B-209113-OM, MAY 9, 1983

B-209113-OM, MAY 9, 1983

PRECIS-UNAVAILABLE

THE COMPTROLLER GENERAL:

WE ARE FORWARDING FOR YOUR CONSIDERATION THE CLAIM OF JAMES C. SCHWARZHOFF FOR A RETROACTIVE INCREASE IN MERIT PAY.

MR. SCHWARZHOFF WAS TEMPORARILY PROMOTED FROM GM-13 TO GM-14 ON JULY 12, 1981, BUT SINCE HE HAD BEEN IN THE GM-14 POSITION FOR LESS THAN 120 DAYS BEFORE THE EFFECTIVE DATE OF THE MERIT PAY INCREASE, HE DID NOT RECEIVE MERIT PAY ON OCTOBER 4, 1981. 5 C.F.R. 540.104 (H)(1). WHEN HE RETURNED TO THE GM-13 POSITION HIS MERIT PAY WAS COMPUTED ON THE BASIS OF OPM'S COMPUTATION TABLE, WHICH GIVES AN AWARD EQUAL TO WHAT A GS EMPLOYEE OF SIMILAR GRADE AND SALARY RECEIVES.

MR. SCHWARZHOFF CONTENDS THAT AN ACTUAL MERIT PAY COMPUTATION SHOULD BE PERFORMED AND AN EMPLOYEE ENTITLED TO THAT AMOUNT. THE AGENCY IS CONSIDERING THIS CHANGE FOR ITS NEXT YEAR'S MERIT PAY COMPUTATIONS.

WE ARE REFERRING THE CLAIM FOR YOUR CONSIDERATION AND ADVICE, SINCE SUFFICIENT GUIDELINES HAVE NOT BEEN ESTABLISHED.

INDORSEMENT

DIRECTOR, AFMD

RETURNED. THE QUESTION IN THIS CASE IS HOW TO COMPUTE THE PAY OF AN EMPLOYEE OF THE DEPARTMENT OF AGRICULTURE, FOREST SERVICE, WHO RETURNS FROM A TEMPORARY PROMOTION IN A GM-14 POSITION TO HIS PERMANENT GRADE GM- 13 POSITION AFTER A WAIVER OF MERIT PAY DETERMINATION. THE DEPARTMENT ESTABLISHED A METHOD OF COMPUTATION THAT WAS NOT PRECLUDED BY THE OFFICE OF PERSONNEL MANAGEMENT'S (OPM) REGULATIONS. SINCE THE CLAIMANT WAS PAID THE AMOUNT HE WAS ENTITLED TO UNDER THAT METHOD, HIS CLAIM MUST BE DENIED.

A GENERAL SCHEDULE (GS) EMPLOYEE RECEIVING A PROMOTION DESIGNATED IN ADVANCE AS TEMPORARY IS ENTITLED, UPON RETURN TO HIS FORMER POSITION, TO ANY WITHIN-GRADE INCREASES HE WOULD HAVE RECEIVED HAD THERE BEEN NO TEMPORARY PROMOTION. FPM SUPPLEMENT 990-2, SUBCHAPTER 4-7D. BECAUSE MERIT PAY EMPLOYEES ARE GENERALLY TREATED THE SAME AS GS EMPLOYEES, THE CLAIMANT ARGUES THAT UPON RETURN TO HIS FORMER POSITION HE SHOULD HAVE RECEIVED THE ACTUAL MERIT PAY INCREASE HE WOULD HAVE RECEIVED IN THE LOWER GRADE POSITION DURING THE TIME OF HIS TEMPORARY PROMOTION AND NOT THE AVERAGE INCREASE PROVIDED FOR BY DEPARTMENT REGULATIONS.

ATTACHMENT 2 TO FPM BULLETIN 540-13 MAKES CLEAR THAT EMPLOYEES RECEIVING MERIT PAY ARE TREATED THE SAME AS GENERAL SCHEDULE EMPLOYEES EXCEPT FOR THE METHOD OF ACCOMPLISHING PAY ADJUSTMENTS WITHIN THE RATE RANGE. MERIT PAY EMPLOYEE'S RETURN TO HIS FORMER POSITION FOLLOWING A MERIT PAY INCREASE REQUIRES A PAY ADJUSTMENT WITHIN THE RATE RANGE FOR THAT POSITION. THAT ADJUSTMENT, HOWEVER, CANNOT BE ACCOMPLISHED ON THE BASIS OF WITHIN-GRADE OR QUALITY STEP INCREASES AND WE ARE NOT AWARE OF ANY OPM REGULATION PRESCRIBING THE MANNER IN WHICH THAT ADJUSTMENT IS TO BE COMPUTED.

