Statute: 5 U.S.C. Chapter 61 and Chapter 34

Regulations: 5 CFR Part 340 and Part 610

General Information

The Civil Service Reform Act (CSRA) did not remove Senior Executive Service (SES) members from the normal provisions of law governing leave and hours of work. Therefore, as a general rule, it is necessary to establish a 40-hour basic administrative workweek under 5 U.S.C.6101(a), for SES members on a full-time work schedule in the same way agencies must for other employees who are subject to the leave system. Certain flexibilities, however, are available to agencies. For example, agencies may adopt flexible or compressed work schedules under an alternative work schedule (AWS) program for SES members under 5 U.S.C. Chapter 61, Subchapter II. (For additional information, see 5 CFR part 610, subpart D, and OPM’s Handbook on Alternative Work Schedules.)

Work Schedules

Prohibition on compensatory time off (overtime and travel). SES members are not eligible for overtime pay. Therefore, they also may not receive compensatory time off in lieu of overtime pay under 5 U.S.C. 5543 for work performed as an SES member. Each agency should establish policies governing the handling of accrued compensatory time off for an employee who is subsequently placed in an SES position and thus no longer covered by 5 U.S.C. 5543. The agency may choose to (1) provide payment for any balance of compensatory time off accrued before placement in the SES position at the rate at which it was earned; or (2) allow the employee to use the accrued compensatory time off while in the SES position, subject to the normal time limits established in 5 CFR 550.114. Members of the SES are not eligible to earn compensatory time off for travel under 5 U.S.C. 5550b and 5 CFR 550, subpart N. If an individual has unused compensatory time off for travel at the time of appointment to the SES, the individual forfeits it.

Credit hours. SES members are prohibited from accumulating credit hours under a flexible work schedule program (5 CFR 610.408). SES members can use credit hours accumulated prior to their SES appointment. However, they may not receive compensation in lieu of any unused credit hours.

Part-time and intermittent employment. SES members may be employed on a part- time basis (regularly scheduled tour of duty) or an intermittent basis (no prearranged scheduled tour of duty), when appropriate. The employee must be able to perform at the SES level under the work schedule established.

Under 5 U.S.C. 3405(b), employees in positions paid at a rate equal to or greater than the minimum rate for SL positions are exempt from the part-time career program requirements (5 U.S.C. 5376), e.g., the 16 to 32 hours per week tour-of-duty requirements (5 U.S.C. 3401(2)). Therefore, it is possible for a part-time SES employee to be placed on a tour of duty that exceeds 32 hours per week.

Intermittent employment in the SES is rare, due to the nature of the duties SES members must perform, but might be used, for example, in a rare instance when someone may be returning from sick leave. Unlike employees on a part-time schedule, intermittent employees are excluded from the definition of “employee” at 5 U.S.C. 6301(2)(ii) and therefore do not accrue annual and sick leave.

Leave 

Statute: 5 U.S.C. Chapter 63

Regulations: 5 CFR Part 630

General. SES members are subject to the same annual and sick leave system and policies as other non-SES employees, except for the annual leave rate of accrual and a higher maximum annual leave carryover ceiling.

Annual leave accrual. SES members and employees in SL/ST positions are entitled to accrue annual leave at the rate of 8 hours per biweekly pay period, without regard to their length of service in the Federal Government.

Annual leave accumulation. SES members have a maximum annual leave ceiling of 720 hours. Public Law 103-356 amended 5 U.S.C. 6304 to place a 90-day (720-hour) limit on the amount of annual leave an SES member could carry over from one leave year to the next.

Effective October 13, 1994, SES members who had fewer than 720 hours of annual leave and new SES members became subject to the maximum annual leave ceiling of 720 hours. However, SES members who had an accumulated annual leave balance of more than 720 hours were permitted to carry that balance forward as a personal leave ceiling (excluding any restored or advanced annual leave).

SES members employed on a part-time basis (regularly scheduled tour of duty) are also subject to an annual leave ceiling of 720 hours.

