(a) General rule.--An enlisted member in a pay grade above E-1 receiving a sentence by a court-martial that includes a dishonorable or bad-conduct discharge or confinement shall receive a reduction in pay grade to E-1 effective on the date the sentence is approved.

(b) Sentence no longer effective.--If an enlisted member receives a reduction in pay grade under subsection (a) and the sentence which led to a reduction in pay grade is later set aside, disapproved or, as finally approved, does not include a dishonorable or bad-conduct discharge or confinement, the rights and privileges of which the person was deprived because of that reduction shall be restored, including pay grade and allowances.