STATEMENT OF PURPOSE AND JUSTIFICATION AND SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION REQUESTED BY THE PRESIDENT OF THE UNITED STATES TO REFORM THE MAJOR FEDERAL STATUTORY SALARY SYSTEMS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP65B00383R000500030004-5
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 37
• Document Creation Date: December 23, 2016
• Document Release Date: February 19, 2014
• Sequence Number: 4
• Publication Date: February 28, 1962
• Content Type: OPEN SOURCE

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[COMMITTEE PRINT]
STATEMENT OF PURPOSE AND JUSTIFICATION
AND SECTION-BY-SECTION ANALYSIS OF THE
LEGISLATION REQUESTED BY THE PRESIDENT
OF THE UNITED STATES TO REFORM THE
MAJOR FEDERAL STATUTORY SALARY SYSTEMS
COMMITTEE ON POST OFFICE AND
CIVIL SERVICE
HOUSE OF REPRESENTATIVES
FEBRUARY 28, 1962
U.S. GOVERNMENT PRINTING OFFICE
80347 WASHINGTON : 1962
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COMMITTEE ON POST OFFICE AND CIVIL SERVICE
TOM MURRAY, Tennessee, Chairman
JAMES H. MORRISON, Louisiana
JAMES C. DAVIS, Georgia
KATHRYN E. GRANAII AN, Pennsylvania
THADDEUS J. DULSKI, New York
DAVID N. HENDERSON, North Carolina
ARNOLD OLSEN, Montana
JOSEPH P. ADDABBO, New York
RICHARD H. ICOHRD, Missouri
CATHERINE D. NORRELL, Arkansas
MORRIS K. UDALL, Arizona
DOMINICK V. DANIELS, New Jersey
LINDLEY BECKWORTH, Texas
WALTER H. MOELLER, Ohio
CHARLES E. JOHNSON, Staff Director
ROBERT J. CORBETT, Pennsylvania
H. R. GROSS, Iowa
JOEL T. BROYE ILL, Virginia
AUGUST E. JOHANSEN, Michigan
GLENN CUNNINGF:AM, Nebraska
GEORGE M. WALLHAUSER, New Jersey
ROBERT R. BARRY, New York
KATHARINE ST. GEORGE, New York
JOHN R. ROUSSELOT, California
EDWARD J. DERWINSKI, Illinois
ROBERT F. ELLSWORTII , Kansas
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FOREWORD
This print contains a "Statement of Purpose and Justification"
and a section-by-section analysis of the Federal Salary Reform Act
of 1962, which is the President's proposal to reform the major statutory
salary systems of the Federal Government.
The President's proposal is directed to the establishment of appro-
priate relationships between salaries paid for comparable skills and
responsibilities in the Government and in private enterprise, based
upon the Bureau of Labor Statistics studies for which the Congress
appropriated $600,000.
Tom MURRAY, Chairman.
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FEDERAL SALARY REFORM ACT OF 1962
Draft bill to reform the major statutory salary systems of the Federal Govern-
ment, to establish appropriate relationships among them, to adopt and apply
the principle of Government-private enterprise salary comparability and for
other purposes
STATEMENT OF PURPOSE AND JUSTIFICATION
The draft bill reforms four Federal statutory systems: those for
employees paid under the Classification Act, the Postal Field Service
Compensation Act, and the Foreign Service Act, and for physicians,
dentists, and nurses of the Department of Medicine and Surgery of
the Veterans' Administration. In addition, the bill brings into the
reformed salary system, at newly established levels, a few high-
ranking jobs below the agency-head level which are now compensated
under the Federal Executive Pay Act or other authorities. To avoid
undue impact at any one time and provide an orderly transition, the
bill would bring salaries to their proper levels gradually, over a 3-
year period.
REQUISITES OF A FEDERAL PAY SYSTEM
The functions of a public salary system are to control payroll
expenditures, with equity to both the employee and the taxpayer,
and to support recruitment and retention of the high-quality personnel
required to carry out Government programs. To meet its respon-
sibility to the public, the salary system must pay enough to permit
competent staffing in order not to endanger the national security
nor to degrade public service; but it must not pay more than is
necessary for this purpose and for equity to the employee. To
assure fair treatment for the public employee, the salary system
must assure equity among Federal employees and between Federal
employees and those in private employment. To be adaptable to
changing conditions and to stimulate peak performance, the system
must provide for executive discretion to meet individual and special
needs, to use pay for motivating employees, and to initiate general
adjustments as required.
These are the underlying objectives which this proposal is designed
to meet.
CONDITIONS THAT NEED CORRECTING
Statutory pay systems have failed to meet the needs of today's
Federal service. Absence of an accepted standard for Federal salaries
and a procedure for periodic review and adjustment, coupled with rigid
statutory rules of pay administration, deprive the systems of the
adaptability so essential in a period of rapidly changing conditions.
Major inequities exist between the Federal employee and his equals
throughout the national economy. Only in the very lowest grades
has Federal pay kept pace with average private enterprise rates. Com-
parison can now be made directly between private salaries and those
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2 FEDERAL STATUTORY SALARY SYSTEMS
in the Classification Act, which has a broad occupational coverage
having many counterparts in private employment. Findings of the
Bureau of Labor Statistics National Survey of Professional, Admin-
istrative, Technical, and Clerical Pay reported in 1961 provide the
data. This annual survey clearly shows that the greater the level of
difficulty and responsibility, the greater the gap between public and
private pay. From grade GS-4 upward, private salary averages con-
sistently exceed Federal salaries. At the lower professional levels of
GS-7 and GS-9, the difference is quite noticeable. For example:
National average
rate in private
enterprise
Classification Act rate range
Grade
Minimum
Maximum
$6, 648
7, 776
GS-7
GS-9
$5, 355
6,435
$6. 345
7, 425
At the upper professional levels there is an even greater lag of
Federal salaries:
National average
rate in private
enterprise
Classification Act rate range
Grade
Minimum
Maximum
$13. 152
15. 362
19, 348
GS-13
GS-14
GS-15
$10,625
12, 210
13, 730
$11,935
13, 510
15, 030
Further evidence of this trend was furnished by the Civil Service
Commission's 1960 study of salaries paid in 21 large nationwide firms
for personnel, finance, research and development, law, and plant
management positions with responsibilities equivalent to those of
Federal positions in grades GS-16, 17, and 18. This study showed
these serious disparities:
Federal Government
21 firms, major
salary clusters
Grade
Salary range
GS-16
$15, 255-$16. 295
$23, 000-$30, 000
GS-17
16, 530- 17. 570
27-500- 37, 500
GS-18
18, 500
32, 500- 45, 000
Many State and local jurisdictions now have passed the Federal
Government's pay rates. For example, California, Georgia, Illinois,
Michigan, New York, Ohio, and Pennsylvania all have career salaries
higher than the highest Classification Act and other top statutory
salaries. The same is true of Los Angeles City and County, Denver,
Detroit, St. Louis, San Francisco, and Philadelphia. In cities with
populations over 500,000, city managers average $22,950 and school
superintendents average $25,869, about 25 and 40 percent, respec-
tively, above the top Classification Act salary.
Based on the findings of a private consulting firm, New York
State revised its salary structure in 1961 to provide a top career salary
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FEDERAL STATUTORY SALARY SYSTEMS
3
of more than $22,000 and $27,500 for department heads. Thus, a
department head in New York State is paid 10 percent more than
the head of a Cabinet department of the National Government.
Inequities have come about and have been compounded by past
statutory pay raises. These raises over the years have acted to
compress the pay spread from the lowest to the highest levels. In
1928, the ratio of the highest Classification Act salary to the lowest
was 8.8 to 1. By 1945, it had fallen to 6.8 to 1, and today the ratio
is 5.8 to 1. The pay increase of July 1945, demonstrates how this
has worked. Salaries were increased 20 percent on the first $1,200,
10 percent on the next $3,400, and 5 percent on the remainder. This
plan resulted in 20-percent raises at the lowest level and 8.9 percent
at the top. Consequently, the ratio of the highest to the lowest
salary dropped from 7.5 to 1 down to 6.8 to 1.
Inequities exist within systems: for example, inadequate pay
distinctions between grade levels, inadequate within-grade pay ranges,
and inadequate pay spreads from entry to top career levels.
Normal pay practice in a large corporation permits an employee
beginning a professional or management career to look forward to a
salary of $35,000 to $40,000 a year if he reaches a level in the organi-
zation with responsibilities equivalent to those of GS-18 positions in
the Federal service. The top of a pay range for a given level of work
is 30 to 35 percent above the minimum rate for the work level; at
executive levels the range is more likely to be 50 percent. The better
performers advance faster within the range than the merely average
performers. An employee who receives a within-grade pay increase
generally has his salary advanced from 5 to 10 percent.
Differences between salaries for successive Classification Act grade
levels, for instance, are both inconsistent and inadequate. These
differences range from a low of 7.4 percent to a high of 18.8 percent.
This is not a normal progression; there is no logic or pattern to be
found. Between grades GS-1 and GS-2, the difference in minimum
salaries is 9.9 percent. Between GS-2 and GS-3, the difference is
7.4 percent. GS-5 and GS-6 are 11.2 percent apart. GS-13 exceeds
GS-12 by 18.8 percent, but GS-17 exceeds GS-16 by only 8.4 percent.
A similarly inconsistent condition exists with respect to the spread
between minimum and maximum salaries at various grade levels.
Including longevity rates, the top salary for GS-4 exceeds the GS-4
entry rate by 23.4 percent, but at GS-5 the difference is 34.2 percent.
At GS-11, the spread is 27.5 percent, while at GS-15 it is 15.1 percent,
and at GS-17 is 7.3 percent. This contrasts with salary ranges in
industry, which are commonly from 30 to 50 percent of the beginning
salary, with the widest ranges at the higher salary levels.
The salary spread from the entry professional or administrative
level at GS-5 to the top career level at GS-18 is entirely inadequate
by modern business standards. From his beginning salary, a Federal
employee can see an increase of 43 times for a lifetime professional or
administrative career, if he is one of the relatively few who reaches
the very top. His equals in private employment can expect to in-
crease their beginning salary by six or seven times without having to
become corporation president or chairman of the board.
Inequities now exist among the various Federal pay systems; for
example, supervisors under the Classification Act system are some-
times paid less than their subordinates who are under a wage board
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4 FEDERAL STATUTORY SALARY SYSTEMS
system. This comes about because of lack of coordination between
the systems Wage board rates are based on, and move freely with,
prevailing rates in industry while pay levels under the Classification
Act and other systems can be adjusted only by legislative action and
lack a fixed standard to govern the time and amount of increases.
POLICY AND PRINCIPLES-GENERAL REFORMS
Title I states proposed Federal salary policy, provides for continu-
ing application of the governing principles, and clarifies the role of the
executive.
