Rule: Pay Under General Schedule: Special, Locality, and Retained Rates Revision

Tuesday,
May 31, 2005
Part V
Office of Personnel
Management
5 CFR Part 294, et al.
Changes in Pay Administration Rules for
General Schedule Employees; Interim
Rule
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31278 Federal Register / Vol. 70, No. 103 / Tuesday, May 31, 2005 / Rules and Regulations
OFFICE OF PERSONNEL period beginning on or after April 28, U.S.C. 5302, locality payments under 5
MANAGEMENT 2005—i.e., May 1, 2005. Since the U.S.C. 5304 will no longer be paid on
regulations are necessary to implement top of a retained rate. Rather, an
5 CFR Parts 294, 359, 362, 451, 530, the statutory changes, these regulations employee’s pay retention entitlement
531, 532, 534, 536, 550, 591, 630, 831, are issued as interim regulations that will be derived from an employee’s
and 842 take effect on May 1, 2005. payable (highest) rate of basic pay
The changes made by the Act and (including any locality rate or special
RIN 3206–AK88
these implementing regulations are rate) before the action triggering pay
Changes in Pay Administration Rules designed to correct a variety of pay retention, and that entitlement will be
for General Schedule Employees administration anomalies that have compared to the highest applicable rate
produced unfair pay reductions or range (including a locality rate range or
AGENCY: Office of Personnel unwarranted pay increases for a special rate range) for the employee’s
Management. employees in certain situations. These current position. If the pay retention
ACTION: Interim rule with request for anomalies resulted largely from the entitlement results in a retained rate
comments. introduction of locality pay into the above the maximum rate of the highest
General Schedule pay system in 1994. applicable rate range for an employee’s
SUMMARY: The Office of Personnel Many of the basic pay administration position, that retained rate generally
Management is issuing interim rules treated special rates under 5 U.S.C. will be increased by an amount equal to
regulations to implement section 301 of 5305 as rates of basic pay, but ignored 50 percent of any increase in that
the Federal Workforce Flexibility Act of locality rates under 5 U.S.C. 5304. A key maximum rate. A reduction in an
2004, which amends the rules governing objective of the Act and these employee’s payable rate of basic pay
pay setting for employees covered by regulations is to treat locality rates and resulting from conversion to a lower pay
the General Schedule. In particular, we special rates in similar ways—i.e., to put schedule in a different geographic area
are revising provisions related to special them on the same footing. This will (i.e., geographic conversion) does not
rates, locality rates, and retained rates. result in pay rules that are more trigger entitlement to pay retention.
The statutory and regulatory changes are rational, consistent, and equitable. (See Consistent with uncodified section
designed to correct a variety of pay the legislative history of section 301 of 301(d)(2) of the Act, we are issuing
administration anomalies that resulted Pub. L. 108–411, as documented in regulations governing the conversion of
in unfair pay reductions or unwarranted pages 17 through 22 of House Report any existing locality-adjusted retained
pay increases, to allow locality rates and 108–733, October 5, 2004.) rate to a new retained rate that is equal
special rates to be treated in similar The Act requires that, when an in amount. Also, various other types of
ways, and to improve the operation of employee’s official worksite is changed saved rates (i.e., rates above range
the special rates program. to a new location where different pay maximums) are being converted to
DATES: Effective Date: The interim schedules apply, the employee’s pay retained rates under 5 U.S.C. 5363.
regulations are effective on May 1, 2005. must be converted to the new pay We are taking this opportunity to
Comment Date: Comments must be schedules in the new location before reorganize the affected regulations and
received on or before August 1, 2005. processing any simultaneous pay action to clarify the meaning of certain
ADDRESSES: Send or deliver written (other than a general pay adjustment). provisions. We have replaced the verb
comments to Donald J. Winstead, This geographic conversion requirement ‘‘shall’’ with ‘‘must’’ for added clarity
Deputy Associate Director for Pay and is found in 5 U.S.C. 5305(i), 5334(g), and readability. We intend that any
Performance Policy, Division for and 5363(c), as added or amended by provision using the verb ‘‘must’’ has the
Strategic Human Resources Policy, the Act, and is incorporated in these same meaning and effect as previous
Office of Personnel Management, Room interim regulations. Geographic provisions using ‘‘shall.’’
7H31, 1900 E Street, NW., Washington, conversion ensures that an employee We are also taking this opportunity to
DC 20415–8200, by FAX at (202) 606– whose official worksite is moved to a remove regulations that are obsolete. We
0824; or by e-mail at pay-performance- new location receives the same rate of are removing subpart C of part 531,
policy@opm.gov. pay as an employee at the same grade which dealt with special geographic
and step who was already stationed at adjustments for law enforcement
FOR FURTHER INFORMATION CONTACT:
the new location and who undergoes the officers (LEOs) under section 404 of the
Bryce Baker by telephone at (202) 606–
same pay actions. Federal Employees Pay Comparability
2858; by fax at (202) 606–0824; or by e- The Act also is intended to improve Act of 1990. All those special
mail at pay-performance- the operation and effectiveness of the geographic adjustments for LEOs have
policy@opm.gov. special rates program by allowing been surpassed by regular locality
SUPPLEMENTARY INFORMATION: The Office special rate determinations to be driven payments under 5 U.S.C. 5304. In
of Personnel Management (OPM) is by staffing considerations rather than addition, we are removing subpart G of
issuing interim regulations to revise the pay administration issues and by part 531, which dealt with ‘‘continued
rules that govern pay setting for Federal clarifying OPM’s authority to review rates’’—a form of saved rates that were
employees covered by the General and adjust special rates as it determines created under the old interim
Schedule (GS) pay system. The interim necessary. The Act also revises the geographic adjustment authority. For
regulations implement the amendments special rates authority in other respects. the few employees who may have an
made by section 301 of the Federal For example, the Act raises the pay existing continued rate above the
Workforce Flexibility Act of 2004 (Pub. limitation on special rates from the rate applicable rate range, the continued rate
L. 108–411, October 30, 2004), hereafter for level V of the Executive Schedule to will be converted to a retained rate
referred to as ‘‘the Act.’’ Section 301 the rate for level IV of the Executive under 5 U.S.C. 5363, as described in the
amended provisions in 5 U.S.C. chapter Schedule. The Act also allows agencies foregoing paragraph on pay retention
53 relating to the administration of to ‘‘opt out’’ of special rate schedules. changes.
special rates, locality rates, and retained The Act makes significant changes These interim regulations also include
rates. These amendments become related to pay retention under 5 U.S.C. conforming changes in other parts of
effective on the first day of the first pay 5363. Through an amendment to 5 OPM’s regulations, such as corrections
Federal Register / Vol. 70, No. 103 / Tuesday, May 31, 2005 / Rules and Regulations 31279
of regulatory references and revisions of when the employee’s official worksite is changes contained in the revised
the definition of ‘‘rate of basic pay.’’ changed to a location where different subpart F:
The remainder of this SUPPLEMENTARY pay schedules apply. This provision is • The definition of scheduled annual
INFORMATION reviews the significant implemented in 5 CFR 531.205. In rate of pay is revised to exclude any
changes made in the key affected parts addition, Public Law 108–411 amended retained rate. Based on amendments to
and subparts of the regulations. the pay retention law (5 U.S.C. 5363(c)) 5 U.S.C. 5302(8) and 5363, a retained
to provide that a reduction in an rate is no longer supplemented by
Special Rates locality payments. Instead, a retained
employee’s special rate as a result of a
We have revised and reorganized geographic conversion is not a basis for rate is a rate that is derived from an
OPM’s regulations on special rate pay retention. This provision is employee’s payable (highest) rate of
schedules for General Schedule implemented in 5 CFR 536.303(a). basic pay (including any locality
employees in part 530, subpart C. The House Report 108–733 (October 5, 2004) payment or special rate supplement)
revisions implement certain provisions stated that section 5363(c) was and compared to the highest applicable
in section 301 of Public Law 108–411 ‘‘intended to clarify that local special rate range for the employee’s position
and make other changes to clarify the rates are a Government tool to address (including a locality rate range or
rules governing these schedules. a local labor market problem, not an special rate range). (See later discussion
Following are the key provisions employee entitlement that employees of retained rates in the ‘‘Grade and Pay
contained in the revised subpart C: should be allowed to carry to another Retention’’ section of this
• A special rate is defined as area where there is no such problem’’ SUPPLEMENTARY INFORMATION.)
consisting of a base rate (i.e., the GS rate (page 19). This approach provides for • Section 531.608(b) makes clear that
or, if applicable, the law enforcement consistent treatment of special rates and a special rate employee is entitled to
officer (LEO) special base rate) and a locality rates for pay retention purposes. any applicable locality payment on the
special rate supplement. A special rate same basis as any other GS employee
House Report 108–733 (page 19) also
employee is entitled to the applicable (i.e., based on the employee’s
emphasized that the amendments to
GS rate or LEO special base rate for his underlying GS rate or LEO special base
section 5305 ‘‘would make clear that the
or her grade and step, just as any other rate); however, if the locality rate
Government has full authority to adjust
GS employee. A special rate employee’s exceeds the corresponding special rate,
or not to adjust special rate schedules
pay entitlement differs because of the the special rate entitlement is
based on staffing needs.’’ The House
special rate supplement. terminated.
Report explained that determinations • Section 531.609 clarifies that the
• The purposes for which a special
regarding special rate schedule geographic conversion principle applies
rate is basic pay are specified in
adjustments are made solely under to the conversion of an employee’s
regulation. In general, a special rate is
OPM’s authority in 5 U.S.C. 5305(d). locality rate when his or her official
basic pay for the same purposes as a
This means OPM may make worksite is changed to a new location
locality rate.
determinations regarding the adjustment
• An agency may choose to exclude where different pay schedules apply.
of special rate supplements based on its (This is consistent with the manner in
its employees from coverage under a
assessment of staffing needs, without which locality rates have always been
proposed or existing special rate
regard to the percentage increase treated.)
schedule.
• An employee is not entitled to a applied to GS rates. (Special rate • Section 531.610 lists new purposes
special rate if he or she is entitled to a employees receive the same adjustment for which a locality rate is considered
higher rate of basic pay under another in their underlying GS rate as other GS basic pay: (1) Applying GS pay
authority (e.g., a locality rate or retained employees. Thus, OPM’s discretion lies administration provisions to the extent
rate). in adjusting the special rate supplement, provided in part 531, subpart B; (2)
• A special rate may not exceed the which, for any given grade in a special applying pay administration provisions
rate for level IV of the Executive rate schedule, may be a fixed-dollar for prevailing rate employees that use a
Schedule. amount or a fixed-percentage increase.) GS rate of basic pay (except as otherwise
• At the time of a GS annual pay OPM may, at any time, conduct general provided in part 532); (3) applying grade
adjustment, a special rate employee’s or targeted reviews of existing special and pay retention provisions in 5 CFR
GS rate or LEO special base rate is rate schedules and make adjustments in part 536 (consistent with 5 U.S.C.
adjusted. OPM determines whether the special rate supplements as it deems 5361(4) and 5363, as amended); (4)
special rate supplement is adjusted and necessary. computing recruitment, relocation, and
the amount of any adjusted supplement. Section 530.309, ‘‘Miscellaneous retention incentives under 5 U.S.C. 5753
• Rules for converting an employee’s provisions,’’ is patterned after a parallel and 5754 (consistent with OPM’s
rate of basic pay upon establishment, section of miscellaneous provisions in authority under those amended sections
adjustment, or discontinuation of a the locality pay regulations at 5 CFR of law); and (5) computing certain
special rate schedule are specified in 531.611 (which were part of the former performance-based cash awards as a
subpart C. The conversion rules that locality pay regulations at 5 CFR percentage of basic pay (consistent with
apply to schedule adjustments 531.606). 5 U.S.C. 4505a, which was amended to
implement 5 U.S.C. 5305(f). Locality Rates eliminate the prohibition on using
Subpart C of part 530 does not contain locality rates to compute such awards).
all the pay-setting rules that apply to We have revised and reorganized We are inviting comments on whether
special rate employees. Parts 531 and OPM’s regulations in part 531, subpart the final regulations should make a
536 (dealing with basic pay F, governing locality-based change in the treatment of locality rates
administration and pay retention, comparability payments under 5 U.S.C. in computing danger pay allowances
respectively) also implement 5304. The revisions implement certain and post differentials. Since August
amendments to 5 U.S.C. 5305 made by provisions in section 301 of Public Law 2004, OPM regulations have provided
Public Law 108–411. For example, 108–411 and make other changes to that locality rates are considered basic
section 5305(i) requires that a special clarify the rules governing these pay in computing danger pay
rate undergo a geographic conversion payments. Following are the key allowances and post differentials in
foreign areas for which the State determining an employee’s official entitlements for the official worksite of
Department has authorized danger pay worksite that OPM proposed on January his or her permanent position.
allowances, as long as the employee’s 5, 2005, as part of a larger notice of We believe there are some compelling
official worksite is located in a locality proposed rulemaking (70 FR 1068). That arguments for changing the current
pay area (i.e., within the 48 contiguous proposal would add a new § 531.605 to policy regarding temporary promotions
States). (See 69 FR 47353, August 5, define the requirements for determining and reassignments to positions in a
2004.) However, locality rates are not an employee’s official duty station different location so that an employee’s
used in computing post differentials in (hereafter referred to as ‘‘official location-based pay entitlements are
other foreign areas or in nonforeign worksite’’) for the purpose of identifying based on the official worksite of the
areas. These interim regulations retain an employee’s location-based pay employee’s permanent position (unless
these existing policies. We note that this entitlements, including special rate the employee is receiving relocation
issue has limited scope, since supplements and locality payments. The benefits under 5 U.S.C. 5737). However,
employees receiving locality rates are proposed regulations also addressed since this interim regulation takes effect
eligible for post differentials only when official worksite determinations for upon publication, we are inviting
they are temporarily detailed (including employees temporarily working at other comments on this proposed policy
a work assignment while in temporary locations and teleworking from an change so that we can fully consider all
duty travel status) to a post differential alternative worksite. We received the relevant issues before making a
area for at least 42 consecutive days. By comments on this part of our proposal change. Any change in the final
law, locality pay does not apply to from four agencies, one employee regulations will take into account those
employees whose official worksite is union, and two individuals. comments.
outside the 48 contiguous States. (See 5 An agency felt that the determination The employee union and two
U.S.C. 5304(f).) of an employee’s official worksite for individuals felt that official worksite
Under these interim regulations, in pay purposes should be made by determinations for pay purposes should
post differential areas (foreign and individual agencies and not be subject be based on where the employee works
nonforeign) where danger pay to Governmentwide regulations. We do most or the majority of the time. The
allowances do not apply, special rates not agree. The regulations provide
commenters were particularly
are considered basic pay in computing agencies a degree of flexibility in
concerned that § 531.605(d) of the
post differentials, while locality rates determining an employee’s official
regulations would require agencies to
are not. We invite comments on whether worksite. However, providing certain
designate the regular or reporting
this difference in treatment is specific criteria in regulations is
worksite as the employee’s official
appropriate. essential to ensure that agencies pay
We also invite comments on whether worksite if the employee works at that
employees fairly and consistently,
we should continue to have a different site at least once a week. An agency
especially in situations such as telework
policy for danger pay areas than for requested that the regulations clarify
arrangements.
other post differential areas (foreign and An agency recommended that that teleworkers must work at the
nonforeign). Should we maintain the § 531.605 be revised to permit an agency reporting worksite at least once a week
existing policy of using detailed to leave the official worksite unchanged on a regular and recurring schedule and
employees’ locality rates in computing during the temporary assignment of an for a full workday.
danger pay allowances and post employee to a position of record in a We do not agree with using a
differentials in danger pay areas? different location when relocation majority-of-time criterion instead of a
Should we extend this policy to other expenses under 5 U.S.C. 5737 are not once-a-week criterion for determining
post differential areas? If a policy authorized. The agency correctly stated the official worksite of employees for
determination is made to bar the use of that under current policy, when an pay purposes. The once-a-week
locality rates in computing danger pay employee is temporarily promoted or requirement in § 531.605(d) applies only
allowances or post differentials in all reassigned (not detailed) to a position in to employees working under telework
areas or to continue to bar the use of a different geographic location, the arrangements, which we believe require
locality pay in computing post position to which temporarily promoted special rules. Under the interim
differentials in non-danger pay areas, or reassigned must be the employee’s regulations, the regular worksite will
should we also change the policy position of record for pay purposes. remain the teleworker’s official
allowing detailed employees’ special (Generally, if detailed, an employee is worksite, unless the employee does not
rates to be used in such computations so paid based on his or her permanent regularly spend some time at the regular
that locality rates and special rates are position of record, including the worksite. We believe the once-a-week
administered consistently? Commenters location-based pay entitlements requirement is a reasonable standard. In
should provide specific reasons in associated with the official worksite of addition, requiring agencies to track the
support of their position. the permanent position.) Current policy number of hours an employee works at
Other significant clarifying changes in provides that the employee must receive different worksites each week and
subpart F of part 531 include the the location-based pay entitlements whether the employee worked a full or
following: based on the official worksite of the partial workday at the regular worksite
• In § 531.607(b), we address the temporary position of record. The would be administratively burdensome
special hourly rate computations that agency believes that if the length and/ for agencies and could result in frequent
apply to firefighters covered by 5 CFR or circumstances of the temporary changes in an employee’s official
part 550, subpart M. promotion or reassignment do not worksite and locality or other pay rates.
• Throughout subpart F, we replace warrant payment of relocation benefits However, we have revised the proposed
the term official duty station with under 5 U.S.C. 5737, agencies should be regulations to provide that the
official worksite. (See especially able to temporarily promote or reassign teleworker must report to the regular
§§ 531.602 and 531.605.) the employee to the new position of worksite at least once a week on a
In addition to using the new term record, but leave the official worksite regular and recurring basis in order for
official worksite, these interim unchanged. Thus, the employee would the regular worksite to be the
regulations also implement changes in receive the location-based pay employee’s official worksite.
An agency recommended adding an Agencies should periodically reevaluate • Section 531.206 establishes the
exception to § 531.605(d) to provide the official worksite of an employee order of precedence for processing
agencies with the option of designating under a temporary telework simultaneous pay actions. In particular,
the regular worksite as the official arrangement. this section shows that geographic
worksite of a teleworker provided the An agency asked for clarification on conversions must be processed after any
telework site is within the commuting how to determine the official worksite general pay adjustment (related to
area of the regular worksite. The agency of an employee who normally teleworks changes in pay schedules) but before
was concerned about applying the at an alternative site full time when that any other pay action (e.g., a promotion).
proposed rules to a number of its employee is assigned to work in a • Section 531.212 includes new
teleworkers who work at various different location on a temporary basis. provisions related to the authority to set
locations other than their established Under § 531.605 of these interim a newly appointed employee’s rate of
official worksite. regulations, agencies have the flexibility basic pay above the minimum of the rate
The interim regulations revise to change such an employee’s official range based on superior qualifications
§ 531.605(d) to provide that an worksite to the location of a temporary or special agency needs. In particular,
employee under a telework agreement work assignment or to keep the we make clear that this authority is used
whose work location varies on a daily employee’s official worksite at the to set an employee’s ‘‘payable’’ or
basis need not report at least once a location of the telework arrangement, highest rate of basic pay, including
week to the established official worksite depending on the nature of the consideration of any applicable locality
of the employee’s position of record assignment. Agencies may need to rate or special rate.
(where the employee’s work activities reevaluate such decisions periodically if • Sections 531.213 through 531.215
are based) as long as the employee is the time spent on such temporary work establish rules for setting pay upon
performing work within the locality pay assignments is extended. Agencies also lateral reassignment or transfer,
area for that regular official worksite at may cancel the telework agreement in promotion, or demotion. Promotions
least once a week on a regular and such situations. and demotions must be processed after
recurring basis. The interim regulations Finally, several commenters felt that applying the geographic conversion
provide that if an employee covered by regulations should address the tax, rule, if applicable, and using the
a telework agreement does not report to travel, reduction in force, and converted payable rate of basic pay as
the regular official worksite or an bargaining unit coverage implications of the employee’s existing rate
alternative worksite in the same locality making official worksite determinations. immediately before the promotion or
pay area at least once a week, the Since the official worksite regulations demotion. Locality rates and special
employee’s official worksite is the apply only when determining an rates are considered rates of basic pay in
location of the telework site (except as employee’s location-based pay applying these rules.
provided in § 531.605(d)(3)). (Similar entitlements, these comments are • Section 531.216 modifies the rules
provisions apply in determining outside the scope of these regulations. regarding setting pay for employees
whether an employee’s official worksite moving from a Department of Defense or
General Schedule Basic Pay Setting Coast Guard nonappropriated fund
is covered by a special rate schedule or
a nonforeign area cost-of-living We have revised and reorganized instrumentality (NAFI) to a GS position
allowance or post differential. See the OPM’s regulations on GS rate of basic to take into account locality rates. Also,
definition of ‘‘official worksite’’ in pay determinations in part 531, subpart the NAFI maximum payable rate rule is
§§ 530.302 and 591.201.) B. The revisions implement certain revised to take into account the
An agency requested clarification as provisions in section 301 of Public Law geographic location where the NAFI
to the circumstances in which it would 108–411 and make other changes to highest previous rate was earned,
be appropriate for an agency to approve clarify the GS pay-setting rules. consistent with the rules governing
a temporary exception to allow a regular Following are the key changes geographic conversion.
worksite to be the official worksite for contained in the revised subpart B: • Section 531.221 modifies the GS
pay purposes when a teleworker does • Additional terms are defined in the maximum payable rate rule, which
not commute to the regular worksite at new § 531.203, including highest allows an agency to set an employee’s
least once a week. Another commenter applicable rate range, official worksite, rate of pay based on his or her ‘‘highest
requested guidance on when agencies payable rate, pay schedule, position of previous rate’’ in a Federal civilian job.
should reevaluate the official worksite record, and special rate supplement. The modified GS maximum payable rate
determination in such temporary Also, the term rate of basic pay is rule now takes into account locality
telework arrangements. redefined to include a locality rate. rates when the employee’s highest
Section 531.605(d)(3) of these interim (Under the former regulations, locality previous rate was based on a special rate
regulations includes an example of an rates were ignored in applying the rules or on a rate earned in a non-GS pay
appropriate situation in which an in subpart B.) system. (Under the interim regulations,
agency may make a temporary exception • Section 531.204 describes the if an employee’s highest previous rate
to the once-a-week requirement— relationship among various types of was earned in a GS position, the
namely, when an employee is rates of basic pay—including GS rates, maximum payable rate rule generally is
recovering from an injury or medical LEO special base rates, locality rates, applied using the underlying GS rate (or
condition that prevents the employee and special rates. LEO special base rate), which avoids the
from commuting to the regular worksite. • Section 531.205 sets forth the need to apply the geographic conversion
Other examples include temporary geographic conversion rule, which is rule.)
emergency situations at the regular used to convert an employee’s rate(s) of • Sections 531.241 through 531.247
worksite or a critical project that basic pay when his or her official consolidate various special rules for
requires the employee to telework worksite is changed to a new location ‘‘GM employees’’i.e., GS employees who
temporarily. The interim regulations where different pay schedules apply. were formerly covered by the
allow an authorized agency official to (This section implements the statutory Performance Management and
determine the temporary situations in geographic conversion provisions in 5 Recognition System for managers and
which an exception may be applied. U.S.C. 5305(i), 5334(g), and 5363(c).) supervisors at grades GS–13, 14, and 15
and who may have rates of basic pay will not have higher pay simply because series) which would cause the employee
between the established GS step rates. he or she came from an area where to have a different pay schedule and
Consistent with the changes made by higher pay rates applied, while also different highest applicable rate range at
Public Law 108–411 for other GS ensuring consistency between the the higher grade. For example, an
employees, GM employees’ locality treatment of locality rates and special occupational series change in
rates will be taken into account in rates’’ (page 20). conjunction with a promotion could
applying the various pay-setting rules. If The geographic conversion rule will result in an employee becoming covered
a GM employee is entitled to a special be particularly significant in terms of by a special rate schedule at the higher
rate, the special rate is computed by how it affects an employee who is grade. The standard method would not
adding the applicable special rate promoted to a position at a different provide the employee with any increase
supplement on top of the GM official worksite, where different pay in pay based on movement into a
employee’s GS rate. (When pay schedules would apply to the special rate category. In contrast, the
schedules are adjusted, the GM employee’s position of record before alternate method would apply the
employee’s underlying GS rate must be promotion. After applying any promotion rule without regard to the
redetermined using the relative simultaneous general pay adjustment (as new special rate schedule and then
position-in-range methodology described in § 531.206), the agency must would laterally convert the resulting
presented in § 531.244, which is the first convert the employee’s rate(s) of rate to the corresponding rate on the
same basic methodology used in OPM’s basic pay to the applicable pay special rate schedule, which would
former regulations.) schedule(s) for the new official provide an increase reflecting the
The use of locality rates in applying worksite, based on the employee’s difference between the special rate
the GS pay-setting rules, along with the position of record (including grade) and schedule and the former pay schedule.
use of the geographic conversion rule step (or rate) before promotion. The This alternate method is consistent with
when an employee’s official worksite is resulting rate(s) of basic pay must be the method found in the former special
changed to a new location, represent a treated as the employee’s existing rate(s) rate regulations at 5 CFR 530.306(f),
significant change in GS pay in processing the promotion action. which dealt with the promotion of an
administration. The geographic (However, if the employee is employee from a position not covered
conversion rule requires that an simultaneously entitled to a within- by a special rate schedule to a position
employee’s rate(s) of basic pay must first grade increase or quality step increase covered by a special rate schedule.
be converted to a corresponding rate(s) on the same date as the promotion, that However, the alternate method also
on the pay schedule that would apply increase would be applied before applies in other situations, such as
to the employee’s existing position of processing the promotion.) when an employee moves from a lower-
record if he or she were stationed at the Once the geographic conversion rule paying special rate schedule to a higher-
new official worksite. No simultaneous has been applied, the agency must paying special rate schedule.
