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Agencies must use the standard method when an employee is covered by the same pay schedules before and after promotion. For example, an employee may be covered by the same locality rate schedule before and after promotion. See Promotion Examples 7 and 9-14.
Also, agencies should use the standard method when an employee is covered by different pay schedules before and after promotion if the standard method produces a higher payable rate upon promotion than the alternate method. See Promotion Examples 2, 4, 6, and 8. However, an agency may determine it is inappropriate to use the standard method under 5 CFR 531.214(d)(2)(iii).
Agencies should use the alternate method when an employee is covered by different pay schedules before and after promotion if the alternate method produces a higher payable rate upon promotion than the standard method. See Promotion Examples 3 and 5.
Agencies also may use the alternate method even if the alternate method produces a lower payable rate than the standard method. Under this circumstance, the agency must determine under 5 CFR 531.214(d)(2)(iii) that it would be inappropriate to use the standard method based on a finding that the higher pay for the position before promotion is not sufficiently related to the knowledge and skills required for the position after promotion.
When a temporary promotion is made permanent immediately after the temporary promotion ends, the employee is not returned to the lower grade in order to process the permanent promotion. See 5 CFR 531.214(e). The agency must convert the employee’s temporary promotion to a permanent promotion without a change in pay. The appropriate action is to process the promotion (nature of action code 702) showing the higher grade as the grade before and after promotion. (See rules 5 and 6, Table 14-B, chapter 14, of the Office of Personnel Management’s Guide to Processing Personnel Actions.) In effect, the promotion increase granted at the time of the temporary promotion is ratified and made permanent by the removal of the not-to-exceed limitation on the temporary promotion.
If there is any period of time between the end of a temporary promotion and the beginning of a permanent promotion, the employee must be returned to the lower grade. As required by 5 CFR 531.215(c), the agency must recompute the employee’s rate of basic pay for the lower grade as if the employee had never been temporarily promoted.
If the employee’s temporary promotion was for more than 1 year, the agency may choose, at its discretion, to apply the maximum payable rate rule in 5 CFR 531.221 if that would yield a higher rate. Under the maximum payable rate rule, an agency may set pay at any step equal to or less than the maximum payable rate, but not less than the rate to which the employee is entitled under the normal pay-setting rules. Whatever method is used, the resulting rate is the basis for any subsequent promotion action.
Agencies must first process a geographic conversion before deciding which promotion method to apply. 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. The agency must 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 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 rules 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.
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