B-66951, AUGUST 4, 1947, 27 COMP. GEN. 59

B-66951, AUGUST 4, 1947, 27 COMP. GEN. 59

COMPENSATION - WITHIN-GRADE ADVANCEMENTS; INITIAL SALARY RATES - RESTORATION TO FORMER POSITION FOLLOWING REDUCTION AN EMPLOYEE RESTORED TO A FORMER GRADE FOLLOWING SERVICE IN A LOWER GRADE, THE RESULTING COMPENSATION INCREASE BEING EQUAL AT LEAST TO THE SMALLEST SALARY INCREMENT IN THE LOWER GRADE, IS TO BE REGARDED AS HAVING RECEIVED AN "EQUIVALENT INCREASE IN COMPENSATION" WITHIN THE MEANING OF THE WITHIN-GRADE SALARY-ADVANCEMENT PROVISIONS OF SECTION 402 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945 AND THE REGULATIONS ISSUED IN PURSUANCE THEREOF, SO THAT TIME SERVED IN THE HIGHER GRADE PRIOR TO SERVICE IN THE LOWER GRADE MAY NOT BE CREDITED TOWARD WITHIN-GRADE ADVANCEMENT IN THE HIGHER GRADE AFTER RESTORATION THERETO. THE INITIAL SALARY RATE OF AN EMPLOYEE MAY NOT, UPON RESTORATION TO A FORMER GRADE FOLLOWING TRANSFER TO A LOWER GRADE, BE FIXED TO INCLUDE A WITHIN-GRADE SALARY ADVANCEMENT WHICH WOULD HAVE BEEN DUE IN SUCH FORMER GRADE ON THE DATE OF TRANSFER TO THE LOWER GRADE, WHERE THE RATE THUS FIXED WOULD EXCEED THE HIGHEST FORMERLY RECEIVED.

COMPTROLLER GENERAL WARREN TO THE FEDERAL SECURITY ADMINISTRATOR, AUGUST 4, 1947:

THERE HAS BEEN CONSIDERED YOUR LETTER OF JUNE 10, 1947, AS FOLLOWS:

A QUESTION HAS ARISEN CONCERNING ESTABLISHMENT OF SALARY UPON RETURN TO FORMER POSITIONS OF EMPLOYEES WHO HAVE BEEN CHANGED TO LOWER GRADES.

THE PERTINENT FACTS IN A TYPICAL CASE ARE:

ON MAY 22, 1944, THE EMPLOYEE WAS PROMOTED TO THE POSITION OF SUPERVISOR CLAIMS REVIEW UNIT, CHICAGO AREA OFFICE OF THE BUREAU OF OLD-AGE AND SURVIVORS INSURANCE, CAF-9, $3,200.

ON JULY 1, 1945, SHE WAS GIVEN A PERIODIC PAY INCREASE AND STATUTORY PAY ADJUSTMENT TO THE SECOND STEP OF CAF-9, $3,750.

ON JULY 1, 1946, HER SALARY WAS ADJUSTED IN ACCORDANCE WITH THE FEDERAL EMPLOYEES PAY ACT OF 1946 TO $4,275.

ON JULY 14, 1946, SHE WAS RETURNED TO HER PREVIOUS POSITION AS ADJUDICATION REVIEWER, CAF-8, BECAUSE OF THE RETURN OF AN EMPLOYEE FROM MILITARY SERVICE. IN ACCORDANCE WITH THE POLICY OF THE SOCIAL SECURITY ADMINISTRATION IN FIXING SALARY IN SUCH CASES, HER SALARY WAS FIXED AT THE THIRD STEP OF THE GRADE, $4,024.20.

ON DECEMBER 15, 1946, SHE WAS PROMOTED TO THE POSITION OF SUPERVISOR, CLAIMS REVIEW UNIT, WHICH SHE HAD HELD FROM MAY 22, 1944, TO JULY 14, 1946, AND HER SALARY WAS FIXED (IN ACCORDANCE WITH 24 COMP. GEN. 226) AT THE SECOND STEP, $4,275.