Leave year. Each new leave year begins on the first day of the first full biweekly pay period in a calendar year and ends on the day immediately before the first day of the first full biweekly pay period in the following calendar year. See OPM’s Fact Sheet: Leave Year Beginning and Ending Dates for specific dates.

Personal leave ceiling. The personal leave ceiling is the maximum amount of annual leave in excess of 720 hours that may be carried over to a new leave year. The personal leave ceiling is subject to reduction under the rules in 5 U.S.C. 6304(c) and 5 CFR 630.301. An SES member’s personal leave ceiling must be reduced at the beginning of any leave year in which the annual leave balance falls below the personal leave ceiling. When the personal leave ceiling falls below 90 days (720 hours), the personal leave ceiling is eliminated and the SES member becomes subject to the 90-day (720-hour) limit. Agencies are responsible for notifying employees of any reduction in the personal leave ceiling. Amounts of annual leave that are advanced or restored to SES members are not included in the personal leave ceiling.

Use or lose leave. If an SES member has annual leave in excess of the applicable leave ceiling on the last day of the leave year, he or she is subject to the “use or lose” rules for the forfeiture of excess annual leave under 5 U.S.C. 6304(c) and 5 CFR 630.301. Thus, an SES member who has 1,000 hours as a personal leave ceiling at the start of a leave year and earns 100 hours more than he or she uses in that year, will lose those 100 hours, and his or her personal ceiling remains at 1,000 hours at the beginning of the next leave year. Conversely, an SES member who has 1,000 hours as a personal leave ceiling at the start of the leave year and a balance of 920 hours of annual leave at the beginning of the next leave year will have his or her personal leave ceiling reduced to 920 hours for that next leave year.

Lump-sum payments upon separation. At the time of an SES member’s separation from Federal service, the member is entitled to a lump-sum payment for any unused accumulated and accrued annual leave to his or her credit, including any restored annual leave. Generally, a lump-sum payment will equal the pay the employee would have received had he or she remained employed until expiration of the period covered by the annual leave and used that leave. Therefore, if according to agency policy an SES member had remained in Federal service and would have received a pay adjustment during this period, the lump-sum payment is adjusted to reflect the increased rate beginning on the effective date of the pay adjustment (5 U.S.C. 5551). See OPM’s Fact Sheet: Lump-Sum Payments For Annual Leave for additional information.

Example: The agency appointing authority approved a 3 percent performance-based pay adjustment for an SES member in December 2020 to be effective on January 3, 2021. The SES member retires effective December 31, 2020, with 500 hours of unused accumulated and accrued annual leave. The member’s lump-sum payment for 8 hours of annual leave (January 1) is calculated using the employee’s pay prior to the pay adjustment and 492 hours of annual leave is calculated to include the pay adjustment. (Note that the January 1 holiday is counted as a day on which the annual leave would have been used. See 5 U.S.C. 5551(a) and 5 CFR 550.1204(a).)

Home leave. SES members who have completed 24 months of continuous service outside the United States may be granted leave of absence at a rate not to exceed 1 week for each four months of service. The leave is for use in the United States or if the employee’s residence is outside the area of employment, in its territories or possessions (5 U.S.C. 6305 and 5 CFR 630, subpart F).

Military leave. SES members are entitled to military leave for certain types of active or inactive duty in the Armed Forces’ Reserves and National Guard. Any full-time Federal civilian employee whose appointment is not limited to one year is entitled to military leave under 5 U.S.C. 6323(a) and (b). See OPM’s Fact Sheet: Military Leave for additional information.

Movement to an SES appointment. If an individual moves from a non-SES appointment to an SES appointment, any annual leave at the time of the move in excess of the employee’s maximum accumulation level is subject to forfeiture, if not used by the beginning of the first full biweekly pay period in the leave year immediately following entry into the SES (5 CFR 630.301(f)(1)). Annual leave can be restored under conditions provided at 5 U.S.C. 6304(d). Entry into the SES does not change the time limit under 5 CFR 630.306 during which restored leave must be used to avoid forfeiture.

