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An employee whose rate of basic pay otherwise would be reduced as a result of a management action is entitled to retain his or her rate of basic pay. Pay retention may apply to an employee who is in a covered pay system or who is moving to a position under a covered pay system from a position not under a covered pay system (if the individual was an "employee" as defined in 5 CFR 536.103 while in the noncovered pay system). (See definition of covered pay system under Key Terms.)
An agency may not provide pay retention to an employee who-
See 5 CFR 536.102(b) for additional exclusions.
An agency must provide pay retention to an employee who moves between positions under a covered pay system or from a position not under a covered pay system to a position under a covered pay system and whose payable rate of basic pay would be reduced (after application of any applicable geographic conversion) as a result of-
In addition, an agency must establish a retained rate when application of the promotion rule for GS or prevailing rate employees results in a payable rate of basic pay that exceeds the maximum rate of the highest applicable rate range for the employee's new position.
See 5 CFR 536.301 for additional information.
An agency may provide pay retention to an employee not entitled to mandatory pay retention whose payable rate of basic pay otherwise would be reduced as a result of a management action. (See 5 CFR 536.302.)
If, in conjunction with a pay action that may entitle an employee to pay retention, an employee's official worksite changes to a new location where different pay schedules apply, the agency must convert the employee's rate(s) of basic pay to the applicable pay schedule before determining whether the employee is entitled to pay retention and before determining the employee's initial pay retention entitlement. (See 5 CFR 536.303(a).)
Similarly, when an employee is receiving a retained rate and the employee's official worksite changes to a new location where different pay schedules apply, the agency must convert the employee's retained rate to the new location before redetermining the employee's pay retention entitlement in the new position of record at the new official worksite. (See 5 CFR 536.303(b).)
When an employee becomes entitled to pay retention, an agency must determine the employee's pay retention entitlement under the following rules after applying any required geographic conversion (see 5 CFR 536.304):
When an employee receiving a retained rate undergoes a change in position or pay schedule that results in a new highest applicable rate range (when the terminating conditions for pay retention do not apply and the employee's grade and pay system are not changing), the agency must determine the employee's pay retention entitlement under the following rules after applying any required geographic conversion:
See 5 CFR 536.304(c) for additional rules on redetermining retained rates, including when an employee is promoted to a higher-graded position or moves to a higher-graded position under a different covered pay system.
When the maximum rate of the highest applicable rate range for an employee's position of record is increased while the employee is receiving a retained rate, the employee is entitled to 50 percent of the amount of the increase in that maximum rate. This 50-percent adjustment rule applies only when the maximum rate increases are attributable to the adjustment of the employee's existing pay schedule or the establishment of a new pay schedule that covers the employee's existing position of record (e.g., establishment of a new special rate schedule). (See 5 CFR 536.305.)
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A newly established retained rate may not exceed-
In addition, a retained rate may not at any time exceed the rate for level IV of the Executive Schedule. The 150 percent limitation is applicable only when a retained rate is established.
A retained rate is considered to be an employee's rate of basic pay for the purpose of computing or applying retirement deductions, contributions, and benefits; life insurance premiums and benefits; premium pay; severance pay; and General Schedule and prevailing rate pay administration provisions to the extent provided in 5 CFR part 531, subpart B, and 5 CFR part 532; adverse action provisions in 5 CFR part 752; and for other purposes under 5 CFR 536.307. When a retained rate is not considered part of an employee's rate of basic pay when applying other laws and regulations, the employee's rate of basic pay is deemed to be the applicable maximum rate of basic pay for the employee's position of record (e.g., the maximum rate of basic pay for a locality rate range or special rate range, as applicable, for the purpose of computing a percentage-based award under 5 CFR 451.104(g) and recruitment, relocation, and retention incentives under 5 CFR part 575, subparts A, B, and C).
Eligibility for pay retention eligibility ceases or pay retention terminates if any of the following conditions occurs (after applying any applicable geographic conversion):
See 5 CFR 536.308 for additional rules regarding loss of eligibility or termination of pay retention.
An employee whose pay retention benefits are terminated based on a declination of a reasonable offer of a position the pay of which would be equal to or higher than his or her retained rate may appeal the termination to the Office of Personal Management. (See 5 CFR part 536, subpart D.)
An agency must compare the comparison rates (as defined in 5 CFR 536.103) of the applicable grades to determine whether a grade of a position is equal to, higher than, or lower than the grade of another position when determining whether pay retention eligibility is lost or a retained rate is terminated--i.e., when an employee is placed in a lower-graded position under a different covered pay system for personal cause or at the employee's request. (See 5 CFR 536.105 for additional information.)
Covered pay system means the GS pay system under 5 U.S.C. chapter 53, subchapter III; a prevailing rate system under 5 U.S.C. chapter 53, subchapter IV (including the Federal Wage System); or a special occupational pay system under 5 U.S.C. chapter 53, subchapter IX.
Highest applicable rate range means the rate range applicable to an employee based on a given position of record and official worksite that provides the highest rates of basic pay, excluding any retained rates. For example, a rate range of special rates under 5 U.S.C. 5305 may exceed an applicable locality rate range under 5 U.S.C. 5304 for GS employees. In certain circumstances, the highest applicable rate range may consist of two types of pay rates from different pay schedules--e.g., a range where special rates are higher in the lower portion of the range and locality rates are higher in the higher portion of the range.
Management action means an action (not for personal cause) by an agency official not initiated or requested by an employee which may adversely affect the employee's grade or rate of basic pay.
Payable rate means the highest rate of basic pay to which an employee is entitled based on the employee's position of record, official worksite, and step, or, if applicable, retained rate.
Rate of basic pay means the rate of pay fixed by law or administrative action for the position held by a GS employee before any deductions, including a GS rate, under 5 U.S.C. 5332; a law enforcement officer special base rate under section 403 of the Federal Employees Pay Comparability Act of 1990; a special rate under 5 CFR part 530, subpart C, or similar payment under other legal authority; a locality rate under 5 CFR part 531, subpart F, or similar payment under other legal authority; a prevailing rate under 5 U.S.C. 5343; or a retained rate under 5 CFR part 536, subpart C, but excluding additional pay of any other kind.
Reasonable offer means an offer of a position that meets the requirements in 5 CFR 536.104. For example, an offer of a position is a reasonable offer if the employee's rate of basic pay in the offered position would be equal to or greater than the retained rate, if the offer is in writing and includes an official position description, and if the offer meets other certain conditions.
Reduced in grade or pay at the employee's request means a reduction in grade or rate of basic pay that is initiated by the employee for his or her benefit, convenience, or personal advantage. A reduction in grade or pay that is caused or influenced by a management action is not considered to be at an employee's request, except that the voluntary reduction in grade or pay of an employee in response to a management action directly related to personal cause is considered to be at the employee's request.
Reduced in grade or pay for personal cause means a reduction in grade or rate of basic pay based on the conduct, character, or unacceptable performance of an employee. In situations in which an employee is reduced in grade or pay for inability to perform the duties of his or her position because of a medical or physical condition beyond the employee's control, the reduction in grade or pay is not considered to be for personal cause.