[Federal Register: May 31, 2005 (Volume 70, Number 103)]
[Rules and Regulations]
[Page 31277-31315]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31my05-9]
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Part V
Office of Personnel Management
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5 CFR Part 294, et al.
Changes in Pay Administration Rules for General Schedule Employees;
Interim Rule
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 294, 359, 362, 451, 530, 531, 532, 534, 536, 550, 591,
630, 831, and 842
RIN 3206-AK88
Changes in Pay Administration Rules for General Schedule
Employees
AGENCY: Office of Personnel Management.
ACTION: Interim rule with request for comments.
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SUMMARY: The Office of Personnel Management is issuing interim
regulations to implement section 301 of the Federal Workforce
Flexibility Act of 2004, which amends the rules governing pay setting
for employees covered by the General Schedule. In particular, we are
revising provisions related to special rates, locality rates, and
retained rates. The statutory and regulatory changes are designed to
correct a variety of pay administration anomalies that resulted in
unfair pay reductions or unwarranted pay increases, to allow locality
rates and special rates to be treated in similar ways, and to improve
the operation of the special rates program.
DATES: Effective Date: The interim regulations are effective on May 1,
2005.
Comment Date: Comments must be received on or before August 1,
2005.
ADDRESSES: Send or deliver written comments to Donald J. Winstead,
Deputy Associate Director for Pay and Performance Policy, Division for
Strategic Human Resources Policy, Office of Personnel Management, Room
7H31, 1900 E Street, NW., Washington, DC 20415-8200, by FAX at (202)
606-0824; or by e-mail at pay-performance-policy@opm.gov.
FOR FURTHER INFORMATION CONTACT: Bryce Baker by telephone at (202) 606-
2858; by fax at (202) 606-0824; or by e-mail at
pay-performance-policy@opm.gov.
SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is
issuing interim regulations to revise the rules that govern pay setting
for Federal employees covered by the General Schedule (GS) pay system.
The interim regulations implement the amendments made by section 301 of
the Federal Workforce Flexibility Act of 2004 (Pub. L. 108-411, October
30, 2004), hereafter referred to as ``the Act.'' Section 301 amended
provisions in 5 U.S.C. chapter 53 relating to the administration of
special rates, locality rates, and retained rates. These amendments
become effective on the first day of the first pay period beginning on
or after April 28, 2005--i.e., May 1, 2005. Since the regulations are
necessary to implement the statutory changes, these regulations are
issued as interim regulations that take effect on May 1, 2005.
The changes made by the Act and these implementing regulations are
designed to correct a variety of pay administration anomalies that have
produced unfair pay reductions or unwarranted pay increases for
employees in certain situations. These anomalies resulted largely from
the introduction of locality pay into the General Schedule pay system
in 1994. Many of the basic pay administration rules treated special
rates under 5 U.S.C. 5305 as rates of basic pay, but ignored locality
rates under 5 U.S.C. 5304. A key objective of the Act and these
regulations is to treat locality rates and special rates in similar
ways--i.e., to put them on the same footing. This will result in pay
rules that are more rational, consistent, and equitable. (See the
legislative history of section 301 of Pub. L. 108-411, as documented in
pages 17 through 22 of House Report 108-733, October 5, 2004.)
The Act requires that, when an employee's official worksite is
changed to a new location where different pay schedules apply, the
employee's pay must be converted to the new pay schedules in the new
location before processing any simultaneous pay action (other than a
general pay adjustment). This geographic conversion requirement is
found in 5 U.S.C. 5305(i), 5334(g), and 5363(c), as added or amended by
the Act, and is incorporated in these interim regulations. Geographic
conversion ensures that an employee whose official worksite is moved to
a new location receives the same rate of pay as an employee at the same
grade and step who was already stationed at the new location and who
undergoes the same pay actions.
The Act also is intended to improve the operation and effectiveness
of the special rates program by allowing special rate determinations to
be driven by staffing considerations rather than pay administration
issues and by clarifying OPM's authority to review and adjust special
rates as it determines necessary. The Act also revises the special
rates authority in other respects. For example, the Act raises the pay
limitation on special rates from the rate for level V of the Executive
Schedule to the rate for level IV of the Executive Schedule. The Act
also allows agencies to ``opt out'' of special rate schedules.
The Act makes significant changes related to pay retention under 5
U.S.C. 5363. Through an amendment to 5 U.S.C. 5302, locality payments
under 5 U.S.C. 5304 will no longer be paid on top of a retained rate.
Rather, an employee's pay retention entitlement will be derived from an
employee's payable (highest) rate of basic pay (including any locality
rate or special rate) before the action triggering pay retention, and
that entitlement will be compared to the highest applicable rate range
(including a locality rate range or a special rate range) for the
employee's current position. If the pay retention entitlement results
in a retained rate above the maximum rate of the highest applicable
rate range for an employee's position, that retained rate generally
will be increased by an amount equal to 50 percent of any increase in
that maximum rate. A reduction in an employee's payable rate of basic
pay resulting from conversion to a lower pay schedule in a different
geographic area (i.e., geographic conversion) does not trigger
entitlement to pay retention. Consistent with uncodified section
301(d)(2) of the Act, we are issuing regulations governing the
conversion of any existing locality-adjusted retained rate to a new
retained rate that is equal in amount. Also, various other types of
saved rates (i.e., rates above range maximums) are being converted to
retained rates under 5 U.S.C. 5363.
We are taking this opportunity to reorganize the affected
regulations and to clarify the meaning of certain provisions. We have
replaced the verb ``shall'' with ``must'' for added clarity and
readability. We intend that any provision using the verb ``must'' has
the same meaning and effect as previous provisions using ``shall.''
We are also taking this opportunity to remove regulations that are
obsolete. We are removing subpart C of part 531, which dealt with
special geographic adjustments for law enforcement officers (LEOs)
under section 404 of the Federal Employees Pay Comparability Act of
1990. All those special geographic adjustments for LEOs have been
surpassed by regular locality payments under 5 U.S.C. 5304. In
addition, we are removing subpart G of part 531, which dealt with
``continued rates''--a form of saved rates that were created under the
old interim geographic adjustment authority. For the few employees who
may have an existing continued rate above the applicable rate range,
the continued rate will be converted to a retained rate under 5 U.S.C.
5363, as described in the foregoing paragraph on pay retention changes.
These interim regulations also include conforming changes in other
parts of OPM's regulations, such as corrections
[[Page 31279]]
of regulatory references and revisions of the definition of ``rate of
basic pay.''
The remainder of this SUPPLEMENTARY INFORMATION reviews the
significant changes made in the key affected parts and subparts of the
regulations.
Special Rates
We have revised and reorganized OPM's regulations on special rate
schedules for General Schedule employees in part 530, subpart C. The
revisions implement certain provisions in section 301 of Public Law
108-411 and make other changes to clarify the rules governing these
schedules. Following are the key provisions contained in the revised
subpart C:
A special rate is defined as consisting of a base rate
(i.e., the GS rate or, if applicable, the law enforcement officer (LEO)
special base rate) and a special rate supplement. A special rate
employee is entitled to the applicable GS rate or LEO special base rate
for his or her grade and step, just as any other GS employee. A special
rate employee's pay entitlement differs because of the special rate
supplement.
The purposes for which a special rate is basic pay are
specified in regulation. In general, a special rate is basic pay for
the same purposes as a locality rate.
An agency may choose to exclude its employees from
coverage under a proposed or existing special rate schedule.
An employee is not entitled to a special rate if he or she
is entitled to a higher rate of basic pay under another authority
(e.g., a locality rate or retained rate).
A special rate may not exceed the rate for level IV of the
Executive Schedule.
At the time of a GS annual pay adjustment, a special rate
employee's GS rate or LEO special base rate is adjusted. OPM determines
whether the special rate supplement is adjusted and the amount of any
adjusted supplement.
Rules for converting an employee's rate of basic pay upon
establishment, adjustment, or discontinuation of a special rate
schedule are specified in subpart C. The conversion rules that apply to
schedule adjustments implement 5 U.S.C. 5305(f).
Subpart C of part 530 does not contain all the pay-setting rules
that apply to special rate employees. Parts 531 and 536 (dealing with
basic pay administration and pay retention, respectively) also
implement amendments to 5 U.S.C. 5305 made by Public Law 108-411. For
example, section 5305(i) requires that a special rate undergo a
geographic conversion when the employee's official worksite is changed
to a location where different pay schedules apply. This provision is
implemented in 5 CFR 531.205. In addition, Public Law 108-411 amended
the pay retention law (5 U.S.C. 5363(c)) to provide that a reduction in
an employee's special rate as a result of a geographic conversion is
not a basis for pay retention. This provision is implemented in 5 CFR
536.303(a). House Report 108-733 (October 5, 2004) stated that section
5363(c) was ``intended to clarify that local special rates are a
Government tool to address a local labor market problem, not an
employee entitlement that employees should be allowed to carry to
another area where there is no such problem'' (page 19). This approach
provides for consistent treatment of special rates and locality rates
for pay retention purposes.
House Report 108-733 (page 19) also emphasized that the amendments
to section 5305 ``would make clear that the Government has full
authority to adjust or not to adjust special rate schedules based on
staffing needs.'' The House Report explained that determinations
regarding special rate schedule adjustments are made solely under OPM's
authority in 5 U.S.C. 5305(d). This means OPM may make determinations
regarding the adjustment of special rate supplements based on its
assessment of staffing needs, without regard to the percentage increase
applied to GS rates. (Special rate employees receive the same
adjustment in their underlying GS rate as other GS employees. Thus,
OPM's discretion lies in adjusting the special rate supplement, which,
for any given grade in a special rate schedule, may be a fixed-dollar
amount or a fixed-percentage increase.) OPM may, at any time, conduct
general or targeted reviews of existing special rate schedules and make
adjustments in special rate supplements as it deems necessary.
Section 530.309, ``Miscellaneous provisions,'' is patterned after a
parallel section of miscellaneous provisions in the locality pay
regulations at 5 CFR 531.611 (which were part of the former locality
pay regulations at 5 CFR 531.606).
Locality Rates
We have revised and reorganized OPM's regulations in part 531,
subpart F, governing locality-based comparability payments under 5
U.S.C. 5304. The revisions implement certain provisions in section 301
of Public Law 108-411 and make other changes to clarify the rules
governing these payments. Following are the key changes contained in
the revised subpart F:
The definition of scheduled annual rate of pay is revised
to exclude any retained rate. Based on amendments to 5 U.S.C. 5302(8)
and 5363, a retained rate is no longer supplemented by locality
payments. Instead, a retained rate is a rate that is derived from an
employee's payable (highest) rate of basic pay (including any locality
payment or special rate supplement) and compared to the highest
applicable rate range for the employee's position (including a locality
rate range or special rate range). (See later discussion of retained
rates in the ``Grade and Pay Retention'' section of this Supplementary
Information.)
Section 531.608(b) makes clear that a special rate
employee is entitled to any applicable locality payment on the same
basis as any other GS employee (i.e., based on the employee's
underlying GS rate or LEO special base rate); however, if the locality
rate exceeds the corresponding special rate, the special rate
entitlement is terminated.
Section 531.609 clarifies that the geographic conversion
principle applies to the conversion of an employee's locality rate when
his or her official worksite is changed to a new location where
different pay schedules apply. (This is consistent with the manner in
which locality rates have always been treated.)
Section 531.610 lists new purposes for which a locality
rate is considered basic pay: (1) Applying GS pay administration
provisions to the extent provided in part 531, subpart B; (2) applying
pay administration provisions for prevailing rate employees that use a
GS rate of basic pay (except as otherwise provided in part 532); (3)
applying grade and pay retention provisions in 5 CFR part 536
(consistent with 5 U.S.C. 5361(4) and 5363, as amended); (4) computing
recruitment, relocation, and retention incentives under 5 U.S.C. 5753
and 5754 (consistent with OPM's authority under those amended sections
of law); and (5) computing certain performance-based cash awards as a
percentage of basic pay (consistent with 5 U.S.C. 4505a, which was
amended to eliminate the prohibition on using locality rates to compute
such awards).
We are inviting comments on whether the final regulations should
make a change in the treatment of locality rates in computing danger
pay allowances and post differentials. Since August 2004, OPM
regulations have provided that locality rates are considered basic pay
in computing danger pay allowances and post differentials in
[[Page 31280]]
foreign areas for which the State Department has authorized danger pay
allowances, as long as the employee's official worksite is located in a
locality pay area (i.e., within the 48 contiguous States). (See 69 FR
47353, August 5, 2004.) However, locality rates are not used in
computing post differentials in other foreign areas or in nonforeign
areas. These interim regulations retain these existing policies. We
note that this issue has limited scope, since employees receiving
locality rates are eligible for post differentials only when they are
temporarily detailed (including a work assignment while in temporary
duty travel status) to a post differential area for at least 42
consecutive days. By law, locality pay does not apply to employees
whose official worksite is outside the 48 contiguous States. (See 5
U.S.C. 5304(f).)
