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OPM.gov / Policy / Pay & Leave / Pay Administration
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Grade and Pay Retention Examples

Fact Sheet: Grade and Pay Retention Examples

1. Grade Retention-Placement of a General Schedule (GS) non-special rate employee in a lower-graded GS non-special rate position (no geographic conversion)

In 2017, a GS-6, step 3, non-special rate employee with an official worksite in the Rest of United States (RUS) locality pay area is reclassified to a GS-5 non-special rate position at the same worksite.  The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-6 grade for 2 years or until a terminating action occurs under 5 CFR 536.208.

The employee is entitled to retain the GS-6, step 3, RUS locality rate while on grade retention ($39,053).

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2. Grade Retention-Placement of a Federal Wage System (FWS) employee in a GS non-special rate position (no geographic conversion)

In 2017, a WG-9, step 2, employee with an official worksite in Baltimore, Maryland, is placed in a GS-7 position at the same worksite as the result of a reduction in force. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the WG-9 for 2 years or until a terminating action occurs under 5 CFR 536.208.

Determine the employee’s rate of basic pay under grade retention as follows:

Step A: Compare the representative rates of the WG and GS grades to determine whether the GS grade is equal to, higher than, or lower than the WG grade.

WG-9, step 2 (Baltimore wage schedule) = $25.48 per hour. Convert to an annual rate by multiplying the hourly rate by 2,087. $25.48 x 2,087 = $53,177.
GS-7, step 4 (DC locality pay table) = $49,437
$53,177 > $49,437

The GS-7 position is lower than the WG-9 position.

Step B: The employee is entitled to retain the WG-9, step 2, rate while on grade retention.

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3. Grade Retention-Placement of a non-special rate GS employee in a lower-graded GS non-special rate position (geographic conversion)

In 2017, a GS-12, step 4, non-special rate employee with an official worksite in Dallas, TX, ($84,595) is placed in a GS-11 non-special rate position with an official worksite in the “Rest of U.S.” (RUS) locality pay area as the result of a RIF process. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-12 grade for 2 years or until a terminating action occurs under 5 CFR 536.208.

Determine the employee’s rate of basic pay under grade retention as follows:

Geographic conversion rule

Step A: Since the employee is moving to a new official worksite where different pay schedules apply, convert the employee’s rate of basic pay to the new pay schedules by applying the geographic conversion rule. If the agency converted the employee’s former position to the new official worksite, the converted former position would have the same highest applicable rate range as the new position--the RUS locality rate range for GS-12. Thus, pay retention is not potentially applicable, and geographic conversion can be applied by directly setting the employee’s rate of basic pay in the applicable pay schedule for the employee’s new position of record after the RIF action (including the retained grade) which corresponds to the employee’s grade and step immediately before the action. This is the employee’s existing payable rate of basic pay for the purpose of considering whether pay retention applies. (See 5 CFR 536.206(b).)

Grade and rate of basic pay before RIF: GS-12, step 4, Dallas locality rate = $84,595
Retained grade and rate of basic pay after RIF: GS-12, step 4, RUS locality rate = $79,386

Pay retention rules

Step B: While the employee is entitled to a lesser payable rate after the RIF, the reduction is entirely attributable to geographic conversion; therefore, pay retention does not apply. (See 5 CFR 536.303(a) and 536.304(a)(3).) The employee’s payable rate under grade retention is the GS-12, step 4, RUS locality rate ($79,386).

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4. Grade Retention-Placement of a GS special rate employee in a lower-graded GS non-special rate position (no geographic conversion)

In 2017, a GS-0083-9, step 3, police officer with an official worksite in Los Angeles, CA, who is covered by special rate table 983E ($62,282) is placed, as the result of a RIF process, in a GS-8 non-special rate position also located in Los Angeles. (Note: No geographic conversion is necessary in this situation.) The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-9 grade for 2 years or until a terminating action occurs under 5 CFR 536.208.

Determine the employee’s rate of basic pay under grade retention as follows:

Step A: Compare the rate for the former position with the rate for the new position at the same grade and step.

GS-9, step 3, special rate on table 983E: $62,282 (former position)
GS-9, step 3, LA locality rate: $59,814 (new position with retained grade)

Since the rate for the new position is less than the rate for the former position, use the pay retention rules to set pay.

