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A promotion is a change of an employee while continuously employed from one General Schedule (GS) grade to a higher GS grade.
Only GS employees who are promoted to a higher grade under the General Schedule without a break in service are covered by the two-step promotion rule in 5 U.S.C. 5334(b) and 5 CFR 531.214 (also, 5 CFR 531.243 for GM employees).
The two-step promotion rule states that a GS employee promoted to a position in a higher grade is entitled to basic pay at the lowest rate of the higher grade that exceeds his or her existing rate of basic pay by not less than two step increases of the grade from which promoted. The two-step promotion rule must be applied using one of two methods--the standard method or the alternate method.
When an employee's official worksite is changed to a new location upon promotion where different pay schedules apply*, the agency must convert the employee to the applicable pay schedule(s) and rate(s) of basic pay for the new official worksite based on the employee's position of record before promotion before applying the two-step promotion rule. Set the employee's rate(s) of basic pay in the applicable pay schedule(s) in the new location based on his or her position of record (including grade) and step (or a GM employee's GS rate) immediately before the change in the employee's official worksite. The resulting rate must be used as the existing rate in applying the two-step promotion rule. (See 5 CFR 531.206 and 531.214 for information on processing other pay actions that may occur simultaneously with a promotion action.)
*In the context of applying the geographic conversion rule, the phrase "where different pay schedules apply" means that an employee's official worksite is changed to a new location that would cause the employee to lose or gain coverage under a location-based pay schedule (i.e., locality rate schedule or special rate schedule) if the employee were to remain in the same position of record.
Apply the standard method for the two-step promotion rule if the employee is covered by the same pay schedules before and after promotion. For example, an employee may be covered by the General Schedule and the same locality rate schedule before and after promotion. The steps for the standard method are as follows:
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Apply the alternate method for the two-step promotion rule if the employee is covered by different pay schedules before and after promotion and if the alternate method will produce a higher payable rate upon promotion than the standard method. For example, an employee may be covered after promotion by a special rate schedule that did not apply to him or her before promotion, and the alternate method will produce a higher rate.
Exception: An agency may apply the alternate method for an employee covered by different pay schedules before and after promotion, even though the alternate method produces a lesser payable rate than the standard method, only under the following conditions:
If an employee was receiving a retained rate before promotion, apply the promotion rule as follows:
An agency may use the maximum payable rate provisions of 5 CFR 531.221 through 531.223 (and 5 CFR 531.247 for GM employees) to set an employee's pay at a higher rate upon promotion. The maximum payable rate provisions allow an agency to set pay based on higher pay the employee previously earned in another Federal job. However, agencies may not use the maximum payable rate provisions to set an employee's pay at a lower rate than that provided by the two-step promotion rule. See the fact sheet entitled "Maximum Payable Rate Rule" for additional information.
Highest applicable rate range means the rate range applicable to a GS 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 may exceed an applicable locality rate range. 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 (based on a fixed dollar supplement) are higher in the lower portion of the range and locality rates are higher in the higher portion of the range.
Pay schedule means a set of rate ranges established for GS employees under a single authority--i.e., the General Schedule, an LEO special base rate schedule (for grades GS-3 through 10), a locality rate schedule based on GS rates, a locality rate schedule based on LEO special base rates (for grades GS-3 through 10), or a special rate schedule. A pay schedule applies to or covers a defined category of employees based on established coverage conditions (e.g., official worksite, occupation). A pay schedule is considered to apply to or cover an employee who meets the established coverage conditions even when a rate under that schedule is not currently payable to the employee because of a higher pay entitlement under another pay schedule.
Position of record means an employee's official position (defined by grade, occupational series, employing agency, LEO status, and any other condition that determines coverage under a pay schedule (other than official worksite)), as documented on the employee's most recent Notification of Personnel Action (Standard Form 50 or equivalent) and current position description. A position to which an employee is temporarily detailed is not documented as a position of record.
Rate of basic pay means the rate fixed by law or administrative action for the position held by a GS employee before deductions. A rate of basic pay includes 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 U.S.C. 5305, a locality rate under 5 U.S.C. 5304, or a retained rate under 5 U.S.C. 5363. (See section on retained rate employees for more information.)