Example: A GS-15 employee with a maximum accumulation level of 240 hours of annual leave is selected for an SES position. At the time of appointment, the employee has 300 hours of accumulated annual leave, i.e., 60 hours in excess of the 240-hour ceiling. The employee earns 100 additional hours in the SES before the end of the leave year. If the employee uses less than the 60 hours of excess leave (e.g., 40 hours) during the remainder of the leave year while in the SES, the employee’s leave balance at the beginning of the new leave year is 340 hours (the maximum 240 hours that the employee could accumulate as a GS-15 plus the 100 hours earned in the SES). The employee forfeits 20 hours of leave (i.e., the 60 hours excess leave brought into the SES, minus the 40 hours used). If the employee uses more than the 60 hours of excess leave (e.g., 80 hours) during the remainder of the leave year while in the SES, there is no forfeiture since the amount of leave used exceeds the 60 hours of excess leave. In this case, the employee’s leave balance at the beginning of the new leave year is 320 hours (the maximum 240 hours that the employee could accumulate as a GS-15, plus the 100 hours earned in the SES, minus the 20 hours used above the 60 hours of excess leave).

Movement from an SES appointment. If an SES member moves to a non-SES or equivalent position, any annual leave in excess of that which otherwise would be permitted in the new position remains to the employee’s credit. Subsequently, if the individual uses more annual leave in a leave year than earned, the balance carried forward will become the new personal leave ceiling if it is still above the maximum limit normally permitted for the position (5 CFR 630.301(g)). The employee’s annual leave balance is subject to reduction under the rules in 5 U.S.C. 6304(c).

Example with a personal leave ceiling: An individual was in the SES in October 1994 with accumulated leave in excess of 720 hours and became entitled to retain that leave as a personal leave ceiling when 720 hours was set as the annual limit on the accumulation of annual leave for SES members. Later, the SES member moved to a GS-15 position with a retained personal leave ceiling of 800 hours of accumulated annual leave. The employee earned an additional 100 hours before the end of the leave year.

If the employee uses 150 hours of annual leave in the GS-15 position (i.e., 50 hours more than the 100 hours earned), the employee’s personal leave ceiling for the next leave year is reduced to 750 hours. However, if the employee uses only 40 hours (i.e., 60 hours less than the 100 hours earned), the personal leave ceiling for the next leave year remains at 800 hours and the employee loses 60 hours of annual leave.

Example without a personal leave ceiling: An SES member with 750 hours of accumulated annual leave moves to a GS-15 position. The individual does not have a personal leave ceiling as described in 5 CFR 630.301(h). The employee earns 100 additional hours in the new (GS-15) position before the end of the leave year. If the employee uses 150 hours of annual leave in the new position (i.e., 50 hours more than the 100    hours earned), the employee’s carry over amount to the next leave year is 700 hours. However, if the employee uses only 40 hours (i.e., 60 hours less than the 100 hours earned), the carry over amount to the next leave year is 750 hours, and the employee loses 60 hours of annual leave.

In addition, an SES member who moves to a non-SES or equivalent position will no longer be entitled to the higher annual leave accrual rate. The employee’s annual leave accrual rate is determined based on years of creditable service as provided in 5 U.S.C. 6303(a). (5 CFR 630.301(d)).

Appointed by the President with or without Senate confirmation. In general, officers and employees who are appointed by the President to a PAS or PA position are not covered by the Federal leave system established by 5 U.S.C. Chapter 63 if their rate of basic pay equals or exceeds the rate for level V of the Executive Schedule. (See 5 U.S.C. 6301(2)(x) and 5 CFR 630.211(a)(3).) These Presidential appointees do not earn annual and sick leave and cannot be charged leave for absences from work. Nevertheless, OPM has determined that an individual who is appointed by the President to an SES, SL or ST position (regardless of his or her rate of basic pay) is covered by the Federal leave system unless the individual is an officer designated (for exclusion) by the President under 5 U.S.C. 6301(2)(xi). The President has delegated the responsibility for making exclusions under section 6301(2)(xi) to OPM, and OPM has delegated responsibility to the head of each agency consistent with the provisions of 5 CFR 630.211.

