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Frequently Asked Questions Pay & Leave

Can an employee establish initial entitlement to grade or pay retention upon transfer to another agency?

 If an employee is reduced in grade or pay in conjunction with a transfer to another agency, there is no mandatory entitlement to grade or pay retention. However, the gaining agency may grant grade or pay retention under its optional authority (5 CFR 536.202 or 536.302), as long as the employee is otherwise qualified.

One of the eligibility conditions is that the reduction in grade or pay not be "at the employee's request" (5 CFR 536.102(b)(1)). If the transfer is initiated by the employee for his or her benefit, convenience, or personal advantage (including a transfer to avoid adverse action based on personal cause), it would be considered to be at the employee's request, thus barring grade or pay retention. However, if the transfer was directly caused or influenced by a management action (not based on personal cause), then even though the transfer appeared to be voluntary, it would not be "at the employee's request." (See definitions ofmanagement action and reduced in grade or pay at the employee's request in 5 CFR 536.103.)

For purposes of providing optional grade retention to a transferring employee, the management action must be either a specific RIF notice or a written announcement of a reorganization or reclassification that might result in reduction of the employee's grade. For purposes of optional pay retention, the management action must be an action that would result in a pay reduction (after the application of any applicable geographic conversion under 5 CFR 536.303(a) and in the absence of pay retention).

Note: A movement between subcomponents of an Executive department or other Executive agency cannot be considered a transfer. Under the law, the term "agency" includes Executive departments and certain other agencies. (See 5 U.S.C. 101-105, 5102(a), and 5361(2).) Thus, it is possible for mandatory grade and pay retention to apply to an employee who moves between subcomponents of an Executive department or other Executive agency--e.g., if the employee is placed in a lower-graded position at management initiative as a result of reduction-in-force procedures.

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