The proposed bill offers a basis for Federal pay reform by the adop-
tion of two principles:
The comparability principle: Federal salary rates shall be
comparable with private enterprise rates for the same levels of
work; and
The internal alinement principle: There shall be equal pay for
substantially equal work, and pay distinctions shall be maintained
in keeping with work and performance distinctions.
Comparability principle
Adoption of this principle will assure equity for the Federal employee
with his equals throughout the national economy. Its use will im-
prove the Government's ability to compete with private firms for
qualified personnel.
Comparability with private enterprise salary levels provides a long-
needed logical and factual standard for setting Federal salaries. It
includes the effects of such legitimate pay consideration as cost of
living, standard of living, and productivity as those factors are re-
solved into the going rate over bargaining tables and other salary
determining processes throughout the country.
The principle has a history of wide acceptance. Within the Federal
Government, it has been used for 100 years; first applied to navy yard
workers, it is now applied to virtually all Federal trades and crafts
workers, to employees of the Tennessee Valley Authority, and to
Government work contractors through the Walsh-Healey and Davis-
Bacon Acts. It is widely accepted in industry, although many
leading firms have adopted the modification of paying better than the
competition. State and local governments, as well as some other
national governments (such as Canada and the United Kingdom), rely
on this principle.
Until recent years, the principle of comparability could not be
applied on a nationwide basis because there was no broad, acceptable
source of comparative salary data from private enterprise. Now,
however, the Bureau of Labor Statistics national survey of profes-
sional, administrative, technical, and clerical pay provides annually
the requisite data on private enterprise pay. It is the only compre-
hensive and authoritative survey of its kind, and there are technically
valid and established methods for translating the BLS data into
Federal comparability pay levels.
Pay comparability would be established between the same levels of
work in private enterprise and Government, that is, between levels
of work having substantially the same degrees of difficulty, responsi-
bility, and required qualifications. Although survey techniques
require ascertaining private enterprise rates by occupation as well as
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FEDERAL STATUTORY SALARY SYSTEMS
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work level, the survey is so designed that the occupational rates at a
given work level can be combined into a single rate representing the
general level of private enterprise salaries for a work level equivalent
to a Classification Act grade.
As will be explained later, comparability for the more specialized
salary systems?postal, Foreign Service, Veterans' Administration
medical?will be established by a systematic linkage of key levels
with grades of the Classification Act.
Internal alinement principle
The internal alinement principle rests on the two concepts of
equal pay for equal work and pay distinctions in keeping with differ-
ences in work and quality of performance. As with the comparability
principle, the internal alinement principle is well established, both
within and outside the Government. It is stated in the current
Classification Act, the Postal Field Service Compensation Act, and
the Foreign Service Act; and it is imbedded in public and private
enterprise pay practices throughout the country. It is translated
through different concepts in different systems, in some cases through
evaluation of jobs and in other cases through evaluation of the quali-
fications of employees, but the same basic concept of internal equity
underlies all systems.
The equal pay for equal work part of the internal alinement prin-
ciple is now in effect and it works well, but pay distinctions for differ-
ences in work are not adequate under any of the statutory salary
systems.
Proposed schedules would regularize and generally enlarge the
differences in salaries between successive grade levels of positions.
The new intergrade differentials recognize more appropriately the
differences in responsibilities and furnish greater incentives for em-
ployees to strive to prepare themselves for higher responsibilities.
The proposed bill would improve the provisions for within-grade
step increases and would make them more meaningful. The bill
recognizes the importance of step increases by making them large
enough to serve as material incentives and by allowing sufficient
increases to sustain performance even where all or much of a career
is served within a single grade or level.
Essential flexibilities
To maintain Federal salaries at levels comparable with private
enterprise levels and to assure that other features of statutory salary
systems are corrected and improved as experience shows the need,
the bill provides that the President shall require an annual report,
from an agency he designates, on the relationship of Federal salaries
to those in private enterprise and shall submit an annual report to
Congress recommending the adjustments in salary schedules, struc-
ture, and policy he considers advisable. This provision is a funda-
mental feature of the reforms proposed. It establishes a procedure
for annual review of salary schedules and for annual adjustment when
necessary to maintain the prescribed relationship to private enterprise
pay levels. A systematic review of this kind is essential to prevent
Federal salary schedules from relapsing to their present conditions.
When it is found that the Government is handicapped in recruiting
and retaining well-qualified employees because private enterprise
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6 FEDERAL STATUTORY SALARY SYSTEMS
salaries in an occupation or in a given place are substantially higher
than salary rates of statutory schedules, the President or an agency
which he designates may set higher pay scales than those in the
nationwide Classification Act, Postal Field Service, Veterans' Admin-
istration medicine and surgery, or Foreign Service salary schedules.
In setting the new scales, the entrance rate of a grade may be advanced
up to but not exceeding the top scheduled rate of the grade, and all
other rates of the grade may be advanced proportionately. Such
adjustments may be made for positions in an occupation in all areas
or in a given area; for all positions, or for all positions in certain
grades, in a given area; or for any other appropriate grouping of
positions.
Authority thus to advance salary scales is a modification of the
present authority in section 803 of the Classification Act which
permits the Civil Service Commission to raise the minimum rate of
the grade?or hiring rate?for positions in shortage occupations paid
under the act. Under the present authority, the minimum rate may
be increased as high as the maximum rate but no increases are per-
mitted for other step rates. Thus, when it becomes necessary to
advance the minimum rate at a given grade of an occupation to the
top rate of the grade, only a single salary rate may be paid to those in
the class of position concerned. New employees enter at the same
salary that is being paid to experienced, better performing employees,
a situation that has caused understandable resentment among indi-
viduals who had been several years on the job. Advancing the entire
rate range of a grade when the hiring rate is raised, as now proposed,
will permit experienced employees at the higher step rates to retain
the salary advantage they have earned over new appointees.
The proposed new authority would also permit a general increase
of rates payable under salary systems in a place where general salary
levels in private enterprise are so far above statutory salaries for
corresponding levels of work that they handicap the Government's
recruiting and retention of well-qualified personnel. Available in-
formation indicates that, once the Government's salaries are brought
up to national average private enterprise levels, there are few places
in which this condition may exist, and the authority to raise rates
generally in a geographic locality or area would be used very sparingly
and only where the need and justification is clearly and conclusively
demonstrated.
In accordance with sound management principles and in the interest
of coordination among Federal salary systems, the President would be
authorized to issue policies and rules, to which would be subject the
pay regulations issued by the Civil Service Commission, the Post-
master General, the Administrator of Veterans' Affairs, and the
Secretary of State under the several Federal statutory salary systems.
Present law fails to contain specific provisions making clear the Chief
Executive's responsibilities for salary administration as a part of the
general management of the executive branch.
CLASSIFICATION ACT REFORM
Title II of the proposed bill would achieve the specific additional
reforms needed in the Classification Act system.
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FEDERAL STATUTORY SALARY SYSTEMS 7
Structural reforms
One major reform of the Classification Act salary structure would
be achieved through a regularized pattern of intervals between salaries
at successive grades. Under the proposed bill, pay differentials
between successive grades would be brought into a regularized pattern
and the entry rates for all grades will be, upon full reform, not less
than 10 percent apart. This spreading out of entry rates will relieve
the compression now existing generally but especially severe at the
higher grades.
Salary ranges of the grades would be made uniform. Each grade
would have a 30-percent pay range?entry rate and nine step in-
creases?except the top grades, which taper down to single rates
because of ceiling considerations. Step increases would be uni-
formly large enough to serve their purposes as material incentives.
The present length-of-service requirements for step increases would
be revised. Step increases are now granted every 52 weeks at GS-10
and below and every 78 weeks at GS-11 and above. Under the pro-
posals, the first three step increases would each be granted after 52
weeks of satisfactory performance. Thus, step-ups would relatively
frequent during the first 3 years on a job when performance normally
improve rapidly. The next three steps would come at 2-year intervals,
and the final three steps at 3-year intervals, when the aim is to motivate
continued good performance. This revised use of step increases offers
incentives over a period of 18 years. Most Classification Act em-
ployees receive promotions in grade and few work more than 18
years in a grade. At the same time, the revised use of step increases
encompasses within the salary range of a grade what. are now called
longevity rates, thus removing unnecessary now-existent restrictions
on the use of such rates.
Comparability schedule
The Bureau of Labor Statistics surveys annually private enterprise
salaries and reports national averages. The jobs surveyed involve
work that is essentially the same in Government and industry and are
representative of Classification Act grades GS-1 through GS-15.
The survey covers 80 metropolitan areas, selected as representative
of the 200 standard metropolitan areas. It covers all industries that
are major employers of the occupations surveyed (manufacturing,
public utilities, wholesale and retail trade, finance, and certain service
industries). It covers establishments with 250 or more employees?
gathering clerical and technical pay data from about 6,000 establish-
ments, and professional and administrative data from about 1,600.
The Classification Act comparability pay schedule is constructed
by combining the BLS averages for several occupational-work levels
that equate with a given GS grade. From this information a regular-
ized comparability pay line is developed through grade GS-15, and
extended through grade GS-18 by continuing the same regularized
shape, based on the internal alinement principle. The extension of
the line above grade GS-15 was checked against the findings of the
Civil Service Commission's study of salaries in 21 large corporations
to assure its reasonableness. The construction of the pay line is
shown by the following chart.
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40,000 -
35.000
30,000
25,000
20,000
15,000
10,000
5,000
/1
/
r
o AURAE OF PRIVATE ENTERPRISE
RATES
-1r- 21 CCFPANY MIDDLE RATES
/
/
/
- CURRENT CLASSIFICATION ACT
4TH STEP-RATE LINE
-- PAYLINE EqUIVALEI?T
PRIVAMENTERPRISE
TO
LEVELS
/
/
/
III
11111
.
-moil
II
1111111111
.
I1111111
INN
rlir
!Milli
GS 1 2 3 4 5 6 7 8 9 10 11
12
13
14
16
17
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COMPARABILITY PAY LINE, CURRENT CLASSIFICATION ACT, AND 21:COMPANIES
00
FEDERAL STATUTORY SALARY SYSTEMS
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FEDERAL STATUTORY SALARY SYSTEMS
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The rate for each grade in the comparability pay line is adopted
as the fourth step rate of that Classification Act grade, and the other
rates for the rate range of each grade are computed on the basis of an
interval between step rates equal to 3j? percent of the entrance rate
of the grade. The fourth rate of the grade is adopted as the pay line
rate because it best represents the average rate of the grade for Clas-
sification Act employees and BLS findings represent average rates
paid by private firms.
In Classification Act grades where the comparability schedule falls
below current rates, the current schedule rates would be somewhat
increased nevertheless.
Flexibilities in use of schedule
The proposed bill provides greater flexibility in pay administration.
The bill also includes the provision in H.R. 1010 which passed the
House of Representatives on August 22, 1961. This provision would
insure employees promoted to a higher grade a salary increase equiv-
alent to not less than two step increases in the grade from which
promoted.
