420 Wage Administration Policy for Bargaining Unit Employees

421 General Principles and Terms

421.1 Scope

This subchapter establishes the conditions and procedures for setting the wages for Postal Service employees covered by collective bargaining agreements.

Note:  

  1. Consistency With Agreements. It is not the intent of these instructions to amend or conflict with the provisions of the collective bargaining agreements negotiated between the Postal Service and the officially recognized labor unions. The applicable provisions of a collective bargaining agreement control in the event of any conflict with this subchapter.
  2. Categorization of Bargaining Units. Exhibit 421.7 provides a categorization of bargaining unit employees.
  3. Employee Classifications. Employee classifications for bargaining unit employees appear in 432.111.

421.2 Objectives

The principal objectives of the wage administration policies are:

  1. To provide uniform compensation rules and practices consistent with the provisions of the bargaining unit agreements for the establishment of wage rates for employment, reassignment, promotion, and other changes in the pay status of bargaining unit employees.
  2. To provide for the effective administration of wage expenditures.

421.3 Responsibilities

421.31 Assigning Positions to Salary Schedules

The executive vice president of Human Resources is responsible for determining the appropriate salary schedule for each position covered in 420.

Note:  

  1. A position is the aggregate of all the current duties and responsibilities contained in a work assignment. These duties and responsibilities are to be performed during an employee’s full working schedule, as normally reflected in the authorized position description.
  2. The procedures for authorizing and ranking bargaining unit positions appear in 230 and 240.
  3. Each bargaining unit position is assigned to one of the authorized salary schedules, based upon the established categories listed in Exhibit 421.7.
421.32 Setting Wages

The appointing official has primary responsibility for setting the wage of an employee according to the guidelines for the appropriate salary schedule (see 422.12). Higher level approval is required when appropriate or when specified (see 422.514 and 422.714).

421.4 Definitions

421.41 Appointments

The types of appointments are as follows:

  1. Career appointment — a new hire for an appointment without time limit requiring the completion of a probationary period that confers full employee benefits and privileges. The term applies to (a) new employees, (b) former employees who are being reinstated, (c) employees transferring from federal agencies, and (d) current Postal Service employees who choose to transfer to or from the rural carrier craft.
  2. Temporary/casual appointment — a new hire for a time–limited appointment; does not apply to bargaining unit employees.
  3. Appointment to additional position — applies to cases of dual employment, as described in 422.15, when an existing employee is appointed up to three additional positions.
421.42 Assignments

The types of assignments are as follows:

  1. Permanent assignment — simply called assignment; a set of specific duties at a specified location in a specified schedule related to an employee’s position description. For postal police officers, an individual preferred schedule consists of a desired tour and nonscheduled days at a work facility.
  2. Temporary assignment — the assignment of an employee for a short period of time to perform duties and responsibilities other than those specifically contained in his or her position description when a formal personnel action is not required.
    1. Employees assigned to higher level duties may receive higher level pay (see 422.14).
    2. Employees other than rural carriers assigned to lower level duties continue to receive their regular pay. In the rural carrier craft, compensation is dependant upon the evaluated route hours or length of the assigned route.
    3. For postal police officers, temporary assignment is a transfer to another schedule (tour and days off) or work facility.
421.43 Change Actions

The types of change actions are as follows:

