10 U.S.C. § 858a

(a) A court-martial sentence of an enlisted member in a pay grade above E–1, as set forth in the judgment of the court-martial entered into the record under section 860c of this title (article 60c), that includes— (1) a dishonorable or bad-conduct discharge; (2) confinement; or (3) hard labor without confinement; reduces that member to pay grade E–1, if such a reduction is authorized by regulation prescribed by the President. The reduction in pay grade shall take effect on the date on which the judgment is so entered. (b) If the sentence of a member who is reduced in pay grade under subsection (a) is set aside or reduced, or, as finally affirmed, does not include any punishment named in subsection (a)(1), (2), or (3), the rights and privileges of which he was deprived because of that reduction shall be restored to him and he is entitled to the pay and allowances to which he would have been entitled, for the period the reduction was in effect, had he not been so reduced.