Step B: Compare the employee’s existing payable rate of basic pay ($62,282) to the maximum rate on the highest applicable rate range for the employee’s new position and retained grade.

Existing payable rate of basic pay = $62,282 (GS-9, step 3, special rate table 983E)
Maximum rate of new highest applicable rate range = $72,901 (GS-9, step 10, LA locality rate) $62,282<$72,901

Step C: Since the employee’s existing payable rate of basic pay is less than step 10 of the LA locality rate range, the employee is entitled to the lowest step in that rate range that equals or exceeds his or her existing payable rate of basic pay.

Lowest step rate on the GS-9 LA locality rate range that equals or exceeds $62,282 = step 5
The employee is entitled to the GS-9, step 5, LA locality rate ($63,553).

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5. Grade Retention-Placement of a non-special rate GS employee in a lower-graded GS special rate position (no geographic conversion)

In 2017, a GS-7, step 10, non-special rate employee with an official worksite in the Albuquerque, New Mexico, locality pay area ($53,031) is placed in a GS-6 special rate position covered by special rate table 0349 at the same official worksite as the result of a RIF process. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-7 grade for 2 years or until a terminating action occurs under 5 CFR 536.208. With respect to the new position with a retained grade of GS-7, the highest applicable rate range is the GS-7 range on special rate table 0349.

Determine the employee’s rate of basic pay under grade retention as follows:

Step A: Compare the rate for the former position with the rate for the new position at the same grade and step.

GS-7, step 10, Albuquerque locality rate: $53,031 (former position)
GS-7, step 10, special rate on table 0349: $53,044 (new position with retained grade)
$53,031 < $53,044

Step B: Since the rate for the new position is greater than the rate for the old position, pay retention does not apply. The employee’s payable rate is the GS-7, step 10, special rate of $53,044.

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6. Grade Retention and Pay Retention-Placement of a GS special rate employee in a lower-graded GS non-special rate position (geographic conversion)

In 2017, a GS-11, step 6, information technology (IT) specialist (GS-2210) with an official worksite in Miami, FL, is placed in a GS-9 non-special rate position with an official worksite in Palm Bay, FL, as the result of a RIF process. The employee meets the eligibility requirements for mandatory grade retention under 5 CFR 536.201 and 536.203 and will retain the GS-11 grade for 2 years or until a terminating action occurs under 5 CFR 536.208. Determine the employee’s payable rate of basic pay as follows:

Geographic conversion rule

Step A: Since the employee is moving to a new official worksite where different pay schedules apply, convert the employee’s rate of basic pay to the new pay schedules by applying the geographic conversion rule. Determine the employee’s payable rate of basic pay under the pay schedules that would apply to the employee if his or her former IT position were located in the new location (Palm Bay). (This step is necessary if pay retention is potentially involved.) The resulting rate is considered the employee’s existing payable rate of basic pay in applying pay retention rules.

Grade and payable rate of basic pay before RIF: GS-11, step 6, Miami locality rate = $74,559 (Note: In Miami, the GS-11, step 6, IT special rate under table 999C = $73,259, which is less than the corresponding locality rate and therefore not applicable.) Grade and payable rate of basic pay in Palm Bay after geographic conversion: GS-11, step 6, IT special rate under table 999B = $72,038 (which exceeds the corresponding Palm Bay locality rate of $70,499)

Grade retention rules

Step B: Determine the payable rate of basic pay for the new non-special rate position under grade retention. The employee is entitled under grade retention to the payable rate of basic pay for the new position (including the retained grade) that corresponds to the employee’s existing step.

Grade and payable rate of basic pay under grade retention: GS-11, step 6, Palm Bay locality rate = $70,499

Pay retention rules

Step C: Compare the payable rate under grade retention from Step B to the existing payable rate from Step A (i.e., the rate after geographic conversion- the Palm Bay IT special rate).

