213 (replaces FWM 11 S, 09/01/93)
Date: September 7, 1995
Part 225: Classification, Pay and Allowances
Originating Office: Division of Personnel Management
5.1 Purpose. This chapter establishes policy and procedures for the administration and uniform application of the provisions governing grade and pay retention.
5.2 Policy. It is the policy of the U.S. Fish and Wildlife Service (Service) to:
A. Administer grade and pay retention provisions in a manner that conforms with the guidance provided in this chapter and that is consistent with the statute and Office of Personnel Management (OPM) regulations;
B. Identify and correct misclassified positions through the conduct of periodic maintenance reviews and the application of new position classification standards; and
C. Provide aggressive priority placement assistance to employees covered by grade and pay retention provisions through the operation of placement programs available to the Service.
5.3 Scope. This chapter applies to any full-time, part-time, or intermittent employee in the competitive or excepted service who is not serving under a temporary or term appointment and who is not excluded for one or more of the following reasons.
A. The employee moves from a position in an agency that is excluded from coverage in 5 U.S.C. 5102 (e.g., Postal Service, Tennessee Valley Authority, and the Central Intelligence Agency);
B. The employee is other than a prevailing rate employee under 5 U.S.C. 5342(a)(2)(B) and is paid from non-appropriated funds;
C. The employee is reduced in grade or pay for personal cause or at the employee's request;
D. The employee does not satisfactorily complete a supervisory or managerial probationary period and is removed from a supervisory or managerial position;
E. The employee is a Senior Executive Service (SES) career appointee who was appointed following service in a career conditional or career appointment (or equivalent appointment) and who is entitled to receive basic pay under 5 U.S.C. 3594 due to removal from the SES and placement in a non-SES civil service position in accordance with 5 U.S.C. 3594(b)(2); or
F. The employee is a member of the SES (or serves in a position subject to the senior level pay authority) who is placed in a position in a covered pay schedule.
A. Title VIII of Public Law 95-454 (Civil Service Reform Act of 1978)
B. Subchapter VI of Title 5, United States Code (5 U.S.C. 5361-5366)
C. Part 536 of Title 5, Code of Federal Regulations
A. The Director is responsible for the overall administration and direction of the provisions governing grade and pay retention within the Service.
B. The Assistant Director - Policy, Budget and Administration (APBA) serves as technical advisor to the Director and is responsible for the effective administration of the policy and procedures pertaining to grade and pay retention.
C. The Chief, Division of Personnel Management (DPM), under the direction of the APBA, is responsible for the development, implementation, and management of Service policy and procedures on grade and pay retention.
D. Regional Directors are responsible for the proper administration and management of grade and pay retention within the Regions.
E. Regional Personnel Officers and the Chief, Branch of Headquarters Operations, DPM, are responsible for appropriately applying the provisions of this chapter to employees within their respective organizations. The Chief, Office of Administrative Support, Region 8, will execute this responsibility for Region 8 employees in Headquarters whose grades do not exceed GS/GM-13.
A. Covered Pay Schedule means the General Schedule, any prevailing rate schedule established under 5 U.S.C. 5343, or the Performance Management and Recognition System (PMRS).
B. Demotion at an Employee's Request means a reduction in grade that is initiated by an employee for his/her benefit, convenience, or personal advantage and that is not caused or influenced by a management action. (If management takes action that is unrelated to conduct or unacceptable performance, and such action impacts an employee and influences him/her to take a demotion, the demotion will not be considered to be at the employee's request.)
C. Demotion for Personal Cause means a reduction in grade based on unacceptable conduct or performance of an employee. (If the physical condition of an employee is the reason for the demotion; e.g., when a physical/medical examination discloses a condition that is considered to be a potential hazard to an employee or others, the demotion is not considered to be one for personal cause.)
D. Rate of Basic Pay is the rate of pay fixed by law or administrative action for the position held by an employee before any deductions and exclusive of additional pay of any kind such as night or environmental differentials in the case of a prevailing rate employee.
E. Rate Schedule is a specific set of rates within a pay schedule.
(1) The fourth rate of the grade of a position under the General Schedule (GS), including the fourth rate of the corresponding grade of the GS in the case of a position under the PMRS, or an individual's rate under the Senior Executive Service.
