[Federal Register: July 10, 2006 (Volume 71, Number 131)]
[Rules and Regulations]
[Page 38753-38754]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jy06-1]
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Rules and Regulations
Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents
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[[Page 38753]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 534
RIN 3206-AL01
Senior Executive Service Pay
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management is issuing final
regulations to provide agencies with the authority to increase the
rates of basic pay of certain members of the Senior Executive Service
whose pay was set before the agency's senior executive performance
appraisal system was certified for the calendar year involved. The
final regulations allow an agency to review the rate of basic pay of
these employees and provide an additional pay increase, if warranted,
up to the rate for level II of the Executive Schedule upon
certification of the agency's senior executive performance appraisal
system for the current calendar year.
DATES: Effective Date: The final regulations will become effective on
July 10, 2006.
FOR FURTHER INFORMATION CONTACT: Jo Ann Perrini by telephone at (202)
606-2858; by FAX at (202) 606-0824; or by e-mail at
pay-performance-policy@opm.gov.
SUPPLEMENTARY INFORMATION: On March 3, 2006, the Office of Personnel
Management (OPM) issued proposed regulations to provide agencies with
the authority to increase the rates of basic pay of certain members of
the Senior Executive Service (SES) whose pay was set before the
agency's senior executive performance appraisal system was certified
under 5 CFR part 430, subpart D, for the calendar year involved (71 FR
10913). We proposed that agencies be authorized to review the rates of
basic pay set for these SES members and provide an additional pay
increase, if warranted, up to the rate for level II of the Executive
Schedule upon certification of the agency's senior executive
performance appraisal system for the current calendar year. The
additional pay increase would not be considered a pay adjustment for
the purpose of applying 5 CFR 534.404(c) (``the 12-month rule'').
The 30-day public comment period ended on April 3, 2006. During the
public comment period, OPM received comments from eight Federal
agencies and one association of Federal executives. All of the
commenters fully support OPM's proposed regulations. Therefore, we are
adopting the proposed regulations as final.
``Certification Gap''
Under the new SES performance-based pay system, an agency must set
and adjust the rate of basic pay for an SES member on the basis of the
employee's performance and/or contribution to the agency's performance,
as determined by the agency through the administration of its
performance management system(s) for senior executives. Under 5 U.S.C.
5382(b), the maximum rate of the SES rate range may not exceed the rate
for level III of the Executive Schedule unless the agency's senior
executive performance appraisal system is certified under 5 U.S.C.
5307(d). By law, such certification must be made on a calendar year
basis. (See 5 U.S.C. 5307(d) and 5 CFR part 430, subpart D.) Therefore,
an agency may not set or adjust pay for an SES member at a rate above
the rate for level III until its senior executive performance appraisal
system is certified for the calendar year involved. Since many
agencies' senior executive performance appraisal systems are not
certified at the beginning of a calendar year, there is a gap from the
time an agency may set or adjust pay above level III (in the previous
calendar year) to the time an agency may set or adjust pay above level
III upon certification of its senior executive performance appraisal
system (in the next calendar year).
The regulations at 5 CFR 534.404(e)(2) allow agencies that
eventually receive certification of their senior executive performance
appraisal system(s) to provide an additional pay increase to certain
SES members, such as a new appointee with superior leadership skills,
an SES member accepting a position with substantially greater
responsibility, or an SES member who is critical to the mission of the
agency and who is likely to leave the agency. This is accomplished by
providing for an additional exception to the ``12-month rule.''
The requirement in 5 U.S.C. 5307(d) that senior executive
performance appraisal systems be certified on a calendar year basis may
be changed only through legislation. Although the commenters fully
support OPM's efforts to close the ``certification gap,'' several
recognized the need for a long-term solution and recommended a
legislative change to allow senior executive performance appraisal
systems to be certified on an annual basis (i.e., once every 12
months), rather than on a calendar year basis, as required by current
law.