Career SES members who are appointed by the President, with Senate confirmation, to a civil service position outside the SES at a rate of pay equivalent to Executive Schedule level V or higher, are entitled to elect to retain SES annual and sick leave coverage (and certain other career SES benefits, including SES basic pay) in accordance with 5 U.S.C. 3392(c)(1). Career SES members who are appointed by the President (without Senate confirmation) to a civil service position outside the SES, which is covered by the Executive Schedule, or the rate of basic pay for which is fixed by statute at a rate equal to one of the levels of the Executive Schedule, have the same entitlement under 5 U.S.C. 3392(c)(2). If Federal leave system coverage is retained, the individual continues to accrue leave and is charged leave as if still in the SES. If the individual separates from the Government immediately following the Presidential appointment, any lump-sum annual leave payment is based on his/her current pay (i.e., SES pay, if retained, or Executive Schedule or equivalent pay, if SES pay was not retained). (See 5 CFR 550, subpart L)

A current Federal employee who receives a Presidential appointment to a civil service position (other than an SES, SL or ST position) with a rate of basic pay that equals or exceeds level V of the Executive Schedule (including an employee who held a career SES position immediately before the Presidential appointment and who does not retain leave coverage under 5 U.S.C. 3392(c)(1) or (2)), is not covered by the Federal leave system and does not receive a lump-sum payment for his/her unused annual leave at the time of the Presidential appointment. The unused annual leave is held in abeyance for re- credit if the employee is subsequently reemployed in a position covered by the Federal leave system. If the individual separates from Federal service while under a Presidential appointment, he or she will receive a lump-sum payment for unused annual leave based on the rate of pay in effect for the position the employee held immediately before the employee accepted the Presidential appointment. (5 U.S.C. 5551(b) and 5 CFR 550, subpart L). (If the Presidential appointment is to an SES or SL/ST position, the employee is covered by the Federal leave system regardless of the employee’s rate of basic pay.) 

Unemployment Compensation

Statute: 5 U.S.C. Chapter 85

Unemployment Compensation for Federal Employees

Presidential appointees, noncareer SES appointees, and Schedule C employees who resign by request due to a change in agency leadership, or as a result of the transition to a new Presidential Administration or Term, may be eligible for Unemployment Compensation for Federal Employees (UCFE). Career and limited SES appointees who are involuntarily separated from the civil service may also be eligible for unemployment compensation, depending on the reason for the involuntary separation.

In general, unemployment compensation is provided through the State of the individual’s last official duty station. Eligibility requirements and benefit levels vary from State to State. For further information about UCFE requirements and benefits, contact the appropriate State Employment Security Office.

Whether an individual’s resignation is requested or not requested may affect entitlement to unemployment compensation. Resigning before receiving a request to resign is generally considered an unprompted resignation and is not usually viewed as sufficient for unemployment compensation purposes. To assure that State unemployment offices are aware that the separation by request is due to a change in agency leadership, it is important that this reason is clearly indicated on the SF-50 and all UCFE claims inquiry forms. Individuals are advised to provide a copy of the request for resignation to the State unemployment compensation office when filing.

For additional information about these services, see DOL Dislocated Workers page.

Dislocated Worker Services

These employees may also be eligible for dislocated worker services, including retraining and placement assistance, which are funded through Department of Labor grants. Benefits and eligibility requirements vary from state to state. For further information about Dislocated Worker Services and eligibility requirements, contact the State Dislocated Worker Unit in the state in which the individual was employed (20 CFR 680.130). 

For additional information about these services, see the Department of Labor (DOL) Unemployment Compensation for Federal Employees page.

Retirement 

Statute: 5 U.S.C. Chapters 83 and Chapter 84

Regulations: 5 CFR Parts 831, 841 – 847, 850, 880, 891

The Guide to Processing Personnel Actions: Chapter 30

Coverage. For individuals appointed to the SES after December 31, 1986, with no prior civilian service that is creditable for retirement:

• all career appointees are covered by the Federal Employees’ Retirement System (FERS);
• all noncareer appointees are covered by FERS even if the appointment is designated as “indefinite”; and
• a limited appointee is covered by FERS if the appointment is for more than one year.