The Classification Act in its present torm contains no provisions
for merit increases. Private enterprise relies heavily on merit in-
creases for rewarding and encouraging its better employees. The
proposed bill provides for use of step increases, under Civil Service
Commission regulations, to reward high-quality performance. No
more than one such increase could be granted an employee during a
year. This authority would make it possible for Federal managers to
reward appropriately the better performers, whose everyday contri-
butions to Federal programs continuously exceed the contributions
of their associates.
At various times in the past, the Classification Act system has
permitted within-grade merit increases. In the early years of the
act, increases were permitted to employees with specified efficiency
ratings. Absence of coordination among agencies?with increases
depending more on the condition of an agency's appropriation than on
merit?led to the present system of automatic, length-of-service
increases. A limited, relatively cumbersome system of superior
performance increases remained in existence but proved unsatisfactory
and the authority on which it rested was repealed in 1954. The
present proposal takes a middle ground between the two extremes that
proved unsuccessful under the Classification Act in the past.
The proposed bill also provides for appointing individuals with
extra qualifications at a rate above the minimum of a grade, or for
using a higher rate when the minimum would be lower than the candi-
date's current salary. This authority would also be exercised under
Civil Service Commission regulations. It is designed to help attract
high-quality personnel to the Federal service. There are many
instances in which ability to offer a few hundred dollars more may
enable the Government to secure the services of a well-qualified
individual.
Under present law, there is no pay method for rectifying a situation
in which a Classification Act supervisor is paid less than a wage board
employee under his supervision. With Classification Act salaries at
comparability levels, the incidence of situations of this sort should
be sharply reduced but, with the supervisor's rate based upon a na-
tional average and the subordinate's rate on a local average, some of
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FEDERAL STATUTORY SALARY SYSTEMS
these pay inversions may still be encountered. Accordingly, the
proposed bill would permit an agency, under Civil Service Commission
regulations, to raise the rate of the supervisor in these circumstances
to a rate of his grade which is above the rate paid the wage board
employee under his supervision.
Objectivity and equity would be provided in classifying positions at
the higher career levels by removing the limitations on numbers of
positions which may be placed in grades GS-16, GS-17, and GS-18.
Existing special authorities for certain agencies to place a specified
number of positions in grades GS-16, GS-17, and GS-18 without Civil
Service Commission review would become less necessary and would be
eliminated; but requirements for an annual report to Congress on
positions in grades GS-16 and above would be retained. Limitations
on the number of positions to be placed in a grade are inconsistent with
the principle of alinement underlying the proposed reforms. A limi-
tation of this kind prevents classification of positions at the grade
levels appropriate to the duties, responsibilities, and qualifications
required.
Addition of two new levels
As indicated in the opening paragraph, an important part of the
salary reform plan is to return a few high-ranking positions of bureau
directors and similar posts to the general salary structure. The posi-
tions, most of which were formerly under the Classification Act, had
been granted higher compensation under the Federal Executive Pay
Act or other authorities. Since these are not positions of heads or
assistant heads of agencies, they are being placed in the Classification
Act system, at grade levels and under procedures which fully recognize
their special importance. Almost all of these will be placed in new
grades GS-19 and-GS-20, at salary rates considerably above GS-18,
even though full comparability as projected from present comparisons
with private enterprise cannot be attained. Personal action by the
President, after review of recommendation by the Civil Service Com-
mission, is required to place a position in either of the two new grades,
to insure maintenance of high standards of responsibility and com-
petence.
REFORM OF SPECIAL STATUTORY SALARY SYSTEMS
Linking
The BLS survey furnishes private enterprise salary data for occu-
pations which are representative of the Classification Act but not for
other Federal pay systems where the majority of jobs have few, if
any, counterparts in private enterprise. As indicated earlier in this
statement, in order to extend the principle of comparability to other
statutory salary systems the proposed bill relates, or links, several
key levels or ranks of each system with equivalent Classification Act
grades. Linkage is based in most cases on an evaluation of duties,
responsibilities, and qualifications required but also takes into account
other factors which should affect pay, such as career patterns and
opportunities for advancement, group characteristics of employees,
employment conditions, and special requirements of the service con-
cerned. All linkages were agreed upon by the Bureau of the Budget,
the Civil Service Commission, and the department or agency
concerned.
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FEDERAL STATUTORY SALARY SYSTEMS 11
For each key level or rank so linked with a Classification Act
grade, the salary level was established on the basis of the compara-
bility pay rate used for the Classification Act grade. The remainder
of the schedule was developed in accordance with the alinement and
structure required by internal conditions and needs of the specific
service.
Postal field service pay reform
Title III of the bill relates to postal field service compensation.
Proposals are based on the principles of comparability and internal
alinement and on the special career conditions at the lower levels.
To extend comparability salary levels to the postal service, PFS-20
and PFS-11 are linked with GS-17 and GS-11, respectively, through
evaluation of duties, responsibilities, and qualifications required; and
PFS-4 is linked with GS-5. Linking PFS-4 with a grade as high as
GS-5 of the Classification Act schedule is not predicated solely on a
work-level evaluation basis but on the additional considerations of the
unique character of postal occupations, the full career served by many
postal clerks and carriers in PFS-4 and the family responsibilities of
most of them, and the relative scarcity of opportunities for advance-
ment to higher work levels.
The fourth step rates of Classification Act grades GS-17, 11, and
5 were used as the fourth step rates of PFS-20, 11, and 4, respectively.
The fourth rates of other postal levels were established by application
of uniform intergrade differentials for levels PFS-1 through PFS-10
and another set of uniform differentials among levels above PFS-10.
This established a PFS comparability pay line at the same general
level as the Classification Act pay line.
The PFS comparability schedule was constructed by applying
within-grade pay ranges patterned on those proposed for the Classi-
fication Act but substantially wider at the lower postal levels. Twelve
within-grade increases, spread over 27 years and adding up to a 40-
percent range, are proposed for PFS-1 through PFS-6, where em-
ployees normally spend their entire careers in a single level. The
new PFS rate ranges replace the former longevity increases as well
as the regular step-increases in the former pay schedule.
Time intervals between step increases would be the same as under
the Classification Act: 1 year each for the first three, 2 years each
for the next three, and 3 years each for the remainder. Additional
step increases could be given for exceptional competence, and an
individual with extra qualifications could be appointed at a rate
above the minimum of the level.
Other revisions in the postal compensation system would guarantee
a minimum two-step increase on promotion to a higher level or a
three-step increase if promoted three or more levels; place rural carrier
pay on a work requirement rather than a mileage basis; and modify
the salary schedule for fourth-class postmasters.
Reform of salaries in the Veterans' Administration Department of
Medicine and Surgery
Title IV of the bill is concerned with salaries of physicians, dentists,
nurses, and directive staff in the Department of Medicine and Surgery
of the Veterans' Administration. Proposals rest on the twin principles
of comparability and internal alinement.
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12 FEDERAL STATUTORY SALARY SYSTEMS
Pay comparability is brought about by linking the pay of:
Physician, Director grade (new) with GS-16.
Physician, associate grade with GS-11.
Director, nursing service with GS-15.
Nurse, junior grade with GS-6.
Salary ranges for intermediate grades of physicians, dentists, and
directive staff and most grades of nurses were established by main-
taining a regularized pattern of intervals between grades similar to
the pattern used for the Classification Act. Directive level salaries
are based on an upward projection of these salary schedules, except
for the Chief Medical Director rate, which is linked to the new GS-20
grade.
Salary structures are improved by adding two new physician grades
and dropping one former grade and by adding one nurse grade. The
proposed Classification Act rate range, generally 30 percent, is used
except at the highest levels, where lesser ranges or single rates are
proposed.
Under existing law, the Administrator of Veterans' Affairs has wide
discretion in determining what step rates will be established within
prescribed statutory rate ranges and how the step rates will be used.
His present authority would continue, but subject to the President's
policy direction. Step rates within the statutory limits of the rate
ranges would be set administratively, as they now are. The existing
authority for 15 percent additional pay for specialists would be re-
pealed. Proposed 30 percent rate ranges would provide an adequate
spread to permit recognition of specialist qualifications.
Foreign Service pay reform
Title V would extend comparability and alignment principles to
salary schedules of the Foreign Service under the Department of State.
Comparability would be brought about by linking the pay of--
FSO-4 with GS-13.
FSO-8 with GS-7.
FSS-1 with FSO-3.
FSS-10 (new) with GS-4.
The fourth rate of the class at the point of linkage is associated with
the fourth rate of the corresponding Classification Act grade. A
structure of regularized, slightly increasing interclass differentials
provides the fourth rates of other Foreign Service officer classes.
The rate for the highest class, Career Ambassador, is set at the same
level as that for Chief Medical Director of the Department of Medi-
cine and Surgery of the Veterans' Administration. Foreign Service
Staff rates for other classes are derived from a uniform interclass
differential pattern up to FSS-4, above which FSS salary levels con-
form with those for corresponding FSO classes. Ten FSS levels
would replace the existing 22, the lower 9 of which seldom have
been used.
Rate ranges for Foreign Service Staff classes would be 30 percent,
with an entry rate and nine step increases, like the proposed Classi-
fication Act within-grade structure. Existing longevity increase pro-
visions would be repealed. Except at top levels, where lesser ranges
or single rates are used, 20-percent salary ranges are proposed for
Foreign Service officer classes. Foreign Service officer career pat-
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FEDERAL STATUTORY SALARY SYSTEMS 13
terns, because of the selection-out system and other factors, do not
require a wide range of salaries for a class.
Existing law permits the Secretary of State substantial discretion
in the use of within-class salary rates. His present authorities would
remain in effect; they would be subject to Presidential policies and
rules.
PHASING OF SALARY INCREASES AND COSTS
Because of the lag that has accrued over the past 20 years or more,
bringing statutory salary schedules up to levels reasonably com-
parable with private enterprise would involve substantial cost in the
intermediate levels and substantial individual increases at the top.
To reduce the budgetary and economic impact and to provide a
modest and orderly transition under a new governing principle for
salary determination, it is proposed that the comparability principle
be placed in effect through a 3-year phased program.
Accordingly, the proposed bill includes under the appropriate
titles three salary schedules for each statutory salary system:
One effective the first pay period beginning on or after January
1, 1963.
One effective the first pay period beginning on or after Janu-
ary 1, 1964.
One effective the first pay period beginning on or after January
1, 1965.
The schedules have been so developed as to provide an annual
increase of at least $120 for all employees in the third schedules to
be effective after January 1, 1965.
Results of Bureau of Labor Statistics annual surveys reported in
the meantime will be taken into account in the annual reports and
recommendations to Congress required under title I of the proposed
bill. Thus the effects of any intervening changes in national salary
levels can be considered before second-phase and third-phase schedules
become operative.