change in the employee’s position of follow the promotion rule in § 531.214. The objective of the alternate method
record (defined as including grade, The standard method of applying the is to treat an employee who is being
occupational series, agency, law promotion rule consists of the following directly promoted to a higher pay
enforcement officer status, and any steps: schedule the same as a similarly
other element that affects coverage (1) Find the employee’s existing step situated employee who is promoted and
under a pay schedule, other than the (or rate) in the GS rate range (or LEO then later (in a separate action)
official worksite) or any simultaneous special base rate range, if applicable) reassigned to a position covered by the
pay action (other than a general pay and increase that rate by two GS within- higher pay schedule. The alternate
adjustment) is considered until after the grade increases. method mandatorily applies in lieu of
geographic conversion. The converted (2) Determine the payable (highest) the standard method whenever it
rate(s) of basic pay resulting from the rate of basic pay for the step or rate produces a higher payable rate upon
geographic conversion must be treated determined in paragraph (1) by applying promotion. In addition, an agency may,
as the employee’s existing rate(s) of any applicable locality payment or at its sole discretion, use the alternate
basic pay in applying the next special rate supplement. method when it produces a lower
simultaneous pay action in the order of (3) Identify the highest applicable rate payable rate upon promotion. For
precedence. A reduction in an range for the employee’s position of example, if an employee is moving to a
employee’s payable rate of basic pay as record after promotion and find the position in a different career field, an
a result of a geographic conversion is lowest step rate in that range that equals agency may determine that it is not
not a basis for pay retention, even if the or exceeds the rate determined in appropriate to allow the employee’s pay
move is involuntary. This does not paragraph (2). This is the employee’s upon promotion to be set based on a
represent a change in treatment of payable rate of basic pay upon special rate for the employee’s former
locality rates, but does represent a promotion. job.
change in the treatment of special rates. The interim regulations provide for an The alternate method of applying the
The legislative history of Public Law alternate method of applying the promotion rules departs from the
108–411 shows that a major objective of promotion rule which involves (1) standard method after the step of
the geographic conversion rule was to applying the promotion rule using the determining the payable (highest) rate of
provide the same pay result that would pay schedules that would apply to the basic pay at the lower (pre-promotion)
have occurred if the employee in employee’s position of record if only the grade that reflects an increase of two
question had moved laterally without a employee’s grade were changed and (2) within-grade increases. Under the
change in position to the new converting the resulting rate to the pay alternate method, that payable rate must
geographic location and then underwent schedules for the actual position of be compared to the highest applicable
a position change. House Report 108– record after promotion. This method rate range for the employee’s grade after
733 (October 5, 2004) stated that the yields a different result from the promotion based on consideration of
geographic conversion rule ‘‘would standard method only when there is a pay schedules that apply to the
make it clear that an employee with the change in the employee’s position of employee’s position of record before
same work history as another employee record (e.g., change in occupational promotion. Any pay schedule that
applies solely to the employee’s (dealing with the superior qualifications Public Law 108–411 and make other
position of record after promotion and special needs pay-setting authority) changes to clarify the rules governing
would be ignored. The employee’s rate include some policy clarifications and GS within-grade increases.
of basic pay is set at the lowest step rate changes beyond the immediate We have revised subpart D to exclude
in the highest applicable rate range that requirements of Public Law 108–411. consideration of special rates. For the
exceeds the specified rate. Then the For example, the interim regulations purpose of subpart D, the term rate of
employee is converted to the new define what is meant by superior basic pay is defined as a GS base rate
highest applicable rate range (reflecting qualifications and special needs so that or an LEO special base rate. Subpart D
any new pay schedule that applies after agencies better understand how this pay
deals with adjusting an employee’s base
promotion) by setting the payable rate at flexibility may be used. The interim
rate in connection with within-grade
the corresponding step rate in that regulations also expand and clarify the
increases. Any applicable locality
range. exceptions to the 90-day break-in-
payment or special rate supplement is
To aid in understanding the alternate service requirement to allow greater
access to the superior qualifications and paid on top of the base rate.
method, we provide an example using
2005 pay schedules. In this example, we special needs pay-setting authority. For We have revised the definition of
are assuming that a GS–7, step 7, human example, the interim regulations equivalent increase in § 531.403 and
resources specialist (occupational series consolidate several of the former related regulations in § 531.407. We
GS–201) stationed in Atlanta, Georgia, is exceptions into a broader exception have defined equivalent increase as an
being promoted to a GS–9 information covering any temporary or time-limited increase in an employee’s rate of basic
technology specialist position appointment in the competitive or pay, or an opportunity for such an
(occupational series GS–2210) in excepted service. If an individual was increase under non-GS pay systems,
Washington, DC. employed under any competitive or resulting from certain events or actions
Step A—Apply the geographic conversion
excepted service temporary listed in § 531.407. The interim
rule to determine the rates of basic pay for appointment during the 90 days regulations no longer require that
the GS–7, step 7, position in Washington, DC. immediately preceding an appointment agencies add up the dollar value of
Based on the GS–7 position before promotion to a GS position, the agency could use multiple increases under non-GS pay
(including the GS–201 occupational series), the superior qualifications and special systems in determining when an
the pay schedules applicable to the employee needs pay-setting authority. The interim equivalent increase occurred, which
in Washington, DC, would be the General regulations also expand the elements was required under the former
Schedule and the locality rate schedule that can be considered in justifying the
applicable in Washington, DC (Salary Table regulations at § 531.407(a) and (b). The
2005–DCB).
higher rate, allowing the use of factors new events-based approach avoids the
Step B—Using the underlying General other than existing pay, consistent with need to consider locality payments,
Schedule, increase the GS–7, step 7, rate by 5 U.S.C. 5333. special rate supplements, or other
two within-grade increases, which produces We are inviting comments regarding a similar supplements or to apply
the GS–7, step 9, rate ($38,719). proposal to establish a regulatory time geographic conversion rules in making
Step C—The payable (highest) rate of basic limit on the period of time from which equivalent increase determinations. We
pay for GS–7, step 9, is the corresponding an employee’s highest previous rate may
GS–7, step 9, locality rate in Washington, DC note that the former regulations at
be drawn. Consistent with current § 531.407(d) had provided that a zero
($44,906). regulations, the interim regulations in
Step D—If the employee were promoted to merit increase under the former
a GS–9 position in the GS–201 human § 531.221 (dealing with the maximum Performance Management Recognition
resources management series, the highest payable rate rule) establish no time limit System would be treated as an
applicable rate range for that GS–9 position regarding how long ago a highest equivalent increase, which is consistent
after promotion would be the GS–9 locality previous rate was earned. We believe it with the events-based approach.
rate range in Washington, DC (15.98 percent would be reasonable to limit
above GS rates). The GS–9, step 3, locality consideration of rates of pay earned Grade and Pay Retention
rate ($46,255) is the lowest step rate in that during a recent time period (e.g., 5 or 10
range that equals or exceeds the GS–7, step years before the action in question). We have revised and reorganized
9, locality rate from step C. OPM’s regulations on grade and pay
Step E—Convert the GS–9, step 3, locality Even under the current regulations, an
agency has discretion to set an retention in part 536. The revisions
rate to the higher GS–9, step 3, special rate
that applies to the employee’s GS–2210 employee’s pay at any rate equal to or implement certain provisions in section
information technology specialist position less than the maximum payable rate; 301 of Public Law 108–411, incorporate
after promotion. The applicable special rate thus, an agency could take into account changes OPM previously issued as
schedule is Table 999C. The GS–9, step 3, the age of an employee’s highest proposed regulations, and make other
special rate on that schedule is the payable previous rate in exercising that changes to clarify the rules governing
rate of basic pay upon promotion ($51,847). discretion. The proposed time limit the grade and pay retention authorities
(At GS–9, a special rate in Table 999C is 30 under 5 U.S.C. chapter 53, subchapter
would reduce the administrative burden
percent above the corresponding GS rate.) VI. We have reorganized part 536 into
Step F—The standard method would have associated with identifying an
employee’s highest previous rate over four subparts that provide (1) general
compared the GS–7, step 9, locality rate
directly to the higher GS–9 range of special an entire career and comparing the provisions relating to grade and pay
rates and produced a rate of GS–9, step 1 highest previous rate with pay retention, (2) rules for grade retention,
($48,607). Since the rate produced by the schedules in effect many years ago. (3) rules for pay retention, and (4)
alternate method (GS–9, step 3, or $51,847) appeals and miscellaneous provisions.
is greater than the rate produced by the General Schedule Within-Grade Except for correcting citations and
standard method, the result of the alternate Increases moving former § 536.308 to the grade
method is used. We have revised OPM’s regulations retention subpart, the appeals and
In addition to changes in subpart B of on within-grade increases for General miscellaneous provisions formerly
part 531 that relate directly to the Schedule employees in part 531, contained in 5 CFR part 536, subpart C,
changes made by Public Law 108–411, subpart D. The revisions implement are not revised by this interim
the interim regulations in § 531.212 certain provisions in section 301 of regulation. (See redesignated subpart D.)
The following new provisions in the references in §§ 831.503(b)(3)(iv) and new regulations provide that an eligible
revised part 536 implement section 301 842.206(c)(3)(iv). employee is entitled to a retained rate if
of Public Law 108–411: • Section 536.206 modifies the rules his or her rate of basic pay (including
• Additional terms are defined in the for determining an employee’s rate of any locality payment or special rate, but
new § 536.103, including highest basic pay when an employee becomes after geographic conversion under
applicable rate range, official worksite, entitled to grade retention or becomes § 536.303(a)) exceeds the maximum rate
payable rate, pay schedule, position of covered by different pay schedules of the highest applicable rate range for
record, and rate range. Also, the term during a period of grade retention and the new position or geographic area.
rate of basic pay is redefined to include the order for processing such pay The retained rate will equal the
a locality rate, consistent with 5 U.S.C. actions. If such an employee’s rate of employee’s former rate of basic pay
5361(4). (Under the former regulations, basic pay otherwise would be reduced (including any locality payment or
locality rates were ignored when upon placement in a lower-paying pay special rate). This section implements 5
applying the rules in part 536.) The schedule (excluding a reduction that U.S.C. 5363(b)(1).
definition of representative rate is results from a geographic conversion), • Section 536.305 modifies the rules
redefined as described later in this the employee is eligible for pay for adjusting a retained rate at the time
Supplementary Information. retention under 5 U.S.C. 5363 and 5 of a pay schedule adjustment.
• Sections 536.206, 536.301, 536.302, CFR part 536, subpart C, to the same Consistent with 5 U.S.C. 5363(b)(2)(B),
536.303, 536.304, 536.305, and 536.308 extent as any other employee. Under the when a pay schedule adjustment causes
incorporate the geographic conversion former regulations, a rate above the the maximum rate of the highest
rule into the grade and pay retention maximum rate that resulted from the applicable rate range for an employee’s
regulations, where it is used to convert application of the grade retention rules position to increase, the employee’s
a rate(s) of basic pay when an was not treated as a retained rate under retained rate is increased by 50 percent
employee’s official worksite is changed 5 U.S.C. 5363. However, consistent with of the increase in that maximum rate. If
to a new location where different pay section 301(d)(2) of Public Law 108– an employee’s retained rate would fall
411, and our regulatory authority in 5 below the maximum rate after the 50
schedules apply. The converted rate
U.S.C. 5365, we have revised the grade percent increase, the employee’s
resulting from geographic conversion is
retention regulations to provide that the payable rate is set at that maximum rate
treated as the employee’s existing rate in
normal pay retention rules apply to and pay retention ceases to apply. The
applying the pay retention provisions.
employees with a retained grade. interim regulations make clear that,
(These provisions implement the • Sections 536.301 and 536.302 consistent with 5 U.S.C. 5363(c), the
statutory geographic conversion clarify the situations in which an agency geographic conversion rule in
provisions in 5 U.S.C. 5305(i), 5334(g), must provide pay retention to an § 536.303(b) applies in lieu of the 50-
and 5363(c).) employee and the situations in which percent adjustment rule when a pay
• Section 536.105 clarifies when an agency may apply optional pay schedule change is caused by a change
agencies must compare the grades of retention (after application of in the location of the employee’s official
positions in different pay systems using geographic conversion rules under worksite. The interim regulations also
representative rates under the grade § 536.303(a)). We also removed the make clear that the 50-percent
retention rules. This section also requirement in former § 536.104(a)(5) adjustment rule does not apply if a pay
provides that, for positions located at that pay retention apply to an employee schedule change is caused by a change
different official worksites where whose rate of basic pay otherwise would in the employee’s position of record.
different pay schedules apply, the be reduced as a result of placement in • Section 536.304(b)(3) provides that,
geographic conversion rules must be a lower wage area. These changes are when initially established, a retained
applied before comparing the consistent with 5 U.S.C. 5363(c)(2), rate may not exceed (1) 150 percent of
representative rates. In addition, the which provides that a reduction in an the maximum payable rate of basic pay
definition of representative rate in employee’s rate of basic pay resulting of the highest applicable rate range for
§ 536.103 is revised to mean the payable from a geographic conversion is not a the grade of the employee’s position of
(highest) rate of basic pay (including basis for entitlement to pay retention record or (2) the rate for level IV of the
any locality payment or special rate under 5 U.S.C. 5363. Executive Schedule. Section 536.306
supplement) for the specified point in • Section 536.301 also provides that provides that at no time may a retained
the range (e.g., GS step 4 ). The an agency must provide pay retention rate exceed the rate for level IV of the
definition also provides that in under part 536, subpart C, to an Executive Schedule and that if an
comparing grades or work levels when employee whose rate of basic pay employee’s retained rate is limited by
one of the grades or work levels is not otherwise would be reduced (after the level IV rate, the employee’s higher,
under a covered pay system, the geographic conversion) as a result of the uncapped rate is not maintained or used
representative rates that must be application of the promotion rule in 5 for any purpose. This level IV limitation
compared are the maximum payable U.S.C. 5334(b) and 5 CFR 531.214 when is consistent with the level IV limit on
rates of basic pay (including any locality the employee’s payable rate of basic pay locality rates under 5 U.S.C. 5304(g)(1)
payment, special rate supplement, or after promotion exceeds the maximum and special rates under 5 U.S.C.
similar payment) that apply to the grade rate of basic pay of the new rate range. 5305(a)(1) for General Schedule
or level of each position. (The former Under the former regulations, a rate of employees and the level IV limitation
regulations provided agencies with the basic pay above the maximum rate that on rates for prevailing rate employees
flexibility to set the representative rate resulted from application of the under 5 U.S.C. 5373. Under amended 5
for positions under noncovered pay promotion rule was not treated as a U.S.C. 5365(b), OPM is authorized to
systems.) This revised definition of retained rate under 5 U.S.C. 5363 and 5 establish limitations on the application
representative rate also must be used for CFR part 536. This change is required of pay retention provisions for
making severance pay and discontinued by an amendment to 5 U.S.C. 5334(b). employees in noncovered pay systems.
service retirement reasonable offer • Section 536.304 modifies the rules • Section 536.307 provides the
determinations. See the definition of for determining an employee’s pay purposes for which a retained rate is
reasonable offer in § 550.703 and the retention entitlement. In particular, the basic pay, consistent with 5 U.S.C.
5363(d). A retained rate is basic pay for (i.e., not provide the normal 50 percent system to a position under a covered
many of the same purposes as a special pay adjustment under former 5 CFR pay system. Employees entitled to grade
rate or a locality rate. When a retained 536.205(c)); (2) freeze the retained rate retention immediately prior to the
rate is not basic pay, the maximum rate of an employee who moves from a effective date of these regulations as a
of basic pay for the employee’s grade noncovered pay system to a covered pay result of movement from a noncovered
must be used in place of the retained system and who receives a rate in excess pay system to a covered pay system will
rate (e.g., for computing percentage- of the maximum rate applicable to the remain entitled to grade retention until
based awards under 5 CFR part 451 and covered pay system; and (3) prohibit the one of the terminating conditions in
recruitment, relocation, and retention application of grade retention to any § 536.208 applies.
incentives under 5 CFR part 575, employee who moves from a The revised part 536 contains the
subparts A, B, and C). noncovered pay system. following additional significant
• Section 536.309 provides the rules We received comments from an clarifying and conforming changes
for converting retained rates in effect on agency and an employee association on regarding the coverage, eligibility, and
April 30, 2005, to a retained rate under the proposed regulations. The agency applicability of grade and pay retention:
new 5 U.S.C. 5363 and 5 CFR part 536, requested that OPM amend the • Section 536.102 merges the
subpart C. This section covers an regulations to provide agencies with the coverage, applicability, and
employee who on April 30, 2005, was administrative authority to establish a exclusionary provisions from the former
receiving (1) a retained rate under 5 pay adjustment mechanism for an regulations into a single coverage
U.S.C. 5363, (2) a rate paid under 5 employee on pay retention under a section that clarifies the employees
U.S.C. 5334(b) or 5362 that was greater noncovered pay system as consistent as covered by and excluded from the
than the maximum rate of basic pay possible with the General Schedule regulations, including the coverage of
payable for the grade of the employee’s mechanism in the former 5 CFR employees in Department of Defense
position of record, or (3) a continued 536.205(c). The association suggested and Coast Guard nonappropriated fund
rate of pay under 5 CFR part 531, that we modify the regulations to allow instrumentality (NAFI) positions. (See
subparts C or G, that was greater than such an employee to receive the also new § 536.202(d) for information on
the maximum rate of basic pay payable reduced pay adjustment of 50 percent, NAFI coverage.)
for the grade of the employee’s position. as long as the rate of pay does not • Section 536.103 adds new
Effective on May 1, 2005, the exceed the pay level previously held, or definitions of covered pay system
employee’s new retained rate must the maximum rate of the new position, (consistent with the definition of
equal his or her previous retained rate, whichever is greater. covered pay schedule under 5 U.S.C.
including any applicable locality We revisited the proposal to provide 5361), employee, General Schedule,
payment under 5 U.S.C. 5304. agencies with the authority to apply pay management action, and prevailing rate
On May 25, 2000, OPM published retention provisions to employees employee and revises the definitions of
proposed changes in part 536 (65 FR moving to or within noncovered pay reduced in grade or pay at the
33785) regarding the applicability of systems and have decided not to employee’s request (formerly demotion
grade and pay retention to employees include this authority in the revised part at an employee’s request), reduced in
moving within and between covered 536. Agencies may continue to apply grade or pay for personal cause
pay schedules (hereafter referred to as pay retention provisions at their (formerly demotion for personal cause),
‘‘covered pay systems’’). Under 5 U.S.C. discretion to employees moving from a temporary promotion, and temporary
5361, a covered pay system includes the noncovered pay system to a covered pay reassignment to clarify coverage and
General Schedule; a prevailing rate system. See new § 536.102(a). eligibility provisions.
schedule under 5 U.S.C. chapter 53, The association also objected to our • Section 536.201 clarifies the
subchapter IV; or a special occupational proposal to freeze the retained rates of conditions under which a movement to
pay system under 5 U.S.C. chapter 53, employees who move from a a lower grade is considered to be a
subchapter IX. Consistent with the grade noncovered pay system to a covered pay result of reduction in force (RIF)
and pay retention statute, the former system and who receive a retained rate procedures or a reclassification process
regulations provided grade and pay in excess of the maximum rate for grade retention purposes, consistent
retention benefits for employees moving applicable to the covered pay system. with the guidance in the former Federal
between positions within a covered pay We revisited this issue and have Personnel Manual.
system and between positions under decided not to include this proposal in • Section 536.203 eliminates the
different covered pay systems. In the revised part 536. The revised part requirement that the 52 weeks of service
addition, OPM used its regulatory 536 provides that employees who move needed for optional grade retention
authority under 5 U.S.C. 5365 to from noncovered pay systems to eligibility in RIF situations must be in
provide agencies with the discretionary covered pay systems and receive a an agency as defined in 5 U.S.C. 5102,
authority in the former regulations to retained rate are entitled to the normal but requires that such service be under
apply grade and pay retention 50 percent pay adjustment under new a covered pay system. This change is
provisions to employees moving from § 536.305. (Note that such retained rates consistent with the new rule in
positions not under a covered pay are subject to the limitation under new § 536.102(d) barring agencies from
system to positions under a covered pay § 536.306.) providing grade retention to employees
system. These interim regulations retain the moving from a noncovered pay system
In the regulations issued on May 25, proposal that prohibits agencies from to a covered pay system.
2000, we proposed to (1) provide applying grade retention to an employee • Section 536.205 clarifies that an
agencies with the discretionary who moves into a covered pay system employee with a retained grade also
authority to apply pay retention from a noncovered pay system. See new retains the pay system associated with
provisions to employees moving to or exclusion in § 536.102(d). Accordingly, that retained grade, even if the
within noncovered pay systems who we are removing the rule in former employee’s actual position is in a
would otherwise suffer a reduction in § 536.203(b) for determining a retained different covered pay system.
pay as a result of a management action grade for an employee who moves from • Sections 536.207, 536.208, and
and to freeze any resulting retained rate a position not under a covered pay 536.308 provide that an employee loses
eligibility for or entitlement to grade position change that caused the awards; Disability benefits; Firefighters;
and pay retention upon movement to a employee to become covered by a new Freedom of information; Government
position not under a covered pay pay schedule. employees; Hospitals; Income taxes;
system. Other changes in § 359.705 are Intergovernmental relations; Law
clarifications. For example, we have enforcement officers; Pensions;
SES Pay Retention
clarified that a saved rate terminates Reporting and recordkeeping
We have revised OPM’s regulations when an employee becomes entitled to requirements; Research; Retirement;
on establishing, adjusting, and a higher rate of basic pay—e.g., when Students; Travel and transportation
terminating saved rates for former the 50-percent adjustment would cause expenses; Wages.
members of the Senior Executive the saved rate to fall below the range Office of Personnel Management.
Service (SES) who are guaranteed maximum and the employee’s pay is set
placement in a position covered by Dan G. Blair,
at the range maximum.
another pay system (e.g., the General Acting Director.
Schedule pay system), as provided in Waiver of Notice of Proposed ■ For the reasons stated in the preamble,
subpart G of part 359. Under our broad Rulemaking and Delayed Effective Date OPM is amending parts 294, 359, 362,
regulatory authority in 5 U.S.C. 3596, Pursuant to 5 U.S.C. 553(b)(3)(B), I 451, 530, 531, 532, 534, 536, 550, 591,
we are revising § 359.705 to make find that good cause exists for waiving 630, 831, and 842 of title 5 of the Code
changes that are consistent with (1) the the general notice of proposed of Federal Regulations as follows:
changes made in the pay retention rulemaking. Also, pursuant to 5 U.S.C.
provisions in part 536 in implementing 553(d)(3), I find that good cause exists PART 294—AVAILABILITY OF
section 301 of Public Law 108–411 and for making this rule effective in less OFFICIAL INFORMATION
(2) congressional intent as reflected in than 30 days. These interim regulations ■ 1. The authority citation for part 294 is
uncodified section 301(d)(2) of that Act. implement section 301 of Public Law revised to read as follows:
The significant changes made in the 108–411, which became effective on
interim regulations are as follows: Authority: 5 U.S.C. 552, Freedom of
May 1, 2005. Thus, these interim Information Act, Pub. L. 92–502, as amended
• Section 359.705(c) provides that an regulations are necessarily effective by the Freedom of Information Reform Act of
SES saved rate may not be retroactive to May 1, 2005. Waiver of the 1986, Pub. L. 99–570, and E.O. 12600, 52 FR
supplemented by any locality payment requirement for proposed rulemaking 23781, 3 CFR, 1987 Comp., p. 235.
or other supplement. With the and making the effective date less than
amendment of 5 U.S.C. 5302(8), locality 30 days after publication are necessary Subpart D—Cross References
pay is no longer paid on top of any kind to ensure timely implementation of the
of retained or saved rate. § 294.401 [Amended]
law as intended by Congress. To delay
• Section 359.705(g) provides for implementation of these regulations by ■ 2. Amend § 294.401 by removing the
conversion of any existing locality- imposing a general notice of proposed reference ‘‘536.307’’ and adding in its
adjusted saved rate to a new saved rate rulemaking or an additional 30-day place ‘‘536.405’’.
of equal value on May 1, 2005. Without implementation requirement would be
such a conversion, employees might contrary to the public interest of good PART 359—REMOVAL FROM THE
suffer a reduction in pay under the new governance. It would leave Federal SENIOR EXECUTIVE SERVICE;
rules. The saved rate will be compared agencies without regulations, required GUARANTEED PLACEMENT IN OTHER
to the highest applicable rate range by law, directing those agencies in PERSONNEL SYSTEMS
(including a locality rate range or implementing complex and extensive
special rate range) for the employee’s ■ 3. The authority citation for part 359
pay administration rules. Delay in continues to read as follows:
position of record. implementation would prevent uniform
• Section 359.705(b) provides that, in Authority: 5 U.S.C. 1302 and 3596, unless
and consistent application of the new
determining the amount of a saved rate, otherwise noted.
pay administration rules. The public
an agency must take into account any
and the Federal workforce will be Subpart G—Guaranteed Placement
locality rate or special rate (1) currently
benefited by timely implementation of
payable for the GS position in which he
these regulations. Comments are being ■ 4. Revise § 359.705 to read as follows:
or she is placed upon removal from the
solicited which will assist OPM in
SES and (2) currently payable for the GS § 359.705 Pay.
issuing final regulations.
position held before placement in the (a) An appointee placed under this
SES. E.O. 12866, Regulatory Review subpart in a position outside the SES (in
• Section 359.705(d) provides that the This rule has been reviewed by the the same or different agency) is entitled
50-percent adjustment rule does not Office of Management and Budget in to receive basic pay at the highest of—
apply when an employee’s rate range accordance with E.O. 12866. (1) The rate of basic pay in effect for
maximum is increased due to a change the position in which the appointee is
in the employee’s official worksite. Regulatory Flexibility Act being placed;
Instead, the retained rate will be I certify that these regulations will not (2) The rate of basic pay currently in
adjusted under the geographic have a significant economic impact on effect for the position the appointee
conversion authority in paragraph (e). a substantial number of small entities held immediately before being
For GS employees receiving a saved because they will apply only to Federal appointed to the SES; or
rate, the geographic conversion rule is agencies and employees. (3) The rate of basic pay in effect for
the same as that used for retained rates the appointee immediately before
under part 536 (i.e., it maintains the List of Subjects in 5 CFR 294, 359, 362, removal from the SES.
relative position of the retained rate vis- 451, 530, 531, 532, 534, 536, 550, 591, (b)(1) The rate of basic pay under
à-vis the range maximum). Also, the 50- 630, 831, and 842 paragraph (a)(1) and (2) of this section
percent adjustment rule does not apply Administrative practice and includes any applicable locality
when an employee’s rate range procedure; Air traffic controllers; payment under 5 U.S.C. 5304, special
maximum is increased as a result of a Alimony; Claims; Decorations, medals, rate supplement under 5 U.S.C. 5305, or
similar payment under other legal different basic pay schedules based on locality payment under 5 CFR part 531,
authority. geographic location (such as the General subpart F; special rate supplement
(2) When an employee is entitled to Schedule pay system), the saved rate under 5 CFR part 530, subpart C; or
a payable rate of basic pay under must be adjusted in conjunction with a similar payment or supplement under
paragraph (a)(2) or (3) of this section change in the employee’s official other legal authority. For an employee
which exceeds the maximum payable worksite consistent with the geographic receiving a retained rate under 5 CFR
rate of basic pay for the grade or level conversion rule for retained rates under part 536, subpart C (or similar authority,
of the employee’s position after 5 CFR 536.303(b). such as 5 CFR 359.705), the rate of basic
placement, the resulting saved rate is (f) A saved rate established under this pay is the maximum payable rate for the
subject to the adjustment and section must be terminated if— employee’s grade or level, rather than
termination rules in paragraphs (d) (1) The employee has a break in the retained rate.
through (f) of this section. service of 1 workday or more;
(c) For an employee placed in a (2) The employee is demoted based on PART 530—PAY RATES AND
General Schedule position, a saved rate unacceptable performance or conduct or SYSTEMS (GENERAL)
established under this section may not at the employee’s request; or
be supplemented by a locality payment (3) The employee becomes entitled to ■ 9. The authority citation for part 530 is
under 5 U.S.C. 5304, a special rate a rate of basic pay that is equal to or revised to read as follows:
supplement under 5 U.S.C. 5305, or a higher than the saved rate. Authority: 5 U.S.C. 5305 and 5307; subpart
similar payment under other legal (g) If an employee is receiving a saved C also issued under 5 U.S.C. 5338 and sec.
authority. rate established under this section on 4 of the Performance Management and
(d) A saved rate established under this May 1, 2005 (when section 301 of Pub. Recognition System Termination Act of 1993,
section must be adjusted in connection Pub. L. 103–89), 107 Stat. 981.
