c. Differential Not Paid if Hazard Considered in Grading Job. The differential may not be paid where the grading of the employee's position takes into account the severity of the hazard or working condition involved. 8-2. REGULAR AND RECURRING HAZARDOUS CONDITIONS To the extent that it is warranted, additional compensation is provided to wage board employees through the regular job grading process when an unusually severe hazard or working condition is inherent in the position, regularly recurs, and is present for a substantial part of the working time. Where such hazards or working conditions are inherent in an occupation they are specifically described in the job standard and considered in its evaluation. SUBCHAPTER 9. PAY RETENTION UNDER THE COORDINATED FEDERAL WAGE SYSTEM 9-1. GENERAL An employee's existing rate of pay is retained when he is demoted or reassigned to a lower-pay wage board position through no fault of his own. This policy recognizes the personal hardship and morale factors involved in such demotions or reassignments and provides a transitional period during which efforts should be made to assign the employee to higher grade or level duties. 9-2. PAY RETENTION UPON INITIAL CONVERSION Separate provisions contained in the instructions for "Conversion to Coordinated Federal Wage System" (Subchapter 10) cover retention of pay for employees whose pay otherwise would be reduced upon initial conversion from an agency wage system to the Coordinated Federal Wage System. 9-3. PAY RETENTION UNDER ON-GOING PROGRAM Subject to the conditions and limitations specified below, an employee's basic rate of compensation is retained when he is demoted or reassigned to a wage board position having an established maximum basic rate of compensation which is less than the employee's existing basic rate of compensation. a. Pay Supplements Not Retained. Except as provided under 9-4, below, separately stated or identifiable allowances and differentials such as cost-ofliving allowances, overseas differentials, night shift differentials, hazard differentials, etc., are not considered for purposes of determining entitlement to, or amounts of, pay retention. b. Eligibility Requirements. To be eligible for pay retention under this policy the employee must: (1) On the effective date of such demotion or reassignment, hold a career or career-conditional appointment in the competitive civil service or an appointment of equivalent tenure in the excepted service; (2) Not have been demoted or reassigned for personal cause, at his own request, or in a reduction in force due to lack of funds or curtailment of work, or because such demotion or reassignment was a condition of his temporary promotion; (3) Have served for two continuous years in the same department or agency immediately prior to the demotion or reassignment in a position or positions of (1) higher grade, or (2) higher pay level, or (3) higher relative rate, or (4) a combination thereof, than the position to which demoted or reassigned. (A position is considered to be of a higher relative rate if its "going" rate, e.g., that rate or step which is keyed to the local prevailing rate determination (the established rate on a single rate schedule, the 2nd step on 3 and 4 step schedules, the 4th step of the General Schedule), is higher than the "going" rate of the position to which demoted or reassigned. All determinations of "going" rates with respect to the positions encumbered during the two-year period are based upon the wage schedules in effect at the time of the demotion or reassignment); and (4) Have performed his work at all times during the two-year period to a satisfactory or better than satisfactory degree. c. Amount of Pay Retention. Each employee meeting the basic eligibility requirements for pay retention is entitled to retain for the prescribed period the full amount of his existing rate, subject to the limitations contained in paragraph a, above. d. Pay Retention Period. An employee's pay is retained under this policy for a period of two years, unless it is terminated earlier by one of the following conditions: (1) A break in service of one or more work days; (2) Transfer out of the department or agency; (3) A subsequent demotion or reassignment, either of which is effected for personal cause, at the employee's own request, or in a reduction in force due to lack of funds or curtailment of work; or (4) Entitlement to a rate of basic compensation which is equal to or higher than the retained rate by reason of the normal operation of the wage system, or any other personnel action. e. Effect of Wage Schedule Adjustments During Pay Retention Period. An employee in a retained pay status is not entitled to wage increases based on wage schedule adjustments until such time as a wage schedule adjustment causes the maximum established rate for the position occupied to equal or exceed the retained rate of pay. At such time the retained pay status is considered terminated and the employee is placed at such maximum established rate with entitlement to all pay and benefits attached thereto. f. Further Demotion or Reassignment During Pay Retention Period. When, during a two-year pay retention period, an employee is further demoted or reassigned under conditions entitling him to pay retention, he continues for the remainder of the two-year period to receive the same retained rate. However, at the time of the further demotion or reassignment a record is made of the retained rate the employee would have been entitled to on the basis of such demotion or reassignment if he had not then been in a retained pay status. At the expiration of the original two-year period, this new rate is used as the retained pay rate for the remainder of a two-year period beginning on the date of the subsequent demotion or reassignment. g. Termination of Maximum Pay Retention Period. Upon termination of the two-year period for which pay retention is provided under the terms of this policy, the employee's rate of pay is adjusted to the maximum established rate for the position occupied. 