Under these interim regulations, in post differential areas
(foreign and nonforeign) where danger pay allowances do not apply,
special rates are considered basic pay in computing post differentials,
while locality rates are not. We invite comments on whether this
difference in treatment is appropriate.
We also invite comments on whether we should continue to have a
different policy for danger pay areas than for other post differential
areas (foreign and nonforeign). Should we maintain the existing policy
of using detailed employees' locality rates in computing danger pay
allowances and post differentials in danger pay areas? Should we extend
this policy to other post differential areas? If a policy determination
is made to bar the use of locality rates in computing danger pay
allowances or post differentials in all areas or to continue to bar the
use of locality pay in computing post differentials in non-danger pay
areas, should we also change the policy allowing detailed employees'
special rates to be used in such computations so that locality rates
and special rates are administered consistently? Commenters should
provide specific reasons in support of their position.
Other significant clarifying changes in subpart F of part 531
include the following:
In Sec. 531.607(b), we address the special hourly rate
computations that apply to firefighters covered by 5 CFR part 550,
subpart M.
Throughout subpart F, we replace the term official duty
station with official worksite. (See especially Sec. Sec. 531.602 and
531.605.)
In addition to using the new term official worksite, these interim
regulations also implement changes in determining an employee's
official worksite that OPM proposed on January 5, 2005, as part of a
larger notice of proposed rulemaking (70 FR 1068). That proposal would
add a new Sec. 531.605 to define the requirements for determining an
employee's official duty station (hereafter referred to as ``official
worksite'') for the purpose of identifying an employee's location-based
pay entitlements, including special rate supplements and locality
payments. The proposed regulations also addressed official worksite
determinations for employees temporarily working at other locations and
teleworking from an alternative worksite. We received comments on this
part of our proposal from four agencies, one employee union, and two
individuals.
An agency felt that the determination of an employee's official
worksite for pay purposes should be made by individual agencies and not
be subject to Governmentwide regulations. We do not agree. The
regulations provide agencies a degree of flexibility in determining an
employee's official worksite. However, providing certain specific
criteria in regulations is essential to ensure that agencies pay
employees fairly and consistently, especially in situations such as
telework arrangements.
An agency recommended that Sec. 531.605 be revised to permit an
agency to leave the official worksite unchanged during the temporary
assignment of an employee to a position of record in a different
location when relocation expenses under 5 U.S.C. 5737 are not
authorized. The agency correctly stated that under current policy, when
an employee is temporarily promoted or reassigned (not detailed) to a
position in a different geographic location, the position to which
temporarily promoted or reassigned must be the employee's position of
record for pay purposes. (Generally, if detailed, an employee is paid
based on his or her permanent position of record, including the
location-based pay entitlements associated with the official worksite
of the permanent position.) Current policy provides that the employee
must receive the location-based pay entitlements based on the official
worksite of the temporary position of record. The agency believes that
if the length and/or circumstances of the temporary promotion or
reassignment do not warrant payment of relocation benefits under 5
U.S.C. 5737, agencies should be able to temporarily promote or reassign
the employee to the new position of record, but leave the official
worksite unchanged. Thus, the employee would receive the location-based
pay entitlements for the official worksite of his or her permanent
position.
We believe there are some compelling arguments for changing the
current policy regarding temporary promotions and reassignments to
positions in a different location so that an employee's location-based
pay entitlements are based on the official worksite of the employee's
permanent position (unless the employee is receiving relocation
benefits under 5 U.S.C. 5737). However, since this interim regulation
takes effect upon publication, we are inviting comments on this
proposed policy change so that we can fully consider all the relevant
issues before making a change. Any change in the final regulations will
take into account those comments.
The employee union and two individuals felt that official worksite
determinations for pay purposes should be based on where the employee
works most or the majority of the time. The commenters were
particularly concerned that Sec. 531.605(d) of the regulations would
require agencies to designate the regular or reporting worksite as the
employee's official worksite if the employee works at that site at
least once a week. An agency requested that the regulations clarify
that teleworkers must work at the reporting worksite at least once a
week on a regular and recurring schedule and for a full workday.
We do not agree with using a majority-of-time criterion instead of
a once-a-week criterion for determining the official worksite of
employees for pay purposes. The once-a-week requirement in Sec.
531.605(d) applies only to employees working under telework
arrangements, which we believe require special rules. Under the interim
regulations, the regular worksite will remain the teleworker's official
worksite, unless the employee does not regularly spend some time at the
regular worksite. We believe the once-a-week requirement is a
reasonable standard. In addition, requiring agencies to track the
number of hours an employee works at different worksites each week and
whether the employee worked a full or partial workday at the regular
worksite would be administratively burdensome for agencies and could
result in frequent changes in an employee's official worksite and
locality or other pay rates. However, we have revised the proposed
regulations to provide that the teleworker must report to the regular
worksite at least once a week on a regular and recurring basis in order
for the regular worksite to be the employee's official worksite.
[[Page 31281]]
An agency recommended adding an exception to Sec. 531.605(d) to
provide agencies with the option of designating the regular worksite as
the official worksite of a teleworker provided the telework site is
within the commuting area of the regular worksite. The agency was
concerned about applying the proposed rules to a number of its
teleworkers who work at various locations other than their established
official worksite.
The interim regulations revise Sec. 531.605(d) to provide that an
employee under a telework agreement whose work location varies on a
daily basis need not report at least once a week to the established
official worksite of the employee's position of record (where the
employee's work activities are based) as long as the employee is
performing work within the locality pay area for that regular official
worksite at least once a week on a regular and recurring basis. The
interim regulations provide that if an employee covered by a telework
agreement does not report to the regular official worksite or an
alternative worksite in the same locality pay area at least once a
week, the employee's official worksite is the location of the telework
site (except as provided in Sec. 531.605(d)(3)). (Similar provisions
apply in determining whether an employee's official worksite is covered
by a special rate schedule or a nonforeign area cost-of-living
allowance or post differential. See the definition of ``official
worksite'' in Sec. Sec. 530.302 and 591.201.)
An agency requested clarification as to the circumstances in which
it would be appropriate for an agency to approve a temporary exception
to allow a regular worksite to be the official worksite for pay
purposes when a teleworker does not commute to the regular worksite at
least once a week. Another commenter requested guidance on when
agencies should reevaluate the official worksite determination in such
temporary telework arrangements.
Section 531.605(d)(3) of these interim regulations includes an
example of an appropriate situation in which an agency may make a
temporary exception to the once-a-week requirement--namely, when an
employee is recovering from an injury or medical condition that
prevents the employee from commuting to the regular worksite. Other
examples include temporary emergency situations at the regular worksite
or a critical project that requires the employee to telework
temporarily. The interim regulations allow an authorized agency
official to determine the temporary situations in which an exception
may be applied. Agencies should periodically reevaluate the official
worksite of an employee under a temporary telework arrangement.
An agency asked for clarification on how to determine the official
worksite of an employee who normally teleworks at an alternative site
full time when that employee is assigned to work in a different
location on a temporary basis. Under Sec. 531.605 of these interim
regulations, agencies have the flexibility to change such an employee's
official worksite to the location of a temporary work assignment or to
keep the employee's official worksite at the location of the telework
arrangement, depending on the nature of the assignment. Agencies may
need to reevaluate such decisions periodically if the time spent on
such temporary work assignments is extended. Agencies also may cancel
the telework agreement in such situations.
Finally, several commenters felt that regulations should address
the tax, travel, reduction in force, and bargaining unit coverage
implications of making official worksite determinations. Since the
official worksite regulations apply only when determining an employee's
location-based pay entitlements, these comments are outside the scope
of these regulations.
General Schedule Basic Pay Setting
We have revised and reorganized OPM's regulations on GS rate of
basic pay determinations in part 531, subpart B. The revisions
implement certain provisions in section 301 of Public Law 108-411 and
make other changes to clarify the GS pay-setting rules. Following are
the key changes contained in the revised subpart B:
Additional terms are defined in the new Sec. 531.203,
including highest applicable rate range, official worksite, payable
rate, pay schedule, position of record, and special rate supplement.
Also, the term rate of basic pay is redefined to include a locality
rate. (Under the former regulations, locality rates were ignored in
applying the rules in subpart B.)
Section 531.204 describes the relationship among various
types of rates of basic pay--including GS rates, LEO special base
rates, locality rates, and special rates.
Section 531.205 sets forth the geographic conversion rule,
which is used to convert an employee's rate(s) of basic pay when his or
her official worksite is changed to a new location where different pay
schedules apply. (This section implements the statutory geographic
conversion provisions in 5 U.S.C. 5305(i), 5334(g), and 5363(c).)
Section 531.206 establishes the order of precedence for
processing simultaneous pay actions. In particular, this section shows
that geographic conversions must be processed after any general pay
adjustment (related to changes in pay schedules) but before any other
pay action (e.g., a promotion).
Section 531.212 includes new provisions related to the
authority to set a newly appointed employee's rate of basic pay above
the minimum of the rate range based on superior qualifications or
special agency needs. In particular, we make clear that this authority
is used to set an employee's ``payable'' or highest rate of basic pay,
including consideration of any applicable locality rate or special
rate.
Sections 531.213 through 531.215 establish rules for
setting pay upon lateral reassignment or transfer, promotion, or
demotion. Promotions and demotions must be processed after applying the
geographic conversion rule, if applicable, and using the converted
payable rate of basic pay as the employee's existing rate immediately
before the promotion or demotion. Locality rates and special rates are
considered rates of basic pay in applying these rules.
Section 531.216 modifies the rules regarding setting pay
for employees moving from a Department of Defense or Coast Guard
nonappropriated fund instrumentality (NAFI) to a GS position to take
into account locality rates. Also, the NAFI maximum payable rate rule
is revised to take into account the geographic location where the NAFI
highest previous rate was earned, consistent with the rules governing
geographic conversion.
Section 531.221 modifies the GS maximum payable rate rule,
which allows an agency to set an employee's rate of pay based on his or
her ``highest previous rate'' in a Federal civilian job. The modified
GS maximum payable rate rule now takes into account locality rates when
the employee's highest previous rate was based on a special rate or on
a rate earned in a non-GS pay system. (Under the interim regulations,
if an employee's highest previous rate was earned in a GS position, the
maximum payable rate rule generally is applied using the underlying GS
rate (or LEO special base rate), which avoids the need to apply the
geographic conversion rule.)
Sections 531.241 through 531.247 consolidate various
special rules for ``GM employees''i.e., GS employees who were formerly
covered by the Performance Management and Recognition System for
managers and supervisors at grades GS-13, 14, and 15
[[Page 31282]]
and who may have rates of basic pay between the established GS step
rates. Consistent with the changes made by Public Law 108-411 for other
GS employees, GM employees' locality rates will be taken into account
in applying the various pay-setting rules. If a GM employee is entitled
to a special rate, the special rate is computed by adding the
applicable special rate supplement on top of the GM employee's GS rate.
(When pay schedules are adjusted, the GM employee's underlying GS rate
must be redetermined using the relative position-in-range methodology
presented in Sec. 531.244, which is the same basic methodology used in
OPM's former regulations.)
The use of locality rates in applying the GS pay-setting rules,
along with the use of the geographic conversion rule when an employee's
official worksite is changed to a new location, represent a significant
change in GS pay administration. The geographic conversion rule
requires that an employee's rate(s) of basic pay must first be
converted to a corresponding rate(s) on the pay schedule that would
apply to the employee's existing position of record if he or she were
stationed at the new official worksite. No simultaneous change in the
employee's position of record (defined as including grade, occupational
series, agency, law enforcement officer status, and any other element
that affects coverage under a pay schedule, other than the official
worksite) or any simultaneous pay action (other than a general pay
adjustment) is considered until after the geographic conversion. The
converted rate(s) of basic pay resulting from the geographic conversion
must be treated as the employee's existing rate(s) of basic pay in
applying the next simultaneous pay action in the order of precedence. A
reduction in an employee's payable rate of basic pay as a result of a
geographic conversion is not a basis for pay retention, even if the
move is involuntary. This does not represent a change in treatment of
locality rates, but does represent a change in the treatment of special
rates.
The legislative history of Public Law 108-411 shows that a major
objective of the geographic conversion rule was to provide the same pay
result that would have occurred if the employee in question had moved
laterally without a change in position to the new geographic location
and then underwent a position change. House Report 108-733 (October 5,
2004) stated that the geographic conversion rule ``would make it clear
that an employee with the same work history as another employee will
not have higher pay simply because he or she came from an area where
higher pay rates applied, while also ensuring consistency between the
treatment of locality rates and special rates'' (page 20).