ALTHOUGH SHE WAS ELIGIBLE FOR A PERIODIC INCREASE EFFECTIVE JULY 14, 1946, ON THE BASIS OF COMPLETION OF WAITING PERIOD, A REGULAR EFFICIENCY RATING ON MARCH 31, 1946, OF VERY GOOD, AND A CERTIFICATION THAT HER CONDUCT AND SERVICES WERE OTHERWISE SATISFACTORY, THE PAY INCREASE IN CAF- 9 WAS NOT EFFECTED BECAUSE OF YOUR RULING (25 COMP. GEN. 90) THAT AN EMPLOYEE CHANGED TO LOWER GRADE UPON THE DATE THAT A PERIODIC INCREASE WOULD HAVE BEEN EFFECTED "LOST ANY RIGHT HE MAY HAVE HAD TO AN AUTOMATIC PROMOTION EFFECTIVE THE SAME DAY" IN THE HIGHER GRADE. HER PROMOTION ON DECEMBER 15, 1946, WAS EFFECTED AT THE STEP OF THE GRADE SHE WAS RECEIVING PRIOR TO JULY 14, 1946, BECAUSE WE INTERPRETED YOUR DECISION IN 24 COMP. GEN. 226 (THAT IT IS "WITHIN ADMINISTRATIVE DISCRETION TO RESTORE AN EMPLOYEE TO THE SAME SALARY RATE PREVIOUSLY HELD IN THE POSITION AND GRADE TO WHICH THE EMPLOYEE HAS ADVANCED BY OPERATION OF THE WITHIN-GRADE PROMOTION PLAN") AS APPLYING ONLY TO RATES AT WHICH THE EMPLOYEE WAS ACTUALLY PAID OR RATES AT WHICH THE EMPLOYEE WOULD HAVE BEEN PAID IF IN PAY STATUS.

WERE WE CORRECT IN THE ACTION TAKEN? IT APPEARS INCONSISTENT WITH THE THINKING IN 24 COMP. GEN. 226 FOR THE EMPLOYEE TO WAIT UNTIL THE BEGINNING OF THE FIRST PAY PERIOD AFTER DECEMBER 15, 1947, FOR ADVANCEMENT TO THE THIRD STEP. THIS THINKING IS SUMMARIZED IN 26 COMP. GEN. 368, ON PAGE 369, WHERE IT IS STATED THAT IT WAS THE INTENT OF THE WITHIN-GRADE PROMOTION PLAN "TO GRANT SALARY ADVANCEMENTS BASED UPON EFFICIENCY, SERVICE, AND CONDUCT IN A PARTICULAR POSITION AND * * * AN EMPLOYEE WHO, HAVING PROVED HIS QUALIFICATIONS FOR WITHIN-GRADE ADVANCEMENTS BY HIS EFFICIENCY, SERVICE, AND CONDUCT IN A PARTICULAR POSITION, WAS REDUCED IN GRADE AND THEREAFTER WAS RESTORED TO THE SAME POSITION IN THE SAME GRADE PREVIOUSLY HELD AGAIN NEED NOT BE REQUIRED TO PROVE HIS QUALIFICATIONS FOR THE WITHIN-GRADE ADVANCEMENTS PREVIOUSLY EARNED.'

WE HAVE CONSIDERED POSSIBLE ADMINISTRATIVE ACTIONS THAT MIGHT AVOID SUCH SITUATIONS IN FUTURE CASES. ONE SOLUTION WOULD BE TO ISSUE INSTRUCTIONS TO OFFICES OF THE AGENCY NOT TO CHANGE ANY EMPLOYEE TO A LOWER GRADE UPON THE DATE ON WHICH AN INCREASE WOULD BE EFFECTED IN THE HIGHER GRADE, BUT RATHER TO POSTPONE TO THE CHANGE TO LOWER GRADE FOR AT LEAST 1 DAY. ANOTHER SOLUTION WOULD BE NOT TO REDUCE THE SALARY OF AN EMPLOYEE UPON CHANGE TO A LOWER GRADE, PROVIDED HIS SALARY IN THE HIGHER GRADE IS WITHIN THE RANGE OF SALARIES IN THE LOWER GRADE. THERE ARE, HOWEVER, SERIOUS DISADVANTAGES TO BOTH SOLUTIONS.