9-4. PAY RETENTION UPON CHANGE FROM GENERAL SCHEDULE TO WAGE BOARD WITHIN A NON-FOREIGN OVERSEAS AREA a. Cost-of-Living Allowance as Base Pay in Non-Foreign Overseas Areas. When an employee in a non-foreign overseas area is changed from the General Schedule to a wage board schedule within the same area, any non-foreign area differential or cost-of-living allowance he is receiving in the General Schedule position is added to his basic rate of pay for the purpose of establishing his basic rate of pay in his wage board position. b. Effect on Retained Rate of Subsequent Move to Another Area. If the employee is reassigned or promoted in the same agency to an area without, or with a lesser cost-of-living allowance or post differential, the saved rate is reduced by the amount of the difference in the cost-of-living allowance or post differential prescribed for the old and new post of duty. If the employee is demoted in the same area during the pay retention period, his rate of basic compensation is determined in accordance with 9-3.f., above. 9-5. PRIOR PAY RETENTION BENEFITS NOT AFFECTED Wage board employees who are receiving pay retention benefits granted prior to the effective date of this policy continue to be entitled to such pay retention, as necessary, under the specific rules then applicable to them. 9-6. PAY RETENTION UPON CHANGE FROM WAGE BOARD TO GENERAL SCHEDULE Employees who are changed from wage board to General Schedule pay category are not covered by this policy. Pay is retained for employees under this circumstance only in certain cases of conversion expressly provided for under other regulations of the Civil Service Commission. SUBCHAPTER 10. CONVERSION TO COORDINATED FEDERAL WAGE SYSTEM 10-1. GENERAL No employee is to suffer a reduction in pay as a direct result of initial conversion to the new Coordinated Federal Wage System. 10-2. AREA-BY-AREA APPLICATION The Coordinated Federal Wage System is placed into effect on an area-by-area basis as new wage schedules based on full scale surveys under the new system are established. 10-3. CONVERSION TO NEW GRADE STRUCTURE Effective as of the date of conversion in each local wage area, each employee is placed in the appropriate grade of the new grading structure consistent with instructions issued by the Civil Service Commission. 10-4. DETERMINING APPROPRIATE STEP AND RATE OF PAY An employee's step rate in the new grade is determined as follows at the time of his initial conversion to the new system: a. Conversion From Three-Step-Rate Systems. Ordinarily an employee paid under a three-step-rate system is converted to the new system on a step-for-step basis. However: (1) If the employee's rate of pay immediately prior to the conversion is above the maximum rate of the new grade, the employee's pay rate is retained for an indefinite period as indicated in paragraph 10-5, below. (2) If an employee's existing rate is within the rate range for his new grade and application of the general step-for-step rule would result in a lower rate of pay for the employee, he is paid at his existing rate if this equals one of the rates of his grade on the new schedule, and otherwise he is paid that rate of the new schedule which is next above his existing rate. b. Conversion From Single-Rate Systems. Ordinarily an employee paid under a single-rate system is paid at his existing rate if this is one of the rates for his grade on the new schedule; otherwise he is paid at that rate of his grade on the new schedule which is next above his existing rate of pay. However, if the employee's rate of pay immediately prior to the conversion is above the maximum rate of the new grade, the employee's pay rate is retained for an indefinite period as indicated in paragraph 10-5, below. c. Conversion From Other Systems. Conversion instructions for other systems involving more or fewer than three step rates are to be worked out directly with the agencies involved. 10-5. PAY RETENTION UPON CONVERSION An employee whose pay is retained above the maximum established rate of his grade at the time of initial conversion to the new system receives one-half of the amount of each later prevailing rate pay increase applicable to the maximum established rate of his grade until the retained pay rate is terminated by one of the following conditions: A break in service of one or more work days; A demotion or reassignment, either of which is effected for personal cause, at the employee's own request, or in a reduction in force resulting from lack of funds or curtailment of work; or Entitlement to a rate of basic compensation which is equal to or higher than the retained rate by reason of the normal operation of the wage system, or by any other personnel action. 