waiting period because of an unjustified or unwarranted personnel action. (Sec. 4, 80 Stat. 94; 5 U.S.C. App. 652c, 5338) [31 F.R. 809, Jan. 21, 1966, as amended at 31 F.R. 11447, Aug. 31, 1966; 32 F.R. 16475, Dec. 1, 1967]

NOTE: 531.407 is effective for determinations made with respect to waiting periods completed on and after January 27, 1966, except that paragraph (b) and paragraph (c) (5) are effective for determinations made with respect to waiting periods completed on and after April 27, 1966.

(a) A within-grade increase is effective on the first day of the first pay period following completion of the required waiting period and compliance with the other conditions of eligibility.

(b) When the effective date of a within-grade increase and the effective date of a personnel action occur at the same time, the department shall process the actions in the order that gives the employee the maximum benefit. § 531.409

Corrective action within

grade increase. (a) When a within-grade increase is delayed beyond its proper effective date through administrative oversight, error, or delay, the department shall make the increase effective as of the date it was properly due.

(b) When an improper personnel action is corrected in accordance with a mandatory statutory or regulatory requirement, the waiting period is not extended and begins on the date it would have begun had the improper action not occurred.

§ 531.410 Authority—quality increase.

The head of a department, or a person authorized to act in his behalf, may grant a quality increase in accordance with section 702 of the act and this subpart. § 531.411 Quality of performance required.

(a) A supervisory recommendation for a quality increase shall be in writing and shall show why performance can be characterized as high quality performance above that ordinarily found in the type of position concerned.

(b) Before a quality increase may be granted, the head of a department, or a person authorized to act in his behalf, shall find that (1) the employee concerned has been performing the most important functions of his position in a manner that substantially exceeds normal requirements so that when viewed as a whole the employee's work performance is of a high level of effectiveness, and (2) the employee's high level of effectiveness has been sustained to the extent that it may be considered characteristic of his performance.

Each department shall establish a plan for granting quality increases. The plan shall include standards and procedures to provide for the granting of quality increases with reasonable consistency throughout the department and with fairness to all employees.

§ 531.413 Reports—quality increase.

The Commission, from time to time, may request departments to report on the use of the authority to grant quality increases.

Subpart E-Salary Retention

§ 531.501 Purpose.

The purpose of this subpart is to provide the regulations necessary to administer section 507 of the Classification Act and carry out the intent of Congress in establishing salary retention benefits for Classification Act employees whose demotions are without personal cause, not at their own request, and not in a reduction in force due to lack of funds or curtailment of work.

§ 531.502 Entitlement.

An employee who is demoted from one Classification Act grade to another and qualifies under section 507 of the act and this subpart is entitled to salary retention.

§ 531.503 Definitions.

In this subpart:

(a) "Act" or "Classification Act" means the Classification Act of 1949, as amended.

(b) "Department" has the meaning given that word by section 201(a) of the act.

(c) "Employee" means an officer or employee in a Classification Act position.

(d) "Rate of basic compensation" means the rate of compensation fixed by law or administrative action for the position held by an employee before any deductions and exclusive of additional compensation of any kind.

(e) "Salary retention" means an employee's entitlement to be paid at a rate fixed under the act and this subpart, and includes those rates preserved by section 2 of the Salary Retention Act.

(f) "Salary Retention Act" means the act of August 23, 1958, 72 Stat. 830, 5 U.S.C. 1107 note.

(g) "Salary retention period" means the period of not to exceed 2 continuous years during which an employee is entitled to salary retention under section 507 of the act.

When an employee is granted the benefits of this subpart, the department concerned shall:

(a) Notify him of the action taken and the effective date thereof; and

(b) Make a written record of the action which becomes a permanent part of the employee's Official Personnel Folder even though no salary change occurs at the time of demotion.

§ 531.505 Equivalent tenure.

(a) Excepted service. When a department has established an employment system for its excepted service on a basis comparable to the career-conditional or career employment system in the competitive service, the department shall determine which excepted employees have tenure equivalent to careerconditional or career employees in the competitive service. When a department has not established such a system, each excepted employee having an appointment not limited to 1 year or less is deemed to have tenure equivalent to a career-conditional or career employee in the competitive service.

(b) Status quo employment. When an employee had an appointment in the excepted service of tenure equivalent to that held by a career-conditional or career appointee in the competitive service, and he continues to serve under the same appointment as a status quo em

ployee, he continues as a status quo employee to have tenure equivalent to a career-conditional or career appointee in the competitive service in determining his entitlement to salary retention under this subpart.

[30 F.R. 9247, July 24, 1965]

§ 531.506 Demotion for personal cause.

A demotion or other personnel action for personal cause is an action based on conduct, character, or inefficiency of the employee.

§ 531.507 Demotion at employee's request.

The reference in section 507(a) (3) of the act to the demotion of an employee "at his own request," includes a demotion to which he has consented in lieu of a proposed adverse action for personal cause, and one that he personally requests for another reason. The employee's consent to, or personal request for, a demotion shall be in writing and signed by the employee.

§ 531.508 Demotion in a reduction in force.

Salary retention does not apply to a demotion in a reduction in force due to (a) a lack of funds for personal services in the competitive area when that lack of funds results from a limitation imposed on a department or a military department by outside authority, or (b) a curtailment of the number of man hours required to perform the current work of the department in the competitive area. § 531.509 Continuous service.

The period of 2 continuous years of service immediately prior to a demotion required by section 507(a) (4) of the act must be served in a Classification Act position or in a position covered by § 539.201 of this chapter. This period includes any period or periods of nonpay status occurring in the 2-year period. Similarly, the salary retention period after demotion includes any period or periods in a nonpay status.