Effective Date
Under 5 CFR 534.404(e)(2), the decision to provide an additional
pay increase to an SES member may not be made effective before the date
the agency's senior executive performance appraisal system is certified
under 5 CFR part 430, subpart D, or after December 31st of the calendar
year for which the agency's system is certified. An agency asked
whether the effective date for providing an additional pay increase
would be the effective date of the final regulations or the date the
agency's senior executive performance appraisal system is certified. If
an agency's senior executive performance appraisal system is certified
for calendar year 2006 before the final regulations become effective,
the earliest date an agency may provide an additional pay increase
would be the effective date of the final regulations. The agency has no
authority to provide an additional pay increase until the final
regulations become effective. However, if an agency's senior executive
performance appraisal system is certified for calendar year 2006 after
the final regulations become effective, the earliest date an agency may
provide an additional pay increase would be the date the agency's
senior executive performance appraisal system is certified.
[[Page 38754]]
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities because they
apply only to Federal agencies and employees.
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with E.O. 12866.
List of Subjects in 5 CFR Part 534
Government Employees, Hospitals, Students, and Wages.
Office of Personnel Management.
Linda M. Springer,
Director.
0
Accordingly, OPM is amending part 534 of title 5 of the Code of Federal
Regulations as follows:
PART 534--PAY UNDER OTHER SYSTEMS
Subpart D--Pay and Performance Awards Under the Senior Executive
Service
0
1. The authority citation for part 534 continues to read as follows:
Authority: 5 U.S.C. 1104, 3161(d), 5307, 5351, 5352, 5353, 5376,
5382, 5383, 5384, 5385, 5541, 5550a, and sec. 1125 of the National
Defense Authorization Act for FY 2004, Public Law 108-136, 117 Stat.
1638 (5 U.S.C. 5304, 5382, 5383, 7302; 18 U.S.C. 207).
0
2. In Sec. 534.404, redesignate paragraphs (c)(3)(v) and (vi) as
(c)(3)(vi) and (vii), respectively, add new paragraph (c)(3)(v), and
revise paragraph (e) to read as follows:
Sec. 534.404 Setting and adjusting pay for senior executives.
* * * * *
(c) 12-month rule. * * *
(3) * * *
(v) A determination to provide an additional pay increase under
paragraph (e)(2) of this section when an agency's senior executive
performance appraisal system is certified under 5 CFR part 430, subpart
D, after the beginning of a calendar year;
* * * * *
(e) Adjustments in pay after certification of applicable
performance appraisal system.
(1) In the case of an agency that obtains certification of a
performance appraisal system for senior executives under 5 CFR part
430, subpart D, an authorized agency official may increase a covered
senior executive's rate of basic pay up to the rate for level II of the
Executive Schedule, consistent with the limitations in Sec.
534.403(a)(3). The authorized agency official may provide an increase
in pay if warranted under the conditions prescribed in paragraph (b) of
this section and if the senior executive is otherwise eligible for such
an increase (i.e., he or she did not receive a pay adjustment under
Sec. 534.404(c) during the previous 12-month period). An adjustment in
pay made under this paragraph is considered a pay adjustment for the
purpose of applying Sec. 534.404(c).
(2) In the case of an agency that was prevented from establishing
or adjusting a rate of basic pay above the rate for level III of the
Executive Schedule for an individual upon initial appointment to the
SES under Sec. 534.404(a) or for a current SES member using one of the
exceptions to the 12-month rule in Sec. 534.404(c)(4)(i), (ii), or
(iii) because the agency had not yet obtained certification of its
performance appraisal system for senior executives under 5 CFR part
430, subpart D, in the current calendar year, an authorized agency
official may increase such a senior executive's rate of basic pay up to
the rate for level II of the Executive Schedule upon certification of
the agency's senior executive performance appraisal system, consistent
with the limitations in Sec. 534.403(a)(3). The authorized agency
official may review the previous determination to set or adjust the pay
of a senior executive to determine whether, and to what extent, an
additional pay increase may be warranted based on the same criteria
used for the previous determination. The determination to provide an
additional pay increase may not be made effective before the date the
agency's senior executive performance appraisal system is certified
under 5 CFR part 430, subpart D, or after December 31st of the calendar
year for which the agency's system is certified. An adjustment in pay
made under this paragraph is not considered a pay adjustment for the
purpose of applying Sec. 534.404(c) and does not begin a new 12-month
period for that purpose.
[FR Doc. E6-10750 Filed 7-7-06; 8:45 am]
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