Employees

ELM REVISION

Health Benefits Program

Effective August 21, 2003, the Employee and Labor Relations Manual (ELM) subchapter 520, Health Benefits Program, is modified to incorporate the following:

• Revisions indicating the role of the National Finance Center (NFC) in administering Spouse Equity Act enrollments under the Federal Employees Health Benefits (FEHB) Program.

• Other updates reflecting Office of Personnel Management (OPM) guidance.

• Editorial changes conforming to Postal ServiceTM editorial style.

We will incorporate these revisions into the next printed version of the ELM and also into the next update of the online version available on the Postal Service PolicyNet Web site at http://blue.usps.gov/cpim; click on Manuals. It is also available on the Internet site at www.usps.com; click on About USPS & News, then Forms & Publications, then Browse All Periodicals and Publications, and last click on Manuals.

Summary of Changes

520, Health Benefits Program, is edited throughout for consistency of presentation and conformance to Postal Service editorial style.

521.411, Responsibility of Employing Office, is modified by the deletion of the second paragraph, which was redundant.

521.423, Foster Children, is modified in "Note" to indicate that a sample certification form is found in Exhibit 521.423, Certification of Foster Children. Exhibit 521.423 is revised to elaborate on the certification requirements per OPM guidance.

521.621, Eligible for Coverage, is modified to indicate that RI 70-5, Guide to Federal Employee Health Benefit Plans for TCC and Former Spouse Enrollees, is sent to an eligible former spouse.

521.711, Eligible for Coverage, is modified at item d to show that former spouses awaiting approval or disapproval from OPM are among those who are eligible for temporary continuation of coverage.

523, Enrollment, is revised to reflect a new title.

523.6, Enrollment by a Former Spouse, is revised to reflect a new title.

523.61, Enrollment Form, is modified to indicate that all former spouse SFs 2809, Employee Health Benefits Election Form - Federal Employees Health Benefits Program (FEHB), are forwarded to the National Finance Center (NFC) rather than to the Eagan Retirement Branch. The title of the section is also revised.

523.632, Contents of File, is restructured so that text under item f becomes items 1 through 6 and "Payroll's" is replaced by "NFC's."

523.634, Disposition of File, is modified to indicate that it is the NFC that maintains the file and to clarify the terms under which the personnel office maintains records.

524.529, Change to Self Only, is modified to elaborate on circumstances considered "qualified life status changes."

524.531, Change in Marital Status, is modified at item a(1) to include common law marriage under the criteria for change in status and at item c to clarify the provision for new spouse enrollment.

524.62, Change to Self Only, is modified to clarify change to Self Only depending on whether premiums are paid on a pretax basis or an after-tax basis.

524.773, Application for Conversion, is modified to clarify the time frame within which application for conversion can be made.

524.774, Late Conversion, is added to clarify the steps to be taken when an application for conversion is belated. Subsequent sections are renumbered 524.775 and 524.776, respectively.

524.831, Tax Benefits, is modified to delete obsolete information indicating that a pre-tax benefit is not available under FEHB.

524.832, Career Employees, is modified to add occurrence of a qualified life status change as an opportunity for waiver of pretax basis for payment of premiums.

524.833, Certain Noncareer and Transitional Employees, is modified to add occurrence of a qualified life status change as an opportunity to elect payment of premiums on a pretax basis.

524.84, Health Benefits Schedule, is modified to indicate that Publication 12, Health Benefits Open Season Administrative and Processing Information, is available on the Postal Service intranet and to eliminate reference to cost information.

524.921, New Enrollment, is modified to clarify the effective date of a new enrollment.

524.922, Change in Enrollment, is modified to replace "employing office" with "NFC."

524.93, Payment of Premiums, is modified to replace "Eagan ASC" with "NFC."

524.95, Cancellation of Enrollment, is modified to replace "employing office" with "NFC."

524.965, Former Spouse Responsibility, is modified to replace "employing office" with "NFC."

524.966, National Finance Center Responsibility, is modified to show in the title and in the text the role of the NFC in terminating health coverage for former spouses.

525.141, Reporting to OWCP, is modified to clarify that injury compensation personnel annotate OWCP Form CA-7/20, Claim for Compensation on Account of Traumatic Injury or Occupational Disease/Attending Physician's Report.

525.146, On LWOP Ten Months, But Enrollment Not Transferred, is modified to show in the title and in item a that the time period is 10 months rather than 8 months in accordance with OPM guidance.

525.222, Procedures to Be Followed by Employing Office, is modified at item e to indicate that enrollment is continued for an employee entering nonpay status who fails to respond to notice of his or her option to continue or terminate health benefits and that the employee is expected to pay his or her portion of the premiums due.

525.52, Enrollment Eligibility Both as an Employee and as a Survivor, is modified to clarify terms under which a surviving spouse may apply for reinstatement of annuitant- or survivor-acquired health benefits enrollment.

Employee and Labor Relations Manual (ELM)

* * * * *

5 Employee Benefits

* * * * *

520 Health Benefits Program

521 Administration and Eligibility

* * * * *

521.4 Family Members' Eligibility

521.41 General

521.411 Responsibility of Employing Office

[Revise the first paragraph to read as follows, and delete the second paragraph:]

The employing office is responsible for determining whether or not a person is a family member for health benefits purposes for an enrolled employee. It is that person's relationship to the employee that is controlling. The employing office must satisfy itself that an event has occurred that permits enrollment or a change in enrollment under the FEHB program. Documentary evidence may be requested as appropriate (e.g., marriage certificate, birth certificate, divorce decree). However, it is not necessary that such evidence be retained. The carrier is not notified at the time the original determination is made regarding the eligibility status of an enrollee's family member, but the carrier may request evidence to verify the eligibility of the family member at the time benefits for that family member are claimed.

