Retention of Compensation Incident to Reduction in Force

An employee appealed a Claims Division settlement which denied his claim for retained pay incident to a reduction in force (RIF) in which he was downgraded from a General Schedule (GS) position to a wage schedule position. His claim was considered barred since it was not filed with GAO within 6 years from the date it accrued. In October 1971, the employee was downgraded and became entitled to retained pay for 2 years according to the provisions of the Federal Personnel Manual (FPM). In June 1972, the employee was downgraded from his wage schedule position to a lower GS position. At this time, the agency discontinued the retained pay resulting from the first downgrading in accordance with its interpretation of the FPM provisions. The Claims Division affirmed the agency's early termination of the retained pay on the basis of an FPM section which provides that employees who are changed from a wage schedule to a GS category are not covered by the retained pay policy. GAO did not view this provision as terminating retained pay entitlement from an earlier RIF. It found that, under another FPM provision, a second reduction in grade has no effect on the 2-year period of pay retention generated by the first downgrading. In this case, the employee's claim accrued on the date the retained pay was discontinued. At that time, legislation provided for a 10-year period from the date of accrual of a claim for filing with GAO to avoid being forever barred. Subsequently, a 6-year period was substituted for the 10-year period. This 6-year time period applies to this claim, even though the claim was accrued before the effective date of the change in the limitation period. GAO has no authority to waive or modify the statute of limitations. Since the employee did not file his claim until April 1979, all retained pay that he may have been entitled to which was earned before April 1973 was barred from GAO consideration. Accordingly, the employee may only be paid the difference between his saved pay rate and the rate actually paid to him for the period which was not barred by the 6-year statute of limitations.