[Federal Register: February 20, 2004 (Volume 69, Number 34)]
[Proposed Rules]
[Page 8029-8071]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20fe04-14]
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Part III
Department of Homeland Security
Office of Personnel Management
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5 CFR Chapter XCVII and Part 9701
Department of Homeland Security Human Resources Management System;
Proposed Rule
[[Page 8030]]
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DEPARTMENT OF HOMELAND SECURITY
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Chapter XCVII and Part 9701
RIN 3206-AK31/1601-AA-19
Department of Homeland Security Human Resources Management System
AGENCY: Department of Homeland Security; Office of Personnel
Management.
ACTION: Proposed rule.
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SUMMARY: The Department of Homeland Security (DHS) and the Office of
Personnel Management are issuing proposed regulations to establish a
new human resources management system within DHS, as authorized by the
Homeland Security Act of 2002. The affected subsystems include the
systems governing basic pay, classification, performance management,
labor relations, adverse actions (e.g., disciplinary actions), and
employee appeals. These changes are designed to ensure that DHS' human
resources management system aligns with the Department's critical
mission requirements and protects the civil service rights of its
employees.
DATES: Comments must be received on or before March 22, 2004.
ADDRESSES: You may submit comments, identified by docket number DHS-
2004-001 and/or RIN number 3206-AK31, by any of the following methods:
E-Docket Web Site: http://www.epa.gov/edocket.
Follow the instructions for submitting comments at that web site.
Mail: DHS/OPM HR System Public Comments, P.O.
Box 14474, Washington, DC 20044-4474.
Hand delivery/Courier: OPM Resource Center, Room
B469, Office of Personnel Management, 1900 E Street, NW., Washington,
DC. Delivery must be made between 10 a.m. and 2 p.m., Monday through
Friday, except Federal holidays.
Federal Rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Instructions: All submissions must include the agency name and
docket number or Regulation Identifier Number (RIN) for this
rulemaking. The online e-docket system is DHS/OPM's preferred method
for receiving comments. Mailed or hand-delivered comments must be in
paper form. No mailed or hand-delivered comments in electronic form
(CDs, floppy disk, or other media) will be accepted. All comments
received, whether mailed, hand-delivered, or submitted online, will be
posted without change or omission to the e-docket at: http://www.epa.gov/edocket.
For detailed instructions on submitting comments
and additional information on the rulemaking process, see the "Public
Participation" and "Electronic Access and Filing" headings in the
Supplementary Information section of this document.
Docket: For access to the e-docket to read background documents,
submit comments, and read comments received, go to http://www.epa.gov/edocket.
To read the hard-copy originals of mailed and hand-delivered
comments, visit the OPM Resource Center, Room B469, Office of Personnel
Management, 1900 E Street, NW., Washington, DC, between 10 a.m. and 2
p.m., Monday through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: At OPM: Ronald P. Sanders, (202) 606-
9150; at DHS: Melissa Allen, (202) 692-4272.
SUPPLEMENTARY INFORMATION: The Department of Homeland Security (DHS or
"the Department") and the Office of Personnel Management (OPM) are
proposing to establish a new human resources (HR) management system
within DHS under 5 U.S.C. 9701, as enacted by section 841(a)(2) of the
Homeland Security Act of 2002 (Public Law 107-296, November 25, 2002).
The following information is intended to provide interested parties
with relevant background material about (1) the Homeland Security Act,
(2) the process used to design options for a new HR system, (3) a
summary of the options developed and the review of those options by the
DHS Human Resource Management System Senior Review Advisory Committee,
(4) an evaluation of the design process, (5) a description of the
proposed new HR system, and (6) an analysis of the costs and benefits
of the proposed system.
The Homeland Security Act of 2002
Background
On November 25, 2002, President George W. Bush signed Public Law
107-296, the Homeland Security Act, which established DHS. On March 1,
2003, more than 20 organizations and functions previously assigned to
other Federal agencies were merged officially into the new Department,
making this the most significant reorganization in the executive branch
of the Federal Government in more than 50 years. DHS was created with
the overriding mission of protecting the Nation against further
terrorist attacks. DHS analyzes threats and intelligence, guards our
borders and airports, protects our critical infrastructure, coordinates
the response of our Nation to emergencies, and implements other
security measures. DHS also is committed to enhancing public services
such as natural disaster assistance.
Authority To Establish a New HR System
In creating the new Department, Congress provided a historic
opportunity to design a 21st century HR management system that is
mission-centered, fair, effective, and flexible. One of the most
important features of the Homeland Security Act was the authority
granted jointly to the Secretary of Homeland Security and the Director
of OPM under 5 U.S.C. 9701(a) to establish a new HR management system
within the Department. By law, this authority is to be exercised
through the issuance of regulations prescribed jointly by the Secretary
and the Director.
Through this authority, DHS may establish a modern, flexible HR
system to support its mission and improve employee and organizational
performance. In granting this authority, Congress gave DHS flexibility
to create an HR system that supports the agency's primary mission of
protecting Americans from terrorist attack without compromising
fundamental employee rights. In so doing, DHS has the authority to
waive or modify the following provisions of title 5, United States
Code:
The rules governing performance appraisal
systems established under chapter 43;
The General Schedule classification system
established under chapter 51;
The pay systems for General Schedule employees,
Federal Wage System employees, Senior Executive Service members, and
certain other employees, as set forth in chapter 53;
The labor relations system established under
chapter 71;
The rules governing adverse actions taken under
chapter 75; and
The rules governing the appeal of adverse
actions and certain other actions under chapter 77.
The "section 9701 authority" does not extend to systems or rules
established under an authority outside the above-listed title 5
chapters. (See 5 U.S.C. 9701(b) and (c).) For example, the authority
does not reach to DHS employees covered by a basic pay system
authorized by an authority outside title 5 (e.g., Secret Service
Uniformed Division officers, Coast Guard military personnel, Coast
Guard
[[Page 8031]]
Academy faculty members, Transportation Security Administration
employees, and employees of the DHS Emergency Preparedness and Response
Directorate appointed under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act).
In some cases, however, laws authorizing separate pay and
classification systems for certain DHS employees not covered by title 5
provide considerable administrative discretion for modification of
those systems. For example, the Transportation Security Administration
(TSA) generally must adopt the system established for Federal Aviation
Administration (FAA) employees, but the Administrator of TSA is
authorized to modify that system consistent with 49 U.S.C. 40122.
Similar discretionary authority applies to the pay systems for Stafford
Act employees and to employees of the U.S. Coast Guard Academy. Thus,
it is possible for DHS to extend a new pay system designed for
employees currently covered by title 5 to TSA employees, Stafford Act
employees, and/or employees of the Coast Guard Academy by
administrative action. In contrast, the basic pay system established
under the DC Code for Secret Service Uniformed Division (SSUD) officers
cannot be altered administratively. Legislative action would be
required to modify the basic pay system for SSUD officers.
Also, the section 9701 authority does not cover systems or rules in
other title 5 chapters, such as the employment provisions in chapters
31 and 33, the premium pay provisions in chapter 55, or the retirement
systems in chapters 83 and 84. However, section 881 of the Homeland
Security Act does require DHS to review the pay and benefits plans
applicable to its employees, identify possible disparities, and submit
a plan for eliminating any unwarranted disparities. DHS provided a
preliminary report to Congress on possible pay and benefits disparities
on March 5, 2003, and continues to review these issues.
DHS' authority to modify or waive the six chapters of title 5 cited
above (and the associated implementing regulations) is subject to
certain limitations set forth in section 9701 of title 5 and elsewhere
in the Homeland Security Act. These limitations are designed to ensure
that fundamental merit system principles and employee protections are
preserved. The limitations include the following:
Any new or modified system must be consistent
with the merit system principles in 5 U.S.C. 2301. Similarly,
protections against prohibited personnel practices (e.g., reprisal
against whistleblowing or discrimination) remain in force.
The section 9701 regulations may not modify
regulations implementing nonwaivable laws.
DHS may not modify the pay system for Executive
Schedule officials, even though that system is authorized under chapter
53.
DHS employees remain subject to the aggregate
limitation on pay established under 5 U.S.C. 5307, and the annual rate
of pay for employees covered by the pay system proposed here may not
exceed the rate for level I of the Executive Schedule.
DHS must ensure that employees may organize,
bargain collectively, and participate through labor organizations of
their own choosing in decisions which affect them, subject to any
exclusion from coverage or limitation on negotiability established by
law.
Any modification of chapter 77 appeals
procedures must be consistent with the requirements of due process,
must provide for expeditious handling of DHS cases to the maximum
extent practicable, and must make modifications only insofar as those
modifications are designed to further the fair, efficient, and
expeditious resolution of DHS cases.
DHS and OPM may not issue new regulations under
the section 9701 authority after the 5-year period following the 12-
month transition period beginning on the effective date of the Homeland
Security Act. Since the Act became effective on January 24, 2003, the
section 9701 regulatory authority sunsets on January 23, 2009. Any
section 9701 regulations issued before that date will remain in effect.
Collaboration With Employee Representatives
Section 9701 also prescribes certain procedural requirements in
connection with the exercise of the joint DHS/OPM regulatory authority.
Section 9701(e) sets forth provisions to ensure collaboration with
employee representatives in the planning, development, and
implementation of any new or modified HR system. These provisions are
described in detail in the "Next Steps" section of this Supplementary
Information.
In addition to the procedural requirements related to consultation
with employee representatives, the Homeland Security Act also requires
the Secretary and the Director to consult with the Merit Systems
Protection Board (MSPB) before issuing regulations modifying the
appeals procedures under chapter 77.
Designing Options for a New HR System
Design Team Membership and Purpose
With the enactment of the Homeland Security Act of 2002, DHS
Secretary Tom Ridge and OPM Director Kay Coles James made a commitment
that the Department's new HR system would be the result of a
collaborative and inclusive process involving managers, employees, the
Department's largest unions, and a broad array of stakeholders and
experts from the Federal sector and private industry. This commitment
went far beyond the strict requirements of the Homeland Security Act,
as described above, because the Secretary and the Director felt it was
critical to involve employees, the unions that represent them, and DHS
managers in a direct and meaningful way throughout the entire design
process--not just at the end of the process, as required by law.
In April 2003, the Secretary and the Director established a DHS/OPM
HR Systems Design Team composed of DHS managers and employees, HR
experts from DHS and OPM, and professional staff from the agency's
three largest Federal employee unions (the American Federation of
Government Employees, the National Treasury Employees Union, and the
National Association of Agriculture Employees). The 48 team members
were assigned to one of two sub-teams: (1) pay, performance, and
classification or (2) labor and employee relations. Each sub-team had
two co-leaders, one from DHS and one from OPM.
The team was not asked to reach agreement on a single solution or
the best approach in any of the six areas where DHS was given
flexibility. Instead, the team's mission was to develop a wide-ranging
set of options for a new HR system at DHS. To help in this effort, the
team conducted extensive research into human capital practices in the
public and private sectors, talked with many leading human resources
experts, heard directly from DHS employees and managers through a
series of town hall meetings and focus groups, and gathered insights
from a Field Team composed of DHS managers and local union officials
who were asked to provide feedback and a front-line perspective to the
Design Team. The lessons learned through these outreach and research
efforts helped the Design Team develop a total of 52 options that
addressed one or more of the six HR areas under consideration. The
options were presented to the DHS Human Resource Management Senior
Review Advisory
[[Page 8032]]
Committee on October 20-22, 2003. (The Senior Review Committee and its
review of the options are described in detail below.)
Guiding Principles
During the Design Team's inaugural meeting in April 2003, Secretary
Ridge, Director James, and the presidents of the three largest Federal
employee unions at DHS discussed the fundamental elements of a model HR
system for the Department. They stated, for example, that any new
system must be responsive to the mission of the agency, that it must be
performance-based, that it must be a 21st century system agile enough
to respond to 21st century threats, and that it must be credible and
fair.
Building on these requirements, the Design Team developed a set of
"guiding principles" that were reviewed by the Field Team and
approved by the Senior Review Committee. The Senior Review Committee
agreed that options for a new HR system must, first and foremost, be
mission-centered. The new system must be performance-focused,
contemporary, and excellent. It must generate respect and trust; it
must be based on the principles of merit and fairness embodied in the
statutory merit system principles; and it must comply with all other
applicable provisions of law. In addition, the Design Team and the
Senior Review Committee agreed that the process for developing HR
options must be collaborative, reflecting the input of managerial and
non-managerial employees at all levels in DHS and of employee unions.
These guiding principles served as the basis for conducting research
and outreach activities and, later, for evaluating options for a new HR
system.
Research and Outreach Activities
The research phase of the design process took place from April
until July 2003. The pay, performance, and classification (PPC) sub-
team focused its work on those chapters of title 5 which cover pay
systems, performance management, and classification. The labor
relations/employee relations (LR/ER) sub-team focused its research on
those chapters of title 5 dealing with labor relations, adverse
actions, and appeals. Both sub-teams researched promising and
successful practices and systems in their respective areas. Both also
sought to understand the reasons for less-than-successful practices and
systems. The two sub-teams followed the same methodology in conducting
research by identifying sources of information and devising and
implementing methods of collecting, categorizing, and storing the
information so that it was available to the entire team. In addition,
the Design Team collected and analyzed statistical information about
the DHS workforce. To understand what employees thought about the
current systems, team members also attended DHS town hall meetings and
employee focus groups at various locations around the country, as
described in greater detail below.
The PPC sub-team identified 25 areas of interest and assigned
groups to research each area. The areas of interest included the
structure of pay ranges, methods for categorizing types of work, and
different appraisal and rating methods. The PPC sub-team identified
research sources from State and local governments, international
organizations, non-profit organizations, other Federal agencies with
different pay systems, and private sector organizations. These sources
were asked to give presentations to the sub-team or full team, as
appropriate. Some sources, who could not meet with the Design Team,
were interviewed by team members.
The LR/ER sub-team followed similar practices and identified
similar groups. However, since Federal sector labor relations are
conducted differently than in the private sector and in State and local
governments, few outside sources were identified by the LR/ER sub-team
as suitable models in the labor relations area. Instead, the LR/ER sub-
team identified experts in the field of Federal sector labor relations
to be interviewed or to give presentations to the sub-team. There were,
however, a number of sources in the private sector and in State and
local governments that had innovative or promising processes for
handling adverse actions and appeals.
Both sub-teams made an effort to ensure that their fact-finding and
data-gathering activities were balanced. For instance, in the labor
relations area, the LR/ER sub-team identified organizations with strong
labor relations programs, as well as those with restricted programs or
no labor relations programs at all. The Design Team also conducted a
literature review to identify articles, reports, and other
publications, which added to the body of information on current HR
practices. Altogether, the Design Team contacted and received
information from almost 200 individuals. A summary of the research
conducted by the Design Team can be found at http://www.epa.gov/edocket">http://www.epa.gov/edocket
.
Town Hall Meetings and Focus Groups
As noted above, Design Team members, along with senior DHS and OPM
officials, attended a series of town hall meetings and focus groups
sponsored by DHS. Consistent with the team's collaborative approach,
these meetings were planned jointly with employee representatives and
were conducted to inform employees about the design process and to
solicit employees' perceptions of current HR policies.
To ensure that each town hall meeting and focus group meeting was
attended by a diverse group of DHS employees, careful consideration was
given to participant selection methodology. Diverse representation was
sought and achieved by DHS component; geographic location; job/series;
bargaining unit and non-bargaining unit status; and age, gender, and
ethnicity demographics.
Town hall meetings with DHS employees were held between May and
July 2003 in El Paso, Texas; Los Angeles, California; Seattle,
Washington; Detroit, Michigan; New York, New York; Norfolk, Virginia;
Miami, Florida; and Atlanta, Georgia. Senior DHS and OPM officials,
including Janet Hale, DHS' Under Secretary for Management, Asa
Hutchinson, Under Secretary for Border and Transportation Security, and
Mike Brown, Under Secretary for Emergency Preparedness and Response,
presided over each town hall meeting, with senior union officials
joining them in some locations. Concurrent with the town hall meetings,
54 focus groups--44 with non-supervisory employees and 10 with
supervisors--were held in the same 8 locations, as well as in Baltimore
and Washington, DC. One of the Baltimore focus groups was composed
entirely of blue-collar ("wage grade") employees. In addition, two
focus groups were conducted with DHS HR professionals. In total, more
than 2,000 DHS employees participated in these town hall meetings and
focus groups.
Each focus group was professionally facilitated and included
several Design Team members as observers, note takers, and/or technical
experts. For each of the six HR areas under review, focus group
participants were asked, among other things, what they thought worked
well in the current HR systems and what they thought should be changed.
The information received from focus group participants was summarized
and made a part of the Design Team's research. A comprehensive and
detailed report on the focus group process and findings can be found at
http://www.epa.gov/edocket.
Communications Strategy
A comprehensive communications strategy is essential for designing
and implementing a new HR system. DHS
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therefore developed a communications strategy in order to build and
sustain high levels of respect and trust among DHS employees--one of
the guiding principles for the design process--and to gain insight and
support and address the concerns of stakeholders inside and outside of
DHS. The objectives of DHS' communications strategy were to (1) raise
awareness, disseminate information, and promote a clear understanding
of the purpose for designing a new HR system; (2) manage stakeholder
expectations and address their concerns; (3) provide opportunities for
two-way dialogue between the Design Team and the stakeholders; and (4)
generate a flow of timely, accurate, and consistent messages.
DHS identified channels for disseminating relevant, timely, and
consistent information (including a wide variety of print and
electronic media, e-mail, town hall meetings, focus groups, speeches,
and briefings) and developed an action plan for communicating with each
stakeholder. The Design Team also developed key messages to include in
stakeholder communications to reinforce the guiding principles of the
DHS HR systems design process. Finally, the Design Team developed
mechanisms for providing feedback to ensure an on-going two-way
dialogue between the design team and its stakeholders and to evaluate
the effectiveness of communication activities in meeting the
communication strategy objectives.
Outreach to Stakeholders
In addition to reaching out to DHS employees and to organizations
and individuals of interest to the Design Team as part of its research
activity, the Design Team reached out to stakeholders who were thought
to be keenly interested in the design of new HR systems for DHS. As
part of the communications strategy developed by DHS, the Design Team
invited selected stakeholders to participate in two stakeholder
briefings held at OPM in late August 2003.
The first stakeholder briefing was for Federal employee unions not
represented on the Design Team. Seven individuals representing six
employee unions attended this briefing. The second stakeholder briefing
was for other stakeholders identified by DHS through its communications
strategy. About 20 individuals representing 13 organizations or other
Federal agencies participated in the second briefing. Attendees at both
briefings received background information about the Homeland Security
Act, an update on the Design Team's work plan, a presentation on the
guiding principles developed by the Design Team, and updates on the
research activities of the team, including town hall meetings and focus
groups. Attendees were afforded an opportunity to participate in a
question-and-answer session following these presentations.
Both before and after the stakeholder briefings, the Design Team
also responded to requests from other stakeholders, including the
General Accounting Office and the Coalition for Effective Change (an
umbrella organization consisting of more than 30 Federal management
associations), to bring them up to date on the team's activities.
Design Team leaders also briefed the staff of key congressional
committees regarding the progress of the design process, and officials
from DHS and OPM testified before the House Committee on Government
Reform's Subcommittee on Civil Service and Agency Organization and the
Senate Committee on Governmental Affairs.
Options Development Process
The options development process was grounded in the extensive
research described above. The resulting product was a set of 52 options
that cover a broad range of variations on the six areas of focus.
The options development process was collaborative and inclusive,
with ample opportunity for input from employees and their
representatives. To ensure that the options reflected the wide range of
views and concerns expressed by various entities, the Design Team did
not attempt to reach consensus regarding the merits of the options.
Consequently, none of the 52 options presented represents a consensus
view of the Design Team.
Some of the options integrate approaches to developing new HR
systems across two or more of the six subject matter areas under
consideration. This is especially true of many of the pay, performance,
and classification options, which were intended to illustrate how
various pay, performance, and classification system elements might work
in combination. The pay, performance, and classification options also
tended to cluster around several distinct themes, such as "time-
focused" options, "performance-focused" options, and "competency-
focused" options.
The initial draft options were reviewed by the Field Team to
capture feedback prior to finalizing them for submission to the Senior
Review Committee. The options presented to the Senior Review Committee
do not exhaust all of the possible combinations of subsystems, nor were
the options intended to imply that there might not be other possible
ways of combining the approaches incorporated in the different options.
In addition, the Secretary and the Director remain free to suggest and
adopt other ways of combining various design elements to establish a
new HR system for DHS.
Summary and Review of Options
Overview of Pay, Performance Management, and Classification Options
The pay, performance, and classification sub-team developed a total
of 27 options. The majority of these options attempted to present an
integrated set of proposals across the pay, performance management, and
classification areas. Among these options, four were traditional, time-
focused graded systems under which pay progression would be based
primarily on time in grade. Under these options, any general
adjustments to the pay structure would be passed on automatically to
all employees whose performance is at least acceptable. (The status quo
General Schedule option provides across-the-board and locality pay
increases to all employees, regardless of performance.)
The eight performance-focused options would link individual base
pay and bonuses to individual, team, and/or organizational performance.
Several of these options do not provide for any automatic pay
increases. They usually (but not always) make use of a streamlined
classification and paybanding system that groups similar occupations
together in "clusters" that contain up to four pay bands each.
The four competency-focused options would make use of a set of
competencies (i.e., knowledge, skills, and abilities) developed for
specific positions or occupations as a key component in classifying
jobs, setting basic pay, and managing performance. Each of these
options would use competencies to some degree, but most also would have
a strong performance component, with pay progression based on the
acquisition and application of competencies or the evaluation of
performance.
Among the remaining pay, performance management, and classification
options, there was one "rank-in-person" option that would make use of
a person-based, rather than position-based, pay and classification
system (similar to military or Foreign Service systems) and one
collective bargaining option, under which all aspects of pay,
performance
[[Page 8034]]
management, and classification systems would be subject to collective
bargaining for all DHS bargaining unit employees. Finally, the pay,
performance, and classification sub-team developed five "stand-alone"
performance management or classification options and four "plug-and-
play" options. A "stand-alone" option is one that provides a self-
contained alternative to one of the three major components of an
integrated pay/performance management/classification option. For
example, a "stand-alone" performance management option could be
substituted in its entirety for the performance management portion of
an integrated option. A "plug-and-play" option, in contrast,
generally addresses only one feature or aspect of a pay/performance
management/classification system and cannot be substituted in its
entirety for any of the major components of an integrated option. For
example, a gainsharing/goalsharing program could be added to an
integrated pay/performance management/classification option without
altering the basic character of that option
Overview of Labor Relations, Adverse Action, and Appeals Options
Labor Relations
The labor and employee relations sub-team developed seven labor
relations options that describe, among other things, the parties'
bargaining obligations and how the labor relations program would be
administered. One of the options would retain the status quo as
codified in chapter 71 of title 5, United States Code, which sets out
the rights and obligations of labor and management and authorizes the
three-member Federal Labor Relations Authority (FLRA) to administer the
labor relations program.
Some of the labor relations options proposed to narrow the scope of
bargaining and/or place additional limitations on when the duty to
bargain would arise. Some also would place time limits on bargaining
over term and mid-term agreements. All of the options (except for the
status quo) would replace FLRA and the Federal Service Impasses Panel
with an internal DHS labor relations panel or administrator that would
assume all or some of the functions performed by those two bodies. All
of the options also would, for homeland security reasons or to meet
operational needs, permit DHS management to act quickly with no
bargaining at all or bargaining only after the action is taken.
Adverse Actions and Appeals
The sub-team developed 16 adverse action and/or appeals options,
including a status quo option. The current adverse action process is
found in chapter 75 of title 5, U.S. Code, which identifies the
procedures for proposing and taking adverse actions against certain
categories of employees. The current appeals process is found in
chapter 77 of title 5, which identifies the procedure that covered
employees must follow to appeal certain adverse actions to MSPB.
Some of the adverse action options would provide protections to
more employees than are covered today under chapter 75, while others
would narrow employee coverage. Similarly, some options would expand
the range of matters that would be considered adverse actions (e.g.,
any suspension) while others would narrow that range (e.g., adverse
actions limited to removals and suspensions of more than 30 days). All
options (except the status quo) would replace the two current statutory
processes for handling misconduct and poor performance with a single
process.
Some of the appeals options would provide appeal rights to more
employees than have such protections today (e.g., appeal rights for
probationary employees), while other options provide appeals rights to
fewer employees (e.g., appeal rights only for employees who complete 2
years or more of Federal service). Some of the options would replace
MSPB with an internal DHS panel that would adjudicate adverse action
appeals. Some options would raise management's burden or standard of
proof required to win an appeal, while other options would lower that
burden.
There were also two "plug-and-play" LR/ER options. One provides
for a bargaining impasse standard that third parties would use to
resolve impasse disputes between management and labor, and the other
would establish alternative dispute resolution programs to address
employee claims arising from adverse actions.
Review of Options by Senior Review Committee
In June 2003, DHS appointed 13 individuals to the DHS Human
Resource Management System Senior Review Advisory Committee, which was
chartered as a Federal advisory committee under the Federal Advisory
Committee Act (FACA). Members included six top officials from DHS, four
top officials from OPM, and the presidents of the three largest
employee unions representing DHS employees. In addition, five non-
Federal experts in public administration were designated as technical
advisors to the Senior Review Committee. A complete listing of Senior
Review Committee members and technical advisors follows:
Members From the Department of Homeland Security:
Janet Hale, Under Secretary for Management (Co-Chair);
Robert Bonner, Commissioner of Customs and Border Protection;
James Loy, Administrator, Transportation Security Administration;
Eduardo Aguirre, Director, Bureau of Citizenship and Immigration
Services;
J. Michael Dorsey, Chief of Administrative Services;
Ralph Basham, Director, United States Secret Service.
Members From the Office of Personnel Management:
Steven R. Cohen, Senior Advisor for Homeland Security (Co-Chair);
Doris L. Hausser, Senior Policy Advisor to the Director and Chief
Human Capital Officer;
Ronald P. Sanders, Associate Director for Strategic Human Resources
Policy;
Marta B. Perez, Associate Director for Human Capital Leadership and
Merit System Accountability.
Members From Unions:
John Gage, President, American Federation of Government Employees;
Colleen Kelley, President, National Treasury Employees Union;
Michael Randall, President, National Association of Agricultural
Employees.
Technical Advisors:
Robert Tobias, Distinguished Adjunct Professor, American
University;
Patricia Ingraham, Professor of Public Administration, Maxwell
School, Syracuse University;
Maurice McTigue, Visiting Scholar, Mercatus Center, George Mason
University;
Bernard Rosen, Distinguished Adjunct Professor in Residence
Emeritus, American University;
Pete Smith, President and Chief Executive, Private Sector Council.
The Senior Review Committee held its first meeting on July 25,
2003, in Washington, DC. The meeting was open to the public and was
conducted in accordance with FACA rules and regulations. At this
meeting, the Committee heard presentations from Design Team leaders
about the team's research strategy and methods, the guiding principles
developed by the
[[Page 8035]]
Design Team, and the options development process. The Committee agreed
to a slightly modified version of the guiding principles and an options
template developed by the Design Team for the purpose of presenting
options in a consistent fashion.
The Senior Review Committee held its second and last meeting on
October 20-22, 2003, in Washington, DC. Once again, this meeting was
open to the public and conducted in accordance with FACA rules and
regulations. The purpose of the meeting was to discuss possible options
for new HR systems in the areas of pay, performance management,
classification, labor relations, adverse actions, and appeals and to
express views that would inform decisions to be made subsequently by
DHS Secretary Ridge and OPM Director James regarding which systems
should be implemented within DHS.
The October 2003 meeting, in downtown Washington, DC, was
professionally facilitated and well-attended. Following opening
statements on the first day, the Committee members and technical
advisors received a presentation from Design Team leaders about the
pay, performance management, and classification options developed by
the Design Team. The facilitator then asked Committee members for their
views on the various categories of options presented. The second day
followed a similar pattern, with presentations by Design Team leaders
on the labor relations, adverse actions, and appeals options developed
by the Design Team, followed by a facilitated discussion of those
options. On the final day of the meeting, Committee members and
technical advisors were afforded an opportunity to summarize their
views for the benefit of the Secretary and the Director.
