classes in which the salary of a class is adjusted to the responsibility and difficulty of the work. The salary range for each class will consist of minimum, intervening, and maximum rates of pay to provide for salary advancements within the range. In arriving at such salary schedules, consideration will be given to the prevailing rates for comparable positions in other departments of the State and to other relevant factors. The State administrative agencies will adopt plans for salary advancements based upon quality and length of service. Salary laws and rules and regulations uniformly applicable to departments of the State government will be given consideration in the formulation of the compensation plan. § 70.8

Recruitment and appointment of personnel.

(a) All positions in the State agencies, except those hereinbefore exempted, will be filled by personnel selected on the basis of merit, and in accordance with standards and procedures set forth in rules and regulations for the merit system.

(b) Regulations governing the administration of examinations will include the following provisions:

(1) Examinations for entrance to the service will be conducted on an open competitive basis, with adequate publicity, and with a reasonable period for filing applications.

(2) Applicants admitted to examinations will meet the minimum requirements for the positions for which they apply as set forth in the specifications for the positions.

(3) Examinations will be practical in nature, constructed to reveal the capacity of the applicant for the position for which he is competing and his general background and related knowledge, and will be rated objectively. A practical written test will be included, except that where exceptional qualifications of a scientific or professional character are required, and competition through an assembled examination is impracticable, an unassembled examination may be held.

(4) Examinations will also include: A rating of training and experience for the more responsible positions; an oral examination for positions requiring frequent contact with the public, or which involve important supervisory or administrative duties; and a performance test

for positions involving the operation of office machines.

(c) The Merit System Director will prepare and establish registers of eligibles in the order of their final scores and will maintain the registers, make certification of eligibility, and keep all examination records.

(d) All positions, not specifically exempted herein, are to be filled from registers of eligibles, except for emergency and provisional appointments for limited periods. Appointments will be made by selection from a limited number of the highest available eligibles on the appropriate register.

(e) In the absence of an appropriate register, provisional appointments may be made pending competitive examination, provided each provisional appointee is certified by the Merit System Director as meeting at least the minimum qualifications established for the class of position, and further provided that no individual may receive successive provisional or emergency appointments.

(f) Personnel selected from registers to fill permanent positions will serve a fixed probationary period. Permanent appointment will be based upon an evaluation in writing of the performance of the employee during the probationary period.

(g) An employee of an agency who has received appointment under a merit system with standards substantially comparable to these will retain the status held by him under such merit system in the event the State agency is placed under the jurisdiction of another merit system.

(h) An employee of an agency in which no comparable merit system has been in operation may, upon the initial extension of the merit system to such agency, obtain status through examination on an open competitive or qualifying basis as specified in the merit system rules and regulations. Such rules and regulations may permit an employee with a specified period of service in the agency to be automatically admitted to the examination covering the position held by him, and may permit him to be retained at the discretion of the State agency, providing he attains a passing grade in such examination.

of the eligible permanent employees in the agency or in the career service, upon the basis of demonstrated capacity and quality and length of service. Promotions, whether or not from a competitive promotional register, will require certification of eligibility by the Merit System Director.

§ 70.10 Layoffs and separations.

(a) Regulations will be established governing layoffs, suspensions and separations, and governing leaves and the conditions for payment of salary at termination of services. Such regulations will include provisions for adequate competition among employees in classes affected by reduction in force, and for retention of employees based upon systematic consideration of type of appointment, length of service and efficiency.

(b) Employees who have completed the required probationary period of appointment and acquired permanent status will not be subject to separation except for cause, or for reasons of curtailment of work or lack of funds. In the event of separation, permanent employees will have the right of appeal to an impartial body through an established procedure provided for in the merit system rules. § 70.11 Performance evaluations.

A system of periodic evaluations of work performance will be maintained. The manner in which such performance evaluations are to be used in promotions, salary advancements, and separations, as well as in the improvement of individual performance, will be provided for by regulation. § 70.12

Personnel records and reports. Such personnel records as are necessary for the proper maintenance of a merit system and effective personnel administration will be maintained by the State administrative agency. Periodic reports will be published by the Merit System Council.

PART 73-STANDARDS OF CONDUCT

73.735-903

Annual reporting.

Subpart A-General Provisions

73.735-904

73.735-1208 Requesting waivers or exemptions. 73.735-1209 Negotiations for contracts or grants.

73.735-1210

Salary from two sources.