IF WE DID NOT EFFECT A CHANGE TO LOWER GRADE UNTIL AT LEAST 1 DAY AFTER A PERIODIC INCREASE WAS EFFECTED IN THE HIGHER GRADE, AND THE EMPLOYEE EVENTUALLY RETURNED TO THE HIGHER GRADE, WE COULD FIX HIS SALARY UPON PROMOTION OF THE STEP ATTAINED 1 DAY PRIOR TO HIS CHANGE TO LOWER GRADE. DISADVANTAGES OF THIS PROCEDURE WOULD BE:

1. THERE ARE CASES IN WHICH IT IS IMPOSSIBLE TO POSTPONE A CHANGE OF AN EMPLOYEE TO ANOTHER POSITION. CIVIL SERVICE REGULATIONS PERMIT US TO RESTORE A VETERAN EXERCISING MANDATORY REEMPLOYMENT RIGHTS TO A TEMPORARY IDENTICAL ADDITIONAL POSITION FOR A PERIOD NOT TO EXCEED 60 DAYS. IF THE EMPLOYEE WHOM HE WILL REPLACE WOULD HAVE RECEIVED A PERIODIC INCREASE ON THE SIXTY-FIRST DAY AFTER THE VETERAN RETURNS, WE CANNOT POSTPONE THE CHANGE OF THE REPLACED EMPLOYEE UNTIL HE RECEIVES HIS PERIODIC INCREASE.

2. DECENTRALIZATION OF RESPONSIBILITIES FOR EFFECTING PERSONNEL ACTIONS MAKES IT DIFFICULT TO BE SURE THAT AN INSTRUCTION AFFECTING ONLY RARE CASES, AND THEREFORE EASILY OVERLOOKED BY OPERATING OFFICIALS WITH MANY OTHER RESPONSIBILITIES, WILL BE CORRECTED RETROACTIVELY; BUT IF, THROUGH OVERSIGHT OR INTENT, AN OFFICE EFFECTED A CHANGE TO LOWER GRADE UPON THE DAY THAT A PERIODIC INCREASE WOULD HAVE BEEN DUE, THE EFFECT OF THE RULING IN 25 COMP. GEN. 90 WOULD APPARENTLY BE TO PREVENT ANY RETROACTIVE CORRECTION.

IF WE DID NOT REDUCE THE SALARY RATE OF AN EMPLOYEE UPON CHANGE TO A LOWER GRADE, WHERE HIS SALARY IN THE HIGHER GRADE IS WITHIN THE RANGE OF SALARIES IN THE RANGE OF THE LOWER GRADE, HE WOULD BE ELIGIBLE FOR PROMOTION TO THE NEXT STEP (IF WITHIN THE RANGE OF THE GRADE) AS SOON AS AN EFFICIENCY RATING IN THE NEW GRADE COULD BE RECORDED, AND HIS WAITING PERIOD FOR THE NEXT INCREASE WOULD DATE FROM THE INCREASE IN THE LOWER GRADE. HE WOULD NOT BEGIN A NEW WAITING PERIOD UPON RETURN TO THE HIGHER GRADE. DISADVANTAGES OF THIS PROCEDURE WOULD BE:

1. DURING THE WAR PERIOD A CONSIDERABLE NUMBER OF EMPLOYEES WERE PROMOTED TO HIGHER GRADES TO PERFORM THE DUTIES OF FORMER EMPLOYEES WHO WERE IN MILITARY SERVICE OR SERVING UNDER WAR TRANSFERS. MANY OF THESE ARE NOW BEING CHANGED TO LOWER GRADES. IF THEIR SALARIES ARE NOT REDUCED UPON CHANGE TO LOWER GRADE, SALARY COSTS WILL BE GREATLY INCREASED AND IN SOME CASES FUNDS MIGHT NOT BE AVAILABLE FOR CARRYING OUT SUCH A POLICY. REALIZE THAT IN SOME CASES EMPLOYEES WHO HAVE SERVED IN HIGHER GRADES HAVE SUPERIOR QUALIFICATIONS FOR THE WORK IN LOWER GRADES, AND MAY THEREFORE BE EXPECTED TO RENDER A HIGHER QUALITY OF SERVICE; BUT WE DO NOT THINK THAT THE OCCUPANCY OF A HIGHER GRADE IS IN ITSELF PROOF THAT THE EMPLOYEE WILL PERFORM A MUCH HIGHER QUALITY OF SERVICE IN THE LOWER GRADE THAN OTHER EMPLOYEES WHO HAVE NEVER HELD THE HIGHER GRADE. OUR PRESENT POLICY (STATED IN PERSONNEL BULLETIN 14) IS AS FOLLOWS:

"/C) THE SALARY OF ANY EMPLOYEE WHOSE SERVICES AND CONDUCT HAVE BEEN SATISFACTORY SHOULD BE ESTABLISHED UPON CHANGE TO A LOWER GRADE AT A RATE NOT LESS THAN WOULD INCLUDE ANY WITHIN-GRADE SALARY INCREASES THAT WOULD HAVE BEEN EARNED HAD HE REMAINED IN THE LOWER GRADE. IN THE CASE OF THE EMPLOYEE WHO HAS NEVER PREVIOUSLY OCCUPIED A POSITION AT THE LOWER GRADE, SET THE SALARY RATE AT NOT LESS THAN THE SALARY STEP HE WOULD HAVE REACHED IF HE HAD BEEN EMPLOYED IN THE GRADE TO WHICH REDUCED FOR THE TOTAL PERIOD OF HIS SERVICE IN THE HIGHER-GRADE.

"/D) IF THE EMPLOYEE HAS AT ANY TIME BEEN AWARDED A WITHIN-GRADE INCREASE FOR ESPECIALLY MERITORIOUS SERVICE OR SUPERIOR ACCOMPLISHMENT IN HIGHER GRADES, ADD AN ADDITIONAL PAY STEP FOR EACH SUCH AWARD TO THE PAY STEP AS DETERMINED IN "C.'

"/E) WHEN AVAILABILITY OF FUNDS PERMITS, AND THE EMPLOYEE'S ENTIRE WORK RECORD, EFFICIENCY RATINGS, AND LENGTH OF SERVICE IN THE HIGHER POSITION WARRANT, THE SALARY IN THE NEW GRADE MAY BE ESTABLISHED AT ANY RATE ABOVE THAT PROVIDED IN "C" OR "D" THAT DOES NOT EXCEED THE SALARY IN THE PREVIOUS GRADE; IF, HOWEVER, THE PREVIOUS SALARY DOES NOT COINCIDE WITH A SALARY STEP OF THE NEW GRADE, THE SALARY IN THE NEW GRADE MAY BE ANY RATE THAT DOES NOT EXCEED THE NEXT HIGHER SALARY STEP IN THE NEW GRADE. HEADS OF CONSTITUENT UNITS MAY ESTABLISH CONTROLS TO ENSURE CONSISTENCY IN THE APPLICATION OF THIS POLICY.'

WE BELIEVE THAT THE TYPE OF SITUATION PRESENTED BY THIS CASE DEFEATS THE PURPOSE OF EXCEPTION THAT WAS MADE IN 24 COMP. GEN. 226 AND 26 COMP. GEN. 368 TO THE GENERAL RULE FOR ESTABLISHING SALARY UPON PROMOTION. WE ARE BRINGING IT TO YOUR ATTENTION FOR YOUR CONSIDERATION OF THE POSSIBILITY OF EXTENDING THE RULINGS IN THOSE DECISIONS (AS YOU HAVE EXTENDED THEM IN DECISION B-63142 ON JANUARY 28, 1947, WITH REFERENCE TO CASES INVOLVING ODD SALARY RATES) TO:

1. PERMIT CREDITING AN EMPLOYEE ON RETURN TO A HIGHER GRADE FORMERLY HELD WITH TIME PREVIOUSLY SPENT IN THE HIGHER GRADE, SUBSEQUENT TO LAST EQUIVALENT INCREASE IN THAT GRADE, TOWARD NEXT PERIODIC INCREASE, OR

2.AT LEAST PERMIT ESTABLISHING THE EMPLOYEE'S RATE UPON RETURN TO THE HIGHER GRADE AT THE RATE FOR WHICH HE HAD ACTUALLY COMPLETED HIS WAITING PERIOD AND MET OTHER REQUIREMENTS BEFORE DEMOTION.

