(a) An incumbent of a position brought into the career service or otherwise made subject to the classification and pay system of this chapter after December 31, 1967, in a grade whose maximum pay step is lower than the compensation he last received in the unclassified position, shall receive the compensation he received in the unclassified position as long as he continues in that position and such compensation is higher than the maximum step. If his pay in the unclassified position equaled a pay step in the grade he shall receive compensation of that step. If it fell between two steps of the grade, he shall receive the compensation of the higher of the two steps. However, in making initial pay adjustments under this section, the provisions of section 557 of this subchapter may be applied to all employees under the General Schedule.
(b) An incumbent member of the classified service who is, either individually or as a member of a class, reallocated to a higher grade of the classification and pay system, shall receive compensation at the first step within such higher grade that results in an actual increase in the compensation he was receiving immediately prior to his reallocation.