B-157031, JUL. 12, 1965

B-157031, JUL. 12, 1965

TO CHIEF, OFFICE OF INDUSTRIAL RELATIONS, DEPARTMENT OF THE NAVY:

THERE HAS BEEN BROUGHT TO OUR ATTENTION THE CASE OF MR. RUSSELL E. CONWAY, A CIVILIAN EMPLOYEE OF THE DEPARTMENT OF THE NAVY, CONSOLIDATED INDUSTRIAL RELATIONS OFFICE, U.S. NAVAL STATION, WASHINGTON, D.C. MR. CONWAY WAS PROMOTED FROM AN UNGRADED POSITION TO A POSITION UNDER THE CLASSIFICATION ACT DURING THE RETROACTIVE PERIOD OF THE FEDERAL EMPLOYEES SALARY ACT OF 1964, 78 STAT. 400, 5 U.S.C. 1113 (B).

THE RECORD SHOWS THAT MR. CONWAY WAS PROMOTED ON AUGUST 2, 1964, FROM THE POSITION OF QUARTERMAN (STOCKMAN), $3.94 PER HOUR (UNGRADED RATING) TO A SUPERVISORY STORAGE OFFICER, GRADE GS-9, STEP 7, $8,410 PER ANNUM. THE PROVISIONS OF THE FEDERAL EMPLOYEES SALARY ACT OF 1962, PUB.L. 87-793, 76 STAT. 832, WERE IN EFFECT AT THAT TIME. ON AUGUST 14, 1964, THE FEDERAL SALARY REFORM ACT OF 1964, PUB.L. 88-426, WAS APPROVED AND MADE RETROACTIVE TO THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGAN ON OR AFTER JULY 1, 1964. AS A RESULT OF THIS ACT MR. CONWAY'S SALARY WAS ADJUSTED TO GRADE GS-9, STEP 7, $8,690 PER ANNUM.

UPON RECEIPT OF A COPY OF OUR DECISION B-156058, DATED FEBRUARY 26, 1965, TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, A DETERMINATION WAS MADE BY THE NAVAL STATION OFFICIALS THAT MR. CONWAY'S RATE OF PAY WAS IN ERROR AND HIS PAY WAS CORRECTED RETROACTIVELY FROM $8,690 PER ANNUM TO $8,200 PER ANNUM. THAT RATE ($8,200) WAS ALLOWED ONLY TO DECEMBER 6, 1964, SINCE AT THAT TIME HE IS UNDERSTOOD TO HAVE BECOME ENTITLED TO THE RATE OF $8,690 BECAUSE OF HIS RESPONSIBILITY TO SUPERVISE A WAGE BOARD EMPLOYEE WHOSE SALARY WAS $8,486.40.

THE DECISION B-156058 STEMS FROM OUR DECISION IN 31 COMP. GEN. 166 (1951) IN WHICH WE RULED, QUOTING FROM THE SYLLABUS, AS FOLLOWS:

"THE INCREASED COMPENSATION AMENDMENT TO THE CLASSIFICATION ACT OF 1949 REQUIRES THE ADJUSTMENT OF AN EMPLOYEE'S COMPENSATION FOR THE PERIOD BETWEEN ITS EFFECTIVE DATE AND ENACTMENT DATE TO REFLECT THE PAY STATUS HE WOULD HAVE ATTAINED HAD THE AMENDED PAY SCHEDULES BEEN OPERATIVE AND APPLIED CURRENTLY DURING THAT PERIOD, SO THAT THE PROMOTION OF AN EMPLOYEE DURING SAID PERIOD TO A HIGHER STEP INCREASE UNDER THE OLD SALARY SCALE THAN REQUIRED UNDER THE NEW SALARY SCALE MUST BE AMENDED RETROACTIVELY IN ACCORDANCE WITH THE NEW SALARY SCALE AND THE NECESSARY ADJUSTMENTS MADE IN THE EMPLOYEE'S SALARY.'

THE QUOTED DECISION CONCERNED THE ACT OF OCTOBER 24, 1951, 65 STAT. 612, WHICH, AMONG OTHER THINGS, INCREASED THE SALARY RATES OF FEDERAL EMPLOYEES SUBJECT TO THE CLASSIFICATION ACT OF 1949. THAT ACT WAS MADE RETROACTIVELY EFFECTIVE ON THE FIRST DAY OF THE FIRST PAY PERIOD WHICH BEGAN AFTER JUNE 30, 1951. THE STATUTE CONTAINED NO PROVISION FOR ADJUSTING THE RATES OF EMPLOYEES PROMOTED FROM ONE CLASSIFICATION ACT POSITION TO ANOTHER DURING THE RETROACTIVE PERIOD FROM JUNE TO OCTOBER 24, 1951.