Over the course of this 3-day meeting, discussion and debate
centered on the best design for DHS' HR system. Several topics evoked
wide-ranging perspectives, but core areas and principles related to
system design and the design process drew a great deal of consensus
among the members. For example, the members agreed that--
Above all else, any new HR system for DHS must
be mission-focused, and its design must facilitate mission performance;
the future system should be fair, transparent,
and credible;
establishing broad general principles as a
foundation for the future system will be important to ensure
integration, but HR options might have to be tailored to specific parts
of DHS;
employee and union participation, as well as
effective communication, will be critical to creating, implementing,
and operating a successful HR management system;
creating a new system will take time and require
a substantial investment of resources, including training and
development, particularly for managers who must implement the changes
in a manner that is seen by employees and the public as fair and
credible.
Discussion of the various Design Team options revealed a wide range
of opinions, with some options evoking greater discussion than others.
A comprehensive summary of the October Senior Review Committee meeting
can be found at http://www.epa.gov/edocket.
Summary of Public Comments on Options
Comments regarding the options discussed at the October Senior
Review Committee meeting were received from a total of 16 organizations
and individuals, including 5 employee organizations and 1 organization
representing senior executives. Some of these comments were presented
orally during the public comment period on October 21. Other comments
were submitted to the Senior Review Committee in writing.
The comments reflected a range of views that included strong
support for flexibility, as well as some concern for preserving due
process for employees. It was suggested that inequities should not be
permitted under the guise of national security and that it is not
necessary to "fix" systems that are working well. At the same time,
some comments stressed that DHS would need considerable HR flexibility
to carry out its mission efficiently.
Comments also addressed the importance of recognizing and rewarding
excellence. Some commenters expressed trepidation about implementing a
pay-for-performance system, noting a potential for favoritism which can
discourage teamwork. Others expressed support for the concept, while
urging that such a system be adequately funded and ample training be
provided. The importance of good communication with employees
throughout the design and implementation of the new system was also
noted.
Evaluation of Design Process
The creation of DHS is the largest undertaking of its kind since
the creation of the Department of Defense in the late 1940s. The
success of merging more than 20 agency components and more than 180,000
employees into a single organization with a clear mission and focus
will depend to a considerable degree on how effectively and efficiently
the Department addresses its human capital issues.
Accordingly, the General Accounting Office (GAO) evaluated the DHS/
OPM HR systems design process. GAO's findings and recommendations are
found in GAO report GAO-03-1099 (September 2003).
The report praises the collaborative and inclusive process
developed for designing new DHS HR systems and for "reflecting
important elements of effective transformation." Specifically, the
report indicates that the design process incorporated the following
essential ingredients to successful transformation:
Leadership--on-going commitment of both DHS and
OPM leadership to stimulate and support the design effort.
Key Principles--the guiding principles of the
design process reflected support for the mission and the employees of
the new department, protection of basic merit system principles, and
the commitment to incorporate employee accountability for performance.
Employee Involvement--collaboration with
employee representatives and employee involvement through the focus
group interviews, town hall meetings, and Field Team participation.
The report further states that the analysis of DHS' effort to
design a human capital system "can be particularly instructive in
light of legislative requests for agency-specific human capital
flexibilities at the Department of Defense and the National Aeronautics
and Space Administration."
The report also includes some valuable recommendations for ensuring
effective implementation of the new system. These recommendations
include effective communication characterized by two-way dialogue,
integration of the human capital policy into the strategic plan and
programmatic goals, and continued employee feedback.
Summary of Proposed HR System for DHS
The Department of Homeland Security was created in recognition of
the paramount responsibility to safeguard the American people from
terrorist attack and other threats to homeland security. Congress
stressed that any HR system established by DHS and OPM must be
"flexible" and "contemporary" (5 U.S.C. 9701(b)(1) and (2)). The
Secretary of Homeland Security and the Director of OPM are
[[Page 8036]]
determined to create a new HR system for DHS that is, first and
foremost, mission-centered. In other words, the most important
objective of the new system must be to serve and advance the
Department's critical homeland security mission. At the same time, DHS
and OPM remain committed to ensuring that the new DHS HR system
generates respect and trust and that it is based on the principles of
merit and fairness embodied in the statutory merit system principles.
Secretary Ridge and Director James have determined that the best
way to achieve these goals is to create a system that is performance-
focused, flexible, and contemporary, since these qualities are critical
to freeing the DHS workforce to focus on the Department's mission. For
example--
The proposal to establish a pay-for-performance
system for DHS is designed to ensure that employees have a clear
understanding of their expected performance and to reinforce and reward
high-performing employees who advance and support the Department's
mission by, for example, guarding our Nation's borders, protecting our
Nation's critical infrastructure, and enhancing the security of air
travel.
Providing for greater flexibility in collective
bargaining within DHS allows the Department to take action against
terrorist threats, secure the Nation's borders and ports of entry, and
meet other critical mission needs without unnecessary delay. We have
narrowed the duty to bargain over core management rights where
flexibility and swift implementation are most critical to achieving the
mission, while preserving the right to bargain over important HR
polices.
Authorizing the Secretary to designate offenses
that merit mandatory removal and establishing a special independent DHS
panel to review such actions is designed to recognize both the harm
certain acts of misconduct can inflict on the Department's critical
mission and to permit DHS to move quickly to address and resolve very
serious misconduct.
The adoption of a single, lower standard of
proof ("substantial evidence" rather than "preponderance of the
evidence") for all adverse actions, whether based on performance or
conduct, is designed to recognize the appropriate deference that should
be granted to DHS officials responsible for overseeing the Department's
critical operations and to ensure consistency in the review of all
adverse actions involving DHS employees, thus reinforcing the single
overarching mission of the new Department.
The streamlined process for adverse action
appeals and the creation of a DHS Labor Relations Board will balance
employee rights with critical mission needs.
As explained previously, the Secretary of Homeland Security and the
Director of OPM are authorized by the Homeland Security Act of 2002 to
waive specified chapters of title 5, United States Code, to create a
new HR system for DHS. The Secretary and the Director have reviewed and
given full consideration to all of the options developed by the DHS/OPM
HR Systems Design Team. In addition, they have given due weight to the
views and opinions expressed by DHS employees in the town hall meetings
and focus groups hosted by DHS from May to July 2003. They have given
special consideration to the thoughtful review of the options conducted
by the DHS HRMS Senior Review Advisory Committee in October 2003 and to
all public comments received in connection with that meeting. Finally,
as required by law, they have consulted with MSPB regarding possible
changes in the appeals procedures established under chapter 77 of title
5, United States Code. They also consulted with many other Federal
officials and external stakeholders.
The proposed regulations reflect authorities that are extended to
the Secretary and the Director through January 23, 2009. During that
period, DHS and OPM are committed to conducting an ongoing evaluation
of the HR system described here--overall, as well as with regard to its
separate elements--to ensure that it is achieving its intended
purposes. Further, DHS and OPM are committed to making appropriate
modifications to that system as circumstances warrant, particularly
with respect to any unanticipated consequences that may emerge during
its implementation. To that end, these regulations will be issued in
interim final form, so as to provide the Secretary and the Director
with sufficient flexibility (subject to appropriate consultation with
stakeholders) to make additional changes to the HR system that may
result from initial evaluations. Subsequent evaluations may result in
further changes in the regulations.
The proposed regulations in part 9701 of title 5, Code of Federal
Regulations, are organized into six subparts that correspond to the
specific chapters in title 5, United States Code, which DHS and OPM are
authorized to waive, plus an opening subpart (subpart A) that sets
forth general provisions applicable throughout part 9701. Subpart B
sets forth a new job evaluation (classification) system for DHS that
waives chapter 51 of title 5 for most purposes. Subpart C sets forth a
new pay and pay administration system that waives substantial portions
of chapter 53. Subpart D sets forth new performance management
provisions that replace chapter 43. Subpart E sets forth new labor-
management relations provisions that replace chapter 71. Subpart F sets
forth new rules for adverse actions that replace the rules set forth in
chapter 75. And subpart G sets forth new rules governing appeals that
replace the rules set forth in chapter 77.
General Provisions--Subpart A
Subpart A of the proposed regulations sets forth their purpose,
establishes general provisions governing coverage under the new DHS HR
system, and defines terms that are used throughout the new part 9701.
Part 9701 will apply to DHS employees who are identified under the
regulations as eligible for coverage and who are approved for coverage,
as of a specified date, by the Secretary of Homeland Security. This
will enable DHS to phase in coverage of particular groups of employees
or components of the Department. Subpart A also allows DHS to issue
internal Departmental regulations that further define the design
characteristics of the new HR system. (See the "Next Steps" section
at the end of this Supplementary Information.) Finally, subpart A
clarifies the relationship of these regulations to other provisions of
law and regulation outside those that are being waived with respect to
DHS.
A New Job Evaluation, Pay, and Performance Management System for DHS
DHS and OPM have determined that a performance-focused job
evaluation and pay system best meets the critical operations and
mission-focused needs of DHS and that changes are needed in the current
performance management provisions to support a new, performance-focused
job evaluation and pay system.
DHS and OPM have concluded that the current GS classification and
pay system, as a whole, does not focus sufficiently on creating and
sustaining a high performance culture within DHS and that other "time-
focused" options considered during the design process rely too much on
longevity and not enough on recognizing and rewarding high performance
at all levels of the workforce. DHS and OPM found some aspects of
"competency-focused" options to be attractive, particularly for
employees early in their careers, who are still acquiring the
competencies,
[[Page 8037]]
skills, and knowledge needed to make significant contributions to the
mission of DHS. DHS and OPM agree that a new job evaluation and pay
system should focus primarily on encouraging the development of a high
performance culture.
All DHS employees currently covered by the job evaluation and pay
systems established under chapter 51 or 53 of title 5, United States
Code, are eligible for coverage under this job evaluation and pay
system at the discretion of DHS, in coordination with OPM, except for
(1) Executive Schedule officials (who, by law, remain covered by
subchapter II of chapter 53) and (2) administrative law judges paid
under 5 U.S.C. 5372. At present, DHS plans to cover only GS employees
and employees in senior-level (SL) and scientific or professional (ST)
positions.
SES members employed by DHS will be eligible for coverage under the
new DHS pay system. However, the proposed regulations provide that any
new pay system covering SES members must be consistent with the
performance-based features of the new Governmentwide SES pay-for-
performance system authorized by section 1125 of the National Defense
Authorization Act for Fiscal Year 2004 (Public Law 108-136, November
24, 2003). If DHS wishes to establish an SES pay system that varies
substantially from the new Governmentwide SES pay-for-performance
system, DHS and OPM will issue joint authorizing regulations consistent
with all of the requirements of the Homeland Security Act, as set forth
in 5 U.S.C. 9701. In addition, DHS and OPM will involve SES members and
other interested parties in the design and implementation of any new
pay system for SES members employed by DHS.
As explained in the "Background" section, above, the new job
evaluation and pay system proposed in these regulations cannot apply
directly to DHS employees covered by a basic pay system authorized by
an authority outside title 5. However, it is possible for DHS to extend
this job evaluation and pay system by administrative action to
Transportation Security Administration (TSA), Stafford Act, Coast Guard
Academy, and other similarly situated employees under authorities
provided to the Secretary or other DHS officials.
The transitional provisions in subparts B and C include a special
authority to deal with the possibility that DHS may transfer Federal
Air Marshal Service positions from TSA to another DHS component before
a new DHS job evaluation and pay system is in place. This special
authority allows DHS to establish a temporary job evaluation and pay
system for any such transferred Federal Air Marshal Service positions
that parallels the system established for TSA employees. Absent this
authority, these transferred positions generally would be covered by
the GS classification and pay system. Thus, without the transitional
authority in subparts B and C, this would mean that Air Marshals could
be moved from the TSA job evaluation and pay system to the GS system,
and then to the new DHS system, all in a relatively short period of
time. This would be far too disruptive to these critical employees, and
the proposed regulations minimize this disruption. The regulations
authorize DHS to modify the TSA-parallel system after coordination with
OPM. For example, DHS may adjust the rate ranges to be more consistent
with the ranges that apply to other employees in the same DHS
component.
By necessity and design, the proposed regulations on job
evaluation, pay, and performance management provide considerable
discretion to design many of the detailed features of the new system,
by DHS at its sole and exclusive discretion and/or in coordination with
OPM. What follows, therefore, is intended to provide a general
description of the system DHS and OPM will establish under the
authority provided by 5 U.S.C. 9701 and the regulations set forth in
the proposed 5 CFR part 9701. DHS is committed to a high degree of
employee involvement in developing the details of the new job
evaluation, pay, and performance management system.
Throughout the development and implementation of the new DHS job
evaluation, pay, and performance management system, DHS will coordinate
with OPM to ensure the flexibilities afforded by the Homeland Security
Act are exercised in a manner that takes Governmentwide impact into
account. This coordination role is consistent with OPM's institutional
responsibility, as codified in 5 U.S.C. chapter 11 and Executive Order
13197 of January 18, 2001, to provide Governmentwide oversight in human
resources management programs and practices.
Job Evaluation (Classification)--Subpart B
Subpart B will provide DHS with the authority to replace the
current 15-grade structure of the GS classification and qualifications
system with a new method of evaluating or classifying jobs to determine
their relative value to the organization by grouping them into
occupational categories and levels of work for pay and other related
purposes. Under this new "job evaluation" system, DHS will have the
authority to establish qualifications for positions and to assign
occupations and positions to broad occupational "clusters" and pay
levels (or "bands"). (Note: "Job evaluation" is a common term of
art used among HR professionals. It is separate and distinct from the
evaluation or appraisal of an employee's performance, which is
addressed as part of the performance management system established
under subpart D of the proposed regulations.)
In coordination with OPM, DHS will establish broad occupational
clusters by grouping occupations and positions that are similar in
terms of type of work, mission, developmental/career paths,
competencies, and/or skill sets. These occupational clusters will serve
as the basic framework for the DHS job evaluation system. DHS may elect
to phase in the coverage of specific categories of employees or
occupations under the new job evaluation and pay system established
under these proposed regulations. Within each occupational cluster, DHS
(in coordination with OPM) will establish broad salary ranges, commonly
referred to as "bands." DHS may use OPM-approved occupational series
and titles to identify and assign positions to a particular cluster and
band. Occupational clusters typically will include the following bands,
each with progressively higher pay ranges:
Entry/Developmental--Employees in positions
assigned to this band focus on gaining the competencies and skills
needed to perform successfully at the full performance level.
Full Performance--Employees in positions
assigned to this band have completed all necessary entry-level training
and/or developmental activities and have demonstrated they are capable
of performing the full range of non-supervisory work required for
positions in that occupation. Employees assigned to positions in this
band will be evaluated primarily on their contributions to the mission
of DHS.
Senior Expert--Positions assigned to this band
will be reserved for a relatively small number of non-supervisory
employees who possess an extraordinary level of technical knowledge or
expertise upon which DHS relies for the accomplishment of critical
mission goals and objectives. Typically, entry will be controlled and/
or competitive.
Supervisory--Positions assigned to this band
will be reserved primarily for first-level supervisors of employees in
[[Page 8038]]
the same occupational cluster. Typically, entry will be competitive.
This typical structure will provide a clearly-defined career path
for each occupation within a cluster. DHS also will establish a
separate cluster for higher-level managers. The accompanying table
(table 1) illustrates the occupational cluster structure concept.
[GRAPHIC] [TIFF OMITTED] TP20FE04.011
Employees will be permitted to request reconsideration as to
whether their job has been placed in the appropriate series or whether
their job is covered by the system itself. An employee's assignment to
a particular cluster or band within a cluster will not be subject to
this reconsideration process.
The new job evaluation system for DHS will result in a streamlined
method of evaluating jobs that no longer relies on lengthy
classification standards and position descriptions or requires fine
distinctions among closely related levels of work, as is now required
under the GS classification system, without compromising internal
equity and the merit system principle of equal pay for work of equal
value. In addition, the system described here, together with the new
DHS pay system described below, will provide DHS with greater
flexibility to adapt the Department's job and pay structure to meet
present and future DHS mission requirements.
Pay and Pay Administration--Subpart C
DHS, in coordination with OPM, will set the minimum and maximum
rates for each band in each occupational cluster based on factors such
as labor market rates, recruitment and retention information, mission
requirements, operational needs, and overall budgetary constraints. The
bands will have open pay ranges, with no fixed step rates. OPM will
manage cross-agency consistency, competition, and movement within the
Federal Government.
Pay adjustments under the new system will fall into three general
categories: market-related adjustments comprising annual rate range
adjustments and locality pay supplements, annual performance-based pay
increases, and other individual adjustments. In keeping with the desire
of the Secretary and the Director to achieve and sustain a culture of
high performance, the proposed regulations provide that these pay
adjustments will be provided only to employees who meet or exceed
performance expectations. Under criteria to be developed by DHS, an
employee whose performance is unacceptable and who does not receive
annual market adjustments may have those adjustments granted
prospectively if performance improves to the fully successful level or
better.
Annual rate range adjustments and locality pay supplements will be
determined by DHS, considering mission requirements, labor market
conditions, availability of funds, pay adjustments received by
employees in other Federal agencies, and other relevant factors. Annual
rate range adjustments and locality pay supplements may differ by
occupational cluster or band. DHS will determine locality pay areas in
coordination with OPM. DHS will determine the timing of these annual
pay adjustments. If DHS finds that recruitment and/or retention efforts
are, or are likely to become, significantly handicapped for particular
subcategories of employees within a band or cluster because of
insufficient pay, DHS may, in coordination with OPM, establish special
basic pay supplements that provide higher pay levels for those
subcategories of employees.
Employees also will receive annual performance-based pay increases.
For employees in a Full Performance or higher band, this pay increase
will be based on their rating of record. The performance-based pay
increase for a given rating of record will be expressed as a dollar
amount or percentage of basic pay, and that amount or percentage will
be the same for all employees assigned to a given "performance pay
pool." A performance pay pool consists of the money allocated for
performance-based pay increases for a defined group of employees.
Generally speaking, performance pay pools will be established by
occupational cluster and by band within each cluster, but may also be
further divided by organizational unit and/or location.
In response to concerns expressed by employees and employee
representatives during the DHS HR system design process, managers will
not have complete discretion regarding the amount of performance-based
pay
[[Page 8039]]
increases. Instead, performance-based pay increases will be a function
of the amount of money in the performance pay pool, the relative point
value placed on performance ratings, and the distribution of
performance ratings within that performance pay pool. The relative
point value of a performance rating will be established in advance
through DHS implementing regulations or instructions.
A performance-based pay increase may be calculated as a dollar
amount or as a percentage of basic pay. For example, consider a group
of 100 employees for whom the performance pay pool is determined to be
$84,390. If 30 employees receive a "fully successful" rating valued
at 1 point, 46 employees receive an "exceeds fully successful" rating
valued at 2 points, and 24 employees receive an "outstanding" rating
valued at 3 points, then the total number of points for this group
would be 194: (30 x 1) + (46 x 2) + (24 x 3) = 194. Therefore, the
value of 1 point is $435 ($84,390/194 = $435). In this example, a
"fully successful" rating would result in a $435 performance-based
pay increase ($435 x 1), an "exceeds fully successful" rating would
result in an $870 pay increase ($435 x 2), and an "outstanding"
rating would result in a $1,305 pay increase ($435 x 3).
A similar calculation could be made to determine the amount of
performance-based pay increases in terms of a percentage of salary.
Under this method, employees who receive a specific rating of record
would receive the same percentage increase in basic pay, though the
actual dollar amount of that increase would vary in proportion to each
employee's rate of basic pay. The proposed regulations allow DHS to
adopt either of these methods. In addition, DHS could adopt different
point values for ratings of record than those used in this example.
If a performance-based pay increase would cause an employee's
salary to exceed the band maximum, the proposed regulations allow DHS
to grant a lump-sum payment in lieu of that portion of the pay increase
that otherwise would exceed the band maximum. In addition, the proposed
regulations allow DHS to establish a "control point" within a band,
beyond which basic pay increases may be granted only for meeting
criteria established by DHS, such as an "outstanding" performance
rating. If a performance-based pay increase would cause an employee's
salary to exceed such a control point, DHS could grant a lump-sum
payment in lieu of that portion of the pay increase that otherwise
would exceed the control point. Lump-sum payments in lieu of a basic
pay increase generally will be granted at the same time as performance-
based pay increases.
Employees in a Senior Expert band generally will move through the
band range by means of the performance-based pay increases described
above. In addition to those pay increases, however, DHS reserves the
discretion to grant additional pay increases to those employees having
specified mission-critical skills or those who make exceptional
contributions to the DHS mission. Such additional payments will be
limited to employees in the Senior Expert band and will not affect the
performance pay pool associated with that band.
Employees in an Entry/Developmental band will receive pay
adjustments as they acquire the competencies, skills, and knowledge
necessary to advance to the target Full Performance band. The training
program and competencies required for a given occupation will not
change as a result of the new DHS pay system. Under the new system, DHS
will be able to advance an employee through the Entry/Developmental
band to the target Full Performance band without regard to the limits
and constraints of the GS system, such as time-in-grade restrictions
and rigid salary setting rules.
Other individual pay adjustments may be granted by DHS. These
payments will not be considered part of basic pay. They include special
skills payments for specializations for which the incumbent is trained
and ready to perform at all times, such as proficiency in foreign
languages or dog-handling; special assignment payments for assignments
of greater difficulty or complexity within the same cluster and band;
and special staffing payments to address recruitment and retention
difficulties in particular occupations and/or locations. Some of these
payments may require that employees enter into a service agreement as a
condition of receiving additional pay.
Promotion pay increases (from a lower band to a higher band in the
same cluster or to a higher band in a different cluster) generally will
be fixed at 8 percent of the employee's rate of basic pay or the amount
necessary to reach the minimum rate of the higher band, whichever is
greater. (This amount is roughly equivalent to the value of a promotion
to a higher grade within the GS system.) As with the current system, in
the case of a demotion to a lower band for performance or conduct
reasons, pay may be set at any lower rate within the lower band at
management's discretion. Where pay retention is applicable (e.g.,
following a reduction in force), the employee's pay will be frozen
until such time as the maximum rate of the applicable band catches up
to the frozen rate.
Upon implementation of the new system, employees will be converted
based on their official position of record. Employees on temporary
promotions will be returned to their official position of record prior
to conversion. GS employees will be converted at their current rate of
basic pay, including any locality payment, adjusted on a one-time, pro-
rata basis for the time spent towards their next within-grade increase.
Employees in career-ladder positions below the full performance level
generally will be placed in the Entry/Developmental band in the
appropriate cluster.
The new DHS pay system will provide DHS with an enhanced ability to
establish and adjust overall pay levels in keeping with changes in
national and local labor markets. It is designed to adjust individual
pay levels based on the acquisition and assessment of competencies,
skills, and knowledge for employees below the Full Performance band and
on the basis of performance or contribution to mission for employees in
the Full Performance band or higher. Above all, the new DHS pay system
will be capable of adapting to changing circumstances and mission
requirements.
Performance Management--Subpart D
DHS and OPM have decided to waive the provisions of chapter 43 of
title 5, United States Code, in order to design a performance
management system that will complement and support the Department's
proposed performance-based pay system described above. The proposed
system will also ensure greater employee accountability with respect to
individual performance expectations, as well as organizational results.
Over the past 25 years, legal interpretations of the current
chapter 43 have produced a system that is procedurally complex,
inflexible, and paper-intensive, requiring a manager to set an
employee's specific written elements and standards at the beginning of
an annual appraisal period. In so doing, the manager must anticipate
the myriad work assignments (each potentially with its own unique
performance expectations) the employee will receive during the course
of that appraisal period. These static, often generic standards make it
difficult for managers to adjust performance requirements and
expectations in response to the Department's rapidly
[[Page 8040]]
changing work environment, hold individual employees accountable for
those general and/or assignment-specific work requirements and
expectations, and make meaningful distinctions in employee performance
as they accomplish those assignments.
The proposed regulations are designed to address these
deficiencies. They continue to require that managers establish and
communicate performance expectations to employees; however, they no
longer require that this be accomplished exclusively through written
performance elements and standards set at the beginning of the
appraisal period. Instead, they give managers the option of
establishing and communicating performance expectations during the
course of the appraisal period through specific work assignments or
other means (including standard operating procedures, organizational
directives, manuals, and other generally established job requirements
that apply to employees in a particular occupation and/or unit).
However, managers may also continue to use performance plans, elements,
and standards.
By providing managers more realistic alternatives for setting
employee expectations and assessing their performance against those
expectations, the Department will be better able to hold its employees
accountable and to recognize and reward those who exceed expectations.
By the same token, managers will also be held accountable for clearly
and effectively communicating those expectations, giving employees
feedback regarding their performance in relation to those expectations,
making meaningful performance distinctions in support of the
Department's new performance-based pay system, and identifying and
addressing unacceptable performance.
Finally, in order to enable managers to make meaningful
distinctions in performance, the regulations provide for a single level
of unacceptable performance, a fully successful level, and at least one
level above fully successful. The regulations do not permit two-level
("pass/fail") ratings for employees above the entry/developmental
level, nor do they allow any type of rating quotas or forced ratings
distribution. The regulations also provide for DHS to appoint
Performance Review Boards to provide oversight and ensure consistent
application of the performance management system.
Further, the regulations provide managers with a broad range of
options for dealing with poor performance, including remedial training,
an improvement period, reassignment, verbal warnings, letters of
counseling, written reprimands, and/or adverse actions as defined in
subpart F of the regulations. Adverse actions will include the
reduction of an employee's pay within a band, giving managers another
means of dealing with poor performance, short of demotion or removal.
The proposed regulations also streamline and simplify the procedures
involved in taking an adverse action without compromising an employee's
right to due process (described below and in subpart F). In this
regard, the proposed regulations require a manager to take the nature
and consequences of the poor performance into account in deciding among
these options.
As provided in subpart C of the proposed regulations, performance
ratings of record will be used to make individual pay adjustments under
the new DHS pay system. In recognition of these pay consequences, the
regulations permit employees to grieve their ratings of record. Non-
bargaining unit employees may grieve such ratings through the
Department's internal administrative grievance procedure; bargaining
unit employees will have access to negotiated grievance procedures. In
the latter case, an exclusive representative may seek arbitration of an
appraisal grievance, but the rating of record will be sustained unless
the union is able to prove that it was arbitrary or capricious. Either
party may file exceptions to an arbitration award with the DHS Labor
Relations Board established under subpart E of these proposed
regulations.
Generally, DHS employees who are currently covered by chapter 43 of
title 5, U.S. Code, are eligible for coverage under the new performance
management provisions in subpart D of the proposed regulations.
Therefore, administrative law judges and Presidential appointees will
not be eligible for coverage, because they are currently excluded from
chapter 43 of title 5. However, certain categories of employees are
currently excluded from chapter 43 by OPM administrative action, as
authorized by 5 CFR 430.202(d), such as those hired under the Stafford
Act; these employees are eligible for coverage under the new DHS
performance management provisions. DHS will decide which of those
categories of otherwise eligible employees will be covered by the
Department's new performance management system or systems. The proposed
regulations also allow DHS to develop, implement, and administer
performance management systems tailored to specific organizations and/
or categories of employees (for example, in a particular occupational
cluster).
These proposed regulations lay the foundation for a performance
management system that is fair, credible, and transparent, and that
holds employees and managers accountable for results. However, a
performance management system is only as effective as its
implementation and administration. To that end, DHS is committed to
providing its employees and managers with extensive training on the new
performance management system and its relationship to other HR policies
and programs, as well as on effective performance management generally.
A New Labor Relations, Adverse Actions, and Appeals System for DHS
Labor-Management Relations--Subpart E
As noted previously, the Department of Homeland Security was
created in recognition of the paramount responsibility to safeguard the
American people from terrorist attack and other threats to homeland
security. In enacting the Homeland Security Act, Congress stressed that
any HR system established by DHS and OPM must be "flexible" and
"contemporary," enabling a swift response to the ever-evolving
threats to our homeland. The labor-management regulations in this part
are designed to meet these compelling concerns.