L. 108–411 took effect), any locality
with a pay schedule adjustment payment under 5 U.S.C. 5304 formerly ■ 10. Revise subpart C to read as follows:
according to the following rules: paid in addition to the employee’s saved
(1) When the maximum payable rate Subpart C—Special Rate Schedules for
rate no longer applies as of that date. Recruitment and Retention
of basic pay for the grade or level of an Any locality-adjusted saved rate in
employee’s position is increased while effect and payable on April 30, 2005, General Provisions
the employee is receiving a saved rate, must be converted to an equal saved rate Sec.
the employee is entitled to a pay effective on May 1, 2005. If the 530.301 Purpose and applicability.
adjustment equal to 50 percent of the employee received no locality payment 530.302 Definitions.
amount of the increase in that maximum 530.303 Coverage.
because of a pay limitation, no 530.304 Establishing or increasing special
payable rate, except as otherwise conversion under this paragraph is rates.
provided in this section. required. 530.305 Agency requests for new or
(2) If an employee’s official worksite increased special rates.
is changed while the employee is PART 362—PRESIDENTIAL 530.306 Evaluating agency requests for new
receiving a saved rate, a change in the MANAGEMENT INTERN PROGRAM or increased special rates.
applicable range maximum because of a 530.307 OPM review and adjustment of
change in an employee’s official ■ 5. The authority citation for part 362 is special rate schedules.
worksite is not considered in applying revised to read as follows: 530.308 Treatment of special rate as basic
paragraph (d)(1) of this section. Instead, pay.
Authority: E.O. 12364, 47 FR 22931, 3 CFR, 530.309 Miscellaneous provisions.
any adjustment of the employee’s saved 1982 Comp., p. 185.
rate in conjunction with a change in Setting an Employee’s Rate of Pay
official worksite must be determined Subpart B—Program Administration 530.321 General.
under paragraph (e) of this section. If an 530.322 Setting pay when a special rate is
§ 362.202 [Amended] newly established or increased.
employee’s range maximum is increased
because of a pay schedule adjustment ■ 6. In § 362.202, amend paragraph (d) 530.323 Setting pay when a special rate is
on the same effective date as a change by removing the reference ‘‘rules under discontinued or decreased.
in the employee’s official worksite, the 5 CFR 531.203(c)’’ and adding in its
place ‘‘rule under 5 CFR 531.221’’. Subpart C—Special Rate Schedules for
saved rate must be adjusted under
Recruitment and Retention
paragraph (d)(1) of this section before
applying paragraph (e) of this section. PART 451—AWARDS General Provisions
(3) A change in an employee’s rate
■ 7. The authority citation for part 451 is § 530.301 Purpose and applicability.
range maximum resulting from a change
revised to read as follows: (a) Purpose. This subpart contains
in the employee’s position (e.g., change
in occupational series) that causes the Authority: 5 U.S.C. 4302, 4501–4509; E.O. OPM regulations implementing 5 U.S.C.
employee to be covered by a different 11438, 33 FR 18085, 3 CFR, 1966–1970 5305, which authorizes the
pay schedule does not result in Comp., p. 755; E.O. 12828, 58 FR 2965, 3 establishment of special rates of pay for
CFR, 1993 Comp., p. 569. Federal employees in executive agencies
application of paragraph (d)(1) of this
section. to address significant recruitment or
Subpart A—Agency Awards
(4) When an employee’s saved rate retention problems. This subpart also
becomes equal to or lower than the ■ 8. In § 451.104, revise paragraph (g) to contains rules for determining an
maximum payable rate of basic pay for read as follows: employee’s rate of pay when a special
the grade or level of the employee’s rate schedule is established, increased,
position, the employee is entitled to the § 451.104 Awards. decreased, or discontinued, or when
maximum payable rate, and saved pay * * * * * conditions for coverage under a special
under this section ceases to apply. (g) When granting an award paid as a rate schedule are changed. All other pay
(e) When an employee receiving a percentage of basic pay under 5 U.S.C. actions for special rate employees are
saved rate established under this section 4505a(a)(2)(A), the rate of basic pay governed by the pay-setting rules in 5
is covered by a pay system that provides used must include any applicable CFR parts 531 and 536.
(b) Applicability. Except as explained Official worksite means the official rates, locality rates, special rates, or
in § 530.303(a), this subpart applies only location of an employee’s position of similar rates under other legal authority.
to GS employees. record as determined under 5 CFR Retained rate means a rate above the
531.605. Official worksite is maximum rate of the rate range
§ 530.302 Definitions. synonymous with the term ‘‘official applicable to the employee which is
In this subpart: duty station’’ as used in 5 U.S.C. payable under 5 CFR part 536 or, for a
Agency means an executive agency as 5305(i). former member of the Senior Executive
defined in 5 U.S.C. 105. OPM means the Office of Personnel Service, under 5 CFR 359.705.
Authorized agency official means the Management. Special rate means a rate of pay
head of the agency or an official who is Pay schedule means a set of rate within a special rate schedule
authorized to act for the head of the ranges established for GS employees established under this subpart.
agency in the matter concerned. under a single authority—i.e., the Special rate schedule means a pay
Employee has the meaning given that General Schedule, an LEO special base schedule established under this subpart
term in 5 U.S.C. 2105. rate schedule (for grades GS–3 through to provide higher rates of pay for
General Schedule or GS means the 10), a locality rate schedule based on GS specified categories of GS positions or
classification and pay system rates, a locality rate schedule based on employees at one or more grades. An
established under 5 U.S.C. chapter 51 LEO special base rates (for grades GS– increased or decreased special rate
and subchapter III of chapter 53. It also 3 through 10), a special rate schedule schedule refers to an increase or
refers to the pay schedule of GS rates under this subpart, or a similar schedule decrease in one or more rate ranges
established under 5 U.S.C. 5332, as under 38 U.S.C. 7455. A pay schedule within that schedule.
adjusted under 5 U.S.C. 5303 or other applies to or covers a defined category Special rate supplement means the
law (including GS rates payable to GM of employees based on established portion of a special rate paid above an
employees). Law enforcement officers coverage conditions (e.g., official employee’s GS rate after applying any
(LEOs) receiving LEO special base rates worksite, occupation). A pay schedule is applicable pay limitation. For a law
are covered by the GS classification and considered to apply to or cover an enforcement officer receiving an LEO
pay system, but receive higher base rates employee who meets the established special base rate who is also entitled to
of pay in lieu of GS rates at grades GS– coverage conditions even when a rate a special rate, a special rate supplement
3 through GS–10. under that schedule is not currently increases the LEO’s pay only to the
payable to the employee because of a extent that the resulting special rate
GM employee has the meaning given
higher pay entitlement under another exceeds the LEO’s rate of basic pay. The
that term in 5 CFR 531.203.
pay schedule. payable amount of a special rate
GS rate means a rate of basic pay Position of record means an supplement is subject to the Executive
within the General Schedule, excluding employee’s official position (defined by Level IV limitation, as provided in
any LEO special base rate and grade, occupational series, employing § 530.304(a).
additional pay of any kind such as agency, LEO status, and any other
locality payments or special rate condition that determines coverage § 530.303 Coverage.
supplements. A rate payable to a GM under a pay schedule (other than official (a) Under 5 U.S.C. 5305, OPM may
employee is considered a GS rate. worksite)), as documented on the establish special rates for employees
Highest applicable rate range means employee’s most recent Notification of paid under a statutory pay system (as
the rate range applicable to an Personnel Action (Standard Form 50 or defined in 5 U.S.C. 5302(1)) or any other
employee’s position that provides the equivalent) and current position pay system established by or under
highest rates of basic pay, excluding any description, excluding any position to Federal statute for civilian positions in
retained rates. For example, a rate range which the employee is temporarily the executive branch. Special rates
of special rates may exceed an detailed. For an employee whose change apply only to GS employees unless the
applicable locality rate range. In certain in official position is followed within 3 approved schedule coverage criteria
circumstances, the highest applicable workdays by a reduction in force specifically state otherwise. OPM will
rate range may consist of two types of resulting in the employee’s separation establish special rate schedules covering
pay rates from different pay schedules— before he or she is required to report for employees under a non-GS pay system
e.g., a range where special rates (based duty in the new position, the position only at the request of the agency
on a fixed dollar supplement) are higher of record in effect immediately before responsible for administering that
in the lower portion of the range and the position change is deemed to remain system. For employees covered by a
locality rates are higher in the higher the position of record through the date non-GS pay system, the responsible
portion of the range. of separation. agency is subject to the requirements in
Law enforcement officer or LEO has Rate of basic pay means the rate of 5 U.S.C. 5305. To the extent the
the meaning given that term in 5 CFR pay fixed by law or administrative statutory or regulatory provisions
550.103. action for the position held by an governing the non-GS pay system differ
LEO special base rate means a special employee before any deductions, from the regulatory provisions of this
base rate established for GS law including a GS rate, an LEO special base subpart, the responsible agency must
enforcement officers at grades GS–3 rate, a locality rate, a special rate under follow policies that are consistent as
through GS–10 under section 403 of the this subpart or a similar rate under 38 possible with this subpart.
Federal Employees Pay Comparability U.S.C. 7455, or a retained rate under 5 (b) An employee’s coverage under a
Act of 1990 (section 529 of Pub. L. 101– CFR 359.705 or 5 CFR part 536, but special rate schedule is subject to the
509, November 5, 1990, as amended) excluding additional pay of any other coverage conditions established by OPM
which is used in lieu of a GS rate. kind. for that schedule, except as provided in
Locality payment has the meaning Rate range or range means the range paragraph (c) of this section. The
given that term in 5 CFR 531.602. of rates of basic pay for a grade within coverage conditions for a special rate
Locality rate means a GS rate or an an established pay schedule, excluding schedule may be based on occupation,
LEO special base rate, if applicable, plus any retained rate. A rate range may grade, employing agency, geographic
any applicable locality payment. consist of GS rates, LEO special base location of official worksite, or other
factors OPM may determine to be § 530.306 when evaluating the need for are necessary to ensure adequate staffing
appropriate. An agency determination special rates. When OPM establishes a levels to accomplish the agency’s
as to whether an employee meets the minimum special rate under this mission.
coverage conditions for a special rate authority, corresponding increases also (b) The authorized agency official is
schedule must be based on the may be made in one or more of the responsible for submitting complete
employee’s position of record and remaining rates of the affected grade or supporting data for any request for new
official worksite. An agency also may be level. For any given grade, a minimum or higher special rates. OPM may
required to consider other employee- special rate may not exceed the require that the supporting data include
specific factors established by OPM to maximum rate of basic pay for the rate a survey of prevailing non-Federal pay
determine special rate coverage, such as range (excluding any locality rate, other rates in the relevant labor market.
special qualifications or certifications. special rate, or similar payment under (c) OPM may coordinate an agency
(c) An agency must pay the applicable other legal authority) by more than 30 special rate request with other agencies
special rate to any employee who meets percent. A special rate is not payable if that have similar categories of
the coverage conditions established by it exceeds the rate for level IV of the employees. OPM may designate a lead
OPM with respect to a special rate Executive Schedule. agency to assist in coordinating the
schedule unless an authorized agency (b) The circumstances considered by collection of relevant data. Each affected
official determines that a category of OPM in evaluating the need for special agency is responsible for submitting
employees of the agency will not be rates are the following: complete supporting data upon request
covered by a proposed or existing (1) Rates of pay offered by non- to OPM or the lead agency, as
special rate schedule, subject to the Federal employers which are appropriate, unless the agency
following requirements: significantly higher than those payable determines that a category of its
(1) An authorized agency official may by the Government within the area, employees will not be covered by the
determine that a category of employees location, occupational group, or other proposed special rate schedule, as
of the agency will not be covered by a category of positions under GS pay provided in § 530.303(c).
special rate request or a proposed new system;
special rate schedule. The official must (2) The remoteness of the area or § 530.306 Evaluating agency requests for
provide written notice to OPM that location involved; new or increased special rates.
identifies the specific category or (3) The undesirability of the working (a) In evaluating agency requests for
categories of employees who will not be conditions or the nature of the work new or increased special rates, OPM
covered by the special rate schedule. involved (including exposure to toxic may consider the following factors:
The notice must be received by OPM substances or other occupational (1) The number of existing vacant
before the effective date of the new hazards); or positions and the length of time they
special rate schedule. (4) Any other circumstances OPM have been vacant;
(2) An authorized agency official may considers appropriate. (2) The number of employees who
remove a category of employees of the (c) In setting the level of special rates have quit (i.e., voluntarily left Federal
agency from coverage under an existing within a rate range for a category of service), including, when available, a
special rate schedule. The official must employees, OPM will compute the subcount of the number of employees
provide written notice to OPM that special rate supplement by adding a who quit to take a comparable position
identifies the specific category or fixed dollar amount or a fixed offering higher pay;
categories of employees who will not be percentage to all GS rates within that (3) Evidence to support a conclusion
covered by the special rate schedule. range, except that an alternate method that recruitment or retention problems
The loss of coverage under a special rate may be used for grades GS–1 and GS– likely will develop (if such problems do
schedule will become effective on the 2, where within-grade increases vary not already exist) or will worsen;
first day of the first pay period throughout the range. (4) The number of vacancies an
beginning on or after the date of the (d) If OPM establishes a special rate agency tried to fill, compared to the
notice to OPM. schedule that covers only law number of hires and offers made;
(d) An employee covered by a special enforcement officers, OPM may (5) The nature of the existing labor
rate schedule is not entitled to a special compute the special rate supplement for market;
rate for any purpose with respect to any grades GS–3 through 10 as a fixed (6) The degree to which an agency has
period during which the employee is percentage of LEO special base rates considered and used other available pay
entitled to a higher rate of basic pay instead of GS rates. With respect to such flexibilities to alleviate staffing
under any other legal authority. For a schedule, references to GS rates in problems, including the superior
example, an employee is not entitled to § 530.307 are deemed to be references to qualifications and special needs pay-
a special rate if he or she is entitled to LEO special base rates. setting authority in 5 CFR 531.212 and
a higher locality rate or a retained rate. recruitment, relocation, and retention
§ 530.305 Agency requests for new or incentives under 5 CFR part 575;
§ 530.304 Establishing or increasing increased special rates. (7) The degree to which an agency has
special rates. (a) An agency may request that a considered relevant non-pay solutions
(a) OPM may increase the minimum special rate schedule be established or to staffing problems, such as conducting
rates of pay otherwise payable to a increased or that its employees be an aggressive recruiting program, using
category of employees in one or more covered by an existing special rate appropriate appointment authorities,
areas or locations, grades or levels, schedule at any time. An authorized redesigning jobs, establishing training
occupational groups, series, classes, or agency official in the agency programs, and improving working
subdivisions thereof, when it is headquarters office must submit to OPM conditions;
necessary to address existing or likely any request to establish or increase (8) The effect of the staffing problem
significant recruitment or retention special rates for a category of agency on the agency’s mission; and
difficulties. OPM will consider the employees. The request must include a (9) The level of non-Federal rates paid
circumstances listed in paragraph (b) of certification by the authorized agency for comparable positions. Data on non-
this section and the factors listed in official that the requested special rates Federal salary rates may be
supplemented, if appropriate, by data require that a change in the underlying (d) Application of pay administration
on Federal salary rates for comparable GS rate automatically results in an provisions for prevailing rate employees
positions established under a non-GS adjusted special rate schedule, unless which consider rates of basic pay under
pay system. OPM determines that an adjustment in the GS pay system in setting pay (except
(b) In determining the level at which the supplement percentage is as otherwise provided in 5 CFR part
to set special rates, OPM may consider appropriate for one or more special rate 532), subject to the requirement that, if
the following factors: schedules. the employee’s actual special rate would
(1) The pay levels that, in OPM’s (2) For special rate schedules not apply at the official worksite for the
judgment, are necessary to recruit or computed by applying a fixed-dollar prevailing rate position, a special rate
retain an adequate number of qualified supplement on top of each GS rate may be used only if it is a corresponding
employees based on OPM’s findings within a rate range, OPM may require special rate on a special rate schedule
with respect to the factors set forth in that special rate supplements generally that would cover the employee if his or
paragraph (a) of this section; be adjusted to reflect the increase in GS her GS position of record were located
(2) The dollar costs that will be rates, unless OPM determines that a at the same official worksite as the
incurred if special rates are not different adjustment is appropriate for prevailing rate position, consistent with
authorized; one or more special rate schedules. the geographic conversion rule in 5 CFR
(3) The level of pay for comparable (e) If OPM determines that a special 531.205.
positions; and rate schedule, or a rate range within a
(4) The need to provide for a special rate schedule, is no longer § 530.309 Miscellaneous provisions.
reasonable progression in pay from needed to ensure satisfactory (a) A special rate may be paid only for
lower grade levels to higher grade levels recruitment or retention of qualified those hours for which an employee is in
to avoid pay alignment problems (e.g., employees, OPM may discontinue the a pay status.
such as might result from applying the schedule or rate range. Consistent with (b) A pay increase caused by an
two-step promotion rule in 5 U.S.C. § 530.303(d), if all employees and employee becoming entitled to a new or
5334(b)). positions covered by a special rate higher special rate supplement is not an
(c) No one factor or combination of schedule or rate range are entitled to a equivalent increase in pay within the
factors specified in paragraph (a) or (b) higher rate of basic pay, the schedule or meaning of 5 U.S.C. 5335. (See 5 CFR
of this section requires OPM to establish rate range (as applicable) will be 531.407(c).)
or increase special rates or to set special automatically discontinued. (c) A special rate is included in an
rates at any given level. (f) OPM may change the established employee’s total remuneration, as
conditions for coverage under a special defined in 5 CFR 551.511(b), and
§ 530.307 OPM review and adjustment of
special rate schedules.
rate schedule at any time based on a straight time rate of pay, as defined in
reevaluation of the circumstances and 5 CFR 551.512(b), for the purpose of
(a) OPM may review an established factors that led to establishing the overtime pay computations under the
special rate schedule at any time to schedule. Expansion of coverage is Fair Labor Standards Act of 1938, as
determine whether that schedule should equivalent to establishing a special rate amended.
be increased, decreased, or schedule for a category of affected (d) The reduction or termination of an
discontinued, taking into account the employees. Reduction of coverage is the employee’s special rate supplement in
circumstances listed in § 530.304(b) and equivalent of discontinuing a special accordance with the requirements of
the factors listed in § 530.306 that led to rate schedule for a category of affected this subpart is not an adverse action
establishing the schedule. An employees. under 5 CFR part 752, subpart D, or an
authorized agency official may request (g) When a special rate schedule is action under 5 CFR 930.214.
that OPM conduct such a review of one adjusted or discontinued, or when there
or more special rate schedules. is a change in a schedule’s coverage Setting an Employee’s Rate of Pay
(b) OPM may designate lead agencies criteria, the rate of pay for affected
to assist in the review of designated § 530.321 General.
employees must be set as provided in
special rate schedules and to coordinate (a) This section and §§ 530.322 and
§§ 530.321 through 530.323.
the collection of relevant data. Each 530.323 provide conversion rules for
affected agency is responsible for § 530.308 Treatment of special rate as setting an employee’s pay when a
submitting complete supporting data basic pay. special rate schedule is established,
upon request to OPM or the lead agency, Except as otherwise specifically increased, decreased, or discontinued,
as appropriate. provided under other legal authority, a or when an employee’s coverage under
(c) OPM will adjust a special rate special rate is considered a rate of basic an existing special rate schedule is
schedule by determining the amount of pay only for the following purposes: affected by a change in coverage criteria.
the special rate supplement to be paid (a) The purposes for which a locality These conversion rules do not apply to
on top of the current GS rate for each rate is considered to be a rate of basic changes in an employee’s special rate
rate range within the schedule. OPM pay in computing other payments or entitlements based on a change in the
will determine the extent to which benefits, to the extent provided by 5 employee’s position of record or official
special rate supplements are to be CFR 531.610, except as otherwise worksite. Pay-setting rules for other
adjusted (increased or decreased), if at provided in paragraphs (b) through (d) personnel actions affecting special rate
all, and when the special rate of this section; employees are provided in 5 CFR parts
supplements are to be adjusted. As (b) Computation of nonforeign area 531 and 536. For example, if an
provided in 5 U.S.C. 5305(d), special cost-of-living allowances and post employee becomes covered by a special
rate schedule adjustments made by differentials under 5 U.S.C. 5941 and 5 rate schedule as a result of a change in
OPM have the force and effect of statute. CFR part 591, subpart B; the employee’s official worksite, the
(d)(1) For special rate schedules (c) Computation of foreign area post geographic conversion rule in 5 CFR
computed by applying a fixed- differentials under 5 U.S.C. 5925(a) and 531.205 must be used to set the
percentage supplement on top of each danger pay allowances under 5 U.S.C. employee’s rate(s) of basic pay in the
GS rate within a rate range, OPM may 5928; and new location before considering any
other simultaneous pay action (other § 530.323 Setting pay when a special rate 531.201 Purpose.
than a general pay adjustment). is discontinued or decreased. 531.202 Coverage.
(a) General. This section applies when 531.203 Definitions.
(b) The conversion rules in §§ 530.322 531.204 Entitlement to other rates of pay.
a special rate applicable to a position is
and 530.323 are considered general pay 531.205 Converting pay upon change in
discontinued or decreased because of— location of employee’s official worksite.
adjustments for the purpose of applying (1) A reduction or termination of the
5 CFR 531.206 (dealing with the order 531.206 Order of processing simultaneous
rates of the special rate schedule (or of pay actions.
of precedence for processing rates of a rate range within a schedule); 531.207 Applying annual pay adjustments.
simultaneous pay actions). The rate(s) of or
pay resulting from these conversion (2) The reduction in the scope of Setting Pay When Appointment or Position
Changes
rules are considered the employee’s coverage of the special rate schedule.
existing rate(s) of pay before processing (b) Employee entitled to pay retention. 531.211 Setting pay for a newly appointed
When a special rate applicable to a employee.
the next simultaneous pay action in the 531.212 Superior qualifications and special
order of precedence. position is discontinued or decreased, needs pay-setting authority.
and an employee holding the position is 531.213 Setting pay upon change in
§ 530.322 Setting pay when a special rate entitled to pay retention under 5 CFR position without a change in grade.
schedule is newly established or increased. part 536 as a result, the employee’s rate 531.214 Setting pay upon promotion.
(a) General rule. When an employee of pay must be set consistent with the 531.215 Setting pay upon demotion.
requirements in 5 CFR part 536, subpart 531.216 Setting pay when an employee
holds a position that becomes covered moves from a Department of Defense or
by a newly established special rate C.
(c) Employee not entitled to pay Coast Guard nonappropriated fund
schedule (including a schedule for instrumentality.
retention. When a special rate
which coverage is expanded) or 531.217 Special conversion rules for certain
applicable to a position is discontinued non-GS employees.
increased special rate schedule
or decreased, and an employee holding
(including an increased special rate the position is not entitled to pay Using a Highest Previous Rate Under the
range within a schedule), the agency retention under 5 CFR part 536, the Maximum Payable Rate Rule
must set the employee’s rate of pay at employee’s rate of pay is set in the 531.221 Maximum payable rate rule.
the step or rate of the grade on the new highest applicable rate range at the 531.222 Rates of basic pay that may be used
special rate schedule that corresponds as the highest previous rate.
grade and step (or rate) that corresponds
to the employee’s existing numerical 531.223 Rates of basic pay that may not be
to the grade and step (or rate) for the used as the highest previous rate.
step or rate (as in effect immediately employee’s existing special rate (as in
before the new special rate schedule effect immediately before the schedule Special Rules for GM Employees
takes effect), except as otherwise change). 531.241 Retaining and losing GM status.
provided in this section. The (d) Employee receiving a retained 531.242 Setting pay upon loss of GM status.
corresponding special rate is rate. When a special rate applicable to 531.243 Promotion of a GM employee.
a position is discontinued or decreased, 531.244 Adjusting a GM employee’s rate at
determined by adding the applicable
the time of an annual pay adjustment.
special rate supplement on top of the and the employee holding the position
531.245 Computing locality rates and
employee’s GS rate, subject to the is receiving a retained rate immediately special rates for GM employees.
limitation that no special rate may before the schedule change, the 531.246 Within-grade increases for GM
exceed the rate for level IV of the employee’s rate of pay must be set employees.
