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Pay & Leave Pay Administration

Fact Sheet: Pay Action Examples in the Federal Wage System

Pay Retention - Placement of a GS non-special rate employee into a lower-graded FWS position (no geographic conversion)

A GS-7, step 10, employee with an official worksite in San Francisco, CA (locality rate of $52,204), is involuntarily placed in a WG-5 position located at the same official worksite. The employee is not entitled to grade retention.

Step A: Determine the nature of action by comparing representative rates (step 4 for GS positions and step 2 for FWS positions). Convert the annual rate of pay to an hourly rate of pay by dividing the annual rate by 2,087. San Francisco locality rate for GS-7, step 4, $44,175 ÷ 2,087 = $21.17. Since the FWS representative rate (WG-5, step 2, $19.08) is lower than the GS representative rate (GS-7, step 4, $21.17), the nature of action is a change to lower grade.

Step B: San Francisco locality rate for GS-7, step 10, $52,204 ÷ 2,087 = $25.01. This hourly rate is the employee's existing payable rate of basic pay.

Step C: Compare the existing rate derived in step B to the highest applicable rate range for the employee's new position of record. If the existing rate from step B exceeds the maximum FWS rate for the employee's grade (WG-5, step 5), the employee is entitled to a retained rate (not to exceed 150 percent of maximum rate of the FWS rate range). Since the existing rate of $25.01 is greater than the WG-5, step 5, rate of $21.36, the employee is entitled to a retained rate of $25.01.

Pay Retention - Placement of a GS non-special rate employee into a lower-graded FWS position (geographic conversion)

A GS-7, step 10, employee with an official worksite in San Francisco, CA (locality rate of $52,204), is involuntarily placed in a WG-5 position in Charlotte, NC. The employee is not entitled to grade retention.

Geographic conversion rule

Step A: Since the employee's San Francisco locality rate would not apply at the official worksite for the FWS position (located in Charlotte), convert the locality rate to the corresponding rate on the "Rest of U.S." (RUS) locality pay schedule that applies in Charlotte. (See 5 CFR 531.610(j).) The GS-7, step 10, locality rate in Charlotte is considered to be the employee's existing payable rate of basic pay.

Grade and rate of basic pay in the San Francisco locality area: GS-7, step 10, $52,204
Grade and rate of basic pay in the RUS locality area: GS-7, step 10, $45,648

Step B: Determine the nature of action by comparing representative rates (step 4 for GS positions and step 2 for FWS positions). Convert the annual rate of pay to an hourly rate of pay by dividing the annual rate by 2,087. RUS locality rate for GS-7, step 4, $38,627 ÷ 2,087 = $18.51. Since the FWS representative rate (WG-5, step 2, $14.39) is lower than the GS representative rate (GS-7, step 4, $18.51), the nature of action is a change to lower grade.

Pay retention rules

Step C: RUS locality rate for GS-7, step 10, $45,648 ÷ 2,087 = $21.87. This hourly rate is the employee's existing payable rate of basic pay.

Step D: Compare the existing rate derived in step C to the highest applicable rate range for the employee's new position of record. If the existing rate from step C exceeds the maximum FWS rate for the employee's grade (WG-5, step 5), the employee is entitled to a retained rate (not to exceed 150 percent of maximum rate of the FWS rate range). Since the existing rate of $21.87 is greater than the WG-5, step 5, rate of $16.11, the employee is entitled to a retained rate of $21.87.

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Promotion - GS to FWS (same location; no geographic conversion)

A GS-8, step 7, non-special rate employee with an official worksite in Washington, DC (locality rate of $48,733), moves to a WG-10 position located at the same official worksite.

Step A: Determine the nature of action by comparing representative rates (step 4 for GS positions and step 2 for FWS positions). Convert the annual rate of pay to an hourly rate of pay by dividing the annual rate by 2,087. DC locality rate for GS-8, step 4, $44,672 ÷ 2,087 = $21.40. Since the FWS representative rate (WG-10, step 2, $22.92) is higher than the GS representative rate (GS-8, step 4, $21.40), the nature of action is a promotion.

Step B: DC locality rate for GS-8, step 7, $48,733 ÷ 2,087 = $23.35. This hourly rate is the employee's existing payable rate of basic pay.

Step C: The employee is entitled to the lowest scheduled rate of the grade to which promoted which exceeds the employee's existing scheduled rate of pay identified in step B by at least four percent of the representative rate of the grade from which promoted. (See 5 CFR 532.407(a).) GS-8, step 4, $21.40 x 4% = $0.86 (rounded to the next cent). GS-08, step 7, $23.35 + $0.86 = $24.21.

Step D: Slot the $24.21 rate into the employee's new FWS grade, WG-10 (highest applicable rate range). Since the lowest step that exceeds $24.21 is step 4 ($24.77), the agency sets the employee's pay at WG-10, step 4.

Promotion - GS to FWS (different location; geographic conversion)

A GS-8, step 7, non-special rate employee with an official worksite in Washington, DC (locality rate of $48,733), moves to a WG-10 position in Buffalo, NY.