1. Purpose
DHS has a unique mission not duplicated elsewhere in the Federal
Government. When Congress passed the Homeland Security Act and created
DHS, it could have relied upon the current labor-management relations
statute at 5 U.S.C. chapter 71 with respect to the Department's labor
relations obligations. However, Congress chose not to maintain the
status quo and gave the Secretary and the Director of OPM clear
authority to waive or modify the provisions of chapter 71. (See 5
U.S.C. 9701(c).) In so doing, Congress provided DHS the option of
exploring and implementing new and innovative human resources
management systems that would be more responsive to the unique and
critical mission of DHS. (See 5 U.S.C. 9701(a) and (c).)
These regulations define the purpose of the labor relations system.
They implement the requirements of 5 U.S.C. 9701(b) by ensuring the
right of employees to organize, bargain collectively, and participate
through labor organizations of their own choosing in decisions which
affect
[[Page 8041]]
them, subject to the limitations on negotiability established in law,
including the authority that Congress delegated to OPM and DHS to
promulgate these regulations.
Chapter 71 of title 5, United States Code, enacted in 1978,
recognizes that the "special requirements and needs of the
Government" demand special procedures and that its provisions must be
interpreted in a manner consistent with the requirement of "an
effective and efficient Government." These regulations state that
every provision of this subpart must be interpreted in a way that
recognizes the critical mission of the Department, and each must be
interpreted to promote the swift, flexible, effective, and efficient
day-to-day accomplishment of that mission as defined by the Secretary.
2. Definitions
Unless otherwise provided, these regulations leave intact many of
the definitions contained in chapter 71 of title 5. The regulations
adopt the following terms and their associated definitions from that
chapter and apply them to DHS: "employee," "labor organization,"
"exclusive representative," "supervisor," "collective
bargaining," and "management official." The term "agency," as
referenced in chapter 71, will be replaced by the term "Department"
and refers to the Department of Homeland Security. The term
"components" applies to the major entities under the Department,
e.g., Customs and Border Protection.
The regulations revise other definitions from chapter 71 as they
would apply to DHS. The term "conditions of employment" has been
redefined to exclude matters specifically provided for by Department-
wide personnel regulations and to exclude pay, pay adjustments, and job
evaluation under subparts B and C. The term "grievance" has been
modified somewhat to mean any claimed violation, misinterpretation, or
misapplication of any law, rule, or regulation only if the law, rule,
or regulation was issued for the purpose of affecting the working
conditions of employees--not one that does so indirectly or
incidentally. To this extent, DHS and OPM adopt the D.C. Circuit's
interpretation of what constitutes a "grievance."
Chapter 71 of title 5, U.S. Code, defines employees who are
excluded from coverage in a bargaining unit. In addition to managers
and supervisors, "confidential employees" are excluded from coverage
under chapter 71 if the employee acts in a confidential capacity with
respect to an individual who "formulates or effectuates management
policies in the field of labor relations." We believe this definition
is drawn too narrowly. There are many management officials who do not
formulate labor relations policy but who have labor-management
relations responsibilities. For example, officials who resolve
grievances at the second or third step of a negotiated grievance
procedure or who serve on negotiating teams or help decide the position
management takes in negotiating labor agreements. We propose to exclude
from coverage any employees who work for such managers in a
confidential capacity because of the sensitive nature of the
information they might be privy to and the potential for real or
perceived conflicts of interest.
3. Administration
The Department will create a Homeland Security Labor Relations
Board (Board) composed of three external members appointed to fixed
terms. These three members will be appointed by the Secretary, and one
member will be nominated by the Chair of the Federal Labor Relations
Authority (FLRA) from among the current members of FLRA. Members will
be chosen not only for their background in labor-management relations,
but also for their knowledge of the DHS mission and their leadership
experience in comparable organizations. The Board must interpret the
regulations in subpart E and related decisions and policies in a way
that recognizes the critical mission of the Department and the need for
flexibility.
The Board will issue decisions in the following types of cases:
bargaining unit determinations; unfair labor practice claims arising
out of the duty to bargain; information request disputes; bargaining
impasses and negotiability disputes; and exceptions to arbitration
awards. In order to maintain the integrity of the Governmentwide labor
relations program and preserve DHS resources, FLRA will continue to
supervise and conduct representation elections and retain jurisdiction
over the processing of unfair labor practice charges concerning the
rights and obligations of individual employees and labor organizations
(i.e., 5 U.S.C. 7116 (a)(1)-(4) and (b)(1)-(4)).
In evaluating the merits of a separate Homeland Security Labor
Relations Board that would largely replace FLRA, DHS and OPM put a high
premium on the Board members' understanding of and appreciation for the
unique challenges the Department faces in carrying out its homeland
security mission. Given its responsibilities to administer a
Governmentwide labor relations program for over 1 million Federal
employees, FLRA is less likely than an independent DHS Labor Relations
Board to develop the mission-focus and homeland security expertise that
the Department and its unions will need, nor will it be as able to
dedicate its resources to prioritize DHS cases. However, to ensure
independence and impartiality, the DHS Labor Relations Board will not
report to the Secretary; rather, its members will be appointed to fixed
terms and subject to removal only for inefficiency, neglect of duty, or
malfeasance.
DHS and OPM also gave great weight to the benefits of a unified,
expeditious process to resolve bargaining issues and disputes. Under
the current system, a bargaining dispute can be investigated and
pursued by FLRA's Office of General Counsel to determine whether there
was an obligation to bargain; by FLRA itself to determine whether the
matter is within the scope of bargaining; and by the Federal Service
Impasses Panel to resolve the bargaining issue on its merits. This
division of critical adjudicatory functions causes excessive delays and
repeated litigation and contributes significantly to the cost of
collective bargaining. OPM and DHS concluded that there are significant
advantages to be gained from "one-stop shopping" to resolve
bargaining disputes.
In sum, we determined that the Department should establish a
separate Labor Relations Board focused on the DHS mission but
completely independent. In addition, we concluded that the Board should
oversee a unified dispute resolution process that will decide
bargaining disputes more efficiently and effectively than is possible
today under FLRA and chapter 71. However, the fragmentation and
overlapping jurisdiction that makes resolving bargaining disputes so
complex and protracted is not a problem in the way employee appeals are
adjudicated by MSPB. As a single forum with a unified statutory
process, MSPB already employs the "one-stop shop" approach to adverse
action appeals that OPM and DHS will apply to bargaining disputes. That
is why OPM and DHS are creating the DHS Labor Relations Board to
resolve bargaining matters while preserving MSPB for deciding most
employee appeals, subject to streamlined rules and new substantive
standards, discussed more fully in the "Appeals" section of this
Supplementary Information.
OPM and DHS also concluded that an understanding of the
Department's mission is essential to resolving bargaining disputes,
which involve
[[Page 8042]]
general conditions of employment affecting most or all bargaining unit
employees. Except for offenses designated as "mandatory removal
offenses" under subpart G, which will be resolved by an independent
DHS panel, an appreciation for the Department's unique mission, while
important, is not as essential for resolving individual employee
appeals to MSPB.
Both the DHS Labor Relations Board and FLRA must interpret the
regulations in subpart E in a way that promotes the swift, flexible,
effective, and efficient day-to-day accomplishment of the Department's
mission as defined by the Secretary. In addition, the Board is
authorized to promulgate its own operating procedures and issue
advisory opinions on important issues of law. These opinions will help
both labor and management understand how key provisions of the
regulations will be interpreted without the time and expense of years
of litigation.
Matters that come before the DHS Labor Relations Board may be
reviewed de novo, which means that the Board will have the discretion
to reevaluate the evidence presented by the record and reach its own
independent conclusions with respect to the matters at issue. Under
chapter 71, FLRA reviews issues of law de novo. The Board will have the
same authority, but it may also employ a de novo review to factual
findings and contract interpretation. Given the inherently executive
branch nature of decisions relating to homeland security and the
Department's unique responsibilities in this area, the Board is
authorized to conduct a thorough review of all matters, including
factual determinations by its adjudicators or arbitrators, to safeguard
the Department's homeland security mission.
Under 5 U.S.C. 7123, the United States courts of appeals have
jurisdiction over appeals filed from final orders of FLRA, with limited
exceptions. Similar judicial review in the U.S. Court of Appeals for
the Federal Circuit exists for MSPB pursuant to 5 U.S.C. 7703. Ideally,
these regulations would have applied the same standards and procedures
as set forth in 5 U.S.C. 7123 and 7703 to the decisions of the DHS
Labor Relations Board and the DHS Panel that will decide "mandatory
removal offenses." This would have been the most efficient way in
which to accord the right of judicial review to individuals adversely
affected or aggrieved by a decision of the Board or the Panel. However,
DHS and OPM currently lack the statutory authority to confer
jurisdiction to hear such appeals in the United States courts of
appeals or the U.S. Court of Appeals for the Federal Circuit. In light
of these issues, the proposed regulatory language is silent on judicial
review of decisions of the Board or the Panel. DHS and OPM seek
comments on available options, including (1) remaining silent on
judicial review and (2) retaining the current statutory judicial review
provisions by permitting FLRA and MSPB to review decisions of the Board
and the Panel.
Option 1. Under this option, DHS and OPM would not include appeal
language in the regulation addressing any form of judicial review, but
would allow existing governing legal principles to determine the
circumstances under which there would be judicial review.
Option 2. Under 5 U.S.C. 7123, the United States courts of appeals
have jurisdiction over appeals filed from final orders of FLRA, with
limited exceptions. Under this option the final regulations would
provide that Board decisions are appealable to the three-member FLRA
but with a deferential standard of review appropriate for an appellate
procedure of this type. FLRA would be required to decide an appeal from
a final decision of the Board within 20 days. All decisions of FLRA,
including those decisions on appeals from the Board, would be subject
to judicial review in accordance with 5 U.S.C. 7123. Under this option,
judicial deference would be given to the decisions of the Board because
the Board is charged by regulation with interpreting and implementing
the Homeland Security Act and was created to apply its specialized
expertise in homeland security matters.
4. Employee Rights
The regulations retain the statement of employee rights enumerated
in chapter 71. Employees, as defined in the regulations, will have the
right to form, join, or assist any labor organization, or to refrain
from any such activity. Each employee will be protected in the exercise
of any rights under the regulations through existing FLRA procedures.
5. Union Rights and Obligations
As in chapter 71, these regulations provide that recognized unions
are the exclusive representatives of the employees in the unit and act
for and negotiate on their behalf, consistent with law and regulation.
This section also preserves what has come to be known as the
"Weingarten" right, which permits union representation at the
employee's request when management examines an employee during an
investigation and the employee reasonably believes that discipline will
follow. The proposed regulations provide that representatives of the
Office of the Inspector General, Office of Security, and Office of
Internal Affairs are not representatives of the Department for this
purpose.
Under current law, a union has the right to send a representative
to a "formal meeting" called by management to discuss general working
conditions with employees. Determining what is and is not a "formal
meeting" as the FLRA and courts have interpreted that term requires
managers to balance numerous factors concerning the relative formality
of the meeting and the precise subject matter discussed. Front-line
managers and supervisors are expected to be familiar with and know how
to apply these complicated, nuanced criteria, and they get it wrong at
their legal peril. This can have a chilling effect on discussions
between management and employees concerning everyday workplace issues
and can inhibit creative thinking and problem solving. This is
particularly disruptive to the mission at ports of entry, where there
are often multiple unions.
The rights associated with "formal meetings" were intended to
safeguard against management efforts to bypass the union and deal
directly with employees in ways that undermine the union's status as
exclusive representative. We agree that such protections are needed,
but these regulations eliminate the concept of a formal meeting.
Instead, the regulations treat management efforts to bypass the union
as a breach of the duty to bargain in good faith and an unfair labor
practice. This change does not affect or limit the union's right to
attend meetings at which an employee's grievance is discussed.
In conjunction with the regulation concerning grievances, this
regulation resolves any uncertainty resulting from litigation about
whether unions are entitled to participate in EEO proceedings,
including mediation, after a formal EEO complaint has been filed. Under
these regulations, unions do not have such a right unless the
complainant requests union representation. This change will preserve
the informality and confidentiality of the entire EEO complaint
process.
Under these regulations, the Department will hold employee
representatives to the same conduct requirements as any other DHS
employees. The intent is to not bind the Department to FLRA's
"flagrant
[[Page 8043]]
misconduct" standard or any other test developed through case
decisions which may immunize union representatives engaged in otherwise
actionable misconduct. The regulations clarify that the Department may
address the misconduct of any employee, including employees acting as
union representatives, as long as the agency does not treat employees
more severely because they are engaging in union activity. The
regulation is not intended to target the content of ideas; rather, it
applies to misconduct in any manner expressed.
6. Information Disclosure
Under chapter 71, a union has the right to information maintained
by the agency if the information is necessary and relevant to the
union's representational responsibilities. This right is maintained
with some modifications under these regulations.
Under the regulations, disclosure of information is not required if
adequate alternative means exist for obtaining the requested
information, or if proper discussion, understanding, or negotiation of
a particular subject within the scope of collective bargaining is
possible without recourse to the information. This change was made to
relieve management of the administrative burden of producing
information that can readily be obtained some other way or information
that the union does not really need to fulfill its representational
obligations. The regulations further provide that information may not
be disclosed if the Secretary or his designee determines that
disclosure would compromise the Department's mission, security, or
employee safety.
The proposed regulations specify that sensitive information such as
home addresses, home telephone numbers, e-mail addresses, and other
personal identifiers, may not be disclosed to unions without employees'
express written consent. While this is not a change in existing
statutory interpretation, it is necessary to specify these limitations
in the regulations, given the extremely sensitive nature of the
Department's mission and the serious consequences if such information
fell into the wrong hands.
7. Management Rights
The Department's ability to respond rapidly to a variety of
critical challenges, ranging from terrorist threats to natural
disasters, is vital. To carry out its wide ranging mission, the
Department must have the authority to move employees quickly when
circumstances demand; it must be able to develop and rapidly deploy new
technology to confront threats to security; and it must be able to act
without unnecessary delay to properly secure the Nation's borders and
ports of entry.
Actions such as these involve the exercise of management's reserved
rights and lie at the very core of how DHS carries out its mission.
Under chapter 71 of title 5, the obligation to notify the union well
ahead of any changes in the workplace and complete all negotiations
before making any changes could seriously impede the Department's
ability to meet mission demands. For example, before the Department
could redeploy personnel from one border to another, it could be
required to bargain over the procedures it would have to follow in
deciding how assignments are made, who gets deployed, and for how long.
Based on these negotiations, the Department may have to spend valuable
time canvassing for volunteers or considering seniority before moving
people from one location to another. In the face of a committed and
unpredictable enemy, these excessive limitations on the Department's
authority to act where and when needed would significantly impede the
Department's ability to accomplish its mission.
To ensure that the Department has the flexibility it needs, we
propose to revise the management rights provisions of chapter 71. We
will expand the list of nonnegotiable subjects in section 7106 to
include what are now permissive subjects of bargaining--the numbers,
types, and grades of employees and the technology, methods, and means
of performing work. The Department will not be required to bargain over
the Department's exercise of these rights or over most of the other
rights enumerated in chapter 71, including the right to determine
mission, budget, organization, and internal security practices, and the
right to hire, assign and direct employees, and contract out. The
Department can take action in any of these areas without advance notice
to the union and without bargaining. After the Department acts, it will
have discretion to bargain over procedures and appropriate
arrangements. The regulations also provide for consultation with
employee representatives both before and after implementation when
circumstances permit.
The Department will have the same bargaining obligation it has
today concerning the exercise of the remaining management rights in
chapter 71. These include the right to lay-off and retain employees, to
take disciplinary action, and to promote. With respect to these rights,
management will be obligated to bargain over procedures and
arrangements prior to implementation, as provided under chapter 71.
These changes were carefully crafted to meet the operational needs
of DHS. We focused on those areas where flexibility and swift
implementation are most critical to preserving and safeguarding our
Nation. We concluded that the Department's mission could not be met
merely by setting time limits on how long the Department would have to
bargain before taking action or by streamlining the system in other
ways. DHS must have flexibility in these core management right areas to
respond without delay to an evolving and ever changing threat. We
believe these proposed rules accommodate the collective bargaining
rights provided by the Homeland Security Act without compromising the
Department's paramount responsibility to protect the lives and security
of the American people.
8. Bargaining Unit Determinations
In determining bargaining units, the Board will continue to apply
the same factors set forth under chapter 71 (i.e., do the employees in
a proposed unit have a clear and identifiable community of interest,
and does the unit promote effective and efficient dealings with the
Department?). However, in applying these criteria, the Board will give
the most weight to effectiveness and efficiency and determine
bargaining units based on what is "an appropriate unit consistent with
the Department's organizational structure." Using this standard will
help align the Department's bargaining units as closely as possible
with the agency's mission and organizational structure, reduce the
threat of fragmented bargaining units, provide for more uniform
conditions of employment, and facilitate contract administration, all
of which contribute to more efficient and effective agency operations.
9. Duty To Bargain
In order to ensure a consistent approach to managing the Department
within a multi-union, multi-bargaining unit environment, the proposed
regulations specify that there is no duty to bargain over DHS-wide
personnel policies and regulations including the human resources
management system established by OPM and DHS (management must bargain
over personnel policies and regulations issued by the Department's
components). In addition, proposals that do not significantly impact a
substantial portion of the bargaining unit are
[[Page 8044]]
outside the duty to bargain. This will focus bargaining on those
matters that are of significant concern and relieve the parties of
potentially lengthy negotiations over matters that are limited in scope
and effect.
If parties bargain over an initial term agreement or its successor
and do not reach agreement within 60 days, the parties will be able to
agree to continue bargaining or either party may refer the matter to
the Board for resolution. Mid-term bargaining over proposed changes in
conditions of employment must be completed within 30 days or management
will be able to implement the change after notifying the union.
As is currently the case, collective bargaining provisions that are
contrary to law, regulation, or the exercise of reserved management
rights cannot be enforced; the Secretary may disapprove any collective
bargaining provision whenever he determines that a provision is
contrary to law, regulation, or management rights; and matters reserved
to the sole and exclusive discretion of the Secretary or his designee
will be non-negotiable.
10. Grievance/Arbitration
DHS' grievance and arbitration process generally follows the
contours of chapter 71. Under DHS' system, matters excluded from the
grievance procedure under 5 U.S.C. 7121(c) will remain excluded from
coverage in the DHS system. However, in order to enhance consistency,
discourage forum shopping, and provide for faster and more consistent
resolution of appeals, the regulations propose to eliminate those
adverse actions that are appealable to MSPB (e.g., removals,
suspensions of more than 14 days, and demotions) from the scope of the
grievance procedure. To ensure fairness, these actions will be
appealable under subpart G. Lesser disciplinary and adverse actions
will still be covered by the negotiated grievance procedure. Employees
alleging discrimination may file a grievance under a negotiated
grievance procedure or a complaint with the Equal Employment
Opportunity Commission (EEOC), but not both.
Performance appraisal grievances will be handled in a similar
manner. An employee can file a grievance and the union can pursue
arbitration regarding a performance rating. However, if management
subsequently takes an appealable adverse action based on the rating and
the employee files an appeal with MSPB under subpart G, any grievance
or arbitration will be merged with the MSPB appeal and adjudicated
under subpart G.
Finally, subpart E includes a savings provision to make clear that
the procedures established under these regulations will not apply to
grievances and other administrative proceedings that were already in
progress when the affected employee(s) became covered by subpart E.
Adverse Actions--Subpart F
The regulations propose several revisions and additions to the
current adverse actions system. These changes are directed at the
cumbersome and restrictive requirements for addressing and resolving
unacceptable performance and misconduct. The proposed changes
streamline the rules and procedures for taking adverse actions, to
better support the mission of the Department while ensuring that
employees receive due process and fair treatment guaranteed by the
Homeland Security Act.
The following sections identify the major changes proposed by this
subpart and briefly describe the purpose of each change.
1. Employees Covered
All DHS employees are eligible for coverage under subpart F of the
proposed regulations, except where specifically excluded by law or
regulation. For example, employees of the Transportation Security
Administration are not eligible for coverage under subpart F because
they are excluded from coverage under 5 U.S.C. chapter 75, and 5 U.S.C.
9701 does not allow the joint regulations issued by DHS and OPM to
cover such employees.
The regulations provide an "initial service period" of one-to-two
years for all employees upon appointment to DHS. Prior Federal service
counts toward this requirement. Employees who are on time-limited
appointments and those serving in an "initial service period" are not
covered by this subpart. However, so as to ensure that the rights
currently granted preference eligible employees are not diminished, all
preference eligible employees are covered by the adverse action
protections of subpart F after completing one year of an "initial
service period." Furthermore, employees who are in the competitive
service and who are removed during an "initial service period" are
covered by the adverse action protections of 5 CFR 315.804 and 315.805.
The specific length of the "initial service period" will be tied to
specific occupations to reflect varying job demands and training needs.
For example, certain occupations have long periods of formalized
training which impact the ability of management to assess employee job
performance. Other occupations require employees to demonstrate skills
and competencies that also cannot be adequately measured or assessed
within 1 year.
2. Actions Covered
Adverse actions will continue to be defined as they are now in
chapter 75 of title 5, U.S. Code, to include removals, suspensions of
any length, demotions, and reductions in pay. These regulations propose
to change the coverage from furloughs for 30 days or less to furloughs
for 90 days or less.
A small number of Federal agencies are covered under the national
security provisions of 5 U.S.C. 7532. Under these provisions, an
employee may be immediately suspended without pay or removed if the
agency head considers the action "necessary in the interests of
national security." Before taking such an action, however, the agency
head must afford the employee procedural rights as set forth in the
statute. An agency head's decision in these cases is not subject to
appeal or judicial review. This regulation incorporates the current
provisions of the law and makes them applicable to DHS.
3. Mandatory Removal Offenses
This subpart permits the Secretary or designee to identify offenses
that have a direct and substantial impact on the ability of the
Department to protect homeland security" for example, accepting or
soliciting a bribe that would compromise border security or willfully
disclosing classified information. These offenses carry a mandatory
penalty of removal from Federal service. This change allows management
to act swiftly to address and resolve misconduct or unacceptable
performance that would be most harmful to the Department's critical
mission. These mandatory removal offenses will be identified in advance
and made known to all employees. Employees alleged to have committed
these offenses will have the right to advance notice, an opportunity to
respond, a written decision, a review by an adjudicating official, and
a further appeal to an independent DHS panel, as set forth in subpart G
of this part. However, only the Secretary or his or her designee can
mitigate the penalty for committing a mandatory removal offense.
The regulations do not list the infractions that will constitute
mandatory removal offenses. DHS has not yet identified a list of such
offenses, and it is important to preserve the Secretary's flexibility
to carefully and narrowly determine the offenses that
[[Page 8045]]
will fall into this category and to make changes over time. The absence
of this flexibility has been problematic at the Internal Revenue
Service (IRS) where the IRS Restructuring Act codified mandatory
disciplinary offenses in law and limited the agency's ability to make
needed changes. The Department will identify mandatory removal offenses
well in advance and make sure that employees know what these offenses
are. The Department invites public comment on the best and most
effective way to provide such notice to employees.
4. Adverse Action Procedures
This subpart retains an employee's right to representation and a
written decision but provides shorter advance notice periods and reply
periods than are currently required for appealable adverse actions.
Except where a mandatory removal offense is involved, employees are
entitled to a minimum of 15 days advance notice. In cases involving a
mandatory removal offense, the advance notice period is a minimum of 5
days. In all cases, employees are granted a minimum of 5 days to reply,
which runs concurrently with these notice periods. These changes
facilitate timely resolution of adverse actions while preserving
employee rights.
5. Single Process and Standard for Action for Unacceptable Performance
and Misconduct
This subpart establishes a single system for taking adverse actions
based on misconduct or unacceptable performance. This change represents
a return to a simplified approach that existed prior to the 1978
passage of the Civil Service Reform Act and chapter 43 of title 5, U.S.
Code.
Congress enacted chapter 43 in part to create a simple, dedicated
process for agencies to use in taking adverse actions based on
unacceptable performance. Since that time, however, chapter 43 has not
worked as Congress intended. In particular, interpretations of chapter
43 have made it difficult for agencies to take actions against poor
performers and to have those actions upheld. As a result, agencies have
consistently preferred to use the procedures available under chapter 75
of title 5 rather than chapter 43 when taking actions for unacceptable
performance.
The regulations eliminate the requirement for a formal, set period
for an employee to improve performance before management can take an
adverse action. Management selects employees for their positions
because the employees are well qualified. In addition, employees must
complete an "initial service period" during which they will have
learned the specific requirements of their positions. As set forth in
subpart D, management must explain to employees what is expected of
them when it comes to performance. If an employee fails to perform at
an acceptable level, management may use a variety of measures,
including training, regular feedback, counseling and, at management's
discretion, an improvement period, to address and resolve performance
deficiencies. If an employee is still unable or unwilling to perform as
expected, it is reasonable for management to take an action against the
employee.
We revised the standard for taking an adverse action to require
that the Department establish a factual basis for any adverse action
and a connection between the action and a legitimate Departmental
interest. We replaced the current title 5 "efficiency of the service"
standard for action to allay any confusion that might arise from case
law linking this standard with the authority to review and mitigate
penalties, an authority we generally do not provide third parties in
adjudicating DHS cases. We intend no substantive change to the
efficiency of the service standard.
Appeals--Subpart G
Subpart G of part 9701 covers employee appeals of certain adverse
actions taken under subpart F. As is currently the case, these
appealable adverse actions include removals, suspensions of 15 days or
more, demotions, and reductions in pay. In addition, the regulations
provide for appeals of reductions in pay band and substantially
increase the length of furloughs that may be appealed. Suspensions
shorter than 15 days and other lesser disciplinary measures are not
appealable to MSPB, but may be grieved through a negotiated grievance
procedure or agency administrative grievance procedure, whichever is
applicable. Furthermore, employees who are in the competitive service
and who are removed during the first year of an "initial service
period" are provided the appeal rights found in 5 CFR 315.806.
Section 9701 of title 5, U.S. Code, requires that these new appeal
regulations provide DHS employees fair treatment, are consistent with
the protections of due process, and, to the maximum extent practicable,
provide for the expeditious handling of appeals. The law also specifies
that modifications to the current chapter 77 of title 5 should further
the fair, efficient, and expeditious resolution of appeals.
This subpart establishes procedures and timeframes for filing
appeals with MSPB and modifies rules that MSPB will use to process
appeals from DHS employees. These regulations are intended to ensure
appropriate deference to the adverse actions taken by DHS and to
streamline the way MSPB cases are handled while continuing to preserve
and safeguard employee due process protections. In addition, they
provide for an internal appeals process for "mandatory removal
offenses."
As noted earlier in the Supplementary Information, the Secretary
and the Director will conduct an ongoing evaluation of the DHS HR
system to ensure that it is achieving its intended purposes. As part of
this evaluation, the Department and OPM will pay particular attention
to the proposed adverse action and appeal procedures established by
these regulations. As noted (and discussed in more detail below), those
proposed procedures continue to permit employees to appeal most adverse
actions to MSPB, despite the fact that DHS and OPM could have
established a separate appellate body for all such actions.
In proposing these appellate procedures, the Secretary and the
Director were especially mindful of 5 U.S.C. 9701(f)(2), which requires
that they consult with MSPB on changes to chapter 77 of title 5. This
requirement was met through extensive consultations between members and
staffs of MSPB, DHS, and OPM. During those consultations, DHS and OPM
officials described specific concerns with existing procedures and
discussed the range of appellate options and alternatives that were
under consideration. For their part, MSPB officials were particularly
constructive in responding to those concerns, offering numerous
suggestions to address them, including several modifications to their
own rules and regulations.
The appellate procedures proposed below reflect many of those
suggestions, as well as the constructive dialogue that gave rise to
them. Indeed, the proposal to retain MSPB was predicated on the results
of that dialogue. However, the cumulative effect of these changes can
be assessed only as they are actually implemented and administered by
MSPB. Accordingly, DHS and OPM, with MSPB, intend to conduct a formal
evaluation of these appellate procedures after they have been in effect
for 2 years in order to determine whether the procedures have given the
Department's critical mission due weight and deference and whether
additional
[[Page 8046]]
modifications to 5 U.S.C. chapter 77 and/or these regulations need to
be proposed.