Existing payable rate from Step A (after geographic conversion) = $72,038 (GS-11, step 6, special rate table 999B)
Payable rate under grade retention from Step B = $70,499 (GS-11, step 6, Palm Bay locality rate)
$70,499 < $72,038

Step D: Since the employee’s payable rate under grade retention from Step B is less than the employee’s existing payable rate from Step A (after geographic conversion), the employee may be eligible for pay retention--assuming all other conditions are met. Determine the employee’s pay retention entitlement by comparing the existing payable rate to the highest applicable rate range for the employee’s new position (reflecting the retained grade). In this case, the existing rate is below the range maximum, and the employee is entitled to the lowest rate in the range that equals or exceeds the existing rate. Once the employee’s pay is set within the rate range, pay retention ceases to apply.

Existing payable rate from Step A (after geographic conversion) = $72,038
Maximum rate of new highest applicable rate range = $78,555 (GS-11, step 10, Palm Bay locality rate)
$72,038 < $78,555

Lowest step on the GS-11 locality rate range that equals or exceeds $72,038 = step 7
Entitlement under pay retention = GS-11, step 7, Palm Bay locality rate of $72,513

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7. Pay Retention—Expiration of grade retention for a GS non-special rate employee (no change in position; rate below step 10 of lower grade)

In 2015, a GS-11 non-special rate employee is placed in a GS-9 non-special rate position and is entitled to grade retention.  Both positions are in the Boston locality pay area.  In 2017, the 2-year period of grade retention expires.  The employee’s existing rate of pay immediately before the expiration is GS-11, step 3.  Determine the employee’s pay retention entitlement as follows (see 5 CFR 536.304(a)-(b)):

Step A: Compare the employee’s existing payable rate of basic pay with the maximum rate of the highest applicable rate range for the grade of the employee’s GS-9 position of record (i.e., the position of record immediately after the event causing the pay retention entitlement).

Existing payable rate of basic pay = $70,737 (GS-11, step 3, Boston locality rate)
Maximum rate of new highest applicable rate range = $71,259 (GS-9, step 10, Boston locality rate)
$70,737<$71,259

Step B: Since the employee’s existing payable rate of basic pay is less than the maximum rate of the locality rate range as shown in step A, the employee is entitled, under pay retention rules, to the lowest rate of basic pay in that range that equals or exceeds the employee’s existing payable rate of basic pay. Once the employee’s rate is set within a rate range, pay retention ceases to apply.

Lowest step in the GS-9 Boston locality rate range that exceeds existing payable rate of $70,737 = step 10
The employee’s payable rate is the GS-9, step 10, Boston locality rate = $71,259

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8. Pay Retention—Expiration of grade retention for a GS non-special rate employee (no change in position; rate above step 10 of lower grade; pay retention limitation applies)

In 2015, a GS-9 non-special rate employee is placed in a GS-5 non-special rate position and is entitled to grade retention.  Both positions are in the Chicago locality pay area.  In 2017, the 2-year period of grade retention expires.  The employee’s existing rate of pay immediately before the expiration is GS-9, step 10.  Determine the employee’s pay retention entitlement as follows (see 5 CFR 536.304(a)-(b)):

Step A: Compare the employee’s existing payable rate of basic pay with the maximum rate of the highest applicable rate range for the grade of the employee’s GS-5 position of record (i.e., the position of record immediately after the event causing the pay retention entitlement).

Existing payable rate of basic pay = $71,326 (GS-9, step 10, Chicago locality rate)
Maximum rate of new highest applicable rate range = $47,078 (GS-5, step 10, Chicago locality rate)
$71,326>$47,078

Step B: Since the employee’s existing payable rate of basic pay is more than the maximum rate of the locality rate range as shown in step A, the employee is entitled, under pay retention rules, to a retained rate equal to the employee’s existing payable rate of basic pay, subject to the limitations on newly established retained rates. (See 5 CFR 536.304(b).)  A newly established retained rate may not exceed 150 percent of the maximum payable rate of basic pay of the highest applicable rate range for the grade of the employee’s position of record, or the rate for level IV of the Executive Schedule ($161,900).

150 percent of the maximum rate of the new highest applicable rate range = $70,617
($47,078 x 1.50)
$71,326 >$70,617

The employee’s existing payable rate of basic pay is more than the 150 percent limitation on newly established rated rates.  The employee is entitled to a retained rate of $70,617.