Geographic conversion rule

Step A: Since the employee's DC locality rate would not apply at the official worksite for the FWS position (which is located in Buffalo), convert the locality rate to the corresponding rate on the Buffalo (BU) locality rate schedule. (See 5 CFR 531.610(j).) The BU GS-8, step 7, locality rate is considered to be the employee's existing payable rate of basic pay.

Grade and rate of basic pay in the DC locality area: GS-8, step 7, $48,733
Grade and rate of basic pay in the BU locality area: GS-8, step 7, $47,082

Step B: Determine the nature of action by comparing representative rates (step 4 for GS positions and step 2 for FWS positions). Convert the annual rate of pay to an hourly rate of pay by dividing the annual rate by 2,087. BU locality rate for GS-8, step 4, $43,159 ÷ 2,087 = $20.68. Since the FWS representative rate in Buffalo (WG-10, step 2, $22.83) is higher than the GS representative rate in Buffalo (GS-8, step 4, $20.68), the nature of action is a promotion.

Promotion rule

Step C: The employee is entitled to the lowest scheduled rate of the grade to which promoted which exceeds the employee's existing scheduled rate of pay by at least four percent of the representative rate of the grade from which promoted. (See 5 CFR 532.407(a).)

Under 5 CFR 532.407(c), if the promotion is to a position in a different wage area, the agency must determine the employee's pay entitlement as if there were two pay actions - a promotion and a reassignment - and must process them in the order which gives the employee the maximum benefit.

REASSIGN THEN PROMOTE

  1. Reassign employee to new location within the GS pay system, consistent with the geographic conversion rule (convert GS position in DC to GS position in Buffalo)
    • DC locality rate for GS-8, step 7 = $48,733
    • BU locality rate for GS-8, step 7 = $47,082
  2. Promote employee from GS to FWS in Buffalo (new location)
    • BU locality rate for GS-8, step 7, $47,082 ÷ 2,087 = $22.56 hourly rate
    • BU representative rate GS-8, step 4, $20.68 x 4% = $0.83 (rounded to next higher cent)
    • BU locality rate GS-8, step 7, $22.56 + $0.83 = $23.39
    • The employee is entitled to lowest rate on applicable FWS schedule in Buffalo that exceeds $23.39, which is WG-10, step 3, $23.76.

PROMOTE THEN REASSIGN

  1. Promote employee from GS to FWS in DC (old location)
    • DC locality rate for GS-8, step 7, $48,733 ÷ 2,087 = $23.35 hourly rate
    • DC representative rate GS-8, step 4 = annual rate of $44,672 or hourly rate of $21.40
    • $21.40 x 4% = $0.86 (rounded to next higher cent)
    • DC locality rate GS-8, step 7, $23.35 + $0.86 = $24.21
    • The employee is entitled to lowest rate on applicable FWS schedule in DC that exceeds $24.21, which is WG-10, step 4, $24.77.
  2. Reassign employee to new location within the FWS (convert FWS position in DC to FWS
    position in Buffalo)
    • The agency sets the rate at the same grade and step on the new wage area schedule.
    • DC FWS WG-10, step 4 = $24.77
    • BU FWS WG-10, step 4 = $24.67
    • The employee is entitled to WG-10, step 4, $24.67, in Buffalo.

Since the promote-then-reassign method produces a higher rate than the reassign-then-promote method, the employee is entitled to WG-10, step 4, $24.67, upon promotion.

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Placement of a WG non-special rate employee in another WG position at the same grade in a lower wage area (geographic conversion)

A WG-8, step 4, employee with an official worksite in Las Vegas, NV, is involuntarily placed in a WG-8 position in Pensacola, FL. The employee is not entitled to grade retention.

Geographic conversion rule

Convert the employee's rate in the WG-8 position in Las Vegas to the WG-8 position in Pensacola at the same step.

WG-8, step 4 (Las Vegas) = $23.84
WG-8, step 4 (Pensacola) = $21.75

A WG employee moving to another WG position at the same grade in a lower wage area is not eligible for pay retention. The pay retention regulations at 536.303(a) provide that a reduction in an employee's payable rate of basic pay resulting from a geographic conversion is not a basis for entitlement to pay retention. The new pay administration regulations remove the requirement in former 5 CFR 536.104(a) (5) that pay retention apply to an employee whose rate of basic pay would otherwise be reduced as a result of placement in a lower wage area. This change is consistent with 5 U.S.C. 5363(c)(2), which provides that a reduction in an employee's rate of basic pay resulting from a geographic conversion is not a basis for entitlement to pay retention.

Grade Retention - Placement of a WG non-special rate employee in a lower-graded WG position as a result of a reduction in force (geographic conversion)

A WG-10, step 5, FWS employee with an official worksite in Chicago, IL, is placed in a WG-9 position with an official worksite in Baltimore, MD, as a result of a RIF. 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. 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: WG-10, step 5, Chicago = $26.00
Retained grade and rate of basic pay after RIF: WG-10, step 5, Baltimore = $24.13

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 WG-10, step 5, Baltimore rate ($24.13).

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