1. Appeals to MSPB
The proposed regulations retain MSPB as the adjudicator of employee
appeals of adverse actions, except as described below for mandatory
removal offenses. At the same time, the regulations propose new
substantive standards that MSPB will apply to DHS cases to improve the
appeals process and accommodate and support the agency's critical
homeland security mission. The regulations also propose new case-
handling procedures to facilitate the efficient and expeditious
resolution of appeals.
We gave serious consideration to establishing a DHS internal
appeals board to replace MSPB. However, we concluded that the
advantages of creating an internal DHS appeals board--greater
efficiency of decisionmaking and deference to agency mission and
operations among them--could be achieved if MSPB were retained as the
appeals body for adverse actions but with substantive and significant
procedural modifications. However, for mandatory removal offenses, we
decided to establish an internal appeals process that fully preserves
due process because we believe that, for these offenses, it is critical
that the adjudicator of the appeal be intimately familiar with the
mission of DHS in order to understand the particular impact of these
offenses on the Department's ability to carry out its mission.
2. Appeals of Mandatory Removal Offenses
An employee will be able to appeal a DHS removal action based on a
mandatory removal offense to an adjudicating official, who may conduct
a full evidentiary hearing and will issue a written decision. Either
party may appeal that decision to an independent DHS Panel.
Option 1
Under this option, DHS and OPM would not include appeal language in
the regulation addressing any form of judicial review, but would allow
existing governing legal principles to determine the circumstances
under which there would be judicial review.
Option 2
We are proposing to adopt the same procedures and standards for
review of Panel decisions that we developed for Board decisions.
Specifically, under 5 U.S.C. 7703, the United States Court of Appeals
for the Federal Circuit has jurisdiction over appeals filed from final
orders of MSPB. Under this option the final regulations would provide
that Panel decisions are appealable to the three-member MSPB but with a
deferential standard of review appropriate for an appellate procedure
of this type. MSPB would be required to decide an appeal from a final
decision of the Panel within 20 days. All decisions of MSPB, including
those decisions on appeals from the Panel, would be subject to judicial
review in accordance with 5 U.S.C. 7703. Under this option, judicial
deference would be given to the decisions of the Panel because the
Panel is charged by regulation with interpreting and implementing the
Homeland Security Act and was created to apply its specialized
expertise in homeland security matters.
3. MSPB Appellate Procedures
MSPB will continue to have the authority to review and adjudicate
actions covered by this subpart (except for mandatory removal offenses)
as prescribed in chapter 12 of title 5, U.S. Code. However, these
regulations propose to modify certain case processing rules and
substantive standards. The initial review and adjudication of adverse
action appeals will be governed by current title 5 provisions and MSPB
regulations, as well as the modifications identified in this section.
The modifications being made to current MSPB requirements will further
the mission of DHS without impairing fair treatment and due process
protections. Key procedural modifications include the following:
When there are no material facts in dispute, the
adjudicating official must grant a motion for summary judgment without
an evidentiary hearing. Currently, appellants are entitled to a
hearing.
The appeal filing deadline, including the
deadline for class appeals, is decreased from 30 days to 20 days.
The adjudicating official's initial decision
must be made no later than 90 days after the date on which the appeal
is filed. Moreover, if MSPB reviews an initial decision, MSPB must
render its final decision no later than 90 days after the close of
record. Also, if OPM seeks reconsideration of a final MSPB decision or
order, MSPB must render its decision no later than 60 days after
receipt of the opposition to OPM's petition in support of such
reconsideration.
Currently, the parties to an appeal may submit
unilateral requests for additional time to pursue discovery or
settlement. The ability of the parties to unilaterally submit a request
for case suspension is eliminated.
The parties may seek discovery regarding any
matter that is relevant to any of their claims or defenses. However, by
motion to MSPB, either party can seek to limit any discovery being
sought because it is privileged; not relevant; unreasonably cumulative
or duplicative; or can be secured from some other source that is more
convenient, less burdensome, or less expensive. Discovery can also be
limited through such a motion if the burden or expense of providing a
response outweighs its benefit. Prior to filing such a motion with
MSPB, the parties must confer and attempt to resolve any pending
objections. Further, when engaging in discovery, either party can
submit only one set of interrogatories, requests for production, and
requests for admissions. Additionally, the number of interrogatories or
requests for production or admissions may not exceed 25 per pleading,
including subparts, and each party may not conduct more than two
depositions. However, either party may file a motion requesting MSPB to
allow more discovery. A motion will be granted only if MSPB determines
that good cause has been shown to justify additional discovery.
All of these modifications will expedite and streamline the appeals
process so that both employees and the Department will be able to
resolve appeals more quickly and efficiently than is possible today.
The proposed regulations also retain due process protections--notice,
an opportunity to respond, and a post-action review, either in person
or on the record--for removal actions. We provide the same procedural
protections for all actions covered in subpart F. Further, these
regulations retain the statutory requirement that the appealability of
a removal be unaffected by the individual's status under any retirement
system.
Section 7701 of title 5, U.S. Code, currently authorizes the
Director of OPM to intervene in an MSPB proceeding or to petition MSPB
for review of a decision if the Director believes that an erroneous
decision will have a substantial impact on a civil service law, rule,
or regulation under OPM's jurisdiction. Given OPM's responsibility for
Governmentwide personnel management, these regulations authorize OPM to
intervene in such situations regardless of whether the law, rule or
regulation is one that falls under OPM jurisdiction. A similar
authority is provided to OPM with
[[Page 8047]]
respect to decisions of the independent Panel that will decide appeals
of removals based on mandatory removal offenses.
4. Standard of Proof
Currently, actions taken under chapter 75 are sustained if
supported by a preponderance of the evidence, and performance actions
taken under chapter 43 are sustained if supported by substantial
evidence, a lower standard of proof than preponderance. In all cases
arising under this subpart, dealing either with performance or conduct,
the Department's decision will be sustained if it is supported by
substantial evidence. Changing the standard of proof to a single, lower
standard regardless of the nature of the action simplifies the appeal
process, grants appropriate deference to DHS officials in recognition
of the critical nature of the agency mission, and assures consistency
without compromising fairness.
5. Affirmative Defenses
The Department's action will not be sustained if MSPB (as is
currently the case) determines that (1) a harmful procedural error
occurred; (2) the decision was based on any prohibited personnel
practice; or (3) the decision was not otherwise in accordance with law.
The Board/Panel will defer to OPM and DHS in their interpretation of
these regulations and the Homeland Security Act, and will defer to OPM
in its interpretation of civil service law.
These regulations require the Department to prove by substantial
evidence the factual basis of the charge brought against an employee,
but do not permit MSPB or the Panel to reverse the charge based on the
way in which the charge is labeled or the conduct is characterized.
This will eliminate excessively technical pleading requirements in
adverse action proceedings imposed by MSPB and the U.S. Court of
Appeals for the Federal Circuit in King v. Nazelrod, 43 F.3d 663, and
similar cases. As long as the employee is on fair notice of the facts
sufficient to respond to the allegations of a charge, the Department
will have complied with the notice and due process requirements of
these regulations.
6. Penalty Review
In all cases arising under this subpart, the penalty selected by
the Department may not be reduced or otherwise modified by MSPB or the
Panel. This is a significant but necessary departure from current rules
permitting MSPB to mitigate penalties in certain circumstances. We have
modified the current practice because DHS management is in the best
position to determine the penalty that most effectively supports the
Department's mission. That decision should not be subject to MSPB or
Panel review. However, nothing in these regulations would limit the
Secretary or designee's sole and exclusive authority to mitigate any
penalty imposed on, or rescind any action taken against, a DHS employee
pursuant to subpart F.
7. Attorney Fees
OPM and DHS have simplified the current standard for recovering
attorney fees. Under the current two-pronged test set forth in 5 U.S.C.
7701(g), appellants may recover fees if (1) they are prevailing parties
and (2) if an award is "in the interest of justice." Much judicial
ink has been spilled interpreting both elements of this imprecise
standard. Accordingly, in an attempt to clarify the test for recovering
attorney fees, the regulations specify that an appellant may recover
fees if the action is reversed in its entirety and the Department's
action constituted a prohibited personnel practice or was taken in bad
faith or without any basis in fact and law. Requiring the Department to
pay attorney fees simply because some of its charges were not sustained
would deter the Department from taking action in appropriate cases and
have a chilling effect on the Department's ability to carry out its
mission.
8. Alternative Dispute Resolution
These regulations encourage the use of alternative dispute
resolution procedures (ADR) and provide for DHS, OPM, and MSPB to
jointly develop expedited appeals procedures. However, because ADR and
settlement efforts are most successful when voluntary, the regulations
prohibit MSPB from requiring ADR or settlement in connection with any
action taken under this subpart. Once either party decides that
settlement is not desirable, the matter will proceed to adjudication.
Eliminating settlement efforts that are contrary to the expressed
wishes of one or both of the parties will speed up the adjudication
process and strengthen management decisionmaking authority.
Where the parties agree to engage in settlement discussions, the
case will be assigned to an official specifically designated for that
sole purpose, rather than the official responsible for adjudication.
This is necessary to avoid actual or perceived conflicts of interest on
the part of MSPB adjudicating officials.
9. Discrimination Allegations
We have decided to retain the current statutory provisions dealing
with the processing of mixed cases, i.e., cases involving allegations
of discrimination which are also appealable to MSPB. However, we
revised those provisions to reflect the establishment of the DHS Panel.
10. Judicial Review
Decisions of MSPB are subject to review by the U.S. Court of
Appeals for the Federal Circuit based on the same standard currently
provided for in 5 U.S.C. 7703.
Next Steps
The Homeland Security Act provides that the development and
implementation of a new HR system for DHS will be carried out with the
participation of, and in collaboration with, employee representatives.
The DHS Secretary and OPM Director must provide employee
representatives with a written description of the proposed new or
modified HR system. The description contained in this Federal Register
notice satisfies this requirement. The Act further provides that
employee representatives must be given 30 calendar days to review and
make recommendations regarding the proposal. Any recommendations must
be given full and fair consideration. If the Secretary and Director do
not accept one or more recommendations, they must notify Congress of
the disagreement and then meet and confer with employee representatives
for at least 30 calendar days in an effort to reach agreement. The
Federal Mediation and Conciliation Service may provide assistance at
the Secretary's option or if requested by a majority of employee
representatives who have made recommendations.
If a proposal is not challenged, it may be implemented immediately.
Similarly, when the Secretary and the Director accept any
recommendation from employee representatives, the revised proposal may
be implemented immediately. If the Secretary and the Director do not
fully accept a recommendation, the Secretary may implement the proposal
(including any modifications made in response to the recommendations)
at any time after 30 calendar days have elapsed since the initiation of
congressional notification, consultation, and mediation procedures. To
proceed with implementation in this circumstance, the Secretary must
determine (in his sole and unreviewable discretion) that further
consultation and mediation are unlikely to produce
[[Page 8048]]
agreement. The Secretary must notify Congress promptly of the
implementation of any such contested proposal.
The Secretary and the Director must develop a method under which
each employee representative may participate in any further planning or
development in connection with implementation of a proposal. Also, the
Secretary and the Director must give each employee or representative
adequate access to information to make that participation productive.
DHS plans to make the new labor relations, adverse actions, and
appeals provisions effective 30 days after the issuance of interim
final regulations later this year. At this time, DHS intends to
implement the new job evaluation, pay, and performance management
system in phases. The tentative schedule for implementing these
provisions is outlined below.
In the first phase, employees of DHS Headquarters, Science and
Technology, and Intelligence Analysis and Infrastructure Protection, as
well as GS employees of the Coast Guard, will be converted to the new
performance management system in the fall of 2004. These employees will
be converted to the new job evaluation and pay system in early 2005. At
that time, affected employees will be converted to the new system as
described in the above summary, with one-time within-grade buyouts
where appropriate. The first performance-based pay increases will
become effective in late summer 2005 for affected Coast Guard
employees, to coincide with the completion of their performance
appraisal cycle. The first annual market adjustments for these
employees will be made in early 2006. DHS will determine the timing of
pay increases for its Headquarters, Science and Technology, and
Intelligence Analysis and Infrastructure Protection employees at a
later date.
In the second phase, all remaining GS employees in DHS are expected
to be covered by the new performance management system no later than
fall 2005. These employees would then be converted to the new job
evaluation and pay system in early 2006, with one-time within-grade
buyouts where appropriate. DHS anticipates that the first pay increases
for these employees under the new system will be made effective no
later than early 2007. Transportation Security Administration employees
(except screeners), Stafford Act employees, and Coast Guard Academy
employees will be converted to a similar or identical job evaluation,
pay, and performance management system during the second phase.
The Department will determine whether Secret Service Uniformed
Division (SSUD) officers should be covered by a similar or identical
system. Legislation would be required to alter the SSUD pay system.
Public Participation
DHS and OPM invite interested persons to participate in this
rulemaking by submitting written comments, data, or views. Commenters
should refer to a specific portion of the proposal, explain the reason
for any recommended change, and include supporting data or information.
All comments received in an approved format will be posted in the
e-docket. The e-docket will be available online for public inspection
before and after the comment closing date. You may also review the
hard-copy originals of mailed and hand-delivered comments by visiting
the OPM Resource Center, as explained in the Addresses section of this
preamble.
Before acting on this proposal, we will consider all comments we
receive on or before the closing date for comments. We will consider
comments filed late if it is possible to do so without incurring
expense or delay. We may change this proposal in light of the comments
we receive.
Electronic Access and Filing
You may access the DHS/OPM e-docket on the Internet at: http://www.epa.gov/edocket.
This official e-docket will contain the various
documents specifically referenced in this Supplementary Information,
any public comments received, and other information used by
decisionmakers related to the proposed rule. You may use the DHS/OPM e-
docket to access available public docket materials online, as well as
submit electronic comments during the open comment period.
The U.S. Environmental Protection Agency (EPA) has been designated
by the Office of Management and Budget (OMB) as the official Managing
Partner in the "e-Rulemaking Initiative." DHS and OPM are pleased to
partner with EPA to provide the e-docket for this DHS/OPM proposed
rule. As a result of this partnership, you will notice references to
EPA when you access the DHS/OPM e-docket.
Public comments will be made available for public viewing in this
e-docket system, without change, as DHS/OPM receive them, unless the
comment contains copyrighted material, confidential business
information, or other information whose public disclosure is restricted
by statute. When DHS/OPM identifies a comment containing copyrighted
material, we will provide a reference to that material in the version
of the comment that is placed in the e-docket.
The e-docket system is DHS/OPM's preferred method for receiving
comments. The system is an "anonymous access" system, which means
DHS/OPM will not know your identity, e-mail address, or other contact
information unless you provide it in the body of your comment. All
comments may be viewed electronically on the e-docket; thus, unless a
comment is submitted anonymously, the names of commenters will be
public information.
You should ensure that your comments are submitted within the
specified open comment period. Comments received after the close of the
comment period will be marked "late," and DHS/OPM are not required to
consider them in formulating a final decision.
E.O. 12866, Regulatory Review
DHS and OPM have determined that this action is a significant
regulatory action within the meaning of Executive Order 12866 because
there is a significant public interest in revisions of the Federal
employment system. DHS and OPM have analyzed the expected costs and
benefits of the proposed HR system to be adopted for DHS, and that
analysis is presented below.
Integral to the administration of the proposed new DHS pay system
is a commitment to "manage to budget." Accordingly, the new pay
system carries with it potential implications relative to the base pay
of individual employees, depending upon local labor market conditions
and individual, team, and organizational performance. However, actual
payroll costs under this system will be constrained by the amount
budgeted for overall DHS payroll expenditures, as is the case with the
present GS pay system. Moreover, assuming that a normal, static
population will exist over time, DHS anticipates that accessions,
separations, and promotions will net out and, as with the present
system, not add to the overall cost of administering the system.
The creation of a new DHS pay and performance management system
will, however, result in some initial implementation costs, including
some payroll related conversion costs (e.g., the "buyout" of within-
grade increases). In addition, DHS will incur costs relating to such
matters as training (including the cost of overtime pay required to
backfill for front-line DHS employees during periods of training),
reprogramming automated payroll and HR information systems, developing
[[Page 8049]]
and conducting pay surveys to determine future pay adjustments in
relation to the labor market, and conducting employee education and
communication activities. The extent of these costs will be directly
related to the level of comprehensiveness desired by DHS, especially in
relation to training in the new system and developing and conducting
labor market pay surveys for the wide variety of jobs in DHS.
Programming costs relating to automating the payroll, HR
information, and performance management systems and for administering
pay in a performance-focused pay system should not be extensive, since
such systems already are in use elsewhere in the Federal Government and
could be adapted for use by DHS. In some cases, however, DHS could
benefit from contracting with outside providers for the development and
maintenance of such systems.
DHS estimates the overall costs associated with implementing the
new DHS HR system--including the development and implementation of a
new pay and performance system, the conversion of current employees to
that system, and the creation of the new DHS Labor Relations Board--
will be approximately $130 million through FY 2007 (i.e., over a 4-year
period); less than $100 million will be spent in any 12-month period.
The primary benefit to the public of this new system resides in the
HR flexibilities that will enable DHS to build a high-performance
organization focused on mission accomplishment. The new job evaluation,
pay, and performance management system provides DHS with an increased
ability to attract and retain a more qualified and proficient
workforce. The new labor relations, adverse actions, and appeals system
affords DHS greater flexibility to manage its workforce in the face of
constantly changing threats to the security of our homeland. Taken as a
whole, the changes included in these proposed regulations will result
in a contemporary, merit-based HR system that focuses on performance,
generates respect and trust, and above all, supports the primary
mission of DHS--protecting our homeland.
Regulatory Flexibility Act
DHS and OPM have determined that these regulations would not have a
significant economic impact on a substantial number of small entities
because they would apply only to Federal agencies and employees.
E.O. 12988, Civil Justice Reform
This proposed regulation is consistent with the requirements of
E.O. 12988. The regulation: would not preempt, repeal, or modify any
Federal statute; provides clear legal standards; has no retroactive
effects; specifies procedures for administrative and court actions;
defines key terms; and is drafted clearly.
E.O. 13132, Federalism
DHS and OPM have determined these proposed regulations would not
have Federalism implications because they would apply only to Federal
agencies and employees. The proposed regulations would not have
financial or other effects on States, the relationship between the
Federal Government and the States, or the distribution of power and
responsibilities among the various levels of government.
Unfunded Mandates
These proposed regulations would not result in the expenditure by
State, local, or tribal governments of more than $100 million annually.
Thus, no written assessment of unfunded mandates is required.
List of Subjects in 5 CFR Part 9701
Administrative practice and procedure, Government employees, Labor
management relations, Labor unions, Reporting and recordkeeping
requirements, Wages.
Department of Homeland Security.
Tom Ridge,
Secretary.
Office of Personnel Management.
Kay Coles James,
Director.
Accordingly, under the authority of section 9701 of title 5, United
States Code, the Department of Homeland Security and the Office of
Personnel Management are proposing to amend title 5, Code of Federal
Regulations, by establishing chapter XCVII consisting of part 9701 as
follows:
CHAPTER XCVII--DEPARTMENT OF HOMELAND SECURITY HUMAN RESOURCES
MANAGEMENT SYSTEM (DEPARTMENT OF HOMELAND SECURITY--OFFICE OF PERSONNEL
MANAGEMENT)
PART 9701--DEPARTMENT OF HOMELAND SECURITY HUMAN RESOURCES
MANAGEMENT SYSTEM
Subpart A--General Provisions
Sec.
9701.101 Purpose.
9701.102 Applicability and coverage.
9701.103 Definitions.
9701.104 Scope of authority.
9701.105 DHS regulations.
9701.106 Relationship to other provisions.
Subpart B--Job Evaluation
General
9701.201 Purpose.
9701.202 Coverage.
9701.203 Waivers.
9701.204 Definitions.
9701.205 Relationship to other provisions.
Job Evaluation Structure
9701.211 Occupational clusters.
9701.212 Bands.
Job Evaluation Process
9701.221 Job evaluation requirements.
9701.222 Reconsidering job evaluation decisions.
Transitional Provisions
9701.231 Conversion.
9701.232 Special transition rules for Federal Air Marshal Service.
Subpart C--Pay and Pay Administration
General
9701.301 Purpose.
9701.302 Coverage.
9701.303 Waivers.
9701.304 Definitions.
9701.305 Bar on collective bargaining.
Overview of Pay System
9701.311 Major features.
9701.312 Maximum rates.
9701.313 DHS responsibilities.
Setting and Adjusting Rate Ranges
9701.321 Structure of bands.
9701.322 Setting and adjusting rate ranges.
9701.323 Eligibility for pay increase associated with a rate range
adjustment.
Locality and Special Pay Supplements
9701.331 General.
9701.322 Locality pay supplements.
9701.333 Special pay supplements.
9701.334 Setting and adjusting locality and special pay supplements.
9701.335 Eligibility for pay increase associated with a supplement
adjustment.
Performance-Based Pay
9701.341 General.
9701.342 Performance pay increases.
9701.343 Within-band reductions.
9701.344 Special within-band increases for certain employees in a
Senior Expert band.
9701.345 Developmental pay adjustments.
Pay Administration
9701.351 Setting an employee's starting pay.
9701.352 Use of highest previous rate.
9701.353 Setting pay upon promotion.
9701.354 Setting pay upon demotion.
9701.355 Setting pay upon movement to a different occupational
cluster.
9701.356 Pay retention.
9701.357 Miscellaneous.
Special Payments
9701.361 Special skills payments.
[[Page 8050]]
9701.362 Special assignment payments.
9701.363 Special staffing payments.
Transitional Provisions
9701.371 General.
9701.372 Creating initial pay ranges.
9701.373 Conversion of employees to the DHS pay system.
9701.374 Special transition rules for Federal Air Marshal Service.
Subpart D--Performance Management
9701.401 Purpose.
9701.402 Coverage.
9701.403 Waivers.
9701.404 Definitions.
9701.405 Performance management systems.
9701.406 Setting and communicating performance expectations.
9701.407 Monitoring performance.
9701.408 Developing performance.
9701.409 Rating performance.
9701.410 Rewarding performance.
9701.411 Performance Review Boards.
9701.412 DHS responsibilities.
Subpart E--Labor-Management Relations
9701.501 Purpose.
9701.502 Rule of construction.
9701.503 Waiver.
9701.504 Definitions.
9701.505 Coverage.
9701.506 Impact on existing agreements.
9701.507 Employee rights.
9701.508 Homeland Security Labor Relations Board.
9701.509 Powers and duties of the Board.
9701.510 Powers and duties of the Federal Labor Relations Authority.
9701.511 Management rights.
9701.512 Consultation.
9701.513 Exclusive recognition of labor organizations.
9701.514 Determination of appropriate units for labor organization
representation.
9701.515 Representation rights and duties.
9701.516 Allotments to representatives.
9701.517 Unfair labor practices.
9701.518 Duty to bargain in good faith.
9701.519 Negotiation impasses.
9701.520 Standards of conduct for labor organizations.
9701.521 Grievance procedures.
9701.522 Exceptions to arbitration awards.
9701.523 Official time.
9701.524 Compilation and publication of data.
9701.525 Regulations of the Board.
9701.526 Continuation of existing laws, recognitions, agreements,
and procedures.
9701.527 Savings provision.
Subpart F--Adverse Actions
General
9701.601 Purpose.
9701.602 Waivers.
9701.603 Definitions.
9701.604 Coverage.
Requirements for Suspension, Demotion, Reduction in Pay, Removal, or
Furlough of 90 Days or Less
9701.605 Standard for action.
9701.606 Mandatory removal offenses.
9701.607 Procedures.
9701.608 Departmental record.
National Security
9701.609 Suspension and removal.
Subpart G--Appeals
9701.701 Purpose.
9701.702 Waivers.
9701.703 Definitions.
9701.704 Coverage.
9701.705 Alternative dispute resolution.
9701.706 MSPB appellate procedures.
9701.707 Appeals of mandatory removal actions.
9701.708 Actions involving discrimination.
Authority: 5 U.S.C. 9701.
Subpart A--General Provisions
Sec. 9701.101 Purpose.
This part contains regulations governing the establishment of a new
human resources management system within the Department of Homeland
Security (DHS), as authorized by 5 U.S.C. 9701. As permitted by section
9701, these regulations modify or waive various statutory provisions
that would otherwise be applicable to affected DHS employees. The
modified provisions are designed to establish a modern, flexible system
that supports DHS mission requirements and efforts to improve employee
and organizational performance, while maintaining merit system
principles and employee civil service protections. These regulations
are issued jointly by the Secretary of Homeland Security and the
Director of the Office of Personnel Management (OPM).
Sec. 9701.102 Applicability and coverage.
(a) The provisions of this part apply to DHS employees who are in a
category--
(1) Eligible for coverage under one or more provisions of subparts
B through G of this part; and
(2) Approved for coverage by the Secretary or designee under a
specific set of provisions as of a specified effective date, at the
Secretary's or designee's sole and exclusive discretion after
coordination with OPM.
(b) Any new DHS job evaluation, pay, or performance management
system covering Senior Executive Service (SES) members must be
consistent with the performance-based features and the pay caps
applicable to employees covered by the Governmentwide SES pay-for-
performance system authorized by 5 U.S.C. chapter 53, subchapter VIII,
and applicable implementing regulations issued by OPM. If the Secretary
determines that SES members employed by DHS should be covered by job
evaluation, pay, or performance management provisions that differ
substantially from the Governmentwide SES pay-for-performance system,
the Secretary and the Director must issue joint authorizing regulations
consistent with all of the requirements of 5 U.S.C. 9701.
(c) The Secretary or designee, at his or her sole and exclusive
discretion, may rescind approval granted under paragraph (a)(2) of this
section on a prospective basis and prescribe procedures for converting
a category of employees to coverage under applicable title 5
provisions.
(d) The regulations in this part do not apply to employees covered
by a component of a human resources system established under the
authority of a provision outside the waivable chapters of title 5, U.S.
Code, identified in Sec. 9701.104. For example, Transportation
Security Administration employees, employees appointed under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act, Secret
Service Uniformed Division officers, Coast Guard Academy faculty
members, and Coast Guard military members are not eligible for coverage
under any job evaluation or pay system established under subpart B or C
of this part. Similarly, Transportation Security Administration
employees also are not eligible for coverage under any performance
management system established under subpart D of this part or the
adverse action provisions established under subpart F of this part.
(Please refer to subparts B through G of this part for specific
information regarding the coverage of each subpart.)
(e) Notwithstanding paragraph (d) of this section, nothing in this
part prevents the Secretary or other authorized DHS official from using
an independent discretionary authority to establish a parallel system
that follows some or all of the requirements in this part for a
category of employees who are not eligible for coverage under the
authority provided by 5 U.S.C. 9701.
Sec. 9701.103 Definitions.
In this part:
Authorized agency official means the Secretary or an official who
is authorized to act for the Secretary in the matter concerned.
Coordination means the process by which DHS, after appropriate
staff-level consultation, officially provides OPM with notice of a
proposed action and intended effective date. If OPM concurs, or does
not respond to that notice within 30 calendar days, DHS may proceed
with the proposed action. However, in the event that OPM indicates the
matter has
[[Page 8051]]
Governmentwide implications or consequences, DHS will not proceed until
the matter is resolved. The coordination process is intended to give
due deference to the flexibilities afforded DHS by the Homeland
Security Act and the regulations in this part, without compromising
OPM's institutional responsibility, as codified in 5 U.S.C. chapter 11
and Executive Order 13197 of January 18, 2001, to provide
Governmentwide oversight in human resources management programs and
practices.
Department or DHS means the Department of Homeland Security.
Director means the Director of the Office of Personnel Management.
Employee means an employee within the meaning of that term in 5
U.S.C. 2105, except as otherwise provided in this subpart for specific
purposes.
General Schedule or GS means the General Schedule classification
and pay system established under chapter 51 and subchapter III of
chapter 53 of title 5, U.S. Code.
OPM means the Office of Personnel Management.
Secretary means the Secretary of Homeland Security or, as
authorized, the Deputy Secretary of Homeland Security.
