**Frequently Asked Questions**

**[Grade and Pay Retention]{.underline} - 5 CFR 536**

**Permanent General Schedule (GS/GM/GW) and/or Federal Wage System
(WG/WL/WS)**

**What is grade retention?**

Grade and pay retention is an entitlement to protect employees who are
demoted because of reasons other than their conduct or work performance.
For two years, these employees keep the grade and pay of the position
from which they were demoted.

**What happens if I am changed to a lower grade?**

You retain your grade if you are placed in a lower-graded position. This
is referred to as AGrade Retention@. Your pay also continues as if your
grade had not changed. You receive within grade increases and
comparability increases as if you were still assigned to your previous,
higher-graded position.

**What must occur in order for me to retain my current grade?**

Demotions or changes to lower graded positions that result from the
following management initiated actions *entitle* you to grade and pay
retention:

A.  [Reduction-in-Force]{.underline}. Grade retention is mandatory if
    you are placed in or changed to a lower grade after receiving a
    formal RIF notice [and]{.underline} you have completed 52 weeks of
    service at a higher grade under a pay system (i.e., GS, FWS) that
    provides grade and pay retention protection.

B.  [Reclassification of position]{.underline} (*due to correction of
    classification error or implementation of a new classification
    standard*). Grade retention is mandatory if your position is
    down-graded [and]{.underline} the position has been classified at
    the higher grade for 52 continuous weeks.

C.  [Interim appointments]{.underline} under the Whistleblower
    Protection Act re-entitle employees who were previously entitled to
    grade or pay retention for the duration of their original period of
    entitlement.

Grade and pay retention protections *may be provided* to employees who
are demoted or changed to lower graded positions as a result of the
following management initiated actions:

D.  [Reorganization or Reclassification]{.underline}. When a
    reorganization or reclassification has been announced in writing, an
    agency has the option to offer grade and pay retention to employees
    who are being or might be reduced in grade *provided* that these
    employees have completed 52 weeks of service at the higher grade.

**How long will I retain the higher grade and pay?**

Grade retention begins on the effective date of the change to lower
grade and lasts for two years. During this two-year period, employees
continue to receive locality pay, within grade increases, 100% of
comparability increases, and consideration for other Federal positions
based on the retained grade.

However, any of the following conditions will result in termination of
grade retention:

-   The two-year anniversary of the retained grade period;

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-   A break in service of one work day or more;

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-   Demotion for personal causes or at the employee=s own request;

-   Permanent placement in a grade equal to or above the retained grade;

-   A request from the employee in writing for grade retention
    termination;

-   If the employee declines a reasonable offer for a position at or
    above the retained grade; or

-   Failure to enroll in or comply with an HHS placement program.

**Will I have promotion opportunities while retaining my grade?**

If your retained grade and pay entitlement is a result of a mandatory
reason as described above, your have priority entitlement to be
re-promoted to equivalent positions at the same grade (and to
intervening grades between the lower grade and the retained grade)
without being required to apply for those positions.

If you apply for promotion to other positions or if the retained grade
and pay entitlement is a result of a discretionary decision and you
apply for promotion, your qualifications will be evaluated:

-   On the basis of your retained grade and series, or

-   On the basis of the actual position you currently occupy, whichever
    is most beneficial to you.

**If I accept a position in another agency, will my grade and pay
retention continue?**

An employee who moves to a position outside the NIH, is entitled to
grade and pay retention that was provided to that employee while he/she
was employed at the NIH. An employee on retained grade and pay who is
transferred or reassigned from outside the NIH to a position within the
NIH is entitled to continue that grade and pay retention.

However, at the time of selection the selecting official may ask such
retained grade and pay employees to *waive* their retained grade
entitlement in order to be placed at a lower grade within the NIH than
their retained grade of a position outside the NIH. An employee who
*waives grade retention* is *not entitled* to *pay retention,* but pay
retention may be extended at the discretion of management.

**When grade retention ends, what will happen to my pay?**

When grade retention ends, your pay will still be protected. Your basic
annual rate of pay (without locality pay) will be compared to the rates
of pay for each step within the lower-graded position to which you are
now appointed.

-   If your basic annual rate of pay is equal to the rate for one of
    those steps, your pay will be set at that step and your entitlement
    to pay retention ends.

-   If your basic annual rate of pay falls between the rates of two of
    those steps, your pay will be set at the higher step and your
    entitlement to pay retention ends.