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9. Pay Retention—Placement of a GS non-special rate employee in a lower-graded GS non-special rate position (no geographic conversion; rate below step 10 of lower grade)

A GS-6, step 4, non-special rate employee is placed in a GS-5 non-special rate position as a result of a RIF.  Both positions are in the Detroit locality pay area.  The employee does not meet the eligibility requirements for grade retention, but is entitled to mandatory pay retention. Determine the employee’s pay retention entitlement as follows (see 5 CFR 536.304(a)-(b)):

Step A: Compare the employee’s existing payable rate of basic pay with the maximum rate of the highest applicable rate range for the grade of the employee’s GS-5 position of record (i.e., the position of record immediately after the event causing the pay retention entitlement).

Existing payable rate of basic pay = $43,991 (GS-6, step 4, Detroit locality rate)
Maximum rate of new highest applicable rate range = $46,644 (GS-5, step 10, Detroit locality rate)
$43,991<$46,644

Step B: Since the employee’s existing payable rate of basic pay is less than the maximum rate of the locality rate range as shown in step A, the employee is entitled, under pay retention rules, to the lowest rate of basic pay in that range that equals or exceeds the employee’s existing payable rate of basic pay. Once the employee’s rate is set within a rate range, pay retention ceases to apply.

Lowest step in the GS-5 Detroit locality rate range that exceeds existing payable rate of $43,991 = step 8
The employee’s payable rate is the GS-5, step 8, Detroit locality rate = $44,251  

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10. Pay Retention—Placement of a GS non-special rate employee in a lower-graded GS non-special rate position (no geographic conversion; rate above step 10 of lower grade)

A GS-9, step 3, non-special rate employee is reclassified to a GS-7 non-special rate position.  Both positions are in the Kansas City locality pay area.  The employee does not meet the eligibility requirements for grade retention, but is entitled to mandatory pay retention.  Determine the employee’s pay retention entitlement as follows (see 5 CFR 536.304(a)-(b)):

Step A: Compare the employee’s existing payable rate of basic pay with the maximum rate of the highest applicable rate range for the grade of the employee’s GS-7 position of record (i.e., the position of record immediately after the event causing the pay retention entitlement).

Existing payable rate of basic pay = $53,327 (GS-9, step 3, Kansas City locality rate)
Maximum rate of new highest applicable rate range = $53,137 (GS-7, step 10, Kansas City locality rate)
$53,327>$53,137

Step B: Since the employee’s existing payable rate of basic pay is more than the maximum rate of the locality rate range as shown in step A, the employee is entitled, under pay retention rules, to a retained rate equal to the employee’s existing payable rate of basic pay. (See 5 CFR 536.304(b). Note that the retained rate does not exceed 150 percent of the range maximum.)

The employee is entitled to a retained rate of $53,327

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11. Pay Retention-Relocation of an agency office from one locality pay area to another without a change in grade.

A transfer of function occurs when a claims office in Baltimore, Maryland (Washington, DC, locality pay area) relocates to Wilmington, Delaware (Philadelphia locality pay area). An employee’s locality pay rate as a GS-7, step 2, in Baltimore is $46,440 in 2017. Determine the employee’s pay retention eligibility as follows:

Geographic conversion rule

Step A: Identify the highest applicable rate range that would apply to the employee’s former position of record (before the pay action/transfer of function) if that position were stationed at the new official worksite.

Highest applicable pay schedule for GS-7, step 2, in Wilmington = Philadelphia locality pay table

Step B: Determine the employee’s converted payable rate of basic pay for GS-7, step 2, in the rate range identified in step A. The resulting converted payable rate of basic pay is the employee's existing payable rate of basic pay in applying step C.

GS-7, step 2, on Philadelphia locality pay table = $45,260

Pay retention rules

Step C: While the employee is entitled to a lesser payable rate after placement into the new locality pay area, the reduction is entirely attributable to geographic conversion; therefore, pay retention does not apply. (See 5 CFR 536.303(a) and 536.304(a)(3) and 5 U.S.C. 5363(c).) The employee’s payable rate is the GS-7, step 2, Philadelphia locality rate ($45,260).