For individuals appointed to the SES after December 31, 1986 with prior Government service, refer to the CSRS and FERS Handbook for Personnel and Payroll Offices to determine the retirement coverage. Some provisions to note regarding noncareer and limited SES appointees:

• noncareer appointees: these individuals are covered by Social Security, even though they may have continuous service without a break in service of more than 365 after December 31, 1983, from an appointment where they were under regular CSRS); and
• limited appointees: individuals normally are excluded from FERS or CSRS if they are serving under an appointment limited to one year or less. This exclusion does not apply, however, if the individual moves from a position covered by FERS or CSRS into the excluded type of appointment with no break in service or a break of three days or less.)

These elections generally remain in effect upon subsequent appointments. See Chapter 101, Appendix A of the FERS & CSRS Handbook for Personnel and Payroll Offices

Under Pub. L. 100-647, if an SES career appointee takes a PAS appointment on or after November 10, 1988, where the maximum rate of pay payable for their position is at or above the rate for level V of the Executive Schedule, and the position is listed in 5 U.S.C. 5312- 5317, the appointee is subject to mandatory Social Security coverage even if the appointee elected to continue SES benefits under 5 U.S.C. 3392(c). (See the CSRS and FERS Handbook, Chapter 101, Special Retirement Provisions for Senior Officials.)

If the appointee was under full CSRS in the SES and had at least 5 years of creditable civilian service at the time of the Presidential appointment, the appointee is under CSRS Offset and has a six month opportunity to elect FERS.

If the appointee was under FERS or CSRS Offset in the SES, the appointee remains under FERS or the CSRS Offset.

If an individual under Social Security coverage in a civil service position (e.g., in a Presidential or noncareer SES appointment) takes an SES career appointment on or after November 10, 1988, the individual remains subject to full FICA deductions in the SES position, in addition to CSRS or FERS coverage, as appropriate.

Under FERS there is no authority to allow credit for service performed after 1988 under appointments excluded from FERS coverage. Thus, service after 1988 under an SES limited appointment that is for 1 year or less not only is not covered by FERS at the time of the appointment, but also is not creditable for eligibility or computation purposes, if the individual takes an appointment that is covered by FERS.

Optional retirement. Eligibility for optional retirement is the same for SES members as for other employees.

If the individual is covered by CSRS, eligibility is at least age 55 with 30 years of service or more, at least age 60 with 20 years of service or more, or at least age 62 with five years of service or more.

If the individual is covered by FERS, eligibility is at least 5 years of service and age 62, at least 10 years of service and the Minimum Retirement Age (reduced benefits), at least 20 years of service and age 60, or at least 30 years of service and the Minimum Retirement Age. The Minimum Retirement Age is the first year in which an individual can receive benefits and varies according to the year born. See Chapters 41 and 42 of the CSRS & FERS Handbook for more information about the minimum Retirement Age.

Under both CSRS and FERS, a minimum of five years of civilian service is required. There are special provisions for law enforcement officers and certain other personnel.

Discontinued service retirement. To be eligible for discontinued service retirement (DSR), an individual must have completed 25 years of service or have completed 20 years of service and be 50 years of age. Further, the individual must be involuntarily separated other than for cause or charges of misconduct or delinquency. General information on DSR is in the CSRS and FERS Handbook for Personnel and Payroll Offices, Chapter 44.