The geographic conversion rule will be particularly significant in
terms of how it affects an employee who is promoted to a position at a
different official worksite, where different pay schedules would apply
to the employee's position of record before promotion. After applying
any simultaneous general pay adjustment (as described in Sec.
531.206), the agency must first convert the employee's rate(s) of basic
pay to the applicable pay schedule(s) for the new official worksite,
based on the employee's position of record (including grade) and step
(or rate) before promotion. The resulting rate(s) of basic pay must be
treated as the employee's existing rate(s) in processing the promotion
action. (However, if the employee is simultaneously entitled to a
within-grade increase or quality step increase on the same date as the
promotion, that increase would be applied before processing the
promotion.)
Once the geographic conversion rule has been applied, the agency
must follow the promotion rule in Sec. 531.214. The standard method of
applying the promotion rule consists of the following steps:
(1) Find the employee's existing step (or rate) in the GS rate
range (or LEO special base rate range, if applicable) and increase that
rate by two GS within-grade increases.
(2) Determine the payable (highest) rate of basic pay for the step
or rate determined in paragraph (1) by applying any applicable locality
payment or special rate supplement.
(3) Identify the highest applicable rate range for the employee's
position of record after promotion and find the lowest step rate in
that range that equals or exceeds the rate determined in paragraph (2).
This is the employee's payable rate of basic pay upon promotion.
The interim regulations provide for an alternate method of applying
the promotion rule which involves (1) applying the promotion rule using
the pay schedules that would apply to the employee's position of record
if only the employee's grade were changed and (2) converting the
resulting rate to the pay schedules for the actual position of record
after promotion. This method yields a different result from the
standard method only when there is a change in the employee's position
of record (e.g., change in occupational series) which would cause the
employee to have a different pay schedule and different highest
applicable rate range at the higher grade. For example, an occupational
series change in conjunction with a promotion could result in an
employee becoming covered by a special rate schedule at the higher
grade. The standard method would not provide the employee with any
increase in pay based on movement into a special rate category. In
contrast, the alternate method would apply the promotion rule without
regard to the new special rate schedule and then would laterally
convert the resulting rate to the corresponding rate on the special
rate schedule, which would provide an increase reflecting the
difference between the special rate schedule and the former pay
schedule. This alternate method is consistent with the method found in
the former special rate regulations at 5 CFR 530.306(f), which dealt
with the promotion of an employee from a position not covered by a
special rate schedule to a position covered by a special rate schedule.
However, the alternate method also applies in other situations, such as
when an employee moves from a lower-paying special rate schedule to a
higher-paying special rate schedule.
The objective of the alternate method is to treat an employee who
is being directly promoted to a higher pay schedule the same as a
similarly situated employee who is promoted and then later (in a
separate action) reassigned to a position covered by the higher pay
schedule. The alternate method mandatorily applies in lieu of the
standard method whenever it produces a higher payable rate upon
promotion. In addition, an agency may, at its sole discretion, use the
alternate method when it produces a lower payable rate upon promotion.
For example, if an employee is moving to a position in a different
career field, an agency may determine that it is not appropriate to
allow the employee's pay upon promotion to be set based on a special
rate for the employee's former job.
The alternate method of applying the promotion rules departs from
the standard method after the step of determining the payable (highest)
rate of basic pay at the lower (pre-promotion) grade that reflects an
increase of two within-grade increases. Under the alternate method,
that payable rate must be compared to the highest applicable rate range
for the employee's grade after promotion based on consideration of pay
schedules that apply to the employee's position of record before
promotion. Any pay schedule that
[[Page 31283]]
applies solely to the employee's position of record after promotion
would be ignored. The employee's rate of basic pay is set at the lowest
step rate in the highest applicable rate range that exceeds the
specified rate. Then the employee is converted to the new highest
applicable rate range (reflecting any new pay schedule that applies
after promotion) by setting the payable rate at the corresponding step
rate in that range.
To aid in understanding the alternate method, we provide an example
using 2005 pay schedules. In this example, we are assuming that a GS-7,
step 7, human resources specialist (occupational series GS-201)
stationed in Atlanta, Georgia, is being promoted to a GS-9 information
technology specialist position (occupational series GS-2210) in
Washington, DC.
Step A--Apply the geographic conversion rule to determine the
rates of basic pay for the GS-7, step 7, position in Washington, DC.
Based on the GS-7 position before promotion (including the GS-201
occupational series), the pay schedules applicable to the employee
in Washington, DC, would be the General Schedule and the locality
rate schedule applicable in Washington, DC (Salary Table 2005-DCB).
Step B--Using the underlying General Schedule, increase the GS-
7, step 7, rate by two within-grade increases, which produces the
GS-7, step 9, rate ($38,719).
Step C--The payable (highest) rate of basic pay for GS-7, step
9, is the corresponding GS-7, step 9, locality rate in Washington,
DC ($44,906).
Step D--If the employee were promoted to a GS-9 position in the
GS-201 human resources management series, the highest applicable
rate range for that GS-9 position after promotion would be the GS-9
locality rate range in Washington, DC (15.98 percent above GS
rates). The GS-9, step 3, locality rate ($46,255) is the lowest step
rate in that range that equals or exceeds the GS-7, step 9, locality
rate from step C.
Step E--Convert the GS-9, step 3, locality rate to the higher
GS-9, step 3, special rate that applies to the employee's GS-2210
information technology specialist position after promotion. The
applicable special rate schedule is Table 999C. The GS-9, step 3,
special rate on that schedule is the payable rate of basic pay upon
promotion ($51,847). (At GS-9, a special rate in Table 999C is 30
percent above the corresponding GS rate.)
Step F--The standard method would have compared the GS-7, step
9, locality rate directly to the higher GS-9 range of special rates
and produced a rate of GS-9, step 1 ($48,607). Since the rate
produced by the alternate method (GS-9, step 3, or $51,847) is
greater than the rate produced by the standard method, the result of
the alternate method is used.
In addition to changes in subpart B of part 531 that relate
directly to the changes made by Public Law 108-411, the interim
regulations in Sec. 531.212 (dealing with the superior qualifications
and special needs pay-setting authority) include some policy
clarifications and changes beyond the immediate requirements of Public
Law 108-411. For example, the interim regulations define what is meant
by superior qualifications and special needs so that agencies better
understand how this pay flexibility may be used. The interim
regulations also expand and clarify the exceptions to the 90-day break-
in-service requirement to allow greater access to the superior
qualifications and special needs pay-setting authority. For example,
the interim regulations consolidate several of the former exceptions
into a broader exception covering any temporary or time-limited
appointment in the competitive or excepted service. If an individual
was employed under any competitive or excepted service temporary
appointment during the 90 days immediately preceding an appointment to
a GS position, the agency could use the superior qualifications and
special needs pay-setting authority. The interim regulations also
expand the elements that can be considered in justifying the higher
rate, allowing the use of factors other than existing pay, consistent
with 5 U.S.C. 5333.
We are inviting comments regarding a proposal to establish a
regulatory time limit on the period of time from which an employee's
highest previous rate may be drawn. Consistent with current
regulations, the interim regulations in Sec. 531.221 (dealing with the
maximum payable rate rule) establish no time limit regarding how long
ago a highest previous rate was earned. We believe it would be
reasonable to limit consideration of rates of pay earned during a
recent time period (e.g., 5 or 10 years before the action in question).
Even under the current regulations, an agency has discretion to set an
employee's pay at any rate equal to or less than the maximum payable
rate; thus, an agency could take into account the age of an employee's
highest previous rate in exercising that discretion. The proposed time
limit would reduce the administrative burden associated with
identifying an employee's highest previous rate over an entire career
and comparing the highest previous rate with pay schedules in effect
many years ago.
General Schedule Within-Grade Increases
We have revised OPM's regulations on within-grade increases for
General Schedule employees in part 531, subpart D. The revisions
implement certain provisions in section 301 of Public Law 108-411 and
make other changes to clarify the rules governing GS within-grade
increases.
We have revised subpart D to exclude consideration of special
rates. For the purpose of subpart D, the term rate of basic pay is
defined as a GS base rate or an LEO special base rate. Subpart D deals
with adjusting an employee's base rate in connection with within-grade
increases. Any applicable locality payment or special rate supplement
is paid on top of the base rate.
We have revised the definition of equivalent increase in Sec.
531.403 and related regulations in Sec. 531.407. We have defined
equivalent increase as an increase in an employee's rate of basic pay,
or an opportunity for such an increase under non-GS pay systems,
resulting from certain events or actions listed in Sec. 531.407. The
interim regulations no longer require that agencies add up the dollar
value of multiple increases under non-GS pay systems in determining
when an equivalent increase occurred, which was required under the
former regulations at Sec. 531.407(a) and (b). The new events-based
approach avoids the need to consider locality payments, special rate
supplements, or other similar supplements or to apply geographic
conversion rules in making equivalent increase determinations. We note
that the former regulations at Sec. 531.407(d) had provided that a
zero merit increase under the former Performance Management Recognition
System would be treated as an equivalent increase, which is consistent
with the events-based approach.
Grade and Pay Retention
We have revised and reorganized OPM's regulations on grade and pay
retention in part 536. The revisions implement certain provisions in
section 301 of Public Law 108-411, incorporate changes OPM previously
issued as proposed regulations, and make other changes to clarify the
rules governing the grade and pay retention authorities under 5 U.S.C.
chapter 53, subchapter VI. We have reorganized part 536 into four
subparts that provide (1) general provisions relating to grade and pay
retention, (2) rules for grade retention, (3) rules for pay retention,
and (4) appeals and miscellaneous provisions. Except for correcting
citations and moving former Sec. 536.308 to the grade retention
subpart, the appeals and miscellaneous provisions formerly contained in
5 CFR part 536, subpart C, are not revised by this interim regulation.
(See redesignated subpart D.)
[[Page 31284]]
The following new provisions in the revised part 536 implement
section 301 of Public Law 108-411:
Additional terms are defined in the new Sec. 536.103,
including highest applicable rate range, official worksite, payable
rate, pay schedule, position of record, and rate range. Also, the term
rate of basic pay is redefined to include a locality rate, consistent
with 5 U.S.C. 5361(4). (Under the former regulations, locality rates
were ignored when applying the rules in part 536.) The definition of
representative rate is redefined as described later in this
Supplementary Information.
Sections 536.206, 536.301, 536.302, 536.303, 536.304,
536.305, and 536.308 incorporate the geographic conversion rule into
the grade and pay retention regulations, where it is used to convert a
rate(s) of basic pay when an employee's official worksite is changed to
a new location where different pay schedules apply. The converted rate
resulting from geographic conversion is treated as the employee's
existing rate in applying the pay retention provisions. (These
provisions implement the statutory geographic conversion provisions in
5 U.S.C. 5305(i), 5334(g), and 5363(c).)
Section 536.105 clarifies when agencies must compare the
grades of positions in different pay systems using representative rates
under the grade retention rules. This section also provides that, for
positions located at different official worksites where different pay
schedules apply, the geographic conversion rules must be applied before
comparing the representative rates. In addition, the definition of
representative rate in Sec. 536.103 is revised to mean the payable
(highest) rate of basic pay (including any locality payment or special
rate supplement) for the specified point in the range (e.g., GS step 4
). The definition also provides that in comparing grades or work levels
when one of the grades or work levels is not under a covered pay
system, the representative rates that must be compared are the maximum
payable rates of basic pay (including any locality payment, special
rate supplement, or similar payment) that apply to the grade or level
of each position. (The former regulations provided agencies with the
flexibility to set the representative rate for positions under
noncovered pay systems.) This revised definition of representative rate
also must be used for making severance pay and discontinued service
retirement reasonable offer determinations. See the definition of
reasonable offer in Sec. 550.703 and the references in Sec. Sec.
831.503(b)(3)(iv) and 842.206(c)(3)(iv).
Section 536.206 modifies the rules for determining an
employee's rate of basic pay when an employee becomes entitled to grade
retention or becomes covered by different pay schedules during a period
of grade retention and the order for processing such pay actions. If
such an employee's rate of basic pay otherwise would be reduced upon
placement in a lower-paying pay schedule (excluding a reduction that
results from a geographic conversion), the employee is eligible for pay
retention under 5 U.S.C. 5363 and 5 CFR part 536, subpart C, to the
same extent as any other employee. Under the former regulations, a rate
above the maximum rate that resulted from the application of the grade
retention rules was not treated as a retained rate under 5 U.S.C. 5363.
However, consistent with section 301(d)(2) of Public Law 108-411, and
our regulatory authority in 5 U.S.C. 5365, we have revised the grade
retention regulations to provide that the normal pay retention rules
apply to employees with a retained grade.