Increases in annual costs under the reform proposals would be
distributed as follows:
Annual cost increases
[Millions of dollars]
Salary system
Proposed
comparability
schedules
First phase
alone, 1963
Classification Act
8733. 7
$307.2
Postal field service
267. 0
118. 3
Veterans' Administration, medicine and surgery
31.3
12. 4
Foreign Service
26. 5
10. 1
Total
1, 058. 5
448. 0
Although designed to reform statutory salary systems rather than
to provide a pay raise, the bill would raise salary levels substantially.
Increases are greatest at the higher levels, because these are the levels
which have been allowed to lag farthest behind while national salary
levels have been consistently rising. Classification Act increases
during the three-phase program would vary from a 3.7-percent increase
at grade GS-1 to a 38-percent increase at GS-17 and a 32-percent
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14 FEDERAL STATUTORY SALARY SYSTEMS
increase at GS-18. Similarly, postal salary increases would range
from 7.5 percent at PFS-4 to 26.5 percent at PFS-20. Veterans'
Administration medicine and surgery salaries would be raised 11.8
percent for junior grade nurse, 41 percent for the Deputy Chief
Medical Director, and 37 percent for the Chief Medical Director.
In the Foreign Service, salaries for new FSS class 10 would be 3.6
percent above those of the former corresponding class, and salaries
for career Ambassadors would become 45 percent higher than at
present.
The reform program would produce the following average salary
increases under the several statutory systems:
Average percentage salary increases
Salary system
Proposed
comparability
schedules
First phase
alone, 1963
Classification Act
11. 0
4.6
Postal field service
7.9
3.9
Veterans' Administration, medicine and surgery
16.8
6.6
Foreign Service
18. 1
6.9
Overall average
10.2
4.3
Even though the overall average increase under the comparability
schedule is less for the postal system, the fact is that at the most
heavily populated postal level the average increase is greater than at
the corresponding Classification Act grade.
Once Federal salaries have been brought into adjustment with com-
parability levels, future increases can be expected to be distributed
more evenly over the higher and lower grades, and to have smaller
fiscal impact in any one year.
MISCELLANEOUS
Title VII contains most miscellaneous provisions; others affecting
only a single salary system are ill the appropriate title.
The principal provisions of title VII relate to existing authorities
to set salaries for specified numbers of positions in certain scientific
activities without regard to the Classification Act. The positions are
in the Departments of Defense, Interior, Agriculture, Health, Educa-
tion, and Welfare, Commerce, and Post Office, the National Security
Agency, National Aeronautics and Space Administration, Federal
Aviation Agency, and Arms Control and Disarmament Agency.
Salaries generally are restricted to the range between $12,500 and
$19,000, but a maximum of 30 positions in the National Aeronautics
and Space Administration may be paid up to $21,000 a year.
Title VII, in place of the present fixed dollar limitations, would
authorize salaries in the range between the minimum rate of grade
GS-16 and the pay of grade GS-18. Under the first phase Classifica-
tion Act schedule effective January 1, 1963, the range would be $16,400
to $20,315. A year later it would be $17,970 to $22,740; and on
January 1, 1965, it would become $19,125 to $24,500. A special
provision would permit immediately setting salaries for a maximum of
30 positions in the National Aeronautics and Space Administration
(which may now be compensated up to $21,000 a year) at not to
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FEDERAL STATUTORY SALARY SYSTEMS 15
exceed the rate for grade GS-18 which would be in effect after January
1, 1965, under title II of the proposed bill.
This proposal would produce much needed increases in salaries for
the positions concerned, generally ?those of scientists engaged in
advanced research and developmental studies. More important,
linking the rate range for these positions to specified Classification
Act grade ranges would produce automatically appropriate adjust-
ments in the salary limits for these positions whenever the Classifica-
tion Act and other statutory salary schedules are adjusted as a result
of movements in national private enterprise salary levels.
Other miscellaneous provisions in the bill would, for example, make
desirable changes in provisions for salary retention in downgradings
under the Classification Act and for necessary conversion of employees'
present salaries to those under the proposed schedules.
The effective date of all provisions of the bill other than the second-
phase and third-phase salary schedules would be the first pay period
beginning after January 1, 1963.
CONCLUSION
Enactment of the proposed bill would gradually bring Federal
statutory salaries up to levels reasonably comparable with rates paid
in private enterprise and would establish equitable relationships
among Federal pay systems. The proposed bill offers a "governor"
standard which objectively controls pay levels and automatically sets
in motion needed periodic adjustments, and provides for executive
recommendations, as needed, on salary structure and compensation
policy.
Taken as a whole, provisions of the proposed bill would provide a
powerful continuing force for improved management in the Federal
service and competent execution of the programs that the Congress
prescribes for administration by the executive branch.
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SECTION ANALYSIS
TITLE I-GENERAL POLICY
Section 101: Provides that the act may be cited as the "Federal
Salary Reform Act of 1962."
Section 102: This section sets forth the policy of the Congress that
pay of Federal civilian personnel shall be established upon the prin-
ciples of equal pay for substantially equal work with pay distinctions
maintained in keeping with work and performance distinctions; and
that Federal salaries shall be comparable with salaries in private
enterprise for the same levels of work. The declaration of policy
further states that pay levels of the several Federal statutory salary
systems shall be interrelated, and that pay levels shall be set and
hereafter adjusted in accordance with these principles.
Section 103: This section provides that in order to give effect to the
policy stated in section 102, the President shall direct an appropriate
agency, or agencies, to prepare and submit to him an annual report
comparing salary rates paid to Federal employees whose rates are
fixed by statute with rates paid for the same levels of work in private
industry as determined on the basis of annual surveys of the Bureau
of Labor Statistics of the Department of Labor. After seeking the
views of employee organizations the President is required to make an
annual report to the Congress containing the comparison of Federal
and private enterprise salary rates and such recommendations for
revision of statutory salary schedules, salary structure, and compensa-
tion policy as he deems advisable.
Section 104: Subsection (a) of this section provides that whenever
the President, or such agency or agencies as he may designate, finds
that salary rates in private enterprise for one or more occupations in
one or more areas or locations are so substantially above the salary
rates of statutory pay schedules as to handicap significantly the
Government in recruiting and retaining well qualified persons in
positions paid under the Classification Act of 1949, the Postal Field
Service Compensation Act of 1955, the pay scales applicable to certain
positions in the Department of Medicine and Surgery of the Veterans'
Administration, or the Foreign Services Act of 1946, the President,
or the agency or agencies designated by him, may for such areas or
locations, establish higher minimum rates of pay for one or more
grades or levels, occupational groups, series, classes, or subdivisions
thereof, of one or more of the acts cited. Corresponding increases
may be made in all step rates of the salary range for each such grade
or level but no minimum salary rate so established may exceed the
highest salary rate prescribed by law for the grade or level.
Subsection (b) provides that such rates may be revised from time
to time and that such actions shall have the force and effect of law.
Subsection (c) provides that any increase in basic compensation
established under section 104 shall not be regarded as an equivalent
increase in compensation for purposes of within-grade advancement
16
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FEDERAL STATUTORY SALARY SYSTEMS 17
under the Classification Act or the Postal Field Service Compensation
Act.
Section 105: This section provides that the functions, duties, and
regulations of the departments and the Civil Service Commission with
respect to compensation grades and salary scales under title I of this
act, the Classification Act, the Postal Field Service Compensation
Act, the Foreign Service Act, and chapter 73 of title 38 of the United
States Code (relating to compensation of medical and nursing posi-
tions in the Department of Medicine and Surgery of the Veterans'
Administration) shall be subject to such policies and rules as the
President may issue. The rules and policies of the President may,
among other things, provide for (1) the annual preparation and report
to him of the comparison of salary rates in the Federal Government
with those in private enterprise; (2) obtaining and reporting the views
of employee organizations on the annual comparison of salary rates,
and on other compensation matters; (3) reviewing and reporting to
him on the adequacy of the various statutory salary structures; (4)
reviewing relationships of Federal statutory salary rates and those of
private enterprise in specific occupations and local areas; and (5)
providing step increases in recognition of extra competence, for ap-
pointment at salary rates above the minimum, and for properly
relating supervisory salary rates paid under one system to subordinates
paid under another system.
TITLE II-PAY SYSTEM OF CLASSIFICATION ACT OF 1949
Section 201: This section provides that title II may be cited as the
"Classification Act Amendments of 1962."
Section 202: This section adds two new grades, GS-19 and GS-20,
to the General Schedule of the Classification Act. The new grades
are primarily to accommodate outstanding positions being brought
under the act, by other sections of the bill which are presently paid
under the Executive Pay Act or individual statutory authorities.
Section 203: This section contains the proposed compensation
schedule for the General Schedule of the Classification Act, and the
conversion rules for the three phases of the salary adjustment plan
which would become effective in 1963, 1964, and 1965.
Subsection (a) prescribes the compensation schedule for the general
schedule for the first phase of the pay adjustment program which would
be effective on the first day of the first pay period which begins on or
after January 1, 1963. The schedule contains 10 per annum rates in
lieu of 7 scheduled and 3 longevity rates currently provided for GS-1
through 10; 10 rates for GS-11 through 14 in lieu of 6 scheduled and
3 longevity rates; 10 rates for GS-15 in lieu of 5 scheduled and 3
longevities; and 7 rates for GS-16 in lieu of the 5 rates currently pro-
vided by the Classification Act. Grade GS-17 will have four rates
in lieu of the present five, and GS-18 would continue to have a single
rate. Because the number of regular step rates is increased, the
current provisions for longevity step increases in title VII of the Classi-
fication Act are no longer needed and are repealed in subsequent
sections of the bill.
Subsection (b) of this section specifies the rules by which existing
pay rates are to be automatically adjusted to tbeirates of the new
schedules. The general principle is that employees are to retain the
same relative place within the new grade range as they had within
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FEDERAL STATUTORY SALARY SYSTEMS
their former grade range. This principle, however, requires special
provisions where the number of rates is not the same in both the old
and the new grade range. Hence, some special transition rules are
provided relating primarily to grades GS-11 and above.
Paragraph (9) of subsection (b) provides that service immediately
preceding the effective date of subsection (a) of the section shall be
counted toward not to exceed one step increase under the time in
grade provisions of section 701(a) of the Classification Act, as amended
by this act.
Subsection (c) of this section provides the compensation schedule
for the general schedule for the second phase of the pay adjustment
program which would be effective on the first day of the first pay
period beginning on or after January 1, 1964.
Subsection (d) of this section specifies the rules for automatically
converting then existing pay rates to the rates of the new schedule.
The general principle is again followed that employees are to retain
the same relative place within the new grade range as they did in the
former grade range. The conversion rules are somewhat simpler in
this instance because the number of rates in the salary range of each
grade is the same under the 1963 and 1964 compensation schedules.
Subsection (e) of this section provides the compensation schedule
for the general schedule for the third phase of the pay adjustment
proposal. It would become effective on the first day of the first pay
period which begins on or after January 1, 1965.
Subsection (f) specifies the necessary rules for converting the pay
rates of the 1964 schedule to those of the 1965 schedule. The rules
are identical to those prescribed in subsection (d).
