B-151785, AUGUST 1, 1963, 43 COMP. GEN. 103

B-151785, AUGUST 1, 1963, 43 COMP. GEN. 103

COMPENSATION - RATES - HIGHEST PREVIOUS RATE - ADJUSTMENTS - UNDER 1962 SALARY ACT. COMPENSATION - RATES - HIGHEST PREVIOUS RATE - ADJUSTMENTS - UNDER 1962 SALARY ACT. COMPENSATION - RATES - HIGHEST PREVIOUS RATE ADJUSTMENTS - UNDER 1962 SALARY ACT. COMPENSATION - RATES - HIGHEST PREVIOUS RATE - ADJUSTMENTS - UNDER 1962 SALARY ACT EMPLOYEES WITH PRIOR SERVICE WHO WERE APPOINTED BEFORE OCTOBER 14, 1962, THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT OF 1962, BUT WHO, BECAUSE THEIR SERVICE RECORDS HAD NOT BEEN RECEIVED, HAD TWO SALARY ADJUSTMENTS MADE AT THE SAME TIME, THE FIRST, ADJUSTING THEIR SALARIES UNDER THE HIGHEST PREVIOUS RATE RULE RETROACTIVELY TO THE DATE OF APPOINTMENT ON THE BASIS OF THE GRADE, STEP AND SALARY RATE IN EFFECT IMMEDIATELY PRIOR TO THE 1962 ACT, AND THE SECOND ON THE BASIS OF THE HIGHER STEPS UNDER THE 1962 ACT, HAVE IN EFFECT HAD THE HIGHEST PREVIOUS RATE RULE IN THE SECOND ADJUSTMENT APPLIED TO AN ACTION WHICH WAS NOT A TRANSFER OR REASSIGNMENT AS DEFINED IN SECTION 25.102 OF THE FEDERAL EMPLOYEES PAY REGULATIONS AND, THEREFORE, THE OVERPAYMENT RESULTING FROM THE SECOND ADJUSTMENT IS FOR RECOVERY. AN EMPLOYEE WHO WAS APPOINTED TO A POSITION IN GRADE GS-6 STEP (A) PRIOR TO OCTOBER 14, 1962, THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT OF 1962, AND WHEN HER PREVIOUS SERVICE WAS VERIFIED ON OCTOBER 23 HAD HER SALARY ADJUSTED TO STEP (G) RETROACTIVELY TO THE DATE OF APPOINTMENT ON THE BASIS OF THE RATE IN EFFECT IMMEDIATELY PRIOR TO THE 1962 ACT AND AT THE SAME TIME ADVANCED TO STEP 10, THE HIGHEST RATE IN GRADE 6 UNDER THE 1962 ACT, FROM OCTOBER 14, 1962, HAS HAD THE HIGHEST PREVIOUS RATE RULE IN THE CASE OF THE SECOND ADVANCEMENT IMPROPERLY APPLIED WHEN THERE WAS NO TRANSFER, REASSIGNMENT, ETC., AS DEFINED IN SECTION 25.102 OF THE FEDERAL EMPLOYEES PAY REGULATIONS AND THE EMPLOYEE IS LIABLE FOR THE OVERPAYMENT OF COMPENSATION. AN EMPLOYEE WHO WAS APPOINTED TO A GS-3 POSITION STEP (A) PRIOR TO OCTOBER 14, 1962, THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT OF 1962, AND WHEN HER PREVIOUS SERVICE IN GRADE GS-7 WAS VERIFIED ON OCTOBER 23, 1962, HAD THE SALARY RATE INCREASED TO STEP (G) RETROACTIVELY TO THE DATE OF HER APPOINTMENT AND AT THE SAME TIME ADVANCED TO STEP 10 FROM OCTOBER 14, 1962, ON THE BASIS OF THE HIGHEST SCHEDULED SALARY RATE FOR GRADE GS-3 UNDER THE 1962 ACT HAS HAD THE HIGHEST PREVIOUS RATE RULE IN THE CASE OF THE SECOND ADVANCEMENT IMPROPERLY APPLIED, AND, THEREFORE, THE EMPLOYEE SHOULD HAVE HER SALARY ADJUSTED TO STEP 8 UNDER SECTION 602 (B) (1) WHICH AUTHORIZED THE GRANTING OF A ONE STEP ADVANCE FOR EMPLOYEES SERVING IN GRADES BELOW 4 IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE 1962 ACT, AND THE OVERPAYMENT RECEIVED BY THE EMPLOYEE IS REQUIRED TO BE RECOVERED. AN EMPLOYEE WHO HAD HER SALARY RATE REDUCED TO $4,880, THE RATE FOR GS-4 (Y), WHEN HER SAVED SALARY RATE OF $5,335 (GS-5 (G) ( TERMINATED IN JULY 1962, AND WHO UNDER THE FEDERAL SALARY REFORM ACT OF 1962 HAD HER SALARY ADJUSTED TO STEP 10 OF GS-4, PRIOR TO COMPLETING THE REQUIRED 156 WEEKS IN THE NEXT LOWER STEP AND SHORTLY BEFORE SHE WAS TRANSFERRED AND PROMOTED TO GS-7 (2), HAS RECEIVED AN OVERPAYMENT OF COMPENSATION UNDER THE 1962 ACT WHICH DOES NOT CONTAIN ANYTHING TO SUPPORT AN ADJUSTMENT WITHOUT COMPLETION OF THE REQUIRED SERVICE; THEREFORE, THE EMPLOYEE WHO SHOULD HAVE HAD HER SALARY ADJUSTED TO STEP 9 AT $5,230 AND UPON PROMOTION SHOULD HAVE BEEN GIVEN THE EQUIVALENT OF TWO STEP-INCREASES OR GS-7 (1) $5,540 IS LIABLE FOR REFUND OF THE OVERPAYMENT.