(2) The second rate of a grade of a position under a regular prevailing rate schedule established under subchapter IV of chapter 53, title 5, United States Code (i.e., positions under the Federal Wage System), or in the case of a position with a single rate, the single rate of that position.
(3) The rate designated as representative of the position by the agency responsible for establishing and adjusting the schedule of a position under a schedule different from those covered in 5.6F(1) and 5.6F(2).
G. Reorganization means the planned elimination, addition, or redistribution of functions or duties either wholly within an agency or between agencies.
5.7. Maintenance Reviews. The identification and correction of classification errors and the resolution of position management problems that may contribute to the need to evoke the grade and/or pay retention authority will be handled through the system established for maintenance reviews. Refer to 225 FW 1 for guidance and procedures relating to the operation of these reviews.
5.8 Placement Programs. Guidance, procedures, and other information on placement programs is provided in 223 FW 5 to assist in placing any employee serving in an overgraded position in a properly graded position and any employee subject to the grade and pay retention provisions in a position that terminates the employee's entitlement to retained grade or pay.
5.9 Basic Eligibility for Grade and Pay Retention. Before an employee otherwise eligible under the mandatory or optional provisions may be granted grade or pay retention, he/she must satisfy the basic eligibility requirements for grade and pay retention. These requirements specify that an employee must not be excluded by regulation as provided in 5.3 and must have served 52 consecutive weeks (1 year for reclassification actions) or longer at a grade or grades higher than the grade of the position to which reduced. The 52-week/1 year requirement may be satisfied by a period of service performed in one or more positions or agencies.
5.10 Eligibility for Grade Retention. Grade retention allows an employee to retain for 2 years, for pay and benefits purposes, the grade of the position from which he/she was reduced when an employee is placed in a lower grade as a result of reduction-in-force procedures, a reclassification process, or a reorganization. An employee's eligibility for mandatory or optional grade retention, as appropriate, is determined by application of the criteria contained in 5.10A or 5.10B. In addition to meeting the specific eligibility requirements for grade retention, an employee must meet the basic eligibility requirements in 5.9.
A. Mandatory Grade Retention. An employee is entitled to grade retention under the mandatory provisions if he/she is reduced in grade as a result of a reduction-in-force or the reclassification of his/her position.
(1) Reduction-in-Force. An employee is affected by reduction-in-force procedures if he/she:
(a) Receives a specific reduction-in-force notice; and
(b) Has been placed in the position offered in a specific reduction-in-force notice; or
(c) Is placed in a position other than the one offered in the notice when the lower-graded position (may be any grade level) was a management initiative offered in writing and the employee has received a specific reduction-in-force notice.
(2) Reclassification of a Position. An employee is demoted as a result of a reclassification process if he/she:
(a) Remains in his/her position after it has been reclassified; or
(b) Is placed in another position prior to the effective date of the reclassification action when the placement position (may be at any grade level) was offered in writing at the initiative of management and the offer was made after the employee was notified in writing that his/her position was to be reclassified to a lower grade.
B. Optional Grade Retention. The Director has discretion to approve grade retention for any employee who is not entitled to grade retention under 5.10A who meets the basic eligibility requirements in 5.9 and who moves to a lower-graded position during a reorganization or reclassification that is announced by management in writing or before receiving a specific reduction-in-force notice or before receipt of a notice that his/her position is being downgraded through reclassification. The move in either case may be initiated by the employee or management. Grade retention under the optional provisions is generally appropriate when such action will assist management in achieving its objectives and/or when the reduction in grade will have a positive effect on another employee during a reduction-in-force. When management offers an employee a lower-graded position solely for the purpose of enhancing the employee's career and/or providing direct or indirect benefits to the Service, grade retention is not appropriate.
5.11 Applicability of Grade Retention.
A. When an employee is under grade retention, the retained grade must be treated as the employee's grade for pay and pay administration purposes (e.g., comparability, within-grade increases, and merit pay increases). The rate of basic pay to which an employee is entitled as a result of grade retention is based on the retained grade. Also, during the grade retention period, the retained grade must be treated as the employee's grade for retirement, life insurance, and eligibility for training and promotion.
