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Five administrative law judges of the Social Security Administration, who served as temporary GS-14 hearing examiners for the Department of Health, Education and Welfare (HEW) claimed retroactive adjustment of pay. The claimants stated that HEW did not apply the "highest previous rate rule" in in 1974 and 1975 when they were appointed to their permanent GS-13 level positions and placed in a leave without pay status in those positions while they continued to serve as hearing examiners at GS-14. The claimants alleged that this action was contrary to HEW policy and inequities occurred because those individuals who chose not to continue as examiners were given the advantage of the highest previous rate rule. The claimants felt that they should have been given two or more in-grade step increases at GS-13 in 1974 and 1975. GAO responded by stating that application of the highest previous rate rule is discretionary and the rate was properly set in accordance with agency regulations when the claimants were assigned to the permanent GS-13 positions. They are, however, entitled to credit for the time spent in the GS-14 positions toward within-grade increases in these temporary positions, since their reassignment to such positions did not initiate new waiting periods.

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