Title 5 — Government Organization and EmployeesRelease 119-73
§5362 Grade retention following a change of positions or reclassification
Title 5 › Part PART III— - EMPLOYEES › Subpart Subpart D— - Pay and Allowances › Chapter CHAPTER 53— - PAY RATES AND SYSTEMS › Subchapter SUBCHAPTER VI— - GRADE AND PAY RETENTION › § 5362
Summary
If an employee is moved to a lower-graded job because of a reduction-in-force and had worked 52 straight weeks in one or more higher-graded jobs under the same rules, they can keep the higher grade as their "retained grade" for two years from the move. If a job itself is lowered in grade, the worker also gets the prior higher grade as a retained grade for two years, unless the job had not been at that higher grade for at least one continuous year right before the cut. For those two years the retained grade counts as the employee’s grade for pay, pay rules, retirement, life insurance, and eligibility for training and promotion. It does not count for deciding who is placed by reduction-in-force rules, for applying reduction-in-force procedures, or for other exceptions OPM may make. The retained-grade status ends if the employee has a break in service of one or more workdays, is demoted for personal cause or at their request, accepts or declines a reasonable offer at or above the retained grade, or asks in writing to end it.
Full Legal Text
Title 5, §5362
Government Organization and Employees — Source: USLM XML via OLRC
(a)Any employee—
(1)who is placed as a result of reduction-in-force procedures from a position subject to this subchapter to another position which is subject to this subchapter and which is in a lower grade than the previous position, and
(2)who has served for 52 consecutive weeks or more in one or more positions subject to this subchapter at a grade or grades higher than that of the new position,
(b)(1)Any employee who is in a position subject to this subchapter and whose position has been reduced in grade is entitled, to the extent provided in subsection (c) of this section, to have the grade of such position before reduction be treated as the retained grade of such employee for the 2-year period beginning on the date of the reduction in grade.
(2)The provisions of paragraph (1) of this subsection shall not apply with respect to any reduction in the grade of a position which had not been classified at the higher grade for a continuous period of at least one year immediately before such reduction.
(c)For the 2-year period referred to in subsections (a) and (b) of this section, the retained grade of an employee under such subsection (a) or (b) shall be treated as the grade of the employee’s position for all purposes (including pay and pay administration under this chapter and chapter 55 of this title, retirement and life insurance under chapters 83, 84, and 87 of this title, and eligibility for training and promotion under this title) except—
(1)for purposes of subsection (a) of this section,
(2)for purposes of applying any reduction-in-force procedures, or
(3)for such other purposes as the Office of Personnel Management may provide by regulation.
(d)The foregoing provisions of this section shall cease to apply to an employee who—
(1)has a break in service of one workday or more;
(2)is demoted (determined without regard to this section) for personal cause or at the employee’s request;
(3)is placed in, or declines a reasonable offer of, a position the grade of which is equal to or higher than the retained grade; or
(4)elects in writing to have the benefits of this section terminate.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Prior Provisions
A prior section 5362, Pub. L. 89–554, Sept. 6, 1966, 80 Stat. 473, Pub. L. 95–251, § 2(a)(1), (b)(1), Mar. 27, 1978, 92 Stat. 183, which related to hearing examiners, was renumbered section 5372 of this title by Pub. L. 95–454, title VIII, § 801(a)(3)(A)(ii), Oct. 13, 1978, 92 Stat. 1221.
Amendments
1993—Subsec. (c). Pub. L. 103–89 substituted “chapter 55 of this title, retirement and life insurance under chapters 83, 84, and 87” for “chapters 54 and 55 of this title, retirement and life insurance under chapters 83 and 87” in introductory provisions, redesignated par. (4) as (3), and struck out former par. (3) which read as follows: “for purposes of determining whether the employee is covered by the performance management and recognition system established under chapter 54 of this title, or”. 1984—Subsec. (c)(3). Pub. L. 98–615 substituted “performance management and recognition system established under chapter 54” for “merit pay system established under section 5402”.
Statutory Notes and Related Subsidiaries
Effective Date
of 1993 AmendmentAmendment by Pub. L. 103–89 effective Nov. 1, 1993, see section 3(c) of Pub. L. 103–89, set out as a note under section 3372 of this title.
Effective Date
of 1984 Amendment section 205 of Pub. L. 98–615 provided that amendment by Pub. L. 98–615 was effective Oct. 1, 1984, and applicable with respect to pay periods commencing on or after that date, with certain exceptions and qualifications. Additional Pay and Benefits for Employees Reduced in Grade On or After January 1, 1977, Etc.Pub. L. 95–454, title VIII, § 801(b), Oct. 13, 1978, 92 Stat. 1222, provided that: “(1) Under
Regulations
prescribed by the Office of Personnel Management, any employee—“(A) whose grade was reduced on or after January 1, 1977, and before the
Effective Date
of the
Amendments
made by subsection (a) of this section [see
Effective Date
note set out under section 5361 of this title] under circumstances which would have entitled the employee to coverage under the provisions of section 5362 of title 5, United States Code (as amended by subsection (a) of this section) if such
Amendments
had been in effect at the time of the reduction; and “(B) who has remained employed by the Federal Government from the date of the reduction in grade to the
Effective Date
of the
Amendments
made by subsection (a) of this section without a break in service of one workday or more; shall be entitled— “(i) to receive the additional pay and benefits which such employee would have been entitled to receive if the
Amendments
made by subsection (a) of this section had been in effect during the period beginning on the
Effective Date
of such reduction in grade and ending on the day before the
Effective Date
of such
Amendments
, and “(ii) to have the
Amendments
made by subsection (a), of this section apply to such employee as if the reduction in grade had occurred on the
Effective Date
of such
Amendments
. “(2) No employee covered by this subsection whose reduction in grade resulted in an increase in pay shall have such pay reduced by reason of the
Amendments
made by subsection (a) of this section. “(3)(A) For purposes of this subsection, the requirements under paragraph (1)(B) of this subsection, relating to continuous employment following reduction in grade, shall be considered to be met in the case of any employee—“(i) who separated from service with a right to an immediate annuity under chapter 83 of title 5, United States Code, or under another retirement system for Federal employees; or “(ii) who died. “(B) Amounts payable by reason of subparagraph (A) of this paragraph in the case of the death of an employee shall be paid in accordance with the provisions of subchapter VIII of chapter 55 of title 5, United States Code, relating to settlement of accounts in the case of deceased employees. “(4) The Office of Personnel Management shall have the same authority to prescribe
Regulations
under this subsection as it has under section 5365 of title 5, United States Code, with respect to subchapter VI of chapter 53 of such title, as added by subsection (a) of this section.”
Reference
Citations & Metadata
Citation
5 U.S.C. § 5362
Title 5 — Government Organization and Employees
Last Updated
Apr 6, 2026
Release point: 119-73