Washington, DC
U.S. Office of Personnel Management
Compensation Claim Decision
Under section 3702 of title 31, United States Code
Fort Belvoir, Virginia
Damon B. Ford
Compensation and Leave Claims
Program Manager
Agency Compliance and Evaluation
Merit System Accountability and Compliance
08/03/2020
Date
The claimant occupies a Supervisory Pharmacist, GS-660-14, position with the Defense Health Agency (DHA) at Fort Belvoir, Virginia. She seeks to correct the setting of her pay from step 9 to step 10 upon her promotion to the GS-14 grade level, and to be granted back pay to the effective date of her November 30, 2014, appointment to the position. We received the claim on March 27, 2019, and the agency administrative report on May 17, 2019. For reasons discussed herein, the claim is denied and corrective action is required.
The claimant was previously employed as a Supervisory Pharmacist (Clinical Specialist), GS-660-13, step 10, with the U.S. Department of Veterans Affairs (VA) in Las Vegas, Nevada. When she resigned from the VA, effective November 29, 2014, her rate of basic pay was $132,716, with no locality adjustment as a result of her special salary rate (SSR) exceeding the locality rate of pay. Upon appointment to the DHA, the agency used the GS maximum payable rate (MPR) rule to set the claimant’s pay at the GS-14, step 9, rate with basic pay of $108,352, locality adjustment of $26,243, for a total salary of $134,595.
As provided for by section 531.221(a) of title 5, Code of Federal Regulations (CFR), the MPR rule allows an agency to set pay for a GS employee above the rate that would be established using normal rules, based on a higher rate of pay the employee previously received in another Federal job; i.e., his or her highest previous rate (HPR). The MPR rule may be used for various pay actions including reemployment, transfer, reassignment, promotion, demotion, change in appointment type, and movement from a non-GS pay system. The pay set under the MPR rule may not exceed the rate for step 10 of the GS grade of the position in which the employee is being placed or be less than the rate to which the employee would be entitled under normal pay-setting rules.
In its administrative report to OPM, the agency explains its consideration of the claimant’s HPR from the VA to determine the MPR, as follows:
Using the maximum pay rate rule, 5 CFR 531.221 and 531.222, for the current salary of ($132,716) on the [DCB table for the locality pay area of Washington-Baltimore-Arlington, DC-MD-VA-WV-PA] GS-14 scale, $132,716 fell between the step 8 and 9, but did not exceed the step 9. Pay was set at the GS-14 step 9 ($134,595).
However, the claimant states in her request to OPM that the agency "did not consider using [HPR] on [her] transfer and promotion." She explains her pay should be set at GS-14, step 10, as follows:
I reviewed 5 CFR part 531.222 Rates of basic pay that may be used as the [HPR], a.1.i. The highest rate of basic pay previously received by an individual while employed in a civilian position in any part of the Federal Government, without regard to whether the position was in a GS pay system. In my case, according to my [Standard Form] 50 from the VA, Box 12A. Basic Pay is $132,716 (Attachment 1). Therefore, HPR used should be $132,716. The lowest step rate in that range that was equal to or higher than this HPR would be GS-14 step 9 $134,595 ($108,352 base + $26,243 locality) from salary table 2014-DCB (Attachment 3). Then, the 2 step promotion rule should apply. The within grade difference on the GS-14 2014-DCB pay scale is $3,541, therefore, 2 step promotion should equal $141,677 ($134,595 + $3,541 + $3,541). Because this salary cannot exceed the salary for step 10 ($138,136), then pay setting in my case should have been GS-14 step 10.
First, we must establish the lowest payable rate of basic pay to which the claimant is entitled upon promotion, defined by 5 CFR 531.203 as movement from one GS grade to a higher GS grade while continuously employed including movement in conjunction with a transfer. Setting pay upon an employee’s promotion in the GS is governed by the rules in 5 CFR 531.214, which implements the two-step promotion rule provided in section 5334(b) of title 5, United States Code (U.S.C.). The two-step promotion rule provides 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 which 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 the standard method or the alternate method. 5 CFR 531.214(d)(2)(ii) provides that the alternate method is to be applied if the employee is covered by different pay schedules before and after promotion (e.g., an employee may be covered after promotion by a SSR schedule that did not apply to him or her before promotion) and if the alternate method will produce a higher payable rate upon promotion than the standard method. In the claimant’s situation, an SSR schedule would apply at Fort Belvoir, Virginia, to her GS-13 position but no special rate range applies to the GS-14 level. Instead, just a locality rate range applies. Because the claimant is covered by an SSR schedule before promotion but not after promotion and, additionally, the alternate method would not produce a higher payable rate, we applied the standard method as instructed by 5 CFR 531.214(d)(2)(i) as follows:
Step A: If applicable, apply the geographic conversion rule to determine the employee’s rate(s) and range(s) of basic pay based on the employee’s position of record before promotion and the new official worksite. Use the resulting rate(s) of basic pay as the existing rate(s) in effect immediately before promotion in applying steps B and C.
The geographic conversion rule, provided in 5 CFR 531.205, applies since the claimant’s official worksite changed to an area covered by a different locality schedule after her promotion. Based on the GS-13 position before promotion (the GS-660 occupational series), the 2014 pay schedules applicable to her at Fort Belvoir, Virginia, would be the regular GS (base), the locality rate schedule covering Fort Belvoir (i.e., the DCB salary table), and the Department of Defense’s SSR table covering GS-660 positions.