* * * * *

521.42 Determining Family Membership Status of Children

* * * * *

521.423 Foster Children

* * * * *

[Revise the text for "Note" to read as follows:]

Note: A Certification of Foster Child Status must be signed by the employee and filed as a permanent document in the employee's official personnel folder. For a sample certification, see Exhibit 521.423.

* * * * *

[Revise Exhibit 521.423 to read as follows:]

Exhibit 521.423
Certification of Foster Children

Federal Employees Health Benefits Program Certification of Foster Children

I have been informed of the following requirements for coverage of a foster child under the Federal Employees Health Benefits Program and/or Option C of the Federal Employees' Group Life Insurance Program:

1. The child must be unmarried and under age 22. (If the child is over age 22, he or she can be covered only if he or she is incapable of self-support because of a disabling condition that began before age 22. I must provide documentation of this to my employing office.)

2. The child must be living with me.

3. The parent-child relationship must be with me, not with the biological parent. This means that I am exercising parental authority, responsibility, and control; I am caring for, supporting, disciplining, and guiding the child; I am making the decisions about the child's education and health care.

4. I must be the primary source of financial support for the child.

5. I must expect to raise the child to adulthood.

I understand that if the child moves out of my to live with a biological parent, he or she loses coverage and cannot ever again be covered as a foster child unless the biological parent dies, is imprisoned, or becomes incapable of caring for the child due to a disability, or unless I obtain a court order taking parental responsibility away from the biological parent.

This is to certify that [__name of child__] lives with me; I have a regular parent-child relationship with [__name of child__], as described above; I am the primary source of financial support for [__name of child__]; and I intend to raise [__name of child__] into adulthood.

I will immediately notify both my employing office and the health benefits carrier if the child marries, moves out of my , or ceases to be financially dependent on me.

[__print name of employee/annuitant__][__Social Security number__]

[__signature of employee/annuitant__][__date__]

FILE THE ORIGINAL IN THE EMPLOYEE'S OFFICIAL PERSONNEL FILE

* * * * *

521.6 Former Spouses

* * * * *

521.62 Documentation of Eligibility

521.621 Eligible for Coverage

[Revise the text to read as follows:]

If the former spouse meets all the requirements stated in 521.61, and is, therefore, eligible for coverage, the employing office notifies the former spouse in writing of its determination. The notification of eligibility acknowledges the documents on which the employing office based its decision, that is, proof that the former spouse has not remarried prior to age 55 and that the former spouse was enrolled under the FEHB Program at some point during the 18 months prior to divorce. An RI 70-5, Guide to Federal Employees Health Benefits Plans for TCC and Former Spouse En- rollees, and a statement of the requirements for continued enrollment (Exhibit 523.62) are forwarded to the former spouse with the notification. See 523.6 for enrollment procedures.

* * * * *

521.7 Temporary Continuation of Coverage

* * * * *

521.71 Eligibility

521.711 Eligible for Coverage

Individuals identified below are eligible to continue enrollment beyond the 31-day extension period allowed following termination of coverage:

* * * * *

[Revise item d to read as follows:]

d. Former spouses who are enrolled as family members in FEHB sometime during the 18 months prior to the end of the marriage, but who are not entitled to coverage under the Spouse Equity Act (see 521.611) or who are awaiting approval or disapproval from OPM of entitlement to coverage under the Spouse Equity Act.

* * * * *

[Revise the title of 523 to read as follows:]

523 Enrollment

* * * * *

[Revise the title of 523.6 to read as follows:]

523.6 Enrollment by a Former Spouse

[Revise the title of 523.61 to read as follows:]

523.61 Enrollment Form

* * * * *

[Revise the last paragraph of 523.61 to read as follows:]

All SFs 2809 for former spouses are forwarded to the NFC at the following address:

DPRS BILLING UNIT
NATIONAL FINANCE CENTER
PO BOX 61760
NEW ORLEANS LA 70161-1760

* * * * *

523.63 Employing Office Records on Former Spouse

* * * * *

523.632 Contents of File

The following documents are kept in the former spouse's health benefits file:

* * * * *

[Revise item f (including replacing "Payroll's" with "NFC's") to read as follows:]

f. Copies of all correspondence relating to the former spouse's enrollment, for example:

(1) The employing office's letter approving or denying eligibility for health benefits coverage along with documents on which the agency's eligibility decision is based.

(2) The former spouse's agreement (Exhibit 523.62) to notify the employing office within 31 days of an event that terminates eligibility.

(3) The NFC's letter requesting payment of overdue premiums prior to terminating coverage.

(4) Documents pertaining to a child's physical disability before age 22.

(5) Court order terminating entitlement to survivor annuity or a portion of a retirement annuity.

(6) Letter from the former spouse canceling the enrollment; and OPM's notice that a refund has been made to a former employee or that the former employee has died and no survivor annuity is payable.

* * * * *

523.634 Disposition of File

[Revise the text to read as follows:]

The employing office maintains the former spouse's health benefits file for as long as the NFC maintains the enrollment. The file is transferred to OPM upon the occurrence of one of the following events:

a. The former spouse cancels the enrollment.

b. The employing office terminates the enrollment.

c. The former spouse begins receiving an annuity payment (a portion of the employee's retirement annuity or a survivor annuity).

If the former spouse does not qualify for coverage under the Spouse Equity Act provisions, the personnel office must keep a file containing the records for at least 1 year from the date of notice stating that he or she did not qualify. Then the contents of the file may either be destroyed or returned to the former spouse.