Executive Schedule. For an employee consistent with the requirements in 5 531.247 Maximum payable rate rule for GM
CFR part 536, subpart C (or 5 CFR employees.
receiving an LEO special base rate, add
the applicable special rate supplement 359.705 for a former member of the
Senior Executive Service receiving a Subpart B—Determining Rate of Basic
to the GS rate for the employee’s grade Pay
retained rate under that section).
and step, except as otherwise provided
under § 530.304(d). General Provisions
PART 531—PAY UNDER THE
(b) Employee entitled to a higher rate GENERAL SCHEDULE § 531.201 Purpose.
of basic pay. As provided in This subpart contains regulations of
§ 530.303(d), if an employee meeting the ■ 11. The authority citation for part 531
the Office of Personnel Management
coverage conditions for a newly is revised to read as follows:
(OPM) implementing 5 U.S.C 5332,
established or increased special rate Authority: 5 U.S.C. 5115, 5307, and 5338; 5333, and 5334, which deal with setting
schedule is entitled to a higher rate of sec. 4 of Pub. L. 103–89, 107 Stat. 981; and and adjusting rates of basic pay for
E.O. 12748, 56 FR 4521, 3 CFR, 1991 Comp.,
basic pay under other legal authority, p. 316; Subpart B also issued under 5 U.S.C.
General Schedule (GS) employees.
the employee must be paid at that 5303(g), 5305, 5333, 5334(a) and (b), and These regulations are supplemented by
higher rate. 7701(b)(2); Subpart D also issued under 5 regulations on GS within-grade
(c) Employee receiving a retained rate. U.S.C. 5335(g) and 7701(b)(2); Subpart E also increases in subpart D of this part; GS
When an employee is receiving a
issued under 5 U.S.C. 5336; Subpart F also quality step increases in subpart E of
issued under 5 U.S.C. 5304, 5305, and 5338; this part; locality rates in subpart F of
retained rate immediately before the and E.O. 12883, 58 FR 63281, 3 CFR, 1993 this part; special rates in 5 CFR part 530,
employee’s position is covered by a Comp., p. 682 and E.O. 13106, 63 FR 68151,
subpart C; and grade and pay retention
newly established or increased special 3 CFR, 1998 Comp., p. 224.
in 5 CFR part 536.
rate schedule, the agency must ■ 12. Revise subpart B to read as follows:
determine the employee’s rate of pay § 531.202 Coverage.
consistent with the requirements in 5 Subpart B—Determining Rate of Basic This subpart covers employees who
CFR part 536, subpart C (or 5 CFR Pay occupy positions classified and paid
359.705 for a former member of the under the GS classification and pay
Senior Executive Service receiving a General Provisions system, as provided in 5 U.S.C. 5102
retained rate under that section). Sec. and 5331 or other applicable laws. Law
enforcement officers (LEOs) receiving were first employed by that government rates are higher in the higher portion of
LEO special base rates are covered by before October 1, 1987. A Department of the range.
the GS classification and pay system, Defense or Coast Guard Law enforcement officer or LEO has
but receive higher base rates of pay in nonappropriated fund instrumentality the meaning given that term in 5 CFR
lieu of GS rates at grades GS–3 through (as described in 5 U.S.C. 2105(c)) is not 550.103.
GS–10. This subpart also covers GS considered part of the Federal LEO special base rate means a special
employees who receive special rates Government except for the purpose of base rate established for GS law
under 5 U.S.C. 5305 and 5 CFR part 530, applying §§ 531.211 and 531.212 to enforcement officers at grades GS–3
subpart C. employees covered by § 531.216 upon through GS–10 under section 403 of the
employment in a GS position. Federal Employees Pay Comparability
§ 531.203 Definitions. Act of 1990 (section 529 of Pub. L. 101–
General Schedule or GS means the
In this subpart: classification and pay system 509, November 5, 1990, as amended)
Agency means an Executive agency as established under 5 U.S.C. chapter 51 which is used in lieu of a GS rate.
defined in 5 U.S.C. 105 or an agency in and subchapter III of chapter 53. It also Locality payment means a locality-
the legislative branch with employees refers to the pay schedule of GS rates based comparability payment payable to
covered by this subpart. To the extent established under 5 U.S.C. 5332, as GS employees under 5 U.S.C. 5304 and
that the regulations in this subpart relate adjusted under 5 U.S.C. 5303 or other 5 CFR part 531, subpart F.
to non-GS service in the Federal Locality rate means a GS rate or an
law (including GS rates payable to GM
Government, agency includes any other LEO special base rate, if applicable, plus
employees). Law enforcement officers
agency in the Federal Government. any applicable locality payment.
(LEOs) receiving LEO special base rates
Demotion means a change of an Official worksite means the official
are covered by the GS classification and
employee, while continuously location of the employee’s position of
pay system but receive higher base rates
employed, from one GS grade to a lower record, as determined under 5 CFR
of pay in lieu of GS rates at grades GS–
GS grade, with or without a reduction 531.605.
3 through GS–10. OPM means the Office of Personnel
in pay.
Employee means an employee as GM employee means a GS employee Management.
defined in 5 U.S.C. 2105 who is covered who was formerly covered by the Payable rate means the highest rate of
by this subpart. For the purpose of Performance Management and basic pay to which an employee is
determining eligibility under the Recognition System under 5 U.S.C. entitled based on the employee’s
superior qualifications and special chapter 54 on October 31, 1993 (and position of record, official worksite, and
needs pay-setting authority in § 531.212 therefore became covered on November step (or relative position in range for a
and applying the maximum payable rate 1, 1993, by section 4 of Pub. L. 103–89, GM employee) or, if applicable, a
provisions in §§ 531.216 and 531.221 the Performance Management and retained rate.
(which consider rates of pay received Recognition System Termination Act of Pay schedule means a set of rate
during non-GS service in the Federal 1993), and who continues thereafter to ranges established for GS employees
Government), employee also includes occupy a position as a supervisor or under a single authority—i.e., the
any employee as defined in 5 U.S.C. management official (as defined in 5 General Schedule, an LEO special base
2105 and— U.S.C. 7103(a)(10) and (11)) in the same rate schedule (for grades GS–3 through
(1) An individual employed by the grade of the General Schedule (GS–13, 10), a locality rate schedule based on GS
U.S. Postal Service or the Postal Rate 14, or 15) and in the same agency rates, a locality rate schedule based on
Commission who would be considered without a break in service of more than LEO special base rates (for grades GS–
an employee under 5 U.S.C. 2105 but for 3 days. (See § 531.241.) Any reference to 3 through 10), or a special rate schedule.
the exclusion in section 2105(e); and employees, grades, positions, or rates of A pay schedule applies to or covers a
(2) An individual employed by a basic pay under the General Schedule defined category of employees based on
Department of Defense or Coast Guard includes GM employees. established coverage conditions (e.g.,
nonappropriated fund instrumentality GS rate means a rate of basic pay official worksite, occupation). A pay
(as described in 5 U.S.C. 2105(c)) for within the General Schedule, excluding schedule is considered to apply to or
service covered by § 531.216 (for the any LEO special base rate and cover an employee who meets the
purpose of applying that section and additional pay of any kind such as established coverage conditions even
§§ 531.211 and 531.212). locality payments or special rate when a rate under that schedule is not
Existing rate means the rate received supplements. A rate payable to a GM currently payable to the employee
immediately before a pay action takes employee is considered a GS rate even because of a higher pay entitlement
effect, after processing a general pay though the rate may fall between GS under another pay schedule.
adjustment and any other simultaneous step rates. Position of record means an
pay action that is higher in the order of Highest applicable rate range means employee’s official position (defined by
precedence under § 531.206. For the rate range applicable to a GS grade, occupational series, employing
example, the existing rate immediately employee based on a given position of agency, LEO status, and any other
before a promotion action must reflect record and official worksite that condition that determines coverage
any geographic conversion under provides the highest rates of basic pay, under a pay schedule (other than official
§ 531.205 and any simultaneous within- excluding any retained rates. For worksite)), as documented on the
grade increase or quality step increase. example, a rate range of special rates employee’s most recent Notification of
Federal Government means all may exceed an applicable locality rate Personnel Action (Standard Form 50 or
entities of the Government of the United range. In certain circumstances, the equivalent) and current position
States, including the U.S. Postal Service highest applicable rate range may description, excluding any position to
and the Postal Rate Commission. The consist of two types of pay rates from which the employee is temporarily
District of Columbia is deemed to be different pay schedules—e.g., a range detailed. For an employee whose change
part of the Federal Government with where special rates (based on a fixed in official position is followed within 3
respect to employees of the government dollar supplement) are higher in the workdays by a reduction in force
of the District of Columbia (DC) who lower portion of the range and locality resulting in the employee’s separation
before he or she is required to report for applicable pay limitation. For a law applicable pay schedule (e.g., a locality
duty in the new position, the position enforcement officer receiving an LEO rate schedule or a special rate schedule),
of record in effect immediately before special base rate who is also entitled to the agency must determine the
the position change is deemed to remain a special rate under 5 CFR part 530, employee’s underlying GS rate or LEO
the position of record through the date subpart C, the special rate supplement special base rate, as applicable, based on
of separation. increases the LEO’s pay only to the that payable rate (i.e., by finding the
Promotion means a GS employee’s extent that the resulting special rate corresponding underlying rate with the
movement from one GS grade to a exceeds the LEO’s rate of basic pay. same grade and step (or relative
higher GS grade while continuously Temporary promotion means a time- position) as the payable rate).
employed (including such a movement limited promotion with a not-to-exceed
in conjunction with a transfer). date or a specified term. § 531.205 Converting pay upon change in
Rate of basic pay means the rate of Transfer means a change of an location of employee’s official worksite.
pay fixed by law or administrative employee, without a break in service of When an employee’s official worksite
action for the position held by a GS 1 full workday, from one branch of the is changed to a new location where
employee before any deductions, Federal Government (executive, different pay schedules apply, the
including a GS rate, an LEO special base legislative, or judicial) to another or agency must convert the employee’s
rate, a special rate, a locality rate, a from one agency to another. rate(s) of basic pay to the applicable pay
retained rate, but exclusive of additional Where different pay schedules apply
schedule(s) in the new location before
pay of any other kind. For the purpose means, in the context of applying the
processing any simultaneous pay action
of applying the maximum payable rate geographic conversion rule, that an
(other than a general pay adjustment, as
rules in §§ 531.216 and 531.221 to non- employee’s official worksite is changed
provided in § 531.206). The agency must
GS employees, rate of basic pay means to a new location that would cause the
first set the employee’s rate(s) of basic
a rate of pay under other legal authority employee to lose or gain coverage under
a location-based pay schedule (i.e., pay in the applicable pay schedule(s) in
which is equivalent to a rate of basic
locality rate schedule or special rate the new location based on his or her
pay for GS employees, as described in
schedule) if the employee were to position of record (including grade) and
this definition.
Rate range or range means a range of remain in the same position of record. step (or rate) immediately before the
rates of basic pay for a grade within an Within-grade increase has the change in the employee’s official
established pay schedule, excluding any meaning given that term in § 531.403. worksite. The resulting rate must be
retained rate. A rate range may consist used as the existing rate in processing
§ 531.204 Entitlement to other rates of pay. the next simultaneous pay action in the
of GS rates, LEO special base rates,
locality rates, special rates, or, for non- (a) A law enforcement officer is order of precedence, using the
GS employees, similar rates under other entitled to LEO special base rates in lieu applicable pay schedules in the new
legal authority. of GS rates at grades GS–3 through GS– location. In conjunction with any
Reassignment means a change of an 10. A law enforcement officer is entitled simultaneous pay actions, the
employee, while serving continuously to the LEO special base rate that employee’s rate(s) of basic pay will then
in the same agency, from one position corresponds to his or her grade and step. be set based on the employee’s new
to another without promotion or If an employee loses LEO status, the position of record and new official
demotion. employee is entitled to the GS rate for worksite.
Reemployment means employment, his or her grade and step unless a higher
including reinstatement or another type rate is set under the maximum payable § 531.206 Order of processing
rate rule in § 531.221 or under the pay simultaneous pay actions.
of appointment, after a break in service
of at least 1 full workday. retention rules in 5 CFR part 536, as When multiple pay actions with the
Retained rate means a rate above the applicable. LEO special base rates are same effective date affect an employee’s
maximum rate of the rate range used in computing locality rates, as rate of basic pay, the actions will be
applicable to a GS employee which is provided in subpart F of this part. A law processed in the following order:
payable under 5 CFR part 536 or, for a enforcement officer may be entitled to a
(a) Process general pay adjustments
former member of the Senior Executive special rate that is computed using the
before any individual pay action that
Service, under 5 CFR 359.705. underlying GS rate for the LEO’s grade
takes effect at the same time. General
Special rate means a rate of pay and step.
(b) When an employee’s GS rate or pay adjustments include an annual
within a special rate schedule
LEO special base rate is determined adjustment in the General Schedule
established under 5 CFR part 530,
under the rules of this subpart, the under 5 U.S.C. 5303; an adjustment in
subpart C, or a similar rate for GS
agency must determine any other rate of LEO special base rates; an adjustment of
employees established under other legal
basic pay to which the employee is a locality pay percentage under subpart
authority (e.g., 38 U.S.C. 7455). The
entitled, including a locality rate under F of this part; the establishment or
term special rate does not include an
subpart F of this part and a special rate adjustment of a special rate schedule
LEO special base rate.
Special rate schedule means a pay under 5 CFR part 530, subpart C, or under 5 CFR part 530, subpart C, or
schedule established under 5 CFR part other legal authority (e.g., 38 U.S.C. similar legal authority (e.g., 38 U.S.C.
530, subpart C, to provide higher rates 7455). The employee is entitled to the 7455); and an adjustment of a retained
of pay for specified categories of GS highest applicable rate of basic pay as rate under 5 CFR 359.705(d)(1) and
positions or employees at one or more his or her payable rate. When an 536.305(a)(1) based on the
grades or levels or a similar schedule employee’s special rate is surpassed by establishment or adjustment of a pay
established for GS employees under a higher locality rate, his or her schedule.
other legal authority (e.g., 38 U.S.C. entitlement to a special rate is (b) Convert the employee’s rate(s) of
7455). terminated, as provided in § 530.303(d). pay to reflect any change in the location
Special rate supplement means the (c) When application of the rules in of the employee’s official worksite, as
portion of a special rate paid above an this subpart results in setting an prescribed in § 531.205 (or similar
employee’s GS rate after applying any employee’s payable rate in the highest geographic conversion provision).
(c) Process any within-grade increase § 531.212 Superior qualifications and employment does not block application
or quality step increase to which the special needs pay-setting authority. of this section.
employee is entitled. (a) Agency authority. (1) An agency (b) Superior qualifications or special
(d) Process any promotion action may use the superior qualifications and needs determination. An agency may set
using the rates of pay and rate ranges in special needs pay-setting authority in 5 the payable rate of basic pay of a newly
the sequence prescribed in § 531.214. U.S.C. 5333 to set the payable rate of appointed employee above the
(e) Except as otherwise provided in basic pay for an employee above the minimum rate of the grade under this
paragraphs (a) through (d) of this section minimum rate of the highest applicable section if the candidate meets one of the
or other regulation, process individual rate range for the employee’s position of following criteria:
pay actions that take effect at the same record. The superior qualifications and (1) The candidate has superior
time in the order that gives the special needs pay-setting authority may qualifications. An agency may
employee the maximum benefit. be used for— determine that a candidate has superior
(i) A first appointment (regardless of qualifications based on the level, type,
§ 531.207 Applying annual pay tenure) as a civilian employee of the or quality of the candidate’s skills or
adjustments.
Federal Government; or competencies demonstrated or obtained
(a) Except as otherwise provided in (ii) A reappointment that is through experience and/or education,
this section, on the effective date of a GS considered a new appointment under 5 the quality of the candidate’s
pay adjustment under 5 U.S.C. 5303 or U.S.C. 5333 because it meets the accomplishments compared to others in
similar authority, an agency initially conditions prescribed in paragraph the field, or other factors that support a
must set the GS rate of a GS employee (a)(2) and (3) of this section. superior qualifications determination.
at the new rate of the adjusted General (2) An agency may use the superior The candidate’s skills, competencies,
Schedule corresponding to the qualifications and special needs pay- experience, education, and/or
employee’s grade and step in effect setting authority for a reappointment accomplishments must be relevant to
immediately before the effective date of only when the employee has had a the requirements of the position to be
the pay adjustment. Any simultaneous break in service of at least 90 days from filled. These qualities must be
pay actions must be processed after the the last period of civilian employment significantly higher than that needed to
pay adjustment, as provided in with the Federal Government, except as be minimally required for the position
§ 531.206. provided in paragraph (a)(3) of this and/or be of a more specialized quality
(b) For employees receiving a retained section. compared to other candidates; or
rate immediately before the effective (3) An agency may use the superior (2) The candidate fills a special
date of a GS annual pay adjustment, the qualifications and special needs pay- agency need. An agency may determine
agency must adjust the employee’s rate setting authority for a reappointment that a candidate fills a special agency
of basic pay under the rules in 5 CFR without requiring a 90-day break in need if the type, level, or quality of
536.305 (or under 5 CFR 359.705 for service if the candidate’s civilian skills and competencies or other
former members of the Senior Executive employment with the Federal qualities and experiences possessed by
Service receiving a retained rate under Government during the 90-day period the candidate are relevant to the
that section). immediately preceding the appointment requirements of the position and are
(c) For GM employees, the agency was limited to one or more of the essential to accomplishing an important
must follow the rules in § 531.244. following: agency mission, goal, or program
Setting Pay When Appointment or (i) Employment under a time-limited activity. A candidate also may meet the
Position Changes or non-permanent appointment in the special needs criteria by meeting agency
competitive or excepted service; workforce needs, as documented in the
§ 531.211 Setting pay for a newly (ii) Employment under an agency’s strategic human capital plan.
appointed employee. appointment as an expert or consultant (c) Pay rate determination. An agency
(a) First appointment. An agency must under 5 U.S.C. 3109 and 5 CFR part 304; may consider one or more of the
set the payable rate of basic pay for an or following factors, as applicable in the
employee receiving his or her first (iii) Employment under a provisional case at hand, to determine the step at
appointment (regardless of tenure) as a appointment designated under 5 CFR which to set an employee’s payable rate
civilian employee of the Federal 316.403. of basic pay using the superior
Government at the minimum rate of the (4) Service as an employee of a qualifications and special needs pay-
highest applicable rate range for the nonappropriated fund instrumentality setting authority:
employee’s position of record, except as (NAFI) of the Department of Defense or (1) The level, type, or quality of the
provided in § 531.212. Coast Guard is not considered candidate’s skills or competencies;
(b) Reemployment. For an employee employment by the Federal Government (2) The candidate’s existing salary,
who has previous civilian service in the under this section except for employees recent salary history, or salary
Federal Government, an agency must set covered by § 531.216 upon appointment documented in a competing job offer
the payable rate of basic pay upon or reappointment (i.e., employees who (taking into account the location where
reemployment at the minimum rate of move from NAFI position to GS position the salary was or would be earned and
the highest applicable rate range for the with a break in service of 3 days or less comparing the salary to payable rates of
employee’s position of record unless— and without a change in agency). basic pay in the same location);
(1) The employee meets the Employees covered by § 531.216 upon (3) Significant disparities between
conditions in § 531.212 and an agency appointment or reappointment to a GS Federal and non-Federal salaries for the
determines it is appropriate to set pay position are not eligible to have pay set skills and competencies required in the
under that section; or under the superior qualifications or position to be filled;
(2) The employee is eligible for a special needs authority, since their (4) Existing labor market conditions
higher payable rate under the maximum NAFI employment is considered and employment trends, including the
payable rate rule in § 531.221 and the employment by the Federal availability and quality of candidates for
agency chooses to apply that rule. Government. Otherwise, NAFI the same or similar positions;
(5) The success of recent efforts to § 531.213 Setting pay upon change in apply to an employee before and after
recruit candidates for the same or position without a change in grade. promotion, as provided in paragraph
similar positions; For an employee who is moved (d)(2) of this section. In this paragraph
(6) Recent turnover in the same or laterally (by transfer, reassignment, (d), references to an employee’s rate or
similar positions; change in type of appointment, change range ‘‘before promotion’’ mean the rate
(7) The importance/criticality of the in official worksite, or other change in or range before promotion but after any
position to be filled and the effect on the position) from one GS position to a geographic conversion required by
agency if it is not filled or if there is a different GS position without a change paragraph (b) of this section.
delay in filling it; in grade or a break in service, the agency (2) Determining applicable method.
(8) The desirability of the geographic must determine the employee’s payable The following rules govern
location, duties, and/or work rate of basic pay and any underlying determinations regarding which
environment associated with the rate(s)s of basic pay based on the promotion method to use:
position; employee’s new position of record, new (i) Apply the standard method
(9) Agency workforce needs, as official worksite, and the step (or rate) exclusively if the employee is covered
documented in the agency’s strategic in effect before the position change. If by the same pay schedules before and
human capital plan; or an employee is eligible to receive a after promotion. For example, an
(10) Other relevant factors. higher rate under the maximum payable employee may be covered by the
(d) Consideration of recruitment rate rule in § 531.221, the agency may General Schedule and the same locality
incentive. In determining whether to use choose to apply that rule. If an rate schedule before and after
the superior qualifications and special employee is entitled to pay retention, promotion.
needs pay-setting authority and the the agency must apply the rules in 5 (ii) Apply the alternate method if the
level at which the employee’s payable CFR part 536. employee is covered by different pay
rate of basic pay should be set, an schedules before and after promotion
§ 531.214 Setting pay upon promotion.
agency must consider the possibility of and if the alternate method will produce
(a) General. An agency must set an a higher payable rate upon promotion
authorizing a recruitment incentive employee’s payable rate of basic pay
under 5 CFR part 575, subpart A. than the standard method. For example,
upon promotion following the rules in an employee may be covered after
(e) Approval and documentation this section, consistent with 5 U.S.C.
requirements. (1) An agency must promotion by a special rate schedule
5334(b). The promotion rule in 5 U.S.C. that did not apply to him or her before
approve each determination to use the 5334(b) and the implementing rules in
superior qualifications and special promotion, and the alternate method
this section apply only to a GS will produce a higher rate.
needs pay-setting authority prior to the employee who is promoted from one GS (iii) Apply the standard method in all
candidate entering on duty. Each grade to a higher GS grade. Consistent other circumstances, except that an
determination must be made in writing with § 531.206, any general pay agency may, at its sole and exclusive
and reviewed and approved by an adjustment that takes effect on the same discretion, apply the alternate method
official of the agency who is at least one day as a promotion action must be for an employee covered by different
level higher than the employee’s processed before applying the rules in pay schedules before and after
supervisor, unless there is no official at this section. promotion even though the method
a higher level in the agency. (b) Geographic conversion. When an produces a lesser payable rate than the
(2) An agency must document all of employee’s official worksite is changed standard method, but only under the
the following for each determination to to a new location where different pay following conditions:
use the superior qualifications and schedules apply, the agency must (A) The agency determines it would
special needs pay-setting authority convert the employee to the applicable be inappropriate to use the alternate
sufficient to allow reconstruction of the pay schedule(s) and rate(s) of basic pay method based on a finding that the
action taken in each case: for the new official worksite based on higher pay for the position before
(i) The superior qualifications of the the employee’s position of record before promotion is not sufficiently related to
candidate under paragraph (b)(1) of this promotion as provided in § 531.205 the knowledge and skills required for
section or the special agency need for before processing a simultaneous the position after promotion; and
the candidate’s services under promotion action. (B) The agency informs the employee
paragraph (b)(2) of this section which (c) Simultaneous within-grade of the determination to use the alternate
justifies a higher than minimum rate; increase. When an employee is entitled method before the effective date of the
(ii) An explanation of the factor(s) and to a within-grade increase or a quality promotion.
supporting documentation under step increase that is effective at the same (3) Standard method. (i) The standard
paragraph (c) of this section which were time as a promotion, the agency must method of applying the promotion rule
used to justify the rate at which the process that increase before processing is presented in the following table:
employee’s pay is set. The written the promotion action.
documentation must explain how the (d) Promotion rule. (1) General. An Promotion Rule—Standard Method
factors directly relate to the rate agency must determine an employee’s Step A—If applicable, apply the geographic
approved; and payable rate of basic pay upon conversion rule in § 531.205 to determine the
(iii) The reasons for authorizing a promotion using the standard method in employee’s rate(s) and range(s) of basic pay
higher than minimum rate instead of or paragraph (d)(3) of this section or the based on the employee’s position of record
in addition to a recruitment incentive alternate method in paragraph (d)(4) of before promotion and the new official
under 5 CFR part 575, subpart A. this section, subject to the special rule worksite, as required by paragraph (b) of this
(f) Ensuring compliance. An agency in paragraph (d)(5) of this section for section. Also, if applicable, provide any
simultaneous within-grade increase or
must establish appropriate internal employees receiving a retained rate quality step increase, as required by
guidelines and evaluation procedures to before promotion. A determination paragraph (c) of this section. Use the
ensure compliance with the law, this regarding whether the alternate method resulting rate(s) of basic pay as the existing
section of OPM regulations, and agency is used in place of the standard method rate(s) in effect immediately before
policies. depends on the pay schedules that promotion in applying steps B and C.
Step B—Identify the employee’s existing (4) Alternate method. (i) The alternate no special rate schedule would apply to
GS rate (or LEO special base rate) in the grade method of applying the promotion rule, a GS–7 or GS–9 position in the old
before promotion, and increase that rate by which involves using pay schedules occupational series, but a special rate
two GS within-grade increases for that grade.
