(A) Except as otherwise provided in regulations made by the adjutant general, a court-martial sentence of an enlisted member in a pay grade above E-1 that includes a dishonorable or bad-conduct discharge, confinement, or hard labor without confinement reduces the member to pay grade E-1, effective on the date the convening authority approves the sentence.

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(B) If the sentence of a member who is reduced in pay grade under division (A) of this section is set aside or disapproved, or as finally approved does not include a dishonorable or bad-conduct discharge, confinement, or hard labor without confinement, the rights and privileges of which the member was deprived because of the reduction in pay are restored, and the member shall be paid the pay and allowances that the member would have been paid for the period the reduction was in effect had the member not been reduced in pay.