Secretary or designee means the Secretary or a DHS official
authorized to act for the Secretary in the matter concerned who--
(1) Reports directly to the Secretary; or
(2) Serves as the Chief Human Capital Officer for DHS.
Sec. 9701.104 Scope of authority.
Subject to the requirements and limitations in 5 U.S.C. 9701, the
provisions in the following chapters of title 5, U.S. Code, and any
related regulations, may be waived or modified in exercising the
authority in 5 U.S.C. 9701:
(a) Chapter 43, dealing with performance appraisal systems;
(b) Chapter 51, dealing with General Schedule job classifications;
(c) Chapter 53, dealing with pay for General Schedule employees,
pay and job grading for Federal Wage System employees, and pay for
certain other employees;
(d) Chapter 71, dealing with labor relations;
(e) Chapter 75, dealing with adverse actions and certain other
actions; and
(f) Chapter 77, dealing with the appeal of adverse actions and
certain other actions.
Sec. 9701.105 DHS regulations.
DHS may issue internal Departmental directives to further define
the design characteristics of any system established in accordance with
this part.
Sec. 9701.106 Relationship to other provisions.
(a) DHS employees who are covered by a system established under
this part are considered to be covered by chapters 43, 51, 53, 71, 75,
and 77 of title 5, U.S. Code, for the purpose of applying other
provisions of law or Governmentwide regulations outside those chapters
to DHS employees, except as specifically provided in this part or in
DHS regulations.
(b) Selected examples of provisions that continue to apply to any
eligible DHS employees (despite coverage under subparts B through G of
this part) include, but are not limited to, the following:
(1) Foreign language awards for law enforcement officers under 5
U.S.C. 4521-4523;
(2) Pay for firefighters under 5 U.S.C. 5545b;
(3) Differentials for duty involving physical hardship or hazard
under 5 U.S.C. 5545(d);
(4) Recruitment, relocation, and retention payments under 5 U.S.C.
5753-5754;
(5) Physicians' comparability allowances under 5 U.S.C. 5948; and
(6) The higher cap on relocation bonuses for law enforcement
officers established by section 407 of the Federal Employees Pay
Comparability Act of 1990 (section 529 of Public Law 101-509).
(c) The following provisions do not apply to DHS employees covered
by a DHS job evaluation and pay system established under subparts B and
C in place of the General Schedule:
(1) Time-in-grade restrictions that apply to competitive service GS
positions under 5 CFR part 300, subpart F;
(2) Supervisory differentials under 5 U.S.C. 5755; and
(3) Law enforcement officer special rates and geographic
adjustments under sections 403 and 404 of the Federal Employees Pay
Comparability Act of 1990 (section 529 of Public Law 101-509).
(d) Nothing in this part waives, modifies or otherwise affects the
employment discrimination laws that the Equal Employment Opportunity
Commission (EEOC) enforces under 42 U.S.C. 2000e et seq., 29 U.S.C. 621
et seq., 29 U.S.C. 791 et seq., and 29 U.S.C. 206(d). Employees and
applicants for employment in DHS will continue to be covered by EEOC's
Federal sector regulations found at 29 CFR part 1614.
Subpart B--Job Evaluation
General
Sec. 9701.201 Purpose.
This subpart contains regulations establishing a modified job
evaluation structure and rules for covered DHS employees and positions
in place of the classification structure and rules in 5 U.S.C. chapter
51 and the job grading system in 5 U.S.C. chapter 53, subchapter IV.
Sec. 9701.202 Coverage.
(a) This subpart applies to eligible DHS employees and positions
listed in paragraph (b) of this section, subject to approval by the
Secretary or designee under Sec. 9701.102(a)(2).
(b) The following employees and positions are eligible for coverage
under this subpart:
(1) Employees and positions that would otherwise be covered by the
General Schedule classification system established under 5 U.S.C.
chapter 51;
(2) Employees and positions that would otherwise be covered by a
prevailing rate system established under 5 U.S.C. chapter 53,
subchapter IV;
(3) Employees in senior-level (SL) and scientific or professional
(ST) positions who would otherwise be covered by 5 U.S.C. 5376; and
(4) Members of the Senior Executive Service who would otherwise be
covered by 5 U.S.C. chapter 53, subchapter VIII, subject to Sec.
9701.102(b).
Sec. 9701.203 Waivers.
(a) The provisions of 5 U.S.C. chapter 51 and 5 U.S.C. 5346, and
related regulations, are waived except as provided in Sec. 9701.106
and paragraph (b) of this section.
(b) Section 5108 of title 5, U.S. Code, dealing with the
classification of positions above GS-15, is not waived or modified.
(c) For the purpose of applying provisions of title 5, U.S. Code,
and title 5, Code of Federal Regulations, that are not otherwise waived
or modified by this subpart, the term "job evaluation" includes
"classification" and "reclassification". (See also Sec. 9701.106.)
Sec. 9701.204 Definitions.
In this subpart:
Band means a work level or pay range within an occupational
cluster.
Job evaluation means the process of evaluating or classifying a job
or position to determine its relative value to an organization by
assigning it to an occupational series, cluster, and band for pay and
other related purposes. This term does not refer to the evaluation or
appraisal of an employee's performance
[[Page 8052]]
under a performance management system established under subpart D of
this part.
Occupational cluster means a grouping of one or more associated or
related occupations or positions.
Occupational series means the four-digit number OPM or DHS assigns
to a group or family of similar positions for identification purposes
(for example: 0110, Economist Series; 1410, Librarian Series).
Position or Job means the duties, responsibilities, and related
competency requirements that are assigned to an employee whom the
Secretary or designee approves for coverage under Sec. 9701.202(a).
Sec. 9701.205 Relationship to other provisions.
(a) Any job evaluation program described under this subpart must be
established in conjunction with the pay system described in subpart C
of this part.
(b) As provided in the definition of "conditions of employment"
in Sec. 9701.504, any job evaluation program established under this
subpart is not subject to collective bargaining. This bar on collective
bargaining applies to all aspects of the job evaluation program,
including coverage determinations, the design of the job evaluation
structure, and job evaluation methods, criteria, and administrative
procedures and arrangements.
Job Evaluation Structure
Sec. 9701.211 Occupational clusters.
For purposes of evaluating positions, DHS may establish
occupational clusters in coordination with OPM based on factors such as
mission; nature of work; qualifications, competencies, or skill sets;
typical career or pay progression patterns; relevant labor-market
features; and other characteristics of those occupations or positions.
DHS must document in writing the criteria for grouping occupations or
positions into occupational clusters.
Sec. 9701.212 Bands.
(a)(1) For purposes of identifying relative levels of work and
corresponding pay ranges, DHS may establish one or more bands within
each occupational cluster in coordination with OPM. Each occupational
cluster may include, but is not limited to, the following bands:
(i) Entry/Developmental--involving work that focuses on gaining the
competencies and skills needed to perform successfully in a Full
Performance band through appropriate formal training and/or on-the-job
experience.
(ii) Full Performance--involving work that requires the successful
completion of any required entry-level training and/or developmental
activities necessary to independently perform the full range of non-
supervisory duties of a position in an occupational cluster.
(iii) Senior Expert--involving work that requires an extraordinary
level of specialized knowledge or expertise upon which DHS relies for
the accomplishment of critical mission goals and objectives; reserved
for a limited number of non-supervisory employees.
(iv) Supervisory--reserved primarily for first-level supervisors.
(2) DHS must document the definitions for each band which specify
the type and range of difficulty and responsibility; qualifications,
competencies, or skill sets; or other characteristics of the work
encompassed by the band.
(b) DHS may establish qualification standards and requirements for
each occupational cluster, occupational series, and/or band in
coordination with OPM.
Job Evaluation Process
Sec. 9701.221 Job evaluation requirements.
(a) DHS must develop a methodology for describing and documenting
the duties, qualifications, and other requirements of categories of
jobs, and DHS must make such descriptions and documentation available
to affected employees.
(b) An authorized agency official must--
(1) Assign occupational series to jobs consistent with occupational
series definitions established by OPM under 5 U.S.C. 5105 and 5346 or
by DHS in coordination with OPM; and
(2) Apply the criteria and definitions required by Sec. 9701.211
and Sec. 9701.212 to assign jobs to an appropriate occupational
cluster and band.
(c) DHS must establish procedures for evaluating jobs and may make
such inquiries or investigations of the duties, responsibilities, and
qualification requirements of jobs as it considers necessary for the
purposes of this section.
(d) Job evaluation decisions become effective on the date
designated by the authorized agency official who makes the decision.
(e) DHS must establish a plan to review the accuracy of job
evaluation decisions.
Sec. 9701.222 Reconsidering job evaluation decisions.
(a) An employee may request that DHS reconsider the occupational
series or pay system assignment of the employee's official position of
record. An employee may not request that DHS reconsider any other job
evaluation determination made under this subpart (e.g., an employee's
placement in a band or cluster).
(b) DHS must establish policies and procedures for handling
reconsideration requests.
(c) DHS reconsideration decisions made under this section are
final.
Transitional Provisions
Sec. 9701.231 Conversion.
(a) This section describes the transitional provisions that apply
when DHS positions and employees are converted to a job evaluation
system established under this subpart. Affected positions and employees
may convert from the GS system, a prevailing rate system, the SL/ST
system, or the SES system, as provided in Sec. 9701.202. For the
purpose of this section, the terms "convert," "converted," and
"converting" refer to positions and employees that become covered by
the job evaluation system as a result of a coverage determination made
under Sec. 9701.102(a)(2) and exclude employees who are reassigned or
transferred from a noncovered position to a position already covered by
the DHS system.
(b) DHS must prescribe policies and procedures for converting the
GS and prevailing rate grade of a position to a band and for converting
SL/ST and SES positions to a band upon initial implementation of the
DHS job evaluation system. Such procedures must include provisions for
converting an employee who is retaining a grade under 5 U.S.C. chapter
53, subchapter VI, immediately prior to conversion. As provided in
Sec. 9701.373, DHS must convert employees without a reduction in an
employee's rate of basic pay (taking into account any applicable
locality payment, special rate, or other similar supplemental pay).
Sec. 9701.232 Special transition rules for Federal Air Marshal
Service.
Notwithstanding any other provision in this subpart, if DHS
transfers Federal Air Marshal Service positions from the Transportation
Security Administration (TSA) to another organization within DHS, DHS
may cover those positions under a job evaluation system that is
parallel to the job evaluation system that was applicable to the
Federal Air Marshal Service within TSA. DHS may modify that system
after coordination
[[Page 8053]]
with OPM. DHS may prescribe rules for converting Federal Air Marshal
Service employees to any new job evaluation system that may
subsequently be established under this subpart.
Subpart C--Pay and Pay Administration
General
Sec. 9701.301 Purpose.
This subpart contains regulations establishing pay structures and
pay administration rules for covered DHS employees in place of the pay
structures and pay administration rules established under 5 U.S.C.
chapter 53, as authorized by 5 U.S.C. 9701. These regulations are
designed to provide DHS with the flexibility to allocate available
funds strategically in support of DHS mission priorities and
objectives. Various features that link pay to employees' performance
ratings are designed to promote a high-performance culture within DHS.
Sec. 9701.302 Coverage.
(a) This subpart applies to eligible DHS employees in the
categories listed in paragraph (b) of this section, subject to approval
by the Secretary or designee under Sec. 9701.102(a)(2).
(b) The following employees are eligible for coverage under this
subpart:
(1) Employees who would otherwise be covered by the General
Schedule pay system established under 5 U.S.C. chapter 53, subchapter
III;
(2) Employees who would otherwise be covered by a prevailing rate
system established under 5 U.S.C. chapter 53, subchapter IV;
(3) Employees in senior-level (SL) and scientific or professional
(ST) positions who would otherwise be covered by 5 U.S.C. 5376; and
(4) Members of the Senior Executive Service who would otherwise be
covered by 5 U.S.C. chapter 53, subchapter VIII, subject to Sec.
9701.102(b).
Sec. 9701.303 Waivers.
(a) The provisions of 5 U.S.C. chapter 53, and related regulations,
are waived except as provided in Sec. 9701.106 and paragraphs (b)
through (e) of this section.
(b) The following provisions of 5 U.S.C. chapter 53 are not waived
or modified:
(1) Section 5307, dealing with the aggregate limitation on pay;
(2) Sections 5311 through 5318, dealing with Executive Schedule
positions; and
(3) Section 5377, dealing with the critical pay authority.
(c) The following provisions of 5 U.S.C. chapter 53 are modified
but not waived:
(1) Section 5371 is modified to allow DHS, in coordination with
OPM, to apply the provisions of 38 U.S.C. chapter 74 to health care
positions covered by section 5371 in lieu of any DHS pay system
established under this subpart or the following provisions of title 5,
U.S. Code: chapters 51, 53, and 61, and subchapter V of chapter 55. The
reference to "chapter 51" in section 5371 is deemed to include a job
evaluation system established under subpart B of this part.
(2) Section 5373 is modified to raise the limit on certain rates of
basic pay fixed by administrative action (including any applicable
locality payment or supplement) to the rate for level III of the
Executive Schedule. Notwithstanding Sec. 9701.302(a), any DHS employee
otherwise covered by section 5373 is eligible for coverage under the
modified provisions established under this paragraph, subject to
approval by the Secretary or designee under Sec. 9701.102(a)(2).
(3) Section 5379 is modified to allow DHS and OPM to establish and
administer a modified student loan repayment program for DHS employees,
except that DHS may not make loan payments for any noncareer appointees
to the SES (as defined in 5 U.S.C. 3132(a)(7)) or for any employee
occupying a position that is excepted from the competitive service
because of its confidential, policy-determining, policy-making, or
policy-advocating character. Notwithstanding Sec. 9701.302(a), any DHS
employee otherwise covered by section 5379 is eligible for coverage
under the modified provisions established under this paragraph, subject
to approval by the Secretary or designee under Sec. 9701.102(a)(2).
(d) In approving the coverage of employees who would otherwise be
covered by a prevailing rate system established under 5 U.S.C. chapter
53, subchapter IV, DHS may limit the waiver so that affected employees
remain entitled to environmental or other differentials established
under 5 U.S.C. 5343(c)(4) and night shift differentials established
under 5 U.S.C. 5343(f) if such employees are grouped in separate
occupational clusters (established under subpart B of this part) that
are limited to employees who would otherwise be covered by a prevailing
rate system.
(e) Employees in SL/ST positions and SES members who are covered by
a basic pay system established under this subpart are considered to be
paid under 5 U.S.C. 5376 and 5382, respectively, for the purpose of
applying 5 U.S.C. 5307(d).
Sec. 9701.304 Definitions.
In this part:
48 contiguous States means the States of the United States,
excluding Alaska and Hawaii, but including the District of Columbia.
Band has the meaning given that term in Sec. 9701.204.
Band rate range means the range of rates of basic pay (excluding
any locality pay supplements or special pay supplements) applicable to
employees in a particular band, as described in Sec. 9701.321. Each
band rate range is defined by a minimum and maximum rate.
Basic pay means an employee's rate of pay before any deductions and
exclusive of additional pay of any kind, except as expressly provided
by law or regulation. For the specific purposes prescribed in
Sec. Sec. 9701.332(c) and 9701.333, respectively, basic pay includes
locality pay supplements and special pay supplements.
Control point means a specified rate in a band rate range used to
limit initial pay setting or pay progression as described in Sec.
9701.321(d).
Demotion means a reduction to a lower band within the same
occupational cluster or a reduction to a lower band in a different
occupational cluster under rules prescribed by DHS pursuant to Sec.
9701.355.
Locality pay supplement means a geographic-based addition to basic
pay, as described in Sec. 9701.332.
Occupational cluster has the meaning given that term in Sec.
9701.204.
Promotion means an increase to a higher band within the same
occupational cluster or an increase to a higher band in a different
occupational cluster under rules prescribed by DHS pursuant to Sec.
9701.355.
Rating of record has the meaning given that term in Sec. 9701.404.
SES means the Senior Executive Service established under 5 U.S.C.
chapter 31, subchapter II.
SL/ST refers to an employee serving in a senior-level position paid
under 5 U.S.C. 5376. The term "SL" identifies a senior-level employee
covered by 5 U.S.C. 3324 and 5108. The term "ST" identifies an
employee who is appointed under the special authority in 5 U.S.C. 3325
to a scientific or professional position established under 5 U.S.C.
3104.
Special pay supplement means an addition to basic pay for a
particular category of employees to address staffing problems, as
described in
[[Page 8054]]
Sec. 9701.333. A special pay supplement is paid in place of any lesser
locality pay supplement that would otherwise apply.
Unacceptable performance has the meaning given that term in Sec.
9701.404.
Unacceptable rating of record means a rating of record indicating
unacceptable performance.
Sec. 9701.305 Bar on collective bargaining.
As provided in the definition of conditions of employment in Sec.
9701.504, any pay program established under authority of this subpart
is not subject to collective bargaining. This bar on collective
bargaining applies to all aspects of the pay program, including
coverage decisions, the design of pay structures, the setting and
adjustment of pay levels, pay administration rules and policies, and
administrative procedures and arrangements.
Overview of Pay System
Sec. 9701.311 Major features.
DHS will establish a pay system that governs the setting and
adjusting of covered employees' rates of pay. The DHS pay system will
include the following features:
(a) A structure of rate ranges linked to various bands for each
occupational cluster, in alignment with the job evaluation structure
described in subpart B of this part;
(b) Policies regarding the setting and adjusting of basic pay
ranges based on mission requirements, labor market conditions, and
other factors, as described in Sec. Sec. 9701.321 through 9701.322;
(c) Policies regarding the setting and adjusting of supplements to
basic pay based on local labor market conditions and other factors, as
described in Sec. Sec. 9701.331 through 9701.334;
(d) Policies regarding employees' eligibility for pay increases
based on adjustments in rate ranges and supplements, as described in
Sec. Sec. 9701.323 and 9701.335;
(e) Policies regarding performance-based pay increases, as
described in Sec. Sec. 9701.341 through 9701.345;
(f) Policies on basic pay administration, including movement
between occupational clusters, as described in Sec. Sec. 9701.351
through 9701.356;
(g) Policies regarding special payments that are not basic pay, as
described in Sec. Sec. 9701.361 through 9701.363; and
(h) Linkages to employees' performance ratings of records, as
described in subpart D of this part.
Sec. 9701.312 Maximum rates.
(a) DHS may not pay any employee an annual rate of basic pay in
excess of the rate for level III of the Executive Schedule, except as
provided in paragraph (b) of this section.
(b) DHS may establish the maximum annual rate of basic pay for
members of the SES at the rate for level II of the Executive Schedule
if DHS obtains the certification specified in 5 U.S.C. 5307(d).
Sec. 9701.313 DHS Responsibilities.
DHS responsibilities in implementing this subpart include the
following:
(a) Providing OPM with information regarding the implementation of
the programs authorized under this subpart at OPM's request;
(b) Participating in any interagency pay coordination council or
group established by OPM to ensure that DHS pay policies and plans are
coordinated with other agencies; and
(c) Fulfilling all other responsibilities prescribed in this
subpart.
Setting and Adjusting Rate Ranges
Sec. 9701.321 Structure of bands.
(a) In coordination with OPM, DHS may establish ranges of basic pay
for bands, with minimum and maximum rates set and adjusted as provided
in Sec. 9701.322. A band may include control points, as described in
paragraph (d) of this section. Rates must be expressed as annual rates.
(b) For each band within an occupational cluster, DHS will
establish a common rate range that applies in all locations, except as
provided in paragraph (c) of this section.
(c) DHS may establish a different rate range for employees in a
band who are stationed in locations outside the contiguous 48 States.
(d) DHS may establish control points within a band that limit
initial pay-setting or pay progression for specified categories of
employees. DHS may require that employees meet certain criteria (e.g.,
performance rating) before exceeding certain control points.
Sec. 9701.322 Setting and adjusting rate ranges.
(a) Within its sole discretion, DHS, after coordination with OPM,
may set and adjust the rate ranges established under Sec. 9701.321. In
determining the rate ranges, DHS and OPM may consider mission
requirements, labor market conditions, availability of funds, pay
adjustments received by employees of other Federal agencies, and any
other relevant factors.
(b) In coordination with OPM, DHS may determine the effective date
of newly set or adjusted band rate ranges. Generally, these rate ranges
will be adjusted on an annual basis.
(c) DHS may provide different rate range adjustments for different
occupational clusters or for different bands within an occupational
cluster.
(d) For a given band, DHS may provide rate range adjustments in
locations outside the contiguous 48 States that differ from the
adjustments within the contiguous 48 States. DHS must take into account
any cost-of-living allowance received by employees stationed outside
the contiguous 48 States in determining the appropriate amount of the
band rate range adjustment.
(e) DHS may adjust the minimum and maximum rates of a band by
different percentages.
Sec. 9701.323 Eligibility for pay increase associated with a rate
range adjustment.
(a) An employee who meets or exceeds performance expectations
(i.e., has a rating of record above the unacceptable performance level)
must receive an increase in basic pay equal to the percentage value of
any increase in the minimum rate of the employee's band resulting from
a rate range adjustment under Sec. 9701.322. The pay increase takes
effect at the same time as the corresponding rate range adjustment,
except as provided in paragraph (d) of this section.
(b) An employee who has an unacceptable rating of record may not
receive a pay increase as a result of a rate range adjustment. The
denial of this increase is not considered an adverse action under
subpart F of this part.
(c) If an employee does not have a rating of record, he or she must
be deemed to meet or exceed performance expectations and is entitled to
receive an increase based on the rate range adjustment, as provided in
paragraph (a) of this section.
(d) DHS may adopt policies under which an employee who is initially
denied a pay increase under this section (based on an unacceptable
rating of record) may receive, at management's discretion, a delayed
increase after demonstrating significantly improved performance and
receiving a new rating of record. Any such delayed increase will be
made effective prospectively.
Locality and Special Pay Supplements
Sec. 9701.331 General.
The basic pay ranges established under Sec. Sec. 9701.321 through
9701.323 may be supplemented by locality and special pay supplements,
as described in Sec. Sec. 9701.332 through 9701.335. These supplements
are expressed as a
[[Page 8055]]
percentage of basic pay and are set and adjusted as described in Sec.
9701.334.
Sec. 9701.332 Locality pay supplements.
(a) For each band rate range and in coordination with OPM, DHS may
establish locality pay supplements that apply in specified locality pay
areas. Locality pay supplements apply to employees whose official duty
station is located in the given area. DHS may provide different
locality pay supplements for different occupational clusters or for
different bands within the same occupational cluster.
(b) In coordination with OPM, DHS may set the boundaries of
locality pay areas. If DHS does not use the locality pay areas
established by the President's Pay Agent under 5 U.S.C. 5304, it may
make boundary changes by regulation or other means. Judicial review of
any DHS regulation on boundary changes is limited to whether or not any
regulation was promulgated in accordance with 5 U.S.C. 553. A DHS
decision to apply the boundaries established under 5 U.S.C. 5304 does
not require regulations and is not subject to judicial review.
(c) Locality pay supplements are considered basic pay for the
following purposes:
(1) Retirement under 5 U.S.C. chapter 83 or 84;
(2) Life insurance under 5 U.S.C. chapter 87;
(3) Premium pay under 5 U.S.C. chapter 55, subchapter V, or similar
payments under other legal authority;
(4) Severance pay under 5 U.S.C. 5595;
(5) Other payments and adjustments authorized under this subpart as
specified by DHS internal regulations;
(6) Other payments and adjustments under other statutory or
regulatory authority that are basic pay for the purpose of locality-
based comparability payments under 5 U.S.C. 5304; and
(7) Any provisions for which DHS locality pay supplements must be
treated as basic pay by law.
Sec. 9701.333 Special pay supplements.
In coordination with OPM, DHS may establish special pay supplements
that provide higher pay levels for subcategories of employees within an
occupational cluster if warranted by current or anticipated recruitment
and/or retention needs. DHS may establish rules necessary to implement
such supplements. Any special pay supplement must be treated as basic
pay for the same purposes as locality pay supplements, as described in
Sec. 9701.332(c), and for the purpose of computing cost-of-living
allowances and post differentials in nonforeign areas under 5 U.S.C.
5941.
Sec. 9701.334 Setting and adjusting locality and special pay
supplements.
(a) Within its sole discretion, DHS, after coordination with OPM,
may set and adjust locality and special pay supplements. In determining
the amounts of the supplements, DHS and OPM may consider mission
requirements, labor market conditions, availability of funds, pay
adjustments received by employees of other Federal agencies, and other
relevant factors.
(b) In coordination with OPM, DHS may determine the effective date
of newly set or adjusted locality and special pay supplements.
Generally, established supplements will be reviewed for possible
adjustment on an annual basis in conjunction with rate range
adjustments under Sec. 9701.322.
Sec. 9701.335 Eligibility for pay increase associated with a
supplement adjustment.
(a) An employee who meets or exceeds performance expectations
(i.e., has a rating of record above the unacceptable performance level)
is entitled to the pay increase resulting from an increase in any
applicable locality or special pay supplement authorized by DHS. This
includes an increase resulting from the initial establishment and
setting of a special pay supplement. The pay increase takes effect at
the same time as the applicable supplement is set or adjusted, except
as provided in paragraph (d) of this section.
(b) An employee who has an unacceptable rating of record may not
receive a pay increase as a result of an increase in an applicable
locality or special pay supplement. DHS may determine the method of
preventing a pay increase in this circumstance. If DHS chooses to
reduce the employee's rate of basic pay by the amount necessary to
prevent an increase, this reduction will not be considered an adverse
action under subpart F of this part.
(c) If an employee does not have a rating of record, he or she must
be deemed to meet or exceed performance expectations and is entitled to
any pay increase associated with a supplement adjustment, as provided
in paragraph (a) of this section.
(d) DHS may adopt policies under which an employee who is initially
denied a pay increase under this section (based on an unacceptable
rating of record) may receive, at management's discretion, a delayed
increase after demonstrating significantly improved performance and
receiving a new rating of record. Any such delayed increase will be
made effective prospectively.
Performance-Based Pay
Sec. 9701.341 General.
Sections 9701.342 through 9701.345 describe various types of
performance-based pay increases that are part of the pay system
established under this subpart. Generally, these within-band pay
increases are directly linked to an employee's rating of record (as
assigned under the performance management system described in subpart D
of this part). These provisions are designed to provide DHS with the
flexibility to allocate available funds based on performance as a means
of fostering a high-performance culture that supports mission
accomplishment. While performance measures primarily focus on an
employee's contributions (as an individual or as part of a team) in
accomplishing work assignments and achieving mission results,
performance also may be reflected in the acquisition and demonstration
of required competencies.
Sec. 9701.342 Performance pay increases.
(a) Overview. The DHS pay system provides employees in a Full
Performance or higher band with increases in basic pay based on
individual performance ratings of record as assigned under a system
established under subpart D of this part. The rating of record used as
the basis for a performance pay increase is the one assigned for the
most recently completed appraisal period, except that if an employee's
current performance is determined to be inconsistent with that rating,
an authorized agency official must prepare a more current rating of
record, subject to the requirements of subpart D of this part. The DHS
pay system uses pay pool controls to allocate pay increases based on
performance points that are directly linked to the employee's rating of
record, as described in this section. Performance pay increases are a
function of the amount of money in the performance pay pool, the
relative point value placed on ratings, and the distribution of ratings
within that performance pay pool.
(b) Performance pay pools. (1) DHS will establish pay pools to
allocate monies budgeted for performance pay increases.
(2) Each pay pool covers a defined group of DHS employees, as
determined by DHS.
(3) The Secretary or designee may determine the size of the pay
pools and may adjust those amounts based on overall levels of
organizational performance or contribution to the Department's mission.
[[Page 8056]]
(4) In allocating the monies to be budgeted for performance pay
increases, the Secretary or designee must take into account the average
value of within-grade and quality step increases under the General
Schedule, as well as amounts that otherwise would have been spent on
promotions among positions placed in the same band.
(c) Performance point values. (1) DHS will establish point values
that correspond to the performance rating levels established under
subpart D of this part, so that a point value is attached to each
rating level. For example, in a four-level rating program, the point
value pattern could be 4-2-1-0, where 4 points are assigned to the
highest (outstanding) rating and 0 points to an unacceptable rating.
