B-155341, OCTOBER 28, 1964, 44 COMP. GEN. 232

COMPENSATION - PERIODIC STEP-INCREASES - EQUIVALENT INCREASES - INCREASES NOT SO CONSTRUED. COMPENSATION - PERIODIC STEP-INCREASES - WAITING PERIOD COMMENCEMENT - INCREASES NOT CONSTRUED AS EQUIVALENT INCREASES. COMPENSATION - PERIODIC STEP-INCREASES - WAITING PERIOD COMMENCEMENT - INCREASES NOT CONSTRUED AS EQUIVALENT INCREASES FOR EMPLOYEES ADVANCED IN GRADE PRIOR TO THE MANDATORY SALARY ADJUSTMENTS DIRECTED BY SECTION 102 (B) (5) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, APPROVED AUGUST 14, 1964, INCREASES GRANTED BY LAW AND NOT CONSTRUED AS EQUIVALENT INCREASES PURSUANT TO SECTION 701 (B) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED (5 U.S.C. 1121 (B) (, THE COMMENCEMENT OF A WAITING PERIOD FOR THE PERIODIC STEP-INCREASES IN COMPENSATION PRESCRIBED BY SECTION 701 (A) OF THE 1949 ACT (5 U.S.C. 1121 (A) ( DEPENDS ON WHETHER THE INCREASE IN COMPENSATION FLOWING FROM THE ADMINISTRATIVE ACTION RATHER THAN FROM THE 1964 STATUTE MET THE REQUIREMENTS OF SECTION 531.406 OF THE FEDERAL PERSONNEL MANUAL DEFINING AN EQUIVALENT INCREASE AS "AN INCREASE OR INCREASES IN AN EMPLOYEE'S RATE OF BASIC COMPENSATION EQUAL TO OR GREATER THAN THE AMOUNT OF THE WITHIN-GRADE.' AN EMPLOYEE IN GRADE GS-15, STEP 4, WHO UPON PROMOTION TO GRADE GS 16 ON FEBRUARY 2, 1964, IS PLACED IN STEP 5, $18,000 PER ANNUM, GIVING HIM AN INCREASE OF $790 PER ANNUM, WHICH EXCEEDED BY $515 THE AMOUNT OF A STEP- INCREASE IN GRADE GS-15, AND WHO UNDER SECTION 102 (B) (5) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964 HAD HIS SALARY ADJUSTED TO $19,590, STEP 2, GRADE GS-16, AN INCREASE WHICH GRANTED BY LAW IS NOT CONSTRUED AS AN EQUIVALENT INCREASE PURSUANT TO SECTION 701 (B) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED (5 U.S.C. 1121 (B) (, RECEIVED THE EQUIVALENT INCREASE PRESCRIBED BY SECTION 701 (A) OF THE 1949 ACT (5 U.S.C. 1121 (A) (, AS DEFINED IN 531.406 OF THE FEDERAL PERSONNEL MANUAL, INCIDENT TO HIS ADMINISTRATIVE PROMOTION ON FEBRUARY 2, 1964, AND A NEW WAITING PERIOD FOR THE EMPLOYEE TOWARD A STEP-INCREASE IN GRADE GS-16 BEGAN ON THAT DATE. AN EMPLOYEE PROMOTED ON FEBRUARY 2, 1964, FROM STEP 5 OF GRADE GS 15, 417,725 PER ANNUM TO STEP 5 OF GRADE GS-16, $18,000 PER ANNUM, AN INCREASE OF ONLY $275, WHICH AMOUNT WAS LESS THAN A STEP-INCREASE IN GRADE GS-15, AND WHOSE SALARY ADJUSTMENT UNDER SECTION 102 (B) (5) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, APPROVED AUGUST 14, 1964, TO STEP 3, GRADE GS-16, $20,245 PER ANNUM, AN INCREASE WHICH HAVING BEEN GRANTED BY LAW IS NOT CONSTRUED AS AN EQUIVALENT INCREASE PURSUANT TO SECTION 701 (B) OF THE CLASSIFICATION ACT OF 1949, AS AMENDED (5 U.S.C. 1121 (B) (, DID NOT RECEIVE AN EQUIVALENT INCREASE AS DEFINED IN SECTION 531.406 OF THE FEDERAL PERSONNEL MANUAL AT THE TIME OF HIS ADMINISTRATIVE PROMOTION, AND HIS WAITING PERIOD FOR THE PERIODIC STEP INCREASE PRESCRIBED BY SECTION 701 (A) OF THE 1949 ACT IN GRADE GS-16 BEGAN ON THE DATE HE LAST RECEIVED AN EQUIVALENT INCREASE, WHICH IS THE DATE OF HIS ENTRY INTO STEP 5, GS- 15.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, OCTOBER 28, 1964:

YOUR LETTER OF OCTOBER 6, 1964, PRESENTS CERTAIN QUESTIONS CONCERNING THE BEGINNING DATES OF WAITING PERIODS FOR STEP INCREASES IN CASES WHEN EMPLOYEES WERE PROMOTED FROM GRADE GS-15 TO GRADE GS-16 BETWEEN JANUARY 1 AND JULY 5, 1964, AND LATER HAD THEIR SALARIES ADJUSTED ON JULY 5 UNDER SECTION 102 (B) (5) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964,PUBLIC LAW 88-426, APPROVED AUGUST 14, 1964, 78 STAT. 401.

YOUR LETTER DISCLOSES THAT AN EMPLOYEE IN GRADE GS-15, STEP 4, THEN $17,210 PER ANNUM, WAS PROMOTED TO GRADE GS-16 ON FEBRUARY 2, 1964. THE PROMOTION RULE (SECTION 802 (B) OF THE CLASSIFICATION ACT, 5 U.S.C. 1132 (B) ( WOULD HAVE ENTITLED HIM TO THE LOWEST RATE PAYING $18,240 OR MORE IF AT THAT TIME THERE HAD BEEN SUCH A RATE IN GRADE GS 16. THE HIGHEST RATE IN THAT GRADE THEN BEING STEP 5, $18,000 PER ANNUM, THE EMPLOYEE WAS PLACED IN THAT STEP, WHICH GAVE HIM AN INCREASE OF $790 PER ANNUM. SINCE THAT INCREASE EXCEEDED $515, THE AMOUNT OF A STEP INCREASE IN GRADE GS-15, YOU EXPRESS THE VIEW THAT A NEW WAITING PERIOD FOR A STEP INCREASE IN GRADE GS-16 BEGAN ON THE EFFECTIVE DATE OF PROMOTION. SUBSEQUENTLY, EFFECTIVE ON THE FIRST DAY OF THE FIRST PAY PERIOD BEGINNING AFTER JULY 1, 1964, THE EMPLOYEE'S SALARY WAS ADJUSTED TO $19,590, STEP 2, GRADE GS-16, UNDER SECTION 102 (B) (5) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964.

IN ANOTHER CASE AN EMPLOYEE WAS PROMOTED ON FEBRUARY 2, 1964, FROM STEP 5 OF GRADE GS-15, $17,725 PER ANNUM, TO STEP 5 OF GRADE GS-16, $18,000 PER ANNUM, AN INCREASE OF ONLY $275, WHICH AMOUNT WAS LESS THAN A STEP INCREASE IN GRADE GS-15. THEREFORE, YOU CONCLUDE THAT THE EMPLOYEE DID NOT AT THAT TIME RECEIVE AN "EQUIVALENT INCREASE" SO AS TO START A NEW WAITING PERIOD FOR A STEP INCREASE. UNDER SECTION 102 (B) (5) OF THE SALARY ACT OF 1964, HIS SALARY WAS ADJUSTED ON JULY 5, 1964, TO STEP 3 OF GRADE GS-16, $20,245.

YOUR VIEW IS THAT THE EMPLOYEES DID NOT RECEIVE AN "EQUIVALENT INCREASE" INCIDENT TO THE ADJUSTMENTS UNDER THE 1964 SALARY ACT ON JULY 5 SINCE THE INCREASE IN EACH CASE WAS PRESCRIBED BY LAW.

YOUR QUESTIONS ARE AS FOLLOWS:

1. IN THE FIRST INSTANCE, IS THE CONCLUSION CORRECT THAT THE EMPLOYEE'S WAITING PERIOD TOWARD RATE 3 IN GS-16 BEGAN ON FEBRUARY 2, 1964, THE DATE OF HIS PROMOTION?