§ 531.510 Transfer of functions.

The movement of an employee with his function in a transfer of function between departments does not terminate or defeat the employee's eligibility for salary retention in determining whether

An employee who has not received an official rating of less than satisfactory covering any part of the 2-year period required to be served immediately prior to a demotion is eligible for salary retention.

§ 531.512 Rate determination.

(a) At the time of an employee's demotion, the department shall select a rate in the grade to which he is demoted which would have been the employee's rate of basic compensation if he were not entitled to a retained rate. When the department does not select a higher rate under § 531.203 (c), it shall determine the rate, subject to the provisions of paragraph (b) of this section, as follows:

(1) When the employee's retained rate is equal to a rate in the grade to which he is demoted, that rate shall be selected.

(2) When the employee's retained rate falls between two rates of the grade to which he is demoted, the lower of the two rates shall be selected.

(3) When the employee's retained rate is above the maximum rate of the grade to which he is demoted, the maximum rate shall be selected.

(b) When the employee's retained rate is a rate established under section 504 of the Federal Salary Reform Act of 1962 (Public Law 87-793; 76 Stat. 842), the department shall determine what the employee's rate in the grade from which demoted would have been if the rate established by section 504 had not applied to him and this rate shall be considered to be the employee's retained rate for the purpose of selecting a rate under the provisions of subparagraph (1), (2), or (3) of paragraph (a) of this section.

(c) At the time of the employee's demotion, the department shall (1) record in the employee's Official Personnel Folder the rate selected in accordance with paragraph (a) of this section, and (2) shall make all determinations of within-grade increases, in accordance with Subpart D of this part, on this rate during the salary retention period and record these determinations in the employee's Official Personnel Folder.

[28 F.R. 11220, Oct. 19, 1963, as amended at 30 F.R. 2588, Feb. 27, 1965]

(c) An employee receiving a retained rate under Public Law 594, 84th Congress (70 Stat. 291), holds that retained rate without time limitation in accordance with that act. However, if the employee is reassigned, the department shall terminate his retained rate and adjust his rate of basic compensation in a manner comparable to that provided in § 531.515.

(d) When an employee's retained rate is terminated by reassignment, the department shall furnish him with a written notification of the effective date of the termination of the retained rate and of his right to appeal under § 531.516. § 531.514 Within-grade increases.

An employee with a retained rate is eligible for within-grade increase, only in the grade in which he is serving and on the rate selected under § 531.512. § 531.515 Pay adjustment.

When an employee's retained rate is terminated because of the expiration of the salary retention period, the department shall adjust his rate of basic compensation within the grade in which he is serving to the rate previously selected in accordance with § 531.512(a) together with any within-grade increases to which the employee became entitled during the salary retention period.

§ 531.516 Appeals to the Commission.

(a) General. An employee who is reduced in grade or compensation, or reassigned during his salary retention period, may appeal to the Commission from a decision of the department that (1) he is not entitled to salary retention, or (2) will terminate or adversely affect the salary retention he is currently receiving. This right of appeal does not in

any way restrict an employee's entitlement to appeal to the Commission under another part of this chapter or under statute.

(b) Departmental notification to employee. When an employee is reduced in grade or compensation, or reassigned during a salary retention period, the department shall inform him in writing whether or not he is entitled to salary retention, or the salary retention he is currently receiving will be terminated or adversely affected. When a department decides that (1) an employee is not entitled to salary retention, or (2) the salary retention an employee is currently receiving will be terminated, the department shall inform him in writing of his right of appeal to the Commision under this section.

(c) Time limit-(1) General. Except as provided in subparagraph (2) of this paragraph, an employee may submit an appeal to the Commission at any time after his receipt of a decision to deny or terminate salary retention but not later than 15 calendar days after his demotion or reassignment has been effected.

(2) Exceptions. When an employee appeals a decision to deny or terminate salary retention to the department under established procedures, other than those based on Subpart B of Part 771 of this chapter, the time limit on an appeal to the Commission is not later than 15 calendar days after receipt of the notice of final decision on the appeal to the department. The Commission may extend the time limits in this paragraph when the employee shows that he was not informed of his right of appeal or of the applicable time limit and was not otherwise aware of that right or that time limit, or that he was prevented by circumstances beyond his control from appealing within the time limit.

(d) How submitted. The appeal shall be in writing and shall set forth the employee's reasons why he considers the department's decision erroneous, with such offer of proof and evidence as he is able to submit.

(e) Departmental action when Commission recommends corrective action. (1) It is mandatory that the department take all corrective action recommended in the Commission's initial decision on an appeal unless it makes a timely appeal to the Board of Appeals and Review.

Subpart C-Scientific and Professional Positions Requiring Specially qualified Personnel (Public Law 313-Type Positions)

534.301 Approval of agency pay determinations and adjustments.

AUTHORITY: The provisions of this Part 534 issued under 5 U.S.C. 5351, 5352, 5353, 5541, unless otherwise noted.

SOURCE: The provision of this Part 534 appear at 28 F.R. 10951, Oct. 12, 1963, unless otherwise noted.

Subpart A-[Reserved]

Subpart B-Trainees in Government Hospitals

§ 534.201 Exclusions from the Federal Employees Pay Act and the Classification Act.

In addition to the positions specifically excluded by the Federal Employees Pay Act of 1945, as amended (5 U.S.C. 902), the Classification Act of 1949, as amended (5 U.S.C. 1082), and section 2 of the act of August 4, 1947 (5 U.S.C. 1052), the positions named in § 511.201 (b) of this chapter are excluded from the Federal Employees Pay Act and the Classification Act.