Subject to the requirements described in Chapter 44 of the CSRS and FERS Handbook, after a notice of specific action, a resignation in lieu of involuntary action is qualifying for discontinued service retirement. These are the actions that qualify you for discontinued service retirement:

• separation from the SES as the result of a reduction in force following notification that there is no vacant SES position in the agency for which qualified. (Eligibility exists even if the individual declines OPM placement assistance, declines an SES position offer in another agency, separates during the OPM placement period, or declines placement in a position outside the SES.);
• separation from the SES following position abolishment, even though no reduction in force was conducted, if the employee did not have an offer of another SES position in the agency at the time of separation;
• separation from the SES following notice of directed reassignment to another commuting area or transfer of function to another commuting area, and the notice indicates the employee would be subject to removal under adverse action procedures for declining the proposed move; or removed under adverse action procedures (or during the probationary period) for declining to accept the proposed move. (The individual is eligible for DSR even if the separation occurs before the effective date of the reassignment. The employee is not eligible for DSR, however, if at the time of appointment the employee’s position description, or other written agreement or understanding, provided for geographic mobility. SES employment in itself does not automatically establish a mobility agreement.);
• separation from the SES, when reporting directly to a Presidential appointee, in response to a specific written request from a recognized representative of a new Administration having authority to request such resignation or from a new department or agency head;

• separation from the SES, if a noncareer appointee, when reporting directly to a Presidential appointee who is leaving (otherwise a noncareer appointee who resigns without being asked is not eligible for DSR); and
• length of service even if the appointee has placement rights in a position outside the SES:
  • removed from the SES for less than Fully Successful performance under 5 U.S.C. Chapter 43, Subchapter II; or
  • removed from the SES during the probationary period for reasons not involving conduct.

A Presidential appointee who is eligible for DSR upon separation maintains that eligibility even if entitled to reinstatement to the SES as a former career SES appointee. This is true even if the appointee has received a job offer in the SES since tenure is different in the SES from that under the Presidential appointment.

Disability retirement. The eligibility requirements for disability retirement are the same for SES as for non-SES personnel and the same under FERS as under CSRS. The individual must have at least 18 months of civilian service for FERS and five years for CSRS (5 CFR 844.202). 

Travel and Transportation

Statute: 5 U.S.C. 5723, 5724, and 5752

Regulations: 5 CFR Part 572 

Pre-employment interviews. An agency may pay candidates’ travel expenses incurred for pre-employment interviews requested by the agency. This authority may be used regardless of whether the candidate is presently in another SES position, is currently employed by a Federal agency in a non-SES position, is applying for reinstatement to the SES from outside the Government, or never worked for the Government. The authority covers candidates for career, noncareer, or limited SES appointment (5 U.S.C. 5752).

Travel to first duty station. An agency may pay travel expenses of a new appointee (career, noncareer, or limited) to the SES from outside the Government. (A new appointee includes not only individuals first appointed to Government service, but also individuals appointed after a break in Government service.) An agency may also pay transportation expenses of the appointee’s immediate family and household goods and personal effects, to the extent authorized by 5 U.S.C. 5724, from the appointee’s place of residence at the time of selection to the duty station (5 U.S.C. 5723(a)).

Payment may be made only after the individual agrees in writing to remain in Government service for 12 months after appointment, unless separated for reasons beyond the individual’s control which are acceptable to the agency concerned. If the individual violates the agreement, the payment is recoverable from the individual as a debt due the United States (5 U.S.C. 5723(b)).

Change of duty station. The provisions in law (5 U.S.C. 5724) and the travel regulations concerning payment of travel and transportation expenses when an employee is moved in the interest of the Government are applicable to SES members, including those individuals newly appointed to the SES from other positions in Government without a break in Government service. A permanent change in duty station which is outside the employee’s commuting area shall take effect only after the employee has been given advance notice for a reasonable period.

Last move home. Under 5 U.S.C. 5724(a)(3), an SES career appointee is entitled to travel, transportation, and household goods moving expenses upon retirement from Government service, to the place where the individual will reside, if the individual:

• was moved geographically by the Federal Government as a career appointee in the SES; and
• at the time of the last Federal directed move was eligible for optional retirement, or within five years of optional retirement, or was eligible for discontinued service retirement.

Entitled individuals include:

• individuals who were geographically moved while a career appointee in the SES as the result of a reassignment or a transfer;
• individuals who at the time of the move were going from an appointment outside the SES (e.g., at GS-15) to a career appointment in the SES; and
• individuals who at the time of the move were going from a limited or noncareer SES appointment to a career appointment in the SES.