524 Enrollment

* * * * *

[Revise the title of 524.5 to read as follows:]

524.5 Enrollment or Change in Enrollment

* * * * *

524.52 Events Permitting

* * * * *

524.529 Change to Self Only

[Revise the text to read as follows:]

The option to change from Self and Family to Self Only at any time during the year is available only to those employees whose health premiums are being paid on an after-tax basis. For those employees with health benefit premiums being paid on a pre-tax basis, a change to Self Only may be processed only during FEHB Open Season or following a qualified life status change. Requests due to qualified life status changes must be received in the local personnel office from the employee within 60 days of the qualifying change. The following list of qualified life status changes is published in the RI 70-2, Guide to Federal Employees Health Benefits Plans:

a. The employee marries (including a valid common law marriage, in accordance with applicable state law), divorces, or legally separates, or his or her marriage is annulled.

b. The employee adds a qualified dependent (e.g., the employee or his or her spouse gives birth to a child, the employee adopts a child, or the employee's dependent now satisfies eligibility requirements).

c. The employee loses a qualified dependent (e.g., the employee or his or her spouse or dependent dies, the employee's child is placed for adoption, or his or her dependent now ceases to satisfy eligibility requirements).

d. The employee or his or her spouse or dependent has a change in work site or residence.

e. The employee's spouse or dependent starts or ends employment, an unpaid leave of absence, or a strike or lockout; or has a change in employment status making that person eligible or ineligible for a benefit plan.

f. A court order, judgment, or decree (resulting from a change in marital status or legal custody) requires the employee to begin providing coverage for his or her child or requires another person to do so.

g. The employee or his or her spouse or dependent becomes or ceases to be eligible for Medicare, Medicaid, or TRICARE.

h. The employee begins or ends an unpaid leave of absence.

i. The employee's spouse or dependent elects to change health coverage under another employer's plan, either based upon a qualified life status change or for a period of coverage that is different from that of the Postal Service, qualifying the employee to eliminate any duplicate coverage.

524.53 Family Changes Affecting Enrollment

524.531 Change in Marital Status

The following provisions apply:

a. Criteria. A change in marital status is any one of the following:

[Revise item a(1) to read as follows:]

(1) Marriage (including a valid common law marriage, in accordance with applicable state law).

* * * * *

[Revise item c to read as follows:]

c. Coverage for New Spouse. An employee may provide immediate coverage for the new spouse by filing an SF 2809 during the pay period before the anti- cipated date of the marriage. If the effective date of the change is before the marriage, the new spouse is not eligible for coverage until the actual day of the marriage.

* * * * *

524.6 Effective Date of Enrollment or Enrollment Change

* * * * *

524.62 Change to Self Only

If a request is submitted to change from Self and Family enrollment to Self Only, and the request meets the requirements as identified in 524.51, the effective date is determined as follows:

[Revise items a and b to read as follows:]

a. If health premiums are paid on an after-tax basis, a change to Self Only may be made at any time. The effective date of the change is the first day of the pay period that begins after the completed SF 2809 is received in the employing office. However, a retroactive change may be approved to the first day of the pay period following the one in which there were no family members eligible for coverage if the employee is able to satisfy the agency of that fact.

b. If health premiums are paid on a pre-tax basis, the employee must provide the local personnel office with documentation showing that he or she had a qualified life status change occur within the past 60 days. The effective date of the change is the first day of the pay period that begins after the completed SF 2809 is received in the employing office.

* * * * *

524.7 Termination of Enrollment

* * * * *

524.77 Conversion Rights

* * * * *

524.773 Application for Conversion

[Revise the text to read as follows:]

Application for conversion (by letter in the case of family members or on the back of the enrollee's copy of SF 2810 in the case of employees) is made directly to the nearest office of the plan. The application must be submitted within 31 days of the termination of enrollment. If the notice to the employee on SF 2810 is delayed, the employee has 31 days from the date of the notice, but no later than 91 days from the termination date, to apply for conversion.

[Insert new 524.774 as follows:]

524.774 Late Conversion

If notice is not given within 60 days of termination or the request for conversion cannot be made for reasons beyond the employee's control, the employee can request a late conversion by writing directly to the carrier of the plan. This request must be made within 6 months of the enrollment termination date and must include:

a. Documentation that the enrollment has terminated (e.g., an SF 50 showing separation from service).

b. Proof that the employee was not notified of the enrollment termination and the right to convert (e.g., a letter from the employing office confirming that it did not provide timely notice of the conversion option), and that he or she was not otherwise aware of it.

c. Proof that the employee was not able to convert because of reasons beyond his or her control.

[Renumber existing 524.774 and 524.775 as new 524.775 and 524.776, respectively.]

* * * * *

524.8 Cost of Enrollment

* * * * *

524.83 Pre-Tax and After-Tax Premiums

524.831 Tax Benefits

[Revise the text to read as follows:]

The Postal Service has established the pre-tax payment of health insurance premium contributions as a tax-saving benefit feature for its employees. FEHB premiums paid on a pre-tax basis are not included in an employee's gross income. This practice reduces the taxable income figure reported and reduces income and Social Security and Medicare taxes paid by employees.

524.832 Career Employees

[Revise the text to read as follows:]

Career employees have their portion of health benefit premiums automatically paid on a pre-tax basis unless a waiver is submitted by the employee. PS Form 8201, Pre-Tax Health Insurance Premium Waiver/Restoration, is accepted during an employee's first opportunity to enroll in health benefits, during the annual FEHB Open Season period, or upon the occurrence of a qualified life status change (see 524.529). Once a waiver is processed and deductions are being made on an after-tax basis, a return to a pre-tax basis requires the completion of a second PS Form 8201 to cancel the waiver and restore the pre-tax status. Requests to cancel pre-tax waivers are accepted during FEHB Open Season periods or upon the occurrence of a qualified life status change (see 524.529).

524.833 Certain Noncareer and Transitional Employees

[Revise the text to read as follows:]

Generally, noncareer employee health benefit premiums are withheld on an after-tax basis. However, noncareer employees in the Rural Carrier craft and transitional employees covered by the APWU contract may elect to have premiums paid on a pre-tax basis by completing PS Form 8202, Pre-Tax Health Insurance Premium Election/Waiver Form for Noncareer Employees, at their first opportunity to enroll in health benefits, during the annual FEHB Open Season periods, or upon the occurrence of a qualified life status change (see ELM 524.529).