2. IN THE SECOND INSTANCE, IS THE CONCLUSION CORRECT THAT THE EMPLOYEE'S WAITING PERIOD TOWARD RATE 4 IN GS-16 BEGAN ON HIS ENTRY INTO RATE 5 OF GS -15, BEFORE HIS PROMOTION? IF NOT, WHEN DID IT BEGIN?

SECTION 701 (A) OF THE CLASSIFICATION ACT OF 1949, 5 U.S.C. 1121 (A), AS AMENDED BY PUBLIC LAW 87-793, PROVIDES THAT EACH EMPLOYEE SUBJECT TO THAT SECTION SHALL BE PERIODICALLY ADVANCED IN COMPENSATION TO THE NEXT HIGHER RATE WITHIN HIS GRADE, PROVIDED, AMONG OTHER THINGS, THAT NO EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE WAS RECEIVED DURING THE PRESCRIBED WAITING PERIOD. SECTION 701 (B) OF THE ACT, 5 U.S.C. 1121 (B), DIRECTS THAT ANY INCREASE IN COMPENSATION GRANTED BY LAW SHALL NOT BE CONSTRUED AS AN EQUIVALENT INCREASE.

SECTION 531.406 OF THE FEDERAL PERSONNEL MANUAL DEFINES AN EQUIVALENT INCREASE IN COMPENSATION AS "AN INCREASE OR INCREASES IN AN EMPLOYEE'S RATE OF BASIC COMPENSATION EQUAL TO OR GREATER THAN THE AMOUNT OF THE WITHIN-GRADE INCREASE FOR THE GRADE IN WHICH THE EMPLOYEE IS SERVING.'

THE ADJUSTMENTS MANDATORILY DIRECTED AND MADE CERTAIN IN AMOUNT BY SECTION 102 (B) (5) OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964 MUST BE CONSTRUED AS INCREASES GRANTED BY LAW AND, THEREFORE, AS YOU INDICATE, MAY NOT BE REGARDED AS EQUIVALENT INCREASES. 34 COMP. GEN. 687 AND 691.

HOWEVER, THE INCREASES IN COMPENSATION RECEIVED BY THESE EMPLOYEES DIRECTLY INCIDENT TO THEIR PROMOTIONS (BEFORE ADJUSTMENT AS REQUIRED BY SECTION 102 (B) FLOWED FROM THE ADMINISTRATIVE ACTION RATHER THAN STATUTE. THEREFORE, IF SUCH INCREASES MET THE REQUIREMENTS OF SECTION 531.406 OF THE FEDERAL PERSONNEL MANUAL, I.E., IF THE INCREASE IN EACH CASE WERE EQUAL TO OR GREATER THAN A STEP INCREASE IN GRADE GS-15, THEY NECESSARILY WOULD BE EQUIVALENT INCREASES WITHIN THE PURVIEW OF SECTION 701 (A) OF THE CLASSIFICATION ACT.

THEREFORE, IN ANSWER TO QUESTION 1, THE EMPLOYEE HAVING RECEIVED AN EQUIVALENT INCREASE INCIDENT TO HIS PROMOTION ON FEBRUARY 2, 1964, A NEW WAITING PERIOD FOR HIM TOWARD A STEP INCREASE IN GRADE GS-16 BEGAN ON THAT DATE.

IN ANSWER TO QUESTION 2, THE EMPLOYEE AFFECTED DID NOT RECEIVE AN EQUIVALENT INCREASE AT THE TIME OF HIS PROMOTION. THEREFORE, HIS WAITING PERIOD FOR AN INCREASE IN GRADE GS-16 BEGAN ON THE DATE HE LAST RECEIVED AN EQUIVALENT INCREASE, WHICH IS UNDERSTOOD TO BE ON THE DATE OF HIS ENTRY INTO STEP 5, GS-15. SEE ANSWER TO QUESTION 3, B 150394, JANUARY 16, 1063, 42 COMP. GEN. 380, AND ANSWER TO QUESTION 1, 42 COMP. GEN. 249, B-150219, NOVEMBER 15, 1962.