Coverage includes families of deceased employees who were eligible for the benefits at the time of death, effective January 1994.

Noncareer and Limited appointees are not eligible for “last move home”.

Regulatory provisions. See the Federal Travel Regulation issued by the General Services Administration for further information. The information on Relocation Allowances is codified in 41 CFR Chapter 302. For more information, visit the GSA Transportation Management Policy page.

Student Loan Repayments

The Federal student loan repayment program permits agencies to repay certain types of Federally made, insured, or guaranteed student loans as a recruitment or retention incentive for job candidates or current employees of the agency. The program implements 5 U.S.C. 5379, which authorizes agencies to set up their own student loan repayment programs to attract or retain highly qualified employees. The authority is used at the discretion of the agency. SES members are eligible, unless otherwise excluded in the agency’s implementation plan. Agencies may wish to consider the following when implementing this program:

• limiting SES eligibility to executives serving on career appointments only, and
• using the standard recruitment incentive as a first choice in recruiting new executives.

For more information, visit the OPM Student Loan Repayment page.

Office Of Inspector General Positions

The Inspector General Reform Act of 2008 (Pub. L. 110-409, October 14, 2008) revised the Inspector General (IG) Act of 1978 (Pub. L. 95-452). A key provision of the 2008 IG Reform Act designated the Office of Inspector General (OIG) as a separate agency for the purpose of applying statutory provisions relating to the SES but did not make it an executive agency, as that term is defined in 5 U.S.C. 105. Otherwise, every OIG could be considered an executive agency covered by the SES under 5 U.S.C. 3132(a)(1) whether or not the agency within which the OIG is established is covered by the SES. If the agency within which an OIG is established is covered by the SES, so is the OIG, but if the agency within which an OIG is established is not covered by the SES, then neither is the OIG. In an OIG to which the SES applies, a reference to the agency head in any SES statute is considered to be a reference to the IG. Where there is a question of how this principle specifically applies, agencies should consult with Senior Executive Services and Performance Management. It should be noted that the IG Reform Act of 2008 did not designate the OIG a separate agency, and the IG the head of that agency, with respect to senior-level (SL) positions or scientific and professional positions (ST). However, for allocation requests of SL/ST positions, the OIGs should independently submit separate requests from the ones submitted by their agencies.

Section 4(a) of the IG Reform Act of 2008 revised the pay of Inspectors General in an “establishment” (as defined in section 12(3) of the IG Act of 1978) by providing for a rate of basic pay equal to EX-III plus 3 percent. For these IGs, biweekly pay is computed by multiplying the applicable hourly rate by 80 hours. The applicable hourly rate is derived by dividing the annual rate of EX-III plus 3% by 2,087 hours and rounding to the nearest cent.

Section 4(b) of the IG Reform Act of 2008 also provided rules for establishing and compensating IGs in a “designated Federal entity” (DFE) (as defined in section 8G of the IG Act of 1978). First, section 4(b) provided that an IG at a DFE must be classified at a grade, level, or rank designation, as the case may be, at or above those of a majority of the senior-level executives of that DFE. For example, this provision could result in an IG at a DFE being placed in the SES pay system instead of the General Schedule classification and pay system. Second, section 4(b) provided that the pay of a DFE IG shall be not less than the average total compensation (including performance awards) of the senior-level executives of that designated Federal entity calculated on an annual basis—i.e., section 4(b) establishes a pay floor. The DFE agency head must continue to determine the IG’s pay in accordance with the applicable pay system rules (i.e., regular pay entitlement without regard to the pay floor) and the resulting pay will be compared to the pay floor established by section 4(b). The higher amount will be payable.

OPM established a pay plan code “IG” for IGs in establishments whose rate of basic pay is fixed at the rate for EX-III plus three percent. In addition, OPM established a pay rate determinant code “D” for IGs in DFEs to recognize their coverage under a provision providing a special classification authority and pay floor.