AS A CONSEQUENCE OF OUR DECISION IN 31 COMP. GEN. 166, THE CONGRESS IN SUBSEQUENT ACTS INCREASING RETROACTIVELY THE RATES OF EMPLOYEES UNDER THE CLASSIFICATION ACT MADE SPECIAL PROVISIONS FOR SAVING THE SALARIES OF THOSE SUBJECT TO THE ACT WHO WERE PROMOTED DURING THE RETROACTIVE PERIOD. SEE FOR EXAMPLE THE PROVISIONS OF SECTION 2 (C) (6) OF THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1955, 69 STAT. 174, AS FOLLOWS:

"/6) THE RATE OF BASIC COMPENSATION OF EACH OFFICER OR EMPLOYEE WHO, AT ANY TIME DURING THE PERIOD BEGINNING ON THE EFFECTIVE DATE OF THIS SECTION AND ENDING ON THE DATE OF ENACTMENT OF THIS ACT, WAS PROMOTED FROM ONE GRADE UNDER THE CLASSIFICATION ACT OF 1949, AS AMENDED, TO ANOTHER SUCH GRADE AT A RATE WHICH IS ABOVE THE MINIMUM RATE THEREOF, SHALL BE ADJUSTED RETROACTIVELY FROM THE EFFECTIVE DATE OF THIS SECTION TO THE DATE ON WHICH HE WAS SO PROMOTED, ON THE BASIS OF THE RATE WHICH HE WAS RECEIVING DURING THE PERIOD FROM SUCH EFFECTIVE DATE TO THE DATE OF SUCH PROMOTION AND, FROM THE DATE OF SUCH PROMOTION, ON THE BASIS OF THE RATE FOR THAT STEP OF THE APPROPRIATE GRADE OF THE APPROPRIATE COMPENSATION SCHEDULE CONTAINED IN THIS SECTION WHICH CORRESPONDS NUMERICALLY TO THE STEP OF THE GRADE OF THE COMPENSATION SCHEDULE FOR SUCH OFFICER OR EMPLOYEE WHICH WAS IN EFFECT (WITHOUT REGARD TO THIS ACT) AT THE TIME OF SUCH PROMOTION.'

THEREAFTER, IN THE FEDERAL EMPLOYEES SALARY INCREASE ACT OF 1958, 72 STAT. 203, AND IN THE FEDERAL EMPLOYEES SALARY ACT OF 1964, 78 STAT. 400, BOTH OF WHICH WERE RETROACTIVELY EFFECTIVE, SIMILAR PROVISIONS WERE INCLUDED.

NONE OF THOSE STATUTES, HOWEVER, COVERED EMPLOYEES PROMOTED FROM WAGE BOARD POSITIONS TO POSITIONS SUBJECT TO THE CLASSIFICATION ACT DURING THE RETROACTIVE PERIODS INVOLVED SO AS TO ENTITLE THEM TO BE ADVANCED TO THE SAME NUMERICAL STEP UNDER THE NEW PAY SCHEDULES. CONSEQUENTLY, IN THE ABSENCE OF AN EXPRESSED CONTRARY INTENT ON THE PART OF THE CONGRESS, THE RULE IN 31 COMP. GEN. 166 CONTINUES TO APPLY.

IN OUR DECISION OF FEBRUARY 26, 1965, B-156058, THE ANSWER TO QUESTION 1 REQUIRED THE ADJUSTMENT TO A LOWER RATE BECAUSE OF (1) THE AGENCY POLICY THAT IN MOVING A WAGE BOARD EMPLOYEE TO A CLASSIFICATION ACT POSITION HIS SALARY RATE WOULD BE INITIALLY ADJUSTED TO THE NEAREST RATE IN THE CLASSIFICATION ACT SCHEDULE WHICH DID NOT RESULT IN A DECREASE, AND (2) THE APPLICATION OF OUR DECISION 31 COMP. GEN. 166 TO THE CASE. SEE ALSO OUR DECISION B-156058, DATED JUNE 15, 1965, COPY HEREWITH.

NAVAL CIVILIAN PERSONNEL INSTRUCTION 552, FOR COMPUTING THE HIGHEST PREVIOUS RATE IN EFFECT AT THE TIME OF MR. CONWAY'S PROMOTION PROVIDES IN PART AS FOLLOWS:

"3-2.D. POSITION NOT SUBJECT TO THE CLASSIFICATION ACT. IF THE HIGHEST PREVIOUS RATE WAS EARNED IN A POSITION NOT SUBJECT TO THE CLASSIFICATION ACT, IT IS COMPUTED AS FOLLOWS (ALSO SEE NCPI 552-ENCL. 3 FOR EXAMPLE OF COMPUTATION):

"/1) EQUIVALENT ANNUAL RATE.

