B-154886, SEP. 21, 1964

B-154886, SEP. 21, 1964

TO THE HONORABLE SECRETARY OF THE TREASURY:

WE REFER TO YOUR LETTER OF JULY 31, 1964, CONCERNING COMPENSATION PAID TO MR. LEO C. JANUSZEWSKI, AN EMPLOYEE OF THE UNITED STATES TREASURY GUARD FORCE, TREASURY DEPARTMENT, AFTER OCTOBER 14, 1962, THE EFFECTIVE DATE OF THE FEDERAL SALARY REFORM ACT OF 1962,WHICH ACT INCLUDED AMENDMENTS TO THE CLASSIFICATION ACT OF 1949.

CERTAIN QUESTIONS REGARDING MR. JANUSZEWSKI'S COMPENSATION WERE RAISED BY THE CIVIL ACCOUNTING AND AUDITING DIVISION OF OUR OFFICE IN THEIR INFORMAL INQUIRY NO. SS-1, DATED JUNE 30, 1964. THE TOTAL AMOUNT OF COMPENSATION QUESTIONED IN THAT INQUIRY WAS $468.88. THE FACTS INVOLVED AND THE RESULTING CHANGES IN MR. JANUSZEWSKI'S COMPENSATION UNDER THE APPLICABLE LAWS AND REGULATIONS ARE AS FOLLOWS.

ON APRIL 3, 1960, MR. JANUSZEWSKI RECEIVED A WITHIN-GRADE SALARY ADVANCEMENT TO STEP F OF GRADE GS-6, $5,240 PER ANNUM. ON JULY 10, 1960, HIS SALARY IN THAT GRADE AND STEP WAS INCREASED TO $5,655 PER ANNUM UNDER THE PROVISIONS OF SECTION 112 (A) OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1960, APPROVED JULY 1, 1960, PUB.L. 86-568, 74 STAT. 298. JANUARY 23, 1961, HE WAS DOWNGRADED FROM GRADE GS-6 TO GRADE GS-4 AND BECAME ENTITLED TO RETAINED COMPENSATION UNDER SECTION 507 OF THE CLASSIFICATION ACT OF 1949 AT THE RATE OF $5,655 PER ANNUM. HAD HE NOT BEEN ENTITLED TO SALARY RETENTION HE WOULD HAVE BEEN PAID AT THE RATE FOR GRADE GS-4, STEP G, $4,670. ON FEBRUARY 4, 1962, HE WAS PROMOTED TO GRADE GS-5 AND HIS SALARY RATE REMAINED AT THE $5,655 LEVEL IN ACCORDANCE WITH SECTION 802 (B) OF THE CLASSIFICATION ACT OF 1949 AS AMENDED, BECAUSE THE SALARY RATE OF $5,655 PER ANNUM WAS IN EXCESS OF THE MAXIMUM SCHEDULED RATE OF THE GRADE TO WHICH PROMOTED.

YOU INDICATE THAT THE PRIMARY QUESTION FOR DETERMINATION IS WHETHER THE $5,655 SALARY RATE WAS MR. JANUSZEWSKI'S ESTABLISHED RATE OF PAY AFTER THE DATE OF HIS PROMOTION OR WHETHER IT WAS STILL A RATE RETAINED UNDER SECTION 507 OF THE CLASSIFICATION ACT OF 1949 WHICH COULD BE RETAINED BY HIM FOR NO MORE THAN TWO YEARS FROM THE DATE OF HIS DOWNGRADING. SECTION 802 (B) OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1132 (B) (1958 ED.), IN FORCE AT THE TIME IN QUESTION PROVIDED:

"ANY OFFICER OR EMPLOYEE WHO IS PROMOTED OR TRANSFERRED TO A POSITION IN A HIGHER GRADE SHALL RECEIVE BASIC COMPENSATION AT THE LOWEST RATE OF SUCH HIGHER GRADE WHICH EXCEEDS HIS EXISTING RATE OF BASIC COMPENSATION BY NOT LESS THAN ONE STEP-INCREASE OF THE GRADE FROM WHICH HE IS PROMOTED OR TRANSFERRED. IF, IN THE CASE OF ANY OFFICER OR EMPLOYEE SO PROMOTED OR TRANSFERRED WHO IS RECEIVING (1) ONE OR MORE LONGEVITY STEP-INCREASES UNDER SECTION 1123 OF THIS TITLE, OR (2) BASIC COMPENSATION AT A RATE IN EXCESS OF THE MAXIMUM SCHEDULED RATE FOR HIS GRADE UNDER SECTION 1114 OF THIS TITLE, SECTION 1105 (B), OR ANY OTHER PROVISION OF LAW, THERE IS NO RATE IN SUCH HIGHER GRADE WHICH IS AT LEAST ONE STEP-INCREASE ABOVE HIS EXISTING RATE OF BASIC COMPENSATION, HE SHALL RECEIVE (A) THE MAXIMUM SCHEDULED RATE OF SUCH HIGHER GRADE, OR (B) HIS EXISTING RATE OF BASIC COMPENSATION, IF SUCH EXISTING RATE IS THE HIGHER.'