  1. Promotion — the permanent assignment of an employee (a) to an established position having a higher grade than the position to which the employee was previously assigned in the same schedule or (b) to a position with a higher than equivalent grade (see Exhibit 418) in another schedule.
  2. Reassignment — the permanent assignment or relocation of an employee (a) to another established position with the same grade in the same schedule or (b) to a position with an equivalent grade (see Exhibit 418) in another schedule, also called lateral assignment or simply lateral. For postal police officers, reassignment is a permanent transfer to another work facility.
  3. Demotion — the permanent assignment due to unsatisfactory performance of an employee (a) to an established position with a lower grade in the same schedule or (b) to a position with a lower than equivalent grade (see Exhibit 418) in another schedule, also called disciplinary reduction.
  4. Voluntary reduction — the permanent assignment at the request of the employee (a) to an established position with a lower grade in the same schedule or (b) to a position with a lower than equivalent grade (see Exhibit 418) in another schedule.
  5. Management action reduction — the permanent, nondisciplinary, and involuntary, assignment of an employee for reasons such as changes in job ranking criteria and job elimination (a) to an established position with a lower grade in the same schedule or (b) to a position with a lower than equivalent grade (see Exhibit 418) in another schedule. Rate retention provisions apply in cases of this type of reduction (see 421.5).
421.44 Terms

The wage terms are as follows:

  1. Basic wage — the annual, daily, or hourly rate of pay provided by the applicable salary schedule for the employee’s assigned position.
  2. Compensation — the same as an employee’s basic wage plus special pay.
  3. Special pay — pay and allowances for additional and premium hours. See 430 for special pay provisions, which include the following:
    1. Overtime pay (see 434.1).
    2. Night differential (see 434.2).
    3. Sunday premium (see 434.3).
    4. Holiday–worked pay (see 434.5).
    5. Out–of–schedule overtime (see 434.6).
    6. Information service center on–call pay (see collective bargaining agreement).
    7. Territorial cost–of–living allowance — TCOLA (see 439).
  4. Grade — the numerical salary standing and salary range in the salary schedule assigned to a position; also called salary grade.
  5. Equivalent grade — the grade in one salary schedule that is most similar in salary range to the grade in another salary schedule whether bargaining or nonbargaining (see Exhibit 418). (See 418 for wage adjustment rules for assignments to a different salary schedule.)
  6. Step — the number or letter assigned to specific wage rates within a grade of a salary schedule. Maximum step is the highest schedule step for a position.
  7. Salary standing — the step rate or percentile with respect to the appropriate salary schedule.
  8. Red–circle amount — the dollar portion of an employee’s salary that is in excess of the maximum salary of the grade and that results from the saved rate provisions described in 421.52.
  9. Promotion — an increase in an employee’s pay grade, within a rate schedule or as a result of a movement to a different rate schedule, determined to be a promotion by Exhibit 418.
  10. Repromotion — a promotion to a grade equivalent to that originally held before reduction in grade occurred (see 421.5).
  11. Interim promotion — a promotion to a grade lower than a grade held before reduction in grade (see 422.123).
  12. Reduction in grade a voluntary or involuntary change to lower or lower than equivalent level.
421.45 Wage Increases

The types of wage increases are as follows:

  1. General increase — an across-the-board wage increase in the step rate or salary range that applies to all employees within the specified category.
  2. Step increase — an increase that represents advancement from one step to the next within a specific grade of a position dependent on satisfying certain waiting period criteria (see 422.13); also called periodic step increase. To be eligible for a step increase, occupational health nurses and postal police officers must in addition satisfy certain performance criteria (see 422.53 and 422.83).
  3. Most prevalent step is the dollar amount determined by calculating the most frequently occurring incremental amount between steps within a grade level, known in mathematics as the mode. When two amounts occur the same number of times, the higher of the two amounts is designated as the most prevalent step. In the unusual circumstance in which there are multiple most prevalent steps (multiple modes), the most prevalent step chosen is the most similar to historical precedent.

  4. Equivalent increase — any increase other than a general increase, a quality step increase, or an incentive award that results in a total increase equal to or greater than the most prevalent step in the salary range for the employee’s position and grade. The following is applicable:
    1. When moving between salary schedules, there may be an equivalent increase if the total amount of an increase exceeds the most prevalent step in the salary range for the employee’s former position.
    2. A new waiting period begins on the effective date of an equivalent increase, except as described in 422.123a4 for repromotions and in 422.125 for reduction in grade.
  5. Quality step increase — an increase in addition to a periodic step increase granted on or before expiration of required waiting periods in recognition of extra competence (see 495.4).
  6. Cost–of–living adjustment (COLA) — a general increase based on increases in the consumer price index (CPI) over a base month as specified by collective bargaining agreements.