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12. Pay Retention-Placement of a GS special rate employee in a GS non-special rate position (no geographic conversion)

In 2017, a GS-2210-9, step 5, employee with an official worksite in the New York locality pay area is receiving a special rate on the information technology (IT) special rate table 999E. The employee is reassigned by management action to a GS-343-9 non-special rate position with the same official worksite and may be eligible for pay retention under 5 CFR 536.301. Determine the employee’s pay retention entitlement as follows (see 5 CFR 536.304(a)-(b)):

Step A: Compare the employee’s existing payable rate of basic pay with the maximum rate of the highest applicable rate range for the grade of the employee’s new GS-343 position of record (i.e., the position of record immediately after the event causing the pay retention entitlement).

Existing payable rate of basic pay = $66,176 (GS-9, step 5, on special rate table 999E)
Maximum rate of new highest applicable rate range = $73,784 (GS-9, step 10, New York locality rate)
$66,176<$73,784

Step B: Since the employee’s existing payable rate of basic pay is less than the maximum rate of the locality rate range as shown in step A, the employee is entitled, under pay retention rules, to the lowest rate of basic pay in that range that equals or exceeds the employee’s existing payable rate of basic pay. Once the employee’s rate is set within a rate range, pay retention ceases to apply.

Lowest step in the GS-9 New York locality rate range that exceeds existing payable rate of $66,176 = step 6 (New York locality pay table)
The employee’s payable rate is the GS-9, step 6, New York locality rate = $66,215

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13. Pay Retention-Placement of a GS special rate employee in a GS non-special rate position (special rate applies to former position after geographic conversion)

In 2017, a GS-2210-9, step 10, employee with an official worksite in San Jose, CA, is receiving a special rate on the IT special rate table 999F ($78,158). The employee is reassigned by management action to a GS-343-9 non-special rate position with an official worksite in San Diego, CA, and may be eligible for pay retention under 5 CFR 536.301. Determine the employee’s pay retention entitlement as follows (see 5 CFR 536.304(b)):

Geographic conversion rule

Step A: Identify the highest applicable rate range that would apply to the employee's former position of record (before the pay action) as if that position were stationed at the new official worksite. (See 5 CFR 536.303(a).)

Applicable pay schedule for GS-2210-9 in San Diego = IT special rate table 999C

Step B: Determine the employee's converted payable rate of basic pay for GS-9, step 10, in the rate range identified in step A. The resulting converted payable rate of basic pay is the employee's existing payable rate of basic pay in applying step C.

GS-9, step 10, on table 999C = $73,098

Pay retention rules

Step C: Compare the San Diego existing payable rate of basic pay identified in step B to the maximum rate on the highest applicable rate range for the employee’s new GS-343 non-special rate position (i.e., the San Diego locality pay table). Since the employee’s existing payable rate of basic pay identified in step B is greater than the maximum rate of the San Diego locality pay table, the employee is entitled to a retained rate equal to the existing payable rate of basic pay. (See 5 CFR 536.304(b). Note that the retained rate does not exceed 150 percent of the range maximum.)

Existing payable rate of basic pay = $73,098 (GS-9, step 10, table 999C)

Maximum rate of new highest applicable rate range = $71,400 (GS-9, step 10, San Diego locality rate)
$73,098 > $71,400
The employee is entitled to a retained rate of $73,098

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14. Pay Retention-Placement of a GS special rate employee in a GS non-special rate position (no special rate applies to former position after geographic conversion)

In 2017, a GS-1529-7, step 1, employee with an official worksite in Washington, DC, is receiving a special rate on special rate table 0032 ($48,442). The employee is reassigned by management action to a GS-1529-7 non-special rate position with an official worksite in Atlanta, GA, and may be eligible for pay retention under 5 CFR 536.301. Determine the employee’s pay retention entitlement as follows (see 5 CFR 536.304(b)):

Geographic conversion rule

Step A: Identify the highest applicable rate range that would apply to the employee's former position of record (before the pay action) if that position was stationed at the new official worksite.

Highest applicable pay schedule for GS-1529-7 in Atlanta = Atlanta locality pay table

Step B: Determine the employee’s converted payable rate of basic pay for GS-7, step 1, based on the rate range identified in step A. The resulting converted payable rate of basic pay is the employee’s existing payable rate of basic pay in applying step C.