* * * * *

524.84 Health Benefits Schedule

[Revise the text to read as follows:]

Publication 12, Health Benefits Open Season Administrative and Processing Information, is published annually during FEHB Open Season and is available for employee review on the Human Resources web site at http://blue.usps.gov/cpim/ftp/pubs/pub12.pdf. The publication provides plan change information for all participating health plans under the FEHB.

524.9 Enrollments for Former Spouses

* * * * *

524.92 Effective Date of Enrollment

524.921 New Enrollment

[Revise the text to read as follows:]

The effective date of a new enrollment for a former spouse is the first day of the pay period after the employing office receives the properly completed SF 2809 and OPM's approval of eligibility or at a future date (at the beginning of a pay period) requested by the former spouse.

If the former spouse requests immediate coverage and both the SF 2809 and proof of eligibility are received within 60 days of the date of divorce, the enrollment may be made effective the same day that Temporary Continuation of Coverage (TCC) would otherwise take effect.

524.922 Change in Enrollment

[Replace "employing office" with "NFC" to read as follows:]

The effective date of a change in enrollment is the first day of the pay period after the date the NFC receives the properly completed SF 2809.

524.93 Payment of Premiums

* * * * *

[Revise the second and third paragraphs (including replacing "Eagan ASC" with "NFC") to read as follows:]

The former spouse is billed in accordance with a schedule established by the NFC.

If payment is not received by the due date established by the NFC, the former spouse is notified by certified mail, return receipt requested, that continuation of coverage rests upon payment being made within 15 days after receipt of the notice. The enrollment of a former spouse who fails to remit payment within the specified time frame is terminated. (See 524.963 for effective date of termination.)

* * * * *

524.95 Cancellation of Enrollment

[Revise the first paragraph (including replacing "employing office" with "NFC") to read as follows:]

A former spouse may cancel enrollment at any time by filing with the NFC a properly completed SF 2809. If a former spouse cancels enrollment, the cancellation becomes effective the last day of the pay period that the health benefits form canceling the enrollment is received by the NFC. The former spouse and family members, if any, are not entitled to the temporary extension of coverage or the right to convert to an individual contract. A former spouse who cancels an enrollment may not later re-enroll.

* * * * *

524.96 Termination of Enrollment

* * * * *

524.965 Former Spouse Responsibility

[Revise the text (including replacing "employing office" with "NFC") to read as follows:]

The former spouse is responsible for notifying the NFC, which maintains health benefits enrollment, of any event that will terminate eligibility for coverage. (See 523.62.)

[Revise the title and text of 524.966 to read as follows:]

524.966 National Finance Center Responsibility

The NFC acts as follows:

a. As soon as the former spouse submits proper notification indicating an event that will require termination, the NFC prepares an SF 2810 terminating the enrollment and provides appropriate copies of the SF 2810 to the former spouse. This enables the former spouse to convert to individual coverage within the 31-day time limit.

b. In cases where OPM is establishing a survivor benefit for the former spouse, the NFC prepares a "transfer out" to OPM of the health benefits enrollment. The effective date of the transfer is the day prior to the commencement date of the annuity.

525 Special Circumstances Affecting Health Insurance Coverage

525.1 Office of Workers' Compensation Programs

* * * * *

525.14 Procedures for Continuation of Enrollment

525.141 Reporting to OWCP

[Revise the text to read as follows:]

When reporting the compensable injury or illness to OWCP, if the employee has been enrolled (a) since the first opportunity, (b) for the 5 years immediately preceding the start of compensation, or (c) from on or before December 31, 1964, injury compensation personnel certify to this effect by noting in the Remarks items of OWCP Form CA-7/20, Claim for Compensation on Account of Traumatic Injury or Occupational Disease/Attending Physician's Report, to show the enrollment code number and the beginning and ending dates of the pay period in which the employee's pay ceased. No documentation of this certification is required to accompany the CA-7/20.

* * * * *

[Revise the title and item a of 525.146 to read as follows:]

525.146 On LWOP Ten Months, But Enrollment Not Transferred

The following provisions apply:

a. If an employee has been carried in nonpay status for 10 months, the appropriate OWCP office is contacted to determine what action should be taken on the enrollment before day 365 of the employee's continuous nonpay status.

* * * * *

525.2 Employees in Nonpay Status

* * * * *

525.22 Payment Required for Periods of Nonpay Status

* * * * *

525.222 Procedures to Be Followed by Employing Office

The employing office acts as follows:

* * * * *

[Revise item e to read as follows:]

e. If the employee fails to sign and return the written notice, the enrollment is continued and the employee is expected to pay his or her portion of the premiums due.

* * * * *

525.5 Death of an Employee

* * * * *

525.52 Enrollment Eligibility Both as an Employee and as a Survivor Annuitant

[Revise the first paragraph to read as follows:]

An eligible employee who has been covered under the family enrollment of a spouse and who, due to the spouse's death, is eligible to continue the enrollment as a survivor annuitant may cancel the enrollment as an annuitant and enroll as an employee on the basis of a change in marital status (e.g., death of spouse). However, if the surviving spouse enrolls as an employee on this basis and later is separated under conditions not entitling the surviving spouse to continue enrollment, the enrollment is terminated by the employing office. In this event, if still a survivor annuitant, the surviving spouse may apply to OPM for reinstatement of the annuitant- or survivor-acquired enrollment

* * * * *

- Compensation,
Employee Resource Management, 8-21-03

ELM REVISION

Changes in Computing Promotional Increases for American Postal Workers Union Crafts and Recodification of ELM 420

Effective November 20, 1999, the method of computing promotional increases for crafts represented by the American Postal Workers Union (APWU) changed. The substantive revisions to Employee and Labor Relations Manual (ELM) 421 and ELM 422.1 (formerly ELM 422) shown below in the summary of changes are intended to reflect the changes originally published in the October 8, 1999, Memorandum of Understanding (MOU) between the United States Postal Service^® and the APWU. Sections on promotional increases throughout the rest of the subchapter are modified to state information that was previously incorporated by reference.