421.5 Rate Retention Provisions

421.51 Protected Rate
421.511 Explanation

An individual employee who is assigned to a lower grade position has a protected rate (i.e., continues to be paid the wage he or she received in the previous higher grade position, as detailed in 421.512, below, augmented by any general increases granted (see also 422.113), for a specified period of 2 calendar years provided all of the following conditions are satisfied:

  1. The employee is serving under a career appointment.
  2. Reduction in salary standing is not disciplinary (for personal cause) or voluntary (at the request of the employee).
  3. The employee served for 2 continuous years immediately preceding the effective date of reduction in a position with a salary standing higher than that to which reduced.
  4. Salary in the higher salary standing was not derived from a temporary appointment or temporary assignment.
  5. Reduction in salary standing is not caused by a reduction in force due to lack of funds imposed on the Postal Service by outside authority or curtailment of work. For this purpose, curtailment of work does not include reduction in revenue unit category of any Post Office or reduction in route mileage on a rural route.
  6. Employee’s performance of work was satisfactory at all times during such period of 2 calendar years.
421.512 Rate Determination

The basic wage of an employee entitled to a protected rate is the lowest of the following:

  1. The employee’s basic wage at the time of reduction.
  2. An amount that is 25 percent more than the maximum basic wage for the new grade (i.e., the grade to which reduced).
  3. The basic wage in the lowest salary standing that the employee held during the 2 years immediately preceding reduction in salary standing, augmented by each step increase he or she would have earned in such salary standing.
  4. Note: For rural carriers serving evaluated routes, the existing basic wage includes additional heavy duty compensation up to 40 hours.

421.513 Duration

An employee who is entitled to a protected rate retains the protected rate, augmented by general increases, for 2 calendar years from the effective date of the protected rate. If, before the 2 years expires the employee is again reduced in salary standing, the following applies:

  1. A new protected rate period of 2 calendar years begins.
  2. The new protected rate is redetermined according to the rule in 421.512 in relation to the salary standing following the latest reduction.
421.514 Termination

Rate protection ceases at the beginning of the pay period following a determination that an employee is no longer entitled to protection for any one of the following reasons:

  1. A break in service of 1 workday or more.
  2. Reduction to a lower salary standing (1) for disciplinary reasons or (2) at employee’s own request.
  3. Promotion (or other advancement) of an employee to a higher grade in the same rate schedule, or to a position with a higher than equivalent grade in another rate schedule that includes a maximum wage equal to or above the protected rate. For the protected rate special pay status to terminate in this circumstance, the employee must be first slotted to the appropriate step in the new grade that represents a wage equal to or above that protected by the special pay status.
  4. Change in compensation of the employee to a basic wage equal to or higher than the protected rate for any reason other than by a general increase.
421.515 Effect on Other Compensation

Rate protection affects other compensation as follows:

  1. Promotion Rules. In applying the promotion rules, the former basic wage is the basic wage the employee would have received except for the protected rate.
  2. Rural Routes. Equipment maintenance allowances on rural routes are paid in relation to the documented route to which the carrier is assigned.
421.516 Documentation

PS Form 50, Notification of Personnel Action, is used to notify an employee who is changed to a lower grade or salary standing of entitlement to rate retention. The PS Form 50 contains under the Remarks section a reference to 421.5 explaining the amount and duration of the rate retention. The PS Form 50 is also used to notify an employee of the expiration of the rate retention status.

421.517 Step Increases

An employee with a protected rate continues to receive step increases in the grade to which the employee is reduced. However, under no circumstances can receipt of these step increases cause the employee’s wage to exceed the maximum step of the lower grade.