WITH RESPECT TO THE DECISION OF SEPTEMBER 19, 1944, B-44393, 24 COMP. GEN. 226, THE DECISION OF NOVEMBER 27, 1946, B-61181, 26 COMP. GEN. 368, AND THE DECISION OF JANUARY 28, 1947, B-63142, 26 COMP. GEN. 530, REFERRED TO IN YOUR LETTER, SUPRA, EACH HAD TO DO WITH THE INITIAL SALARY RATE PAYABLE UPON TRANSFER, PROMOTION, DEMOTION, REINSTATEMENT, REEMPLOYMENT, OR RECLASSIFICATION. IN CONNECTION WITH THOSE DECISIONS THERE IS FOR NOTING THE FOLLOWING STATEMENT APPEARING IN 26 COMP. GEN. 368, 372:

IN VIEW OF THE FOREGOING, AND IN ORDER TO CLARIFY AND COORDINATE THE PREVIOUS DECISIONS RESPECTING THE SALARY RATE PAYABLE UPON TRANSFER, PROMOTION, DEMOTION, AND REINSTATEMENT, AND IN THE ABSENCE OF A STATUTE, OR REGULATION HAVING THE FORCE OF LAW, SPECIFICALLY CONTROLLING, THE GENERAL RULE PROPERLY MAY BE AMPLIFIED AND RESTATED AS FOLLOWS: * * * (ITALICS SUPPLIED.) AS INDICATED IN THAT STATEMENT, THE AMPLIFICATION OF PREVIOUSLY EXISTING RULES REGARDING THE SALARY RATE PAYABLE UPON TRANSFER, PROMOTION, DEMOTION, OR REINSTATEMENT, WAS MADE ONLY BECAUSE OF THE ABSENCE OF A STATUTE OR REGULATION HAVING THE FORCE AND EFFECT OF LAW SPECIFICALLY CONTROLLING, THUS REQUIRING A RULE BY DECISION AS TO THE SALARY PAYABLE.

WITH RESPECT TO THE SITUATION AND SUGGESTIONS PRESENTED IN YOUR LETTER, SUPRA, THERE ARE FOR CONSIDERATION THE REGULATIONS RELATING TO THE GRANTING OF PERIODIC WITHIN-GRADE SALARY ADVANCEMENTS PROMULGATED BY THE CIVIL SERVICE COMMISSION PURSUANT TO AUTHORITY CONTAINED IN SECTION 605 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 304. SECTION 25.223 AND SECTION 25.241 OF THOSE REGULATIONS, 12 F.R. 2890, 2891, PROVIDE, IN PERTINENT PART:

SEC. 25.223 EQUIVALENT INCREASE IN COMPENSATION.--- (A) "EQUIVALENT INCREASE IN COMPENSATION" MEANS ANY INCREASE OR INCREASES IN BASIC COMPENSATION WHICH IN TOTAL, AT THE TIME SUCH INCREASE OR INCREASES ARE MADE, ARE EQUAL TO OR GREATER THAN THE SMALLEST COMPENSATION INCREMENT IN THE LOWER GRADE IN WHICH THE EMPLOYEE HAS SERVED DURING THE TIME PERIOD OF TWELVE OR EIGHTEEN MONTHS, AS THE CASE MAY BE.

(B) THE FOLLOWING, AMONG OTHERS, ARE NOT "EQUIVALENT INCREASES IN COMPENSATION: "

(1) INCREASES IN BASIC RATES OF COMPENSATION PROVIDED BY SECTION 405 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, OR SECTION 2 OF THE FEDERAL EMPLOYEES PAY ACT OF 1946;

(2) REWARDS FOR SUPERIOR ACCOMPLISHMENT AS PROVIDED IN SECTIONS 403 AND 404 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945;

(3) INCREASES AS THE RESULT OF THE ESTABLISHMENT OF A NEW MINIMUM RATE FOR ANY CLASS OF POSITIONS IN ACCORDANCE WITH SECTION 401 OF THE FEDERAL EMPLOYEES PAY ACT OF 1945; OR

(4) AN INCREASE UPON RESTORATION OF AN EMPLOYEE TO THE GRADE AND SALARY FROM WHICH HE WAS PREVIOUSLY REDUCED OR DEMOTED, WHEN THE RESTORATION IS THE RESULT OF A DECISION OF A STATUTORY EFFICIENCY RATING BOARD OF REVIEW, A REDUCTION-IN-FORCE APPEAL, THE REALLOCATION OF HIS POSITION TO ITS FORMER GRADE ON APPEAL, OR AN APPEAL UNDER SECTION 14 OF THE VETERANS' PREFERENCE ACT OF 1944. ( ITALICS SUPPLIED.)