B. The retained grade will not be used for applying reduction-in-force procedures in a subsequent reduction-in-force or for determining if an employee should be covered by the Performance Management and Recognition System, has been demoted for purposes of terminating grade or pay retention, or is exempt or nonexempt from the Fair Labor Standards Act.
C. An employee eligible for grade retention will retain the grade that he/she held immediately prior to the reduction in grade (even if the move is to another pay system) for 2 years beginning on the date the employee is placed in the lower-graded position. If an employee is reduced in grade from a position not under a covered pay schedule, he/she retains the lowest grade of the covered pay schedule in which he/she is placed that has a representative rate equal to or higher than the representative rate of the grade held immediately before the reduction.
5.12 Comparison of Grades in Different Pay Systems. When making a determination concerning the applicability of grade retention, it may be necessary to compare grades in different pay systems in order to determine whether the grade of a position in one pay schedule or pay system is lower than, equal to, or higher than the grade in another. A comparison of the representative rates of the grades of the two positions may be necessary when determining whether a demotion has occurred during a period of grade retention and whether an employee meets the 52-week/1 year eligibility requirement. If the representative rates of two positions are equal, then the grades are considered to be equal. If they are not, then the grade with the higher representative rate will be considered the higher grade of the two positions.
In addition, because the effective dates of prevailing rate increases differ from General Schedule increases and because there might be a difference in the percent of increase, the determination as to whether a grade in one system is equal to, lower than, or higher than a grade in another pay system will be made based on the representative rates in effect in the geographical area to which the employee is officially assigned. Effective dates will be established as follows.
A. On the effective date of the personnel action when determining if the action is a demotion;
B. On the effective date of demotion when determining if the 52-week/1 year requirement is met;
C. On the effective date of placement when determining if grade retention should be terminated based upon the employee being placed in an equal or higher grade; and
D. On the date the employee would have been placed in the offered position when determining if grade retention should be terminated based on the employee's declination of a reasonable offer at, or higher than, the retained grade level.
5.13 Rate Schedules. In some cases, the rate schedule applicable to an employee may depend upon the geographical location or the occupational series of the position in which he/she is placed as a result of grade retention. When an employee entitled to grade retention is placed in a position in a different geographical area, the rate schedule for the new geographical area is applied to the employee. When the application of grade retention results in the employee being placed in, or his/her position being changed to, a different occupational series, the rate schedule for the new occupational series is applied to the employee.
5.14 Determination of Rate of Basic Pay for Retained Grade. An employee who becomes entitled to grade retention or who moves to another position during a period of grade retention under conditions that permit continuation of the grade retention entitlement is entitled to the greatest of:
A. His/her rate of basic pay before the movement;
B. The rate of basic pay from the applicable rate schedule for the grade and step (or relative position within a range of rates under the PMRS) held by the employee before the movement; or
C. The lowest rate of basic pay from the applicable rate schedule for the retained grade which equals or exceeds the employee's rate of basic pay before the movement.
5.15 Termination of Grade Retention. Eligibility for grade retention will cease when the employee:
A. Has a break in service of 1 workday or more;
B. Is demoted for personal cause or at his/her request;
C. Is placed in a position that has a grade equal to, or higher than, the retained grade;
D. Declines (in writing) a reasonable offer of a position with a grade equal to, or higher than, the retained grade;
E. Fails to enroll in, or comply with, a program providing priority consideration for placement; or
F. Elects in writing to have the benefits of grade retention terminated. Once completed, a written election in this case is irrevocable.
5.16 Reasonable Offer. When management offers an employee a position under conditions that may result in the application of grade and/or pay retention provisions, the offer is considered "reasonable" if it is in accordance with the following criteria:
A. The offer must be in writing and must include a copy of the official position description of the offered position.
B. The offer must inform the employee that any entitlement to grade or pay retention will be terminated if the offer is declined and that he/she may appeal the reasonableness of the offer to OPM.
C. The position offered must be of tenure equal to, or greater than, that of the position creating the grade or pay retention entitlement.
D. The offer must be in an agency (e.g., Department of Interior, Department of Agriculture, or General Services Administration) to which 5 U.S.C. 5102 applies; it does not have to be in the same agency, bureau, or Region in which the employee is employed at the time of the offer.