Performance point values will determine performance pay increases.
(2) DHS will establish a point value pattern for each pay pool.
Different pay pools may have different point value patterns.
(3) DHS must assign zero performance points to any employee with an
unacceptable rating of record.
(d) Performance payout. (1) DHS will determine the value of a
performance point, expressed as a percentage of an employee's rate of
basic pay or as a fixed dollar amount.
(2) To determine an individual employee's performance payout, DHS
will multiply the point value determined under paragraph (d)(1) of this
section by the number of performance points credited to the employee.
(3) To the extent that the adjustment does not cause the employee's
rate of basic pay to exceed the maximum rate (or applicable control
point) of the employee's band rate range, DHS will pay the performance
payout as an adjustment in the employee's annual rate of basic pay. Any
excess amount may be granted as a lump-sum payment, which may not be
considered basic pay for any purpose.
(4) In coordination with OPM, DHS may determine the effective date
of adjustments in basic pay under paragraph (d)(3) of this section.
(e) Proration of performance payouts. DHS may establish policies
governing the proration of performance payouts for employees who,
during the period between performance pay adjustments, are--
(1) Hired or promoted;
(2) In a leave without pay status; or
(3) In other circumstances where proration is considered
appropriate.
(f) Adjustments for employees returning after performing honorable
service in the uniformed services. DHS will establish policies
governing how it sets the rate of basic pay prospectively for an
employee who leaves a DHS position to perform service in the uniformed
services (as defined in 38 U.S.C. 4303 and 5 CFR 353.102) and returns
through the exercise of a reemployment right provided by law, Executive
order, or regulation under which accrual of service for seniority-
related benefits is protected (e.g., 38 U.S.C. 4316). Those policies
must credit the employee with intervening performance pay adjustments
based on the employee's last DHS rating of record. For employees who
have no such rating of record, DHS policies must prescribe a
methodology to be used in applying performance pay adjustments that
occurred during the employee's absence.
Sec. 9701.343 Within-band reductions.
Subject to the adverse action procedures set forth in subpart F of
this part, DHS may reduce an employee's rate of basic pay within a band
for unacceptable performance or conduct. A reduction under this section
may not cause an employee's rate of basic pay to fall below the minimum
rate of the employee's band rate range. These reductions may be made
effective at any time.
Sec. 9701.344 Special within-band increases for certain employees in
a Senior Expert band.
DHS may approve special within-band basic pay increases for
employees within a Senior Expert or equivalent band established under
Sec. 9701.212 who possess exceptional skills in critical areas or who
make exceptional contributions to mission accomplishment. Increases
under this section are in addition to any performance pay increases
made under Sec. 9701.342 and may be made effective at any time.
Sec. 9701.345 Developmental pay adjustments.
DHS may establish policies and procedures for adjusting the pay of
employees in an Entry/Developmental band. Those policies and procedures
may use measures that link pay progression to the demonstration of
required knowledge, competencies, skills, attributes, or behaviors. DHS
may set standard timeframes for progression through an Entry/
Developmental band while allowing an employee to progress at a slower
or faster rate based on his or her performance, demonstration of
required competencies or skills, and/or other factors.
Pay Administration
Sec. 9701.351 Setting an employee's starting pay.
In coordination with OPM, DHS may establish policies governing the
starting rate of pay for an employee, including--
(a) An individual who is newly appointed or reappointed to the
Federal service;
(b) An employee transferring to DHS from another Federal agency;
and
(c) A DHS employee who moves from a noncovered position to a
position already covered by this subpart.
Sec. 9701.352 Use of highest previous rate.
DHS may establish policies governing the discretionary use of an
individual's highest previous rate of basic pay received as a Federal
employee or as an employee of a Coast Guard nonappropriated fund
instrumentality (NAFI) in setting pay upon reemployment, transfer,
reassignment, promotion, demotion, placement in a different
occupational cluster, or change in type of appointment. For this
purpose, basic pay may include a locality-based payment or supplement
under circumstances approved by DHS. If an employee in a Coast Guard
NAFI position is converted to an appropriated fund position under the
pay system established under this subpart, DHS must use the existing
NAFI rate to set pay upon conversion.
Sec. 9701.353 Setting pay upon promotion.
(a) Except as otherwise provided in this section, upon an
employee's promotion, DHS must provide an increase in the employee's
rate of basic pay equal to the greater of--
(1) 8 percent; or
(2) The amount necessary to reach the minimum rate of the higher
band.
(b) DHS may prescribe rules providing for an increase other than
the amount specified in paragraph (a) of this section in the case of--
(1) An employee promoted from an Entry/Developmental band to a Full
Performance band (consistent with the pay progression plan established
for the Entry/Developmental band);
(2) An employee who was demoted and is then repromoted back to the
higher band, if necessary to prevent the employee from receiving a rate
of basic pay higher than the rate the employee would have received if
he or she had not been demoted; or
(3) Employees in other circumstances specified by DHS internal
regulations.
(c) An employee receiving a retained rate (i.e., a rate above the
maximum of the band) before promotion is entitled to a rate of basic
pay after promotion that is the greater of--
[[Page 8057]]
(1) The rate that is 8 percent higher than the maximum rate of the
employee's current band;
(2) The minimum rate of the employee's new band rate range; or
(3) The employee's existing rate of basic pay (which may continue
as a retained rate if the rate does not fit within the employee's newly
applicable band).
(d) DHS may determine the circumstances under which and the extent
to which any locality or special pay supplements are treated as basic
pay in applying the promotion increase rules in this section.
Sec. 9701.354 Setting pay upon demotion.
DHS may prescribe rules governing how to set an employee's pay when
he or she is demoted. The rules must distinguish between demotions
under adverse action procedures (as defined in subpart F of this part)
and other demotions (e.g., due to expiration of a temporary promotion
or canceling of a promotion during a new supervisor's probationary
period).
Sec. 9701.355 Setting pay upon movement to a different occupational
cluster.
DHS may prescribe rules governing how to set an employee's pay when
he or she moves voluntarily or involuntarily to a position in a
different occupational cluster, including rules for determining whether
such a movement is to a higher or lower band for the purpose of setting
pay upon promotion or demotion under Sec. Sec. 9701.353 and 9701.354,
respectively.
Sec. 9701.356 Pay retention.
(a) Subject to the requirements of this section and in coordination
with OPM, DHS must prescribe policies governing the application of pay
retention. Pay retention prevents a reduction in basic pay that would
otherwise occur by preserving the former rate of basic pay within the
employee's new band or by establishing a retained rate that exceeds the
maximum rate of the new band.
(b) Pay retention must be based on the employee's rate of basic pay
in effect immediately before the action that would otherwise reduce the
employee's rate. A retained rate must be compared to the range of rates
of basic pay applicable to the employee's position.
(c) Under the DHS pay system, a retained rate is a frozen rate that
is not adjusted in conjunction with rate range adjustments.
Sec. 9701.357 Miscellaneous.
(a) Except in the case of an employee with an unacceptable rating
of record, an employee's rate of basic pay may not be less than the
minimum rate of the employee's band.
(b) Except as provided in Sec. 9701.355, an employee's rate of
basic pay may not exceed the maximum rate of the employee's band rate
range.
(c) DHS must follow the rules for establishing pay periods and
computing rates of pay in 5 U.S.C. 5504 and 5505, as applicable. For
employees covered by 5 U.S.C. 5504, annual rates of pay must be
converted to hourly rates of pay in computing payments received by
covered employees.
(d) DHS may establish rules governing the movement of employees to
or from a band rate range that is augmented by a special pay
supplement.
(e) For the purpose of applying the reduction-in-force provisions
of 5 CFR part 351, DHS must establish representative rates for all band
rate ranges.
(f) If a DHS employee moves from the pay system established under
this subpart to a higher-level GS position within DHS, DHS may provide
for a special increase prior to the employee's movement in recognition
that the employee will not be eligible for a promotion increase under
the GS system.
Special Payments
Sec. 9701.361 Special skills payments.
DHS may establish additional payments for specializations for which
the incumbent is trained and ready to perform at all times. DHS may
determine the amount of the payments and the conditions for
eligibility, including any performance or service agreement
requirements. Payments may be made at the same time as basic pay or in
periodic lump-sum payments. Special skills payments are not basic pay
for any purpose and may be terminated or reduced at any time without
triggering pay retention or adverse action procedures.
Sec. 9701.362 Special assignment payments.
DHS may authorize additional payments for employees serving on
special assignments in positions placing significantly greater demands
on the employee than other assignments within the employee's band. DHS
may determine the amount of the payments and the conditions for
eligibility, including any performance or service agreement
requirements. Payments may be made at the same time as basic pay or in
periodic lump-sum payments. Special assignment payments are not basic
pay for any purpose and may be terminated or reduced at any time
without triggering pay retention provisions or adverse action
procedures.
Sec. 9701.363 Special staffing payments.
DHS may establish additional payments for employees serving in
positions for which DHS is experiencing or anticipates significant
recruitment or retention problems. DHS may determine the amount of the
payments and the conditions for eligibility, including any performance
or service agreement requirements. Payments may be made at the same
time as basic pay or in periodic lump-sum payments. Special staffing
payments are not basic pay for any purpose and may be terminated or
reduced at any time without triggering pay retention or adverse action
procedures.
Transitional Provisions
Sec. 9701.371 General.
Sections 9701.371 through 9701.375 describe the transitional
provisions that apply when DHS employees are converted to a pay system
established under this subpart. An affected employee may convert from
the GS system, a prevailing rate system, the SL/ST system, or the SES
system, as provided in Sec. 9701.302. DHS may prescribe policies and
procedures as necessary to implement these transitional provisions. For
the purpose of this section and Sec. Sec. 9701.372 through 9701.375,
the terms "convert" or "conversion" refer to employees who become
covered by the pay system without a change in position (as a result of
a coverage determination made under Sec. 9701.102(a)(2)) and excludes
employees who are reassigned or transferred from a noncovered position
to a position already covered by the DHS system.
Sec. 9701.372 Creating initial pay ranges.
(a) DHS must set the initial band rate ranges for the DHS pay
system established under this subpart in coordination with OPM. The
initial ranges may link to the ranges that apply to converted employees
in their previously applicable pay system (taking into account any
applicable special rates and locality payments or supplements).
(b) For employees who are law enforcement officers as defined in 5
U.S.C. 5541(3) and who were covered by the GS system immediately before
conversion, the initial ranges must provide rates of basic pay that
equal or exceed the rates of basic pay these officers received under
the GS system (taking into account any applicable special rates and
locality payments or supplements).
[[Page 8058]]
Sec. 9701.373 Conversion of employees to the DHS pay system.
(a) When a pay system is established under this subpart and applied
to a category of employees, DHS must convert employees to the system
without a reduction in the employee's rate of basic pay (taking into
account any applicable special rate or locality payment or supplement).
(b) If an employee receiving a special rate under 5 U.S.C. 5305
before conversion is converted to an equal rate of pay under the DHS
pay system that consists of a basic rate and a locality or special pay
supplement, the conversion is not considered an adverse action under
subpart F of this part even if the supplement is not normally treated
as basic pay for adverse action purposes.
(c) If another personnel action (e.g., promotion, geographic
movement) takes effect on the same day as the effective date of an
employee's conversion to the new pay system, DHS must process the other
action under the rules pertaining to the employee's former system
before processing the conversion action.
(d) An employee on a temporary promotion at the time of conversion
must be returned to his or her official position of record prior to
processing the conversion. If the employee is temporarily promoted
immediately after the conversion, pay must be set under the rules for
promotion increases under the DHS system.
(e) The Secretary has discretion to make one-time pay adjustments
for GS and prevailing rate employees when they are converted to the DHS
pay system. DHS may prescribe rules governing any such pay adjustment,
including rules governing employee eligibility, pay computations, and
the timing of any such pay adjustment.
(f) DHS must convert entry/developmental employees in
noncompetitive career ladder paths to the pay progression plan
established for the Entry/Developmental band to which the employee is
assigned under the DHS pay system.
Sec. 9701.374 Special transition rules for Federal Air Marshal
Service.
Notwithstanding any other provision in this subpart, if DHS
transfers Federal Air Marshal Service positions from the Transportation
Security Administration (TSA) to another organization within DHS, DHS
may cover those positions under a pay system that is parallel to the
pay system that was applicable to the Federal Air Marshal Service
within TSA. DHS may modify that system after coordination with OPM. DHS
may prescribe rules for converting Federal Air Marshal Service
employees to any new pay system that may subsequently be established
under this subpart, consistent with the conversion rules in Sec.
9701.373.
Subpart D--Performance Management
Sec. 9701.401 Purpose.
(a) This subpart provides for the establishment in the Department
of Homeland Security of at least one performance management system as
authorized by 5 U.S.C. chapter 97.
(b) DHS' performance management system(s) must--
(1) Be fair, credible, and transparent;
(2) Be designed, implemented, and administered to support the
accomplishment of the Departmental and organizational mission and
goals;
(3) Promote and sustain a high-performance culture; and
(4) Enable DHS to set mission-sensitive performance expectations,
make meaningful distinctions among employees based on performance,
address poor performance, and foster and reward excellent performance.
Sec. 9701.402 Coverage.
(a) DHS employees who would otherwise be covered by 5 U.S.C.
chapter 43 are eligible for coverage under this subpart, subject to
approval by the Secretary or designee under Sec. 9701.102(a)(2),
except as provided in paragraph (b) of this section. Those eligible for
coverage include employees who were excluded from chapter 43 by OPM
under 5 CFR 430.202(d) prior to the effective date of this subpart, as
determined under Sec. 9701.102(a)(2).
(b) Employees who are not expected to be employed longer than a
minimum period (as defined in Sec. 9701.404) during a consecutive 12-
month period are excluded from coverage under this subpart.
Sec. 9701.403 Waivers.
With respect to employees covered by this subpart, 5 U.S.C. chapter
43 and 5 CFR part 430 are waived.
Sec. 9701.404 Definitions.
In this subpart--
Appraisal means the review and evaluation of an employee's
performance.
Appraisal period means the period of time established under a
performance management system for reviewing employee performance.
Competencies means the measurable or observable knowledge, skills,
abilities, attributes, or behaviors required by the position.
Contribution means a work product, service, output, or result
provided or produced by an employee that supports the Departmental or
organizational mission, goals, or objectives.
Minimum period means period of time established by DHS during which
an employee must perform before receiving a rating of record.
Performance means accomplishment of work assignments or
responsibilities.
Performance management means applying the integrated processes of
setting and communicating performance expectations, monitoring
performance and providing feedback, and developing, rating, and
rewarding employee performance to support the success of the
organization and its employees in attaining goals and objectives.
Performance management system means the policies and requirements
established under this subpart, as supplemented by internal DHS
implementing regulations, for setting and communicating employee
performance expectations, monitoring performance and providing
feedback, and developing, rating, and rewarding employee performance.
Performance measures means observable or verifiable descriptions of
quality, quantity, timeliness, cost-effectiveness, or manner of
performance (including observable behaviors and attributes).
Rating of record means a performance appraisal prepared--
(1) At the end of an appraisal period covering an employee's
performance of assigned duties over the applicable period; or
(2) To support a pay determination, including one granted in
accordance with subpart C of this part, a within-grade increase granted
under 5 CFR 531.404, or a pay determination granted under other
applicable rules.
Unacceptable performance means the failure to meet one or more
performance expectations.
Sec. 9701.405 Performance management systems.
(a) DHS may issue internal implementing regulations that establish
one or more performance management systems for DHS employees, subject
to the requirements set forth in this subpart.
(b) At a minimum, a DHS performance management system or systems
must--
(1) Comply with the provisions of 5 U.S.C. chapter 23 that set
forth the merit system principles and prohibited personnel practices;
(2) Support and otherwise comport with the Government Performance
and Results Act of 1993 (GPRA), and Departmental and organizational
[[Page 8059]]
strategic goals and objectives and annual performance plans;
(3) Identify the employees covered and provide a means for their
involvement in the design and implementation of the system(s);
(4) In design and application, be fair, credible, and transparent;
(5) Align individual performance expectations with the Departmental
or organizational mission, strategic goals, GPRA annual performance
plans, or other DHS or organizational objectives and measures;
(6) Promote individual accountability by clearly communicating
performance expectations and holding employees responsible for
accomplishing them and by holding supervisors and managers responsible
for effectively managing the performance of employees under their
supervision;
(7) Provide for meaningful distinctions in performance to support
adjustments in pay, awards, promotions, and performance-based adverse
actions;
(8) Specify--
(i) The employees covered by the system(s);
(ii) The minimum period during which an employee must perform
before receiving a rating of record;
(iii) Procedures for setting and communicating performance
expectations, monitoring performance and providing feedback, and
developing, rating, and rewarding performance; and
(iv) Criteria and procedures to address the performance of
employees who are detailed or transferred and for employees in other
special circumstances.
Sec. 9701.406 Setting and communicating performance expectations.
(a) Supervisors and managers must establish performance
expectations and communicate them to employees.
(b) Performance expectations must align with and support the DHS
mission and its strategic goals, organizational program and policy
objectives, annual performance plans, and other measures of
performance.
(c) Performance expectations may take the form of--
(1) Goals or objectives that set general or specific performance
targets at the individual, team, and/or organizational level;
(2) Organizational, occupational, or other work requirements, such
as standard operating procedures, administrative manuals, internal
rules and regulations, and/or other instructions that are generally
applicable and available to the employee;
(3) A particular work assignment, including expectations regarding
the quality, quantity, accuracy, timeliness, and/or other expected
characteristics of the completed assignment;
(4) Competencies an employee is expected to demonstrate on the job,
and/or the contributions an employee is expected to make; or
(5) Any other means, as long as it is reasonable to assume that the
employee will understand the performance that is expected.
(d) Employees must seek clarification and/or additional information
when they do not understand their performance expectations.
(e) Supervisors must involve employees, insofar as practicable, in
the development of their performance expectations. However, final
decisions regarding performance expectations are within the sole and
exclusive discretion of the supervisor.
Sec. 9701.407 Monitoring performance.
In applying the requirements of the performance management system
and its internal implementing regulations, supervisors must--
(a) Monitor the performance of their employees and the
organization; and
(b) Provide periodic feedback to employees on their actual
performance as compared to their performance expectations, including
one or more formal interim performance reviews during each appraisal
period.
Sec. 9701.408 Developing performance.
(a) Subject to budgetary and organizational constraints, a
supervisor must--
(1) Provide employees with the proper tools and technology to do
the job; and
(2) Facilitate employee development to enhance employees' ability
to perform.
(b) During the appraisal period, if a supervisor determines that an
employee's performance is unacceptable, the supervisor must--
(1) Consider the range of options available to address the
performance deficiency, such as remedial training, an improvement
period, a reassignment, a verbal warning, letters of counseling,
written reprimands, and/or an adverse action (as defined in subpart F
of this part); and
(2) Take appropriate action to address the deficiency, taking into
account the circumstances, including the nature and gravity of the
unacceptable performance and its consequences.
(c) As specified in subpart G of this part, employees may appeal
adverse actions based on unacceptable performance.
Sec. 9701.409 Rating performance.
(a)(1) Except as provided in paragraph (a)(2) of this section, the
DHS performance management system(s) must establish a single rating
level of unacceptable performance, a rating level of fully successful
performance (or equivalent), and at least one rating level above fully
successful performance.
(2) For employees at the entry/ developmental level, the DHS
performance management system(s) may establish two rating levels, i.e.,
an unacceptable rating level and a rating level of fully successful (or
equivalent).
(b) A supervisor or other rating official must prepare and issue a
rating of record after the completion of the appraisal period. An
additional rating of record may be issued to support--
(1) A performance pay increase determination under Sec.
9701.342(a);
(2) A within-grade increase determination under 5 CFR 531.404; or
(3) A pay determination under any other applicable pay rules.
(c) A rating of record must assess an employee's performance with
respect to his or her performance expectations and/or relative
contributions and is considered final when issued to the employee with
all appropriate reviews and signatures.
(d) DHS may not impose a quota on any rating level or a mandatory
distribution of ratings of record; i.e., forced distributions are
prohibited.
(e) A rating of record issued under this subpart is an official
rating of record for the purpose of any provision of title 5, Code of
Federal Regulations, for which an official rating of record is
required.
(f) As provided in Executive Order 5396, DHS may not lower the
rating of record of a disabled veteran based on absences from work to
seek medical treatment.
(g) A rating of record may be grieved by a non-bargaining unit
employee (or a bargaining unit employee when no negotiated procedure
exists) through an administrative grievance procedure established by
DHS. A bargaining unit employee may grieve a rating of record through a
negotiated grievance procedure, as provided in subpart E of this part.
(h) A supervisor or other rating official may prepare an additional
performance appraisal for the purposes specified in the applicable
performance management system (e.g., transfers and details) at any time
after the completion of the minimum period. Such an appraisal is not a
rating of record.
(i) The DHS performance management system(s) must establish
policies and procedures for crediting performance in
[[Page 8060]]
a reduction in force, including policies for assigning additional
retention credit based on performance. Such policies must comply with 5
U.S.C. chapter 35 and 5 CFR 351.504.
Sec. 9701.410 Rewarding performance.
(a) Ratings of record will be used to make decisions regarding--
(1) Performance pay increases under Sec. 9701.342;
(2) Within-grade and quality step increases under 5 CFR 531.404 and
531.504; and
(3) Pay determinations under other applicable pay rules;
(b) Ratings of record may be used as a basis for issuing awards
under any legal authority, including 5 U.S.C. chapter 45, 5 CFR part
451, and a Departmental or organizational awards program.
Sec. 9701.411 Performance Review Boards.
(a) DHS will establish Performance Review Boards (PRBs) to--
(1) Review ratings of record in order to promote consistency of
application;
(2) Provide general oversight of the performance management
system(s) to ensure administration in a fair, credible, and transparent
manner; and
(3) At the PRB's sole and exclusive discretion and on a case-by-
case basis, remand one or more individual ratings of record for
additional review and/or, where circumstances warrant, modify a rating
or ratings of record.
(b) DHS may establish PRBs for particular organizational units,
occupations, and/or locations, or on such basis as it determines
appropriate.
(c) DHS may appoint as many PRBs as it deems necessary to carry out
their intended function effectively.
(d) When practicable, PRB members may include employees outside the
organizational unit, occupation, and/or location of employees whose
ratings of record are subject to review by that PRB.
Sec. 9701.412 DHS responsibilities.
In carrying out its responsibility to design, implement, and apply
a performance management system that is fair, credible, and
transparent, DHS must--
(a) Provide for training of supervisors, managers, and employees;
(b) Transfer ratings between subordinate organizations and to other
Federal departments or agencies;
(c) Evaluate its performance management system(s) for effectiveness
and compliance with this subpart, internal DHS regulations and
policies, and the provisions of 5 U.S.C. chapter 23 that set forth the
merit system principles and prohibited personnel practices; and
(d) Provide OPM with a copy of the Departmental regulations,
policies, and procedures that implement these regulations.
Subpart E--Labor-Management Relations
Sec. 9701.501 Purpose.
This subpart contains the regulations implementing the provisions
of 5 U.S.C. 9701(b) relating to the Department's labor-management
relations system. The Department was created in recognition of the
paramount interest in safeguarding the American people. For this reason
Congress stressed that personnel systems established by the Department
and OPM must be flexible and contemporary, enabling the Department to
rapidly respond to threats to our Nation. The labor-management
regulations in this subpart are designed to meet these compelling
concerns and must be interpreted with the Department's mission foremost
in mind. The regulations also recognize the rights of DHS employees
described below to organize and bargain collectively, subject to any
exclusion from coverage or limitation on negotiability established by
law, including these regulations.
Sec. 9701.502 Rule of construction.
This subpart must be interpreted in a way that recognizes the
critical homeland security mission of the Department. Each provision of
this subpart must be construed to promote the swift, flexible,
effective day-to-day accomplishment of this mission, as defined by the
Secretary or designee. The interpretation of these regulations by the
Secretary or designee and the Director must be accorded great
deference.
Sec. 9701.503 Waiver.
Except as incorporated with modifications into these regulations,
the provisions of 5 U.S.C. 7101 through 7135 are waived.
Sec. 9701.504 Definitions.
In this his subpart:
Authority means the Federal Labor Relations Authority described in
5 U.S.C. 7104(a).
Board means the Homeland Security Labor Relations Board.
Collective bargaining means the performance of the mutual
obligation of the management representative of the Department and the
exclusive representative of employees in an appropriate unit in the
Department to meet at reasonable times and to consult and bargain in a
good faith effort to reach agreement with respect to the conditions of
employment affecting such employees and to execute, if requested by
either party, a written document incorporating any collective
bargaining agreement reached, but the obligation referred to in this
paragraph does not compel either party to agree to a proposal or to
make a concession.
Collective bargaining agreement means an agreement entered into as
a result of collective bargaining pursuant to the provisions of this
subpart.
Component means any organizational subdivision of the Department.
Conditions of employment means personnel policies, practices, and
matters affecting working conditions--whether established by rule,
regulation, or otherwise--except that such term does not include
policies, practices, and matters relating to--
(1) Political activities prohibited under 5 U.S.C. chapter 73,
subchapter III;
(2) The classification of any position, including any
determinations regarding job evaluation under subpart B of this part;
(3) The pay of any position, including any determinations regarding
pay or adjustments thereto under subpart C of this part; or
(4) Any matters specifically provided for by Federal statute,
Executive order, Governmentwide or Departmental regulations, or the
regulations in this part.
Confidential employee means an employee who acts in a confidential
capacity with respect to an individual who has labor-management
relations responsibilities.
Dues means dues, fees, and assessments.
Employee means an individual employed by the Department or whose
employment in the Department has ceased because of any unfair labor
practice under Sec. 9701.517 and who has not obtained any other
regular and substantially equivalent employment, as determined under
regulations prescribed by the Federal Labor Relations Authority, but
does not include--
(1) An alien or noncitizen of the United States who occupies a
position outside the United States;
(2) A member of the uniformed services;
(3) A supervisor or a management official; or
(4) Any person who participates in a strike in violation of 5
U.S.C. 7311.
Exclusive representative means any labor organization which--
(1) Is certified as the exclusive representative of employees in an
appropriate unit consistent with the
[[Page 8061]]
Department's organizational structure, pursuant to 5 U.S.C. 7111; or
(2) Held recognition on March 1, 2003, as the exclusive
representative of employees in an appropriate unit on the basis of an
election, or on any basis other than an election, and continues to be
so recognized in accordance with the provisions of the Homeland
Security Act.
Grievance means any complaint concerning the effect or
interpretation, or a claim of breach, of a collective bargaining
agreement or any claimed violation, misinterpretation, or
misapplication of any law, rule, or regulation affecting conditions of
employment--
(1) By any employee concerning any matter relating to the
conditions of employment of the employee;
(2) By any labor organization concerning any matter relating to the
conditions of employment of any employee; or
(3) By any employee, labor organization, or the Department; except
that this definition does not apply with respect to any matters
excluded from grievance procedures under Sec. 9701.521.
Labor organization means an organization composed in whole or in
part of Federal employees, in which employees participate and pay dues,
and which has as a purpose the dealing with an agency concerning
grievances and conditions of employment, but does not include--
(1) An organization which, by its constitution, bylaws, tacit
agreement among its members, or otherwise, denies membership because of
race, color, creed, national origin, sex, age, preferential or
nonpreferential civil service status, political affiliation, marital
status, or handicapping condition;
(2) An organization which advocates the overthrow of the
constitutional form of government of the United States;
(3) An organization sponsored by an agency; or
(4) An organization which participates in the conduct of a strike
against the Government or any agency thereof or imposes a duty or
obligation to conduct, assist, or participate in such a strike.
Management official means an individual employed by the Department
in a position the duties and responsibilities of which require or
authorize the individual to formulate, determine, or influence the
policies of the Department or who has the authority to recommend such
action, if the exercise of the authority is not merely routine or
clerical in nature, but requires the consistent exercise of independent
judgment.
Supervisor means an individual employed by the Department having
authority in the interest of the Department to hire, direct, assign,
promote, reward, transfer, furlough, layoff, recall, suspend,
discipline, or remove employees, to adjust their grievances, or to
effectively recommend such action, if the exercise of the authority is
not merely routine or clerical in nature but requires the consistent
exercise of independent judgment.