Step C—Determine the payable (highest)
applicable before promotion and then schedule does apply to the GS–9
rate of basic pay for the step or rate converting pay to a different schedule position in the new occupational series.
determined in step B by applying any locality applicable after promotion, is presented Thus, different pay schedules apply
payment or special rate supplement in the following table: before and after promotion, and the
applicable to the given grade, based on the alternate method would result in a
employee’s position of record before Promotion Rule—Alternate Method higher rate than the standard method.
promotion and official worksite after Steps A, B, C—Same as standard method As provided in paragraph (d)(2)(ii) of
promotion. (If the rate determined in step B in paragraph (d)(3) of this section. this section, the agency must apply the
is above the range maximum, use the same Step D—Identify the highest applicable
locality payment or special rate supplement alternate method and compare the result
rate range for the employee’s grade after to the result derived under the standard
that applies to rates within the rate range.) promotion based on consideration of any pay
Step D—Identify the highest applicable method, as follows:
schedule that applied to the employee’s
rate range for the employee’s position of Step A—Apply the geographic conversion
position of record before promotion (after any
record after promotion and find the lowest rule in § 531.205 to determine the rates of
geographic conversion). (Do not consider pay
step rate in that range that equals or exceeds basic pay for the GS–7, step 7, position in
schedules that apply only to the employee’s
the rate determined in step C. This is the Washington, DC. Based on the GS–7 position
new position of record after promotion. For
employee’s payable rate of basic pay upon before promotion (including the old
promotion. (If the rate identified in step C example, if a particular special rate schedule
applies only to an employee’s position of occupational series), the pay schedules
exceeds the maximum of the rate range applicable to the employee in Washington,
identified in this step, the employee’s record after promotion, disregard that
schedule in applying this step.) Find the DC, would be the General Schedule and the
payable rate is that maximum rate, or, if the locality rate schedule applicable in
employee’s existing rate is higher than that lowest step in the highest applicable rate
range that equals or exceeds the rate Washington, DC.
maximum rate, a retained rate under 5 CFR
identified in step C. (If the rate identified in Step B—Using the underlying General
part 536 equal to that existing rate.)
step C exceeds the maximum of the rate Schedule, increase the GS–7, step 7, rate by
(ii) Example of standard method: A range identified in this step, the employee’s two within-grade increases, which produces
GS–11, step 5, employee in Los Angeles payable rate is that maximum rate, or, if the the GS–7, step 9, rate.
is promoted to a GS–12 position in employee’s existing rate is higher than that Step C—The payable (highest) rate of basic
Kansas City. In Kansas City, a special maximum rate, a retained rate under 5 CFR pay for GS–7, step 9, is the corresponding
part 536 equal to that existing rate.) GS–7, step 9, locality rate in Washington, DC.
rate schedule would apply to the
Step E—Convert the lowest step rate Step D—If the employee were promoted to
employee’s GS–11 position, but at GS– a GS–9 position in the old occupational
12 no special rate range applies; instead, identified in step D to a corresponding step
rate (same step) in the highest applicable rate series, the highest applicable rate range for
just a locality rate range applies. Thus, that GS–9 position after promotion would be
range for the employee’s new position of
different pay schedules apply to the record after promotion. This is the the GS–11 locality rate range in Washington,
employee in Kansas City before and employee’s alternate payable rate of basic pay DC. The GS–9, step 3, locality rate is the
after promotion. The agency determines upon promotion. (If the rate derived under lowest step rate in that range that equals or
that the standard method produces a step D was a retained rate, determine the exceeds the GS–7, step 9, locality rate from
higher rate than the alternate method alternate payable rate of basic pay as step C.
provided in paragraph (d)(4)(ii) of this Step E—Convert the GS–9, step 3, locality
because the employee is covered by a rate to the higher GS–9, step 3, special rate
special rate schedule before promotion section.)
Step F—If the alternate payable rate that applies to the employee’s position after
but not after promotion, The agency also promotion (including the new occupational
identified in step E exceeds the payable rate
determines it will not invoke the series). That GS–9, step 3, special rate is the
resulting from the standard method in
exception provision under paragraph paragraph (d)(3) of this section, the employee payable rate of basic pay upon promotion.
(d)(2)(iii). The agency applies the is entitled to the alternate rate upon Step F—Assume that the standard method
standard method as follows: promotion. Otherwise, the employee is would have compared the GS–7, step 9,
entitled to the payable rate derived under the locality rate directly to the higher GS–9 range
Step A—Apply the geographic conversion of special rates and produced a rate of GS–
rule to determine the rates of basic pay for standard method, except as provided in
paragraph (d)(2)(iii) of this section. 9, step 1. Since the rate produced by the
the GS–11, step 5, position in Kansas City. alternate method (GS–9, step 3) is greater
The pay schedules applicable to the (ii) In applying step E of the table in than the rate produced by the standard
employee in Kansas City are the General
Schedule, the locality rate schedule paragraph (d)(4)(i) of this section, if the method, the result of the alternate method is
rate derived under step D was a retained used.
applicable in Kansas City, and the special
rate schedule applicable to the employee’s rate, compare the retained rate to the (5) If employee was receiving a
position in Kansas City. highest applicable rate range identified retained rate before promotion. (i) If an
Step B—Using the underlying General in step E. If the retained rate exceeds the employee’s existing payable rate of basic
Schedule, increase the GS–11, step 5, rate by maximum of that rate range, the pay before promotion is a retained rate,
two within-grade increases, which produces retained rate continues and is the
the GS–11, step 7, rate.
apply the applicable promotion
Step C—The payable (highest) rate of basic
employee’s alternate payable rate upon methods in paragraphs (d)(3) or (d)(4) of
pay for GS–11, step 7, is the corresponding promotion. If the retained rate is below this section as if the employee were
GS–11, step 7, special rate that would be the rate range maximum, the employee’s receiving the maximum rate of the
applicable to the GS–11 position in Kansas alternate payable rate upon promotion is employee’s grade before promotion.
City. the maximum rate of the range (step 10). (ii) If the payable rate of basic pay
Step D—The highest applicable rate range (iii) Example of alternate method: A after promotion determined under
for the GS–12 position after promotion is the GS–7, step 7, employee in Atlanta is paragraph (d)(5)(i) of this section is
GS–12 locality rate range under the Kansas promoted to a GS–9 position in
City locality rate schedule. Find the lowest
greater than the employee’s existing
step rate in that range that equals or exceeds Washington, DC. The promotion retained rate, the employee is entitled to
the GS–11, step 7, special rate from step C. involves not only a change in grade but that payable rate.
That step rate is the payable rate of basic pay also a change in the employee’s (iii) If the existing retained rate is
upon promotion. occupational series. In Washington, DC, greater than the rate determined under
paragraph (d)(5)(i) of this section, the the maximum payable rate rule in than 3 days or in conjunction with a
retained rate must be compared to the § 531.221. As provided in subpart D of transfer to a different agency, the
highest applicable rate range for the this part, time during the temporary employee has no special conversion
position after promotion, as provided in promotion may be creditable service rights, and this section does not apply.
5 CFR 536.304. The employee is entitled towards GS within-grade increases in (b) NAFI highest previous rate. For the
to the lowest step rate in the range that the lower grade. purpose of this section, the term ‘‘NAFI
equals or exceeds the retained rate or, if (2) If a temporary promotion is made highest previous rate’’ means the
the retained rate exceeds the range permanent immediately after the highest rate of basic pay received by an
maximum, to the retained rate. temporary promotion ends, the agency employee during service in a NAFI
(6) If employee is promoted from GS– may not return the employee to the position, as described in 5 U.S.C.
1 or GS–2. In applying the promotion lower grade. (See § 531.214(e).) 2105(c).
rule to an employee who is promoted (d) Demotion upon failure to complete (c) Voluntary move. (1) For a
from step 9 or 10 of grade GS–1 or GS– a supervisory probationary period. Department of Defense or Coast Guard
2, the value of two within-grade When an employee promoted to a employee who moves voluntarily,
increases is determined by doubling the supervisory or managerial position does without a break in service of more than
within-grade increase between step 9 not satisfactorily complete a 3 days, from an NAFI position in the
and 10 for the applicable grade. probationary period established under 5 Department of Defense or the Coast
(e) Temporary promotions. Pay is set U.S.C. 3321(a)(2) and is returned to a Guard to a GS position in the same
for an employee receiving a temporary position at the lower grade held before agency, the agency may set the
promotion on the same basis as a the promotion, the agency must set the employee’s initial payable rate of basic
permanent promotion. Upon expiration employee’s payable rate of basic pay pay at any step rate in the highest
or termination of the temporary upon return to the lower grade as if the applicable rate range currently in effect
promotion, pay is set as provided in employee had not been promoted to the for the employee’s GS position of record
§ 531.215(c). If a temporary promotion is supervisory or managerial position, and official worksite which does not
made permanent immediately after the unless the agency sets pay at a higher exceed the employee’s NAFI highest
temporary promotion ends, the agency rate under the maximum payable rate previous rate of pay, except as provided
may not return the employee to the rule in § 531.221. As provided in in paragraph (c)(2) or (3) of this section.
lower grade; instead, the agency must subpart D of this part, time served (2) If the highest applicable rate range
convert the employee’s temporary following the promotion may be would be different if the official
promotion to a permanent promotion creditable service towards GS within- worksite for the employee’s position of
without a change in pay. grade increases in the lower grade. record were located at the place where
(f) Corrections of demotions. The However, nothing in this paragraph the employee was stationed while
promotion rule in this section may not prohibits an agency from taking action earning the NAFI highest previous rate,
be used in correcting an erroneous against an employee covered by this the agency must determine the
demotion. (See § 531.215(e).) paragraph for cause unrelated to employee’s maximum payable rate of
supervisory or managerial performance basic pay as follows:
§ 531.215 Setting pay upon demotion. (i) Compare the NAFI highest
and setting pay in accordance with such
(a) General. Except as otherwise previous rate to the highest applicable
action.
provided in this section, an employee (e) Correcting an erroneous demotion. rate range currently in effect in the
who is demoted is entitled to the When a demotion is determined to be location where the employee was
minimum payable rate of basic pay for erroneous and is canceled, the agency stationed while earning that rate. The
the lower grade unless the agency sets must set the employee’s rate of basic highest applicable rate range is
the employee’s pay at a higher rate pay as if the employee had not been determined based on the pay schedules
under— demoted. The action is a correction of that would be applicable to the
(1) The grade and pay retention rules the original demotion action and may employee’s current GS position of
in 5 CFR part 536, as applicable; or not be treated as a promotion under record if the employee were stationed in
(2) The maximum payable rate rule in § 531.214. For example, when a that location. Identify the highest step
§ 531.221, as applicable. demotion based on a reclassification of rate in the highest applicable rate range
(b) Geographic conversion. If the that was equal to or lower than the
the employee’s position is found to be
employee’s official worksite after NAFI highest previous rate. If the NAFI
erroneous and is corrected retroactively
demotion is in a different geographic highest previous rate is less than the
under 5 CFR 511.703, the corrective
location where different pay schedules range minimum, identify the minimum
action is cancellation of the original
apply, the agency must first convert the step rate (step 1).
demotion.
employee’s payable rate of pay as (ii) Identify the step rate in the highest
required by § 531.205 before setting the § 531.216 Setting pay when an employee applicable rate range for the employee’s
demoted employee’s pay using the grade moves from a Department of Defense or current official worksite and position of
and pay retention rules in 5 CFR part Coast Guard nonappropriated fund record that corresponds to the step rate
536 or the maximum payable rate rule instrumentality. derived under paragraph (c)(2)(i) of this
in § 531.221. (a) General. This section governs the section. That corresponding rate is the
(c) Expiration or termination of a setting of pay for an employee who maximum payable rate at which the
temporary promotion. (1) When an moves to a GS position from a position agency may set the employee’s pay
employee is returned to the lower grade in a Department of Defense or Coast under this section, except as provided
from which promoted on expiration or Guard nonappropriated fund by paragraph (c)(3) of this section. The
termination of a temporary promotion, instrumentality (NAFI) (as described in agency may set the employee’s rate of
the agency must set the employee’s 5 U.S.C. 2105(c)) without a break in basic pay at any step rate below that
payable rate of basic pay in the lower service of more than 3 days and without maximum payable rate.
grade as if he or she had not been a change in the employing agency. If an (3) An agency may choose to apply
temporarily promoted, unless the employee moves from an NAFI position the maximum payable rate rule in
agency sets pay at a higher rate under to a GS position with a break of more § 531.221 based on a non-NAFI rate of
basic pay if that rule provides a higher Using a Highest Previous Rate Under (3) Identify the rate on the currently
rate than provided by paragraph (c)(1) or the Maximum Payable Rate Rule applicable range of GS rates or LEO
(2) of this section. special base rates for the employee’s
§ 531.221 Maximum payable rate rule. current position of record and grade that
(d) Involuntary move. (1) For a
(a) General. (1) An agency may apply corresponds to the step identified in
Department of Defense or Coast Guard
the maximum payable rate rule as paragraph (b)(2) of this section. This rate
employee who is moved involuntarily
described in this section to determine is the maximum payable GS rate or LEO
(as defined in paragraph (d)(3) of this an employee’s payable rate of basic pay
section), without a break in service of special base rate the agency may pay the
under the GS pay system at a rate higher employee under this section.
more than 3 days, from a position with than the otherwise applicable rate upon
substantially the same duties in a (4) After setting the employee’s GS or
reemployment, transfer, reassignment, LEO special base rate within the rate
Department of Defense or Coast Guard promotion, demotion, or change in type
NAFI to a GS position in the same range for the grade (not to exceed the
of appointment. (Note: Special rules for maximum payable rate identified in
agency, the employee is entitled to an GM employees are provided in
initial payable rate of basic pay at the paragraph (b)(3) of this section), the
§ 531.247.) A payable rate set under this agency must determine the employee’s
lowest step rate of the grade that is section must take effect on the effective
equal to or greater than the employee’s payable rate of basic pay based on the
date of the action involved. This section employee’s GS or LEO special base rate.
rate of basic pay in the NAFI position may not be used to set an employee’s (c) When highest previous rate is
immediately before the move. The rate of basic pay retroactively unless a based on a GS employee’s special rate.
agency must compare the employee’s retroactive action is required to comply When a GS employee is reassigned
former NAFI rate to the highest with a nondiscretionary agency policy. under the conditions described in
applicable rate range for the employee’s (2) At its discretion, an agency may § 531.222(c), the employee’s former
GS position of record and official set an employee’s rate(s) of basic pay at special rate in effect immediately before
worksite. the maximum rate identified under this the reassignment may be used as the
(2) For an employee covered by section or at a lower rate. However, the employee’s highest previous rate. If the
paragraph (d)(1) of this section, the employee’s rate may not be lower than employee’s former special rate schedule
agency may set the initial payable rate the rate to which he or she is entitled is being adjusted on the effective date of
of basic pay at any of the following under any other applicable pay-setting the employee’s reassignment, the agency
rates, unless the employee is entitled to rule. must determine what the employee’s
receive a higher rate of basic pay under (3) In applying this section, an agency special rate would have been on that
paragraph (d)(1) of this section: must use applicable annual rates of pay adjusted schedule (before any other
(i) A step rate within the highest or, if a rate under a non-GS system is an simultaneous action) and treat the
applicable rate range for the employee’s hourly rate, convert the hourly rate to an resulting special rate as the employee’s
GS position of record and official annual rate. former special rate in applying
worksite that does not exceed the (b) When highest previous rate is paragraph (c)(1) and (2) of this section.
employee’s NAFI highest previous rate based on a GS rate or LEO special base The agency must apply the maximum
(consistent with the method prescribed rate. When an employee’s highest payable rate rule as follows:
in paragraphs (c)(1) and (2) of this previous rate (as determined under (1) When the employee is assigned to
section); § 531.222) is based on a GS rate or an an official worksite within the
LEO special base rate paid under the GS geographic boundaries of a formerly
(ii) A rate determined under the
pay system, an agency must determine applicable special rate schedule,
maximum payable rate rule in § 531.221
the maximum payable rate of basic pay compare the former special rate to the
(using non-NAFI rates of basic pay); or
that may be paid to the employee as rates of basic pay in the highest
(iii) A rate determined under the follows: applicable rate range for the employee’s
authority to grant pay retention in 5 CFR (1) Compare the employee’s highest current position of record and current
536.302(a). previous rate with the GS rates for the official worksite. Identify the lowest
(3) For the purpose of this paragraph grade in which pay is currently being step rate in that range that equals or
(d), ‘‘moved involuntarily’’ means the set. For this comparison, use the exceeds the former special rate (or the
movement of the incumbent of an NAFI schedule of GS rates in effect at the time maximum step rate, if the former special
position in the Department of Defense or the highest previous rate was earned. In rate exceeds the range maximum). That
the Coast Guard with the position when applying this paragraph to an employee step rate is the employee’s maximum
it is moved to the civil service who was a law enforcement officer payable rate of basic pay.
employment system of the Department receiving an LEO special base rate when (2) When the employee is assigned to
of Defense or the Coast Guard, the highest previous rate was earned, an official worksite outside the
respectively. compare the highest previous rate to the geographic boundaries of the formerly
applicable LEO special base rates in lieu applicable special rate schedule,
§ 531.217 Special conversion rules for of GS rates if the grade in which pay is
certain non-GS employees.
determine the maximum payable rate as
currently being set is one of the grades follows:
When an employee moves (without a from GS–3 through GS–10. (i) Convert the former special rate to
break in service) to a GS position from (2) Identify the lowest step in the a corresponding rate (same step) in the
a non-GS system under an authority in grade at which the GS rate (or LEO current highest applicable rate range for
5 U.S.C. chapters 47, 95, or similar special base rate, if applicable) was the new official worksite based on the
provision of law, and that authority equal to or greater than the employee’s employee’s position of record
provides that an employee will be highest previous rate. If the employee’s immediately before the reassignment.
converted to GS-equivalent rates highest previous rate was greater than (ii) If the rate resulting from the
immediately before leaving the non-GS the maximum GS rate (or LEO special geographic conversion under paragraph
system, the employee is considered a GS base rate, if applicable) for the grade, (c)(2)(i) of this section is a special rate,
employee in applying the provisions of identify the step 10 rate (i.e., maximum that converted special rate is deemed to
this subpart. rate of the grade). be the employee’s former special rate
and highest previous rate in applying § 531.222 Rates of basic pay that may be special base rate, if applicable) in
paragraph (c)(2)(iii) of this section. If the used as the highest previous rate. determining the employee’s highest
resulting rate is not a special rate, this (a)(1) Subject to the conditions in this previous rate for the purpose of
paragraph (c) may not be used to section and § 531.223, the highest applying paragraph (b) of this section.
determine the employee’s maximum previous rate used in applying § 531.221
is— § 531.223 Rates of basic pay that may not
payable rate. Instead, paragraph (b) of be used as the highest previous rate.
this section must be used. (i) The highest rate of basic pay
previously received by an individual The highest previous rate may not be
(iii) Compare the employee’s highest
while employed in a civilian position in based on the following:
previous rate (i.e., the former special (a) A rate received under an
rate after the geographic conversion) any part of the Federal Government
(including service with the government appointment as an expert or consultant
with the rates on the current highest under 5 U.S.C. 3109;
applicable rate range for the new official of the District of Columbia for
(b) A rate received in a position to
worksite based on the employee’s employees first employed by that
which the employee was temporarily
position of record after the government before October 1, 1987),
promoted for less than 1 year, except
reassignment. Identify the lowest step without regard to whether the position
upon permanent placement in a
rate in that range that equals or exceeds was in the GS pay system; or
position at the same or higher grade;
the highest previous rate (or the (ii) The highest rate of basic pay in
(c) A rate received in a position from
maximum step rate, if the highest effect when a GS employee held his or
which the employee was reassigned or
previous rate exceeds the range her highest GS grade and highest step reduced in grade for failure to
maximum). That step rate is the within that grade. satisfactorily complete a probationary
employee’s maximum payable rate of (2) The highest previous rate must be
period as a supervisor or manager;
basic pay. a rate of basic pay received by an (d) A rate received by an individual
(3) After setting the employee’s rate of employee while serving— while employed by the government of
basic pay in the highest applicable rate (i) On a regular tour of duty under an
the District of Columbia who was first
range (not to exceed the maximum appointment not limited to 90 days or
employed by that government on or
payable rate), the agency must less; or after October 1, 1987;
(ii) For a continuous period of not less (e) A rate received by an individual
determine any underlying rate of basic
than 90 days under one or more while employed by a Department of
pay to which the employee is entitled
appointments without a break in Defense or Coast Guard
based on the employee’s step rate.
service. nonappropriated fund instrumentality;
(d) When highest previous rate is (b) For periods of service as a GS
based on a rate under a non-GS pay (f) A rate received solely during a
employee, the highest previous rate may period of interim relief under 5 U.S.C.
system. When an employee’s highest not be a special rate, except as provided
previous rate (as provided in § 531.222) 7701(b)(2)(A);
in paragraph (c) of this section. If the (g) A special rate established under 5
is based on a rate of basic pay in a non- highest previous rate is a locality rate,
GS pay system, the agency must U.S.C. 5305 and 5 CFR part 530, subpart
the underlying GS rate or an LEO C, or 38 U.S.C. 7455 (except as provided
determine the maximum payable rate of special base rate associated with that
basic pay that may be paid to the in § 531.222(c)); or
locality rate must be used as the highest (h) A rate received under a void
employee in his or her current GS previous rate in applying § 531.221(b).
position of record as follows: appointment or a rate otherwise
(c) An agency may use a GS contrary to applicable law or regulation.
(1) Compare the highest previous rate employee’s special rate established
to the highest applicable rate range in under 5 U.S.C. 5305 and 5 CFR part 530, Special Rules for GM Employees
effect at the time and place where the subpart C, or 38 U.S.C. 7455 as the § 531.241 Retaining and losing GM status.
highest previous rate was earned. The highest previous rate when all of the
highest applicable rate range is (a) An employee retains status as a
following conditions apply: GM employee (as defined in § 531.203)
determined as if the employee held the (1) The employee is reassigned to
current GS position of record (including when detailed to any position or when
another position in the same agency at reassigned to another GS position in
grade in which pay is being set) at that the same grade level;
time and place. Identify the lowest step which the employee continues to be a
(2) The special rate is the employee’s
rate in that range that was equal to or supervisor or management official (as
rate of basic pay immediately before the
higher than the highest previous rate (or defined in 5 U.S.C. 7103(a)(10) and
reassignment; and
the maximum step rate if the highest (11)).
(3) An authorized agency official finds (b) An employee permanently loses
previous rate exceeded the range that the need for the services of the
maximum). status as a GM employee if he or she is
employee, and the employee’s promoted (including a temporary
(2) Convert the step rate identified in contribution to the program of the promotion), transferred, demoted,
paragraph (d)(1) of this section to a agency, will be greater in the position to reassigned to a position in which the
corresponding rate (same step) in the which reassigned. An agency must make employee will no longer be a supervisor
current highest applicable rate range for such determinations on a case-by-case or management official, has a break in
the employee’s current GS position of basis. In each case, the agency must service of more than 3 days, or becomes
record and official worksite. That step document the determination to use the entitled to a retained rate under 5 CFR
rate is the employee’s maximum special rate as an employee’s highest part 536. (A retained grade is not
payable rate of basic pay. previous rate in writing. considered in determining whether a
(3) After setting the employee’s rate of (d) When an agency is barred from GM employee has been reduced in
basic pay in the current highest using a special rate established under 5 grade. See 5 CFR 536.205.)
applicable rate range (not to exceed the U.S.C. 5305 and 5 CFR part 530, subpart
maximum payable rate), the agency C, or 38 U.S.C. 7455 as an employee’s § 531.242 Setting pay upon loss of GM
must determine any underlying rate of highest previous rate under § 531.223(g), status.
basic pay to which the employee is the agency must consider a special rate (a) On loss of status as a GM employee
entitled at the determined step rate. employee’s underlying GS rate (or LEO under § 531.241 (except as provided in
paragraph (b) of this section), an on a GS step rate in the post-promotion special rates for other GS employees.
employee must receive his or her grade. The applicable locality payment or
existing payable rate of basic pay, plus special rate supplement is added on top
§ 531.244 Adjusting a GM employee’s rate
any of the following adjustments that of the GM employee’s GS rate.
at the time of an annual pay adjustment.
may be applicable on the effective date
of the loss of status, in the order (a) On the effective date of an annual § 531.246 Within-grade increases for GM
pay adjustment under 5 U.S.C. 5303 or employees.
specified:
(1) The amount of any annual similar authority, an agency must set the GM employees are entitled to within-
adjustment in GS rates under 5 U.S.C. new GS rate for a GM employee as grade increases as provided under
5303, and the amount of any adjustment follows: subpart D of this part. A within-grade
in locality payments or special rate (1) For a GM employee whose rate of increase may not cause a GM
supplements, to which the employee basic pay equals a regular GS step rate, employee’s rate of basic pay to exceed
otherwise would be entitled on that set the employee’s rate at the new step the maximum rate of his or her grade.
date; rate in the adjusted General Schedule GM employees may receive quality step
(2) The amount of any within-grade that corresponds to the employee’s increases as provided in subpart E.
increase to which the employee grade and step as in effect immediately
before the effective date of the pay § 531.247 Maximum payable rate rule for
otherwise would be entitled on that date GM employees.
under 5 U.S.C. 5335 and subpart D of adjustment.
(2) For a GM employee whose rate of (a) A rate received by a GM employee
this part;
basic pay is below the minimum rate of may qualify as a highest previous rate
(3) The amount resulting from a
the GS rate range for the employee’s under § 531.222.
promotion effective on that date
grade, increase the existing GM rate by (b) As provided in §§ 531.221(a) and
(consistent with § 531.243(c));
(4) In the case of an employee who the same percentage as the annual pay 531.241(b), if an employee loses status
loses GM status without a change of adjustment for the GS rate range as a GM employee because of a transfer,
grade and whose GS rate falls between applicable to the employee’s grade, with promotion, demotion, or reassignment
two steps of a GS grade, the amount of the result rounded to the nearest dollar to a position in which the employee will
any increase needed to pay the (not to exceed the minimum rate of the no longer be a supervisor or
employee the rate for the next higher range). management official, and if the
step of that grade; and (3) For a GM employee whose rate of employing agency after the action
(5) In the case of an employee whose basic pay is between GS step rates, chooses to apply the maximum payable
resulting GS rate is below the minimum apply the following method: rate rule, the agency must follow the
rate of a GS grade, the amount of any rules in § 531.221.