Sections 536.301 and 536.302 clarify the situations in
which an agency must provide pay retention to an employee and the
situations in which an agency may apply optional pay retention (after
application of geographic conversion rules under Sec. 536.303(a)). We
also removed the requirement in former Sec. 536.104(a)(5) that pay
retention apply to an employee whose rate of basic pay otherwise would
be reduced as a result of placement in a lower wage area. These changes
are consistent with 5 U.S.C. 5363(c)(2), which provides that a
reduction in an employee's rate of basic pay resulting from a
geographic conversion is not a basis for entitlement to pay retention
under 5 U.S.C. 5363.
Section 536.301 also provides that an agency must provide
pay retention under part 536, subpart C, to an employee whose rate of
basic pay otherwise would be reduced (after geographic conversion) as a
result of the application of the promotion rule in 5 U.S.C. 5334(b) and
5 CFR 531.214 when the employee's payable rate of basic pay after
promotion exceeds the maximum rate of basic pay of the new rate range.
Under the former regulations, a rate of basic pay above the maximum
rate that resulted from application of the promotion rule was not
treated as a retained rate under 5 U.S.C. 5363 and 5 CFR part 536. This
change is required by an amendment to 5 U.S.C. 5334(b).
Section 536.304 modifies the rules for determining an
employee's pay retention entitlement. In particular, the new
regulations provide that an eligible employee is entitled to a retained
rate if his or her rate of basic pay (including any locality payment or
special rate, but after geographic conversion under Sec. 536.303(a))
exceeds the maximum rate of the highest applicable rate range for the
new position or geographic area. The retained rate will equal the
employee's former rate of basic pay (including any locality payment or
special rate). This section implements 5 U.S.C. 5363(b)(1).
Section 536.305 modifies the rules for adjusting a
retained rate at the time of a pay schedule adjustment. Consistent with
5 U.S.C. 5363(b)(2)(B), when a pay schedule adjustment causes the
maximum rate of the highest applicable rate range for an employee's
position to increase, the employee's retained rate is increased by 50
percent of the increase in that maximum rate. If an employee's retained
rate would fall below the maximum rate after the 50 percent increase,
the employee's payable rate is set at that maximum rate and pay
retention ceases to apply. The interim regulations make clear that,
consistent with 5 U.S.C. 5363(c), the geographic conversion rule in
Sec. 536.303(b) applies in lieu of the 50-percent adjustment rule when
a pay schedule change is caused by a change in the location of the
employee's official worksite. The interim regulations also make clear
that the 50-percent adjustment rule does not apply if a pay schedule
change is caused by a change in the employee's position of record.
Section 536.304(b)(3) provides that, when initially
established, a retained rate may not exceed (1) 150 percent of the
maximum payable rate of basic pay of the highest applicable rate range
for the grade of the employee's position of record or (2) the rate for
level IV of the Executive Schedule. Section 536.306 provides that at no
time may a retained rate exceed the rate for level IV of the Executive
Schedule and that if an employee's retained rate is limited by the
level IV rate, the employee's higher, uncapped rate is not maintained
or used for any purpose. This level IV limitation is consistent with
the level IV limit on locality rates under 5 U.S.C. 5304(g)(1) and
special rates under 5 U.S.C. 5305(a)(1) for General Schedule employees
and the level IV limitation on rates for prevailing rate employees
under 5 U.S.C. 5373. Under amended 5 U.S.C. 5365(b), OPM is authorized
to establish limitations on the application of pay retention provisions
for employees in noncovered pay systems.
Section 536.307 provides the purposes for which a retained
rate is basic pay, consistent with 5 U.S.C.
[[Page 31285]]
5363(d). A retained rate is basic pay for many of the same purposes as
a special rate or a locality rate. When a retained rate is not basic
pay, the maximum rate of basic pay for the employee's grade must be
used in place of the retained rate (e.g., for computing percentage-
based awards under 5 CFR part 451 and recruitment, relocation, and
retention incentives under 5 CFR part 575, subparts A, B, and C).
Section 536.309 provides the rules for converting retained
rates in effect on April 30, 2005, to a retained rate under new 5
U.S.C. 5363 and 5 CFR part 536, subpart C. This section covers an
employee who on April 30, 2005, was receiving (1) a retained rate under
5 U.S.C. 5363, (2) a rate paid under 5 U.S.C. 5334(b) or 5362 that was
greater than the maximum rate of basic pay payable for the grade of the
employee's position of record, or (3) a continued rate of pay under 5
CFR part 531, subparts C or G, that was greater than the maximum rate
of basic pay payable for the grade of the employee's position.
Effective on May 1, 2005, the employee's new retained rate must equal
his or her previous retained rate, including any applicable locality
payment under 5 U.S.C. 5304.
On May 25, 2000, OPM published proposed changes in part 536 (65 FR
33785) regarding the applicability of grade and pay retention to
employees moving within and between covered pay schedules (hereafter
referred to as ``covered pay systems''). Under 5 U.S.C. 5361, a covered
pay system includes the General Schedule; a prevailing rate schedule
under 5 U.S.C. chapter 53, subchapter IV; or a special occupational pay
system under 5 U.S.C. chapter 53, subchapter IX. Consistent with the
grade and pay retention statute, the former regulations provided grade
and pay retention benefits for employees moving between positions
within a covered pay system and between positions under different
covered pay systems. In addition, OPM used its regulatory authority
under 5 U.S.C. 5365 to provide agencies with the discretionary
authority in the former regulations to apply grade and pay retention
provisions to employees moving from positions not under a covered pay
system to positions under a covered pay system.
In the regulations issued on May 25, 2000, we proposed to (1)
provide agencies with the discretionary authority to apply pay
retention provisions to employees moving to or within noncovered pay
systems who would otherwise suffer a reduction in pay as a result of a
management action and to freeze any resulting retained rate (i.e., not
provide the normal 50 percent pay adjustment under former 5 CFR
536.205(c)); (2) freeze the retained rate of an employee who moves from
a noncovered pay system to a covered pay system and who receives a rate
in excess of the maximum rate applicable to the covered pay system; and
(3) prohibit the application of grade retention to any employee who
moves from a noncovered pay system.
We received comments from an agency and an employee association on
the proposed regulations. The agency requested that OPM amend the
regulations to provide agencies with the administrative authority to
establish a pay adjustment mechanism for an employee on pay retention
under a noncovered pay system as consistent as possible with the
General Schedule mechanism in the former 5 CFR 536.205(c). The
association suggested that we modify the regulations to allow such an
employee to receive the reduced pay adjustment of 50 percent, as long
as the rate of pay does not exceed the pay level previously held, or
the maximum rate of the new position, whichever is greater.
We revisited the proposal to provide agencies with the authority to
apply pay retention provisions to employees moving to or within
noncovered pay systems and have decided not to include this authority
in the revised part 536. Agencies may continue to apply pay retention
provisions at their discretion to employees moving from a noncovered
pay system to a covered pay system. See new Sec. 536.102(a).
The association also objected to our proposal to freeze the
retained rates of employees who move from a noncovered pay system to a
covered pay system and who receive a retained rate in excess of the
maximum rate applicable to the covered pay system. We revisited this
issue and have decided not to include this proposal in the revised part
536. The revised part 536 provides that employees who move from
noncovered pay systems to covered pay systems and receive a retained
rate are entitled to the normal 50 percent pay adjustment under new
Sec. 536.305. (Note that such retained rates are subject to the
limitation under new Sec. 536.306.)
These interim regulations retain the proposal that prohibits
agencies from applying grade retention to an employee who moves into a
covered pay system from a noncovered pay system. See new exclusion in
Sec. 536.102(d). Accordingly, we are removing the rule in former Sec.
536.203(b) for determining a retained grade for an employee who moves
from a position not under a covered pay system to a position under a
covered pay system. Employees entitled to grade retention immediately
prior to the effective date of these regulations as a result of
movement from a noncovered pay system to a covered pay system will
remain entitled to grade retention until one of the terminating
conditions in Sec. 536.208 applies.
The revised part 536 contains the following additional significant
clarifying and conforming changes regarding the coverage, eligibility,
and applicability of grade and pay retention:
Section 536.102 merges the coverage, applicability, and
exclusionary provisions from the former regulations into a single
coverage section that clarifies the employees covered by and excluded
from the regulations, including the coverage of employees in Department
of Defense and Coast Guard nonappropriated fund instrumentality (NAFI)
positions. (See also new Sec. 536.202(d) for information on NAFI
coverage.)
Section 536.103 adds new definitions of covered pay system
(consistent with the definition of covered pay schedule under 5 U.S.C.
5361), employee, General Schedule, management action, and prevailing
rate employee and revises the definitions of reduced in grade or pay at
the employee's request (formerly demotion at an employee's request),
reduced in grade or pay for personal cause (formerly demotion for
personal cause), temporary promotion, and temporary reassignment to
clarify coverage and eligibility provisions.
Section 536.201 clarifies the conditions under which a
movement to a lower grade is considered to be a result of reduction in
force (RIF) procedures or a reclassification process for grade
retention purposes, consistent with the guidance in the former Federal
Personnel Manual.
Section 536.203 eliminates the requirement that the 52
weeks of service needed for optional grade retention eligibility in RIF
situations must be in an agency as defined in 5 U.S.C. 5102, but
requires that such service be under a covered pay system. This change
is consistent with the new rule in Sec. 536.102(d) barring agencies
from providing grade retention to employees moving from a noncovered
pay system to a covered pay system.
Section 536.205 clarifies that an employee with a retained
grade also retains the pay system associated with that retained grade,
even if the employee's actual position is in a different covered pay
system.
Sections 536.207, 536.208, and 536.308 provide that an
employee loses
[[Page 31286]]
eligibility for or entitlement to grade and pay retention upon movement
to a position not under a covered pay system.
SES Pay Retention
We have revised OPM's regulations on establishing, adjusting, and
terminating saved rates for former members of the Senior Executive
Service (SES) who are guaranteed placement in a position covered by
another pay system (e.g., the General Schedule pay system), as provided
in subpart G of part 359. Under our broad regulatory authority in 5
U.S.C. 3596, we are revising Sec. 359.705 to make changes that are
consistent with (1) the changes made in the pay retention provisions in
part 536 in implementing section 301 of Public Law 108-411 and (2)
congressional intent as reflected in uncodified section 301(d)(2) of
that Act. The significant changes made in the interim regulations are
as follows:
Section 359.705(c) provides that an SES saved rate may not
be supplemented by any locality payment or other supplement. With the
amendment of 5 U.S.C. 5302(8), locality pay is no longer paid on top of
any kind of retained or saved rate.
Section 359.705(g) provides for conversion of any existing
locality-adjusted saved rate to a new saved rate of equal value on May
1, 2005. Without such a conversion, employees might suffer a reduction
in pay under the new rules. The saved rate will be compared to the
highest applicable rate range (including a locality rate range or
special rate range) for the employee's position of record.
Section 359.705(b) provides that, in determining the
amount of a saved rate, an agency must take into account any locality
rate or special rate (1) currently payable for the GS position in which
he or she is placed upon removal from the SES and (2) currently payable
for the GS position held before placement in the SES.
Section 359.705(d) provides that the 50-percent adjustment
rule does not apply when an employee's rate range maximum is increased
due to a change in the employee's official worksite. Instead, the
retained rate will be adjusted under the geographic conversion
authority in paragraph (e). For GS employees receiving a saved rate,
the geographic conversion rule is the same as that used for retained
rates under part 536 (i.e., it maintains the relative position of the
retained rate vis-[agrave]-vis the range maximum). Also, the 50-percent
adjustment rule does not apply when an employee's rate range maximum is
increased as a result of a position change that caused the employee to
become covered by a new pay schedule.
Other changes in Sec. 359.705 are clarifications. For example, we
have clarified that a saved rate terminates when an employee becomes
entitled to a higher rate of basic pay--e.g., when the 50-percent
adjustment would cause the saved rate to fall below the range maximum
and the employee's pay is set at the range maximum.
Waiver of Notice of Proposed Rulemaking and Delayed Effective Date
Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists
for waiving the general notice of proposed rulemaking. Also, pursuant
to 5 U.S.C. 553(d)(3), I find that good cause exists for making this
rule effective in less than 30 days. These interim regulations
implement section 301 of Public Law 108-411, which became effective on
May 1, 2005. Thus, these interim regulations are necessarily effective
retroactive to May 1, 2005. Waiver of the requirement for proposed
rulemaking and making the effective date less than 30 days after
publication are necessary to ensure timely implementation of the law as
intended by Congress. To delay implementation of these regulations by
imposing a general notice of proposed rulemaking or an additional 30-
day implementation requirement would be contrary to the public interest
of good governance. It would leave Federal agencies without
regulations, required by law, directing those agencies in implementing
complex and extensive pay administration rules. Delay in implementation
would prevent uniform and consistent application of the new pay
administration rules. The public and the Federal workforce will be
benefited by timely implementation of these regulations. Comments are
being solicited which will assist OPM in issuing final regulations.