GS-7, step 1, on Atlanta locality pay table = $42,678

Pay retention rules

Step C: While the employee is entitled to a lesser payable rate after placement into the non-special rate position, the reduction is entirely attributable to geographic conversion; therefore, pay retention does not apply. (See 5 CFR 536.303(a) and 536.304(a)(3).) The employee’s payable rate is the GS-7, step 1, Atlanta locality rate ($42,678).

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15. Pay Retention-Placement of an FWS employee in a GS non-special rate position (no geographic conversion)

In 2017, a WL-08, step 3, employee with an official worksite in Washington, DC ($28.85 per hour) is placed by management action in a GS-9 non-special rate position that is also located in Washington, DC. The employee is not entitled to grade retention.

Step A: Convert the WL hourly rate of pay to an annual rate of pay by multiplying the hourly rate by 2,087. This annual rate is the employee's existing payable rate of basic pay in applying step B.
$28.85 times 2,087 = $60,210.

Step B: Compare the existing payable rate identified in step A to the maximum rate of the highest applicable rate range for the grade of the employee’s new position of record (after the event causing the pay retention entitlement). Since the employee’s existing payable rate is less than the maximum rate of the DC locality rate range, the employee is entitled to the lowest rate in that range that equals or exceeds his or her existing payable rate of basic pay. After the employee’s pay is set within the rate range, pay retention ceases to apply. (See 5 CFR 536.304(b).)

Annual rate identified in step A = $60,210
Maximum rate of the new highest applicable rate range = $71,467 (GS-9, step 10, DC locality rate)
$60,210<$71,467

Lowest step on the GS-9 DC locality rate range that equals or exceeds $60,210 = step 4
The employee is entitled to the GS-9, step 4, DC locality rate = $60,470

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16. Pay Retention-Placement of an FWS employee into a GS non-special rate position (geographic conversion)

In 2017, a WG-12, step 4, employee with an official worksite in Seattle, Washington, is placed by management action in a non-special rate GS-11 position in Portland, Oregon. The employee is not entitled to grade retention.

Geographic conversion rule

Step A: Convert the employee’s rate in the WG-12 position in Seattle to the WG-12 position in Portland at the same step. (Note: The reduction of the employee’s hourly rate resulting from geographic conversion does not result in pay retention. The rate resulting from geographic conversion is treated as the employee’s existing rate in applying pay retention rules. See 5 CFR 536.303(a) and 536.304(a)(3).)

WG-12, step 4 (Seattle) = $33.31 per hour
WG-12, step 4 (Portland) = $32.00 per hour (existing rate)

Pay retention rules

Step B: Convert the employee’s existing WG hourly rate of pay (i.e., the Portland rate) to an annual rate of pay by multiplying the hourly rate by 2,087. This annual rate is the employee’s existing payable rate of basic pay in applying step C.

$32.00 times 2,087 = $66,784

Step C: Compare the existing payable rate identified in step B to the maximum rate of the highest applicable rate range for the grade of the employee’s new position of record (after the event causing the pay retention entitlement). Since the employee’s existing payable rate is less than the maximum rate on the Portland locality rate range, the employee is entitled to the lowest rate in that range that equals or exceeds his or her existing payable rate of basic pay. After the employee’s pay is set within the rate range, pay retention ceases to apply. (See 5 CFR 536.304(b).)

Annual rate identified in step B = $66,784
Maximum rate of the new highest applicable rate range = $82,956 (GS-11, step 10, Portland locality rate)
$66,784<$82,956

Lowest step on the GS-11 Portland locality rate range that equals or exceeds $66,784 = step 3
The employee is entitled to the GS-11, step 3, Portland locality rate = $68,069.

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17. Geographic conversion of a retained rate resulting in a pay increase (movement to higher locality pay area)

In 2017, a GS-11, step 00, employee with an official worksite in the “Rest of U.S.” (RUS) locality pay area and a retained rate of $81,900 moves to a new official worksite in the Washington, DC, locality pay area. The employee’s grade is not changed, and the employee’s former and new positions of record are not covered by a special rate. Convert the employee’s retained rate to the new geographic location as follows. (See 5 CFR 536.303(b) and 536.304.)