Section 204: This section amends title VI1?"Step-Increases" of
the Classification Act. Title VII currently provides two types of
step-increases: (1) Periodic step-increases under section 701, and (2)
longevity step-increases beyond the scheduled maximum rate of the
grade under section 703. Longevity steps are given as a reward for
long and faithful service. As amended by this bill, title VII provides
for (1) periodic step-increases, and (2) additional step-increases to be
granted in recognition of high quality performance.
Section 701 now provides periodic step-increases, for employees
below the maximum rate of the grade, for each 52 calendar weeks of
service if the amount of the step-increase is less than $200, or 78 weeks
of service if the employee's position is in a grade in which the step-
increase is $200 or more. As amended, section 701(a) provides for
periodic increases following the completion (1) of each 52 calendar
weeks of service in salary rates 1, 2, and 3, (2) 104 calendar weeks of
service in salary rates 4, 5, and 6, and (3) each 156 calendar weeks of
service in salary rates 7, 8, and 9. These periods of service apply
regardless of the grade and the dollar amount of the salary increment.
Paragraphs (A) and (C) of subsection (a) which relate to eligibility
for step increases are in existing law. Paragraph (B) requires, as a
prerequisite to within-grade advancement, that the employee's work
is of an acceptable level of competence in contrast with the present
wording that the employee has a current performance rating of "satis-
factory" or better.
Subsection (b) of the revised section 701 is present law.
Section 702 of the Classification Act as embodied in the bill author-
izes, in subsection (a), additional step increases in recognition of high
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19
quality performance above that ordinarily found in the type of posi-
tion concerned. Such additional step increases could be made in
accordance with regulations prescribed by the Civil Service Commis-
sion and, under subsection (b), would be limited to not more than one
within any period of 52 weeks.
Current provisions of sections 703 and 704 of the Classification Act
relating to longevity step increases are no longer needed since these
steps have been included in the regular rate range for the respective
grades. The provisions are therefore repealed. Section 703 of the
amended title VII which is already in existing law (as sec. 705) pro-
vides that title VII shall not apply to persons appointed by the Presi-
dent, by and with the advice and consent of the Senate. It recognizes
that such persons should not be subject to the usual restrictions on
step increases since their appointments are frequently of limited
duration, being more or less dependent upon changes in political ad-
ministration. Usually it cannot be expected that such noncareer
officials will serve the necessary time to receive full advantage of the
step-increase plan. Therefore, heads of departments and agencies
should be left free to increase their compensation within the salary
range of their grades without regard to the time and other limitations
of title VII.
Section 205: This section amends section 801 of the Classification
Act which now requires that all appointments shall be made at the
minimum rate of the appropriate grade. This would continue to be
the general rule. However as an aid in attracting high quality per-
sonnel to the Federal service, section 801 as amended would permit
appointments at rates above the minimum of the grade under regula-
tions prescribed by the Civil Service Commission in the following
circumstances: (1) Individuals having extra qualifications for the
position concerned could be appointed at such higher rate of the grade
as the Commission might authorize. (2) Well-qualified individuals
whose non-Federal salaries are above the minimum rate of the grade
to which they would be appointed, and who otherwise would decline
appointment or take a reduction in income if the Government's offer
is accepted, could be appointed at a rate above the minimum. Under
these circumstances, no appointment could be made at a rate higher
than the lowest rate of the appropriate grade which equaled or ex-
ceeded the appointee's salary rate immediately prior to appointment.
The authorization is permissive in both categories of exceptions.
Section 206: This section amends section 802 of the Classification
Act by revising the current subsection (b) and by adding a new sub-
section (d).
Subsection (a) of section 205 revises section 802(b) of the Classi-
fication Act to provide that when an officer or employee is promoted
or transferred to a position in a higher grade he shall receive basic
compensation at the lowest rate of the higher grade which exceeds
his existing rate of basic compensation by not less than two step
increases of the grade from which he is promoted or transferred. In
the event that there is no rate in the higher grade which is at least
two step increases above his existing rate of compensation, the officer
or employee would receive either the maximum rate of the higher
grade or his existing rate of basic compensation if it is higher. Exist-
ing law provides only a one-step increase upon promotion or transfer
to a higher grade. This proposal is included in H.R. 1010 which
passed the House of Representatives on August 22, 1961.
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zu FEDERAL STATUTORY SALARY SYSTEMS
Subsection (b) of section 205 adds a new subsection (d) to section
802 of the Classification Act. There is no present authority for
saving the basic compensation of an employee who, together with
his position, is brought under the Classification Act from some other
Federal pay system (such as the wage-board system), if his salary
rate is in excess of the maximum rate of the classification grade in
which his position is placed. The present situation not only works
a hardship on the employee whose compensation is reduced, but it
discourages and hinders the transfer of positions from one system to
another when this is required to be done. The new subsection would
authorize the Civil Service Commission to issue regulations to permit
the retention of salary in such instances. It also provides that if
an employee is demoted to a position of lower grade under the Classi-
fication Act, his salary will be determined under section 507 of that
act which relates to demotions from one grade to another. At the
same time subsection (d) provides that the employee's service in the
position which was brought under the act shall, for the purpose of
computing time in grade under section 507, be considered as service
under the Classification Act.
Section 207: This section repeals the current provisions in section
803 of the Classification Act which authorize the Civil Service Com-
mission to increase the existing minimum salary rate for a given class
of positions whenever it finds that a sufficient number of qualified
eligibles in such class cannot be secured and that there is a possibility
that a sufficient number can be secured at a higher rate. Because of
of the more comprehensive provisions in section 104 of title I of the
bill, the present provisions of section 803 are unnecessary and therefore
are being deleted. Section 803, as amended, is designed to ameliorate
a situation which has long plagued certain segments of the service and
has been detrimental to morale wherever it existed. The new section
provides that under regulations of the Civil Service Commission, any
employee in a position under the Classification Act who regularly
has responsibility for supervision, including technical supervision,
over employees whose pay is fixed by wage boards or similar adminis-
trative authorities, may be paid a rate for his grade which is above the
highest rate of basic compensation being paid to any such prevailing-
rate employee regularly supervised.
Section 208: This section amends section 507 of the Classification
Act which provides for the retention of salary when an employee is
demoted to a lower grade. The amendment in the first paragraph
makes the provisions of the section applicable to officers and employees
in all grades of the Classification Act. The amendment in paragraph
(2) is a minor change in language, but one which will permit salary
retention in some cases not now permitted under section 507.
Section 209: This section materially amends section 505 of the
Classification Act. All present provisions of that section are repealed
with the exception of the provision requiring that no position shall
be placed in grade 16, 17, or 18 of the general schedule except by
action of, or after prior approval by, a majority of the Civil Service
Commissioners. The numerical limitations on the top grades are
repealed as are all special authorizations to designated agencies for
positions in grades 16, 17, and 18 of the general schedule?some with-
out the benefit of review by the Civil Service Commission.
Subsection (b) provides that a position shall be placed in new grade
GS-20 only when the President finds, after review of recommendations
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FEDERAL STATUTORY SALARY SYSTEMS 21
of the Civil Service Commission, that it involves responsibility for
direction of a program or activity with sufficiently significant implica-
tions for the national interest or sufficient magnitude of operations
and impact on the public interest that it should be placed in the
highest grade of the Classification Act.
Subsection (c) provides that a position shall be placed in new grade
GS-19 only when the President finds, after review of recommendations
of the Commission, that its responsibilities are of such national
significance that it should be at a higher level than grade GS-18 but
it does not measure up to the requirements of grade GS-20.
Subsection (d) of section 505 requires the Commission to submit an
annual report to the Congress with respect to positions placed in
grades 16, 17, and 18 of the general schedule and the incumbents of
such positions. The requirements are quite similar to those currently
prescribed in section 503 of the act of July 31, 1956 (70 Stat. 762),
which is repealed in section 209 of the bill.
Section 210: This section expressly repeals those provisions of law
relating to (1) incumbency allocations to specific top grades of the
Classification Act; (2) special agency authorizations in laws other
than the Classification Act for positions in, or paid at salary rates
related to, the top grades of that Act; (3) provisions relating to
required reports on the top grades and the rates and administration
of the Classification Act; and (4) section 803 of the Classification Act.
Section 211: This section amends certain provisions of the Foreign
Assistance Act of 1961 and the Mutual Educational and Cultural
Exchange Act of 1961.
Subsection (a) repeals that part of section 625(b) of the Foreign
Assistance Act of 1961 which reads?
of whom not to exceed fifty-one may be compensated at rates higher than those
provided for grade 15 of the general schedule established by the Classification Act
of 1949, as amended (5 U.S.C. 1071 et seq.), and of these, not to exceed eight may
be compensated at a rate in excess of the highest rate provided for grades of such
general schedule but not in excess of $19,000 per year.
Subsection (b) repeals section 625(c) of the Foreign Assistance Act
which reads as follows:
(c) Of the personnel employed in the United States to carry out part II, not to
exceed eight may be compensated at rates higher than those provided for grade 15
of the general schedule established by the Classification Act of 1949, as amended,
and of these, not to exceed three may be compensated at a rate in excess of the
highest rate provided for grades of such general schedule but not in excess of
$19,000 per year. Such positions shall be in addition to those authorized by law
to be filled by Presidential appointment, and in addition to the number authorized
by section 505 of the Classification Act of 1949, as amended.
Subsection (c) amends section 104(b) of the Mutual Educational
and Cultural Exchange Act of 1961 by repealing that part of subsec-
tion (b) which reads as follows:
and of such personnel not to exceed ten may be compensated without regard to
the provisions of the Classification Act of 1949, as amended, and of these not to
exceed five may be compensated at a rate in excess of the highest rate provided for
grades of the general schedule established by the Classification Act of 1949, as
amended, but not in excess of $1,000 per annum more than such highest rate.
Such positions shall be in addition to the number authorized by section 505 of the
Classification Act of 1949, as amended.
The effect of these amendments, which, internally, are inconsistent
with the compensation schedules proposed in title II, is to place all
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22 FEDERAL STATUTORY SALARY SYSTEMS
of these positions under the Classification Act as proposed in section
211(a) of the proposed bill.
Section 212: Subsection (a) provides that each position specifically
referred to in or covered by any amendment or repeal made by sections
209 and 210 shall be placed in the appropriate grade of the general
schedule of the Classification Act, in accordance with the provisions
of that act.
Subsection (b) provides that positions in grades 16, -17, and 18 of
the general schedule immediately prior to the effective date shall
remain in such grades until appropriate action is taken under section
505 of the Classification Act.
Section 213: This contains the usual savings provisions.
Subsection (a) provides that changes in law made by title II shall
not affect any position existing immediately prior to such changes,
the compensation attached to such position, any incumbent thereof,
his appointment, and his right to receive the compensation attached
to the position until appropriate action is taken in accordance with this
title.
