Office of the General Counsel

Date: July 28, 1998
Matter of: [xxx]
File Number: S001303

OPM Contact: Murray M. Meeker

This responds to a request for an advance decision from the Manager of the [agency]. The request concerns whether the [agency] has authority to pay retroactive cost-of-living adjustments (COLA's) to those employees in the [xxx] Region who were on pay retention when they were converted from wage grade positions to series 2101 positions in the General Schedule in December 1994. It is OPM's determination that [xxx] lacks authority to pay retroactive COLA's to [xxx] employees.

The [xxx], the labor organization that represents the affected employees, reports that numerous wage grade employees did not have their pay set accurately at the time of the conversion. [xxx] asserts that this occurred because [xxx] erroneously instructed employees in January 1995 that an employee's pay retention would terminate if the employee elected to terminate grade retention, and that it was not until August 1996, that [xxx] correctly advised employees that pay retention already in effect at the time of the conversion would not terminate where an employee elected to terminate grade retention and most importantly that such an election to terminate grade retention would entitle employees to a 25% COLA.

[xxx] reports further that [xxx] continued to provide misinformation in December 1996 when [agency] staff in [xxx] were advised that converted [agency] employees were not eligible for COLA's. [xxx] maintains that [xxx's] failure to set the pay of affected employees at the maximum level constituted a violation of both the [agency's] Personnel Management System and the Agreement Between the [xxx] and the [xxx] (February 10, 1992) (Agreement). While [xxx] acknowledges that there was a lack of information, [xxx] has indicated that it does not have the authority to make the retroactive payments.

[xxx] disagrees and contends that Section 2 of Article 35 of the Agreement compels a different result. On its face, this section of the Agreement appears to simply incorporate the simultaneous action provision in OPM's pay setting regulations, 5 C.F.R. 531.203(f), which states that when an employee becomes entitled to two salary adjustments at the same time, the changes shall be effected in the order that provides the employee with the maximum benefit. This section applies only when two pay setting actions may be effected simultaneously; it is inapplicable where an election must be made before an action may be taken. However, OPM declines to definitively construe collective bargaining agreements. [xxx] may pursue its position through arbitration. Our decision is limited to the issue of whether erroneous information, by itself, may justify a back pay award.

It is well established that an agency is not authorized to pay retroactive benefits as a result of any misinformation that may have been provided to employees. Erroneous advice does not constitute an unjustified or unwarranted personnel action under the Back Pay Act, Pub. L. No. 100-202, 5 U.S.C. 5596. 60 Comp. Gen. 417 (1981).