Appendix A-Index to Some Statutes and Executive Orders Related to Conflict of Interest and Other Prohibited Activities.

Appendix B-Professional Occupations. Appendix C-Additional Positions the Incumbents of Which Must Complete Employment and Financial Interest Statements.

Appendix D Confidential Statement of Employment and Financial Interests (For Use by Regular Government Employees).

Appendix E-Confidential Statement of Employment and Financial Interests (For Use by Special Government Employees)

Appendix F-Code of Ethics for Government Service.

AUTHORITY: The provisions of this Part 73 issued under E.O. 11222 of May 8, 1965, 30 F.R. 6469, 3 CFR, 1965 Supp.; 5 CFR 735.104.

SOURCE: The provisions of this Part 73 appear at 31 F.R. 4644, Mar. 18, 1966, unless otherwise noted.

Subpart A-General Provisions

§ 73.735-101 Principles and purpose.

In order to assure that the business of this Department is conducted effectively, objectively and without improper influence or appearance thereof, all employees must be persons of integrity and observe unquestionable standards of behavior. An employee shall not engage in criminal, infamous, dishonest, immoral, or notoriously disgraceful conduct or other conduct prejudicial to the Government. An employee must avoid conflicts of his private interests with his public duties and responsibilities. Also, he must not do indirectly that which is improper for him to do directly. For example, mem

bers of his family may not accomplish for him that which he, himself, may not do. The propriety of any activity must be considered in relation to general ethical standards of the highest order. Certain standards are set by law. Others are set by regulation and by policy. This part references or discusses these standards and constitutes the Department's regulations on this subject. Failure to observe any of the regulations in this part is cause for disciplinary action.

§ 73.735-102 Applicability.

The regulations in this part apply to all officers and employees of the Department, including regular officers of the Public Health Service Commissioned Corps and Reserve Officers of the Corps while on active duty, except that the regulations in this part apply to special Government employees only to the extent stated in Subpart L of this part. A special Government employee is defined by law as 66* * * an officer or employee * * who is retained, designated, appointed, or employed to perform, with or without compensation, for not to exceed 130 days during any period of 365 consecutive days, temporary duties whether on a full-time or intermittent basis

(a) Supervisors are responsible to a large degree for maintaining high standards of conduct by employees they supervise. They shall be aware of the Department regulations and apply the standards to work they do and supervise. They shall inform new employees as they come on duty and make sure that all employees are kept aware of the regulations. Supervisors shall take suitable action, including disciplinary action in accordance with Subpart K of this part, when violations occur.

(b) Each employee shall be responsible for observing all generally accepted rules of conduct and with the specific provisions of law and the regulations in this part. He shall secure approvals when required and file statements of outside work and financial interests as appropriate, as stated in this part. He is subject to discipline in accordance with Subpart K of this part, when he violates laws, rules or regulations on conduct or the ethical principles involved. When an employee has doubt about any provision, he shall consult his supervisor, the personnel office, the administrative

office or the counselor or deputy counselor.

§ 73.735-104 Advice and guidance.

The following sources shall provide guidance and assistance as described on matters covered by the regulations in this part:

(a) Supervisors shall advise employees who come to them with questions on matters covered by the regulations in this part, or, as they consider appropriate, shall refer such questions to higher levels of management, the personnel office, or the counselor or deputy counselors who have been designated in accordance with paragraphs (b) and (c) of this section.

(b) The Regional Attorneys are designated deputy counselors for all employees of the Department in the geographic areas covered by their respective regions, except as specified in paragraph (c) (3) of this section. Included are employees and special Government employees of the regional offices, Public Health Service hospitals, clinics, or other Public Health Service installations, District Offices and Payment Centers of the Social Security Administration, and District Offices of the Food and Drug Administration. Deputy counselors shall:

(1) Give authoritative advice and guidance when requested to employees, special Government employees, management officials and personnel offices within their areas of jurisdiction.

(2) Receive information on and attempt to resolve, or refer to the Department counselor, conflicts of interest or appearances of conflicts of interest in Statements of Employment and Financial Interests submitted by employees and special Government employees to whom they are required to give advice and guidance, which are not resolved at lower levels.

(c) The Assistant General Counsel, Business and Administrative Law Division, Office of the General Counsel, is designated as the counselor for the Department. He shall:

(1) Serve as the Department's designee to the Civil Service Commission on matters covered by the regulations in this part.