Step A—Using the rates and ranges in (c) If an employee retains GM status
increase needed to pay the employee the effect immediately before the annual pay
minimum rate for that grade. adjustment, find the difference between the after an action that allows application of
(b) For an employee who loses status GM employee’s GS rate and the minimum the maximum payable rate rule in
as a GM employee as a result of a rate of the GS rate range for the employee’s § 531.221 to set the employee’s pay, the
demotion, pay must be set as provided grade. rules in § 531.221 must be applied in
in § 531.215. A GM employee’s off-step Step B—Find the difference between the accordance with the following special
maximum rate and minimum rate of the GS provisions:
GS rate at the grade before demotion is rate range in effect immediately before the
not converted to a GS step rate before (1) In comparing the employee’s
annual pay adjustment. (If the GS maximum highest previous rate to an applicable
the demotion, but the employee must be rate was not payable because of the EX level
placed on a GS step rate when pay is set V pay limitation in 5 U.S.C. 5303(f), use the
rate range for the grade in which pay is
in the lower grade. uncapped maximum rate.) being set, do not identify the lowest step
Step C—Divide the result from step A by rate that equals or exceeds the highest
§ 531.243 Promotion of a GM employee. the result from step B. Carry this result to the previous rate. Instead, identify the rate
(a) Upon promotion, an employee’s seventh decimal place and truncate, rather in the rate range that equals the highest
status as a GM employee ends, as than round, the result. This decimal factor previous rate unless that highest
provided in § 531.241(b). represents the employee’s relative position in previous rate is below the range
(b) When an employee loses status as the rate range. minimum or above the range maximum.
Step D—Using rates and ranges in effect
a GM employee because of a temporary after the annual pay adjustment, find the
If the highest previous rate is below the
promotion and is returned to the lower difference between the maximum rate and range minimum, identify the minimum
grade upon expiration or termination of minimum rate of the new GS rate range for rate (step 1) of the grade. If the highest
the temporary promotion under the employee’s grade. (If the GS maximum previous rate is above the range
§ 531.215(c)(1), he or she will be rate was not payable because of the EX level maximum, identify the maximum rate
deemed to have been placed at the V pay limitation, use the uncapped (step 10) of the grade.
lowest step rate that equals or exceeds maximum rate.) (2) In applying § 531.221(b) for an
the employee’s former GS rate (as a GM Step E—Multiply the result from step D by employee whose highest previous rate is
the factor derived from step C.
employee) on the effective date of the a GS rate, the highest previous rate must
Step F—Add the result from step E to the
temporary promotion, before applying minimum rate of the employee’s current GS be compared to the GS rate range for the
any other step increases based on his or rate range and round to the next higher grade in which pay is currently being
her service during the temporary whole dollar. The resulting rate is the GM set, but which was in effect at the time
promotion. employee’s new GS rate (subject to the EX the highest previous rate was earned. If
(c) A GM employee’s GS rate is used level V pay limitation). the highest previous rate was earned
as the existing rate of pay in applying while the current GS rate range was in
the promotion rule in § 531.214. A GM § 531.245 Computing locality rates and effect, the rate identified under
employee’s off-step GS rate in the grade special rates for GM employees. paragraph (c)(1) of this section is the
before promotion is not converted to a Locality rates and special rates are maximum payable GS rate. Otherwise,
GS step rate in applying the promotion computed for GM employees in the based on the rate identified in paragraph
rule, but the employee must be placed same manner as locality rates and (c)(1) of this section, the agency must
determine the corresponding rate in the (b) This subpart does not apply to any locality payments under subpart F of
current GS rate range for the grade in employee who is appointed by the this part and special rate supplements
which pay is currently being set. That President, by and with the advice and under 5 CFR part 530, subpart C, or 38
corresponding rate is the maximum consent of the Senate. U.S.C. 7455. A rate payable to a GM
payable GS rate. If the highest previous ■ 15. In § 531.403— employee is considered a GS rate.
rate was above the range minimum and ■ a. Amend the definition of acceptable Law enforcement officer or LEO has
below the range maximum, the level of competence by adding ‘‘(or the meaning given that term in 5 CFR
corresponding rate in the current GS designee)’’ after ‘‘head of the agency’’; 550.103.
rate range must be derived as follows: ■ b. Add in alphabetical order
LEO special base rate means a special
definitions of General Schedule, GM base rate established for GS law
Step 1—Find the difference between the
employee’s highest previous rate and the employee, GS rate, law enforcement enforcement officers at grades GS–3
minimum rate for the GS rate range (for the through GS–10 under section 403 of the
officer, LEO special base rate, promotion,
employee’s current grade) in effect at the Federal Employees Pay Comparability
and temporary promotion;
time the highest previous rate was earned. Act of 1990 (section 529 of Pub. L. 101–
■ c. Revise the definitions of agency,
Step 2—Find the difference between the 509, November 5, 1990, as amended)
maximum rate and the minimum GS rate of employee, equivalent increase, next
which is used in lieu of a GS rate.
the rate range identified in step 1. (If the GS higher rate within the grade, and rate of Next higher rate within the grade for
maximum rate was not payable because of basic pay; and a GM employee means the rate of basic
the EX level V pay limitation, use the ■ d. Revise the introductory text and
pay that exceeds the employee’s existing
uncapped maximum rate.) paragraph (2) of the definition of within-
Step 3—Divide the result from step 1 by rate of basic pay by one within-grade
grade increase. increase, not to exceed the maximum
the result from step 2. Carry this result to the The additions and revisions read as
seventh decimal place and truncate, rather rate of the grade. For the purpose of this
than round, the result. This decimal factor follows: definition, a within-grade increase
represents the employee’s relative position in § 531.403 Definitions. equals the dollar value of the GS within-
the rate range. grade increase for the applicable grade
Step 4—Using the current GS rate range * * * * *
(excluding any locality payment, special
(for the employee’s current grade), find the Agency means an agency with
rate supplement, or any other additional
difference between the maximum rate and employees covered by this subpart, as
the minimum rate. (If the GS maximum rate payment).
provided in § 531.402.
was not payable because of the EX level V * * * * *
pay limitation, use the uncapped maximum
* * * * * Promotion means an employee’s
rate.) Employee has the meaning given that movement from one grade or level to a
Step 5—Multiply the result from step 4 by term in 5 U.S.C. 2105, except that for higher grade or level while continuously
the factor derived from step 3. the purpose of applying the provisions employed (including such a movement
Step 6—Add the result from step 5 to the regarding equivalent increases and in conjunction with a transfer).
minimum rate for the employee’s current GS creditable service with respect to non-
rate range and round to the next higher
Rate of basic pay means the rate of
GS service, employee also includes— pay fixed by law or administrative
whole dollar. This rate is the maximum
(1) An individual employed by the action for the position held by an
payable GS rate the agency may pay the
employee (subject to the EX level V pay U.S. Postal Service or the Postal Rate employee before any deductions and
limitation). Commission who would be considered exclusive of additional pay of any kind.
an employee under 5 U.S.C. 2105 but for For an employee covered by the General
(3) In applying § 531.221(c) for an
the exclusion in section 2105(e); and Schedule, that rate of basic pay is the
employee whose highest previous rate is
(2) An individual employed by a GS rate or, if applicable, an LEO special
a special rate, the highest previous rate
nonappropriated fund instrumentality base rate.
(after any geographic conversion) must
for service that is creditable under * * * * *
be compared directly to the current
§ 531.406(b)(4). Temporary promotion means a time-
highest applicable rate range for the
Equivalent increase means an increase limited promotion with a not-to-exceed
employee’s position of record and
in an employee’s rate of basic pay, or an date or a specified term.
official worksite after reassignment.
opportunity for such an increase under
Thus, the rate identified under * * * * *
a non-GS pay system, as described in Within-grade increase is synonymous
paragraph (c)(1) of this section is the
§ 531.407. with the term ‘‘step increase’’ used in 5
maximum payable rate of basic pay.
General Schedule or GS means the U.S.C. 5335 and means—* * *
Subpart C—[Removed and Reserved] classification and pay system (2) For a GM employee whose rate
established under 5 U.S.C. chapter 51 does not equal a regular GS step rate
■ 13. Remove and reserve subpart C, and subchapter III of chapter 53. The (i.e., an off-step rate), a periodic increase
consisting of §§ 531.301 through term also refers to the pay schedule of in an employee’s rate of basic pay from
531.307. GS rates established under 5 U.S.C. the employee’s current rate to the next
5332, as adjusted under 5 U.S.C. 5303 higher rate within the grade (as defined
Subpart D—Within-Grade Increases or other law (including GS rates payable in this section) consistent with section
to GM employees). Law enforcement 4 of Public Law 103–89.
■ 14. Revise § 531.402 to read as follows:
officers receiving LEO special base rates
■ 16. Revise § 531.407 to read as follows:
§ 531.402 Employee coverage. are covered by the GS classification and
(a) Except as provided in paragraph pay system, but receive higher base rates § 531.407 Equivalent increase
(b) of this section, this subpart applies of pay in lieu of GS rates at grades GS– determinations.
to employees who— 3 through GS–10. (a) GS employees. For a GS employee,
(1) Are classified and paid under the GM employee has the meaning given an equivalent increase is considered to
General Schedule; that term in 5 CFR 531.203. occur at the time of any of the following
(2) Occupy permanent positions; and GS rate means a rate of basic pay personnel actions:
(3) Are paid less than the maximum within the General Schedule, excluding (1) A within-grade increase, excluding
rate of their grade. additional pay of any kind such as a quality step increase granted under
subpart E of this part or an interim (2) An opportunity to receive a General Schedule or GS means the
within-grade increase if that increase is within-level or within-range increase classification and pay system
later terminated under § 531.414; that results in forward movement in the established under 5 U.S.C. chapter 51
(2) A promotion (permanent or applicable range of rates of basic pay, and subchapter III of chapter 53. It also
temporary) to a higher grade, including where ‘‘forward movement in the refers to the pay schedule of GS rates
the promotion of an employee receiving applicable range’’ means any kind of established under 5 U.S.C. 5332, as
a retained rate under 5 CFR 359.705 or increase in the employee’s rate of basic adjusted under 5 U.S.C. 5303 or other
5 CFR part 536 that does not result in pay other than an increase that is law (including GS rates payable to GM
a pay increase, but excluding— directly and exclusively linked to— employees). Law enforcement officers
(i) A temporary promotion if the (i) A general structural increase in the (LEOs) receiving LEO special base rates
employee is returned to the grade and employee’s basic pay schedule or rate are covered by the GS classification and
step from which promoted (before any range (including the adjustment of a pay system, but receive higher base rates
adjustment in the step (or rate) based on range minimum or maximum); or of pay in lieu of GS rates at grades GS–
credit for service during the temporary (ii) The employee’s placement under 3 through GS–10.
promotion, as provided in § 531.215(c)); a new basic pay schedule within the GM employee has the meaning given
or same pay system. that term in 5 CFR 531.203.
(c) Locality rates and special rates. GS rate means a rate of basic pay
(ii) A promotion to a supervisory or
Since locality rates under subpart F of within the General Schedule, excluding
managerial position when the employee
this part and special rates under 5 CFR any LEO special base rate and
does not satisfactorily complete a
part 530, subpart C, and similar rates additional pay of any kind such as
probationary period established under 5
under other legal authority (e.g., 38 locality payments or special rate
U.S.C. 3321(a)(2) and is returned to a
U.S.C. 7455) are not rates of basic pay supplements. A rates payable to a GM
position at the lower grade and step or
for the purpose of this subpart, increases employee is considered a GS rate.
rate held by the employee before
in pay resulting from an adjustment in
placement (before any adjustment in the * * * * *
an employee’s locality payment or
step or rate based on credit for service Law enforcement officer or LEO has
special rate supplement or from
during the probationary period, as the meaning given that term in 5 CFR
placement on a new locality rate or
provided in § 531.215(d)); 550.103.
special rate schedule are not considered
(3) Application of the maximum LEO special base rate means a special
in making equivalent increase
payable rate rule in § 531.221 that base rate established for GS law
determinations.
results in a higher step rate within the enforcement officers at grades GS–3
employee’s GS grade (or an increase for Subpart F—Locality-Based through GS–10 under section 403 of the
a GM employee to the next higher rate Comparability Payments Federal Employees Pay Comparability
within the grade), except for application Act of 1990 (section 529 of Pub. L. 101–
of that rule in a demotion to the extent ■ 17. Revise § 531.601 to read as follows: 509, November 5, 1990, as amended)
that the employee’s rate of basic pay which is used in lieu of a GS rate.
§ 531.601 Purpose.
after demotion does not exceed the * * * * *
lowest step rate that equals or exceeds This subpart contains Office of Locality payment means a locality-
the employee’s rate of basic pay Personnel Management (OPM) based comparability payment payable
immediately before the demotion; regulations implementing 5 U.S.C. 5304, under 5 U.S.C. 5304 and this subpart.
(4) Application of the superior which authorizes locality payments in An employee’s locality payment is the
qualifications and special needs pay- defined geographic areas for GS difference between the employee’s
setting authority in § 531.212 that employees and other categories of locality rate and the employee’s
results in a higher step rate within the employees to whom locality payments scheduled annual rate of pay.
employee’s GS grade (or an increase for are extended. These regulations must be Locality pay percentage means the
a GM employee to the next higher rate read together with 5 U.S.C. 5304. percentage authorized for a locality pay
within the grade); or ■ 18. In § 531.602— area under 5 U.S.C. 5304 or 5304a
■ a. Revise the definitions of General
(5) Application of the qualifications which is used to compute a locality
pay authority in 5 U.S.C. 9814 to an Schedule and scheduled annual rate of payment (before applying any maximum
employee of the National Aeronautics pay; pay limitations under § 531.606).
■ b. Amend the definition of employee
and Space Administration, when the Locality rate means a scheduled
by removing the words ‘‘duty station’’ in annual rate of pay plus an applicable
employee fulfills the 1-year service
both places it appears and adding in each locality payment. An employee’s
requirement in the position for which
place the words ‘‘worksite’; locality rate is computed under
qualifications pay was paid or in a ■ c. Remove the definitions of locality
successor position. § 531.604.
rate of pay and official duty station; and
(b) Non-GS employees who move to ■ d. Add in alphabetical order the * * * * *
the GS pay system. For an employee definitions of GM employee, GS rate, law Official worksite means the official
who performs service under a non-GS enforcement officer, LEO special base location of an employee’s position of
Federal pay system which is potentially rate, locality payment, locality pay record as determined under § 531.605.
creditable towards a GS within-grade percentage, locality rate, official Position of record means an
increase waiting period, an equivalent worksite, position of record, rate range, employee’s official position (defined by
increase is considered to occur at the retained rate, special rate, special rate grade, occupational series, employing
time of any of the following personnel schedule, special rate supplement, agency, LEO status, and any other
actions: telework, and telework agreement. condition that determines coverage
(1) A promotion to a higher grade or The additions and revisions read as under a pay schedule (other than official
work level (unless the promotion is follows: worksite)), as documented on the
cancelled and the employee’s rate of employee’s most recent Notification of
basic pay is redetermined as if the § 531.602 Definitions. Personnel Action (Standard Form 50 or
promotion had not occurred); or * * * * * equivalent) and current position
description, excluding any position to resulting special rate exceeds the LEO’s the employing agency. An agency must
which the employee is temporarily rate of basic pay. document an employee’s official
detailed. For an employee whose change Telework means work performed by worksite on an employee’s Notification
in official position is followed within 3 an employee at an alternative worksite of Personnel Action (Standard Form 50
workdays by a reduction in force instead of the location of the employee’s or equivalent).
resulting in the employee’s separation assigned organization. Alternative (b) For an employee who is relocated
before he or she is required to report for worksites may include the employee’s and authorized to receive relocation
duty in the new position, the position home, telecenter, satellite office, field expenses under 5 U.S.C. chapter 57,
of record in effect immediately before installation, or other location. subchapter II (or similar authority), the
the position change is deemed to remain Telework agreement means a formal official worksite is the established
the position of record through the date oral or written agreement between a worksite for the position in the area to
of separation. supervisor and an employee to permit which the employee has been relocated.
Rate range or range means a range of the employee to work at an alternative For an employee authorized to receive
rates of basic pay for a grade within an worksite (i.e., telework) instead of the relocation expenses under 5 U.S.C. 5737
established pay schedule, excluding any location of the employee’s assigned in connection with an extended
retained rate. A rate range may consist organization. assignment resulting in a temporary
of GS rates, LEO special base rates, change of station, the duty station
locality rates, special rates, or, for non- § 531.603 [Amended] associated with the extended
GS employees, similar rates under other ■ 19. In § 531.603, amend paragraph (a) assignment is the official worksite. (See
legal authority. by removing the words ‘‘duty stations’’ 41 CFR 302–1.1.)
Retained rate means a rate above the and adding in their place the word (c) For an employee whose
maximum rate of the rate range ‘‘worksites’’. assignment to a new worksite is
applicable to the employee which is ■ 20. Revise § 531.604 to read as follows:
followed within 3 workdays by a
payable under 5 CFR part 536 or similar reduction in force resulting in the
legal authority. § 531.604 Determining an employee’s employee’s separation before he or she
Scheduled annual rate of pay means, locality rate. is required to report for duty at the new
as applicable— (a) An annual locality rate consists of location, the official worksite in effect
(1) The annual GS rate payable to an a scheduled annual rate of pay plus an immediately before the assignment
employee; applicable locality payment remains the official worksite through
(2) An annual LEO special base rate; (representing an annual dollar amount), the date of separation.
or as determined under paragraph (b) of (d)(1) For an employee covered by a
(3) For an employee in a category of this section. telework agreement who is scheduled
positions described in 5 U.S.C. (b) An agency determines an (while in duty status) to report at least
5304(h)(1)(A)–(D) for which the employee’s locality rate by— once a week on a regular and recurring
President (or designee) has authorized (1) Determining the employee’s basis to the regular worksite for the
locality payments under 5 U.S.C. official worksite consistent with the employee’s position of record, the
5304(h)(2), the annual rate of pay fixed rules in § 531.605; regular worksite is the official worksite.
by law or administrative action, (2) Determining the locality pay area However, for an employee whose work
exclusive of any locality-based in which the employee’s official location varies on a daily basis, the
adjustments (including adjustments worksite is located, consistent with the employee need not report at least once
equivalent to local special rate locality pay areas established in a week to the established official
supplements under 5 CFR part 530, § 531.603; worksite (where the employee’s work
subpart C) or additional pay of any other (3) Identifying the locality pay activities are based) as long as the
kind. percentage in effect in the applicable employee is performing work within the
Special rate means a rate of pay locality pay area; locality pay area for that worksite at
within a special rate schedule (4) Increasing the employee’s least once a week on a regular and
established under 5 CFR part 530, scheduled annual rate of pay by the recurring basis. An agency must
subpart C, or a similar rate established applicable locality pay percentage and determine a telework employee’s official
under other legal authority (e.g., 38 rounding the result to the nearest whole worksite on a case-by-case basis.
U.S.C. 7455). The term special rate does dollar (counting 50 cents and over as the (2) If an employee covered by a
not include an LEO special base rate. next higher dollar); and telework agreement does not meet the
Special rate schedule means a pay (5) Applying any applicable limitation requirements of paragraph (d)(1) of this
schedule established under 5 CFR part as described in § 531.606. section, the employee’s official worksite
530, subpart C, to provide higher rates (c) A locality rate may be expressed as is the location of the employee’s
of pay for specified categories of an hourly, daily, weekly, or biweekly telework site.
positions or employees at one or more rate, as provided in § 531.607. (3) An authorized agency official may
grades or levels or a similar schedule ■ 21. Revise § 531.605 to read as follows: make a temporary exception to the
established under other legal authority requirements in paragraph (d)(1) and (2)
(e.g., 38 U.S.C. 7455). § 531.605 Determining an employee’s of this section in appropriate situations,
Special rate supplement means the official worksite. such as when an employee is recovering
portion of a special rate paid above an (a) Except as otherwise provided in from an injury or medical condition that
employee’s GS rate or equivalent rate of this section, the official worksite is the prevents the employee from commuting
basic pay after applying any applicable location of an employee’s position of to the regular worksite.
pay limitation. For a law enforcement record where the employee regularly (e) In applying paragraph (d)(1) of this
officer receiving an LEO special base performs his or her duties or, if the section for the purpose of other
rate who is also entitled to a special rate employee’s work involves regular travel location-based pay entitlements under
under 5 CFR part 530, subpart C, a or the employee’s work location varies other regulations that reference this
special rate supplement increases the on a daily basis, where his or her work section, the reference to a locality pay
LEO’s pay only to the extent that the activities are based, as determined by area is deemed to be a reference to the
applicable geographic area associated § 531.607 Computing hourly, daily, weekly, rate or the corresponding special rate.
with the given pay entitlement. For and biweekly locality rates. As provided in 5 U.S.C. 5305(h) and 5
example, for the purpose of special rates (a) Apply the following methods to CFR 530.303(d), when an employee’s
under 5 CFR part 530, subpart C, the convert an annual locality rate to an locality rate exceeds a corresponding
reference to a locality pay area is hourly, daily, weekly, or biweekly rate: special rate, the employee’s entitlement
deemed to be a reference to the (1) To derive an hourly rate, divide to the special rate is terminated.
geographic area covered by a special the annual locality rate by 2,087 and ■ 25. Add a new § 531.609 to read as
rate schedule. round to the nearest cent, counting one- follows:
half cent and over as the next higher
■ 22. Revise § 531.606 to read as follows: cent. § 531.609 Adjusting or terminating locality
§ 531.606 Maximum limits on locality rates. Example: rates.
(a) Except as provided by paragraph Annual locality rate = $50,000 (a) When an employee’s official
Computation of hourly rate: $50,000 ÷ worksite is changed to a different
(b) of this section, a locality rate may 2,087 = 23.957 or $23.96.
not exceed the rate of basic pay payable locality pay area, the employee’s
for level IV of the Executive Schedule. (2) To derive a daily rate, multiply the entitlement to the locality rate for the
hourly rate by the number of daily hours new locality pay area begins on the
(b)(1) A locality rate for an employee effective date of the change in official
of service required by the employee’s
in a category of positions described in worksite.
basic daily tour of duty.
5 U.S.C. 5304(h)(1)(A)–(C) may not
Example: (b) A locality rate must be adjusted as
exceed the rate for level III of the
Hourly rate = $23.96 of the effective date of any change in the
Executive Schedule.
Daily hours = 8 applicable scheduled annual rate of pay
(2) A locality rate for an employee in Computation of daily rate: $23.96 × 8 = or any change in the applicable locality
a category of positions described in 5 $191.68 percentage.
U.S.C. 5304(h)(1)(D) may not exceed— (c) Except as provided in paragraph
(3) To derive a weekly or biweekly
(i) The rate for level IV of the rate, multiply the hourly rate by 40 or (d) of this section, entitlement to a
Executive Schedule, when the 80, as applicable. locality rate associated with a particular
maximum scheduled annual rate of pay locality pay area under this subpart
Example:
(excluding any retained rate) for such Hourly rate = $23.96 terminates on the date—
positions is less than or equal to the Biweekly hours = 80 (1) An employee’s official worksite is
maximum payable scheduled annual Computation of biweekly rate: $23.96 × 80 no longer in the locality pay area;
rate of pay for GS–15; or = $1,916.80 (2) An employee is no longer in a
(ii) The rate for level III of the (b) Notwithstanding paragraph (a) of position covered by this subpart; or
Executive Schedule, when the this section, for a firefighter whose pay (3) An employee separates from
maximum scheduled annual rate of pay is computed under 5 U.S.C. 5545b, a Federal service.
(excluding any retained rate) for such firefighter hourly locality rate is (d) In the event of a change in the
positions exceeds the maximum payable computed using a divisor of 2,756 hours geographic coverage of a locality pay
scheduled annual rate of pay for GS–15, instead of 2,087, as prescribed in 5 CFR area as a result of the addition by OMB
but is not more than the rate for level part 550, subpart M. Also, such a of a new area(s) to the definition of an
IV of the Executive Schedule. firefighter’s weekly and biweekly MSA or CSA or as the result of any
(3) If initial application of paragraph locality rates must be based on the change made by the President’s Pay
(b)(2) of this section otherwise would firefighter’s extended tour of duty as Agent in the definition of a locality pay
reduce an employee’s existing locality prescribed in that subpart. area, the effective date of any change in
rate, the employee’s locality rate is ■ 24. Add a new § 531.608 to read as an employee’s entitlement to a locality
capped at the higher of— follows: rate under this subpart is the first day
(i) The amount of the employee’s of the first pay period beginning on or
§ 531.608 Relationship of locality rates to after January 1 of the next calendar year.
locality rate on the day before paragraph other pay rates.
(b)(2) of this section was initially Any area removed by OMB from
(a) An employee must receive the coverage within an MSA or CSA that
applied, or
greatest of the following rates of pay, as serves as the basis for defining a locality
(ii) The rate for level IV of the applicable— pay area must be reviewed by the
Executive Schedule. (1) The scheduled annual rate of pay Federal Salary Council and the
(c) Paragraph (b) of this section does payable to the employee; President’s Pay Agent before a decision
not apply to experts and consultants (2) A locality rate under this subpart; is made regarding the locality pay status
appointed under 5 U.S.C. 3109 if the (3) A special rate under 5 CFR part
of that area.
pay for those experts and consultants is 530, subpart C, or a similar rate under
other legal authority (e.g., 38 U.S.C. (e) As provided in § 531.205, when an
limited to the highest rate payable under employee becomes covered by one or
5 U.S.C. 5332 (i.e., the unadjusted 7455); or
(4) A retained rate under 5 CFR part more different pay schedule(s) because
maximum GS–15 rate). Such experts the employee is stationed at a new
and consultants are subject to the pay 536 or a similar rate under other legal
authority. official worksite in a different
limitations established in 5 CFR geographic location, the employee’s pay
304.105. (b) A GS employee receiving a special
rate is entitled to any applicable locality (including a locality rate) must first be
(d) A portion of a locality payment converted to the applicable pay
payment on the same basis as any other
that is not payable because of an schedule(s) in the new location before
GS employee. The locality payment is
applicable limitation is not considered applying any other pay action (other
computed based on the employee’s
in applying any other provision of law than a general pay adjustment).
scheduled annual rate of pay, which
or regulation.
excludes any special rate. The employee ■ 26. Add a new § 531.610 to read as
■ 23. Revise § 531.607 to read as follows: is entitled to the higher of the locality follows:
§ 531.610 Treatment of locality rate as § 531.611 Miscellaneous provisions. 536.104’’ and adding in its place ‘‘5 CFR
basic pay. (a) A locality rate may be paid only part 536, subpart C’’.