10-6. ORDER OF EFFECTING SIMULTANEOUS ACTIONS If, in accomplishing conversion to the new system, an employee becomes subject to more than one personnel or change action the actions will be effected in the order which gives the employee the maximum benefit. (For example, if an employee is due a step-rate increase on the effective date of the conversion to the new system, action to effect the step-rate increase will precede conversion to the revised wage schedule.) APPENDIX A THE WHITE HOUSE, Washington, November 16, 1965. Memorandum for Chairman Macy, U.S. Civil Service Commission. I am deeply concerned by the differences in the systems and practices used by the departments and agencies to fix the pay for Federal wage board employees and by the extent to which resulting wage rates differ for similar work within a community. These wage board pay fixing programs affect more than 617,000 Federal employees in trade, craft, and manual labor occupations. They involve payroll expenditures in excess of $4 billion annually. From the facts available it seems clear that the pay disparities are inequitable, and result primarily from differences among the agencies in basic principles, policies, and practices under which wage board pay is fixed. Accordingly, I have addressed the attached memorandum to the heads of the executive departments and agencies. You will note that this memorandum assigns to you, as Chairman of the Civil Service Commission, three responsibilities: (1) leadership in coordination of the collective effort, including consultation with appropriate employee organizations; (2) keeping me informed of significant developments; and (3) reporting to me not later than July 1, 1966, on the corrective actions adopted. LYNDON B. JOHNSON. APPENDIX B THE WHITE HOUSE, Washington, November 16, 1965. Memorandum for the Heads of Executive Departments and Agencies. It has come to my attention that different executive departments and agencies follow different practices, and continue to pay different wage rates for the same trades and labor jobs in the same locality. Such differences constitute inequities which I believe can and should be corrected by cooperative action. In its report of April 15, 1965, the Special Panel on Federal Salaries recommended that steps should be taken to eliminate the pay differences and to bring about equitable coordination of wage board practices. I agree with this recommendation. I ask you, accordingly, to join with the heads of other executive departments and agencies in the development of common job standards and wage policies and practices which will insure interagency equity in wage rates based upon statistically valid wage surveys. The policies and practices should be based upon the principles that (1) wages shall be fixed and adjusted from time to time as nearly as is consistent with the public interest in accordance with prevailing rates, and (2) there shall be equal pay for substantially equal work, and pay distinctions shall be maintained in keeping with work distinctions. At appropriate stages in the development of the system, there should be consultation with representatives of employee organizations whose members are paid under the wage system. I have asked Chairman Macy of the Civil Service Commission to take leadership in coordinating this collective action to develop a common Federal wage system, including consultation with appropriate employee organizations; to keep me currently informed of significant developments, and to report to me not later than July 1, 1966, on the actions adopted. LYNDON B. JOHNSON. COORDINATED FEDERAL WAGE SYSTEM WEDNESDAY, MARCH 27, 1968 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MANPOWER AND CIVIL SERVICE OF THE Washington, D.C. The subcommittee met at 10:30 a.m., in room 2253, Rayburn House Office Building, Hon. David N. Henderson (chairman of the subcommittee) presiding. Mr. HENDERSON. The subcommittee will come to order. Today this subcommittee is continuing with public hearings initiated a short while ago. Prior actions of this subcommittee disclosed a number of inequities in the system under which the pay of our 800,000 blue-collar employees is established. Consequently, we are now in the process of considering, through these public hearings, a number of proposals to establish a new system that will eliminate the inequities and provide for uniform application of wage-setting principles to all wage board employees, regardless of which department or agency they work for. During our earlier meeting on this subject, Chairman Macy of the Civil Service Commission described in detail the Federal coordinated wage system which is the result of 2 years' extensive analysis by the Civil Service Commission of all phases of systems covering the fixing of the pay rates of the tradesmen, craftsmen, et cetera. That system will go into effect on July 1 of this year unless other action is taken. I was impressed with Chairman Macy's presentation; however, it is the responsibility of this subcommittee to come up with the best possible pay system for such employees one that is also fair to the American taxpayers. In this connection we do have before us other proposals for equitable pay systems. Accordingly, we are proceeding with our study of the wage board proposals, and, this morning we have invited the Honorable Alfred B. Fitt, Assistant Secretary of Defense for Manpower and Reserve Affairs, to tell us how the different proposals are viewed by his Department which has, by far, the greatest number of wage board employees. Secretary Fitt, it is indeed a pleasure to have you give us your views on this important subject. I notice that you are accompanied by others from your staff. If you should like for them to move up to the table with you, and if you would like to introduce them, we would be delighted to have you do so. You may proceed. |