Subsection (b) provides that the incumbent of each such position
immediately prior to the effective date of title II shall continue to
receive the basic salary which he received immediately prior to the
effective date until he leaves his position or until he is entitled to
receive a higher rate in accordance with law. The rate of basic com-
pensation of subsequent appointees to such position will be determined
in accordance with provisions of the Classification Act.
Section 214: This section provides that except as provided in
section 202, title II shall become effective on the first day of the
first pay period which begins on or after January 1, 1963.
TITLE III-POSTAL FIELD SERVICE EMPLOYEES
Section 301: This section contains the short title of this title:
"Postal Employees Salary Adjustment Act of 1962."
Section 302: The salary schedule for the postal field service schedule
(PFS), included in the amendment to section 3542 of title 39 of the
United States Code, follows the pattern established for other statutory
pay systems in that it is based on the principle of industry compar-
ability for levels of work. Comparability in this instance was estab-
lished through reference to the Classification Act schedule since
private industry equivalents are more readily obtainable with positions
ranked under that act than under the postal pay system.
Linkages were established with the Classification Act schedule by
equating PFS-4, PFS-11, and PFS-20 with GS-5, GS-11, and GS-17,
respectively. In order to validate these reference points, positions in
the PFS system were evaluated by reference to the Classification Act.
The level of duties and responsibilities found in PFS-11 and PFS-20
corresponded to those identified with GS-11 and GS-17. While the
level of duties and responsibilities found in PFS-4 positions bear some
similarity to clerical positions in GS-4, distinctive employment condi-
sions prevailing in the postal field service warranted linkage with GS-5.
The PFS comparability pay line, drawn through the points of link-
age, produces a schedule with intergrade differentials of 8.2 percent
from PFS-1 through PFS-9 and 10.9 percent from PFS-10 through
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23
PFS-20. Adoption of this pattern preserves generally the present
alinements within the postal pay system, yet, at the same time, cor-
rects deviations from the standard progressions which have been in-
corporated into the present structure. To illustrate, the present inter-
grade differential between PFS-3 and PFS-4 is 9.9 percent and that
between PFS-4 and PFS-5 is 5.9 percent. The narrowness of the
latter differential compresses the schedule so that step 1 of PFS-7, the
predominant level for firstline supervision, exceeds step 1 of PFS-4
by only 23.6 percent; the proposed schedule raises this differential to
26.9 percent.
Within-grade step differentials are 3.3 percent of step 1 for each
level, as proposed for other Federal pay systems. Because of varia-
tions in the number of steps, rate ranges vary from approximately 40
percent for levels 1 through 6, to 33 percent for level 7, 30 percent for
levels 8 through 18, and somewhat less for levels 19 and 20.
The proposed schedule replaces both annual salary steps in the
present PFS schedule and longevity steps. The combination is ac-
complished by the addition of step increases to the PFS schedule to
be attained on the basis of periodic advancement within the level.
This section provides three schedules which are to become effective
on the first day of the first pay period which begins on or after January
1 of 1963, 1964, and 1965, respectively.
Section 303: Subsection (a) of this section amends section 3543(a)
of title 39 by establishing a new schedule for determining rural carrier
pay and by combining the present salary steps and longevity steps into
a single 13-step schedule. In this respect, the rural carrier schedule
(RCS) follows the pattern of the PFS schedule.
Pay rates for the RCS schedule were determined by adding the
amount of increase provided in each phase for PFS-4, step 7, to the
present step 7 rate for the 58-mile route. This route represents the
average length of route in 1962.
Within-grade step differentials approximate 3.3 percent and the
total range of rates is approximately 40 percent as in the PFS schedule.
The three schedules would become effective in 1963, 1964, and 1965.
Subsection (b) substitutes a system of pay based on weekly work
requirements of the route for the present system which relates pay pri-
marily to miles of route. Five service classifications are established.
- The weekly work requirements will be determined from measurable
route characteristics, such as mail count, number of miles, and number
of boxes. To allow for variations in conditions from day to day, or
season to season, the pay related to each service classification will
compensate for a larger number of hours than are specified as weekly
work requirements for the respective classifications.
Premium pay at overtime rates is provided for routes in service
classification E, where weekly work requirements exceed 40 hours per
week, as shown in the table of rates applicable under the 1963 phase to
the respective service classification. Special provision is made in
subsection (b) (2) for determining compensation on triweekly routes.
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24 FEDERAL STATUTORY SALARY SYSTEMS
PER ANNUM RATES AND STEPS
1
2
3
4
5
6
6
8
9
10
11
12
13
A
$3,
686
$3,
808
$3, 929
$4, 051
$4, 172
$4, 294
$4, 416
$4,
537
$4, 659
$4,
780
$4,
902
$5, 024
$5, 145
B
3,
977
4,
108
4, 239
4, 371
4, 502
4, 633
4,764
4,
895
5,027
5,
158
5,
289
5,420
5, 551
C
4,
268
4,
409
4, 550
4,600
4,831
4,972
5, 113
5,
254
5,394
5,535
5,676
5,817
5,958
D
4,
559
4,
709
4,860
5,010
5, 161
5, 311
5,461
5,
612
5, 762
5, 913
6,
063
6, 213
6,364
E
4,
850
5,
010
5, 170
5, 330
5,490
5,650
5,810
5,
970
6, 130
6,
290
6,
450
6, 610
6, 770
ANNUAL RATE OF OVERTIME PAY, PER HOUR OVER 40
$181.88
$187. 8818193. 8818199. 8818205. 8818211. 88
$217.88
$223.88
229.88
$235.88
$241.88
$247.88
$253.88
Studies of rural routes have confirmed the fact that route mileage
is not an equitable basis on which to determine pay. Routes with
identical mileage vary greatly in terms of workload. At the same
time, routes which vary greatly in length and, consequently, in com-
pensation for the carrier, have the same workload characteristics in
terms of time required. Data collected from a sample of routes
participating in the 1960 inspection showed, for example, that appli-
cation of the service classification, based on uniform time standards,
to randomly selected routes would have resulted in the following
distribution:
Present an-
Miles of route
nual salary
step 7
A
B
C
D
E
29
$4,934
5
1
42
5,305
11
4
1
1
1
58
5,680
10
3
2
2
2
69
5,953
1
7
5
4
3
74
6,073
1
1
2
3
3
The system of service classification proposed does not take into
account differences in the working speed or efficiency of individuals.
Carriers who complete their work in less than the standard time
assigned to their routes will not be penalized. At the same time,
carriers who do not meet the average time standards will not be paid
additional compensation for excess time devoted to the performance
of regular service or the route.
Subsection (c) replaces section 3543(c) of title 39 of the United
States Code.
Present law authorizes the payment of an additional allowance to
carriers serving heavy duty routes of 61 miles or less in length. In
administering this provision of law, the Department has developed
work standards which have been applied to determine eligibility of
routes for qualification as heavy-duty routes. The same standards
have been applied to give relief on overburdened routes for which
heavy duty compensation is either insufficient or not available because
of excess mileage. Subsection (c) (1) incorporates these work standards
which contain time values for various types of mail handled as well
as for miles of route and boxes served. The standards will be applied
to all rural routes.
Under certain circumstances a carrier may be given auxiliary assist-
ance to help in the office work or on the route. Subsection (c)(2)
provides a conversion factor for reducing work requirements on rural
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FEDERAL STATUTORY SALARY SYSTEMS 25
routes when auxiliary assistance is furnished. The ratio is established
at 50 minutes for each hour of assistance. It is anticipated that relief
will be afforded in the most practical and efficient manner, on one or
more days in the week. For example, relief may be afforded on a 48-
hour route by excusing the carrier from duty on one day and assigning
an auxiliary assistant to the performance of all the work on the route
on that day.
Subsection (d): The current provisions of section 3543(d), title 39,
United States Code, are to be reenacted as subsection 303(k).
Subsection (d) of section 3543 is amended to require the Postmaster
General to make inspections of rural routes to serve as the basis for
determining service classification. Under paragraph (1), the Post-
master General is required to provide for annual inspections. Under
paragraph (2) he is required to provide for additional inspections
initiated by management or at the request of a rural carrier for re-
classification due to service changes. Under paragraph (3) the Post-
master General is required to determine the tentative service classi-
fication of a new route to be followed by inspection.
Subsection (e): This subsection amends section 3543(f) of title 39
of the code, which currently relates to allowances for equipment
maintenance. The present allowance for routes other than heavy-
duty routes is $3.50 per day or 10 cents per mile, whichever is greater;
on heavy-duty routes, the Postmaster General is authorized to pay
an additional allowance up to $2.50 per day. While retaining 10 cents
a mile as the standard allowance, the proposal increases the minimum
daily allowance to $4 for routes requiring less than 260 stops to serve
the route. Routes requiring more than 260 stops have features
insofar as wear and tear on equipment is concerned, which are similar
to heavy-duty routes; paragraph (2)(B) will provide all such routes
with an equipment allowance comparable to that now available only
on heavy-duty routes.
Subsection (f): This amendment to section 3543 of title 39 contains
three provisions.
The first, subsection (i), changes the method of compensating
substitute rural carriers. Under the present system, these carriers
are paid at the rate of the carrier in whose absence they are serving.
Under the new provision, substitute carriers will receive appointments
at step 1 for the route, and they will earn step increases in the same
manner as other substitutes in the postal field service.
Since service as a substitute rural carrier is not creditable under
present law for step increases, no credit is given upon conversion for
past service in this capacity.
The second, subsection (j), authorizes the Postmaster General to
advance service classifications of rural routes during the Christmas
mailing season
The third, subsection (k), reenacts subsection (d) of 39 U.S.C. 3543,
which authorizes the payment of additional compensation to carriers
carrying pouch mail to intermediate post offices or for serving inter-
secting loop routes
Section 304: This section amends section 3544(a) of title 39 of the
code.
The proposed schedule for postmasters in fourth-class post offices
continues to relate compensation on receipts categories.
The schedule for the 1963 phase provides minimum compensation
at the rate of $1.25 per hour, the new statutory minimum wage, for
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26 FEDERAL STATUTORY SALARY SYSTEMS
2 hours of daily employment in the lowest receipts category. In the
next six categories, the same minimum rate is provided for graduated
hours of daily employment. The minimum hourly rate for the highest
category, based on 8 hours of daily service, is $1.41. Like the PFS
schedule, within-grade step differentials average approximately 3.3
percent and the range from step 1 to step 13 is approximately 40
percent.
The 1965 schedule, providing for full reform, will raise the minimum
pay of postmasters in fourth-class post offices to $1.30 per hour.
Section 305: This section amends 39 U.S.C. 3552, which relates to
advancement of employees by step-increases.
Under subsection (a), the schedule of advancement is established.