Career SES members who are appointed to an IG position and are entitled to elect to continue certain SES benefits under 5 U.S.C. 3392 may do so with the exception that SES performance awards and awarding of ranks will not apply. Furthermore, notwithstanding any provision of law, career Federal employees serving on an appointment under an authority other than 5 U.S.C. 3392 may not suffer a reduction in pay (not including any bonus or performance award) as a result of being appointed to an IG position. (See section 4(c) of the IG Reform Act of 2008.) An IG of an establishment or a designated Federal entity may not receive any cash award or cash bonus, including any cash award under 5 U.S.C. Chapter 45. (See section 3(f) of the IG Act of 1978, as added by section 5 of the IG Reform Act of 2008.) These provisions apply solely to an IG and not to other SES members within an OIG. Accordingly, other SES members in IG offices are eligible for performance and other awards. Career SES appointees in an OIG may be nominated for rank awards. (See Chapter 6, Presidential Rank Awards, for additional information.)

Each IG or agency head, as applicable, is responsible for implementing and administering the provisions of the IG Reform Act; however, OPM has responsibility to determine how to interpret and apply SES provisions with respect to the designation of each OIG as a separate agency and the IG as the head of that agency. Where there is a question of how to apply SES provisions, agencies should consult with Senior Executive Services and Performance Management.

As head of a separate agency, each IG has the authorities and responsibilities of an agency head with respect to the OIG pertaining to the administration of any SES statute. (See section 6(d) of the IG Act of 1978, as amended by section 14 of the IG Reform Act of 2008.) For example, each IG establishes an Executive Resources Board (ERB) to conduct merit staffing for career appointments and establishes a Performance Review Board (PRB) to make recommendations regarding SES performance ratings and SES performance awards for OIG senior executives. IGs normally establish a separate performance appraisal system to cover OIG SES members. With respect to such a system, the IG is the highest-level official in the OIG; therefore, higher-level review is not available to a senior executive for whom the IG is the initial rater, although the IG can administratively provide for an alternative review. IGs determine rates of basic pay for their senior executives and may provide SES performance awards from an SES performance award pool calculated based upon salaries of career SES appointees within the OIG. As head of a separate agency, each IG is independent of the agency within which the OIG is established with regard to SES actions, e.g., recruitment and selection of executives, reassignment or transfer of executives, position management, performance appraisal, compensation, awards, adverse actions, and reduction-in-force.

When an IG is appointed as a career SES member by the head of a DFE, normal application of SES rules would require the DFE agency head to appraise the DFE IG’s performance annually. Based upon the results of appraisal, the DFE agency head could adjust the pay of the DFE IG or even remove the DFE IG. However, OPM holds that such authority would contradict the purpose of the IG Reform Act of 2008 to “amend the Inspector General Act of 1978 to enhance the independence of Inspectors General.” We therefore advise, pursuant to OPM’s authority under section 6(e)(1)(B)(iii) of title 5 Appendix to determine how SES provisions apply for purposes of section 6(e), that for the purpose of SES performance appraisal a DFE IG should not be considered to occupy a DFE position but rather a position in the DFE Office of Inspector General, which under section 6(e)(1)(A)(i) “shall be considered to be a separate agency.”

Since the DFE IG does not occupy a position in the DFE for this purpose, a DFE agency head should not establish performance requirements for the DFE IG under 5 U.S.C. 4312(b)(1) or appraise the DFE IG’s performance. It follows that a DFE agency head will not be able to adjust SES pay for a DFE IG under SES rules or remove a DFE IG from the SES based upon performance ratings. A DFE agency head must still set pay in accordance with section 4 of the IG Reform Act of 2008, which includes setting the DFE IG’s pay at his or her existing SES rate of basic pay—computed under normal rules without regard to the section 4(b) pay floor—if it is higher than that pay floor. The head of a DFE may also take an adverse action against a DFE IG under 5 U.S.C. 7543, consistent with section 3 of the IG Act of 1978, including a removal action that is not based on a performance rating.