-   If your basic annual rate of pay exceeds the rate for step 10 but is
    equal to/less than 150% of the rate for Step 10 (Step 5 for FWS),
    you retain that rate of pay; and,

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-   You continue to receive 50% of the annual comparability increases to
    the Step 10 (Step 5 for FWS) rate of pay for the grade of the lower
    graded position to which you are now assigned;

-   You are no longer eligible for within grade increases, since your
    rate of pay exceeds the pay range for the grade to which you are now
    assigned;

-   100% of the locality pay for the pay region in which your duty
    station is located will be added to your basic retained rate of pay.

**When is pay retention mandatory?**

Pay retention **must** be granted to you if your pay would otherwise be
reduced for one of the following reasons:

A.  The end of the two-year grade retention period;

B.  Reduction-in-force or reclassification of position if you do not
    meet grade retention requirements (e.g. less than 52 weeks in a
    higher classified grade);

C.  Reduction/elimination of special pay rates;

D.  Placement from a special rate position to a non-special or lower
    special rate position;

E.  Placement in a different pay schedule; or

F.  Placement in a formal employee development program (e.g. Upward
    Mobility, Intern, COTA, Apprenticeship).

**Can pay retention be granted at management=s discretion under other
circumstance?**

Yes, under certain circumstances pay retention may be granted if it is
in the best interest of the Government to do so. For example (not
intended to be all inclusive):

A.  [Transfer of Function.]{.underline} Employees who decline transfer
    of function to a different commuting area and who are placed in a
    lower graded position in the original commuting area in lieu of
    separation by adverse action procedures may be granted pay retention
    (536.103(b) and 351 Subpart C).

B.  [Disability.]{.underline} Pay retention may be granted to employees
    who are found to be disabled for their current position yet are
    willing to accept assignment to a lower graded position, the duties
    of which they are capable of performing. The finding of disability
    must be supported by acceptable medical evidence. This policy is
    applicable regardless of whether an application for disability
    retirement has been filed or the disability retirement application
    has been denied. Grade retention may not be authorized for such
    purposes. (536.104(6)(b)).

C.  [Other.]{.underline} Pay retention may be granted to employees whose
    rate of pay would otherwise be reduced as a result of management
    action. This includes employees who would otherwise cause another
    employee to be reduced in grade (536.104(b)).

**How long will pay retention last?**

Your pay retention will cease to apply if any of the following events
occur:

A. You have a break in service of one day or more;

B. You are demoted for personal cause or at your own request;

C. You become entitled to pay equal to or greater than the retained pay;
or

D. You decline a reasonable offer to a position with pay equal to or
greater than the retained rate.

**How is pay set when a retained grade and pay employee receives a
temporary promotion?**

Since the grade of the temporary promotion is greater than the retained
grade, pay is set for the temporary promotion by adding two steps above
the current annual rate of basic pay, matching that amount within the
higher grade range.

If the grade is to an intervening grade between the permanent lower
graded position and the retained grade, the employee receives a position
change and pay in not affected.

**How is pay set when the temporary promotion of a retained grade and
pay employee ends?**

If the period of temporary promotion extended for one year or longer, or
if the two-year period of grade retention ended during the temporary
promotion period; pay is set under the maximum payable rate rules (if
the rate will fall within the pay range) *or* pay is set under pay
retention after adjusting to reflect any pay adjustments, within-grade
increases, or increases due under the retained grade. Add the locality
rate to this basic annual rate of pay.

If the period of temporary promotion is one year or less and grade
retention has not expired, pay is set within the retained grade to
reflect any pay adjustments, or within-grade increases due during the
period of the temporary promotion. Locality pay is paid in addition to
the retained rate of basic pay.

**How is pay set when a retained pay employee receives a temporary
promotion?**

Pay is set at the higher of:

-   the retained rate of pay; or,

-   the equivalent of two steps above step 10 of the lower grade.

**What happens if an employee on grade or pay retention is moved to a
different pay schedule or pay system?**

The employee is entitled to retain the grade of the position with the
*higher representative rate* (i.e., GS-Step 4, FWS-Step 2, Single band
system - the pay of the employee).

**May an employee appeal grade and pay retention actions?**

Yes, employees may appeal no earlier than the effective date or no late
than 30 calendar days after receiving the Notice of Action (SG-50B). NIH
employees may appeal to the HR Bethesda Center, Classification Appeals
Office or directly to the U. S. Office of Personnel Management.

For additional information, please contact your Client Services Division
Team on 496-1443.