The present schedule of advancement provides for increases based on
52 weeks of service in a step until step 7, the highest step in the ex-
isting schedule, is reached. Thus, an employee entering on duty in
PFS-4, step 1, would reach step 7 upon completion of six 52-week
periods, or after approximately 6 years of service in that level. Under
the new schedule, the employee will be advanced to steps 2, 3, and 4,
on the basis of 52 weeks of service in each step, to steps 5, 6, and 7, on
the basis of 104 weeks of service, and to steps 8 and above, on the
basis of 156 weeks of service. To reach step 7 under the new schedule,
an employee entering on duty in PFS-4, step 1, would complete nearly
9 years of service; he would reach step 13, the last step for his level,
upon completion of nearly 27 years of service.
Subsection (b), 39 U.S.C. 3552, codifies and makes permanent a
provision of law common to salary increase legislation affecting postal
employees. In effect, it provides that statutory increases in basic
compensation are not equivalent increases for purposes of determining
eligibility for advancement under subsection (a).
Subsection (c) reenacts the last sentence of 39 U.S.C. 3552(a) as
a separate subsection.
The current provisions of 39 U.S.C. 3552(b) are, in effect, repealed
by this amendment. Under present service conditions, withholding
of advancement by step-increases from substitutes in PFS-5 assigned
to road duty cannot be justified.
Section 306: This section amends 39 U.S.C. 3554 by deletion of the
phrase "under the postal field service schedule" and insertion in its
place, the phrase, "in the postal field service." The purpose of this
change is to permit the payment of compensation to temporary rural
carriers serving under limited appointments in the same manner as to
other postal field service employees. In effect, this change will
continue the present method of compensation of these carriers.
Section 307: This section amends 39 U.S.C. 3559 in its entirety.
The present method of promotion guarantees to each employee a
minimum increase equivalent to the difference between step 1 of the
level from which promoted and step 1 of the level immediately
above. The new provision will guarantee to each employee pro-
moted to a higher level a minimum increase equivalent to two step
increases of the level from which promoted; if the employee is promoted
to a level more than two levels above the level of his position, he will
receive a minimum increase of three step increases.
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Comparison of promotion benefits (1963 phase)
27
Level to
Present step
Amount of
Proposed
Proposed
Level and step
which
promoted
in higher
level
increase
step in
higher level
increase
PFS-3, step 3
PFS-4
Step 3
$420
Step 3
$370
PFS-4, step 7
PFS-5
Step 7
260
Step 7
455
PFS-4, step 7
PFS-7
Step 3
435
Step 2
505
PFS-6, step 4
PFS-7
Step 4
425
Step 4
480
PFS-7, step 7
PFS-8
Step 7
540
Step 7
565
PFS-10, step 6
PFS-11
Step 6
790
Step 5
560
The provisions of 39 United States Code, section 3559(b) are, in
effect, repealed by this amendment. Under current law, regular
clerks and carriers in first- and second-class post offices become
eligible for promotion upon reaching the maximum step, step 7, for
their positions, or after 6 years of service. Under the new schedule,
they will reach the maximum step in approximately 27 years. Con-
tinuation of this restriction is not consistent with the new compensa-
tion plan.
Section 308: The changes proposed in the amendment to 39 U.S.C.
3560 are conforming changes to make possible continued salary
protection for rural carriers. Premium compensation derived from
assignment to classification E is the equivalent of heavy-duty allow-
ance in excess of that provided for 40 hours, now excluded from
salary protection.
Section 309: The purpose of this amendment is to remove the
limitation on the present authority of the Postmaster General with
respect to the establishment or extension of star routes in areas
previously served by rural routes. Under present law, such substi-
tution may not be made if a qualified rural carrier can be obtained.
This change will permit the Postmaster General to exercise adminis-
trative discretion in the selection of the more efficient or economical
service.
Section 310: The new salary plan abolishes longevity steps and
provides for recognition of long service through addition of within-
grade steps. Therefore, the distinction made in sections 3101(5)
and 3101(6) of title 39, between basic salary and basic compensation,
is no longer valid.
Section 311: The purpose of the amendment to 39 U.S.C. 3541 is
to provide a method for determining the daily rate of compensation
of substitute rural carriers. By using a factor of 304, the number
of days of service on a rural route in a year, holiday pay is prorated
throughout the year against the actual service of the substitute rural
carrier. In this respect, pay treatment of these employees will be
consistent with that afforded other substitute employees.
Section 312: This section provides the rules for the conversion of
existing salaries to the new pay schedules which would become effective
on the first day of the first pay period which begins on or after January
1, 1963.
Postal field service schedule.?The conversion method provided by
subsection (a) of this section will place each employee in the PFS
schedule in the numerical step which he attains'immediately prior to
the effective date of the new pay plan. Employees in PFS-1 through
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PFS-5 will be given an additional numerical step for each longevity
step attained immediately prior to conversion.
Employees in PFS-6 through PFS-18 who have reached step 7 for
their positions will receive a single additional step if they have attained
one or more longevity steps immediately prior to the effective date
of the schedule. Employees in PFS-19 and PFS-20 will receive no
additional steps because of longevity steps attained prior to conversion.
Application of these provisions to selected cases are shown below:
Present level and step
Present
salary
New
step
New salary
(1963 phase)
Present level and step
Present
salary
New
step
New salary
(1963 phase)
PFS-1, 6
$4, 065
1,--,
0 00 IA 00 0,
$4, 165
PFS-6, 5A
$5, 775
5
$6, 005
PFS-2, 7B
4, 680
4,895
PF5-6, 5C
5, 975
5
6, 005
PFS-4, 10
4, 645
4, 975
PFS-7, 7A
6, 550
8
7. 070
PFS-4, 7A
5,405
5, 575
PFS-7, 70
6, 780
8
7,070
PFS-4, 7C
.5, 605
5, 875
PFS-10, 7
8, 310
7
8, 700
Credit is preserved toward the next within-grade or automatic step
increase earned by employees prior to conversion if they were not
given an additional step increase by reason of longevity steps attained
prior to conversion. Such credit will be applied toward fulfillment of
the requirements of the new advancement schedulel. No creidt earned
toward longevity steps will be carried over.
Rural carrier schedule. Subsection (b) provides a conversion method
for rural carriers similar to that afforded employees in PFS-1
through PFS-5. Each carrier will be assigned to his corresponding
numerical step for the service classification of his route. Additional
steps will be given for longevity steps attained immediately prior to
conversion. Credit toward the next automatic step is retained, as for
PFS employees.
Fourth-class office schedule.?The conversion method provided in
subsection (c) for postmasters in fourth-class offices is the same as
that provided for employees in PFS-1 through PFS-5; that is, each
postmaster will be placed in the corresponding numerical step for his
receipts category, and he. will receive an additional step for each longev-
ity step attained prior to the date of conversion.
Subsection (d) provides a method for adjusting salaries of employees
whose existing rate is higher than the rate provided in subsections (a),
(b), and (c). Where the existing compensation falls within the new
range for their positions, they will be placed in the first step which
exceeds their existing compensation. If the existing compensation is
greater then any step for the range, the existing compensation will be
continued as a saved rate. Among employees affected by this provi-
sion are those whose present rates of compensation are saved or pro-
tected at rates in excess of the present maximum scheduled rates for
their positions. Because of the major change in the basis for estab-
lishing compensation on rural routes, more rural carriers are affected
by this provision than are employees in the two other schedules.
Examples of conversions to the RCS, showing application of this pro-
vision, are given below. Where the existing salary is greater than the
rate for the step to which he would otherwise be assigned, he will be
placed in the first step which exceeds his existing compensation.
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Examples of salary conversion, RCS schedule (1963 phase)
29
Present route and step
Present
compensa-
tion
Service
classifi-
cation
Rate for corres-
ponding step
Step to
which con-
verted
New corn-
pensation
27 miles, step 6
$4, 635
k
Step 6, $4,326.00_
9
$4, 059. 00
42 miles, step 7C, H.D. 43 hours_ __
6,061
E, 4
Step 10, $7,231.76
10
7, 231. 76
58 miles, step 2
4, 994
B
Step 2, $4,108.00_
9
5, 027. 00
58 miles, step 5
0,411
D
Step 5, $5,160.00_
7
5, 461. 00
72 miles, step 7B
6,225
E, 1
Step 9, $6,359.88..
9
6, 359. 88
85 miles, step 7A
6,437
C
Step 8, $5,254.00_ ._
Saved rate_ ..
6,437. 00
108 miles, step 7
6,889
D
Step 7, $5,461.00_ __
___ __do _____ __
6, 889. 00
Section 313: This section provides for the conversion of employees
to the schedules to become effective in11964 according to the numerical
step attained immediately prior to the date of conversion. Where
existing compensation exceeds the rate for the numerical step, the
existing compensation is retained if conversion cannot be made to a
scheduled step.
Section 314: This section provides for the conversion of employees
to the schedules to become effective in 1965 according to the numerical
step attained immediately prior to the date of conversion. Where
existing compensation exceeds the rate for the numerical step, the
existing compensation is retained if conversion cannot be made to a
scheduled step.
Section 315: Section 201 of the act of September 21, 1961, 75 Stat.
569 (Public Law 87-270), provides, among other things, that employ-
ees in protected rates will be given statutory increases applicable to
the salary standing from which reduced. The purpose of section 315
is to make clear that, inasmuch as the new salary plan involves basic
structural changes for employees now under the PFS, RCS, and FOS
schedules, this particular feature of 39 U.S.C. 3560 cannot be given
application at the time of conversion to the new schedules. Salaries
of employees in protected rates as of the date of conversion will be
converted under sections 312, 313, and 314 of this act, as appropriate.
Section 316: This section contains an amendment to section 3335
of title 39 of the code, which will clarify the intent of Congress with
respect to the authority of the Postmaster General to pay higher level
compensation. This amendment is required to remove objections of
the Comptroller General, as stated in his decision of February 1, 1962
(B-138999), to the Department's application of the present statutory
provision.
Section 317: This section repeals those provisions of Public Law
86-568, which contained salary increases for postal field service em-
ployees, effective July 9, 1960. It also repeals 39 U.S.C. 3558, which
provides for the present system of longevity compensation; the new
pay schedules supersede the longevity system in its entirety.
Section 318: This section contains two new compensation rules
which will permit the Postmaster General to make (1) exceptions to
the schedule of automatic advancement provided in 39 U.S.C. 3552
in recognition of exceptional competence, and (2) exceptions to the
provisions of 39 U.S.C. 3551(a) where an appointee has extra quali-
fications for the position or where the entrance rate is less than the
current salary of a well-qualified appointee. Both of these provisions
will require implementation by regulations to be issued by the Post-
master General.
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30 FEDERAL STATUTORY SALARY SYSTEMS
Section 319: This section contains two conforming changes to the
table of contents of title 39, United States Code.
Section 320: This section provides that the provisions of this title
will become effective on the first day of the first pay period which
begins on or after January 1, 1963.
