---
kind: "section"
citation: "5 U.S.C. § 5362"
title: "5"
title_heading: "Government Organization and Employees"
number: "5362"
heading: "Grade retention following a change of positions or reclassification"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/5/5362"
units:
  - "Part III — Employees"
  - "Subpart D — Pay and Allowances"
  - "Chapter 53 — Pay Rates and Systems"
  - "Subchapter VI — Grade and Pay Retention"
---

# §5362. Grade retention following a change of positions or reclassification

- (a) Any [employee](/usc/5/5361.md?p=1)—
  - (1) who is placed as a result of [reduction-in-force procedures](/usc/5/5361.md?p=7) from a [position subject to this subchapter](/usc/5/5361.md?p=6) to another [position](/usc/5/5102.md?p=a-3) which is subject to this subchapter and which is in a lower [grade](/usc/5/5102.md?p=a-5) than the previous [position](/usc/5/5102.md?p=a-3), and
  - (2) who has served for 52 consecutive weeks or more in one or more [positions](/usc/5/5102.md?p=a-3) subject to this subchapter at a [grade](/usc/5/5102.md?p=a-5) or [grades](/usc/5/5102.md?p=a-5) higher than that of the new [position](/usc/5/5102.md?p=a-3),

  is entitled, to the extent provided in [subsection (c)](#c) of this section, to have the [grade](/usc/5/5102.md?p=a-5) of the [position](/usc/5/5102.md?p=a-3) held immediately before such placement be considered to be the [retained grade](/usc/5/5361.md?p=3) of the [employee](/usc/5/5361.md?p=1) in any [position](/usc/5/5102.md?p=a-3) he holds for the 2-year period beginning on the date of such placement.

- (b)
  - (1) Any [employee](/usc/5/5361.md?p=1) who is in a [position subject to this subchapter](/usc/5/5361.md?p=6) and whose [position](/usc/5/5102.md?p=a-3) has been reduced in [grade](/usc/5/5102.md?p=a-5) is entitled, to the extent provided in [subsection (c)](#c) of this section, to have the [grade](/usc/5/5102.md?p=a-5) of such [position](/usc/5/5102.md?p=a-3) before reduction be treated as the [retained grade](/usc/5/5361.md?p=3) of such [employee](/usc/5/5361.md?p=1) for the 2-year period beginning on the date of the reduction in [grade](/usc/5/5102.md?p=a-5).
  - (2) The provisions of paragraph (1) of this subsection shall not apply with respect to any reduction in the [grade](/usc/5/5102.md?p=a-5) of a [position](/usc/5/5102.md?p=a-3) which had not been classified at the higher [grade](/usc/5/5102.md?p=a-5) for a continuous period of at least one year immediately before such reduction.
- (c) For the 2-year period referred to in subsections [(a)](#a) and [(b)](#b) of this section, the [retained grade](/usc/5/5361.md?p=3) of an [employee](/usc/5/5361.md?p=1) under such subsection [(a)](#a) or [(b)](#b) shall be treated as the [grade](/usc/5/5102.md?p=a-5) of the [employee](/usc/5/5361.md?p=1)’s [position](/usc/5/5102.md?p=a-3) for all purposes (including [pay](/usc/5/7511.md?p=a-4) and [pay](/usc/5/7511.md?p=a-4) [administration](/usc/5/9801.md?p=1) under this chapter and [chapter 55](/usc/5/chptIII/sptD/ch55.md) of this title, retirement and life insurance under chapters [83](/usc/5/chptIII/sptG/ch83.md), [84](/usc/5/chptIII/sptG/ch84.md), and [87](/usc/5/chptIII/sptG/ch87.md) of this title, and eligibility for [training](/usc/5/4101.md?p=4) and promotion under this title) except—
  - (1) for purposes of [subsection (a)](#a) of this section,
  - (2) for purposes of applying any [reduction-in-force procedures](/usc/5/5361.md?p=7), or
  - (3) for such other purposes as the [Office](/usc/5/5402.md?p=3) of Personnel Management may provide by regulation.
- (d) The foregoing provisions of this section shall cease to apply to an [employee](/usc/5/5361.md?p=1) who—
  - (1) has a break in [service](/usc/5/8401.md?p=26) of one workday or more;
  - (2) is demoted (determined without regard to this section) for personal cause or at the [employee](/usc/5/5361.md?p=1)’s request;
  - (3) is placed in, or declines a reasonable offer of, a [position](/usc/5/5102.md?p=a-3) the [grade](/usc/5/5102.md?p=a-5) of which is equal to or higher than the [retained grade](/usc/5/5361.md?p=3); or
  - (4) elects in writing to have the benefits of this section terminate.

## Source credit

(Added Pub. L. 95–454, title VIII, § 801(a)(1), Oct. 13, 1978, 92 Stat. 1219; amended Pub. L. 98–615, title II, § 204(a)(1), Nov. 8, 1984, 98 Stat. 3216; Pub. L. 103–89, § 3(b)(1)(K), Sept. 30, 1993, 107 Stat. 982.)

## Notes

### 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 Amendment

Amendment 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: Under regulations prescribed by the Office of Personnel Management, any employee— 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 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— 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 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. 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. 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— 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 who died. 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. 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.”