TO THE SECRETARY OF COMMERCE, AUGUST 1, 1963:

IN A RECENT SITE AUDIT OF PAY OF CIVILIAN EMPLOYEES AND EXAMINATION OF RELATED RECORDS IN THE OFFICE OF THE SECRETARY, DEPARTMENT OF COMMERCE, OUR CIVIL ACCOUNTING AND AUDITING DIVISION QUESTIONED THE ADMINISTRATIVE ADJUSTMENTS OF THE RATES OF COMPENSATION OF NANCY ANTHONY, DOROTHY M. JONES, AND LAURA M. ZIRKLE, MADE CONCURRENTLY WITH THE INCREASES PROVIDED BY THE FEDERAL SALARY REFORM ACT OF 1962, PUBLIC LAW 87-793, APPROVED OCTOBER 11, 1962, 76 STAT. 841, 5 U.S.C. 1171 NOTE.

EFFECTIVE SEPTEMBER 24, 1962, MISS ANTHONY WAS APPOINTED TO THE POSITION OF SECRETARY (STENOGRAPHY), IN THE AREA REDEVELOPMENT ADMINISTRATION AT GRADE GS-6 (A), $4,830 PER ANNUM, SUBJECT TO ADJUSTMENT UPON VERIFICATION OF HER PRIOR GOVERNMENT SERVICE. SUBSEQUENTLY, IT WAS ASCERTAINED THAT SHE HAD ATTAINED THE RATE OF $7,186.29 PER ANNUM, WHILE EMPLOYED IN THE HOUSE OF REPRESENTATIVES, AND ON OCTOBER 23, 1962, A PERSONNEL ACTION WAS PROCESSED WHICH INCREASED HER ENTRANCE RATE TO GS-6 (G), $5,820 PER ANNUM, RETROACTIVELY TO THE DATE OF THE APPOINTMENT. ON THE SAME DAY A SECOND PERSONNEL ACTION WAS PROCESSED WHICH ADVANCED HER TO GS-6 (10), $6,565 PER ANNUM, EFFECTIVE OCTOBER 14, 1962, THE EFFECTIVE DATE OF PUBLIC LAW 87- 793, ABOVE.