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with E.O. 12866.
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities because they
will apply only to Federal agencies and employees.
List of Subjects in 5 CFR 294, 359, 362, 451, 530, 531, 532, 534,
536, 550, 591, 630, 831, and 842
Administrative practice and procedure; Air traffic controllers;
Alimony; Claims; Decorations, medals, awards; Disability benefits;
Firefighters; Freedom of information; Government employees; Hospitals;
Income taxes; Intergovernmental relations; Law enforcement officers;
Pensions; Reporting and recordkeeping requirements; Research;
Retirement; Students; Travel and transportation expenses; Wages.
Office of Personnel Management.
Dan G. Blair,
Acting Director.
0
For the reasons stated in the preamble, OPM is amending parts 294, 359,
362, 451, 530, 531, 532, 534, 536, 550, 591, 630, 831, and 842 of title
5 of the Code of Federal Regulations as follows:
PART 294--AVAILABILITY OF OFFICIAL INFORMATION
0
1. The authority citation for part 294 is revised to read as follows:
Authority: 5 U.S.C. 552, Freedom of Information Act, Pub. L. 92-
502, as amended by the Freedom of Information Reform Act of 1986,
Pub. L. 99-570, and E.O. 12600, 52 FR 23781, 3 CFR, 1987 Comp., p.
235.
Subpart D--Cross References
Sec. 294.401 [Amended]
0
2. Amend Sec. 294.401 by removing the reference ``536.307'' and adding
in its place ``536.405''.
PART 359--REMOVAL FROM THE SENIOR EXECUTIVE SERVICE; GUARANTEED
PLACEMENT IN OTHER PERSONNEL SYSTEMS
0
3. The authority citation for part 359 continues to read as follows:
Authority: 5 U.S.C. 1302 and 3596, unless otherwise noted.
Subpart G--Guaranteed Placement
0
4. Revise Sec. 359.705 to read as follows:
Sec. 359.705 Pay.
(a) An appointee placed under this subpart in a position outside
the SES (in the same or different agency) is entitled to receive basic
pay at the highest of--
(1) The rate of basic pay in effect for the position in which the
appointee is being placed;
(2) The rate of basic pay currently in effect for the position the
appointee held immediately before being appointed to the SES; or
(3) The rate of basic pay in effect for the appointee immediately
before removal from the SES.
(b)(1) The rate of basic pay under paragraph (a)(1) and (2) of this
section includes any applicable locality payment under 5 U.S.C. 5304,
special rate supplement under 5 U.S.C. 5305, or
[[Page 31287]]
similar payment under other legal authority.
(2) When an employee is entitled to a payable rate of basic pay
under paragraph (a)(2) or (3) of this section which exceeds the maximum
payable rate of basic pay for the grade or level of the employee's
position after placement, the resulting saved rate is subject to the
adjustment and termination rules in paragraphs (d) through (f) of this
section.
(c) For an employee placed in a General Schedule position, a saved
rate established under this section may not be supplemented by a
locality payment under 5 U.S.C. 5304, a special rate supplement under 5
U.S.C. 5305, or a similar payment under other legal authority.
(d) A saved rate established under this section must be adjusted in
connection with a pay schedule adjustment according to the following
rules:
(1) When the maximum payable rate of basic pay for the grade or
level of an employee's position is increased while the employee is
receiving a saved rate, the employee is entitled to a pay adjustment
equal to 50 percent of the amount of the increase in that maximum
payable rate, except as otherwise provided in this section.
(2) If an employee's official worksite is changed while the
employee is receiving a saved rate, a change in the applicable range
maximum because of a change in an employee's official worksite is not
considered in applying paragraph (d)(1) of this section. Instead, any
adjustment of the employee's saved rate in conjunction with a change in
official worksite must be determined under paragraph (e) of this
section. If an employee's range maximum is increased because of a pay
schedule adjustment on the same effective date as a change in the
employee's official worksite, the saved rate must be adjusted under
paragraph (d)(1) of this section before applying paragraph (e) of this
section.
(3) A change in an employee's rate range maximum resulting from a
change in the employee's position (e.g., change in occupational series)
that causes the employee to be covered by a different pay schedule does
not result in application of paragraph (d)(1) of this section.
(4) When an employee's saved rate becomes equal to or lower than
the maximum payable rate of basic pay for the grade or level of the
employee's position, the employee is entitled to the maximum payable
rate, and saved pay under this section ceases to apply.
(e) When an employee receiving a saved rate established under this
section is covered by a pay system that provides different basic pay
schedules based on geographic location (such as the General Schedule
pay system), the saved rate must be adjusted in conjunction with a
change in the employee's official worksite consistent with the
geographic conversion rule for retained rates under 5 CFR 536.303(b).
(f) A saved rate established under this section must be terminated
if--
(1) The employee has a break in service of 1 workday or more;
(2) The employee is demoted based on unacceptable performance or
conduct or at the employee's request; or
(3) The employee becomes entitled to a rate of basic pay that is
equal to or higher than the saved rate.
(g) If an employee is receiving a saved rate established under this
section on May 1, 2005 (when section 301 of Pub. L. 108-411 took
effect), any locality payment under 5 U.S.C. 5304 formerly paid in
addition to the employee's saved rate no longer applies as of that
date. Any locality-adjusted saved rate in effect and payable on April
30, 2005, must be converted to an equal saved rate effective on May 1,
2005. If the employee received no locality payment because of a pay
limitation, no conversion under this paragraph is required.
PART 362--PRESIDENTIAL MANAGEMENT INTERN PROGRAM
0
5. The authority citation for part 362 is revised to read as follows:
Authority: E.O. 12364, 47 FR 22931, 3 CFR, 1982 Comp., p. 185.
Subpart B--Program Administration
Sec. 362.202 [Amended]
0
6. In Sec. 362.202, amend paragraph (d) by removing the reference
``rules under 5 CFR 531.203(c)'' and adding in its place ``rule under 5
CFR 531.221''.
PART 451--AWARDS
0
7. The authority citation for part 451 is revised to read as follows:
Authority: 5 U.S.C. 4302, 4501-4509; E.O. 11438, 33 FR 18085, 3
CFR, 1966-1970 Comp., p. 755; E.O. 12828, 58 FR 2965, 3 CFR, 1993
Comp., p. 569.
Subpart A--Agency Awards
0
8. In Sec. 451.104, revise paragraph (g) to read as follows:
Sec. 451.104 Awards.
* * * * *
(g) When granting an award paid as a percentage of basic pay under
5 U.S.C. 4505a(a)(2)(A), the rate of basic pay used must include any
applicable locality payment under 5 CFR part 531, subpart F; special
rate supplement under 5 CFR part 530, subpart C; or similar payment or
supplement under other legal authority. For an employee receiving a
retained rate under 5 CFR part 536, subpart C (or similar authority,
such as 5 CFR 359.705), the rate of basic pay is the maximum payable
rate for the employee's grade or level, rather than the retained rate.
PART 530--PAY RATES AND SYSTEMS (GENERAL)
0
9. The authority citation for part 530 is revised to read as follows:
Authority: 5 U.S.C. 5305 and 5307; subpart C also issued under 5
U.S.C. 5338 and sec. 4 of the Performance Management and Recognition
System Termination Act of 1993, Pub. L. 103-89), 107 Stat. 981.
0
10. Revise subpart C to read as follows:
Subpart C--Special Rate Schedules for Recruitment and Retention
General Provisions
Sec.
530.301 Purpose and applicability.
530.302 Definitions.
530.303 Coverage.
530.304 Establishing or increasing special rates.
530.305 Agency requests for new or increased special rates.
530.306 Evaluating agency requests for new or increased special
rates.
530.307 OPM review and adjustment of special rate schedules.
530.308 Treatment of special rate as basic pay.
530.309 Miscellaneous provisions.
Setting an Employee's Rate of Pay
530.321 General.
530.322 Setting pay when a special rate is newly established or
increased.
530.323 Setting pay when a special rate is discontinued or
decreased.
Subpart C--Special Rate Schedules for Recruitment and Retention
General Provisions
Sec. 530.301 Purpose and applicability.
(a) Purpose. This subpart contains OPM regulations implementing 5
U.S.C. 5305, which authorizes the establishment of special rates of pay
for Federal employees in executive agencies to address significant
recruitment or retention problems. This subpart also contains rules for
determining an employee's rate of pay when a special rate schedule is
established, increased, decreased, or discontinued, or when conditions
for coverage under a special rate schedule are changed. All other pay
actions for special rate employees are governed by the pay-setting
rules in 5 CFR parts 531 and 536.
[[Page 31288]]
(b) Applicability. Except as explained in Sec. 530.303(a), this
subpart applies only to GS employees.
Sec. 530.302 Definitions.
In this subpart:
Agency means an executive agency as defined in 5 U.S.C. 105.
Authorized agency official means the head of the agency or an
official who is authorized to act for the head of the agency in the
matter concerned.
Employee has the meaning given that term in 5 U.S.C. 2105.
General Schedule or GS means the classification and pay system
established under 5 U.S.C. chapter 51 and subchapter III of chapter 53.
It also refers to the pay schedule of GS rates established under 5
U.S.C. 5332, as adjusted under 5 U.S.C. 5303 or other law (including GS
rates payable to GM employees). Law enforcement officers (LEOs)
receiving LEO special base rates are covered by the GS classification
and pay system, but receive higher base rates of pay in lieu of GS
rates at grades GS-3 through GS-10.
GM employee has the meaning given that term in 5 CFR 531.203.
GS rate means a rate of basic pay within the General Schedule,
excluding any LEO special base rate and additional pay of any kind such
as locality payments or special rate supplements. A rate payable to a
GM employee is considered a GS rate.
Highest applicable rate range means the rate range applicable to an
employee's position that provides the highest rates of basic pay,
excluding any retained rates. For example, a rate range of special
rates may exceed an applicable locality rate range. In certain
circumstances, the highest applicable rate range may consist of two
types of pay rates from different pay schedules--e.g., a range where
special rates (based on a fixed dollar supplement) are higher in the
lower portion of the range and locality rates are higher in the higher
portion of the range.
Law enforcement officer or LEO has the meaning given that term in 5
CFR 550.103.
LEO special base rate means a special base rate established for GS
law enforcement officers at grades GS-3 through GS-10 under section 403
of the Federal Employees Pay Comparability Act of 1990 (section 529 of
Pub. L. 101-509, November 5, 1990, as amended) which is used in lieu of
a GS rate.
Locality payment has the meaning given that term in 5 CFR 531.602.
Locality rate means a GS rate or an LEO special base rate, if
applicable, plus any applicable locality payment.
Official worksite means the official location of an employee's
position of record as determined under 5 CFR 531.605. Official worksite
is synonymous with the term ``official duty station'' as used in 5
U.S.C. 5305(i).
OPM means the Office of Personnel Management.
Pay schedule means a set of rate ranges established for GS
employees under a single authority--i.e., the General Schedule, an LEO
special base rate schedule (for grades GS-3 through 10), a locality
rate schedule based on GS rates, a locality rate schedule based on LEO
special base rates (for grades GS-3 through 10), a special rate
schedule under this subpart, or a similar schedule under 38 U.S.C.
7455. A pay schedule applies to or covers a defined category of
employees based on established coverage conditions (e.g., official
worksite, occupation). A pay schedule is considered to apply to or
cover an employee who meets the established coverage conditions even
when a rate under that schedule is not currently payable to the
employee because of a higher pay entitlement under another pay
schedule.
Position of record means an employee's official position (defined
by grade, occupational series, employing agency, LEO status, and any
other condition that determines coverage under a pay schedule (other
than official worksite)), as documented on the employee's most recent
Notification of Personnel Action (Standard Form 50 or equivalent) and
current position description, excluding any position to which the
employee is temporarily detailed. For an employee whose change in
official position is followed within 3 workdays by a reduction in force
resulting in the employee's separation before he or she is required to
report for duty in the new position, the position of record in effect
immediately before the position change is deemed to remain the position
of record through the date of separation.
Rate of basic pay means the rate of pay fixed by law or
administrative action for the position held by an employee before any
deductions, including a GS rate, an LEO special base rate, a locality
rate, a special rate under this subpart or a similar rate under 38
U.S.C. 7455, or a retained rate under 5 CFR 359.705 or 5 CFR part 536,
but excluding additional pay of any other kind.
Rate range or range means the range of rates of basic pay for a
grade within an established pay schedule, excluding any retained rate.