A locality rate is considered to be an for those hours for which an employee ■ 34. In § 534.404, amend paragraph
employee’s rate of basic pay for the is in a pay status. (h)(2) by removing the reference ‘‘5 CFR
purpose of computing or applying— (b) Payment of, or an increase in, a 536.104’’ and adding in its place ‘‘5 CFR
(a) Retirement deductions, locality rate is not an equivalent part 536, subpart C’’.
contributions, and benefits under 5 increase in pay within the meaning of
U.S.C. chapters 83 and 84; 5 U.S.C. 5335. (See § 531.407(c).) PART 536—GRADE AND PAY
(b) Life insurance premiums and (c) A locality rate is included in an RETENTION
benefits under 5 U.S.C. chapter 87; employee’s total remuneration, as
(c) Premium pay under 5 U.S.C. defined in 5 CFR 551.511(b), and ■ 35. Revise the authority citation for
chapter 55, subchapter V, and 5 CFR straight time rate of pay, as defined in part 536 to read as follows:
part 550, subparts A and I (including the 5 CFR 551.512(b), for the purpose of Authority: 5 U.S.C. 5361–5366; sec. 4 of
computation of limitations on premium overtime pay computations under the the Performance Management and
pay); Fair Labor Standards Act of 1938, as Recognition System Termination Act of 1993,
(d) Severance pay under 5 U.S.C. 5595 amended. Pub. L. 103–89, 107 Stat. 981; § 536.405 also
and 5 CFR part 550, subpart G; (d) A reduction or termination of a issued under 5 U.S.C. 552, Freedom of
(e) Advances in pay under 5 U.S.C. locality rate under § 531.609 is not an Information Act, Pub. L. 92–502; § 536.308
5524a and 5 CFR part 550, subpart B; adverse action for the purpose of 5 CFR also issued under section 301(d)(2) of the
(f) Post differentials under 5 U.S.C. part 752, subpart D, or an action under Federal Workforce Flexibility Act of 2004,
5925(a) and danger pay allowances 5 CFR 930.214. Pub. L. 108–411, 118 Stat. 2305.
under 5 U.S.C. 5928 for an employee ■ 36. Revise subparts A and B to read as
temporarily working in a foreign area for Subpart F—[Amended] follows:
which the Department of State has
established a danger pay allowance, ■ 28. In addition to the preceding
Subpart A—General Provisions
when the employee’s official worksite is amendments to 5 CFR part 531, subpart
located in a locality pay area; F (§§ 531.601 through 531.611), remove Sec.
(g) Recruitment, relocation, and the words ‘‘locality rate of pay’’ and add 536.101 Purpose.
retention incentives, supervisory in their place the words ‘‘locality rate’’ 536.102 Coverage.
throughout the subpart, as amended. 536.103 Definitions.
differentials, and extended assignment 536.104 Reasonable offer.
incentives under 5 U.S.C. chapter 57, Subpart G—[Removed and Reserved] 536.105 Comparing grades under different
subchapter IV, and 5 CFR part 575; pay systems.
(h) Performance-based cash awards ■ 29. Remove and reserve subpart G,
under 5 U.S.C. 4505a and 5 CFR part consisting of §§ 531.701 through § 536.101 Purpose.
451, subpart A, when such awards are 531.705. This part contains OPM regulations
computed as a percentage of an for the administration of grade and pay
employee’s rate of basic pay; PART 532—PREVAILING RATE retention. This part supplements and
(i) GS pay administration provisions SYSTEMS implements the provisions of 5 U.S.C.
(e.g., GS promotion provisions) to the 5361–5366 and must be read together
extent provided in subpart B of this ■ 30. The authority citation for part 532
with those sections of law. Under 5
part; continues to read as follows: U.S.C. 5362, an employee under a
(j) Pay administration provisions for Authority: 5 U.S.C. 5343, 5346; § 532.707 covered pay system who is placed in a
prevailing rate employees which also issued under 5 U.S.C. 552. lower grade (e.g., as a result of a
consider rates of basic pay under the GS reduction in force or when his or her
pay system in setting pay (except as Subpart B—Prevailing Rate
position is reduced in grade as a result
otherwise provided in 5 CFR part 532), Determinations
of a reclassification) is entitled to retain
subject to the requirement that, if the ■ 31. In § 532.415, amend paragraph (c) the grade held immediately before the
employee’s actual locality rate would by removing the reference ‘‘5 CFR reduction for a period of 2 years under
not apply at the official worksite for the 536.104(a)(3)’’ and adding in its place ‘‘5 the circumstances prescribed in this
prevailing rate position, that locality CFR 536.301(a)(8)’’. part. Under 5 U.S.C. 5363, an employee
rate must be converted to a whose rate of basic pay otherwise would
corresponding rate on the locality rate PART 534—PAY UNDER OTHER be reduced as a result of a management
schedule for that official worksite; SYSTEMS action is entitled to retain his or her rate
(k) Lump-sum payments for of basic pay under the circumstances
accumulated and annual leave under 5 ■ 32. The authority citation for part 534 prescribed in this part.
CFR part 550, subpart L; is revised to read as follows:
(l) Grade and pay retention under 5 Authority: 5 U.S.C. 1104, 3161(d), 5307, § 536.102 Coverage.
U.S.C. chapter 53, subchapter VI, to the 5351, 5352, 5353, 5376, 5382, 5383, 5384, (a) Subject to the exclusions in
extent provided by 5 CFR part 536; 5385, 5541, 5550a, and sec. 1125 of the paragraphs (b) through (e) of this
(m) Other provisions as specified in National Defense Authorization Act for FY section, this part covers any employee
other statute or OPM regulations; and 2004, Pub. L. 108–136, 117 Stat. 1638 (5 who, at the time this part is applied—
(n) Payments or benefits equivalent to U.S.C. 5304, 5382, 5383, 7302; 18 U.S.C. (1) Is in a covered pay system; or
those listed in this section under other 207).
(2) Is moving to a position under a
legal authority, as determined by the Subpart D—Pay and Performance covered pay system from a position not
head of the agency or other authorized Awards Under the Senior Executive under a covered pay system, as long as
official responsible for administering Service the individual was an employee as
such payments or benefits. defined in 5 CFR 536.103 while serving
■ 27. Add a new § 531.611 to read as ■ 33. In § 534.403, amend paragraph (b) in the position in a noncovered pay
follows: by removing the reference ‘‘5 CFR system.
(b) An agency may not provide grade system established under 5 U.S.C. and employee advancement purposes
or pay retention under this part to an chapter 53, subchapter III; a prevailing (e.g., Career Intern Program) is
employee who— rate system established under 5 U.S.C. considered a management action even
(1) Is reduced in grade or pay for chapter 53, subchapter IV; or a special though the employee initiates or
personal cause or at the employee’s occupational pay system established requests such placement or transfer.
request; under 5 U.S.C. chapter 53, subchapter Official worksite means the official
(2) Was employed on a temporary or IX. The various prevailing rate systems location of the employee’s position of
term basis immediately before the action under 5 U.S.C. chapter 53, subchapter record as determined under the rules of
causing the reduction in grade or pay; IV, are considered separate systems if the applicable pay system (e.g., 5 CFR
(3) Does not satisfactorily complete they have separate job grading 531.605 for General Schedule
the probationary period prescribed by 5 structures. employees). Official worksite is
U.S.C. 3321(a)(2), and, as a result, is Employed on a temporary or term synonymous with the term ‘‘official
removed from a supervisory or basis means employment under an duty station’’ as used in 5 U.S.C.
managerial position; appointment having a definite time 5363(c).
(4) Is entitled to receive a saved rate limitation or designated as temporary or OPM means the Office of Personnel
of basic pay under 5 U.S.C. 3594(c) and term. Management.
5 CFR 359.705 because of removal from Employee has the meaning given that Payable rate means the highest rate of
the Senior Executive Service and term in 5 U.S.C. 2105, except that basic pay to which an employee is
placement in a civil service position employee also includes— entitled based on the employee’s
(other than a Senior Executive Service (1) An individual employed by the position of record, official worksite, and
position) under 5 U.S.C. 3594(b)(2); U.S. Postal Service or the Postal Rate step (or relative position in range for a
(5) Moves from an Executive Schedule Commission who would be considered GM employee) or, if applicable, a
position paid under 5 U.S.C. chapter 53, an employee under 5 U.S.C. 2105 but for retained rate.
subchapter II, or a position whose rate the exclusion in section 2105(e); and Pay schedule means a set of rate
of pay is fixed by law at a rate equal to (2) An individual employed by a ranges established under a single
a rate for the Executive Schedule; Department of Defense or Coast Guard authority—i.e., the General Schedule, a
(6) Moves between positions not nonappropriated fund instrumentality law enforcement officer special base rate
under a covered pay system or from a (as described in 5 U.S.C. 2105(c)) who schedule (for grades GS–3 through 10)
position under a covered pay system to is moved without a break in service of under section 403 of FEPCA; a
a position not under a covered pay more than 3 days from employment in prevailing rate schedule (including a
system; such an instrumentality to a position special schedule or special rate
(7) Moves to a nonappropriated fund under a covered pay system in the same schedule) under 5 U.S.C. chapter 53,
position as described in 5 U.S.C. 2105(c) agency. subchapter IV; a locality rate schedule
(except a position occupied by a FEPCA means the Federal Employees under 5 U.S.C. 5304 based on GS rates;
prevailing rate employee); or Pay Comparability Act of 1990 (section a locality rate schedule under 5 U.S.C.
(8) Moves from a nonappropriated 529 of Pub. L. 101–509, November 5, 5304 based on law enforcement officer
fund position as described in 5 U.S.C. 1990, as amended). special base rates (for grades GS–3
2105(c) (except a position occupied by General Schedule or GS means the through 10); or a special rate schedule
a prevailing rate employee) to a position classification and pay system under 5 U.S.C. 5305 or similar
in a covered pay system, unless covered established under 5 U.S.C. chapter 51 authority. A pay schedule applies to or
by § 536.302(a). and subchapter III of chapter 53. This covers a defined category of employees
(c) An agency may not provide grade term also refers to the pay schedule based on established coverage
or pay retention under this part based established under 5 U.S.C. 5332. conditions (e.g., official worksite,
on the grade or rate of basic pay held by Highest applicable rate range means occupation). A pay schedule is
the employee during a temporary the rate range applicable to an employee considered to apply to or cover an
promotion or temporary reassignment. based on a given position of record and employee who meets the established
However, a temporary promotion or official worksite that provides the coverage conditions even when a rate
temporary reassignment does not affect highest rates of basic pay, excluding any under that schedule is not currently
an employee’s preexisting entitlement to retained rates. For example, a rate range payable to the employee because of a
grade or pay retention. of special rates under 5 U.S.C. 5305 may higher pay entitlement under another
(d) An agency may not provide grade exceed an applicable locality rate range pay schedule.
retention under subpart B of this part to under 5 U.S.C. 5304 for General Position of record means an
an employee who moves from a position Schedule employees. In certain employee’s official position (defined by
not under a covered pay system to a circumstances, the highest applicable grade or level, occupational series,
position under a covered pay system. rate range may consist of two types of employing agency, law enforcement
(e) An employee loses eligibility for or pay rates from different pay schedules— officer status, and any other condition
entitlement to grade or pay retention e.g., a range where special rates are that determines coverage under a pay
under the conditions specified in higher in the lower portion of the range schedule (other than official worksite)),
§§ 536.207, 536.208, and 536.308. and locality rates are higher in the as documented on the employee’s most
higher portion of the range. recent Notification of Personnel Action
§ 536.103 Definitions. Management action means an action (Standard Form 50 or equivalent) and
For the purpose of this part: (not for personal cause) by an agency the current position description,
Authorized agency official means the official not initiated or requested by an excluding any position to which an
head of the agency or an official who is employee which may adversely affect employee is temporarily detailed. A
authorized to act for the head of the the employee’s grade or rate of basic retained grade is considered to be part
agency in the matter concerned. pay. However, an employee’s placement of an employee’s position of record even
Covered pay system means a covered in or transfer to a position under a though the actual grade of the
pay schedule as defined in 5 U.S.C. formal employee development program employee’s position is a lower grade,
5361(5)—i.e., the General Schedule pay established by an agency for recruitment except as provided in § 536.205(b). For
an employee whose change in official either wholly within an agency or to a new location that would cause the
position is followed within 3 workdays between agencies. employee to lose or gain coverage under
by a reduction in force resulting in the Representative rate means— a location-based pay schedule if the
employee’s separation before he or she (1) For the purpose of comparing employee were to remain in the same
is required to report for duty in the new grades that are under different covered position of record.
position, the position of record in effect pay systems under § 536.105 and after
immediately before the position change applying any applicable geographic § 536.104 Reasonable offer.
is deemed to remain the position of conversion under § 536.105(b) for (a) For the purpose of determining
record through the date of separation. positions with different official whether grade retention eligibility or
Prevailing rate employee has the worksites— entitlement must be terminated under
meaning given that term in 5 U.S.C. (i) The highest rate of basic pay that § 536.207 or 536.208, the offer of a
5342(a)(2) and refers to an employee in applies to the fourth step of the grade position is a reasonable offer if the
a position covered by a prevailing rate for a position covered by the General position’s grade is equal to or higher
system or schedule established under 5 Schedule; and than the retained grade and if all the
U.S.C. chapter 53, subchapter IV. (ii) The highest rate of basic pay that conditions in paragraph (c) of this
Rate of basic pay means the rate of applies to the second step of the grade section are met. If the offered position
pay fixed by law or administrative of a position under a regular prevailing is in a different pay system, § 536.105
action for the position held by an rate system established under 5 U.S.C. must be applied to determine whether
employee before any deductions, chapter 53, subchapter IV, or, in the the grade of the offered position is equal
including a General Schedule rate under case of a prevailing rate position with a to or greater than the retained grade.
5 U.S.C. 5332; a law enforcement officer single rate, the single rate of basic pay (b) For the purpose of determining
special base rate under section 403 of for that position; and whether pay retention eligibility or
FEPCA; a special rate under 5 CFR part (2) For the purpose of comparing entitlement must be terminated under
530, subpart C, or similar payment grades or levels of work in making § 536.308, the offer of a position is a
under other legal authority; a locality reasonable offer determinations when reasonable offer if the employee’s rate of
rate under 5 CFR part 531, subpart F, or one of the grades or levels of work is not basic pay in the position would be equal
similar payment under other legal under a covered pay system and after to or greater than the rate to which the
authority; a prevailing rate under 5 applying any applicable geographic employee is or would be entitled under
U.S.C. 5343; or a retained rate under conversion rules under § 536.105(b) for the pay retention provisions and if all
this part, but excluding additional pay positions with different official the conditions in paragraph (c) of this
of any other kind (such as premium worksites— section are met.
(i) The maximum payable rate of basic (c) An offer of a position must meet
payments, differentials, and
pay that applies to the grade of a the following additional conditions to
allowances).
position covered by the General qualify as a reasonable offer:
Rate range or range means the range
Schedule; (1) The offer must be in writing and
of rates of basic pay for a grade within (ii) The maximum payable rate of
an established pay schedule, excluding must include an official position
basic pay that applies to the grade of a description of the offered position;
any retained rate. position under a regular prevailing rate (2) The offer must inform the
Reasonable offer means an offer that system established under 5 U.S.C. employee that entitlement to grade or
meets the conditions in § 536.104. chapter 53, subchapter IV, or in the case pay retention will terminate if the offer
Reduced in grade or pay at the of a prevailing rate position with a is declined and that the employee may
employee’s request means a reduction in single rate, the single rate of basic pay appeal the reasonableness of the offer as
grade or rate of basic pay that is for that position; and provided in § 536.402;
initiated by the employee for his or her (iii) The maximum payable rate of (3) The offered position must be of
benefit, convenience, or personal basic pay that applies to the grade or equal or greater tenure than the
advantage. A reduction in grade or pay level of work in the case of a position employee’s position before the action
that is caused or influenced by a not covered by paragraph (2)(i) or (ii) of resulting in the grade or pay retention
management action is not considered to this definition. In the case of a position entitlement;
be at an employee’s request, except that with a single rate under such a (4) The offered position must be full-
the voluntary reduction in grade or pay schedule, the single rate of basic pay for time, unless the employee’s position
of an employee in response to a that position is the representative rate. immediately before the action resulting
management action directly related to Retained rate means a rate above the in entitlement to grade or pay retention
personal cause is considered to be at the maximum rate of the employee’s highest was less than full-time, in which case
employee’s request. applicable rate range that is payable the offered position must have a work
Reduced in grade or pay for personal under subpart C of this part. schedule providing for no fewer hours
cause means a reduction in grade or rate Temporary promotion means a of work per week or per pay period than
of basic pay based on the conduct, promotion that has a definite time the position held before the action; and
character, or unacceptable performance limitation or is otherwise designated as (5) The offered position must be in the
of an employee. In situations in which temporary when the affected employee same commuting area as the employee’s
an employee is reduced in grade or pay is informed in advance. position immediately before the offer,
for inability to perform the duties of his Temporary reassignment means a unless the employee is subject to a
or her position because of a medical or reassignment that has a definite time mobility agreement or a published
physical condition beyond the limitation or is otherwise designated as agency policy that requires employee
employee’s control, the reduction in temporary when the affected employee mobility.
grade is not considered to be for is informed in advance.
personal cause. Where different pay schedules apply § 536.105 Comparing grades under
Reorganization means the planned means, in the context of applying the different pay systems.
elimination, addition, redistribution, or geographic conversion rule, that an (a) General. An agency must compare
restructuring of functions or duties employee’s official worksite is changed the representative rates (as defined in
§ 536.103) of the applicable grades to 536.208 Termination of grade retention. employee’s initiative or in response to a
determine whether a grade of a position management-initiated offer) on or before
§ 536.201 Mandatory grade retention.
is equal to, higher than, or lower than the date the announced reorganization
the grade of another position when— (a) Subject to the requirements in this or reclassification is effected.
(1) Determining eligibility for grade section and in §§ 536.102 and 536.203, (b) An agency must apply § 536.105 in
retention upon movement from a an agency must provide grade retention determining whether a position under a
position under a covered pay system to to an employee who moves from a different covered pay system is a lower-
a lower-graded position under a position under a covered pay system to graded position.
different covered pay system (including a lower-graded position under a covered (c) When an employee is offered a
determinations under § 536.203 that pay system as a result of— position with grade retention under this
involve different covered pay systems); (1) Reduction in force procedures, or section in anticipation of a reduction in
(2) Determining whether grade (2) A reclassification process.
grade, the agency must inform the
retention eligibility is lost or grade (b) An agency must apply § 536.105 in
employee in writing that acceptance of
retention is terminated when an determining whether a position under a
different covered pay system is a lower- the position is not required and that
employee is placed in a lower-graded declination of the offer will not affect
position under a different covered pay graded position.
(c) An employee’s movement to a the employee’s entitlement to grade
system and the action is taken for retention under § 536.201 if the agency
lower-graded position is considered to
personal cause or at the employee’s actually moves the employee to the
be the result of reduction in force
request; lower-graded position.
(3) Determining whether grade procedures when the employee has
received a specific reduction in force (d) Notwithstanding paragraph (a) of
retention eligibility is lost or grade this section, an agency may provide
retention is terminated based on notice and—
(1) The employee is placed in the grade retention to an employee who is
movement to a position under a moved without a break in service of
position offered in the notice; or
different covered pay system with an (2) The employee is placed in a more than 3 days from a position in a
equal or higher grade; position other than that offered in the Department of Defense or Coast Guard
(4) Determining whether grade nonappropriated fund instrumentality
notice but in the same agency, if the
retention eligibility is lost or grade (as defined in 5 U.S.C. 2105(c)) to a
position was offered in writing and at
retention is terminated based on position under a covered pay system in
the initiative of management.
declination of a reasonable offer of a the same agency.
(d) An employee’s movement to a
position under a different pay system
lower-graded position is considered to
with an equal or higher grade; and § 536.203 Additional eligibility
(5) Determining whether pay retention be the result of a reclassification process requirements for grade retention.
eligibility is lost or a retained rate is when—
(a) An employee is eligible for grade
(1) The employee remains in his or
terminated when an employee is placed retention under § 536.201(a)(1) only if
her position after it is reclassified; or
in a lower-graded position under a (2) The employee is placed in a the employee has served for at least 52
different covered pay system and the different position in the same agency consecutive weeks in one or more
action is taken for personal cause or at before the effective date of the positions under a covered pay system at
the employee’s request. one or more grades higher than the
reclassification action, if the position
(b) Geographic conversion. When grade of the position in which the
was offered in writing and at the
comparing positions under paragraph employee is being placed. Such service
(a) of this section which are stationed in initiative of management after the
employee received a specific written is deemed to include service performed
different geographic locations where by an employee of a nonappropriated
different pay schedules apply, the notice that the position would be
reclassified to a lower grade. fund instrumentality of the Department
representative rate of the employee’s of Defense or the Coast Guard (as
(e) Notwithstanding paragraph (a) of
existing position of record (as in effect defined in 5 U.S.C. 2105(c)) who is
this section, an agency must provide
before the movement to a position in a moved to a position in the civil service
grade retention to an employee who
different pay system) must be employment system of the Department
moves without a break in service of
determined as if the official worksite of of Defense or the Coast Guard,
that position of record were the same as more than 3 days from a position in a
Department of Defense or Coast Guard respectively, without a break in service
the official worksite of the new or of more than 3 days.
offered position of record. Geographic nonappropriated fund instrumentality
(as defined in 5 U.S.C. 2105(c)) to a (b) An employee is eligible for grade
conversion is not necessary for the retention under § 536.201(a)(2) based on
purpose of comparing grades if an position under a covered pay system in
the same agency. a reclassification of his or her position
employee is being moved to (or given a only if, immediately before the
reasonable offer of) a position under the § 536.202 Optional grade retention. reduction in grade, that position was
same covered pay system (i.e., same (a) Subject to the requirements in classified at the existing grade or a
grading structure). §§ 536.102 and 536.203, an authorized higher grade for a continuous period of
agency official may provide grade at least 1 year.
Subpart B—Grade Retention (c) An employee is eligible for grade
retention to an employee moving from
Sec. a position under a covered pay system retention under § 536.202 only if,
536.201 Mandatory grade retention. to a lower-graded position under a immediately before being placed in the
536.202 Optional grade retention. covered pay system when— lower grade, the employee has served
536.203 Additional eligibility requirements (1) Management announces a for at least 52 consecutive weeks in one
for grade retention. reorganization or reclassification or more positions under a covered pay
536.204 Period of grade retention. system at one or more grades higher
536.205 Applicability of retained grade.
decision in writing (including a general
536.206 Determining an employee’s rate of notice or a specific notice) that may or than that lower grade. Such service is
basic pay under grade retention. would affect the employee; and deemed to include service performed by
536.207 Loss of eligibility for grade (2) The employee moves to a lower- an employee of a nonappropriated fund
retention. graded position (either at the instrumentality of the Department of
Defense or the Coast Guard (as defined (3) To determine whether an effective date as other pay actions that
in 5 U.S.C. 2105(c)) who is moved to a employee retains status as a GM affect an employee’s rate of basic pay
position in the civil service employment employee (as defined in 5 CFR 531.203); (e.g., within-grade increase), the actions
system of the Department of Defense or or will be processed in the order
the Coast Guard, respectively, without a (4) To determine whether an prescribed in the rules governing the
break in service of more than 3 days. employee is exempt or nonexempt from covered pay system of the employee’s
(d) Eligibility for grade retention the Fair Labor Standards Act of 1938, as position of record (e.g., 5 CFR 531.206
under § 536.201 or 536.202 ceases under amended. for GS positions and 5 CFR 532.413 for
the conditions specified in § 536.207. Federal Wage System positions).
§ 536.206 Determining an employee’s rate
§ 536.204 Period of grade retention. of basic pay under grade retention. § 536.207 Loss of eligibility for grade
(a) Unless grade retention is (a) General. (1) When an employee retention.
terminated under § 536.208, an becomes entitled to grade retention or (a) Eligibility for grade retention as a
employee is entitled to retain the grade becomes covered by one or more result of an entitlement under § 536.201
held immediately before the action that different pay schedules (because of a ceases if any of the following conditions
provides entitlement to grade retention change in the employee’s position of occurs at any time after the employee
for 2 years beginning on the date the record, a change in the employee’s receives written notice of the reduction
employee is placed in the lower-graded official worksite, or the establishment of in grade, but before the commencement
position. a new pay schedule) during a period of of the 2-year period of grade retention:
grade retention, the agency must apply (1) The employee has a break in
(b) During the 2-year period of grade
the rules in this section to determine the service of 1 workday or more;
retention, if an agency further reduces
employee’s rate of basic pay. (2) The employee is reduced in grade
an employee in grade under (2) This section does not apply to an for personal cause or at the employee’s
circumstances also entitling the employee whose entitlement to grade request (based on the actual grade of the
employee to grade retention, the retention is terminated under one of the employee’s position rather than the
employee must continue to retain the conditions in § 536.208. (See employee’s retained grade and, when a
previous retained grade for the § 536.208(d).) movement to a different covered pay
remainder of the first 2-year period. At (b) Preexisting rate within a range. If system is involved, a comparison of
the end of the first 2-year period, the an employee is entitled to a rate of basic representative rates under § 536.105);
employee is entitled to retain the grade pay within the applicable rate range (3) The employee moves to a position
of the position from which the second before the action resulting in under a covered pay system with a
reduction in grade was made for 2 years application of this section, the employee grade that is equal to or higher than the
following the effective date of the is entitled to the rate(s) of basic pay in retained grade (as determined under
second reduction in grade. the applicable pay schedule(s) for the § 536.105), excluding a temporary
(c) Notwithstanding § 536.207(a)(1), employee’s position of record after the promotion;
grade retention continues to apply to an action (including the retained grade) (4) The employee declines a
employee serving under an interim which correspond to the employee’s reasonable offer of a position with a
appointment made under 5 CFR 772.102 grade and step (or rate) immediately grade equal to or higher than the
for the duration of the original 2-year before the action. The employee’s retained grade (as determined under
grade retention period if the employee’s payable rate is the corresponding rate in §§ 536.104 and 536.105);
grade was retained under this part in the the highest applicable rate range for the (5) The employee elects in writing to
appointment immediately preceding the employee’s position of record after the terminate the benefits of grade retention;
interim appointment. action (including the retained grade). If or
§ 536.205 Applicability of retained grade. an employee’s rate of basic pay (6) The employee moves to a position
otherwise would be reduced because of not under a covered pay system.