Step B: Identify the employee’s existing GS rate in the grade before promotion, and increase that rate by two GS within-grade increases for that grade.
Using the underlying GS, increase the GS-13, step 10, rate by two within-grade increases. Because the within-grade amount at the GS-13 level is $2,413, increasing the GS-13, step 10, rate ($94,108) by two within-grade increases ($4,826) results in the rate of $98,934.
Step C: Determine the payable (highest) rate of basic pay for the step or rate determined in step B by applying any locality payment or special rate supplement applicable to the given grade, based on the employee’s position of record before promotion and official worksite after promotion.
Compare the GS-13, step 10, locality rate on the DCB salary table ($116,901) to the GS-13, step 10, special rate on the Department of Defense’s SSR table covering GS-660 positions ($113,412) to determine whether the locality rate or special rate is greater. The locality rate is higher than the special rate. Multiplying the rate determined in Step B ($98,934) by the DCB locality payment plus one ($98,934 x 1.2422), rounding to the nearest whole dollar, results in $122,896. [See OPM’s Fact Sheet: Promotion Examples at https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/promotion-examples/.]
Step D: Identify the highest applicable rate range for the employee’s position of record after promotion and find the lowest step rate in that range that equals or exceeds the rate determined in step C. This is the employee’s payable rate of basic pay upon promotion.
The highest applicable rate range for the claimant’s GS-14 position after promotion is the GS-14 locality rate range in the DCB salary table. The GS-14, step 6, locality rate ($123,970) is the lowest step rate in that range that equals or exceeds the $122,896 rate from step C.
Therefore, the standard method for setting pay upon promotion provided for in 5 CFR 531.214(d) derives the lowest payable rate of basic pay, i.e., GS-14, step 6, to which the claimant is entitled.
Second, we must establish the highest payable rate of basic pay the agency could have offered the claimant upon her promotion based on the MPR rule provided for by 5 CFR 531.221(a). Relevant to the claimant’s situation is 5 CFR 531.222(b), which states that the "[HPR] may not be a special rate, except as provided in paragraph (c) of this section." As provided for by 5 CFR 531.221(c)(1), an agency may establish the GS employee’s special rate as the HPR when an employee is reassigned to another position in the same agency at the same grade level. See 5 CFR 531.221(c)(2)-(3) for additional requirements. Since the action at issue in this claim is not a reassignment at the same agency and grade level, 5 CFR 531.221(c) is not applicable and the agency’s decision to establish the claimant’s SSR as her HPR is not appropriate. Instead, 5 CFR 531.222(d) instructs that when an agency is barred from using a SSR established under 38 U.S.C. 7455, such as the claimant’s SSR with the VA, the agency must consider a special rate employee’s underlying GS rate in determining the employee’s HPR. Thus, the claimant’s HPR is $94,108, i.e., the underlying GS rate from her GS-13, step 10, position with the VA. Because her HPR is based on a GS rate, we applied 5 CFR 531.221(b) provisions to determine MPR as follows:
Step A: Compare the employee’s HPR with the GS rates for the grade in which pay is currently being set using the schedule of GS rates (excluding any locality payment or additional pay of any kind) in effect at the time the HPR was earned.
For comparison, use the schedule of GS rates in effect at the time the HPR was earned, i.e., the 2014 rates for the GS-14.
Step B: Identify the lowest step in the grade at which the GS rate was equal to or greater than the employee’s HPR. If the employee’s HPR was greater than the maximum GS rate for the grade, identify the step 10 rate.
The lowest rate for grade GS-14 on the 2014 GS table that equals or exceeds $94,108 was GS-14, step 5 ($96,948).
Step C: Identify the rate on the currently applicable GS rate range for the employee’s current position of record and grade that corresponds to the step identified in step B. This rate is the maximum payable GS rate the agency may pay the employee.
No change. The GS-14, step 5, rate on the 2014 GS table is $96,948, i.e., the maximum payable GS rate the agency may pay the employee.
Step D: After setting the employee’s GS rate within the rate range for the grade (not to exceed the MPR identified in step C), determine the employee’s payable rate of basic pay (i.e., locality rate or special rate).
The claimant’s payable locality rate corresponding to the GS rate is $120,429, i.e., the GS-14, step 5, rate on the 2014 DCB locality pay table.
We note the claimant incorrectly applied the two-step promotion rule and the MPR rule in her claim request to OPM, applying the two-step promotion rule to the HPR she identified (i.e., adding two steps to the HPR she identified as the GS-14, step 9, rate). However, because the provisions do not allow for combining the two-step promotion and MPR rules, the rate determined under each rule is to be considered separately. Thus, the maximum rate of pay the claimant could have been offered by the DHA based on her promotion is GS-14, step 6, which is greater than her MPR of GS-14, step 5.
Accordingly, we find the agency’s decision to set the claimant’s pay at GS-14, step 9, is contrary to the two-step promotion rule in 5 CFR 531.214 and MPR rule in 5 CFR 531.221(a), and must be reversed. Therefore, the claim is denied and corrective action is required.
This settlement is final. No further administrative review is available within OPM. Nothing in this settlement limits the claimant’s right to bring an action in an appropriate United States court.