Other substantive changes in ELM 420 shown in the summary of changes incorporate information on the following:

• APWU Grade 11, necessitated by the Goldberg Arbitration Award of December 18, 2001.

• Information Technology/Accounting Service Centers (IT/ASC) Step Q, necessitated by the Collins Arbitration Award of April 26, 2000.

• Part-time flexible rural carriers, necessitated by Article 7.A.2. of the Agreement between the USPS and National Rural Letter Carriers' Association (NRLCA), 2000-2004.

• Reconstitution of the Tool and Die Shop bargaining unit, effective January 31, 1997, provided in 422.9.

Exhibit 418.1, Equivalent Changes, referenced in 420, is also updated to incorporate city letter carrier position upgrades necessitated by the Fleischli Arbitration Award of September 19, 1999.

In addition, ELM 420 is recodified. Existing ELM 422 through ELM 429 become new ELM 422.1 through ELM 422.9, respectively. The new section generated is ELM 422.2, City Carriers Schedule.

The summary of changes and the entire subchapter are reproduced below for your convenience. We will in- corporate these revisions into the next printed version of the ELM and also into the next update of the online version available on the Postal Service PolicyNet Web site at http://blue.usps.gov/cpim; click on Manuals.

Summary of Changes

410, Pay Administration Policy for Nonbargaining Unit Employees

Exhibit 418.1, Equivalent Grades, is updated to recognize the city letter carrier position upgrades necessitated by the Fleischli Arbitration Award of September 19,1999.

420, Wage Administration Policy for Bargaining Unit Employees, is recodified and formatted to include a broad structure and numbering scheme to encompass all current salary schedules. It is modified throughout to update the names of bargaining unit categories, schedule acronyms, and grade ranges.

References to "area supply centers" are changed throughout to "material distribution center." References to the bargaining unit "Mail Equipment Shops" are changed to "Material Distribution Center."

"Salary" is changed to "wage" when the compensation term is either preceded by "basic" or "setting" or followed by "rate," "adjustment," "increase," or "level." The changes are made to increase technical accuracy when discussing an employee's compensation expressed as an hourly rate rather than as an annualized salary equivalent.

References are adapted as necessary. In addition, minor editorial revisions are made for clarity and consistency.

421.41, Appointments, adds language to 421.41a to clarify that transfers to or from the rural carrier craft require a new career appointment.

421.42, Assignments, adds language to 421.42b(2) to clarify that rural craft employees are paid based on route evaluated hours or route mileage and adds language to 421.42c to clarify that the provision applies to up to three positions.

421.44, Terms, adds four new terms for clarity and completeness: in 421.44i, the term "promotion"; in 421.44j, the term "repromotion"; in 421.44k, the term "interim promotion"; and in 421.33l, the term "reduction in grade."

421.45, Wage Increases, adds language to 425.45b to clarify the most prevalent step identification procedure.

421.514, Termination, adds language to 421.514c to clarify how a protected rate is currently terminated under certain promotion circumstances.

421.521, Explanation, adds 421.521c to indicate that saved rate applies to an employee who accepts a job offer based on limitations due to an injury on duty.

421.524, Termination, adds language to 421.524c to clarify how a saved rate is currently terminated under certain promotion circumstances.

421.525, Effect on Promotion, is modified to clarify the impact of saved rate special pay status on promotion actions.

421.7, Rate Schedule Summary and References, is modified to update the names of bargaining unit categories, schedule acronyms, grade ranges, and references.

Exhibit 421.81, Higher Level Pay, is reserved pending further revisions necessitated by the October 1,1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

Exhibit 421.82, Promotion Increases, is modified to update the names of bargaining unit categories, schedule acronyms, and grade ranges. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.111, Salary Schedules, notes at 422.111b that the Mail Equipment Shop/Material Distribution Center Schedule has 11 grades following the Goldberg Arbitration Award of December 18, 2001.

422.121, Career Appointment, modifies 422.121a, Reinstatement, to conform to current practice and adds 422.121e, Hiring Into the Rural Carrier Craft, to explain current practices more fully. The procedures for hiring into the PS and MESC Schedule 2 are also clarified in 422.121f.

422.123, Promotion Rules, is modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly." In 422.123b(6), the rule choice provision regarding wage rules now requires decisions regarding deviation from standard practice to be made by the district Human Resources manager rather than by the installation head. To conform to actual pay practices and maintain consistency with 422.144b, it is also modified in 422.123b(7) to delete from the list of exclusions reference to temporary promotions and higher level assignments.

Exhibit 422.123a, Promotion Chart - PS Schedule 1 to PS Schedule 2, is added to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly." It is also revised to incorporate the newly created APWU Grade 11, necessitated by the Goldberg Arbitration Award of December 18, 2001.

Exhibit 422.123b, Promotion Chart - PS Schedule 2 to PS Schedule 2, is added to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly." It is also revised to incorporate the newly created APWU Grade 11, necessitated by the Goldberg Arbitration Award of December 18, 2001.

422.124, Reassignment Rules, adds 422.124d to clarify reassignments for PS and MESC employees.

422.125, Reductions in Grade, adds 425b(3) to clarify reduction in grade for PS and MESC employees.

Exhibit 422.13, Bargaining Unit Step Increase Waiting Periods, is updated and modified to show the addition of Step Q in the IT/ASC Schedule necessitated by the Collins Arbitration Award of April 26, 2000.

422.223, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.323, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.415, Employee Classifications, is modified to add text to 422.415a to show both regular and part-time flexible rural carriers.

