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The Postal Reorganization Act of 1970 requires the Postal Service to pay wages comparable to those of the private sector. It also requires the Service to provide adequate and reasonable pay differences between clerks and carriers and their supervisors, such as postmasters, although the act does not specify what constitutes adequate and reasonable differences. Furthermore, the act requires the Service to consult with supervisor and postmaster organizations when planning and developing pay policies and other programs affecting their members. Since the mid-1970s, two postmaster organizations have voiced concerns that adequate and reasonable pay differences do not exist between postmasters and the clerks and carriers they supervise. Recently, the organizations took their concerns to Congress. The resulting Postmasters' Fairness and Rights Act would make substantive changes in the way postmasters' pay is determined. Most postmasters are now paid under the Service's Executive and Administrative Schedule (EAS), which is the salary schedule that applies to nearly all supervisory and management employees. Generally, postmaster pay consists of basic pay; pay-for-performance; lump-sum merit awards; and supplemental pay, such as overtime. In 1996, the Service lowered the minimum basic pay of the 26 EAS grades. This resulted in the minimum basic pay of EAS-15 and EAS-16 supervisors being less than the maximum basic pay of a grade 5 clerk, which was the most populated grade and pay level of the largest bargaining unit. Because of this and the 1970 Act's requirement that an adequate and reasonable pay difference be maintained, the Service established a Supervisory Differential Adjustment (SDA) policy for EAS-15 and above supervisors who are not eligible to receive overtime pay. This policy provides that these supervisors will be paid no less than five percent more than the maximum basic pay of a grade 5 clerk. GAO's analyses showed that two craft employees earned more in basic pay than did their local postmasters in 1999, and about one-half of one percent of craft employees earned more in gross pay than did their local postmasters. The five organizations that GAO selected to discuss pay practices had pay policies to minimize instances of craft employees earning more than their supervisors. These organizations indicated that craft employees only occasionally earned more than their supervisors.

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Recommendations for Executive Action

Agency Affected Recommendation Status
United States Postal Service 1. In order to be in a better position to evaluate its SDA policy and the pay differences between postmasters and their craft employees, the Postmaster General should use postal payroll and any other comparable data to periodically (1) determine the extent to which clerks and carriers may be earning more than their local postmasters, and the reasons why, if applicable; and (2) reassess the adequacy and reasonableness of the pay differences between postmasters and the clerks and carriers they supervise.
Closed - Not Implemented
On April 28, 2005, USPS sent its 60-day letter to the Chairman of the Government Reform Committee, which was due over 3 1/2 years ago. USPS recently revised its pay system for non-bargaining managerial/staff employees, but the system maintained the supervisory pay differential. USPS' Compensation Office has not taken action to implement GAO's recommendation.

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