	Pay Practices for Postmasters

The vast majority of postmasters were paid under the Service’s EAS, which  has 26 pay grades and covers essentially all supervisory and management  employees. This change  resulted in the basic pay minimums of EAS-15 and EAS-16 exempt  supervisors being less than the basic pay maximum of a grade 5 clerk,  which was the most populated grade and pay level of the largest bargaining  unit. The SDA policy  provided that EAS-15 exempt supervisors and above were to be paid no  less than 5 percent more than the basic pay maximum of a grade 5 clerk. Conclusions

Although the Postal Reorganization Act of 1970 requires that supervisors  and other managerial personnel be paid salaries that provide them an  adequate and reasonable difference in pay over that of clerks and carriers,  the act did not specify what constitutes an adequate and reasonable  difference or whether the difference should apply to basic or gross pay. Postmasters’ pay included basic pay; variable pay; merit awards; and premium pay, including overtime. Two craft employees earned more in basic pay than their local

postmasters in 1999. About one-half of 1 percent of craft employees earned more in gross pay than their local postmasters. The five organizations we selected had pay policies to minimize

instances of craft employees earning more than their supervisors. The five organizations indicated that craft employees will occasionally earn more than their supervisors, but this is the exception and not the norm. In 1996, the Service lowered the the basic pay minimums of the EAS. Recommendations for Executive Action

In order to be in a better position to evaluate its SDA policy and the pay differences between postmasters and their craft employees, we recommend that the Postmaster General use postal payroll and any other comparable data to periodically:  determine the extent to which clerks and carriers may be earning more than their local postmasters, and the reasons why, if applicable; and reassess the adequacy and reasonableness of the pay differences between postmasters and the clerks and carriers they supervise. Comparison of Current Law to the Proposed Postmasters’ Fairness and Rights Act and Views on the Proposed Act

Under the Postal Reorganization Act of 1970, the Service is required to  provide a program of consultation with organizations representing  supervisors and postmasters under which the organizations are entitled to  participate directly in the planning and development of pay policies and  schedules, fringe benefits, and other programs relating to their members  (39 U.S.C.
What GAO Found

The Postal Reorganization Act of 1970 requires the Postal Service to pay wages comparable to those of the private sector. It also requires the Service to provide adequate and reasonable pay differences between clerks and carriers and their supervisors, such as postmasters, although the act does not specify what constitutes adequate and reasonable differences. Furthermore, the act requires the Service to consult with supervisor and postmaster organizations when planning and developing pay policies and other programs affecting their members. Since the mid-1970s, two postmaster organizations have voiced concerns that adequate and reasonable pay differences do not exist between postmasters and the clerks and carriers they supervise. Recently, the organizations took their concerns to Congress. The resulting Postmasters' Fairness and Rights Act would make substantive changes in the way postmasters' pay is determined. Most postmasters are now paid under the Service's Executive and Administrative Schedule (EAS), which is the salary schedule that applies to nearly all supervisory and management employees. Generally, postmaster pay consists of basic pay; pay-for-performance; lump-sum merit awards; and supplemental pay, such as overtime. In 1996, the Service lowered the minimum basic pay of the 26 EAS grades. This resulted in the minimum basic pay of EAS-15 and EAS-16 supervisors being less than the maximum basic pay of a grade 5 clerk, which was the most populated grade and pay level of the largest bargaining unit. Because of this and the 1970 Act's requirement that an adequate and reasonable pay difference be maintained, the Service established a Supervisory Differential Adjustment (SDA) policy for EAS-15 and above supervisors who are not eligible to receive overtime pay. This policy provides that these supervisors will be paid no less than five percent more than the maximum basic pay of a grade 5 clerk. GAO's analyses showed that two craft employees earned more in basic pay than did their local postmasters in 1999, and about one-half of one percent of craft employees earned more in gross pay than did their local postmasters. The five organizations that GAO selected to discuss pay practices had pay policies to minimize instances of craft employees earning more than their supervisors. These organizations indicated that craft employees only occasionally earned more than their supervisors.