E. The position must be full-time unless the employee served in a part-time position prior to the grade or pay retention and the work hours of the offered position are equal to, or more than, those of the position held before the entitlement to grade or pay retention.
F. The position must be in the same commuting area as the employee's position immediately before the offer unless the employee is subject to a mobility agreement.
5.17 Eligibility for Pay Retention. Pay retention allows an employee to retain a rate of basic pay that is higher than the maximum rate of the grade for the position occupied. Eligibility for pay retention depends on an employee satisfying either the mandatory or optional provisions for pay retention provided below and the basic eligibility requirements in 5.9.
A. Mandatory Pay Retention. An employee is entitled to pay retention if his/her rate of basic pay would otherwise be reduced as a result of:
(1) Expiration of the 2-year period of grade retention;
(2) Reduction-in-force or reclassification processes, when the employee does not meet the eligibility requirements for grade retention;
(3) Reduction or elimination of scheduled rates, special schedules, or special rates (does not include a reduction of a scheduled rate resulting from a prevailing rate wage survey or a national emergency);
(4) Placement from a special rate position to one not covered by special rates, or to one with a lower special rate;
(5) Placement in a different pay schedule; or
(6) Placement in a formal employee development, upward mobility, career intern, or apprenticeship program.
B. Optional Pay Retention. The Director may grant pay retention to any employee whose rate of basic pay would otherwise be reduced as a result of a management action.
5.18 Determination of Basic Rate of Pay for Pay Retention.
A. The rate of basic pay (immediately prior to eligibility or movement) for an employee who becomes entitled to pay retention, or who moves to another position while receiving retained pay must be compared with the range of rates of basic pay for the position to be occupied upon the employee's eligibility or movement. Once the comparison has been made, the following applies.
(1) An employee who becomes eligible for, or moves while in receipt of, pay retention is entitled to the lowest rate of basic pay in the position to be occupied that equals or exceeds his/her rate of basic pay immediately prior to the eligibility or movement. If the identified rate can be accommodated in the rate range of the position to be occupied, pay retention does not apply.
(2) If an employee's rate of pay exceeds the maximum rate of the grade of the position to be occupied, the employee is entitled to the lower of the rate of basic pay received immediately before the reduction in pay or 150 percent of the maximum rate of basic pay payable for the new grade.
B. When there is an increase in the scheduled rates of the grade of the position occupied by an employee during a period of pay retention, the employee is entitled to 50 percent of the increase payable for the maximum rate payable for the occupied position. When an increase in scheduled rates causes an employee's retained rate to become equal to, or lower than, the maximum rate of the grade of the occupied position, the employee is entitled to the maximum rate of that grade and pay retention ceases. If there is an overall reduction in the maximum rate of an employee's grade during the period of pay retention, the employee's rate of basic pay is not affected.
5.19 Termination of Pay Retention. Eligibility for pay retention will cease when the employee:
A. Has a break in service of 1 workday or more;
B. Is demoted for personal cause or at his/her request;
C. Becomes entitled to a rate of basic pay that is equal to, or higher than, his/her retained rate; and
D. Declines (in writing) a reasonable offer of a position with a rate equal to, or higher than, his/her retained rate.
5.20 Temporary Promotions and Temporary Reassignments.
A. The grade and rate of basic pay held during a temporary promotion or temporary reassignment may not be used to determine whether the employee has been placed in a lower grade or at a lower rate of basic pay.
B. If an employee becomes entitled to grade or pay retention while on a temporary promotion or temporary reassignment, the grade and/or rate of basic pay to which the employee is entitled will not be based on the grade or rate of basic pay held during the temporary assignment. Instead, it will be based upon the grade or rate of basic pay of the permanent position.
C. If an employee is already entitled to grade or pay retention when he/she is temporarily promoted or temporarily reassigned, his/her entitlement to a grade or rate of basic pay will not be affected by the temporary action. The ending date of the grade retention period is also not affected by a temporary promotion or temporary reassignment. In addition, an employee's entitlement to grade or pay retention will not be terminated as a result of a temporary promotion or temporary reassignment or a declination of a temporary promotion or temporary reassignment.