421.52 Saved Rate
421.521 Explanation

Employees with a saved rate will continue to be paid the wage they received in the previous higher grade position, augmented by any general increases occurring while the saved rate is in effect. A saved rate differs from a protected rate in that it continues for an indefinite period, subject to the conditions explained below (see 421.522 through 421.526) and occurs in several different circumstances, as follows:

  1. An employee is given a permanent, nondisciplinary, and involuntary assignment to a lower grade due to a management action such as a change in job ranking criteria affecting more than one position under the same job description. In this case, saved rate means that the employee continues to receive the wage of the higher grade position.
  2. Management action effects a general increase that, when added to an employee’s wage, produces a wage above the maximum rate for the grade. In this case, saved rate means that the amount of the general increase is added to the employee’s wage and the employee continues to receive the new wage even though it is above the maximum for the grade.
  3. An employee is given a position reevaluation down-grade assignment to a lower grade due to a change in the Cost Ascertainment Group (CAG) of a Post Office.
  4. An employee accepts a job offer based on his or her limitations due to an injury on duty (see 546.143e).
421.522 Red–Circle Amount

The red–circle amount is the dollar portion of an employee’s salary that is in excess of the maximum salary of the grade. An employee continues to receive a red–circle amount as long as he or she is in saved rate status. Note the following:

  1. Red–circle amount results from saved rate only. It does not result from protected rate.
  2. If an employee who receives a red–circle amount (under section C, Special Rule, Pay System for Employees, covered by the collective bargaining agreement of November 18, 1970) is subsequently promoted and later returned to the former position, the red–circle amount is restored.
421.523 Duration

Employees retain the saved rate for as long as they hold a position in the same or higher grade for which the maximum schedule rate is below the saved rate.

421.524 Termination

Saved rate is terminated for any of the following reasons:

  1. A break in service of 1 workday or more.
  2. Demotion or voluntary reduction.
  3. Promotion (or other advancement) of an employee to a higher grade in the same rate schedule, or to a position with a higher than equivalent grade in another rate schedule, which has a maximum wage equal to or above the saved rate. For the saved rate special pay status to terminate in this circumstance, the employee must be first slotted to the appropriate step in the new grade that represents a wage equal to or above that saved by the special pay status. See 421.525.
  4. Change in compensation of the employee to a basic wage equal to or higher than the saved rate for any reason other than by a general increase.
421.525 Effect on Promotion

If an employee with a saved rate is placed into a different position, the placement is compared to those in Exhibit 418, Equivalent Grades, to determine whether or not the placement action is a promotion, change to lower level, or lateral reassignment. If the action is a promotion and the employee’s saved wage exceeds the maximum of the new grade, then the saved rate special pay status continues following the promotion. However, if the promotion is to a higher grade in the same rate schedule, or to a position with a higher than equivalent grade in another rate schedule that includes a maximum wage equal to or above the saved rate, the employee is slotted to the appropriate step in the new grade, and the saved rate special pay status terminates.

421.526 Documentation

PS Form 50 is used to notify an employee of a saved rate status.

421.53 Saved Grade
421.531 Explanation

Saved grade provisions can be invoked only in accordance with the applicable collective bargaining agreement. Decisions to disapprove saved grade are subject to review through the grievance and arbitration process. Saved grade must be approved by area Human Resources managers or their designees. Saved grade applies to all bargaining unit employees except the following:

  1. Employees in Operating Services Division at Headquarters and the Merrifield Engineering Support Center (APWU) (see 422.7).
  2. Employees under the National Postal Professional Nurses’ (NPPN) Agreement (see 422.5).
  3. Employees under the Fraternal Order of Police, National Labor Council (FOP–NLC) Agreement (see 422.8).
421.532 Duration and Termination

The saved grade will be in effect for an indefinite period of time subject to the conditions below:

  1. To continue to receive a saved grade, an employee must bid or apply for all vacant jobs in the saved grade for which he or she is qualified.
  2. If the employee fails to bid or apply, the employee loses the saved grade status immediately.
  3. The Information Service Centers collective bargaining agreement requires that, in order to retain the saved grade, employees bid or apply for reassignment to their former grade or to any position at a grade between that of their former grade and present grade.
421.533 Step Increases

An employee with a saved grade continues to receive step increases in the saved grade. However, under no circumstances can these step increases exceed the maximum step of the saved grade (see 421.45b).