(2) Coordinate the Department's counseling services and assure that counseling and interpretations on questions of conflicts of interest and other matters covered by the regulations in this

part are available as needed to deputy counselors.

(3) Render authoritative advice and guidance on matters covered by the regulations in this part which are presented to him by employees, special Government employees, management or personnel offices in the Washington, D.C., metropolitan area or in the Social Security Administration headquarters, Baltimore, Md.

(4) Receive information on and resolve or forward to the Secretary for consideration, conflicts or appearance of conflicts which appear in the Statements of Employment and Financial Interests submitted under Subpart J or Subpart L of this part, which are not resolved at a lower level.

(d) The names and addresses of the counselor and deputy counselors will be made available to employees by appropriate bulletins, circulars, or other releases of a current nature. Any employee may also obtain the name and address of his counselor or deputy counselor through his personnel office and may seek advice and guidance therefrom, either indirectly through his supervisor or the personnel office, or directly in person, by telephone, or by mail. § 73.735-105 Supplementation.

Operating agencies may supplement the regulations in this part with additional requirements where necessary. Such requirements shall not be inconsistent with Civil Service Regulations and this part. The additional provisions shall be submitted to the Division of Personnel Management, Office of Administration, Office of the Secretary, for clearance and publication as necessary, as supplements to this part. When issued, a copy of the supplement shall be provided to each employee to whom it applies.

Subpart B-Miscellaneous Statutory Provisions

available for review upon the employee's request to the deputy counselor for his part of the Department or to the counselor.

Subpart C-Gifts, Entertainment and

Favors

§ 73.735-301 Accepting gifts and expenses from outside sources.

(a) Law provides that a Federal employee shall not accept anything of value for or because of any official act he has performed or will perform. (See criminal provisions in Appendix A of this part.) In this connection, an employee shall not solicit or accept directly or indirectly any gift, gratuity, favor, entertainment, loan or any other thing of monetary value from members of the public with whom he has official relationships, whether or not proffered for or because of any action or decision of the employee, such as from a person or organization that:

(1) Has, or is seeking to obtain, contractual or other business or financial relations with his agency;

(2) Conducts operations or activities that are regulated by his agency; or

(3) Has interests that may be substantially affected by the performance or nonperformance of his official duties.

(b) Exceptions to the provisions of paragraph (a) of this section are set forth as follows:

(1) When the acceptance of gifts or expenses clearly is motivated by obvious family or personal relationships (such as those between the parents, children, or spouse of the employee and the employee) and not by the business of the persons concerned.

(2) Food and refreshments of nominal value may be accepted on infrequent occasions in the ordinary course of a luncheon or dinner meeting or other meeting or on an inspection tour where an employee may properly be in attendance.

(3) Loans may be accepted from banks or other financial institutions on customary terms to finance proper and usual activities of employees, such as home mortgage loans.

(4) Unsolicited advertising or promotional material may be accepted, such as pens, pencils, note pads, calendars, and other items of nominal intrinsic value.

(5) An employee may accept travel expenses from outside sources only when acceptance is approved in accordance with the provisions of the Department

Travel Manual. The Travel Manual states restrictions in this connection: "Neither payment in cash nor services in kind may be accepted where an inspectional or administrative-supervisory relationship exists between the traveler and the non-Federal organization offering to pay his expenses. Examples are: Food and Drug inspectors may not receive travel expenses in cash or kind from any individual business which it inspects unless the inspection is under the program of Certification Services or is part of a reconditioning operation; staff of the Department who have responsibility for making grants to States, local governments, or institutions may not receive travel expenses in cash or kind from organizational segments of the States, local governments, or institutions to which the traveler has responsibility for making grants or assuring compliance with grant regulations; grant-in-aid auditors may not accept travel expenses in cash or kind from any organization which they have responsibility for auditing."

§ 73.735-302 Offers of gifts and expenses from outside sources.

Law provides criminal penalties for whoever directly or indirectly receives, gives, offers or promises anything of value for performance of or to influence the performance of an official act (Item 2, Appendix A of this part).

§ 73.735-303 Gifts to official superiors.

An employee shall not solicit contributions from another employee for a gift to an employee in a superior official position. An employee in a superior official position shall not accept a gift presented as a contribution from employees receiving less salary than himself. employee shall not make a donation as a gift to an employee in a superior official position (Item 24, Appendix A of this part).

§ 73.735-304 Acceptance of awards.

An