"THE ACTUAL RATE EARNED AT THE TIME OF SERVICE COMPUTED ON AN ANNUAL BASIS (SEE NCPI 552.2-5) EXCLUDING PAY FOR ADDITIONAL PAY ASSIGNMENTS, NIGHT DIFFERENTIAL, ETC., IS COMPARED TO THE ANNUAL RATES UNDER THE CLASSIFICATION ACT, AS AMENDED, AS OF THE TIME OF SERVICE TO SELECT AN EQUIVALENT ANNUAL RATE. WHEN THE ACTUAL RATE IS THE SAME AS A RATE UNDER THE CLASSIFICATION ACT, AS AMENDED, THE RATE UNDER THE ACT IS THE EQUIVALENT ANNUAL RATE. WHEN THE ACTUAL RATE IS THE SAME AS A RATE UNDER THE ACT AND THAT RATE OCCURS WITHIN TWO OR MORE GRADES UNDER THE CLASSIFICATION ACT, AS AMENDED, THE RATE WHICH GIVES THE EMPLOYEE THE MAXIMUM BENEFIT WHEN IT IS CONVERTED UNDER (2) BELOW IS THE EQUIVALENT ANNUAL RATE. WHEN THE ACTUAL RATE FALLS BETWEEN TWO RATES UNDER THE ACT, THE HIGHER RATE IS THE EQUIVALENT ANNUAL RATE. WHEN THE ACTUAL RATE FALLS BETWEEN TWO RATES WITHIN THE RANGE OF TWO OR MORE GRADES UNDER THE ACT, THE RATE WHICH GIVES THE EMPLOYEE THE MAXIMUM BENEFIT WHEN IT IS CONVERTED UNDER (2) BELOW IS THE EQUIVALENT ANNUAL RATE.

"/2) CONVERSION TO CURRENT PAY SCHEDULE.

"THE EQUIVALENT ANNUAL RATE DETERMINED UNDER (1) ABOVE IS CONVERTED TO THE EQUIVALENT RATE UNDER THE CURRENT CLASSIFICATION ACT PAY SCHEDULE AND THAT RATE IS THE EMPLOYEE'S HIGHEST PREVIOUS RATE.'

SIMILAR PROVISIONS ARE CONTAINED IN THE FEDERAL PERSONNEL MANUAL.

WHILE THE RECORD DOES NOT SPECIFICALLY SO STATE WE ASSUME THAT BOTH IMMEDIATELY PRIOR AND SUBSEQUENT TO JULY 5, 1965, THE EMPLOYEE'S WAGE BOARD RATE WAS $3.94 PER HOUR.

UNDER THE REGULATIONS THERE APPEAR IN RETROSPECT TO BE AT LEAST TWO PERIODS, I.E., ONE BEFORE AND ONE ON OR AFTER THE EFFECTIVE DATE OF PUB.L. 88-426, EMBRACED WITHIN THE TERM "AS OF THE TIME OF SERVICE," EITHER OF WHICH IN THE ABSENCE OF AN AGENCY REGULATION OTHERWISE, LAWFULLY COULD BE A BASE OF REFERENCE FOR THE AGENCY IN DETERMINING THE EQUIVALENT ANNUAL RATE. THEREFORE, IF IT CAN BE ESTABLISHED ADMINISTRATIVELY THAT IT WAS THE INTENT OF THE APPOINTING OFFICER AT THE TIME OF THE PROMOTION TO GRANT THE HIGHEST PREVIOUS RATE ALLOWABLE "AS OF THE TIME OF SERVICE" RATHER THAN TO ALLOW THE NEAREST RATE IN THE CLASSIFICATION ACT SCHEDULE WHICH WOULD NOT RESULT IN A DECREASE, WE WOULD INTERPOSE NO OBJECTION TO THE USE OF THE SAME NORM IN SELECTING THE RATE TO BE GRANTED IN THE RECOMPUTATION OF THE SAME NORM IN SELECTING THE RATE TO BE GRANTED IN THE RECOMPUTATION REQUIRED BY 31 COMP. GEN. 166, I.E., THE APPOINTING OFFICER AGAIN COULD LOOK TO COMPENSATION SCHEDULE II, PUB.L. 87-793, UNDER THE "TIME OF SERVICE" REGULATION FOR AN EQUIVALENT RATE WHICH WHEN ADJUSTED IN ACCORD WITH THE REGULATION TO THE CURRENT SCHEDULE WOULD BE THE RATE OF GS-9, STEP 7, OR $8,690 PER ANNUM.