422.422, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.421, Career Appointment, is modified at 422.421a(3) to include reference to part-time flexible rural carriers as described further in the Rural Carrier labor contract at Article 7.A.2.

422.523, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.622, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.723, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.283, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

422.9, Tool and Die Shop Schedule, previously reserved because of the dissolution of the Tool and Die Shop as a bargaining unit, is now published because of the reconstitution of the Tool and Die Shop bargaining unit January 31, 1997. It incorporates provisions previously found in ELM 12 and subsequent changes.

422.923, Promotion Rules, is modified to include the material previously found in 422.123 and incorporated by reference. It is also modified to include revisions necessitated by the October 1, 1999, MOU between the USPS and the APWU resolving the "promotion pay anomaly."

Employee and Labor Relations Manual (ELM)

* * * * *

4 Pay Administration

* * * * *

410 Pay Administration Policy for Nonbargaining Unit Employees

* * * * *

418 Assignment to a Different Salary Schedule

418.1 Equivalent Grades

[Revise Exhibit 418.1 to read as follows:]

Exhibit 418.1
Equivalent Grades

EQUIVALENT GRADE DETERMINATION - To use the chart:

Step 1. In the horizontal list at the top, locate the salary schedule and grade to the employee's position before the change action.

Step 2. Cross over to the salary schedule into which the employee is being assigned.

Step 3. Determine the nature of the change from the following:

* * * * *

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:

a. 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.

b. Categorization of Bargaining Units. Exhibit 421.7 provides a categorization of bargaining unit employees.

c. Employee Classifications. Employee classifications for bargaining unit employees appear in 432.111.

421.2 Objectives

The principal objectives of the wage administration policies are:

a. 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.

b. 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:

a. 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.

b. The procedures for authorizing and ranking bargaining unit positions appear in 230 and 240.

c. 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:

a. 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.

b. Temporary/casual appointment - a new hire for a time-limited appointment; does not apply to bargaining unit employees.

c. 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:

a. 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.

b. 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:

a. 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 418.1) in another schedule.

b. 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 418.1) in another schedule, also called lateral assignment or simply lateral. For postal police officers, reassignment is a permanent transfer to another work facility.

c. 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 418.1) in another schedule, also called disciplinary reduction.

d. 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 418.1) in another schedule.

e. 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 418.1) 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:

a. Basic wage - the annual, daily, or hourly rate of pay provided by the applicable salary schedule for the employee's assigned position.

b. Compensation - the same as an employee's basic wage plus special pay.

c. 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).

d. Grade - the numerical salary standing and salary range in the salary schedule assigned to a position; also called salary grade.

e. 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 418.1). (See 418 for wage adjustment rules for assignments to a different salary schedule.)

f. 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.

g. Salary standing - the step rate or percentile with respect to the appropriate salary schedule.

h. 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.

i. 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 418.1.

j. Repromotion - a promotion to a grade equivalent to that originally held before reduction in grade occurred.

k. Interim promotion - a promotion to a grade lower than a grade held before reduction in grade (see 422.123).

l. 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:

a. General increase - an across-the-board wage increase in the step rate or salary range that applies to all employees within the specified category.

b. 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).

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.

c. 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 422.123(a)(4) for repromotions and in 422.125 for reduction in grade.

d. 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 474).

e. 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:

a. The employee is serving under a career appointment.

b. Reduction in salary standing is not disciplinary (for personal cause) or voluntary (at the request of the employee).

c. 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.

d. Salary in the higher salary standing was not derived from a temporary appointment or temporary assignment.

e. 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.

f. 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:

a. The employee's basic wage at the time of reduction.

b. An amount that is 25 percent more than the maximum basic wage for the new grade (i.e., the grade to which reduced).

c. 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.

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:

a. A new protected rate period of 2 calendar years begins.

b. 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:

a. A break in service of 1 workday or more.

b. Reduction to a lower salary standing (1) for disciplinary reasons or (2) at employee's own request.

c. 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.

d. 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:

a. 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.

b. 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:

a. 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.

b. 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.

c. 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:

a. Red-circle amount results from saved rate only. It does not result from protected rate.

b. 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:

a. A break in service of 1 workday or more.

b. Demotion or voluntary reduction.

c. 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.

d. 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 418.1, 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. De- cisions 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:

a. Employees in Operating Services Division at Headquarters and the Merrifield Engineering Support Center (APWU) (see 422.7).

b. Employees under the National Postal Professional Nurses' (NPPN) Agreement (see 422.5).

c. 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:

a. 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.

b. If the employee fails to bid or apply, the employee loses the saved grade status immediately.

c. 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 20, 1999

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
Promotion Increases
Effective November 20, 1999

Note: Use this chart in conjunction with Exhibit 418.1, Equivalent Grades, to determine whether or not a change represents an equivalent grade or a higher grade.

* 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 and 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 422.123(a)(4).

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).

422 Salary Schedules Covered by Specific Agreements

422 .1 Postal Service and Mail Equipment Shops/Material Distribution Center Salary Schedules

422.11 Salary System

422.111 Salary Schedules

The relevant salary schedules are as follows:

a. The Postal Service (PS) Schedule applies to clerks, vehicle service drivers, and post office maintenance service and vehicle maintenance employees. The PS schedule consists of PS Grades 1 through 11.

b. The Mail Equipment Shops/Material Distribution Center (MESC) Schedule applies to bargaining unit employees in the mail equipment shops and the material distribution center. The MESC schedule consists of MESC Grades 1 through 11.

422.112 Basis of Rates

Rates are established as follows:

a. Annual Rates for Full-Time Employees. The basic annual salaries for the grades and steps of the schedule are established for full-time employees on the basis of a work schedule of 2080 hours per annum.

b. Hourly Rates for Part-Time Employees. The basic hourly rates of the schedule are determined as follows:

(1) For part-time regular schedule employees, divide the appropriate annual rate by 2,080 hours.

