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Office of the General Counsel

Date: February 24, 1998
Matter of: [xxx]
File Number: s9700559

OPM Contact: Murray M. Meeker

By letter dated October 27, 1997, an employee of the [agency] at [city, state], claimed that the [agency] had erroneously set his pay when he was promoted from a GS-9 position to a GS-11 position.

In July 1995, while employed by the [agency] in [city, state], as an Architect, at grade GS-12, step 7, the claimant accepted a GS-9, Engineering Technician position at [xxx]. In accordance with the "highest previous rate" rule, 5 C.F.R.  531.202, and the local [xxx] Pay Fixing Plan, the employee's salary was set at GS-9, step 10. Nine months later, in April 1996, the claimant was promoted to an Architect, GS-11, position, and in accordance with the "two step rule", 5 U.S.C.  5334(b), and the local Pay Fixing Plan, the employee's salary was set at GS-11, step 5.

The employee asserts that when he was promoted, his salary "should" have been set at GS-11, step 10, based on his having previously been paid at the GS-12, step 7, level. The claimant is in error.

The establishment of an employee's rate of pay under the General Schedule is governed by 5 U.S.C. 5334 and implementing regulations that have been issued by the Office of Personnel Management and which are currently codified at 5 C.F.R. Part 531, Subpart B. In accordance with these provisions, each employing agency has discretion to formulate its own policies regarding the application of the highest previous rate rule See Jean M. Drummond, B-229165, Aug. 8, 1988; Carma A. Thomas, B-212833, June 4, 1984; and Virginia A. Rawlings, B-195032, July 25, 1979.

The claimant's salary was properly set. The [agency] was not required to apply the "highest previous rate" rule in setting the claimant's salary. See Donald R. Rutt, B-247265, June 5, 1992, and Milton Morvitz, B-192562, June 11, 1979. Indeed, an employee has no vested right to receive the highest salary rate previously paid to him; an agency may exercise its discretion not to set an employee's salary at the employee's highest previous rate. See 5 C.F.R. 531.203(c) (the "highest previous rate" rule may be used to set an employee's pay); Doris M. Arehart-Zuidema, B-223356, August 21, 1987; and Michael F. Richardson, B-140790, November 13, 1959.

We find no evidence that by setting the employee's pay in accordance with the "two step rule", 5 U.S.C.  5334(b), and the local Fort Carson Pay Fixing Plan, there has been an abuse of administrative discretion. See Rutt, supra, and Morvitz, supra. Accordingly, we find that the employee is not entitled to have his pay set at a higher rate.

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