TITLE IV-DEPARTMENT OF MEDICINE AND SURGERY IN THE VETERANS'
ADMINISTRATION
Title IV relates to physicians, dentists, and nurses in the Depart-
ment of Medicine and Surgery of the Veterans' Administration, which
are subject to a separate pay system prescribed by chapter 73 of title
38, United States Code. The revisions made by this title not only
take into account the Bureau of Labor Statistics findings but also
reflect the results of extensive studies of the Veterans' Administration
concerning the need for a modernization of the entire grade and
salary structure of the Department of Medicine and Surgery to
recognize the numerous organizational and functional changes which
have taken place in the Department since its inception in 1946.
In recognition of the nature of their occupations and the variability
of assignments in a clinical setting, the grade and salary of physicians,
dentists, and nurses in the Department of Medicine and Surgery is
determined on the basis of an individual's qualifications and profes-
sional attainment. Notwithstanding this fact, comparison of the
qualification and skill requirements for like occupations under the
Classification Act, corroborate extension to the Department of
Medicine and Surgery Schedules in the manner indicated in the bill
of the salary scale proposed for the Classification Act system. Appro-
priate differentiation in pay between recognized skill levels as well
as executive and managerial levels is maintained. Internal relation-
ships of pay between the D.M. & S. system and the Classification Act
system are also continued.
Section 401: This section amends section 4103 of title 38 of the
United States Code. It reduces the maximum number of Assistant
Chief Medical Directors from eight to five and modifies the provisions
pertaining to directors of service and chiefs of division. In lieu of
these positions, a new position level of Medical Director is established.
The salaries of the Chief Medical Director, the Deputy Chief Medical
Director, the Assistant Chief Medical Directors, the Director of
Nursing Service, the Chief Pharmacist and Chief Dietitian are appro-
priately adjusted in line with other increases proposed by the bill.
The statutory positions of the Deputy Director of Nursing Service,
Chief Physical Therapist, and Chief Occupational Therapist are
eliminated. The duties of the first-named position will be filled by
a nurse of the Assistant Director grade. The salaries for the positions
of Chief Physical Therapist and Chief Occupational Therapist will be
set in the future under the Classification Act. Appropriate salary
rates and schedules to be effective on the first day of the first pay
period beginning on or after January 1, 1963, January 1, 1964, and
January 1, 1965, are provided for the Chief Medical Director, the
Deputy Chief Medical Director, Assistant Chief Medical Directors,
Medical Directors, the Director of Nursing Service, a Chief Pharma-
cist, and the Chief Dietitian. Present provisions that appointments
under this section of the United States Code (1) shall be for a period
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FEDERAL STATUTORY SALARY SYSTEMS 31
of four years subject to removal by the Administrator of Veterans'
Affairs for cause, and (2) that reappointments may be made for suc-
cessive like periods, are continued.
Section 402: This section amends section 4107 of title 38 of the
Code. In subsection (a) of section 4107, the former schedules en-
titled "Medical Service" and "Dental Service" have been combined
and retitled "Physician and Dentist Schedule." The existing sched-
ules have provided identical grades and pay scales and their con-
tinued separation serves no purpose. The Junior grade of the former
schedules has been eliminated and, two new grades?the Director
grade and Executive grade?have been established. The schedule
now titled "Nursing Service" has been retitled "Nurse Schedule."
Two new grades?the Assistant Director grade and Chief grade?have
been established, and the former grades of Assistant Director and
Senior grade have been retitled "Senior grade" and "Intermediate
grade," respectively. The new grade of Assistant Director is intended
to recognize the special responsibilities assigned a few individuals in
the Nursing Service and will absorb the former statutory position of
Deputy Director of Nursing Service. The Chief grade will primarily
be used for nurses who qualify for and are assigned in positions com-
parable to that of a chief nurse at one of the larger hospitals.
Subsection (a) also provides the pay scales for the physician and
dentist schedule and the nurse schedule to be effective on the first day
of the first pay period beginning on or after January 1 of 1963, 1964,
and 1965.
Subsection (b) of section 4107 of title 38 of the United States Code
specifies the intended use of the two new grades?Director and Execu-
tive?in the physician and dentist schedule. It provides that no
person may hold the Director grade unless he is serving as a director
of a hospital, domiciliary, center, or outpatient clinic (independent),
and that no person may hold the Executive grade unless he holds the
position of chief of staff at a hospital, center, or outpatient clinic
(independent), or the position of Clinic Director, outpatient clinic, or
comparable position. The establishment of these two new grades
obviates the situation in which individuals charged with the responsi-
bility of entire hospital operations received less compensation than
their subordinates.
Section 403: This section which amends section 4108 of title 38 of
the United States Code repeals the present provision providing for an
allowance equal to 15 percent of the pay of persons rated as medical,
surgical, or dental specialists under the provisions of that section.
since the latitude which will be afforded within the pay range of each
grade will permit appropriate recognition of specially qualified indi-
viduals. The current subsection (b) of 4107 of title 38, without
change, has been redesignated as section 4108 for purpose of greater
clarity and as a matter of drafting convenience.
i
Subsection (b) of section 403 s a perfecting amendment to the
table of contents at the head of chapter 73 of title 38, to reflect the
change in the catchline of section 4108.
Section 404: This section amends section 4111(b) of title 38 to
provide that the per annum salary rate of a director of a hospital,
domiciliary, or center who is not a physician in the medical service
shall not be less than the rate of salary he would receive if such service
as a director had been as a physician in the director grade. Except
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32 FEDERAL STATUTORY SALARY SYSTEMS
with respect to change in rate of salary the subsection does not affect
the allocation of any such position to any grade of the Classification
Act or the application of the Performance Rating Act of 1950 to any
individual.
Section 405: This section provides that title IV shall become effec-
tive on the first day of the first pay period which begins on or after
January 1, 1963, except as otherwise expressly provided.
TITLE V-THE FOREIGN SERVICE ACT OF 1946
Section 501: This section provides that title V may be cited as the
"Foreign Service Salary Reform Act of 1962."
Section 502: This section amends section 412 of the Foreign Service
Act by adjusting upward the per annum salary rates for career
ambassador, career minister, and the additional eight classes of Foreign
Service officers. No change is made in the number of classes and,
with the exception of class I, which has two salary rates, the general
pattern of seven rates for each class is continued. As in other sec-
tions of this title, the schedules of per annum salary rates, provided
by this section, are to be effective in three phases, in 1963, 1964, and
1965.
Section 503: This section amends section 415 of the Foreign Service
Act of 1946 by revising the structure of the Foreign Service staff
salary schedule and embodying certain changes directly comparable
to those made in the revision of the Classification Act.
There are at present 22 classes in the Foreign Service staff schedule.
The proposed schedule of 10 classes would eliminate the unnecessary
and seldom used classes in the current schedule. Since custodial,
maintenance, and the most routine clerical functions are performed
almost exclusively by alien employees at Foreign Service posts, there
is little need for U.S.-citizen employees at the level of duties repre-
sented by classes 14 through 22. Since classes 14 through 22 are to
be abolished, it will be necessary to give the Secretary the authority
contained in proposed section 415(b) in order that persons in such
classes may continue to be employed at appropriate rates. The new
section 415(b) would give the Department all needed flexibility in this
respect, should it be desirable in unusual circumstances, to employ
American personnel at lower rates for duties less difficult than those
of FSS-10. The proposed 10-class schedule would provide a reason-
able number of levels in relation to the duties and responsibilities which
are carried out by staff personnel and in addition would provide a more
adequate promotion ladder by reducing and consolidating to a major
extent overlapping classes. Within the proposed Foreign Service
staff salary schedule, 10 salary rates are proposed for each class. This
makes possible within-class increases over a longer period of time for
staff personnel. The 10 rate salary schedule will also replace the
present provisions for longevity rates for staff personnel contained in
section 642(b) of the Foreign Service Act which is repealed by a later
section of this bill. Section 504 prescribes three schedules of per
annum salaries for staff officers and employees to be effective in 1963,
1964, and 1965.
Section 504: This section provides for the conversion of Foreign
Service personnel from their present salary rates to those established
by this bill.
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FEDERAL STATUTORY SALARY SYSTEMS
33
Section 505: This section repeals section 642(b) of the Foreign
Service Act relating to longevity step increases for Foreign Service
staff officers and employees and makes minor conforming changes in
the heading and identification of the section in the Foreign Service Act.
Since the new Foreign Service staff schedule provides ten rates for
within-class increases this section is no longer needed.
Section 506: This section provides that except as otherwise ex-
pressly provided, title V shall become effective on the first day of the
first pay period which begins on or after January 1, 1963.
TITLE VI-REPEAL OF SPECIFIC STATUTORY SALARIES
This title repeals a number of statutory salaries, in the Federal
Executive Pay Act and other special statutes. Positions currently
being paid at these salaries would come under the Classification Act
schedule, many of them in new grades GS-19, and GS-20. These
positions are sinilar to positions generally compensated under the
Classification Act system but had been granted higher compensation
under the Executive Pay Act or other statutes. Addition of new
grades GS-19 and GS-20 and establishing top Classification Act
salaries at levels more nearly comparable to those in private enter-
prise make it possible to restore these positions to the general salary
system.
TITLE VII-MISCELLANEOUS PROVISIONS
This title increases the salary limitations for certain scientific and
professional positions to accord with the salary ranges of the general
schedule of the Classification Act. In most cases the salary range
stated in the laws which are amended is $12,500 minimum and $19,000
maximum. The amendments proposed would tie the minimum to the
minimum rate of grade GS-16 and the maximum to grade 18 of the
general schedule.
Section 701 amends the salary range in section 2(b) of Public Law
313, as amended, as indicated above.
Section 702 amends section 1581(b) of title 10 of the United States
Code, relating to certain scientific or professional positions in the
Department of Defense, to provide a minimum rate for such positions
as the minimum rate of GS-16 and a maximum rate equivalent to
GS-18 pay.
Section 703 amends the proviso in the first sentence of section
208(g) of the Public Health Service Act, as amended, which relates
to compensation rates of certain scientific, professional, and adminis-
trative personnel in the Public Health Service to provide a minimum
rate of grade GS-16 and a maximum at the pay of grade GS-18.
Section 704 establishes a maximum rate, equivalent to the pay of
grade GS-18 for five positions of technical experts in the Department
of Agriculture engaged in research in foot-and-mouth and other
animal diseases.
Section 705 amends section 203(b)(2) of the National Aeronautics
and Space Act of 1958 to provide that the Administrator may fix the
rates for certain excepted positions at not to exceed the pay of grade
GS-18 of the Classification Act. For 30 of these positions (which
may now be paid up to $21,000), the Administrator may, on or after.
the effective date of this title, pay up to the highest rate established
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34 FEDERAL STATUTORY SALARY SYSTEMS
for grade GS-18 which will be effective under the bill on January 1,
1965.
Section 706 amends the proviso in section 161(d) of the Atomic
Energy Act of 1954, as amended, to permit the fixing of salaries of
scientific and technical personnel up to a limit of the pay of grade 18
of the General Schedule of the Classification Act. The present limit
is $19,000.
Section 707 establishes the effective date of title VII as the first
day of the first pay period which begins on or after January 1, 1963.
0
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