(2) For part-time flexible schedule employees, divide the appropriate annual rate by 2,000 hours.

422.113 Cost-of-Living Adjustment

Bargaining unit employees receive cost-of-living (COLA) as specified by their applicable collective bargaining agreement (see 421.45e).

422.114 Setting Wages

The appointing officer has primary responsibility for setting wages of employees according to the guidelines in 422.1.

422.115 Employee Classifications

The bargaining unit classifications in 432.111 that apply are:

a. Full-time regular.

b. Part-time regular.

c. Part-time flexible.

422.12 Change Action Pay Rules

422.121 Career Appointment

An employee new to the Postal Service hired with a career appointment is to be paid the rate for the first step of the grade of the position for which hired, except as specified below:

a. Reinstatement. A former Postal Service employee is to be paid the rate for the first step of the grade of the position for which hired. However, for exceptional circumstances, as authorized by the district Human Resources manager, a former Postal Service employee may be placed in the first step that is less than one full step above the highest former basic wage (augmented by any general increases since the date of separation) - provided the new basic wage does not exceed the maximum step of the grade.

b. Congressional Service. A new employee who has 2 or more years of service in the legislative branch and was paid by either house of Congress may be placed in the first step that does not exceed the highest previous basic wage (augmented by statutory pay increases).

c. Transfer of Function. If a Postal Service installation assumes the function of a federal agency, the employee who performed the function may be transferred with the function. If so, the employee is placed in the first step that is less than one full step above the pretransfer basic wage - provided the basic wage does not exceed the maximum of the grade.

d. Veterans' Preference Eligible. An employee whose service seniority is established pursuant to the appropriate entrance register standing (i.e., a veterans' preference eligible) is placed in the step attained by the lower eligible with the same anniversary date for step increases as the lower eligible. (See also Handbook EL-312, Employment and Placement.)

e. Hiring Into the Rural Carrier Craft. A new employee to the Postal Service, or an existing employee hired since August 7, 1991, who transfers into the rural carrier craft, is given a new appointment and placed into Step A in the rural carrier pay schedule (RSC R or B). An existing Postal Service employee who has been on the rolls before August 7, 1991, who decides to transfer to the rural carrier craft is placed at Step C in the rural carrier pay schedule.

f. Hiring Into PS (RSC PB) and MESC (RSC CB) Schedule 2. All employees new to the Postal Service are hired into the entry step of Schedule 2. All reinstated former employees are hired into the entry step of Schedule 2 or, at the discretion of the district Human Resources manager, into a higher Schedule 2 step that is less than one full step above the highest former basic salary (augmented by any general increases since the date of separation), providing the new basic salary does not exceed the maximum salary.

422.122 Additional Appointment

If an employee is appointed to an additional position, the compensation for the position is determined according to the rules for career appointment in 422.121 above. (See 422.15 for additional information about dual employment.)

422.123 Promotion Rules

Note: See 421.43a and 421.44i for definition of promotion, and consult Exhibit 418.1, Equivalent Grades, to determine whether or not a personnel action represents a promotion.

Rules are as follows:

a. Basic Rules. The basic rules are as follows:

(1) Promotion From PS or MESC Schedule 1. For this promotion:

(a) To a position in PS (RSC PB) or MESC (RSC CB) Schedule 2: Assign the proper step in Schedule 2 by referring to Exhibit 422.123a. A new step waiting period begins on the effective date of the promotion.

(b) To a position in EAS (RSC E): Add 5 percent to the current full-time salary. If the result is below the minimum or above the maximum of the new grade, the new salary is adjusted to fit within this range.

Note: Promotions to FLSA-exempt EAS-15 to EAS-18 positions that supervise two or more full-time equivalent bargaining unit employees are instead given a supervisory differential adjustment, as described in 413.21(d).

Note: For promotion from this schedule to a nonbargaining schedule, see 413.

(c) To a position in PNS (RSC G), OSD (RSC K), MH (RSC M), IT/ASC (RSC N), CC (RSC Q), TDS (RSC T), or PPO (RSC Y): To the 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 the calculated amount falls between two steps. A new step waiting period begins unless the employee is promoted to a bargaining unit grade previously held (i.e., repromoted), in which case see 422.123(a)(4).

(2) Promotion From PS Schedule 2. For this promotion:

(a) To a position in the PS (RSC PB) or MESC (RSC CB) Schedule 2: Assign the proper step in the new grade by referring to Exhibit 422.123b. A new step waiting period begins on effective date of the promotion.

(b) To a position in EAS (RSC E): Add 5 percent to the current full-time salary. If the result is below the minimum or above the maximum of the new grade, adjust the new salary to fit within this range.

Note: Promotions to FLSA-exempt EAS-15 to EAS 18 positions that supervise two or more full-time equivalent bargaining unit employees are instead given a supervisory differential adjustment, as described in 413.21(d).

Note: For promotion from this schedule to a nonbargaining schedule, see 413.

(c) To a position in PNS (RSC G), OSD (RSC K), MH (RSC M), IT/ASC (RSC N), CC (RSC Q), TDS (RSC T), or PPO (RSC Y): To the 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 the calculated amount falls between two steps. A new step waiting period begins unless the employee is promoted to a bargaining unit grade previously held (i.e., repromoted), in which case see 422.123(a)(4).

(3) Promotion From Other Rate Schedules to PS Schedule 2. For this promotion:

(a) From PPO (RSC Y), IT/ASC (RSC N), or OSD (RSC K): To the 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 the calculated amount falls between two steps. A new step waiting period begins unless the employee is promoted to a bargaining unit grade previously held (i.e., repromoted), in which case see 422.123(a)(4).

