FOLLOWS:

IF THE * * * EMPLOYEE IS RECEIVING BASIC COMPENSATION IMMEDIATELY PRIOR TO THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGINS ON OR AFTER THE DATE OF ENACTMENT OF THIS ACT AT THE * * * SEVENTH SCHEDULED RATE * * * OF A GRADE BELOW GRADE 4 OF THE GENERAL SCHEDULE OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, HE SHALL BE ADVANCED AS FOLLOWS: EMPLOYEES IN STEP 1 TO STEP 2 OF THE NEW SCHEDULE; * * * STEP 7 TO STEP 8 * * *.

WE ARE OF THE OPINION THAT UNDER SECTION 602 (B) (1), ABOVE, THE EMPLOYEE IN QUESTION 1 WHOSE SAVED RATE OF BASIC COMPENSATION WAS BASED UPON THE SEVENTH SCHEDULED RATE OF GS-3 IS ENTITLED TO BE ADVANCED IN ACCORDANCE WITH PUBLIC LAW 594 TO THE SALARY RATE OF $4,580, STEP 8, GS-3. QUESTION 1 IS ANSWERED ACCORDINGLY. SEE 38 COMP. GEN. 216.

THE EMPLOYEE IN QUESTION 2 WAS REDUCED FROM GRADE GS-4 TO GS-2 ON NOVEMBER 17, 1957, AND ADMINISTRATIVELY GRANTED SAVED SALARY UNDER SECTION 507 (A) OF THE CLASSIFICATION ACT OF 1949, AS ADDED BY THE ACT OF JUNE 18, 1956, PUBLIC LAW 594, 70 STAT. 291, 5 U.S.C. 1107 (A), SINCE THAT PROVISION COVERS SUCH TRANSACTIONS OCCURRING AFTER JUNE 17, 1956. FROM THE FACTS SUBMITTED IT WOULD APPEAR THAT PUBLIC LAW 85 737, ENACTED AUGUST 23, 1958, 5 U.S.C. 1107, AMENDING THE FOREGOING SECTIONS OF PUBLIC LAW 594, HAS NO APPLICATION TO THIS MATTER. THIS EMPLOYEE'S SALARY ON OCTOBER 13, 1962, THE DAY BEFORE THE CLASSIFICATION ACT AMENDMENTS OF 1962 BECAME EFFECTIVE, REPRESENTED SAVED SALARY, I.E., GRADE GS-4, $4,670. THAT RATE IS BASED UPON THE HIGHEST SCHEDULED RATE OF THE GRADE FROM WHICH REDUCED NOVEMBER 17, 1957. UNDER THE FEDERAL SALARY REFORM ACT OF 1962 THE SAVED SALARY HERE INVOLVED, SEVENTH STEP, GS-4, $4,670, A SCHEDULED RATE, BECAME $4,950, THE NEW SCHEDULED RATE, GRADE GS-4, AND IN VIEW OF THE LANGUAGE IN SECTION 507 (A), I.E., ,INCLUDING ANY INCREASES IN SUCH RATE OF BASIC COMPENSATION PROVIDED BY LAW AT ANY TIME WHILE SUCH * * * EMPLOYEE IS IN SUCH POSITION," THE EMPLOYEE IS ENTITLED IN ACCORDANCE WITH PUBLIC LAW 594 TO HAVE HER SAVED GS-4 SALARY INCREASED UNDER SECTION 602 (B) (3), 5 U.S.C. 1113 NOTE, TO THE NEW SCHEDULED RATE OF STEP 7, GRADE GS-4, $4,950. THAT QUESTION IS ANSWERED ACCORDINGLY.

YOUR LETTER PRESENTS ANOTHER QUESTION NOT CONCERNED WITH RETAINED RATES. IT READS AS FOLLOWS:

3. ANOTHER QUESTION WE ARE ASKED TO PRESENT CONCERNS THE CREDITING OF PAST SERVICE TOWARD A WITHIN-GRADE INCREASE UNDER THE FEDERAL SALARY REFORM ACT. AN EMPLOYEE WAS ADVANCED TO THE TOP LONGEVITY STEP OF GS-3, $4,705, IN JULY, 1961. IN MARCH 1962, SHE WAS PROMOTED TO GS 4, AND CONTINUED TO RECEIVE THE RATE OF $4,705, WHICH WAS BETWEEN THE TOP SCHEDULED RATE AND THE FIRST LONGEVITY RATE OF GS-4. ON THE EFFECTIVE DATE OF THE SALARY REFORM ACT SHE WENT TO STEP 8 OF GS-4 UNDER THE INITIAL ADJUSTMENT PROVISION OF SECTION 602 (B) (8). THIS INCREASE WAS NOT, OF COURSE, EQUIVALENT TO A WITHIN-GRADE INCREASE.

UNDER SECTION 602 (B) (10), DOES THE THREE-YEAR WAITING PERIOD TOWARD STEP 9 BEGIN IN JULY, 1961, THE DATE OF THE LAST EQUIVALENT INCREASE?

SECTION 602 (B) (10), 76 STAT. 845, 5 U.S.C. 1113 NOTE, READS AS FOLLOWS:

SERVICE OF OFFICERS AND EMPLOYEES PERFORMED IMMEDIATELY PRECEDING THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGINS ON OR AFTER THE DATE OF ENACTMENT OF THIS ACT, IN THE GRADE OF THE GENERAL SCHEDULE IN WHICH THEIR RESPECTIVE POSITIONS WERE PLACED ON SUCH DAY, SHALL BE COUNTED TOWARD NOT TO EXCEED ONE STEP INCREASE UNDER THE TIME IN GRADE PROVISIONS OF SUBSECTION (A) OF SECTION 701 OF THE CLASSIFICATION ACT OF 1949 AS AMENDED BY THIS ACT.

IN DETERMINING CREDITABLE SERVICE THEREUNDER, OUR OPINION IS THAT THE EMPLOYEE IN THIS CASE IS ENTITLED TO BEGIN THE 156-CALENDAR WEEK WAITING PERIOD PRESCRIBED BY SECTION 603 OF THE FEDERAL SALARY REFORM ACT OF 1962, 76 STAT. 847, AMENDING SECTION 701, TITLE VII OF THE CLASSIFICATION ACT OF 1949, AS AMENDED (5 U.S.C. 1121-1125), RELATING TO STEP INCREASES, FROM THE DATE OF THE LAST EQUIVALENT INCREASE, I.E., JULY, 1961. 22 COMP. GEN. 151, 336; 27 ID. 278. CF. 42 COMP. GEN. 249. QUESTION 3 IS ANSWERED ACCORDINGLY.