421.6 Changes in Compensation Following Review or Audit

A review or audit of a position may result in a change in compensation if a decision is made to change the evaluation of the position or its identification. The compensation change occurs at the beginning of the pay period following the date of the decision.

421.7 Rate Schedule Summary and References

Exhibit 421.7, Rate Schedule Summary and References, outlines the rate schedule codes (RSCs) for the categories and subcategories of bargaining unit employees, their salary schedule acronyms, and their grade ranges. It also provides references to ELM sections with appropriate exhibits and explanations.

Exhibit 421.7 

Rate Schedule Summary and References

Effective November 29, 2003

 

Rate Schedule Code (RSC)

Salary Schedule

Salary
Schedule
Acronym

Range

ELM 420
Reference

C
CB

Mail Equipment Shops/Material Distribution Center

MESC–1
MESC–2

Grades 1–12

422.1

G

Postal Nurses

PNS

Grade 1

422.5

K

Operating Services Division

OSD

Grades 1–9

422.7

M

Mail Handlers

MH

Grades 4–6

422.3

N

Information Technology/Accounting Service Centers

IT/ASC

Grades 6–23

422.6

P
PB

Postal Service

PS–1
PS–2

Grades 1–12

422.1

Q

City Carriers

CC

Grades 1–2

422.2

 

Rural Carrier

 

 

422.4

R

Evaluated

RC

Hours 12–48

 

R

Mileage

RCS

Miles 6–140

 

R

Substitute Rural Carrier

RSCR

6–Day: Hours 12–48

5 1/2–Day: Hours 41–46

5–Day: Hours 40–48

 

B

Rural Auxiliary

RAUX

Grade 5

422.4

B

Rural Carrier Associate

RCA

 

 

B

Rural Carrier Relief

RCR

 

 

T

Tool and Die Shop

TDS

Grades 4–11

422.9

Y

Postal Police Officers

PPO

Grade 6

422.8

421.8 Calculation Methods

421.81 Exhibit 421.81, Higher Level Pay

Exhibit 421.81, Higher Level Pay, provides calculation methods to use in computing higher level pay.

Exhibit 421.81 

Higher Level Pay
Effective November 20, 1999

[Reserved]

421.82 Exhibit 421.82, Promotional Increases

Exhibit 421.82, Promotional Increases, provides calculation methods to use in computing promotional increases.

Exhibit 421.82 

Promotional Increase

Effective November 20, 1999

Note: Use this chart in conjunction with Exhibit 418, Equivalent Grades, to determine whether or not a change represents an equivalent grade or a higher grade.

 

From

Rate Schedule

To Rate Schedule

 

C Mail Equip. Shops/

Material
Distrib-ution Center

(MESC-1)

CB Mail Equipment Shops/
Material Distribution Center (MESC-2)

E Executive & Admin.

(EAS)

F A–E Postmasters (A–E)**

G Postal Nurses (PNS)

K HQ Operating Service (OSD)

M Mail Handlers (MH)

N Info. Tech./
Accounting Service Centers (IT/ASC)

P Postal Service (PS-1)

PB Postal Service (PS-2)*

Q City Carriers (CC)

R Rural Carriers (RC)***

T Tool & Die Shop (TDS)

Y Postal Police Officers (PPO)

C — Mail Equipment Shops/

Material Distribution Center (MESC–1)

9

2

1

1

1

1

9

1

3

1

1

CB — Mail Equipment Shops/

Material Distribution Center

(MESC-2)*

5

2

7

7

7

7

5

7

3

7

7

E — Executive & Administrative (EAS)