EFFECTIVE SEPTEMBER 19, 1962, MRS. JONES WAS GIVEN A TEMPORARY POSITION (MADE PERMANENT DECEMBER 9, 1962) OF CLERK-TYPIST, GRADE GS-3 (A), IN THE AREA REDEVELOPMENT ADMINISTRATION AT $3,760 PER ANNUM, SUBJECT TO ADJUSTMENT UPON VERIFICATION OF HER PRIOR GOVERNMENT SERVICE. UPON ASCERTAINING THAT MRS. JONES PREVIOUSLY HELD A POSITION IN GRADE GS-7 IN ANOTHER AGENCY, A PERSONNEL ACTION WAS PROCESSED ON OCTOBER 23, 1962, WHICH INCREASED HER ENTRANCE RATE TO GS-3 (G), $4,390, RETROACTIVELY TO THE DATE OF HER APPOINTMENT AND, AS IN THE CASE OF MISS ANTHONY, A SECOND PERSONNEL ACTION WAS PROCESSED ON THE SAME DAY WHICH ADVANCED HER TO STEP 10, $4,830 PER ANNUM, EFFECTIVE OCTOBER 14, 1962.

ON OCTOBER 14, 1962, MRS. LAURA ZIRKLE, AN EMPLOYEE OF THE BUREAU OF THE CENSUS IN GRADE GS-4 (9), $4,880 PER ANNUM, WAS ADVANCED TO GS-4 (10) AT $5,370 AND ON JANUARY 19, 1963, WAS REASSIGNED WITH PROMOTION TO THE BUSINESS AND DEFENSE SERVICES ADMINISTRATION AT GS-7 (2), $5,725 PER ANNUM.

THE PROVISIONS FOR ADJUSTMENTS IN THE SALARY RATES OF MISS ANTHONY AND MRS. JONES WERE MADE IN ORDER TO GIVE THEM THE BENEFITS OF THE HIGHEST PREVIOUS RATE RULE SET FORTH IN SECTION 25.103 (B) OF THE FEDERAL EMPLOYEES PAY REGULATIONS (Z1-315) IN PERTINENT PART AS FOLLOWS:

(B) POSITION OR APPOINTMENT CHANGES. SUBJECT TO THE MANDATORY REQUIREMENTS OF PARAGRAPH (G) OF THIS SECTION AND SECTION 25.104, AN EMPLOYEE WHO IS REEMPLOYED, TRANSFERRED, REASSIGNED, PROMOTED, REPROMOTED OR DEMOTED, MAY BE PAID AT ANY SCHEDULED RATE FOR HIS GRADE WHICH DOES NOT EXCEED HIS HIGHEST PREVIOUS RATE. * * *

ON THE DATE THE APPOINTMENTS WERE MADE THE HIGHEST SCHEDULED RATE FOR GRADE GS-6 WAS STEP (G) AT $5,820 PER ANNUM, AND FOR GRADE GS-3, STEP (G) AT $4,390 PER ANNUM. THESE RATES REMAINED IN EFFECT UNTIL OCTOBER 14, 1962, THE EFFECTIVE DATE OF PUBLIC LAW 87-793, ABOVE. CONSEQUENTLY, THE PERSONNEL ACTIONS BY WHICH THE EMPLOYEES WERE GRANTED THOSE RATES RETROACTIVELY TO THE DATE OF THEIR APPOINTMENTS WERE IN ACCORD WITH THE QUOTED PORTION OF THE REGULATIONS AND THE NOTATIONS RECORDED ON THE PAPERS (FORM 50--- NOTIFICATION OF PERSONNEL ACTION) WHICH EVIDENCED THEIR APPOINTMENTS.

THE FEDERAL SALARY REFORM ACT OF 1962, IDENTIFIES THE WITHIN-GRADE SALARY STEPS NUMERICALLY RATHER THAN ALPHABETICALLY. STEPS "A" THROUGH "G" BECAME STEPS "1" THROUGH "7.' IN ADDITION IT CONVERTED THE LAST THREE STEPS (THERETOFORE KNOWN AS LONGEVITY STEPS X, Y, AND Z) TO SCHEDULED SALARY STEPS. THUS, WITH THE EFFECTIVE DATE OF THAT ACT, STEP 10 AT $6,565 BECAME THE HIGHEST SCHEDULED SALARY RATE IN GRADE GS 6 WHILE STEP 10 AT $4,830 BECAME THE HIGHEST SCHEDULED RATE IN GRADE GS-3.