A. An employee entitled to grade and/or pay retention must receive a copy of the SF-50, Notification of Personnel Action, that documents the entitlement and a letter that describes the circumstances warranting mandatory or optional grade and/or pay retention and the nature of that entitlement. A copy of this letter is to be filed as a permanent document in the employee's Official Personnel Folder (OPF).
B. In addition to the letter required in 5.21A, an employee offered a position with grade retention in anticipation of a reduction in grade must be informed in writing that acceptance of the position is not required and that declination of the offer has no effect on the employee's entitlement to grade retention if he/she is placed in a lower-graded position. This letter (also to be included in the OPF) should also state the basic entitlement for grade retention and, as appropriate, should explain that the retained grade will not be used for determining retention rights in a subsequent reduction-in-force and that after 2 years the employee will receive only 50 percent of comparability increases. For purposes of paperwork reduction, this letter may be combined with the letter required in 5.16, but it may not be substituted for the letter required in 5.21A; two letters must be prepared.
5.22 Submission and Approval of Requests for Grade and Pay Retention.
A. Mandatory grade and pay retention requests are approved and processed in the same manner as other conventional personnel actions; i.e., through normal supervisory channels prior to the action being submitted to the servicing personnel office for technical review and processing. Requests concerning employees up to grade GS/GM-13 will be processed at the Regional level. Requests for employees at GS/GM-14 and above will be forwarded to the DPM in Headquarters.
B. All requests for optional grade or pay retention must be forwarded to Headquarters for approval by the Director on a case-by-case basis. Memoranda requesting optional grade or pay retention are signed by the Regional Director/Assistant Director, as appropriate, before they are submitted through the servicing personnel office to the DPM for review. Recommendations to the Director regarding the appropriateness of grade or pay retention will be prepared by the DPM based upon the merits of each case.
C. Each request must be specific with regard to employee identification information (i.e., name, grade, and current and proposed organizational location), the management action proposed or taken, and the justification for grade and/or pay retention.
5.23 Pay Determinations for Requests for Grade and Pay Retention.
A. For guidance on making pay determinations for specific grade or pay retention personnel actions, refer to Book 536, subchapter 4, of Federal Personnel Manual (FPM) Supplement 990-2, which is maintained in all servicing personnel offices.
5.24 Determination of Effective Date for Terminations of Grade or Pay Retention. If an employee loses eligibility for grade or pay retention prior to beginning either benefit, the loss of eligibility is effective immediately. However, if the loss of eligibility occurs after the grade or pay retention begins, the effective date will be:
A. The date of placement in another position, if this is the reason for the loss of eligibility; or
B. The end of the last day of the pay period that the employee:
(1) Declines a reasonable offer;
(2) Elects in writing to waive grade retention benefits; or
(3) Fails to enroll in a program providing priority consideration for placement.
5.25 Appeals. Appeals will be handled in the following manner:
A. An employee who is granted grade or pay retention because of a reclassification action may appeal the classification decision to either the Service or the Department, or to the OPM.
B. An employee who is granted grade or pay retention because of a reduction-in-force action may appeal the reduction-in-force to the Merit Systems Protection Board as provided in FPM chapter 351.
C. If an employee is granted grade or pay retention, and there has been no reduction in grade, he/she may not, at the time it is granted, file an appeal under any other procedures (e.g., adverse action procedures). (Instances where there is no grade reduction for an employee granted grade or pay retention are likely to occur during the interim period following a decision to grant grade or pay retention but before implementation of the decision and when an employee moves to a position having a grade equal to, or higher than, the retained grade.) If, however, the employee's grade has been reduced and the employee is not eligible for grade retention, he/she may file an appeal under other procedures, even if he/she is granted pay retention.
D. An employee may appeal the termination of grade or pay retention benefits only if the termination is based upon the employee's declination of a reasonable offer. Procedures for filing this particular appeal are in FPM Supplement 990-2, Book 536.
5.26 Record Maintenance. Servicing personnel offices are required to maintain all official documentation relating to the approval or disapproval of grade and/or pay retention. All documentation relevant to the approved or disapproved action must be maintained in a separate file for reference and retrieval purposes. Pay actions of this nature are subject to review during the conduct of Personnel Management Evaluations.
For additional information regarding this policy, contact the Division of Human Capital. For more information about this Web page, contact Krista Holloway, in the Division of Policy and Directives Management.