Geographic conversion rule

Step A: Identify the maximum rate for the highest applicable rate range that applies to the employee's former position of record based on the former official worksite.

GS-11, step 10, RUS locality rate = $78,270.

Step B: Identify the maximum rate for the highest applicable rate range that would apply to the employee's former position of record if that position were located at the new official worksite.

GS-11, step 10, Washington, DC, locality rate = $86,460.

Step C: Divide the maximum rate identified in step B by the maximum rate identified in step A, and round the result to the fourth decimal place.

$86,460 ÷ $78,270 = 1.1046

Step D: Multiply the factor resulting from step C by the employee’s retained rate and round to the nearest whole dollar to derive the employee's converted retained rate at the new official worksite.

1.1046 × $81,900 = $90,467 (retained rate after geographic conversion)

Note: The employee’s converted retained rate in the DC location is approximately 4.6 percent above the maximum rate of the highest applicable rate range ($90,467 ÷ $86,460 = 1.0463), just as the employee’s retained rate in the RUS location was approximately 4.6 percent above the maximum rate of the highest applicable rate range ($81,900 ÷ $78,270 = 1.0464). Thus, the geographic conversion rule maintains the relative position of the employee’s retained rate compared to the applicable rate range maximum.

Pay retention rules

Step E: Identify the highest applicable rate range for the employee’s new position in the new location. In this case, that range is the same range identified in step B (i.e., the DC locality rate range for GS-11); therefore, the employee’s retained rate is $90,467. (Note: If a change in position or pay schedule after geographic conversion would have resulted in a different highest applicable rate range, the retained rate from step D would be compared to that range, as provided in 5 CFR 536.304(c). The retained rate would be eliminated if it were less than the maximum of that rate.)

Highest applicable rate range for new position = GS-11 DC locality rate range
Retained rate = $90,467

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18. Geographic conversion of a retained rate resulting in a pay reduction (movement to lower locality pay area)

In 2017, a GS-7, step 00, employee with an official worksite in the Seattle locality pay area and a retained rate of $58,100 moves to a new official worksite in the Sacramento locality pay area. The employee’s grade is not changed, and the employee’s former and new positions of record are not covered by a special rate. Convert the employee’s retained rate to the new geographic location as follows. (See 5 CFR 536.303(b) and 536.304.)

Geographic conversion rule

Step A: Identify the maximum rate for the highest applicable rate range that applies to the employee's former position of record based on the former official worksite.

GS-7, step 10, Seattle locality rate = $57,113

Step B: Identify the maximum rate for the highest applicable rate range that would apply to the employee's former position of record if the employee were stationed at the new official worksite.

GS-7, step 10, Sacramento locality rate = $57,067

Step C: Divide the maximum rate identified in step B by the maximum rate identified in step A, and round the result to the fourth decimal place.

$57,067 ÷ $57,113 = 0.9992

Step D: Multiply the factor resulting from step C by the employee's former retained rate and round to the nearest whole dollar to derive the employee's converted retained rate at the new official worksite.

0.9992 × $58,100 = $58,054 (retained rate after geographic conversion)

Note: The employee’s converted retained rate in the Sacramento location is approximately 1.7 percent above the maximum rate of the highest applicable rate range ($58,054 ÷ $57,067 = 1.0173), just as the employee’s retained rate in the Seattle location was approximately 1.7 percent above the maximum rate of the highest applicable rate range ($58,100 ÷ $57,113 = 1.0173). Thus, the geographic conversion rule maintains the relative position of the employee’s retained rate compared to the applicable rate range maximum. The reduction in the retained rate in this example is attributable to geographic conversion and is not a basis for pay retention.

Pay retention rules

Step E: Identify the highest applicable rate range for the employee’s new position in the new location. In this case, that range is the same range identified in step B (i.e., the Sacramento locality rate range for GS-7); therefore, the employee’s retained rate is $58,054. (Note: If a change in position or pay schedule after geographic conversion would have resulted in a different highest applicable rate range, the retained rate from step D would be compared to that range, as provided by 5 CFR 536.304(c). The retained rate would be eliminated if it were less than the maximum of that rate.)