A rate range may consist of GS rates, LEO special base rates, locality
rates, special rates, or similar rates under other legal authority.
Retained rate means a rate above the maximum rate of the rate range
applicable to the employee which is payable under 5 CFR part 536 or,
for a former member of the Senior Executive Service, under 5 CFR
359.705.
Special rate means a rate of pay within a special rate schedule
established under this subpart.
Special rate schedule means a pay schedule established under this
subpart to provide higher rates of pay for specified categories of GS
positions or employees at one or more grades. An increased or decreased
special rate schedule refers to an increase or decrease in one or more
rate ranges within that schedule.
Special rate supplement means the portion of a special rate paid
above an employee's GS rate after applying any applicable pay
limitation. For a law enforcement officer receiving an LEO special base
rate who is also entitled to a special rate, a special rate supplement
increases the LEO's pay only to the extent that the resulting special
rate exceeds the LEO's rate of basic pay. The payable amount of a
special rate supplement is subject to the Executive Level IV
limitation, as provided in Sec. 530.304(a).
Sec. 530.303 Coverage.
(a) Under 5 U.S.C. 5305, OPM may establish special rates for
employees paid under a statutory pay system (as defined in 5 U.S.C.
5302(1)) or any other pay system established by or under Federal
statute for civilian positions in the executive branch. Special rates
apply only to GS employees unless the approved schedule coverage
criteria specifically state otherwise. OPM will establish special rate
schedules covering employees under a non-GS pay system only at the
request of the agency responsible for administering that system. For
employees covered by a non-GS pay system, the responsible agency is
subject to the requirements in 5 U.S.C. 5305. To the extent the
statutory or regulatory provisions governing the non-GS pay system
differ from the regulatory provisions of this subpart, the responsible
agency must follow policies that are consistent as possible with this
subpart.
(b) An employee's coverage under a special rate schedule is subject
to the coverage conditions established by OPM for that schedule, except
as provided in paragraph (c) of this section. The coverage conditions
for a special rate schedule may be based on occupation, grade,
employing agency, geographic location of official worksite, or other
[[Page 31289]]
factors OPM may determine to be appropriate. An agency determination as
to whether an employee meets the coverage conditions for a special rate
schedule must be based on the employee's position of record and
official worksite. An agency also may be required to consider other
employee-specific factors established by OPM to determine special rate
coverage, such as special qualifications or certifications.
(c) An agency must pay the applicable special rate to any employee
who meets the coverage conditions established by OPM with respect to a
special rate schedule unless an authorized agency official determines
that a category of employees of the agency will not be covered by a
proposed or existing special rate schedule, subject to the following
requirements:
(1) An authorized agency official may determine that a category of
employees of the agency will not be covered by a special rate request
or a proposed new special rate schedule. The official must provide
written notice to OPM that identifies the specific category or
categories of employees who will not be covered by the special rate
schedule. The notice must be received by OPM before the effective date
of the new special rate schedule.
(2) An authorized agency official may remove a category of
employees of the agency from coverage under an existing special rate
schedule. The official must provide written notice to OPM that
identifies the specific category or categories of employees who will
not be covered by the special rate schedule. The loss of coverage under
a special rate schedule will become effective on the first day of the
first pay period beginning on or after the date of the notice to OPM.
(d) An employee covered by a special rate schedule is not entitled
to a special rate for any purpose with respect to any period during
which the employee is entitled to a higher rate of basic pay under any
other legal authority. For example, an employee is not entitled to a
special rate if he or she is entitled to a higher locality rate or a
retained rate.
Sec. 530.304 Establishing or increasing special rates.
(a) OPM may increase the minimum rates of pay otherwise payable to
a category of employees in one or more areas or locations, grades or
levels, occupational groups, series, classes, or subdivisions thereof,
when it is necessary to address existing or likely significant
recruitment or retention difficulties. OPM will consider the
circumstances listed in paragraph (b) of this section and the factors
listed in Sec. 530.306 when evaluating the need for special rates.
When OPM establishes a minimum special rate under this authority,
corresponding increases also may be made in one or more of the
remaining rates of the affected grade or level. For any given grade, a
minimum special rate may not exceed the maximum rate of basic pay for
the rate range (excluding any locality rate, other special rate, or
similar payment under other legal authority) by more than 30 percent. A
special rate is not payable if it exceeds the rate for level IV of the
Executive Schedule.
(b) The circumstances considered by OPM in evaluating the need for
special rates are the following:
(1) Rates of pay offered by non-Federal employers which are
significantly higher than those payable by the Government within the
area, location, occupational group, or other category of positions
under GS pay system;
(2) The remoteness of the area or location involved;
(3) The undesirability of the working conditions or the nature of
the work involved (including exposure to toxic substances or other
occupational hazards); or
(4) Any other circumstances OPM considers appropriate.
(c) In setting the level of special rates within a rate range for a
category of employees, OPM will compute the special rate supplement by
adding a fixed dollar amount or a fixed percentage to all GS rates
within that range, except that an alternate method may be used for
grades GS-1 and GS-2, where within-grade increases vary throughout the
range.
(d) If OPM establishes a special rate schedule that covers only law
enforcement officers, OPM may compute the special rate supplement for
grades GS-3 through 10 as a fixed percentage of LEO special base rates
instead of GS rates. With respect to such a schedule, references to GS
rates in Sec. 530.307 are deemed to be references to LEO special base
rates.
Sec. 530.305 Agency requests for new or increased special rates.
(a) An agency may request that a special rate schedule be
established or increased or that its employees be covered by an
existing special rate schedule at any time. An authorized agency
official in the agency headquarters office must submit to OPM any
request to establish or increase special rates for a category of agency
employees. The request must include a certification by the authorized
agency official that the requested special rates are necessary to
ensure adequate staffing levels to accomplish the agency's mission.
(b) The authorized agency official is responsible for submitting
complete supporting data for any request for new or higher special
rates. OPM may require that the supporting data include a survey of
prevailing non-Federal pay rates in the relevant labor market.
(c) OPM may coordinate an agency special rate request with other
agencies that have similar categories of employees. OPM may designate a
lead agency to assist in coordinating the collection of relevant data.
Each affected agency is responsible for submitting complete supporting
data upon request to OPM or the lead agency, as appropriate, unless the
agency determines that a category of its employees will not be covered
by the proposed special rate schedule, as provided in Sec. 530.303(c).
Sec. 530.306 Evaluating agency requests for new or increased special
rates.
(a) In evaluating agency requests for new or increased special
rates, OPM may consider the following factors:
(1) The number of existing vacant positions and the length of time
they have been vacant;
(2) The number of employees who have quit (i.e., voluntarily left
Federal service), including, when available, a subcount of the number
of employees who quit to take a comparable position offering higher
pay;
(3) Evidence to support a conclusion that recruitment or retention
problems likely will develop (if such problems do not already exist) or
will worsen;
(4) The number of vacancies an agency tried to fill, compared to
the number of hires and offers made;
(5) The nature of the existing labor market;
(6) The degree to which an agency has considered and used other
available pay flexibilities to alleviate staffing problems, including
the superior qualifications and special needs pay-setting authority in
5 CFR 531.212 and recruitment, relocation, and retention incentives
under 5 CFR part 575;
(7) The degree to which an agency has considered relevant non-pay
solutions to staffing problems, such as conducting an aggressive
recruiting program, using appropriate appointment authorities,
redesigning jobs, establishing training programs, and improving working
conditions;
(8) The effect of the staffing problem on the agency's mission; and
(9) The level of non-Federal rates paid for comparable positions.
Data on non-Federal salary rates may be
[[Page 31290]]
supplemented, if appropriate, by data on Federal salary rates for
comparable positions established under a non-GS pay system.
(b) In determining the level at which to set special rates, OPM may
consider the following factors:
(1) The pay levels that, in OPM's judgment, are necessary to
recruit or retain an adequate number of qualified employees based on
OPM's findings with respect to the factors set forth in paragraph (a)
of this section;
(2) The dollar costs that will be incurred if special rates are not
authorized;
(3) The level of pay for comparable positions; and
(4) The need to provide for a reasonable progression in pay from
lower grade levels to higher grade levels to avoid pay alignment
problems (e.g., such as might result from applying the two-step
promotion rule in 5 U.S.C. 5334(b)).
(c) No one factor or combination of factors specified in paragraph
(a) or (b) of this section requires OPM to establish or increase
special rates or to set special rates at any given level.
Sec. 530.307 OPM review and adjustment of special rate schedules.
(a) OPM may review an established special rate schedule at any time
to determine whether that schedule should be increased, decreased, or
discontinued, taking into account the circumstances listed in Sec.
530.304(b) and the factors listed in Sec. 530.306 that led to
establishing the schedule. An authorized agency official may request
that OPM conduct such a review of one or more special rate schedules.
(b) OPM may designate lead agencies to assist in the review of
designated special rate schedules and to coordinate the collection of
relevant data. Each affected agency is responsible for submitting
complete supporting data upon request to OPM or the lead agency, as
appropriate.
(c) OPM will adjust a special rate schedule by determining the
amount of the special rate supplement to be paid on top of the current
GS rate for each rate range within the schedule. OPM will determine the
extent to which special rate supplements are to be adjusted (increased
or decreased), if at all, and when the special rate supplements are to
be adjusted. As provided in 5 U.S.C. 5305(d), special rate schedule
adjustments made by OPM have the force and effect of statute.
(d)(1) For special rate schedules computed by applying a fixed-
percentage supplement on top of each GS rate within a rate range, OPM
may require that a change in the underlying GS rate automatically
results in an adjusted special rate schedule, unless OPM determines
that an adjustment in the supplement percentage is appropriate for one
or more special rate schedules.
(2) For special rate schedules computed by applying a fixed-dollar
supplement on top of each GS rate within a rate range, OPM may require
that special rate supplements generally be adjusted to reflect the
increase in GS rates, unless OPM determines that a different adjustment
is appropriate for one or more special rate schedules.
(e) If OPM determines that a special rate schedule, or a rate range
within a special rate schedule, is no longer needed to ensure
satisfactory recruitment or retention of qualified employees, OPM may
discontinue the schedule or rate range. Consistent with Sec.
530.303(d), if all employees and positions covered by a special rate
schedule or rate range are entitled to a higher rate of basic pay, the
schedule or rate range (as applicable) will be automatically
discontinued.
(f) OPM may change the established conditions for coverage under a
special rate schedule at any time based on a reevaluation of the
circumstances and factors that led to establishing the schedule.
Expansion of coverage is equivalent to establishing a special rate
schedule for a category of affected employees. Reduction of coverage is
the equivalent of discontinuing a special rate schedule for a category
of affected employees.
(g) When a special rate schedule is adjusted or discontinued, or
when there is a change in a schedule's coverage criteria, the rate of
pay for affected employees must be set as provided in Sec. Sec.
530.321 through 530.323.
Sec. 530.308 Treatment of special rate as basic pay.
Except as otherwise specifically provided under other legal
authority, a special rate is considered a rate of basic pay only for
the following purposes:
(a) The purposes for which a locality rate is considered to be a
rate of basic pay in computing other payments or benefits, to the
extent provided by 5 CFR 531.610, except as otherwise provided in
paragraphs (b) through (d) of this section;
(b) Computation of nonforeign area cost-of-living allowances and
post differentials under 5 U.S.C. 5941 and 5 CFR part 591, subpart B;
(c) Computation of foreign area post differentials under 5 U.S.C.
5925(a) and danger pay allowances under 5 U.S.C. 5928; and
(d) Application of pay administration provisions for prevailing
rate employees which consider rates of basic pay under the GS pay
system in setting pay (except as otherwise provided in 5 CFR part 532),
subject to the requirement that, if the employee's actual special rate
would not apply at the official worksite for the prevailing rate
position, a special rate may be used only if it is a corresponding
special rate on a special rate schedule that would cover the employee
if his or her GS position of record were located at the same official
worksite as the prevailing rate position, consistent with the
geographic conversion rule in 5 CFR 531.205.
Sec. 530.309 Miscellaneous provisions.
(a) A special rate may be paid only for those hours for which an
employee is in a pay status.
(b) A pay increase caused by an employee becoming entitled to a new
or higher special rate supplement is not an equivalent increase in pay
within the meaning of 5 U.S.C. 5335. (See 5 CFR 531.407(c).)
(c) A special rate is included in an employee's total remuneration,
as defined in 5 CFR 551.511(b), and straight time rate of pay, as
defined in 5 CFR 551.512(b), for the purpose of overtime pay
computations under the Fair Labor Standards Act of 1938, as amended.
(d) The reduction or termination of an employee's special rate
supplement in accordance with the requirements of this subpart is not
an adverse action under 5 CFR part 752, subpart D, or an action under 5
CFR 930.214.