Sec. 9701.505 Coverage.
Subject to approval by the Secretary or designee under Sec.
9701.102(a)(2), all Department employees are covered by these
regulations unless otherwise excluded pursuant to 5 U.S.C. 7103(a) or
(b), 7112(b) and (c), or any other legal authority.
Sec. 9701.506 Impact on existing agreements.
The provisions of this subpart take precedence over any
inconsistent provision contained in a collective bargaining agreement
covering Department employees. Any such inconsistent provision in a
collective bargaining agreement is unenforceable.
Sec. 9701.507 Employee rights.
Each employee has the right to form, join, or assist any labor
organization, or to refrain from any such activity, freely and without
fear of penalty or reprisal, and each employee must be protected in the
exercise of such right. Except as otherwise provided under this
subpart, such right includes the right--
(a) To act for a labor organization in the capacity of a
representative and the right, in that capacity, to present the views of
the labor organization to heads of agencies and other officials of the
executive branch of the Government, the Congress, or other appropriate
authorities; and
(b) To engage in collective bargaining with respect to conditions
of employment through representatives chosen by employees under this
subpart.
Sec. 9701.508 Homeland Security Labor Relations Board.
(a) The Homeland Security Labor Relations Board is composed of
three members, each of whom is appointed for a term not to exceed 3
years, except as provided in paragraph (d)(2) of this section. Members
may be removed by the appointing official only for inefficiency,
neglect of duty, or malfeasance.
(b) The members of the Board are appointed by the Secretary. The
Secretary will designate one of these members to serve as Chairman.
Members will be chosen for their expertise in labor-management
relations and their knowledge of the Department's mission.
(c) The Secretary will appoint one member of the FLRA to serve as a
member of the Board. The Chair of the FLRA will recommend a Board
member to the Secretary from among the existing members of the FLRA.
This member may serve on the Board only as long as he or she is a
member of the FLRA. (d)(1) An individual chosen to fill a vacancy will
be appointed for the unexpired term of the member who is replaced.
(2) The term of any member may be extended beyond 3 years when
necessary to provide for an orderly transition.
(e) Any two members of the Board constitute a quorum. A vacancy in
the Board may not impair the right of the remaining members to exercise
all of the powers of the Board.
Sec. 9701.509 Powers and duties of the Board.
(a) The Board may, to the extent provided in this subpart and in
accordance with regulations prescribed by the Board--
(1) Determine an appropriate unit consistent with the Department's
organizational structure for labor organization representation under
Sec. 9701.514;
(2) Determine issues of individual bargaining unit eligibility
under 5 U.S.C. 7112(b) and (c) and 6 U.S.C. 412(b)(2);
(3) Resolve issues relating to the scope of bargaining and the duty
to bargain in good faith under Sec. 9701.518 and conduct hearings and
resolve complaints of unfair labor practices concerning--
(i) The duty to bargain in good faith; and
(ii) Strikes, work stoppages, slowdowns, and picketing, or
condoning such activity by failing to take action to prevent or stop
such activity.
(4) Resolve information request disputes;
(5) Resolve exceptions to arbitration awards;
(6) Resolve negotiation impasses in accordance with Sec. 9701.519;
(7) Conduct de novo review of legal conclusions and the
interpretation of collective bargaining agreements;
(8) Have discretion to evaluate the evidence presented in the
record and reach its own independent conclusions with respect to the
matters at issue; and
[[Page 8062]]
(9) Assert jurisdiction over any matter concerning Department
employees that has been submitted to the FLRA if the Board determines
that the matter affects homeland security.
(b) The Board may issue Department-wide advisory opinions with the
force and effect of decisions on matters concerning--
(1) The appropriateness and composition of the Department's
bargaining units;
(2) The labor-management relations obligations of both the
Department and exclusive representatives, including the scope of
bargaining, the duty to bargain, consultation, and the rights and
duties of employees and exclusive representatives; and
(3) The administration of the use of official time by employee
representatives.
(c) In issuing advisory opinions under paragraph (b) of this
section, the Board may elect to consult with the Authority.
Sec. 9701.510 Powers and duties of the Federal Labor Relations
Authority.
The Federal Labor Relations Authority may, to the extent provided
in this subpart and in accordance with regulations prescribed by the
Authority, make the following determinations with respect to the
Department:
(a) Supervise or conduct elections to determine whether a labor
organization has been selected as an exclusive representative by a
majority of the employees in an appropriate unit and otherwise
administer the provisions of 5 U.S.C. 7111 relating to the according of
exclusive recognition to labor organizations; and
(b) Conduct hearings and resolve complaints of unfair labor
practices under Sec. 9701.517(a)(1) through (4) and (b)(1) through
(4).
Sec. 9701.511 Management rights.
(a) Subject to paragraphs (b) and (c) of this section, nothing in
this subpart may affect the authority of any management official or
supervisor of the Department--
(1) To determine the mission, budget, organization, number of
employees, and internal security practices of the agency;
(2) To hire, assign, and direct employees in the Department; to
assign work, make determinations with respect to contracting out, and
to determine the personnel by which agency operations may be conducted;
to determine the numbers, types, and grades of employees or positions
assigned to any organizational subdivision, work project or tour of
duty, and the technology, methods, and means of performing work; and to
take whatever other actions may be essential to carry out the
Department's mission; and
(3) To lay off and retain employees, or to suspend, remove, reduce
in grade, band, or pay, or take other disciplinary action against such
employees or, with respect to filling positions, to make selections for
appointments from properly ranked and certified candidates for
promotion or from any other appropriate source.
(b) Management has no duty to bargain over the exercise of any
authority under paragraph (a)(1) or (2) of this section. Management may
elect, in its sole and exclusive discretion, to bargain over--
(1) Procedures that it will observe in exercising these
authorities; and
(2) Appropriate arrangements for employees adversely affected by
the exercise of these authorities.
(c) At the request of an exclusive representative, management will
bargain over--
(1) Procedures which management officials and supervisors will
observe in exercising any authority under paragraph (a)(3) of this
section; and
(2) Appropriate arrangements for employees adversely affected by
the exercise of any authority under paragraph (a)(3) of this section.
Sec. 9701.512 Consultation.
(a) Before making any substantive change in conditions of
employment through the exercise of a management right in Sec.
9701.511(a)(1) or (2), management may request the exclusive
representative to present its views and recommendations regarding the
impact of the proposed change on bargaining unit employees.
(b) After exercising any authority under Sec. 9701.511(a)(1) or
(2), if management determines not to bargain with the exclusive
representative, the exclusive representative may present its views and
recommendations regarding the impact of the exercise of authority on
bargaining unit employees. Management must consider those views and
recommendations.
Sec. 9701.513 Exclusive recognition of labor organizations.
The Department must accord exclusive recognition to a labor
organization if the organization has been selected as the
representative, in a secret ballot election, by a majority of the
employees in an appropriate unit consistent with the Department's
organizational structure, as determined by the Board, who cast valid
ballots in the election.
Sec. 9701.514 Determination of appropriate units for labor
organization representation.
(a) In determining the appropriateness of any unit, the Board must
determine in each case whether the proposed unit is an appropriate unit
consistent with the Department's organizational structure. The Board
must determine in each case whether the unit will be established on a
Department, component, installation, functional, or other basis and
will determine any unit to be an appropriate unit only if the
determination will promote effective dealings with and efficiency of
the operations of the Department. The Board may also consider whether
the unit will ensure a clear and identifiable community of interest
among the employees in the unit.
(b) A unit may not be determined to be an appropriate under this
section solely on the basis of the extent to which employees in the
proposed unit have organized, nor may a unit be determined to be an
appropriate if it includes--
(1) Except as provided under 5 U.S.C. 7135(a)(2), any management
official or supervisor;
(2) A confidential employee;
(3) An employee engaged in personnel work in other than a purely
clerical capacity;
(4) An employee engaged in administering the provisions of this
subpart;
(5) An employee excluded from a unit under 6 U.S.C. 412(b)(2); or
(6) Any employee primarily engaged in investigation or audit
functions relating to the work of individuals employed by an agency
whose duties directly affect the internal security of the agency, but
only if the functions are undertaken to ensure that the duties are
discharged honestly and with integrity.
(c) Any employee who is engaged in administering any provision of
law relating to labor-management relations may not be represented by a
labor organization--
(1) Which represents other individuals to whom such a provision
applies; or
(2) Which is affiliated directly or indirectly with an organization
which represents other individuals to whom such provision applies.
(d) Two or more units for which a labor organization is the
exclusive representative may, upon petition by the Department or labor
organization, be consolidated with or without an election into a single
larger unit if the Board considers the larger unit to be an appropriate
unit consistent with the Department's organizational structure. The
Board must certify the labor
[[Page 8063]]
organization as the exclusive representative of the new larger unit.
Sec. 9701.515 Representation rights and duties.
(a)(1) A labor organization which has been accorded exclusive
recognition is the exclusive representative of the employees in the
unit it represents and is entitled to act for, and negotiate collective
bargaining agreements covering, all employees in the unit. An exclusive
representative is responsible for representing the interests of all
employees in the unit it represents without discrimination and without
regard to labor organization membership.
(2) An exclusive representative must be given the opportunity to be
represented at--
(i) Any examination of a bargaining unit employee by a
representative of the Department other than its Office of Inspector
General, Office of Security, or Office of Internal Affairs in
connection with an investigation if--
(A) The employee reasonably believes that the examination may
result in disciplinary action against the employee, and
(B) The employee requests such representation; and
(ii) Any discussion between one or more agency representatives and
one or more bargaining unit employees concerning any grievance filed
under the negotiated grievance procedure.
(3) Nothing in paragraph (a)(2) of this section provides a right
for the exclusive representative to be represented at any discussion
between one or more agency representatives and one or more bargaining
unit employees involving an EEO complaint, unless the employee(s)
specifically requests representation from the exclusive representative.
(4) The Department must annually inform its employees of their
rights under paragraph (a)(2)(i) of this section.
(5) Employee representatives are subject to the same standards of
conduct as any other employee, whether they are serving in their
representative capacity or not.
(6) The Department or appropriate component(s) of the Department
and any exclusive representative in any appropriate unit in the
Department, through appropriate representatives, must meet and
negotiate in good faith for the purpose of arriving at a collective
bargaining agreement. In addition, the Department or appropriate
component(s) of the Department and the exclusive representative may
determine appropriate techniques, consistent with the operational rules
of the Board, to assist in any negotiation.
(7) The rights of an exclusive representative under this section
may not be construed to preclude an employee from--
(i) Being represented by an attorney or other representative of the
employee's own choosing, other than the exclusive representative, in
any grievance or appeal action; or
(ii) Exercising grievance or appellate rights established by law,
rule, or regulation, except in the case of grievance or appeal
procedures negotiated under this subpart.
(b) The duty of the Department or appropriate component(s) of the
Department and an exclusive representative to negotiate in good faith
under paragraph (a) of this section includes the obligation--
(1) To approach the negotiations with a sincere resolve to reach a
collective bargaining agreement;
(2) To be represented at the negotiations by duly authorized
representatives prepared to discuss and negotiate on any condition of
employment;
(3) To meet at reasonable times and convenient places as frequently
as may be necessary, and to avoid unnecessary delays;
(4) In the case of the Department or appropriate component(s) of
the Department, to furnish to the exclusive representative involved, or
its authorized representative, upon request and to the extent not
prohibited by law, existing reasonably available information, normally
maintained by the Department or appropriate component(s) of the
Department and demonstrated by the exclusive representative to be
necessary in order to represent an employee in grievance or appeal
proceedings, or the bargaining unit in negotiations. Disclosure of such
information does not include the following:
(i) Disclosure prohibited by law or regulations, including, but not
limited to, the regulations in this part, Governmentwide and
Departmental rules and regulations, and Executive orders;
(ii) Disclosure of information if adequate alternative means exist
for obtaining the requested information, or if proper discussion,
understanding, or negotiation of a particular subject within the scope
of collective bargaining is possible without recourse to the
information;
(iii) Internal agency guidance, counsel advice, or training for
managers and supervisors relating to collective bargaining;
(iv) Any disclosures where an authorized agency official has
determined that disclosure would compromise the Department's mission,
security, or employee safety; and
(v) Home addresses, telephone numbers, email addresses, or any
other information not related to an employee's work.
(5) If agreement is reached, to execute on the request of any party
to the negotiation, a written document embodying the agreed terms, and
to take such steps as are necessary to implement such agreement.
(c)(1) An agreement between Department or appropriate component(s)
of the Department and the exclusive representative is subject to
approval by an authorized agency official.
(2) The authorized agency official must approve the agreement
within 30 days after the date the agreement is executed if the
agreement is in accordance with the provisions of these regulations and
any other applicable law, rule, or regulation.
(3) If the authorized agency official does not approve or
disapprove the agreement within the 30-day period specified in
paragraph (c)(2) of this section, the agreement must take effect and is
binding on the Department or component(s), as appropriate, and the
exclusive representative, but only if consistent with law and the
regulations in this part, Governmentwide and Departmental rules and
regulations, and Executive orders.
(4) A local agreement subject to a national or other controlling
agreement at a higher level may be approved under the procedures of the
controlling agreement or, if none, under regulations prescribed by the
Department.
(5) Provisions in existing collective bargaining agreements are
unenforceable if an authorized agency official determines that they are
contrary to law and the regulations in this part, Governmentwide and
Departmental rules and regulations, and Executive orders.
Sec. 9701.516 Allotments to representatives.
(a) If the Department has received from an employee in an
appropriate unit a written assignment which authorizes the Department
to deduct from the pay of the employee amounts for the payment of
regular and periodic dues of the exclusive representative of the unit,
the Department must honor the assignment and make an appropriate
allotment pursuant to the assignment. Any such allotment must be made
at no cost to the exclusive representative or the employee. Except as
provided under paragraph (b) of this section, any such
[[Page 8064]]
assignment may not be revoked for a period of 1 year.
(b) An allotment under paragraph (a) of this section for the
deduction of dues with respect to any employee terminates when--
(1) The agreement between the Department or Department component
and the exclusive representative involved ceases to be applicable to
the employee; or
(2) The employee is suspended or expelled from membership in the
exclusive representative.
(c)(1) Subject to paragraph (c)(2) of this section, if a petition
has been filed with the Board by a labor organization alleging that 10
percent of the employees in an appropriate unit in the Department have
membership in the labor organization, the Board must investigate the
petition to determine its validity. Upon certification by the Board of
the validity of the petition, the Department has a duty to negotiate
with the labor organization solely concerning the deduction of dues of
the labor organization from the pay of the members of the labor
organization who are employees in the unit and who make a voluntary
allotment for such purpose.
(2)(i) The provisions of paragraph (c)(1) of this section do not
apply in the case of any appropriate unit for which there is an
exclusive representative.
(ii) Any agreement under paragraph (c)(1) of this section between a
labor organization and the Department or Department component with
respect to an appropriate unit becomes null and void upon the
certification of an exclusive representative of the unit.
Sec. 9701.517 Unfair labor practices.
(a) For the purpose of this subpart, it is an unfair labor practice
for the Department--
(1) To interfere with, restrain, or coerce any employee in the
exercise by the employee of any right under this subpart;
(2) To encourage or discourage membership in any labor organization
by discrimination in connection with hiring, tenure, promotion, or
other conditions of employment;
(3) To sponsor, control, or otherwise assist any labor
organization, other than to furnish, upon request, customary and
routine services and facilities on an impartial basis to other labor
organizations having equivalent status;
(4) To discipline or otherwise discriminate against an employee
because the employee has filed a complaint or petition, or has given
any information or testimony under this subpart;
(5) To refuse, as determined by the Board, to consult or negotiate
in good faith with a labor organization, as required by this subpart;
(6) To fail or refuse, as determined by the Board, to cooperate in
impasse procedures and impasse decisions, as required by this subpart;
or
(7) To fail or refuse otherwise to comply with any provision of
this subpart.
(b) For the purpose of this subpart, it is an unfair labor practice
for a labor organization--
(1) To interfere with, restrain, or coerce any employee in the
exercise by the employee of any right under this subpart;
(2) To cause or attempt to cause an agency to discriminate against
any employee in the exercise by the employee of any right under this
subpart;
(3) To coerce, discipline, fine, or attempt to coerce a member of
the labor organization as punishment, reprisal, or for the purpose of
hindering or impeding the member's work performance or productivity as
an employee or the discharge of the member's duties as an employee;
(4) To discriminate against an employee with regard to the terms
and conditions of membership in the labor organization on the basis of
race, color, creed, national origin, sex, age, preferential or
nonpreferential civil service status, political affiliation, marital
status, or handicapping condition;
(5) To refuse, as determined by the Board, to consult or negotiate
in good faith with the Department as required by this subpart;
(6) To fail or refuse, as determined by the Board, to cooperate in
impasse procedures and impasse decisions as required by this subpart;
(7)(i) To call, or participate in, a strike, work stoppage, or
slowdown, or picketing of an agency in a labor-management dispute if
such picketing interferes with an agency's operations; or
(ii) To condone any activity described in paragraph (b)(7)(i) of
this section by failing to take action to prevent or stop such
activity; or
(8) To otherwise fail or refuse to comply with any provision of
this subpart.
(c) Notwithstanding paragraph (b)(7) of this section, informational
picketing which does not interfere with the Department's operations
will not be considered an unfair labor practice.
(d) For the purpose of this subpart, it is an unfair labor practice
for an exclusive representative to deny membership to any employee in
the appropriate unit represented by the labor organization, except for
failure to meet reasonable occupational standards uniformly required
for admission or to tender dues uniformly required as a condition of
acquiring and retaining membership. This does not preclude any labor
organization from enforcing discipline in accordance with procedures
under its constitution or bylaws to the extent consistent with the
provisions of this subpart.
(e) Issues which can properly be raised under an appeals procedure
may not be raised as unfair labor practices prohibited under this
section. Where an employee has an option of using the negotiated
grievance procedure or an appeals procedure, issues which can be raised
under a grievance procedure may, in the discretion of the aggrieved
party, be raised under the grievance procedure or as an unfair labor
practice under this section, but not under both procedures.
(f) The expression of any personal view, argument, opinion, or the
making of any statement which publicizes the fact of a representational
election and encourages employees to exercise their right to vote in
such an election, corrects the record with respect to any false or
misleading statement made by any person, or informs employees of the
Government's policy relating to labor-management relations and
representation, may not, if the expression contains no threat of
reprisal or force or promise of benefit or was not made under coercive
conditions--
(1) Constitute an unfair labor practice under any provision of this
subpart; or
(2) Constitute grounds for the setting aside of any election
conducted under any provision of this subpart.
Sec. 9701.518 Duty to bargain in good faith.
(a)(1) Subject to paragraph (a)(2) of this section, there is no
duty to bargain over any matters that are inconsistent with law or the
regulations in this part, Governmentwide and Departmental rules and
regulations, and Executive orders.
(2)(i) There is no duty to bargain when management exercises any of
the authorities under Sec. 9701.511(a)(1) and (2). Management may
elect, in its sole and exclusive discretion, to bargain over procedures
that it will observe in exercising these authorities and over
appropriate arrangements for employees adversely affected by the
exercise of these authorities.
(ii) At the request of an exclusive representative, management will
bargain over--
[[Page 8065]]
(A) Procedures it will observe in exercising any authority under
Sec. 9701.511(a)(3); and
(B) Appropriate arrangements for employees adversely affected by
the exercise of any authority under Sec. 9701.511(a)(3).
(3) There is no duty to bargain changes in conditions of employment
due to the exercise of any authority under Sec. 9701.511 when such
actions do not significantly affect a substantial portion of the
bargaining unit.
(4) There is no duty to bargain on proposals that--
(i) Concern matters covered by an existing negotiated agreement; or
(ii) Do not significantly affect a substantial portion of the
bargaining unit.
(5) If bargaining over an initial collective bargaining agreement
or any successor agreement is not completed within 60 days after such
bargaining begins, the parties can mutually agree to continue
bargaining or either party can refer the matter to the Board for
resolution.
(6) If the parties bargain during the term of an existing
collective bargaining agreement over a proposed change in conditions of
employment and no agreement is reached within 30 days after such
bargaining begins, management may implement the proposed change after
notifying the union.
(b) Except in any case to which paragraph (a)(2)(i) of this section
applies, if an agency involved in collective bargaining with an
exclusive representative alleges that the duty to bargain in good faith
does not extend to any matter, the exclusive representative may appeal
the allegation to the Board in accordance with provisions established
by the Board.
Sec. 9701.519 Negotiation impasses.
(a) If the Department and exclusive representative are unable to
reach an agreement under Sec. 9701.515, either party may submit the
disputed issues to the Board for resolution.
(b) The Board will publish procedures that will govern the
resolution of negotiation impasses under this subpart.
(c) If the parties do not arrive at a settlement after assistance
by the Board, the Board may take whatever action is necessary and not
inconsistent with this subpart to resolve the impasse.
(d) Notice of any final action of the Board under this section must
be promptly served upon the parties. The action will be binding on such
parties during the term of the agreement, unless the parties agree
otherwise.
Sec. 9701.520 Standards of conduct for labor organizations.
Standards of conduct for labor organizations are those prescribed
under 5 U.S.C. 7120.
Sec. 9701.521 Grievance procedures.
(a)(1) Except as provided in paragraph (a)(2) of this section, any
collective bargaining agreement must provide procedures for the
settlement of grievances, including questions of arbitrability. Except
as provided in paragraphs (d), (f), and (g) of this section, the
procedures must be the exclusive administrative procedures for
grievances which fall within its coverage.
(2) Any collective bargaining agreement may exclude any matter from
the application of the grievance procedures which are provided for in
the agreement.
(b)(1) Any negotiated grievance procedure referred to in paragraph
(a) of this section must be fair and simple, provide for expeditious
processing, and include procedures that--
(i) Assure an exclusive representative the right, in its own behalf
or on behalf of any employee in the unit represented by the exclusive
representative, to present and process grievances;
(ii) Assure such an employee the right to present a grievance on
the employee's own behalf, and assure the exclusive representative the
right to be present during the grievance proceeding; and
(iii) Provide that any grievance not satisfactorily settled under
the negotiated grievance procedure is subject to binding arbitration,
which may be invoked by either the exclusive representative or the
Department.
(2) The provisions of a negotiated grievance procedure providing
for binding arbitration in accordance with paragraph (b)(1)(iii) of
this section must allow the arbitrator to order the Department to take
any disciplinary action identified under 5 U.S.C. 1215(a)(3) that is
otherwise within the authority of the Department to take.
(3) Any employee who is the subject of any disciplinary action
ordered under paragraph (b)(2) of this section may appeal such action
to the same extent and in the same manner as if the agency had taken
the disciplinary action absent arbitration.
(c) The preceding paragraphs of this section do not apply with
respect to any grievance concerning--
(1) Any claimed violation of 5 U.S.C. chapter 73, subchapter III
(relating to prohibited political activities);
(2) Retirement, life insurance, or health insurance;
(3) A suspension or removal under Sec. 9701.609;
(4) Any examination, certification, or appointment; and
(5) The classification of any position which does not result in the
reduction in grade or pay of an employee.
(d) To the extent not already excluded by existing collective
bargaining agreements, the exclusions contained in paragraph (c) of
this section apply upon the effective date of this subpart, as
determined under Sec. 9701.102(a)(2).
(e)(1) An aggrieved employee affected by a prohibited personnel
practice under 5 U.S.C. 2302(b)(1) which also falls under the coverage
of the negotiated grievance procedure may raise the matter under the
applicable statutory procedures, or the negotiated procedure, but not
both.
(2) An employee is deemed to have exercised his or her option under
paragraph (e)(1) of this section to raise the matter under the
applicable statutory procedures, or the negotiated procedure, at such
time as the employee timely initiates an action under the applicable
statutory or regulatory procedure or timely files a grievance in
writing, in accordance with the provisions of the parties' negotiated
grievance procedure, whichever event occurs first.
(f) Matters covered under subpart G of this part may be raised only
under the appellate procedures in subpart G of this part.
(g) An employee may grieve a performance rating of record that has
not been raised in connection with an action appealable under subpart G
of this part. Once an employee raises a performance rating issue in an
appeal under subpart G of this part, any pending grievance or
arbitration will be dismissed with prejudice. The arbitrator shall
sustain the rating of record unless the grievant proves that it was
arbitrary or capricious.
(h)(1) This paragraph applies with respect to a prohibited
personnel practice other than a prohibited personnel practice to which
paragraph (e) of this section applies.
(2) An aggrieved employee affected by a prohibited personnel
practice described in paragraph (h)(1) of this section may elect not
more than one of the procedures described in paragraph (h)(3) of this
section with respect thereto. A determination as to whether a
particular procedure for seeking a remedy has been elected must be made
as set forth under paragraph (h)(4) of this section.
(3) The procedures for seeking remedies described in this paragraph
are as follows:
(i) An appeal under subpart G of this part;
[[Page 8066]]
(ii) A negotiated grievance under this section; and
(iii) Corrective action under 5 U.S.C. chapter 12, subchapters II
and III.
(4) For the purpose of this paragraph, an employee is considered to
have elected--
(i) The procedure described in paragraph (h)(3)(i) of this section
if such employee has timely filed a notice of appeal under the
applicable appellate procedures;
(ii) The procedure described in paragraph (h)(3)(ii) of this
section if such employee has timely filed a grievance in writing, in
accordance with the provisions of the parties' negotiated procedure; or
(iii) The procedure described in paragraph (h)(3)(iii) of this
section if such employee has sought corrective action from the Office
of Special Counsel by making an allegation under 5 U.S.C. 1214(a)(1).
Sec. 9701.522 Exceptions to arbitration awards.
(a) Either party to arbitration under this subpart may file with
the Board an exception to any arbitrator's award. The Board may take
such action and make such recommendations concerning the award as is
consistent with this subpart.
(b) If no exception to an arbitrator's award is filed under
paragraph (a) of this section during the 30-day period beginning on the
date of such award, the award is final and binding. Either party must
take the actions required by an arbitrator's final award. The award may
include the payment of back pay (as provided under 5 U.S.C. 5596 and 5
CFR part 550, subpart H).
Sec. 9701.523 Official time.
(a) Any employee representing an exclusive representative in the
negotiation of a collective bargaining agreement under this subpart
must be authorized official time for such purposes, including
attendance at impasse proceedings, during the time the employee
otherwise would be in a duty status. The number of employees for whom
official time is authorized under this section may not exceed the
number of individuals designated as representing the agency for such
purposes.
(b) Any activities performed by any employee relating to the
internal business of the labor organization, including the solicitation
of membership, elections of labor organization officials, and
collection of dues, must be performed during the time the employee is
in a nonduty status.
(c) Except as provided in paragraph (a) of this section, the
Authority or the Board, as appropriate, will determine whether an
employee participating for, or on behalf of, a labor organization in
any phase of proceedings before the Authority or the Board will be
authorized official time for such purpose during the time the employee
would otherwise be in a duty status.
(d) Except as provided in the preceding paragraphs of this section,
any employee representing an exclusive representative or, in connection
with any other matter covered by this subpart, any employee in an
appropriate unit represented by an exclusive representative, must be
granted official time in any amount the agency and the exclusive
representative involved agree to be reasonable, necessary, and in the
public interest.
Sec. 9701.524 Compilation and publication of data.
(a) The Board must maintain a file of its proceedings and copies of
all available agreements and arbitration decisions and publish the
texts of its impasse resolution decisions and the actions taken under
Sec. 9701.918.
(b) All files maintained under paragraph (a) of this section must
be open to inspection and reproduction in accordance with 5 U.S.C. 552
and 552a. The Board will establish rules in consultation with the
Department for maintaining and making available for inspection
sensitive information.
Sec. 9701.525 Regulations of the Board.
The Board may prescribe procedural rules and regulations to carry
out the provisions of this subpart.
Sec. 9701.526 Continuation of existing laws, recognitions,
agreements, and procedures.
(a) Nothing contained in this subpart precludes the renewal or
continuation of an exclusive recognition, certification of an exclusive
representative, or an agreement that is otherwise consistent with law
and the regulations in this part between an agency and an exclusive
representative of its employees, which is entered into before the
effective date of this subpart, as determined under Sec.