THE FOREST SERVICE EMPLOYEE IN THIS CASE HAD HIS MERIT PAY DETERMINATION WAIVED BECAUSE HE HAD BEEN IN THE TEMPORARY GM-14 POSITION FOR LESS THAN 120 DAYS AT THE TIME OF THE DETERMINATION. SEE 5 C.F.R. SEC. 540.104(H)(I) (1982). UPON RETURN TO HIS FORMER POSITION THE EMPLOYEE'S PAY WAS SET IN ACCORDANCE WITH DEPARTMENT PROCEDURES PRESCRIBING THE METHOD OF COMPUTING MERIT PAY ADJUSTMENTS FOLLOWING TERMINATION OF A TEMPORARY PROMOTION. FOR THE SITUATION IN WHICH THE INTERVENING MERIT PAY DETERMINATION HAS BEEN WAIVED, THE DEPARTMENT ADOPTED A METHOD OF CALCULATION THAT IS THE SAME AS THE METHOD ESTABLISHED BY 5 C.F.R. SEC. 540.106(A). THAT OPM REGULATION GOVERNS THE COMPUTATION OF MERIT PAY INCREASES IN THE POSITION IN WHICH A MERIT PAY DETERMINATION IS WAIVED AND PROVIDES THAT THE EMPLOYEE SHALL BE PAID THE SUM OF:

"(1) THE EMPLOYEE'S RATE OF BASIC PAY IMMEDIATELY BEFORE THE PERTINENT MERIT PAY INCREASE ***.

"(2) THE ADJUSTMENT REQUIRED BY 5 U.S.C. 5402(C)(1) AND (C)(3) AT THE TIME OF THE PERTINENT MERIT PAY INCREASE; AND

"(3) THE AVERAGE ADJUSTMENT UNDER 5 U.S.C. 5402(B) RECEIVED BY COMPARABLY SITUATED EMPLOYEES AT THE TIME OF THE PERTINENT MERIT PAY INCREASE, AS DETERMINED BY THE EMPLOYING AGENCY."

UNDER THE DEPARTMENT'S REGULATION (PERSONNEL BULLETIN NO. 540-13) THE EMPLOYEE'S PAY IN HIS FORMER POSITION WAS ESTABLISHED AS THE SUM OF FACTORS (1) (2), ABOVE, AND A THIRD FACTOR EQUAL TO "THE AMOUNT OF MONEY THE EMPLOYEE GENERATES UNDER THE OPM COMPUTATION TABLE." OPM, IN EXPLAINING THE PROCEDURE FOR MERIT INCREASES UNDER 5 C.F.R. SEC. 540.106, DELIBERATELY LEFT AGENCIES OPTIMUM DISCRETION TO DEFINE THE PHRASE "AVERAGE ADJUSTMENT *** RECEIVED BY COMPARABLY SITUATED EMPLOYEES" AS USED IN SUBSECTION 540.106(A)(3). OPM SPECIFICALLY ACKNOWLEDGED THAT IT COULD BE DEFINED IN TERMS OF "THE AMOUNT OF MONEY PUT IN THE MERIT PAY FUND FOR THE EMPLOYEE'S GRADE AND POSITION IN THE RATE RANGE" WHICH, IN TURN, IS THE AMOUNT SPECIFIED IN OPM'S MERIT PAY COMPUTATION TABLES. SEE 45 FED.REG. 65497, OCTOBER 3, 1980. IN THE ABSENCE OF AN OPM REGULATION PRESCRIBING THE MANNER IN WHICH MERIT PAY IS TO BE COMPUTED UPON TERMINATION OF A TEMPORARY PROMOTION AND RETURN TO THE EMPLOYEE'S FORMER POSITION, WE FIND NOTHING TO PRECLUDE THE DEPARTMENT FROM ADOPTING OPM'S FORMULA FOR DETERMINING PAY IN THE POSITION IN WHICH THE MERIT PAY DETERMINATION IS WAIVED.

ALTHOUGH THE DEPARTMENT, IN ITS DISCRETION, WOULD HAVE BEEN FREE TO ADOPT THE CLAIMANT'S SUGGESTED METHOD OF PROVIDING AN ADJUSTMENT IN THE RETURN FROM A TEMPORARY PROMOTION SITUATION BY PROVIDING FOR AN ACTUAL MERIT PAY INCREASE CALCULATION, IT DID NOT DO SO AT THE TIME OF THE CLAIMANT'S RETURN. APPARENTLY, IT HAS NOW DECIDED TO ADOPT THE CLAIMANT'S SUGGESTED METHOD BY CHANGING ITS REGULATION. SEE ATTACHED COPY OF LETTER DATED FEBRUARY 17, 1983, FROM THE DEPARTMENT'S CHIEF, EXECUTIVE RESOURCES, PERFORMANCE APPRAISAL AND MERIT PAY STAFF.

ACCORDINGLY, SINCE THE CLAIMANT'S PAY WAS SET IN ACCORDANCE WITH A VALID DEPARTMENTAL POLICY IN EFFECT AT THE TIME OF HIS RETURN FROM A TEMPORARY PROMOTION, HE SHOULD BE ADVISED THAT HIS CLAIM IS DENIED.