Setting an Employee's Rate of Pay
Sec. 530.321 General.
(a) This section and Sec. Sec. 530.322 and 530.323 provide
conversion rules for setting an employee's pay when a special rate
schedule is established, increased, decreased, or discontinued, or when
an employee's coverage under an existing special rate schedule is
affected by a change in coverage criteria. These conversion rules do
not apply to changes in an employee's special rate entitlements based
on a change in the employee's position of record or official worksite.
Pay-setting rules for other personnel actions affecting special rate
employees are provided in 5 CFR parts 531 and 536. For example, if an
employee becomes covered by a special rate schedule as a result of a
change in the employee's official worksite, the geographic conversion
rule in 5 CFR 531.205 must be used to set the employee's rate(s) of
basic pay in the new location before considering any
[[Page 31291]]
other simultaneous pay action (other than a general pay adjustment).
(b) The conversion rules in Sec. Sec. 530.322 and 530.323 are
considered general pay adjustments for the purpose of applying 5 CFR
531.206 (dealing with the order of precedence for processing
simultaneous pay actions). The rate(s) of pay resulting from these
conversion rules are considered the employee's existing rate(s) of pay
before processing the next simultaneous pay action in the order of
precedence.
Sec. 530.322 Setting pay when a special rate schedule is newly
established or increased.
(a) General rule. When an employee holds a position that becomes
covered by a newly established special rate schedule (including a
schedule for which coverage is expanded) or increased special rate
schedule (including an increased special rate range within a schedule),
the agency must set the employee's rate of pay at the step or rate of
the grade on the new special rate schedule that corresponds to the
employee's existing numerical step or rate (as in effect immediately
before the new special rate schedule takes effect), except as otherwise
provided in this section. The corresponding special rate is determined
by adding the applicable special rate supplement on top of the
employee's GS rate, subject to the limitation that no special rate may
exceed the rate for level IV of the Executive Schedule. For an employee
receiving an LEO special base rate, add the applicable special rate
supplement to the GS rate for the employee's grade and step, except as
otherwise provided under Sec. 530.304(d).
(b) Employee entitled to a higher rate of basic pay. As provided in
Sec. 530.303(d), if an employee meeting the coverage conditions for a
newly established or increased special rate schedule is entitled to a
higher rate of basic pay under other legal authority, the employee must
be paid at that higher rate.
(c) Employee receiving a retained rate. When an employee is
receiving a retained rate immediately before the employee's position is
covered by a newly established or increased special rate schedule, the
agency must determine the employee's rate of pay consistent with the
requirements in 5 CFR part 536, subpart C (or 5 CFR 359.705 for a
former member of the Senior Executive Service receiving a retained rate
under that section).
Sec. 530.323 Setting pay when a special rate is discontinued or
decreased.
(a) General. This section applies when a special rate applicable to
a position is discontinued or decreased because of--
(1) A reduction or termination of the rates of the special rate
schedule (or of rates of a rate range within a schedule); or
(2) The reduction in the scope of coverage of the special rate
schedule.
(b) Employee entitled to pay retention. When a special rate
applicable to a position is discontinued or decreased, and an employee
holding the position is entitled to pay retention under 5 CFR part 536
as a result, the employee's rate of pay must be set consistent with the
requirements in 5 CFR part 536, subpart C.
(c) Employee not entitled to pay retention. When a special rate
applicable to a position is discontinued or decreased, and an employee
holding the position is not entitled to pay retention under 5 CFR part
536, the employee's rate of pay is set in the highest applicable rate
range at the grade and step (or rate) that corresponds to the grade and
step (or rate) for the employee's existing special rate (as in effect
immediately before the schedule change).
(d) Employee receiving a retained rate. When a special rate
applicable to a position is discontinued or decreased, and the employee
holding the position is receiving a retained rate immediately before
the schedule change, the employee's rate of pay must be set consistent
with the requirements in 5 CFR part 536, subpart C (or 5 CFR 359.705
for a former member of the Senior Executive Service receiving a
retained rate under that section).
PART 531--PAY UNDER THE GENERAL SCHEDULE
0
11. The authority citation for part 531 is revised to read as follows:
Authority: 5 U.S.C. 5115, 5307, and 5338; sec. 4 of Pub. L. 103-
89, 107 Stat. 981; and E.O. 12748, 56 FR 4521, 3 CFR, 1991 Comp., p.
316; Subpart B also issued under 5 U.S.C. 5303(g), 5305, 5333,
5334(a) and (b), and 7701(b)(2); Subpart D also issued under 5
U.S.C. 5335(g) and 7701(b)(2); Subpart E also issued under 5 U.S.C.
5336; Subpart F also issued under 5 U.S.C. 5304, 5305, and 5338; and
E.O. 12883, 58 FR 63281, 3 CFR, 1993 Comp., p. 682 and E.O. 13106,
63 FR 68151, 3 CFR, 1998 Comp., p. 224.
0
12. Revise subpart B to read as follows:
Subpart B--Determining Rate of Basic Pay
General Provisions
Sec.
531.201 Purpose.
531.202 Coverage.
531.203 Definitions.
531.204 Entitlement to other rates of pay.
531.205 Converting pay upon change in location of employee's
official worksite.
531.206 Order of processing simultaneous pay actions.
531.207 Applying annual pay adjustments.
Setting Pay When Appointment or Position Changes
531.211 Setting pay for a newly appointed employee.
531.212 Superior qualifications and special needs pay-setting
authority.
531.213 Setting pay upon change in position without a change in
grade.
531.214 Setting pay upon promotion.
531.215 Setting pay upon demotion.
531.216 Setting pay when an employee moves from a Department of
Defense or Coast Guard nonappropriated fund instrumentality.
531.217 Special conversion rules for certain non-GS employees.
Using a Highest Previous Rate Under the Maximum Payable Rate Rule
531.221 Maximum payable rate rule.
531.222 Rates of basic pay that may be used as the highest previous
rate.
531.223 Rates of basic pay that may not be used as the highest
previous rate.
Special Rules for GM Employees
531.241 Retaining and losing GM status.
531.242 Setting pay upon loss of GM status.
531.243 Promotion of a GM employee.
531.244 Adjusting a GM employee's rate at the time of an annual pay
adjustment.
531.245 Computing locality rates and special rates for GM employees.
531.246 Within-grade increases for GM employees.
531.247 Maximum payable rate rule for GM employees.
Subpart B--Determining Rate of Basic Pay
General Provisions
Sec. 531.201 Purpose.
This subpart contains regulations of the Office of Personnel
Management (OPM) implementing 5 U.S.C 5332, 5333, and 5334, which deal
with setting and adjusting rates of basic pay for General Schedule (GS)
employees. These regulations are supplemented by regulations on GS
within-grade increases in subpart D of this part; GS quality step
increases in subpart E of this part; locality rates in subpart F of
this part; special rates in 5 CFR part 530, subpart C; and grade and
pay retention in 5 CFR part 536.
Sec. 531.202 Coverage.
This subpart covers employees who occupy positions classified and
paid under the GS classification and pay system, as provided in 5
U.S.C. 5102 and 5331 or other applicable laws. Law
[[Page 31292]]
enforcement officers (LEOs) receiving LEO special base rates are
covered by the GS classification and pay system, but receive higher
base rates of pay in lieu of GS rates at grades GS-3 through GS-10.
This subpart also covers GS employees who receive special rates under 5
U.S.C. 5305 and 5 CFR part 530, subpart C.
Sec. 531.203 Definitions.
In this subpart:
Agency means an Executive agency as defined in 5 U.S.C. 105 or an
agency in the legislative branch with employees covered by this
subpart. To the extent that the regulations in this subpart relate to
non-GS service in the Federal Government, agency includes any other
agency in the Federal Government.
Demotion means a change of an employee, while continuously
employed, from one GS grade to a lower GS grade, with or without a
reduction in pay.
Employee means an employee as defined in 5 U.S.C. 2105 who is
covered by this subpart. For the purpose of determining eligibility
under the superior qualifications and special needs pay-setting
authority in Sec. 531.212 and applying the maximum payable rate
provisions in Sec. Sec. 531.216 and 531.221 (which consider rates of
pay received during non-GS service in the Federal Government), employee
also includes any employee as defined in 5 U.S.C. 2105 and--
(1) An individual employed by the U.S. Postal Service or the Postal
Rate Commission who would be considered an employee under 5 U.S.C. 2105
but for the exclusion in section 2105(e); and
(2) An individual employed by a Department of Defense or Coast
Guard nonappropriated fund instrumentality (as described in 5 U.S.C.
2105(c)) for service covered by Sec. 531.216 (for the purpose of
applying that section and Sec. Sec. 531.211 and 531.212).
Existing rate means the rate received immediately before a pay
action takes effect, after processing a general pay adjustment and any
other simultaneous pay action that is higher in the order of precedence
under Sec. 531.206. For example, the existing rate immediately before
a promotion action must reflect any geographic conversion under Sec.
531.205 and any simultaneous within-grade increase or quality step
increase.
Federal Government means all entities of the Government of the
United States, including the U.S. Postal Service and the Postal Rate
Commission. The District of Columbia is deemed to be part of the
Federal Government with respect to employees of the government of the
District of Columbia (DC) who were first employed by that government
before October 1, 1987. A Department of Defense or Coast Guard
nonappropriated fund instrumentality (as described in 5 U.S.C. 2105(c))
is not considered part of the Federal Government except for the purpose
of applying Sec. Sec. 531.211 and 531.212 to employees covered by
Sec. 531.216 upon employment in a GS position.
General Schedule or GS means the classification and pay system
established under 5 U.S.C. chapter 51 and subchapter III of chapter 53.
It also refers to the pay schedule of GS rates established under 5
U.S.C. 5332, as adjusted under 5 U.S.C. 5303 or other law (including GS
rates payable to GM employees). Law enforcement officers (LEOs)
receiving LEO special base rates are covered by the GS classification
and pay system but receive higher base rates of pay in lieu of GS rates
at grades GS-3 through GS-10.
GM employee means a GS employee who was formerly covered by the
Performance Management and Recognition System under 5 U.S.C. chapter 54
on October 31, 1993 (and therefore became covered on November 1, 1993,
by section 4 of Pub. L. 103-89, the Performance Management and
Recognition System Termination Act of 1993), and who continues
thereafter to occupy a position as a supervisor or management official
(as defined in 5 U.S.C. 7103(a)(10) and (11)) in the same grade of the
General Schedule (GS-13, 14, or 15) and in the same agency without a
break in service of more than 3 days. (See Sec. 531.241.) Any
reference to employees, grades, positions, or rates of basic pay under
the General Schedule includes GM employees.
GS rate means a rate of basic pay within the General Schedule,
excluding any LEO special base rate and additional pay of any kind such
as locality payments or special rate supplements. A rate payable to a
GM employee is considered a GS rate even though the rate may fall
between GS step rates.
Highest applicable rate range means the rate range applicable to a
GS employee based on a given position of record and official worksite
that provides the highest rates of basic pay, excluding any retained
rates. For example, a rate range of special rates may exceed an
applicable locality rate range. In certain circumstances, the highest
applicable rate range may consist of two types of pay rates from
different pay schedules--e.g., a range where special rates (based on a
fixed dollar supplement) are higher in the lower portion of the range
and locality rates are higher in the higher portion of the range.
Law enforcement officer or LEO has the meaning given that term in 5
CFR 550.103.
LEO special base rate means a special base rate established for GS
law enforcement officers at grades GS-3 through GS-10 under section 403
of the Federal Employees Pay Comparability Act of 1990 (section 529 of
Pub. L. 101-509, November 5, 1990, as amended) which is used in lieu of
a GS rate.
Locality payment means a locality-based comparability payment
payable to GS employees under 5 U.S.C. 5304 and 5 CFR part 531, subpart
F.
Locality rate means a GS rate or an LEO special base rate, if
applicable, plus any applicable locality payment.
Official worksite means the official location of the employee's
position of record, as determined under 5 CFR 531.605.
OPM means the Office of Personnel Management.
Payable rate means the highest rate of basic pay to which an
employee is entitled based on the employee's position of record,
official worksite, and step (or relative position in range for a GM
employee) or, if applicable, a retained rate.
Pay schedule means a set of rate ranges established for GS
employees under a single authority--i.e., the General Schedule, an LEO
special base rate schedule (for grades GS-3 through 10), a locality
rate schedule based on GS rates, a locality rate schedule based on LEO
special base rates (for grades GS-3 through 10), or a special rate
schedule. A pay schedule applies to or covers a defined category of
employees based on established coverage conditions (e.g., official
worksite, occupation). A pay schedule is considered to apply to or
cover an employee who meets the established coverage conditions even
when a rate under that schedule is not currently payable to the
employee because of a higher pay entitlement under another pay
schedule.
