B-153998, DEC. 16, 1964

B-153998, DEC. 16, 1964

TO MAJOR GEORGE A. RINGS, ACCOUNTING AND FINANCE OFFICER, UNITED STATES AIR FORCE:

WE REFER TO YOUR LETTER OF AUGUST 27, 1964, WITH ENCLOSURES (RECEIVED HERE OCTOBER 5, 1964), REQUESTING OUR DECISION WHETHER YOU MAY CERTIFY FOR PAYMENT A VOUCHER IN THE NET AMOUNT OF $404.82 IN FAVOR OF CHARLES F. STOLL, JR., REPRESENTING SALARY ADJUSTMENT INCIDENT TO HIS EMPLOYMENT AT THE BROOKLEY AIR FORCE BASE.

IT IS STATED THAT ON JANUARY 3, 1963, THE EMPLOYEE HAD SERVED CONTINUOUSLY AT GRADE GS-14 FOR MORE THAN TWO YEARS. ON THAT DATE HE WAS CHANGED TO GS-12 UNDER CONDITIONS WHICH ALLOWED HIM SAVED PAY RATE ON THE BASIS OF GS-14, STEP 4, FOR A PERIOD OF TWO YEARS. ON JUNE 9, 1963, HE WAS FURTHER REDUCED TO GRADE GS-11, UNDER CONDITIONS THAT PERMITTED HIM TO STILL RETAIN THE SAVED PAY AT GS-14 (4). THEREAFTER, EFFECTIVE OCTOBER 27, 1963, MR. STOLL WAS PROMOTED TO GRADE GS-13, BUT CONTINUED TO RECEIVE THE SAVED RATE AT GS-14 (4) UNDER THE CITED PROVISION OF THE CODE.

AS A RESULT OF A REDUCTION IN FORCE MR. STOLL WAS AGAIN REDUCED TO A GRADE GS-12 (9) POSITION AT $12,620 PER ANNUM, EFFECTIVE APRIL 18, 1964, AND APPARENTLY HAS BEEN PAID ON THE BASIS OF THAT GRADE AND STEP SINCE THAT TIME. ON JULY 14, 1964, ACTION WAS TAKEN TO CORRECT THE SALARY RATE TO THAT PROPERLY PAYABLE FOR GS-14 (4), SUCH ACTION TO BE RETROACTIVELY EFFECTIVE TO APRIL 18,1964, THE DATE OF THE LAST DEMOTION. THE VOUCHER SUBMITTED WITH YOUR LETTER COVERS THE DIFFERENCE IN SALARY RATES BETWEEN APRIL 18, 1964, AND JULY 11, 1964, AND IF PAYMENT IS AUTHORIZED IT IS ASSUMED THAT APPROPRIATE ADJUSTMENTS WILL BE MADE TO COVER THE SUBSEQUENT PAY PERIODS. THE STANDARD FORM 50, EVIDENCING THE CORRECTIVE ACTION ALSO INDICATES THAT THE SALARY RETENTION PERIOD EXPIRES ON JUNE 8, 1965.

YOU POINT OUT THAT SECTION 507 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED, 5 U.S.C. 1107, GOVERNING SALARY RETENTION PROVIDES THAT IN ORDER TO RETAIN HIS CURRENT RATE OF PAY THE EMPLOYEE MUST HAVE SERVED FOR TWO CONTINUOUS YEARS IMMEDIATELY PRIOR TO SUCH REDUCTION IN GRADE (A) IN THE SAME DEPARTMENT AND (B) IN ANY GRADE OR GRADES HIGHER THAN THE GRADE TO WHICH DEMOTED AND FURTHER THAT HAVING HELD A GS-11 POSITION FROM JUNE 9, 1963, UNTIL OCTOBER 27, 1963, THE EMPLOYEE HAD NOT ON APRIL 18, 1964 (THE DATE OF THE LAST DEMOTION) SERVED FOR TWO CONTINUOUS YEARS AT A GRADE HIGHER THAN GS-12. YOUR SPECIFIC QUESTION IS SET FORTH IN PARAGRAPH 2 (A) OF YOUR LETTER AS FOLLOWS.

"A. WHETHER SALARY RETENTION CAN BE GRANTED AN EMPLOYEE ON A THIRD CHANGE TO LOWER GRADE WHEN THE EMPLOYEE HAS RECEIVED A PROMOTION IN THE INTERVENING TIME TO A GRADE HIGHER THAN THE GRADE FROM WHICH HE RECEIVED THE SECOND CHANGE TO LOWER GRADE, CONSIDERING THAT HE HAS NOT SERVED TWO (2) CONTINUOUS YEARS IN THE GRADE TO WHICH PROMOTED.'

ALL OF THE STATED PERSONNEL CHANGES OCCURRED WITHIN A PERIOD OF SOME 16 MONTHS. UNDER THE FACTS GIVEN THERE CAN BE NO DOUBT THAT UPON THE REDUCTION FROM GS-14 (4) TO GS-12 ON JANUARY 3, 1963, THE EMPLOYEE BECAME ENTITLED TO THE SAVED PAY RATE OF THE GRADE AND STEP FROM WHICH REDUCED FOR A PERIOD OF TWO YEARS PLUS SUBSEQUENT STATUTORY INCREASES THEREIN. MOREOVER, THE FURTHER RELUCTION TO GRADE GS-11 ON JUNE 9, 1963, HAD THE EFFECT OF BEGINNING A NEW TWO-YEAR RETAINED PAY PERIOD UNDER OUR RULE IN 41 COMP. GEN. 764. WE DO NOT VIEW THE SUBSEQUENT PROMOTION TO GRADE GS-13 AS AFFECTING THE RETAINED PAY PERIOD IN ANY WAY BECAUSE THE STATUTE PROVIDES THAT AN EMPLOYEE WILL CONTINUE TO RECEIVE A RETAINED RATE (SUBJECT TO THE TWO-YEAR LIMITATION) UNTIL HE IS ENTITLED TO RECEIVE BASIC COMPENSATION AT A HIGHER RATE BY OPERATION OF THE CLASSIFICATION ACT OF 1949, AS AMENDED. HERE THE PROMOTION DID NOT HAVE THAT RESULT AND SO THE EMPLOYEE WAS STILL ENTITLED TO THE SAME RETAINED RATE UNTIL THE EXPIRATION OF TWO YEARS FROM JUNE 9, 1963.

AS TO THE DEMOTION TO GRADE GS-12 ON APRIL 18, 1964, WE AGREE THAT THE EMPLOYEE ACQUIRED NO NEW ENTITLEMENT TO SAVED PAY BASED UPON THE SALARY APPLICABLE TO GRADE GS-13, OR THE SALARY HE WAS THEN RECEIVING AS A RETAINED RATE, BECAUSE HE HAD NOT AT THAT TIME SERVED FOR TWO CONTINUOUS YEARS IN ANY GRADE OR GRADES HIGHER THAN THAT TO WHICH DEMOTED AS REQUIRED BY LAW. HOWEVER, AS PREVIOUSLY INDICATED, THE EMPLOYEE'S RIGHT TO RETAINED PAY ARISING OUT OF HIS DEMOTION TO GRADE GS-11 ON JUNE 9, 1963, WAS NOT EXTINGUISHED BY THE SUBSEQUENT PROMOTION OR DEMOTION.

THE VOUCHER, WHICH IS RETURNED, MAY BE CERTIFIED FOR PAYMENT IF OTHERWISE CORRECT.