Fact Sheet: Interpreting References in Law to Maximum Rates under the General Schedule or 5 U.S.C. 5376

Description

Certain laws establish pay limitations by referencing pay rates under the General Schedule (GS) or section 5376 of title 5, United States Code. Section 5376 establishes the minimum and maximum rates of basic pay for (1) senior-level (SL) positions that are classified above GS 15 pursuant to 5 U.S.C. 5108; and (2) scientific or professional (ST) positions established under 5 U.S.C. 3104. This fact sheet provides information on how to interpret statutory references to the maximum rate under the General Schedule or section 5376.

Summary

• In any statutory provision enacted before November 5, 1990, a reference to the maximum GS rate or GS-18 rate is considered to be a reference to the rate for level IV of the Executive Schedule (EX).
• In any statutory provision enacted before April 12, 2009, a reference to the maximum rate of pay under 5 U.S.C. 5376 is considered to be a reference to EX-IV.
• In any statutory provision enacted on or after April 12, 2009, a reference to the maximum rate of pay under 5 U.S.C. 5376 is considered to be a reference to EX-III or, if the head of the agency responsible for administering the applicable pay system certifies that the employees in question are covered by a performance appraisal system meeting the criteria in 5 CFR part 430, subpart D, EX-II.

Detailed Explanation

Federal Employees Pay Comparability Act of 1990

Prior to the passage of the Federal Employees Pay Comparability Act (FEPCA) of 1990 (section 529 of Public Law 101-509, November 5, 1990), the General Schedule had 18 grades, with GS-18 being the highest grade. A single rate of basic pay applied at GS-18. Before and after enactment of FEPCA, GS rates of basic pay were capped at the rate for level V of the Executive Schedule (EX-V).

FEPCA authorized the payment of locality pay for GS employees with locality-adjusted rates capped at EX-IV. FEPCA abolished grades GS-16, GS-17, and GS-18 effective with the movement of covered employees into alternative pay systems, including the SL/ST pay system established under 5 U.S.C. 5376 on the first day of the first pay period on or after April 23, 1991. Under 5 U.S.C. 5376 as enacted under FEPCA, the rate of basic pay for SL/ST employees was capped at EX-IV. (They could receive locality pay, subject to a locality-adjusted rate cap of EX-III.)

In general, Federal employee rates of basic pay set via an administrative determination (under an independent statutory pay authority) are subject to pay cap under 5 U.S.C. 5373. Before FEPCA, the section 5373 pay cap was the GS-18 rate. FEPCA changed the section 5373 pay cap to EX-IV. Since locality pay was not considered “basic pay” for purposes of section 5373, locality pay could be extended, when approved under 5 U.S.C. 5304(h), to allow certain employees under independent pay authorities to have an EX-III cap on their locality-adjusted rate of pay. (See 5 CFR 531.606(b)(3).)

FEPCA Rules on Interpreting Statutory References to GS Rates

Prior to FEPCA, various laws established pay limitations for various groups of employees under independent pay authorities by reference to GS-18 or the maximum rate of the General Schedule.

Section 101(b) of FEPCA included technical and conforming amendments, including amendments to laws referencing GS-16, 17, or 18. Some references to the maximum rate for GS-18 were converted to refer to EX-V or EX-IV. For example, as mentioned above, the pay limit in 5 U.S.C. 5373 (on rates set by administrative action) was changed from the GS-18 rate to the EX-IV rate.

Section 101(c) of FEPCA addressed all other existing references to GS-18 or the maximum GS rate (not addressed by section 101(b) or in FEPCA generally) in laws outside of title 5, United States Code. Under section 101(c), any reference to GS-18 or the maximum GS rate in pre-FEPCA laws outside title 5 must be considered to be a reference to the maximum rate under 5 U.S.C. 5376 (the SL/ST pay authority), which was EX-IV at that time. Section 101(c) further provided that any reference in laws outside title 5 to a rate of pay under the General Schedule would not be considered to include locality pay.

Note: There is no law that prescribes generally how to interpret references to the maximum GS rate in statutory provisions enacted on or after November 5, 1990 (the date FEPCA was enacted). Such provisions must be interpreted on a case-by-case basis in the context of the language used in the statute.

Effect of Senior Professional Performance Act of 2008

The Senior Professional Performance Act of 2008 (Public Law 110-372, October 8, 2008) reformed the SL/ST pay system. Under section 2(b) of the Act, the maximum payable rate under section 5376 was changed from EX-IV to EX-III. However, if the SL/ST employee is covered by a performance appraisal system certified under 5 U.S.C. 5307, the pay cap is EX-II. Entitlement to locality pay was eliminated. (These changes were consistent with changes made previously to the SES pay system under section 1125 of Public Law 108-136, November 24, 2003.) Under section 2(d) of the Act, the amendments provided in section 2 took effect on April 12, 2009. (For further information on this Act, please refer to Compensation Policy Memoranda (CPM) 2008-19, November 7, 2008, and CPM 2009-6, April 2, 2009.)

Section 2(d)(3) of the Act provided that except as otherwise provided by law, any reference in a provision of law to the maximum rate under section 5376 of title 5 must be interpreted based on whether the statutory reference was enacted (1) before or (2) on or after the effective date of the section 2 amendments.

• A statutory reference in law as provided (i.e., as in place or in effect) before the effective day of the amendments made by section 2 must be considered a reference to the rate of basic pay for EX-IV. Therefore, any statutory provision referencing a maximum rate of pay under section 5376 that was enacted before April 12, 2009, must continue to apply the EX-IV rate as the maximum rate of basic pay. (If otherwise authorized, locality pay may be extended under 5 U.S.C. 5304(h), subject to an EX-III cap on the locality-adjusted rate.) Based on section 101(c) of FEPCA, any reference in a pre-FEPCA law to the maximum GS rate or GS-18 rate is considered to be a reference to the maximum rate under section 5376 in applying this provision. Thus, any reference in a pre-FEPCA law to the GS maximum rate or GS-18 rate is considered to be a reference to the EX-IV rate.
• A statutory reference in law as provided (i.e., as put in place or into effect) on or after the effective day of the amendments made by section 2, must be considered a reference to the rate of basic pay for EX-III (or EX-II for employees covered by a performance appraisal system certified under 5 U.S.C. 5307). Therefore, any statutory provision referencing a maximum rate of pay under section 5376 that was enacted on or after April 12, 2009, must apply the pay caps currently found in 5 U.S.C. 5376, EX-III or EX-II, as applicable. EX-II will be considered applicable if the head of the agency responsible for administering the applicable pay system certifies that the employees in question are covered by a performance appraisal system meeting the criteria in 5 CFR part 430, subpart D. (For such an employee subject to an EX-III or EX-II cap on the rate of basic pay, locality pay under 5 U.S.C. 5304 is not available.)

OPM provided guidance to agencies on this matter in CPM 2009-6, April 2, 2009.

References
5 U.S.C. 5376
5 CFR part 534, subpart E
Federal Employees Comparability Act of 1990 (Sec. 529 of Public Law 101-509, Nov. 5, 1990)
Senior Professional Performance Act of 2008 (Public Law 110-372, Oct. 8, 2008)