Position of record means an employee's official position (defined
by grade, occupational series, employing agency, LEO status, and any
other condition that determines coverage under a pay schedule (other
than official worksite)), as documented on the employee's most recent
Notification of Personnel Action (Standard Form 50 or equivalent) and
current position description, excluding any position to which the
employee is temporarily detailed. For an employee whose change in
official position is followed within 3 workdays by a reduction in force
resulting in the employee's separation
[[Page 31293]]
before he or she is required to report for duty in the new position,
the position of record in effect immediately before the position change
is deemed to remain the position of record through the date of
separation.
Promotion means a GS employee's movement from one GS grade to a
higher GS grade while continuously employed (including such a movement
in conjunction with a transfer).
Rate of basic pay means the rate of pay fixed by law or
administrative action for the position held by a GS employee before any
deductions, including a GS rate, an LEO special base rate, a special
rate, a locality rate, a retained rate, but exclusive of additional pay
of any other kind. For the purpose of applying the maximum payable rate
rules in Sec. Sec. 531.216 and 531.221 to non-GS employees, rate of
basic pay means a rate of pay under other legal authority which is
equivalent to a rate of basic pay for GS employees, as described in
this definition.
Rate range or range means a range of rates of basic pay for a grade
within an established pay schedule, excluding any retained rate. A rate
range may consist of GS rates, LEO special base rates, locality rates,
special rates, or, for non-GS employees, similar rates under other
legal authority.
Reassignment means a change of an employee, while serving
continuously in the same agency, from one position to another without
promotion or demotion.
Reemployment means employment, including reinstatement or another
type of appointment, after a break in service of at least 1 full
workday.
Retained rate means a rate above the maximum rate of the rate range
applicable to a GS employee which is payable under 5 CFR part 536 or,
for a former member of the Senior Executive Service, under 5 CFR
359.705.
Special rate means a rate of pay within a special rate schedule
established under 5 CFR part 530, subpart C, or a similar rate for GS
employees established under other legal authority (e.g., 38 U.S.C.
7455). The term special rate does not include an LEO special base rate.
Special rate schedule means a pay schedule established under 5 CFR
part 530, subpart C, to provide higher rates of pay for specified
categories of GS positions or employees at one or more grades or levels
or a similar schedule established for GS employees under other legal
authority (e.g., 38 U.S.C. 7455).
Special rate supplement means the portion of a special rate paid
above an employee's GS rate after applying any applicable pay
limitation. For a law enforcement officer receiving an LEO special base
rate who is also entitled to a special rate under 5 CFR part 530,
subpart C, the special rate supplement increases the LEO's pay only to
the extent that the resulting special rate exceeds the LEO's rate of
basic pay.
Temporary promotion means a time-limited promotion with a not-to-
exceed date or a specified term.
Transfer means a change of an employee, without a break in service
of 1 full workday, from one branch of the Federal Government
(executive, legislative, or judicial) to another or from one agency to
another.
Where different pay schedules apply means, in the context of
applying the geographic conversion rule, that an employee's official
worksite is changed to a new location that would cause the employee to
lose or gain coverage under a location-based pay schedule (i.e.,
locality rate schedule or special rate schedule) if the employee were
to remain in the same position of record.
Within-grade increase has the meaning given that term in Sec.
531.403.
Sec. 531.204 Entitlement to other rates of pay.
(a) A law enforcement officer is entitled to LEO special base rates
in lieu of GS rates at grades GS-3 through GS-10. A law enforcement
officer is entitled to the LEO special base rate that corresponds to
his or her grade and step. If an employee loses LEO status, the
employee is entitled to the GS rate for his or her grade and step
unless a higher rate is set under the maximum payable rate rule in
Sec. 531.221 or under the pay retention rules in 5 CFR part 536, as
applicable. LEO special base rates are used in computing locality
rates, as provided in subpart F of this part. A law enforcement officer
may be entitled to a special rate that is computed using the underlying
GS rate for the LEO's grade and step.
(b) When an employee's GS rate or LEO special base rate is
determined under the rules of this subpart, the agency must determine
any other rate of basic pay to which the employee is entitled,
including a locality rate under subpart F of this part and a special
rate under 5 CFR part 530, subpart C, or other legal authority (e.g.,
38 U.S.C. 7455). The employee is entitled to the highest applicable
rate of basic pay as his or her payable rate. When an employee's
special rate is surpassed by a higher locality rate, his or her
entitlement to a special rate is terminated, as provided in Sec.
530.303(d).
(c) When application of the rules in this subpart results in
setting an employee's payable rate in the highest applicable pay
schedule (e.g., a locality rate schedule or a special rate schedule),
the agency must determine the employee's underlying GS rate or LEO
special base rate, as applicable, based on that payable rate (i.e., by
finding the corresponding underlying rate with the same grade and step
(or relative position) as the payable rate).
Sec. 531.205 Converting pay upon change in location of employee's
official worksite.
When an employee's official worksite is changed to a new location
where different pay schedules apply, the agency must convert the
employee's rate(s) of basic pay to the applicable pay schedule(s) in
the new location before processing any simultaneous pay action (other
than a general pay adjustment, as provided in Sec. 531.206). The
agency must first set the employee's rate(s) of basic pay in the
applicable pay schedule(s) in the new location based on his or her
position of record (including grade) and step (or rate) immediately
before the change in the employee's official worksite. The resulting
rate must be used as the existing rate in processing the next
simultaneous pay action in the order of precedence, using the
applicable pay schedules in the new location. In conjunction with any
simultaneous pay actions, the employee's rate(s) of basic pay will then
be set based on the employee's new position of record and new official
worksite.
Sec. 531.206 Order of processing simultaneous pay actions.
When multiple pay actions with the same effective date affect an
employee's rate of basic pay, the actions will be processed in the
following order:
(a) Process general pay adjustments before any individual pay
action that takes effect at the same time. General pay adjustments
include an annual adjustment in the General Schedule under 5 U.S.C.
5303; an adjustment in LEO special base rates; an adjustment of a
locality pay percentage under subpart F of this part; the establishment
or adjustment of a special rate schedule under 5 CFR part 530, subpart
C, or similar legal authority (e.g., 38 U.S.C. 7455); and an adjustment
of a retained rate under 5 CFR 359.705(d)(1) and 536.305(a)(1) based on
the establishment or adjustment of a pay schedule.
(b) Convert the employee's rate(s) of pay to reflect any change in
the location of the employee's official worksite, as prescribed in
Sec. 531.205 (or similar geographic conversion provision).
[[Page 31294]]
(c) Process any within-grade increase or quality step increase to
which the employee is entitled.
(d) Process any promotion action using the rates of pay and rate
ranges in the sequence prescribed in Sec. 531.214.
(e) Except as otherwise provided in paragraphs (a) through (d) of
this section or other regulation, process individual pay actions that
take effect at the same time in the order that gives the employee the
maximum benefit.
Sec. 531.207 Applying annual pay adjustments.
(a) Except as otherwise provided in this section, on the effective
date of a GS pay adjustment under 5 U.S.C. 5303 or similar authority,
an agency initially must set the GS rate of a GS employee at the new
rate of the adjusted General Schedule corresponding to the employee's
grade and step in effect immediately before the effective date of the
pay adjustment. Any simultaneous pay actions must be processed after
the pay adjustment, as provided in Sec. 531.206.
(b) For employees receiving a retained rate immediately before the
effective date of a GS annual pay adjustment, the agency must adjust
the employee's rate of basic pay under the rules in 5 CFR 536.305 (or
under 5 CFR 359.705 for former members of the Senior Executive Service
receiving a retained rate under that section).
(c) For GM employees, the agency must follow the rules in Sec.
531.244.
Setting Pay When Appointment or Position Changes
Sec. 531.211 Setting pay for a newly appointed employee.
(a) First appointment. An agency must set the payable rate of basic
pay for an employee receiving his or her first appointment (regardless
of tenure) as a civilian employee of the Federal Government at the
minimum rate of the highest applicable rate range for the employee's
position of record, except as provided in Sec. 531.212.
(b) Reemployment. For an employee who has previous civilian service
in the Federal Government, an agency must set the payable rate of basic
pay upon reemployment at the minimum rate of the highest applicable
rate range for the employee's position of record unless--
(1) The employee meets the conditions in Sec. 531.212 and an
agency determines it is appropriate to set pay under that section; or
(2) The employee is eligible for a higher payable rate under the
maximum payable rate rule in Sec. 531.221 and the agency chooses to
apply that rule.
Sec. 531.212 Superior qualifications and special needs pay-setting
authority.
(a) Agency authority. (1) An agency may use the superior
qualifications and special needs pay-setting authority in 5 U.S.C. 5333
to set the payable rate of basic pay for an employee above the minimum
rate of the highest applicable rate range for the employee's position
of record. The superior qualifications and special needs pay-setting
authority may be used for--
(i) A first appointment (regardless of tenure) as a civilian
employee of the Federal Government; or
(ii) A reappointment that is considered a new appointment under 5
U.S.C. 5333 because it meets the conditions prescribed in paragraph
(a)(2) and (3) of this section.
(2) An agency may use the superior qualifications and special needs
pay-setting authority for a reappointment only when the employee has
had a break in service of at least 90 days from the last period of
civilian employment with the Federal Government, except as provided in
paragraph (a)(3) of this section.
(3) An agency may use the superior qualifications and special needs
pay-setting authority for a reappointment without requiring a 90-day
break in service if the candidate's civilian employment with the
Federal Government during the 90-day period immediately preceding the
appointment was limited to one or more of the following:
(i) Employment under a time-limited or non-permanent appointment in
the competitive or excepted service;
(ii) Employment under an appointment as an expert or consultant
under 5 U.S.C. 3109 and 5 CFR part 304; or
(iii) Employment under a provisional appointment designated under 5
CFR 316.403.
(4) Service as an employee of a nonappropriated fund
instrumentality (NAFI) of the Department of Defense or Coast Guard is
not considered employment by the Federal Government under this section
except for employees covered by Sec. 531.216 upon appointment or
reappointment (i.e., employees who move from NAFI position to GS
position with a break in service of 3 days or less and without a change
in agency). Employees covered by Sec. 531.216 upon appointment or
reappointment to a GS position are not eligible to have pay set under
the superior qualifications or special needs authority, since their
NAFI employment is considered employment by the Federal Government.
Otherwise, NAFI employment does not block application of this section.
(b) Superior qualifications or special needs determination. An
agency may set the payable rate of basic pay of a newly appointed
employee above the minimum rate of the grade under this section if the
candidate meets one of the following criteria:
(1) The candidate has superior qualifications. An agency may
determine that a candidate has superior qualifications based on the
level, type, or quality of the candidate's skills or competencies
demonstrated or obtained through experience and/or education, the
quality of the candidate's accomplishments compared to others in the
field, or other factors that support a superior qualifications
determination. The candidate's skills, competencies, experience,
education, and/or accomplishments must be relevant to the requirements
of the position to be filled. These qualities must be significantly
higher than that needed to be minimally required for the position and/
or be of a more specialized quality compared to other candidates; or
(2) The candidate fills a special agency need. An agency may
determine that a candidate fills a special agency need if the type,
level, or quality of skills and competencies or other qualities and
experiences possessed by the candidate are relevant to the requirements
of the position and are essential to accomplishing an important agency
mission, goal, or program activity. A candidate also may meet the
special needs criteria by meeting agency workforce needs, as documented
in the agency's strategic human capital plan.
(c) Pay rate determination. An agency may consider one or more of
the following factors, as applicable in the case at hand, to determine
the step at which to set an employee's payable rate of basic pay using
the superior qualifications and special needs pay-setting authority:
(1) The level, type, or quality of the candidate's skills or
competencies;
(2) The candidate's existing salary, recent salary history, or
salary documented in a competing job offer (taking into account the
location where the salary was or would be earned and comparing the
salary to payable rates of basic pay in the same location);
(3) Significant disparities between Federal and non-Federal
salaries for the skills and competencies required in the position to be
filled;
(4) Existing labor market conditions and employment trends,
including the availability and quality of candidates for the same or
similar positions;
[[Page 31295]]
(5) The success of recent efforts to recruit candidates for the
same or similar positions;
(6) Recent turnover in the same or similar positions;
(7) The importance/criticality of the position to be filled and the
effect on the agency if it is not filled or if there is a delay in
filling it;
(8) The desirability of the geographic location, duties, and/or
work environment associated with the position;
(9) Agency workforce needs, as documented in the agency's strategic
human capital plan; or
(10) Other relevant factors.
(d) Consideration of recruitment incentive. In determining whether
to use the superior qualifications and special needs pay-setting
authority and the level at which the employee's payable rate of basic
pay should be set, an