IT IS OUR UNDERSTANDING THAT IT WAS THE PRACTICE OF THE CIVIL SERVICE COMMISSION, AS WELL AS OTHER AGENCIES OF THE GOVERNMENT, PRIOR TO THE AMENDMENT OF THE ABOVE SECTION BY SECTION 604 (A) OF THE CLASSIFICATION ACT AMENDMENTS OF 1962 (TITLE II, PUB.L. 87-793, APPROVED OCTOBER 11, 1962), IN THE OPERATION OF SUCH SECTION TO REGARD THE PROMOTION OF AN EMPLOYEE TO A HIGHER GRADE WHERE HE CONTINUED TO RECEIVE HIS EXISTING RATE OF BASIC COMPENSATION--- SUCH RATE BEING BASED ON A SAVED RATE AS PROVIDED BY SECTION 507--- AS ELIMINATING ANY FURTHER CONSIDERATION OF SUCH RATE AS A RETAINED SALARY RATE.

IN OUR DECISION IN 42 COMP. GEN. 702, WE HELD THAT A PROMOTION OF AN EMPLOYEE TO A INTERVENING GRADE WITH A SAVED RATE OF COMPENSATION ABOVE THE MAXIMUM OF THE GRADE, DID NOT OPERATE TO ELIMINATE THE RETAINED RATE. HOWEVER, THAT DECISION INVOLVED A PROMOTION OF AN EMPLOYEE WITH A RETAINED RATE AFTER THE AMENDMENT OF SECTION 802 (B) BY THE ACT OF OCTOBER 11, 1962. WE DO NOT FIND THAT WE HAVE HAD OCCASION TO RULE ON THE EFFECT OF A PROMOTION ON A SECTION 507 RETAINED RATE (WITH NO INCREASE IN COMPENSATION) WHICH OCCURRED PRIOR TO THE CLASSIFICATION ACT AMENDMENTS OF 1962. HOWEVER, WE SEE NO REASON FOR DISTURBING THE PRACTICE PREVIOUSLY REFERRED TO WHICH WAS NOT UNREASONABLE UNDER THE LANGUAGE OF SECTION 802 (B) PRIOR TO THE 1962 AMENDMENT. IN VIEW THEREOF THE PROMOTION OF THE EMPLOYEE HERE INVOLVED MAY BE VIEWED AS HAVING ELIMINATED HIS RATE OF COMPENSATION ON AND AFTER THE DATE OF HIS PROMOTION TO GRADE GS-5 ON FEBRUARY 5, 1962, FROM THEREAFTER BEING CONSIDERED AS A RETAINED SALARY RATE UNDER SECTION 507 OF THE CLASSIFICATION ACT OF 1949, AS AMENDED.

ON THE BASIS OF THE ABOVE CONCLUSION THE EMPLOYEE'S SALARY RATE OF $5,655 PER ANNUM WAS FOR ADJUSTMENT EFFECTIVE ON THE FIRST DAY OF THE FIRST PAY PERIOD AFTER OCTOBER 11, 1962, TO THE RATE OF $5,845 PER ANNUM (STEP 9 OF GRADE GS-5) IN ACCORDANCE WITH SECTION 602 (B) (8) OF THE 1962 SALARY INCREASE ACT. THEREAFTER, THE EMPLOYEE WAS ENTITLED TO BE ADVANCED TO STEP 10 ($6,005) OF HIS GRADE AT THE BEGINNING OF THE NEXT PAY PERIOD FOLLOWING COMPLETION OF 156 CALENDAR WEEKS OF SERVICE COMPUTED FROM APRIL 3, 1960, THE DATE OF HIS LAST EQUIVALENT INCREASE IN COMPENSATION.

SINCE IT APPEARS THE EMPLOYEE WAS PAID AT THE RATE OF $5,885 FROM OCTOBER 14, 1962, AND AT THE RATE OF $6,005 FROM FEBRUARY 3, 1963, THE DIFFERENCE BETWEEN THOSE RATES AND THE PROPER RATES SET FORTH ABOVE IS FOR COLLECTION. OUR CIVIL ACCOUNTING AND AUDITING DIVISION WILL COMPUTE THE NEW AMOUNT FOUND DUE IN ACCORDANCE WITH THIS DECISION.