(b) From PS (RSC P) or MESC (RSC C) Schedule 1, PNS (RSC G), MH (RSC M), CC (RSC Q), or RC (RSC R or B): Assign the proper step by referring to Exhibit 422.123a. A new step waiting period begins on the effective date of the promotion.

(c) From EAS (RSC E), Postmaster (A-E) or TDS (RSC T): To the current full-time salary, add 5 percent. Advance this amount to the next higher salary step in the new grade if the calculated amount falls between two steps. A new step waiting period begins unless the employee is promoted to a bargaining unit grade previously held (i.e., repromoted), in which case see 422.123(a)(4).

(d) From PS (RSC PB) or MESC (RSC CB) Schedule 2: Assign the proper step in the new grade by referring to Exhibit 422.123b. A new step waiting period begins on the effective date of the promotion.

(4) Repromotion. An employee is repromoted if he or she is promoted to a bargaining unit grade previously held, or to one equivalent to the one previously held, before a change to lower level, as defined further under 421.5. When a repromotion occurs, the employee is assigned to the step in the repromoted grade, or its equivalent, with waiting period credit toward the next step date as if he or she had remained continuously in that previously held grade.

Note: Effective November 20, 1999, and later, the repromotion rule stated above does not apply to employees promoted within or into the PS or MESC Schedule 2. The repromotion rule does, however, apply to employees promoted to other rate schedules.

(5) Promotion Pay Anomaly. No employee is at any time compensated less as a consequence of a promotion than that employee would have been if the employee had not been promoted but, instead, advanced in step increments in the lower grade by fulfilling the waiting time requirements necessary for step increases. This rule includes employees who were promoted to a higher grade and subsequently reassigned to their former grade. If, during any pay period following the promotion, the employee's basic wage is less than the employee would have received for that pay period if the employee had not been promoted, the difference is paid to the employee in a lump sum payment.

Note: The promotion pay anomaly policy described above does not apply to employees promoted into (or within) the PS (RSC PB) and MESC (RSC CB) Schedule 2, or to PS or MESC employees promoted into other rate schedules. (See also Exhibit 432.82.)

b. Supplemental Rules. The supplemental rules are as follows:

(1) Maximum Step. An employee is placed into the maximum step for the new grade if there is no other step below the maximum step that provides the increase specified in 422.123a above.

(2) Above Maximum Step. An employee's existing basic wage is retained if it exceeds the maximum step of the new grade.

(3) Protected Rate. This paragraph applies the rules in 422.123a to an employee whose rate of pay is protected under the provisions of 421.51, as follows:

(a) Promotion or Interim Promotion to Grade With Maximum Wage Below the Protected Rate. If an employee with a protected rate of pay receives an interim promotion to a grade that includes a maximum wage below the protected rate, the rate protection continues.

(b) Promotion or Interim Promotion to Grade With Maximum Wage Equal To, or Above, the Protected Rate. If an employee with a protected rate receives an interim promotion to a grade that includes a maximum wage equal to or above the protected rate, the employee is slotted to the step in the new grade that represents the same or higher wage protected by the special pay status. To determine the appropriate pay schedule step during slotting, only the protected rate of pay is considered (no promotion increase should be added). After the employee is slotted to the appropriate step, the rate protection terminates.

(c) Repromotion. If an employee with a protected rate receives a repromotion, the rate protection terminates and the appropriate step is assigned in accordance with 422.124a(4).

(4) Saved Rate. This paragraph applies the rules in ELM 422.123a to an employee whose rate of pay is saved under the provisions of 421.52, as follows:

(a) Promotion or Interim Promotion to Grade With Maximum Wage Below the Saved Rate. If an employee with a saved rate of pay receives an interim promotion to a grade which includes a maximum wage below the saved rate, the saved rate continues.

(b) Promotion or Interim Promotion to Grade With Maximum Wage Equal To, or Above, the Saved Rate. If an employee with a protected rate receives an interim promotion to a grade which includes a maximum wage equal to or above the saved rate, the employee is slotted to the step in the new grade that represents the same or higher wage saved by the special pay status. To determine the appropriate pay schedule step during slotting, only the saved rate of pay is considered (no promotion increase should be added). After the employee is slotted to the appropriate step, the saved rate terminates.

(c) Repromotion. If an employee with a protected rate receives a repromotion, the saved rate terminates and the appropriate step is assigned in accordance with 422.124a(4).

(5) Saved Grade. In applying the rules in 422.123a to an employee whose grade is protected under the provisions of 421.53, the employee does not receive a promotional increase unless the promotion is to a position with a grade higher than the saved grade.

(6) Rule Choice. When the wage would be more favorable to the employee, the district Human Resources manager may determine an employee's wage under rules for career appointment in 422.121 instead of under the rules for promotion increases.

(7) Exclusions. Salary received under limited appointments cannot be used as the highest previous salary when determining the employee's new salary.

Exhibit 422.123a
Promotion Chart - PS Schedule 1 to PS Schedule 2
(For promotions to PS Schedule 2 from PS Schedule 1 and from other rate schedules)
Effective November 20, 1999

How to use this chart:

1. Choose the "From Grade" table that represents the employee's current grade and step.

2. In the "To Grade" section of that table, find the row which represents the grade to which the employee is being promoted.

3. Move to the right along that row until you reach the cell directly under the employee's current step in the "From Grade" row.

4. The letter in that cell represents the step the employee should be assigned to in the new grade after the promotion action.

Exhibit 422.123b
Promotion Chart - PS Schedule 2 to PS Schedule 2
(For promotions within the P-2 and MESC-2 Schedules)
Effective November 20, 1999

How to use this chart:

1. Choose the "From Grade" table that represents the employee's current grade and step.

2. In the "To Grade" section of that table, find the row which represents the grade to which the employee is being promoted.

3. Move to the right along that row until you reach the cell directly under the employee's current step in the "From Grade" row.

4. The letter in that cell represents the step the employee should be assigned to in the new grade after the promotion action.