IN RESPONSE TO THE QUESTIONS RAISED DURING THE AUDIT THE CERTIFYING OFFICER CONTENDED THAT SINCE THE EMPLOYEES' SERVICE FOLDERS WERE NOT RECEIVED BEFORE THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT OF 1962, THE ADJUSTMENTS WHICH PLACED THE EMPLOYEES IN STEP 10 OF THEIR GRADES WERE CORRECT.

UNDER THE STATUTE AND APPLICABLE REGULATIONS THE HIGHEST SALARY RATES PERMISSIBLE AT THE TIME OF SUCH APPOINTMENTS WERE THOSE PROVIDED FOR STEPS 7 OF THE GRADES, AND UPON THE RETROACTIVELY EFFECTIVE ADJUSTMENTS SUCH RATES BECAME THEIR CORRECT AND LEGAL RATES OF COMPENSATION FROM THE DATES OF THEIR APPOINTMENTS UNTIL THE NEW PAY ACT BECAME EFFECTIVE.

SECTION 602 (B) (3) OF THE FEDERAL SALARY REFORM ACT OF 1962, 5 U.S.C. 1113 NOTE, ABOVE, PROVIDES:

(3) IF THE OFFICER OR 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 FIRST, SECOND, THIRD, FOURTH, FIFTH, SIXTH, OR SEVENTH SCHEDULED RATE, OR AT THE FIRST, SECOND, OR THIRD LONGEVITY RATE, OF GRADE 4, 5, 6, 7, 8, 9 OR 10 OF THE GENERAL SCHEDULE OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, HE SHALL RECEIVE A RATE OF BASIC COMPENSATION AT THE CORRESPONDING FIRST, SECOND, THIRD, FOURTH, FIFTH, SIXTH, SEVENTH, EIGHTH, NINTH, OR TENTH RATE OF THE APPROPRIATE GRADE IN EFFECT ON AND AFTER SUCH DAY.

SINCE MISS ANTHONY'S CORRECT GRADE, STEP, AND SALARY RATE WERE GS-6, STEP G, $5,820, IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE ACT, HER GRADE, STEP, AND SALARY RATE BECAME GS-6, STEP 7, $6,055 PER ANNUM, WITH THE EFFECTIVE DATE THEREOF.

WHILE SECTION 602 (B) (1) OF THE ACT, 5 U.S.C. 1113 NOTE, ALSO BASES THE INCREASE GRANTED THEREIN UPON THE SALARY RATE THE EMPLOYEE WAS RECEIVING IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF THE ACT, IT PROVIDES FOR A ONE- STEP ADVANCE FOR EMPLOYEES SERVING IN GRADES BELOW 4. THEREFORE, MRS. JONES BECAME ENTITLED TO GRADE GS-3, STEP 8, $4,580 PER ANNUM, UNDER THE NEW ACT.

UNDER THE REGULATIONS QUOTED IN PART HEREIN, AN EMPLOYEE'S HIGHEST PREVIOUS RATE MAY BE TAKEN INTO CONSIDERATION IN FIXING HIS SALARY RATE UPON REEMPLOYMENT, TRANSFER, REASSIGNMENT, PROMOTION, REPROMOTION OR DEMOTION. WE FIND NOTHING IN THE REGULATIONS OR IN THE 1962 PAY ACT WHICH AUTHORIZES CONSIDERATION OF THE HIGHEST PREVIOUS RATE OTHER THAN IN CONNECTION WITH SUCH PERSONNEL ACTIONS. SINCE MISS ANTHONY AND MRS. JONES WERE NOT TRANSFERRED, REASSIGNED, ETC., AS THOSE TERMS ARE DEFINED IN SECTION 25.102 OF THE FEDERAL EMPLOYEES PAY REGULATIONS, THE SECOND PERSONNEL ACTIONS PURPORTING TO PLACE THEM IN STEP 10 OF THEIR GRADES WERE ERRONEOUS.