Highest applicable rate range for new position = GS-7 Sacramento locality rate range
Retained rate = $58,054

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19. Geographic conversion of a retained rate resulting in a pay reduction (movement from a special rate schedule to a locality pay schedule)

In 2017, a GS-0680-13, step 00, dental officer in Colorado is receiving a retained rate of $126,000. In Colorado, the dental officer’s highest applicable rate range is the GS-13 range from special rate table 0606. The dental officer moves to a GS-0680-13 position in the Rest of U.S. locality pay area. Convert the employee’s retained rate to the new geographic location as follows. (See 5 CFR 536.303(b) and 536.304.)

Geographic conversion rule

Step A: Identify the maximum rate for the highest applicable rate range that applies to the employee’s former position of record based on the former official worksite.

GS-13, step 10, special rate table 0606 = $124,106

Step B: Identify the maximum rate for the highest applicable rate range that would apply to the employee’s former position of record if the employee were stationed at the new official worksite.

GS-13, step 10, RUS locality rate = $111,560

Step C: Divide the maximum rate identified in step B by the maximum rate identified in step A, and round the result to the fourth decimal place.

$111,560 ÷ $124,106 = 0.8989

Step D: Multiply the factor resulting from step C by the employee’s former retained rate and round to the nearest whole dollar to derive the employee’s converted retained rate at the new official worksite.

0.8989 × $126,000 = $113,261 (retained rate after geographic conversion)

Note: The employee’s converted retained rate in the RUS location is approximately 1.5 percent above the maximum rate of the highest applicable rate range ($113,261 ÷ $111,560 = 1.0152), just as the employee’s retained rate in the Colorado location was approximately 1.5 percent above the maximum rate of the highest applicable rate range ($126,000 ÷ $124,106 = 1.0153). Thus, the geographic conversion rule maintains the relative position of the employee’s retained rate compared to the applicable rate range maximum. The reduction in the retained rate in this example is attributable to geographic conversion and is not a basis for pay retention.

Pay retention rules

Step E: Identify the highest applicable rate range for the employee’s new position in the new location. In this case, that range is the same range identified in step B (i.e., the GS-13 locality rate range); therefore, the employee's retained rate is $113,261. (Note: If a change in position or pay schedule after geographic conversion would have resulted in a different highest applicable rate range, the retained rate from step D would be compared to that range, as provided in 5 CFR 536.304(c). The retained rate would be eliminated if it were less than the maximum of that rate.)

Highest applicable rate range for new position = GS-13 RUS locality rate range
Retained rate = $113,261

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20. Pay Retention-Placement of an FWS employee in a GS position (no geographic conversion)

In 2017, a WL-09, step 5, employee with an official worksite in Atlanta, GA ($33.85 per hour), is placed by management action in a GS-9 non-special rate position also located in Atlanta, GA. The employee is not entitled to grade retention.

Step A: Convert the WL hourly rate of pay to an annual rate of pay by multiplying the hourly rate by 2,087. This annual rate is the employee's existing payable rate of basic pay in applying step B.
$33.85 × 2,087 = $70,645

Step B: Compare the existing payable rate identified in step A to the maximum rate of the highest applicable rate range for the grade of the employee’s new position of record (after the event causing the pay retention entitlement). Since the employee’s existing payable rate is greater than the maximum rate of the Atlanta locality rate range, the employee is entitled to a retained rate equal to the employee’s existing payable rate of basic pay, subject to the limitations in 5 CFR 536.304(b)(3). The employee’s existing payable rate of basic pay is less than the rate for level IV of the Executive Schedule and 150 percent of the GS-9, step 10, Atlanta locality rate.

Annual rate identified in step A = $70,645
Maximum rate of the new highest applicable rate range = $67,868 (GS-9, step 10, Atlanta locality rate)
$70,645>$67,868

$70,645<$161,900 (Executive Level IV)
$70,645<$101,802 (150 percent of GS-9, step 10, Atlanta locality rate) ($67,868 x 1.5)

The employee is entitled to a retained rate equal to the employee’s existing payable rate of basic pay.
GS-9, step 00 = $70,645

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