The maximum payable rate rule is a special rule that allows an agency to set pay for a General Schedule (GS) employee at a rate above the rate that would be established using normal rules, based on a higher rate of pay the employee previously received in another federal job …

(1) Designation of officials with the authority to approve and set pay under this section; (2) Any situations in which the agency must use an employee's highest previous rate; (3) Any situations in which the agency may exercise its discretion in using an employee's highest previous rate;

When an employee's highest previous rate (as determined under § 531.222) is based on a GS rate or an LEO special base rate paid under the GS pay system, an agency must determine the maximum payable rate of basic pay that may be paid to the employee as follows:

Maximum payable rate is an employee's best entitlement based on highest previous rate (HPR). An employee may be paid under maximum payable rate rules at management's discretion provided the employee does not have a higher entitlement under statute, e.g., as a result of pay retention or the two-step promotion rule.

(1) An agency may apply the maximum payable rate rule as described in this section to determine an employee's payable rate of basic pay under the GS pay system at a rate higher than the otherwise applicable rate upon reemployment, transfer, reassignment, promotion, demotion, change in type of appointment, termination of a critical position pay ...

(1) Subject to the provisions of § 532.407 of this subpart and part 536 of this chapter, when an employee is reemployed, reassigned, transferred, promoted, or changed to a lower grade, the agency may fix the pay at any rate of the new grade which does not exceed the employee 's highest previous rate.

The employee's highest previous rate (HPR) is the GS-11, step 5, rate on the General Schedule. (As provided by 5 CFR 531.222(b), use the employee's underlying GS rate as the HPR in applying the maximum payable rate rule in 5 CFR 531.221(b), which is designed to use underlying GS rates to avoid the need for geographic conversion.)

The agency must apply the maximum payable rate rule as follows: (1) When the employee is assigned to an official worksite within the geographic boundaries of a formerly applicable special rate schedule , compare the former special rate to the rates of basic pay in the highest applicable rate range for the employee 's current position of record ...

See the maximum payable rate rule fact sheet at - http://www.opm.gov/oca/pay/HTML/MPRRule.asp

Retaining a special rate as HPR. An official designated by the head of the operating unit may approve use of a special rate as HPR if the employee's services will be better utilized and a greater contribution made to program in the position to which the employee is being reassigned.