SEC. 25.241 ELIGIBILITY REQUIREMENTS AND EFFECTIVE DATE.--- OFFICERS AND EMPLOYEES TO WHOM THIS SUBPART APPLIES SHALL BE ADVANCED IN COMPENSATION SUCCESSIVELY TO THE NEXT HIGHER RATE WITHIN THE GRADE AT THE BEGINNING OF THE NEXT PAY PERIOD (INCLUDING JULY 1, 1945) FOLLOWING THE COMPLETION OF (1) EACH TWELVE MONTHS OF SERVICE IF SUCH OFFICERS OR EMPLOYEES ARE IN GRADES IN WHICH THE COMPENSATION INCREMENTS ARE LESS THAN $200 PER ANNUM OR (2) EACH EIGHTEEN MONTHS OF SERVICE IF SUCH OFFICERS OR EMPLOYEES ARE IN GRADES IN WHICH THE COMPENSATION INCREMENTS ARE $200 OR MORE, SUBJECT TO THE FOLLOWING CONDITIONS:

(A) THAT NO EQUIVALENT INCREASE IN COMPENSATION FROM ANY CAUSE WAS RECEIVED DURING SUCH ERIOD: * * * UNDER THOSE REGULATIONS, WHICH HAVE THE FORCE AND EFFECT OF LAW, THE SALARY RATE RECEIVED AS THE RESULT OF A PROMOTION FROM A LOWER TO A HIGHER GRADE IS REQUIRED TO BE CONSIDERED AS AN "EQUIVALENT INCREASE IN COMPENSATION" WHERE THE INCREASED SALARY RATE EQUALS OR EXCEEDS THE SALARY INCREMENT FOR THE LOWER GRADE EVEN THOUGH THE PROMOTION IS TO A POSITION PREVIOUSLY HELD. A SIMILAR RESULT WAS REQUIRED UNDER PRIOR REGULATIONS PROMULGATED PURSUANT TO STATUTORY 285; ID. 326; ID. 369. ALSO, EVEN IN THE ABSENCE OF SUCH REGULATIONS, A SIMILAR RESULT WOULD BE REQUIRED IN VIEW OF THE PROVISIONS OF SECTION 402 (B) OF THE FEDERAL EMPLOYEES PAY ACT OF 1945, 59 STAT. 299, WHICH FORMED THE BASIS OF, AND ARE SIMILAR TO, THE REGULATIONS QUOTED ABOVE. 25 COMP. GEN. 495. FURTHER, YOUR ATTENTION IS INVITED TO SECTION 25.231 OF THE RULES AND REGULATIONS OF THE CIVIL SERVICE COMMISSION, 12 F.R. 2890, DESCRIBING THE SERVICE TO BE CREDITED FOR WITHIN-GRADE SALARY ADVANCEMENTS. THAT SECTION DOES NOT INCLUDE ANY PROVISION FOR CREDITING SERVICE EARNED IN A HIGHER GRADE POSITION PRIOR TO DEMOTION TOWARD WITHIN-GRADE SALARY ADVANCEMENTS UPON SUBSEQUENT PROMOTION TO THE HIGHER GRADE POSITION PREVIOUSLY HELD.

THIS OFFICE MAY NOT NEGATIVE BY DECISION THE SPECIFIC APPLICABLE PROVISIONS OF THE LAW AND REGULATIONS CITED OR QUOTED ABOVE, AND, IN VIEW OF SUCH LAW AND REGULATIONS, MAY NOT CONSIDER RENDERING A DECISION SUCH AS YOU HAVE SUGGESTED.

IN THE EXAMPLE GIVEN, THE SALARY RATE FIXED FOR THE EMPLOYEE UPON HER PROMOTION ON DECEMBER 15, 1946, WAS THE MAXIMUM WITHIN ADMINISTRATIVE DISCRETION WHICH COULD HAVE BEEN FIXED UNDER EXISTING LAW AND, TO THAT EXTENT, THE ACTION TAKEN WAS CORRECT.