SO FAR AS PERTINENT HERE, THE RECORD SHOWS THAT MRS. ZIRKLE WAS PROMOTED FROM GRADE GS-4 (X) TO GS-5 (G) ON OCTOBER 20, 1957. HOWEVER, ON JULY 10, 1960, SHE WAS REDUCED TO GS-4 WITH A SAVED PAY RATE OF $5,335, WHICH SHE CONTINUED TO RECEIVE FOR 2 YEARS OR UNTIL JULY 10, 1962. SEE 5 U.S.C. 1107 (A). MEANWHILE, ON OCTOBER 16, 1960, SHE RECEIVED A TEMPORARY APPOINTMENT TO GRADE GS-5 (G), IN WHICH SHE SERVED UNTIL JUNE 24, 1962. THIS TEMPORARY PROMOTION DID NOT INTERRUPT THE WAITING PERIOD OF 3 YEARS THEN REQUIRED FOR LONGEVITY STEP INCREASES. SEE PUBLIC LAW 87-769, APPROVED SEPTEMBER 13, 1960, 13 U.S.C. 24. THEREFORE, MRS. ZIRKLE REACHED THE SECOND LONGEVITY STEP (Y) OF HER PERMANENT GRADE IN OCTOBER 1960 AND THE NEW WAITING PERIOD OF 156 WEEKS REQUIRED TO ATTAIN THE THIRD LONGEVITY STEP (NOW SCHEDULED SALARY STEP 10) BEGAN AND WOULD NOT HAVE BEEN COMPLETED UNTIL OCTOBER 1963. HOWEVER, WITH THE ADVANCEMENT TO STEP (Y) SHE COULD NOT BE GIVEN A SALARY INCREASE FOR THE REASON THAT THE SAVED PAY RATE SHE WAS RECEIVING WAS IN EXCESS OF THE RATE PRESCRIBED BY LAW FOR THAT STEP.

MRS. ZIRKLE'S ENTITLEMENT TO THE SAVED PAY RATE OF $5,335 (GS-5 (G) ( TERMINATED ON JULY 10, 1962, AND HER SALARY RATE WAS REDUCED AT THAT TIME TO $4,880 WHICH WAS THE LEGAL RATE FOR GS-4 (Y), THE GRADE IN WHICH SHE WAS SERVING. ON OCTOBER 14, 1962, THE EFFECTIVE DATE OF THE PAY ACT OF 1962 SHE WAS PLACED IN STEP 10 OF THE GRADE. MRS. ZIRKLE HAD NOT COMPLETED THE REQUIRED 156 WEEKS IN THE NEXT LOWER STEP AND WE FIND NOTHING IN THE NEW PAY ACT TO SUPPORT SUCH ACTION. THEREAFTER, ON JANUARY 19, 1963, SHE WAS TRANSFERRED AND PROMOTED TO GRADE GS-7 (2). UNDER THE SUBSECTION OF THE ACT QUOTED HEREIN, IT IS OUR VIEW THAT ON OCTOBER 14 SHE SHOULD HAVE BEEN PLACED IN STEP 9 AT $5,230 AND UPON PROMOTION SHE SHOULD HAVE BEEN GIVEN THE EQUIVALENT OF TWO STEP INCREASES OR GS-7 (1), $5,540 PER ANNUM. THE SALARY RATES OF THE EMPLOYEES SHOULD BE ADJUSTED ACCORDINGLY. HOWEVER, WE HAVE BEEN INFORMED THAT MISS ANTHONY TRANSFERRED TO THE CIVIL RIGHTS COMMISSION ON MARCH 15, 1963.

SINCE WE ARE WITHOUT AUTHORITY TO WAIVE RECOVERY OF THE OVERPAYMENTS INVOLVED APPROPRIATE ACTION SHOULD BE TAKEN BY YOUR DEPARTMENT TO EFFECT RECOVERY THEREOF FROM MRS. JONES AND MRS. ZIRKLE. OUR CIVIL ACCOUNTING AND AUDITING DIVISION WILL INITIATE THE ACTION TO EFFECT RECOVERY FROM MISS ANTHONY.