9701.102(a)(2).
(b) Policies, regulations, and procedures established under, and
decisions issued under Executive Orders 11491, 11616, 11636, 11787, and
11838 or any other Executive order, as in effect on the effective date
of this subpart (as determined under Sec. 9701.102(a)(2)), will remain
in full force and effect until revised or revoked by the President, or
unless superseded by specific provisions of this subpart or by
regulations or decisions issued pursuant to this subpart.
Sec. 9701.527 Savings provision.
This subpart does not apply to grievances or other administrative
proceedings already pending on the effective date of this subpart, as
determined under Sec. 9701.102(a)(2).
Subpart F--Adverse Actions
General
Sec. 9701.601 Purpose.
This subpart contains regulations prescribing the requirements for
employees who are suspended, demoted, reduced in pay, removed, or
furloughed for 90 days or less.
Sec. 9701.602 Waivers.
This subpart waives 5 U.S.C. 7501 through 7514 and 7531 through
7533. This subpart retains 5 U.S.C. 7521 and 7541 through 7543.
Sec. 9701.603 Definitions.
In this subpart:
Band has the meaning given that term in Sec. 9701.204.
Day means a calendar day.
Demotion means a reduction in grade, a reduction to a lower band
within the same occupational cluster, or a reduction to a lower band in
a different occupational cluster under rules prescribed by DHS pursuant
to Sec. 9701.355.
Furlough means the placement of an employee in a temporary status
without duties and pay because of lack of work or funds or other non-
disciplinary reasons.
Grade means a level of work under a position classification or job
grading system.
Indefinite suspension means the placement of an employee in a
temporary status without duties and pay pending investigation, inquiry,
or further Department action. An indefinite suspension continues for an
indeterminate period of time and ends with either the employee
returning to duty or the completion of any subsequent administrative
action.
Initial service period means the 1 to 2 years employees must serve
upon appointment to DHS (on or after the effective date of this
subpart, as determined under Sec. 9701.102(a)(2)) before obtaining
coverage under the adverse action protections of this subpart. Prior
Federal service counts toward this requirement.
Pay means the rate of basic pay fixed by law or administrative
action for the position held by an employee before any deductions and
exclusive of additional pay of any kind. For the purpose of this
subpart, pay does not include locality-based comparability payments
under 5
[[Page 8067]]
U.S.C. 5304, locality or special pay supplements under subpart C of
this part, or other similar payments.
Removal means the involuntary separation of an employee from the
Department.
Suspension means the placement of an employee, for disciplinary
reasons, in a temporary status without duties and pay.
Sec. 9701.604 Coverage.
(a) Actions covered. This subpart covers suspensions, demotions,
reductions in pay (including reductions in pay within a band),
removals, and furloughs of 90 days or less.
(b) Actions excluded. This subpart does not cover--
(1) Any adverse action taken against an employee during an initial
service period, except as provided under paragraph (d)(2) of this
section. The removal of employees in the competitive service who are in
an initial service period must be in accordance with 5 CFR 315.804 and
315.805;
(2) The demotion of a supervisor or manager under 5 U.S.C. 3321;
(3) An action that terminates a temporary or term promotion and
returns the employee to the position from which temporarily promoted,
or to a different position of equivalent band and pay, if the agency
informed the employee that it was to be of limited duration;
(4) A reduction-in-force action under 5 U.S.C. 3502;
(5) An action imposed by the Merit Systems Protection Board under 5
U.S.C. 1204;
(6) An action against an administrative law judge under 5 U.S.C.
7521;
(7) A voluntary action by an employee;
(8) An action taken or directed by the OPM based on suitability
under 5 CFR part 731.
(9) Termination of appointment on or before the expiration date
specified as a basic condition of employment at the time the
appointment was made;
(10) Cancellation of a promotion to a position not classified prior
to the promotion;
(11) Placement of an employee serving on an intermittent or
seasonal basis in a temporary non-duty, non-pay status in accordance
with conditions established at the time of appointment;
(12) Reduction of an employee's rate of basic pay from a rate that
is contrary to law or regulation;
(13) An action taken under a provision of statute, other than one
codified in title 5, United States Code, which excludes the action from
5 U.S.C. chapter 75 or this subpart; and
(14) An action which has been effected before the date on which the
employee is covered under this subpart.
(c) Employees covered. Subject to approval by the Secretary or
designee under Sec. 9701.102(a)(2), this subpart covers DHS employees,
except as excluded by paragraph (d) of this section.
(d) Employees excluded. This subpart does not cover--
(1) Employees who are serving a term, temporary, or otherwise time
limited appointment;
(2) Non-preference employees who are serving in an initial service
period and preference eligible employees who are serving the first year
of an initial service period. Preference eligible employees who have
completed the first year of an initial service period are covered by
subpart F. Employees in the competitive service who are removed during
an initial service period shall be removed in accordance with 5 CFR
315.804 and 315.805;
(3) Employees who are in the Senior Executive Service;
(4) Administrative law judges;
(5) Employees who are terminated in accordance with terms specified
as conditions of employment at the time the appointment was made;
(6) Employees whose appointments are made by and with the advice
and consent of the Senate;
(7) Employees whose positions have been determined to be of a
confidential, policy-determining, policy-making, or policy-advocating
character by--
(i) The President for a position that the President has excepted
from the competitive service;
(ii) OPM for a position that OPM has excepted from the competitive
service; or
(iii) An authorized agency official for a position excepted from
the competitive service by statute;
(8) An employee whose appointment is made by the President;
(9) An employee who is receiving an annuity from the Civil Service
Retirement and Disability Fund or the Foreign Service Retirement and
Disability Fund based on the service of such employee;
(10) An employee who is described in 5 U.S.C. 5102(c)(11) as an
alien or non-citizen occupying a position outside the United States;
and
(11) Employees affected by actions taken or imposed under any
statute or regulation other than this subpart.
Requirements for Suspension, Demotion, Reduction in Pay, Removal, or
Furlough of 90 Days or Less
Sec. 9701.605 Standard for action.
The Department may take an adverse action under this subpart only
when it establishes a factual basis for the action and a connection
between the action and a legitimate Departmental interest.
Sec. 9701.606 Mandatory removal offenses.
(a) The Secretary in his or her unreviewable discretion will
identify offenses that have a direct and substantial impact on the
ability of the Department to protect homeland security. Such offenses
will be identified in advance as part of the Department's internal
implementing regulations and made known to all employees.
(b) An employee who commits a mandatory removal offense must be
removed from Federal service. The Secretary, however, has the sole and
exclusive discretion to mitigate that penalty. Employees alleged to
have committed these offenses will have the right to advance notice, an
opportunity to respond, a written decision, a review by an adjudicating
official, and a further appeal to an independent DHS panel, as set
forth in subpart G of this part.
(c) Nothing in this section limits the discretion of the Department
or any component thereof to remove employees for offenses other than
those identified by the Secretary as a mandatory removal offense.
Sec. 9701.607 Procedures.
An employee against whom an action is proposed is entitled to the
following:
(a) Proposal notice. (1) Notice period. The Department must provide
at least 15 days advance written notice of the proposed adverse action
unless a mandatory removal offense is involved, or when there is
reasonable cause to believe the employee has committed a crime for
which a sentence of imprisonment may be imposed. In such cases the
Department must provide at least 5 days advance written notice.
(2) Duty status during notice period. An employee will remain in a
duty status in his or her regular position during the notice period.
However, when the Department determines that the employee's continued
presence in the workplace during the notice period may pose a threat to
the employee or others, result in loss of or damage to Government
property, or otherwise jeopardize legitimate Government interests, the
Department may elect one or a combination of the following
alternatives:
[[Page 8068]]
(i) Assign the employee to duties where the Department determines
the employee is no longer a threat to safety, the Department's mission,
or to Government property;
(ii) Allow the employee to take leave, or carry him or her in an
appropriate leave status (annual, sick, leave without pay, or absence
without leave) if the employee has absented himself or herself from the
worksite without requesting leave; and/or
(iii) Place the employee in a paid, non-duty status for such time
as is necessary to effect the action.
(3) Contents of notice. (i) The proposal notice must inform the
employee of the factual basis for the proposed action in sufficient
detail to permit the employee to reply to the notice, and inform the
employee of his or her right to review the Department's evidence
supporting the proposed action. The Department may not use evidence
that cannot be disclosed to the employee, his or her representative, or
designated physician pursuant to 5 CFR 297.204.
(ii) When some but not all employees in a given competitive level
are being furloughed, the proposal notice must state the basis for
selecting a particular employee for furlough, as well as the reasons
for the furlough. The notice is not necessary for furlough without pay
due to unforeseeable circumstances, such as sudden breakdowns in
equipment, acts of God, or sudden emergencies requiring immediate
curtailment of activities.
(b) Opportunity to reply. (1) The Department must give employees no
less than 5 days, which must run concurrently with the notice period,
to reply orally and/or in writing.
(2) During the opportunity to reply, the Department must give the
employee a reasonable amount of official time to review the
Department's supporting evidence, and to furnish affidavits and other
documentary evidence, if the employee is otherwise in an active duty
status.
(3) The Department must designate an official to receive the
employee's written and/or oral response who has authority to make or
recommend a final decision on the proposed adverse action. The
opportunity to reply orally in person does not include the right to a
formal hearing with examination of witnesses.
(4) The employee may be represented by an attorney or other
representative of the employee's choice and at the employee's expense.
The Department may disallow an employee's choice of representative
when--
(i) An individual serving as a representative would cause a
conflict of interest or position or compromise security; or
(ii) An employee whose release from his or her official position
would result in unreasonable costs to the Government, or whose priority
work assignment prevents a release from official duties.
(5) An employee who wishes the Department to consider any medical
condition that may be relevant to the proposed adverse action must
provide medical documentation, as that term is defined at 5 CFR
339.104, during the opportunity to reply.
(i) Department responsibilities. When considering an employee's
medical condition, the Department is not required to withdraw or delay
a proposed adverse action. However, the Department must--
(A) Allow the employee to provide medical documentation during the
opportunity to reply;
(B) Comply with 29 CFR 1614.203(b) and relevant Equal Employment
Opportunity Commission rules; and
(C) Comply with 5 CFR 831.1205 when issuing a decision to remove.
(ii) Medical examinations. When considering an employee's medical
documentation, the Department may require or offer a medical
examination pursuant to 5 CFR part 339, subpart C.
(c) Decision notice. (1) In arriving at its decision, the
Department may not consider any reasons for the action other than those
specified in the proposal notice. The Department must consider any
response from the employee and employee's representative, if the
employee provides the response during the opportunity to reply.
(2) The decision notice must specify in writing the reasons for the
decision and advise the employee of any appeal or grievance rights,
under subpart G of this part. The Department must deliver the notice to
the employee on or before the effective date of the action.
Sec. 9701.608 Departmental record.
(a) Document retention. The Department must keep a record of all
relevant documentation concerning the action for a period of time
pursuant to the General Records Schedule and the Guide to Processing
Personnel Actions. The record must include the following:
(1) A copy of the proposal notice;
(2) The employee's written response, if any, to the proposal;
(3) A summary of the employee's oral response;
(4) A copy of the decision notice; and
(5) Any supporting material that is directly relevant and on which
the action was substantially based.
(b) Access to the record. The Department must make the record
available for review by the employee and furnish a copy of the record
upon the employee's request or the request of the Merit Systems
Protection Board or the DHS Panel.
National Security
Sec. 9701.609 Suspension and removal.
(a) Notwithstanding other provisions of law or regulation, the
Secretary may suspend an employee without pay when she or he considers
suspension in the interests of national security. To the extent that
the Secretary determines that the interests of national security
permit, the suspended employee must be notified of the reasons for the
suspension. Within 30 days after the notification, the suspended
employee is entitled to submit to the official designated by the
Secretary statements or affidavits to show why he or she should be
restored to duty.
(b) Subject to paragraph (c) of this section, the Secretary may
remove an employee suspended under this section when, after
investigation and review as the Secretary considers necessary, the
Secretary determines that removal is necessary or advisable in the
interests of national security. The determination of the Secretary is
final.
(c) An employee suspended under this section who has a permanent or
indefinite appointment, has completed an initial service period, and is
a citizen of the United States is entitled, after suspension and before
removal, to--
(1) A written notice that informs the employee of the factual basis
for the proposed action in sufficient detail, as security
considerations permit, to permit the employee to respond to the notice
within 30 days after suspension, which may be amended within 30 days
thereafter;
(2) An opportunity within 30 days thereafter, plus an additional 30
days if the charges are amended, to respond to the proposed adverse
action and submit affidavits;
(3) A hearing, at the request of the employee, by an agency
authority duly constituted for this purpose;
(4) A review of his or her case by the Secretary, before a decision
adverse to the employee is made final; and
(5) A written decision from the Secretary.
Subpart G--Appeals
Sec. 9701.701 Purpose.
This subpart contains the regulations implementing the provisions
of 5 U.S.C. 9701(a) through (c) and (f) concerning the Department's
appeals system for
[[Page 8069]]
certain adverse actions covered under subpart F of this part. These
provisions require that the new appeal regulations provide Department
employees fair treatment, are consistent with the protections of due
process and, to the maximum extent practicable, provide for the
expeditious handling of appeals. The Homeland Security Act also
specifies that modifications to 5 U.S.C. chapter 77 should further the
fair, efficient, and expeditious resolution of appeals.
Sec. 9701.702 Waivers.
The provisions of 5 U.S.C. 7701 are waived insofar as the
appealable adverse actions covered under subpart F of this part are
concerned. The provisions of 5 U.S.C. 7702 are modified as provided in
Sec. 9701.708. The appellate procedures specified herein supersede
those of MSPB to the extent they are inconsistent with MSPB's
regulations. MSPB must follow these regulations until conforming
regulations are issued by MSPB.
Sec. 9701.703 Definitions.
In this subpart:
Adjudicating official means an administrative law judge,
administrative judge, or other employee designated by MSPB or the Panel
to decide an appeal.
Day means calendar day.
Harmful error means error by the Department in the application of
its procedures that is likely to have caused it to reach a conclusion
different from the one it would have reached in the absence or cure of
the error. The burden is on the appellant to show that the error was
harmful, i.e., that it caused substantial harm or prejudice to his or
her rights.
Mandatory removal offense means an offense that the Secretary
determines in his or her sole and unreviewable discretion has a direct
and substantial impact on the ability of the Department to protect
homeland security.
MSPB means the Merit Systems Protection Board.
Panel means the three-person panel composed of officials appointed
by the Secretary to decide appeals of an adjudicating official's
decision on an action taken based on a mandatory removal offense.
Petition for review means a request for review of an initial
decision of an adjudicating official.
Preponderance of the evidence means the degree of relevant evidence
that a reasonable person, considering the record as a whole, would
accept as sufficient to find that a contested fact is more likely to be
true than untrue.
Substantial evidence means the degree of relevant evidence that a
reasonable person, considering the record as a whole, might accept as
adequate to support a conclusion, even though other reasonable persons
might disagree.
Sec. 9701.704 Coverage.
(a) Subject to approval by the Secretary or designee under Sec.
9701.102(a)(2), this subpart applies to employees who appeal demotions,
reductions in pay, suspensions of 15 days or more, removals, or
furloughs of 90 days or less, provided such employees are--
(1) Covered by Sec. 9701.604; or
(2) Employed by the Transportation Security Administration and
would be covered by Sec. 9701.604 but for the exclusion in Sec.
9701.604(d)(11).
(b) Appeals of suspensions shorter than 15 days and other lesser
disciplinary measures are not covered under this subpart but may be
grieved through a negotiated grievance procedure or agency
administrative grievance procedure, whichever is applicable.
(c) The removal of an employee while serving an initial service
period is subject to the provisions of 5 CFR 315.806 to the extent the
employee is in the competitive service. Such provisions are applicable
for the first year of an initial service period.
Sec. 9701.705 Alternative dispute resolution.
The Department and OPM recognize the value of using alternative
dispute resolution methods such as mediation, an ombudsman, or
interest-based negotiation to address employee-employer disputes
arising in the workplace, including those which may involve
disciplinary actions. Such methods can result in more efficient and
more effective outcomes than traditional, adversarial methods of
dispute resolution. The Department will use alternative dispute
resolution methods where appropriate.
Sec. 9701.706 MSPB appellate procedures.
(a) A covered Department employee may appeal an adverse action
identified under Sec. 9701.704(a) to MSPB. Such an employee has a
right to be represented by an attorney or other representative.
However, separate procedures apply when the action is taken because of
a mandatory removal offense or is in the interest of national security.
(See Sec. Sec. 9701.707 and 9701.609 respectively.)
(b) MSPB may decide any case appealed to it or may refer the case
to an administrative law judge appointed under 5 U.S.C. 3105 or other
employee of MSPB designated by MSPB to decide such cases. MSPB or an
adjudicating official must make a decision at the close of the review
and provide a copy of the decision to each party to the appeal and to
OPM.
(c)(1) If an employee is the prevailing party in an appeal under
this section, the employee must be granted the relief provided in the
decision upon issuance of the decision, and such relief remains in
effect pending the outcome of any petition for review unless--
(i) MSPB or an adjudicating official determines that the granting
of such relief is not appropriate; or
(ii) The relief granted in the decision provides that the employee
will return or be present at the place of employment pending the
outcome of any petition for review and the Department, subject to
paragraph (c)(2) of this section, determines in its sole and
unreviewable discretion, that the return or presence of the employee is
unduly disruptive to the work environment.
(2) If the Department makes a determination under paragraph
(c)(1)(ii) of this section that prevents the return or presence of an
employee at the place of employment, such employee must receive pay,
compensation, and all other benefits as terms and conditions of
employment pending the outcome of any petition for review.
(3) Nothing in the provisions of this section may be construed to
require any award of back pay or attorney fees be paid before MSPB's
decision is final.
(d)(1) The decision of the Department must be sustained under
paragraph (b) of this section if it is supported by substantial
evidence, unless the employee shows by a preponderance of the evidence-
-
(i) Harmful error in the application of Department procedures in
arriving at the decision;
(ii) That the decision was based on any prohibited personnel
practice described in 5 U.S.C. 2302(b); or
(iii) That the decision was not in accordance with law.
(2) The Board or adjudicating official may not reverse a Department
action based on the way in which the charge is labeled or the conduct
characterized, provided the employee is on notice of the facts
sufficient to respond to the factual allegations of the charge.
(e) The Director may, as a matter of right at any time in the
proceeding, intervene or otherwise participate in any proceeding under
this section in any case in which the Director believes that an
erroneous decision will have a substantial impact on a civil service
law, rule, regulation, or policy directive.
(f) Except as provided in Sec. 9701.708, any decision under
paragraph (b) of this
[[Page 8070]]
section is final unless a party to the appeal or the Director petitions
MSPB for review within 30 days after receipt of the decision; or, MSPB
reopens and reconsiders a case on its own motion. The Director may
petition MSPB for review only if he or she believes the decision is
erroneous and will have a substantial impact on a civil service law,
rule, regulation, or policy directive. MSPB, for good cause shown, may
extend the filing period.
(g) If MSPB is of the opinion that the action could result in the
appeals being processed more expeditiously and would not adversely
affect any party, MSPB may--
(1) Consolidate appeals filed by two or more appellants; or
(2) Join two or more appeals filed by the same appellant and hear
and decide them concurrently.
(h) MSPB may require payment by the Department of reasonable
attorney fees if the action is reversed in its entirety and only if
MSPB determines the action constituted a prohibited personnel practice,
was taken in bad faith, or is without any basis in fact and law.
However, if the employee is the prevailing party and the decision is
based on a finding of discrimination prohibited under 5 U.S.C.
2302(b)(1), the payment of reasonable attorney fees must be in
accordance with the standards prescribed in section 706(k) of the Civil
Rights Act of 1964 (42 U.S.C. 2000e-5(k)).
(i)(1) The Board shall not require settlement discussions in
connection with any appealed action under this section. If either party
decides that settlement is not desirable, the matter will proceed to
adjudication.
(2) Where the parties agree to engage in settlement discussions
before MSPB, these discussions will be conducted by an official
specifically designated for that sole purpose. Nothing prohibits the
parties from engaging in settlement discussions on their own.
(j) If an employee has been removed under subpart F of this part
and subsequently elects to retire, such retirement will not affect the
employee's appeal rights.
(k) The following provisions modify MSPB's appellate procedures
applicable to appeals under this subpart:
(1) All appeals, including class appeals, will be filed no later
than 20 days after the effective date of the action being appealed, or
no later than 20 days after the date of service of the Department's
decision, whichever is later.
(2) Either party may file a motion for representative
disqualification at any time during the proceedings.
(3) The parties may seek discovery regarding any matter that is
relevant to any of their claims or defenses. However, by motion, either
party may seek to limit such discovery because the burden or expense of
providing the material outweighs its benefit, or because the material
sought is privileged, not relevant, unreasonably cumulative or
duplicative, or can be secured from some other source that is more
convenient, less burdensome, or less expensive.
(i) Prior to filing a motion to limit discovery, the parties must
confer and attempt to resolve any pending objection(s).
(ii) Neither party may submit more than one set of interrogatories,
one set of requests for production, and one set of requests for
admissions. The number of interrogatories or requests for production or
admissions may not exceed 25 per pleading, including subparts; in
addition, each party may not conduct/ compel more than 2 depositions.
(iii) Either party may file a motion requesting additional
discovery. Such motion may be granted only if the party has shown
"necessity and good cause" to warrant such additional discovery.
(4) Requests for case suspensions must be submitted jointly.
(5) When there are no material facts in dispute, the adjudicating
official must render summary judgment on the law without a hearing.
However, when material facts are in dispute and a hearing is held, a
transcript must be kept.
(6) MSPB or an adjudicating official may not reduce or otherwise
modify any penalty selected by the Department. If fewer than all the
charges are sustained, MSPB or an adjudicating official must direct the
Department to promptly determine whether the penalty is still
appropriate based on the sustained charge(s). The Department will
promptly notify the MSPB of its penalty decision, which is final
without any further appeal to MSPB. Within 5 days after receiving the
Department's penalty decision, the MSPB will issue a final order
incorporating that decision. Judicial review of any final MSPB order or
decision is prescribed under 5 U.S.C. 7703.
(7) An initial decision must be made no later than 90 days after
the date on which the appeal is filed. If that initial administrative
decision is appealed to MSPB, MSPB must render its decision no later
than 90 days after the close of the record before MSPB on petition for
review. Any time spent by the Department making a penalty determination
as provided for under Sec. 9701.706(k)(6) does not count against these
time limits.
(8) If the Director seeks reconsideration of a final MSPB order,
MSPB must render its decision no later than 60 days after receipt of
the opposition to OPM's petition in support of such reconsideration.
MSPB is required to state the reasons for its decision so that the
Director can determine whether to seek judicial review and to
facilitate expeditious judicial review if the Director seeks it.
(9) MSPB, in conjunction with the Department and OPM, will develop
and issue voluntary expedited appeals procedures for Department cases.
(l) Failure of MSPB to meet the deadlines imposed by paragraphs
(k)(7) and (k)(8) of this section in a case will not prejudice any
party to the case and will not form the basis for any legal action by
any party.
Sec. 9701.707 Appeals of mandatory removal actions.
(a) Appeals of mandatory removal actions are governed by procedures
set forth in this section. An employee may appeal such actions to an
adjudicating official, whose decision may be further appealed to an
independent Panel. Only the Secretary may mitigate the penalty in these
cases.
(b) The initial appeal of a mandatory removal action must be to an
adjudicating official designated by the Panel. Such official may
conduct a hearing for which a transcript will be kept, to resolve any
factual disputes and other relevant matters and will issue an initial
decision. When there are no material facts in dispute the adjudicating
official must render summary judgment on the law without a hearing. The
adjudicating official must issue a written decision to each party and
to OPM. Decisions of the adjudicating official are appealable by either
party to the Panel.
(c) The appellant has the right to be represented by an attorney or
other representative.
(d) An employee may appeal an initial decision to the Panel, which
will issue a final decision in such matters.
(1) The Panel is composed of three members, appointed by the
Secretary for 3-year terms. Members may be removed by the Secretary
only for inefficiency, neglect of duty, or malfeasance. The Secretary
will designate one member to serve as Chair of the Panel.
(2) A member of the Panel may be reappointed for additional terms.
An individual chosen to fill a vacancy will be appointed for the
unexpired term of the member replaced. The term of any member may not
expire before the date
[[Page 8071]]
on which the member's successor takes office.
(3) Two members of the Panel constitute a quorum. A vacancy on the
Panel does not impair the right of the remaining members to exercise
all of the powers of the Panel.
(4) Panel members will be chosen for their expertise in
adjudicating appeals, their knowledge of the Department's mission, and
leadership experience in comparable organizations.
(e) The Panel must issue a written decision after conducting a de
novo review of the record and must provide a copy of the decision to
each party to the appeal and to OPM.
(f) The decision of the Department must be sustained if it is
supported by substantial evidence, unless the employee shows by a
preponderance of the evidence--
(1) Harmful error in the application of Department procedures in
arriving at the decision;
(2) That the decision was based on any prohibited personnel
practice described in 5 U.S.C. 2302(b); or
(3) That the decision was not in accordance with law.
(g) In no case does the adjudicating official or Panel have the
authority to reverse a Department action based on the way in which the
charge is labeled or the conduct is characterized. When an employee is
on notice of the facts sufficient to respond to the factual allegations
of a charge, the Department will be determined to have complied with
the required notice provisions.
(h) The Director may, as a matter of right at any time in the
proceeding, intervene or otherwise participate in any proceeding under
this section in any case in which the Director believes that an
erroneous decision will have a substantial impact on a civil service
law, rule, regulation, or policy directive.
(i) Except as provided in Sec. 9701.708, any decision under
paragraph (b) of this section is final unless a party to the appeal or
the Director petitions the Panel for review within 30 days after
receipt of the decision, or the Panel reopens and reconsiders a case on
its own motion. The Director may petition the Panel for review only if
he or she believes the decision is erroneous and will have a
substantial impact on a civil service law, rule, regulation, or policy
directive. The Panel, for good cause shown, may extend the filing
period.
(j) If the adjudicating official or Panel is of the opinion that
the action could result in processing the appeal more expeditiously and
that this would not adversely affect any party, the adjudicating
official or Panel may--
(1) Consolidate appeals filed by two or more appellants; or
(2) Join two or more appeals filed by the same appellant and hear
and decide them concurrently,
(k) The Panel may require payment by the Department of reasonable
attorney fees if the action is reversed in its entirety and only if the
Panel determines the action constituted a prohibited personnel
practice, or was taken in bad faith, or is without any basis in fact
and law. However, if the employee is the prevailing party and the
decision is based on a finding of discrimination prohibited under 5
U.S.C. 2302(b)(1), the payment of reasonable attorney fees must be in
accordance with the standards prescribed in section 706(k) of the Civil
Rights Act of 1964 (42 U.S.C. 2000e-5(k)).
(l) If an employee has been removed under subpart F of this part,
and subsequently elects to retire, such retirement will not affect the
employee's appeal rights.
(m) The adjudicating official or Panel may not reduce or otherwise
modify any penalty selected by the Department for a mandatory removal
offense. If fewer than all the charges are sustained, the Panel or
adjudicating official must direct the Department to promptly determine
whether the penalty is still appropriate based on the sustained
charge(s). This determination of whether the penalty is appropriate is
final without any further appeal to the Panel.
(n) The Panel will develop and promulgate regulations for
processing appeals of mandatory removal actions which must conform to
the requirements set forth in Sec. 9701.706(k)(1) through (8) and for
such other matters as may be necessary to ensure the operation of the
Panel.
(o) Failure of the Panel to meet any deadlines imposed under
paragraph (n) of this section in a case will not prejudice any party to
the case and will not form the basis for any legal action by any party.
Sec. 9701.708 Actions involving discrimination.
Section 7702 of title 5, U.S. Code, is modified to read "MSPB or
Panel" wherever the terms "Merit Systems Protection Board" or
"Board" are used.
[FR Doc. 04-3670 Filed 2-17-04; 11:51 am]
BILLING CODE 6325-39-P; 4410-10-P