8

6

6

8

8

8

8

8

8

3

8

8

F — A–E Postmasters (A–E)**

8

6

8

8

8

8

8

8

3

8

8

G — Postal Nurses (PNS)

9

2

1

1

1

9

1

1

1

K — HQ Operating Service (OSD)

1

2

1

1

1

1

1

1

3

1

1

M — Mail Handlers (MH)

9

2

1

1

1

1

9

1

3

1

1

N — Information Technology/ Accounting Service Centers (IT/ASC)

1

2

1

1

1

1

1

1

3

1

1

P — Postal Service (PS–1)

9

2

1

1

1

1

9

1

3

1

1

PB — Postal Service (PS–2)*

5

2

7

7

7

7

5

7

3

7

7

Q — City Carriers (CC)

9

2

1

1

1

1

9

1

3

1

1

R — Rural Carriers (RC)***

9

2

1

1

1

1

9

1

1

1

T — Tool & Die Shop (TDS)

8

2

8

8

8

8

8

8

3

4

8

Y — Postal Police Officers (PPO)

1

2

1

1

1

1

1

1

1

* New schedules effective 11/20/1999 for all new hires and promotions from within and from other rate schedules.

** For A–E postmasters promoted to full-time positions, first adjust the current wage to the full-time equivalent rate. For EAS employees promoted to A–E postmasters, compute the full-time equivalent rate per item number 7 in step 3 below, and convert to the A–E rate using the appropriate hours for the office.

*** Rural carriers promoted into a different salary schedule are converted first to the wage for a 40–hour evaluated route, attained step, before applying the applicable promotional increase.

 

Wage Adjustment Calculations — To use this chart:

Step 1. In the vertical list on the left side, locate the rate schedule of the employee’s position before the change action.

Step 2. On the same line, cross over to the rate schedule of the position into which the employee is being assigned.

Step 3. Use the number found in that cell to choose from the following:

Number in
Cell Above

Calculation Method to Use

1

To current full-time salary, add two times the most prevalent step increment of the current grade (add three times for a promotion of three or more grades). Advance this amount to the next higher salary step in the new grade if between two steps. If the employee is promoted to a bargaining unit grade previously held (i.e., repromotion), refer to 422.123a4.

2

To the current full-time salary, add 5 percent. If the result is below the minimum or above the maximum of the new grade, the new salary is adjusted to fit within the range.

3

Place at Step A all new regular rural carriers appointed from other schedules unless they were on Postal Service rolls before August 7, 1991. In that case, place instead at Step C.

4

Assign the Incumbent Rate of the new position to employees promoted from the Incumbent Rate of the former position. For employees at less than the Incumbent Rate to the current full-time salary, add 2 percent for a one–grade promotion, and 3 percent increase for a two or more grade promotion.

5

Use the PS and MESC Schedule 2 to Schedule 2 Promotion Chart. Note, however, that the bargaining unit repromotion rule does not apply to promotions within Schedule 2 (see Exhibit 422.123b).

6

To the current full-time salary, add up to 8 percent. The new salary may not be below the minimum or exceed the maximum for the new grade.

7

To the current full-time salary, add 2 step increments of the current grade. Advance this amount to the next higher salary step in the new grade if between two steps. If the employee is promoted to a bargaining unit grade previously held, place the salary and the next step the same as if the employee had remained in that grade.

8

To the current full-time salary, add 5 percent. Advance this amount to the next higher salary step in the new grade if between two steps. If the employee is promoted to a bargaining unit previously held (i.e., repromotion), place the salary and next step date the same as if the employee had remained in that grade.

9

Use the PS and MESC Schedule 1 to Schedule 2 Promotion Chart. Note: the bargaining unit repromotion rule does not apply to promotions to or within Schedule 2 (see Exhibit 422.123a).