(a) Except as provided in paragraph placement under a lower-paying pay (b) Eligibility for grade retention as a
(b) of this section, an agency must treat schedule (excluding any reduction that result of entitlement under § 536.202
an employee’s retained grade as the results from a geographic conversion), ceases if any of the following conditions
employee’s grade for all purposes, the employee would be eligible for pay occurs at any time after management
including pay and pay administration, retention under subpart C of this part to informs the employee of an impending
premium pay, retirement, life insurance, the same extent as other employees reorganization or reclassification that
and eligibility for training. If the holding the same position of record will or could result in a reduction in
employee’s actual position of record is whose actual grade is the same as the grade, but before the commencement of
under a different covered pay system employee’s retained grade. the 2-year period of grade retention:
than the covered pay system associated (c) Preexisting retained or saved rate. (1) Any of the conditions listed in
with the retained grade, the agency also (1) If an employee is entitled to a paragraph (a) of this section except that
must treat the employee as being under retained rate immediately before the an employee’s request for placement in
the covered pay system associated with action resulting in application of this a lower-graded position, in lieu of
the retained grade for the same section, the agency must determine the displacing another employee at his or
purposes. employee’s payable rate of basic pay her grade under reduction in force
(b) An agency may not use an under §§ 536.303 and 536.304. procedures, is not a declination of a
employee’s retained grade— (2) If an employee is entitled to a reasonable offer for grade retention
(1) In any reduction in force saved rate under 5 CFR 359.705, the purposes; or
procedure; agency must determine the employee’s (2) The employee fails to enroll in, or
(2) To determine whether an payable rate of basic pay under that to comply with reasonable written
employee has been reduced in grade for section. requirements established to assure full
the purpose of terminating grade or pay (d) Order of processing pay actions. consideration under, a program
retention (i.e., based on personal cause When an action resulting in application providing priority consideration for
or at the employee’s request); of this section takes effect on the same placement.
(c) If an employee loses eligibility for ■ b. In newly redesignated § 536.405(b), (8) A reduction or elimination of
grade retention under this section, the remove ‘‘§ 297.204(c)’’ and add in its scheduled rates, special schedules, or
employee’s rate of basic pay must be set place ‘‘§ 297.205’’. special rate schedules, excluding—
in accordance with the pay-setting rules ■ 39. Add a new subpart C to read as
(i) A statutory reduction in scheduled
and pay rates applicable to the follows: rates of pay under the General Schedule,
employee’s position of record (e.g., 5 including a reduction authorized under
CFR part 531, subpart B, for GS Subpart C—Pay Retention 5 U.S.C. 5303(b); or
positions). An employee is not eligible (ii) A statutory reduction in a
for pay retention under subpart C of this Sec. prevailing rate schedule established
part based on an action that provided 536.301 Mandatory pay retention. under 5 U.S.C. chapter 53, subchapter
536.302 Optional pay retention. IV, and 5 CFR part 532.
eligibility for grade retention if the 536.303 Geographic conversion.
employee elects to terminate mandatory (b) If an employee’s official worksite
536.304 Determining an employee’s pay
eligibility for grade retention under changes in conjunction with an action
retention entitlement.
paragraph (a)(5) of this section. 536.305 Adjusting an employee’s retained that may entitle the employee to pay
rate when a pay schedule is adjusted. retention under paragraph (a) of this
§ 536.208 Termination of grade retention. 536.306 Limitation on retained rates. section, the agency must apply the
(a) Grade retention under § 536.201 536.307 Treatment of a retained rate as geographic conversion rule in
terminates if any of the conditions listed basic pay for other purposes. § 536.303(a) before determining whether
in § 536.207(a) occurs after 536.308 Loss of eligibility for or termination an employee’s rate of basic pay
commencement of the 2-year period of of pay retention. otherwise would be reduced.
grade retention. 536.309 Converting retained rates on May 1, (c) An employee is considered
2005. ‘‘placed’’ under paragraph (a)(2), (3), (4),
(b) Grade retention under § 536.202
terminates if any of the conditions listed § 536.301 Mandatory pay retention. and (5) of this section only when the
in § 536.207(b) occurs after the employee remains in a position in the
(a) Subject to the requirements in same agency. Optional pay retention
commencement of the 2-year period of
§ 536.102 and this section, an agency under § 536.302 may apply when an
grade retention.
must provide pay retention to an employee transfers to a different agency
(c) Termination of grade retention
employee in a position under a covered as a result of a reduction in force or
benefits takes effect—
pay system whose payable rate of basic reclassification action or is selected by
(1) At the end of the day before
pay otherwise would be reduced (after a different agency to fill a position
placement if the termination is the
application of any applicable geographic under a formal employee development
result of the employee’s placement in
conversion under § 536.303(a)) as a program, if all other qualifying
another position; or
result of— conditions are met.
(2) At the end of last day of the pay
period in which the employee— (1) The expiration of the 2-year period (d) Eligibility for pay retention under
(i) Declines a reasonable offer; of grade retention under subpart B of this section ceases under the conditions
(ii) Elects to terminate grade retention this part; specified in § 536.308.
benefits; or (2) A reduction in force or
reclassification action that places an § 536.302 Optional pay retention.
(iii) Fails to enroll in, or comply with
employee in a lower-graded position (a) Subject to the requirements in
reasonable written requirements
when the employee does not meet the § 536.102 and this section, an
established to assure full consideration
eligibility requirements for grade authorized agency official may provide
under, a program providing priority
retention under subpart B of this part; pay retention to an employee not
consideration for placement.
(3) A management action that places entitled to pay retention under
(d) If an employee’s entitlement to
an employee in a non-special rate § 536.301, but whose payable rate of
grade retention terminates under this
position or in a lower-paid special rate basic pay otherwise would be reduced
section, the employee’s rate of basic pay
position from a special rate position; (after application of any applicable
must be set in accordance with the pay-
geographic conversion under
setting rules and pay rates applicable to (4) A management action that places
§ 536.303(a)) as the result of a
the employee’s position of record (e.g., an employee under a different pay
management action. This includes a
5 CFR part 531, subpart B, for GS schedule;
management action to move an
positions). An employee is not entitled (5) A management action that places employee’s position, without a break in
to pay retention under subpart C of this an employee in a formal employee service of more than 3 days, from a
part based on a reduction in basic pay development program generally utilized Department of Defense or Coast Guard
resulting from waiver of the employee’s Governmentwide, such as upward nonappropriated fund instrumentality
grade retention entitlement under mobility, apprenticeship, and career (as defined in 5 U.S.C. 2105(c)) to a
§ 536.207(a)(5). intern programs; position under a covered pay system in
■ 37. Redesignate subpart C as subpart D; (6) The application of the promotion the same agency.
revise the title of redesignated subpart D rule for GS employees under 5 U.S.C. (b) If an employee’s official worksite
to read ‘‘Appeals and Miscellaneous 5334(b) and 5 CFR 531.214 when the changes in conjunction with an action
Provisions’’; remove §§ 536.305, employee’s payable rate of basic pay that may entitle the employee to pay
536.306, and 536.308; and redesignate after promotion exceeds the maximum retention under paragraph (a) of this
§§ 536.301, 536.302, 536.303, 536.304, rate of the highest applicable rate range; section, the agency must apply the
and 536.307 as §§ 536.401, 536.402, (7) The application of the promotion geographic conversion rule in
536.403, 536.404, and 536.405, rule for prevailing rate employees under § 536.303(a) before determining whether
respectively. 5 CFR 532.407 when the employee’s an employee’s rate of basic pay
■ 38. In newly redesignated subpart D— payable rate of basic pay after otherwise would be reduced.
■ a. In newly redesignated § 536.403, promotion exceeds the maximum (c) Eligibility for pay retention under
remove ‘‘§ 536.304’’ and add in its place scheduled rate of the grade, as described this section ceases under the conditions
‘‘§ 536.404’’; and in 5 CFR 532.407(b); specified in § 536.308.
§ 536.303 Geographic conversion. (4) Multiply the factor resulting from hourly rates. An agency must convert an
(a) Geographic conversion at time of paragraph (b)(3) of this section by the employee’s existing hourly rate of pay to
action that may provide initial employee’s former retained rate and an annual rate of pay if the employee’s
entitlement to pay retention. If, in round to the nearest whole dollar (for an new position is under a pay system that
conjunction with a pay action that may annual rate) or the nearest whole cent uses annual rates of pay.
entitle the employee to pay retention (for an hourly rate) to derive the (b) Determining initial pay retention
under §§ 536.301 or 536.302, an employee’s converted retained rate at entitlement. When an employee
employee’s official worksite is changed the new official worksite. becomes entitled to pay retention under
to a new location where different pay § 536.301 or 536.302, the agency must
§ 536.304 Determining an employee’s pay determine the employee’s pay retention
schedules apply, the agency must retention entitlement.
convert the employee’s rate(s) of basic entitlement under the following rules
(a) General. (1) When an employee (subject to the requirements in
pay to the applicable pay schedule(s) in
becomes entitled to pay retention under paragraph (a) of this section):
the new location before applying the
§ 536.301 or 536.302 or undergoes a (1) If an employee’s existing payable
pay retention rules in this subpart or
change in his or her position of record rate of basic pay is less than or equal to
any other simultaneous pay action
or pay schedule while receiving a the maximum rate of the highest
(other than a general pay adjustment).
retained rate (when the terminating applicable rate range for the grade of the
The agency must identify the highest
conditions for pay retention under employee’s position of record
applicable rate range that would apply
§ 536.308 do not apply), the agency immediately after the event causing the
to the employee’s position of record
must determine the employee’s pay pay retention entitlement, the employee
before the pay action as if that position
retention entitlement following the rules is entitled to the lowest rate of basic pay
were stationed at the new official
in this section. in such rate range that equals or exceeds
worksite and determine the employee’s (2) Any general pay adjustment
converted payable rate of basic pay the employee’s existing payable rate of
(including a retained rate adjustment basic pay. If an employee’s payable rate
based on the step (or rate) in that range under § 536.305) that takes effect on the
that corresponds to the employee’s step of basic pay is set at or below the
same date as an action described in maximum rate of the highest applicable
(or rate) before the pay action. A paragraph (a)(1) of this section must be
reduction in an employee’s payable rate rate range, pay retention under this
processed first, before any other pay subpart ceases to apply to the employee.
of basic pay resulting from this action and before applying the rules in (2) If the employee’s existing payable
geographic conversion is not a basis for paragraphs (a)(3), (a)(4), (b), or (c) of this rate of basic pay is greater than the
entitlement to pay retention. The pay section, as applicable. maximum rate of the highest applicable
retention rules in this subpart must be (3) If the location of an employee’s rate range for the grade of the
applied as if the employee’s payable rate official worksite changes in conjunction employee’s position immediately after
of basic pay after geographic conversion with an action that may provide initial the event causing the pay retention
is the employee’s existing payable rate entitlement to pay retention, the agency entitlement, the employee is entitled to
of basic pay in effect immediately before must apply the geographic conversion a retained rate equal to the employee’s
the action. rule under § 536.303(a) before applying existing payable rate of basic pay,
(b) Geographic conversion when a the rules in paragraph (b) of this section. subject to the limitations in paragraph
retained rate employee’s official The converted rate of basic pay must be (b)(3) of this section.
worksite is changed. When an employee treated as the employee’s existing (3) A newly established retained rate
is receiving a retained rate and the payable rate of basic pay in applying may not exceed—
employee’s official worksite is changed those rules. (i) 150 percent of the maximum
to a new location where different pay (4) If the location of an employee’s payable rate of basic pay of the highest
schedules apply, the agency must apply official worksite changes while he or applicable rate range for the grade of the
the following rules (after applying any she is receiving a retained rate, the employee’s position of record; or
simultaneous general pay adjustment agency must apply the geographic (ii) The Executive Level IV maximum
under § 536.305) to derive the converted conversion rule under § 536.303(b) rate limitation established under
retained rate that will be used as the before applying the rules in paragraph § 536.306.
existing retained rate in determining the (c) of this section. The converted (4) In applying this section for an
employee’s pay retention entitlement in retained rate must be treated as the employee who becomes eligible for pay
the new position of record and at the employee’s existing retained rate in retention while serving on a temporary
new official worksite: applying those rules. promotion or temporary reassignment,
(1) Identify the maximum rate for the (5) When an employee’s pay retention the agency must use the rate of basic
highest applicable rate range that entitlement is established or pay the employee would have received
applies to the employee’s former redetermined under this section on the if the temporary promotion or
position of record based on the former same effective date as other pay actions temporary reassignment had not
official worksite; that affect an employee’s rate of basic occurred.
(2) Identify the maximum rate for the pay, the actions must be processed in (c) Redetermining pay retention
highest applicable rate range that would the order prescribed under the rules entitlement at time of change in position
apply to the employee’s former position governing the covered pay system of the or pay schedule. When an employee
of record if the employee were stationed employee’s position of record (e.g., 5 receiving a retained rate undergoes a
at the official worksite for the new CFR 531.206 for GS positions and 5 CFR change in position or pay schedule that
position of record; 532.413 for Federal Wage System results in a new highest applicable rate
(3) Divide the maximum rate positions). range (and when the terminating
identified in paragraph (b)(2) of this (6) In applying this section, an agency conditions for pay retention under
section by the maximum rate identified must convert an employee’s existing § 536.308(a)(1), (3), (4), and (5) do not
in paragraph (b)(1) of this section and annual rate of pay to an hourly rate of apply), the agency must determine the
round the result to the fourth decimal pay if the employee’s new position is employee’s pay retention entitlement
place; and under a pay system that uses only under the following rules (subject to the
requirements in paragraph (a) of this entitlement for an employee serving § 536.306 Limitation on retained rates.
section): under an interim appointment made (a) A retained rate may not at any time
(1) If the employee’s grade and pay under 5 CFR 772.102 if the employee’s exceed the rate payable for level IV of
system are not changing and if the pay was retained under this subpart the Executive Schedule.
employee’s existing retained rate is less under the appointment immediately (b) When an employee’s retained rate
than or equal to the maximum rate of preceding the interim appointment. is limited under this section, an agency
the highest applicable rate range for the
employee’s position of record § 536.305 Adjusting an employee’s may not apply this subpart or the
immediately after the position or retained rate when a pay schedule is provisions of any other law or
schedule change, the employee is adjusted. regulation to the rate of basic pay the
entitled to the maximum rate of the (a)(1) Except as otherwise provided in employee would have received but for
highest applicable rate range, and pay this section, when the maximum rate of this limitation.
retention ceases to apply. the highest applicable rate range for an
§ 536.307 Treatment of a retained rate as
(2) If the employee’s grade and pay employee’s position of record is basic pay for other purposes.
system are not changing and if the increased while the employee is
employee’s existing retained rate is receiving a retained rate, the employee (a) A retained rate is considered to be
greater than the maximum rate on the is entitled to 50 percent of the amount an employee’s rate of basic pay for the
highest applicable rate range for the of the increase in that maximum rate, purpose of computing or applying—
employee’s position of record subject to the maximum rate limitation (1) Retirement deductions,
immediately after the position or in § 536.306. This 50-percent contributions, and benefits under 5
schedule change, the employee adjustment rule applies only when the U.S.C. chapters 83 and 84;
continues to be entitled to the existing maximum rate increases are attributable (2) Life insurance premiums and
retained rate. to the adjustment of the employee’s benefits under 5 U.S.C. chapter 87;
(3) If the employee’s pay system is not existing pay schedule or the (3) Premium pay under 5 U.S.C.
changing but the employee is being establishment of a new pay schedule chapter 55, subchapter V, and 5 CFR
promoted to a higher-graded position, that covers the employee’s existing part 532 and part 550, subparts A and
the agency must apply the applicable position of record. I;
promotion rules to determine the (2) As provided in 5 CFR 531.206, a
(4) Severance pay under 5 U.S.C. 5595
employee’s payable rate of basic pay retained rate adjustment under
and 5 CFR part 550, subpart G;
(e.g., the rules in 5 CFR 531.214(d)(5) for paragraph (a)(1) of this section is a
GS positions and 5 CFR 532.407 for general pay adjustment that must be (5) Post differentials under 5 U.S.C.
Federal Wage System positions). When applied before any geographic 5925 and danger pay allowances under
the resulting rate is equal to or greater conversion under § 536.303(b) or any 5 U.S.C. 5928;
than the existing retained rate, pay other simultaneous pay action. The (6) Nonforeign area cost-of-living
retention ceases to apply. When the retained rate adjustment under allowances and post differentials under
resulting rate is less than the existing paragraph (a)(1) of this section must be 5 U.S.C. 5941(a) and 5 CFR part 591,
retained rate, the employee continues to determined based on the employee’s subpart B;
be entitled to the existing retained rate. position of record and official worksite (7) Lump-sum payments for
(4) If the employee is moving to a as in effect immediately before the accumulated and annual leave under 5
position under a different covered pay effective date of the adjustment. CFR part 550, subpart L;
system whose grade has a higher (3) Consistent with 5 U.S.C. 5363(c), (8) General Schedule pay
representative rate, the agency must a change in the maximum rate of the administration provisions (e.g.,
apply the applicable pay administration highest applicable rate range based on a promotion increases) to the extent
rules to determine the employee’s change in the employee’s official provided in 5 CFR part 531, subpart B;
payable rate of basic pay (e.g., part 531, worksite is not considered in applying (9) Pay administration provisions for
subpart B, for GS positions and part 532 paragraph (a)(1) of this section. The prevailing rate employees to the extent
for Federal Wage System provisions). employee’s new retained rate must be provided in 5 CFR part 532;
When the resulting rate is equal to or determined under the geographic
(10) Other provisions as specified in
greater than the existing retained rate, conversion rule in § 536.303(b).
(4) Paragraph (a)(1) of this section other statutes or OPM regulations; and
pay retention ceases to apply to the
employee. When the resulting rate is does not apply to an increase in an (11) Payments and benefits equivalent
less than the existing retained rate, the employee’s highest applicable rate range to those listed in this section under
employee continues to be entitled to the that results from a change in the other legal authorities, as determined by
existing retained rate. employee’s position of record. Such an the head of the agency or other
(5) In applying this section to a increase is not attributable to an authorized official responsible for
retained rate employee who receives a adjustment in the pay schedule administering such payments or
temporary promotion or temporary applicable to the employee’s position benefits.
reassignment, the temporary promotion and thus is not an increase as described (b) For the purpose of applying other
or temporary reassignment is not a basis in 5 U.S.C. 5363(b)(2)(B). laws and regulations not listed in
for permanently terminating an (b) When a pay schedule adjustment paragraph (a) of this section to an
employee’s pay retention entitlement. causes an employee’s retained rate (after employee receiving a retained rate, the
When the temporary promotion or any adjustment under this section) to employee’s rate of basic pay is deemed
temporary reassignment ends, the become equal to or lower than the to be the applicable maximum rate of
employee’s pay retention entitlement maximum rate of the highest applicable basic pay for the employee’s position of
will be determined as if the employee rate range for the grade of the record (e.g., the maximum rate of basic
had not received the temporary employee’s position, the employee is pay for a locality rate range or special
promotion or temporary reassignment. entitled to the maximum rate of the rate range, as applicable, for the purpose
(6) Notwithstanding § 536.308(a)(1), highest applicable rate range, and pay of computing a percentage-based award
an agency must continue a retained rate retention ceases to apply. under 5 CFR 451.104(g)).
§ 536.308 Loss of eligibility for or retention terminates under this section, Rate of basic pay means the rate of
termination of pay retention. the employee’s rate of basic pay must be pay fixed by law or administrative
(a) Eligibility for pay retention ceases set using the pay-setting rules action for the position held by an
if any of the following conditions occurs applicable to the employee’s position of employee, including any applicable
at any time after the employee has record (e.g., 5 CFR part 531, subpart B, locality payment under 5 CFR part 531,
received written notification that the for GS positions). However, when an subpart F; special rate supplement
employee’s pay will be reduced, and employee’s retained rate is terminated under 5 CFR part 530, subpart C; or
entitlement to pay retention terminates under paragraph (a)(2) or (3) of this similar payment or supplement under
if any of the following conditions occurs section and the employee’s grade is other legal authority, before any
after the commencement of pay unchanged, the employee’s payable rate deductions and exclusive of additional
retention: of basic pay may not be set below the pay of any other kind.
(1) The employee has a break in maximum rate of the highest applicable * * * * *
service of 1 workday or more; rate range.
(2) The employee is entitled to a rate Subpart B—Advances in Pay
of basic pay under a covered pay system § 536.309 Converting retained rates on
which is equal to or greater than the May 1, 2005. ■ 42. The authority citation for subpart
employee’s retained rate (after applying (a) Consistent with section 301(d)(2) B of part 550 is revised to read as follows:
any applicable geographic conversion of Public Law 108–411, an agency must Authority: 5 U.S.C. 5524a, 5545a(h)(2)(B);
under paragraph (b) of this section), convert an employee’s retained rate or E.O. 12748, 3 CFR, 1992 Comp., p. 316.
excluding a rate resulting from a similar rate, as described in paragraph
temporary promotion or temporary (b) of this section, to a retained rate ■ 43. In § 550.202, revise the definition
reassignment; under this subpart on May 1, 2005. The of rate of basic pay to read as follows:
(3) The employee declines a new retained rate must equal the § 550.202 Definitions.
reasonable offer (as determined under retained rate in effect on April 30, 2005,
* * * * *
§ 536.104) of a position in which the as adjusted to include any applicable Rate of basic pay means the rate of
employee’s rate of basic pay would be locality payment under 5 U.S.C. 5304 or pay fixed by law or administrative
equal to or greater than the employee’s similar provision of law. action for the position held by an
retained rate (after applying any (b) This section applies to an employee, excluding additional pay of
applicable geographic conversion under employee under a covered pay system any kind except the following, as
paragraph (b) of this section); who, on April 30, 2005, was receiving— applicable:
(4) The employee is reduced in grade (1) A retained rate under 5 U.S.C. (1) Any locality payment under 5 CFR
for personal cause or at the employee’s 5363; part 531, subpart F; special rate under
request (based on the actual grade of the (2) A rate paid under the authority of 5 CFR part 530, subpart C; or similar
employee’s position rather than the 5 U.S.C. 5334(b) or 5 U.S.C. 5362 which payment or supplement under other
employee’s retained grade and, when a was greater than the maximum rate of legal authority;
movement to a different covered pay basic pay payable for the grade of the (2) Annual premium pay under 5
system is involved, a comparison of employee’s position of record; or U.S.C. 5545(c) or availability pay under
representative rates under § 536.105); or (3) A continued rate of pay under 5 5 U.S.C. 5545a;
(5) The employee moves to a position CFR part 531, subpart C or G (as (3) Straight-time pay for regular
not under a covered pay system. contained in the January 1, 2005, overtime hours for firefighters under 5
(b) When the rate comparison edition of title 5, Code of Federal U.S.C. 5545b (as provided in
required by paragraph (a)(2) or (3) of Regulations, parts 1 to 699) which was § 550.1305(b)); and
this section involves a new or offered greater than the maximum rate of basic (4) Night differential for prevailing
position that is located in a different pay payable for the grade of the rate employees under 5 U.S.C. 5343(f).
geographic area where different pay employee’s position.
schedules would apply to the (c) The conversion rules in this Subpart G—Severance Pay
employee’s existing position of record, section must be applied before any
the agency must convert the employee’s simultaneous pay action that takes effect ■ 44. The authority citation for subpart
existing retained rate using the on May 1, 2005. G of part 550 continues to read as
geographic conversion rules in follows:
§ 536.303(b) before making the rate PART 550—PAY ADMINISTRATION Authority: 5 U.S.C. 5595; E.O. 11257, 3
comparison. The converted retained rate (GENERAL) CFR, 1964–1965 Comp., p. 357.
must be compared to the payable rate of ■ 45. In § 550.703, amend the definition
basic pay for the new or offered position Subpart A—Premium Pay of representative rate by removing the
in determining whether the rate of basic reference ‘‘5 CFR 536.102’’ and adding in
■ 40. The authority citation for subpart
pay for an offered position is equal to its place ‘‘5 CFR 536.103’’, and revise the
A of part 550 is revised to read as
or higher than the employee’s retained definition of rate of basic pay to read as
follows:
rate. follows:
(c) Termination of pay retention Authority: 5 U.S.C. 5304 note, 5305 note,
benefits takes effect— 5504(d), 5541(2)(iv), 5545a(h)(2)(B) and (i), § 550.703 Definitions.
(1) At the end of the day before 5547(b) and (c), 5548, and 6101(c); sections * * * * *
placement if the termination is the 407 and 2316, Pub. L. 105–277, 112 Stat. Rate of basic pay means the rate of
2681–101 and 2681–828 (5 U.S.C. 5545a); pay fixed by law or administrative
result of the employee’s placement in
E.O. 12748, 3 CFR, 1992 Comp., p. 316.
another position; or action for the position held by an
(2) At the end of the last day of the ■ 41. In § 550.103, revise the definition employee, excluding additional pay of
pay period in which the employee of rate of basic pay to read as follows: any kind except the following, as
declines a reasonable offer. applicable:
(d) If an employee’s eligibility for pay § 550.103 Definitions (1) Any locality payment under 5 CFR
retention ceases or entitlement to pay * * * * * part 531, subpart F; special rate under
5 CFR part 530, subpart C; or similar PART 591—ALLOWANCES AND Subpart B [Amended]
payment or supplement under other DIFFERENTIALS
legal authority; ■ 53. In addition to the amendments set
Subpart B—Cost-of-Living Allowance forth above, in 5 CFR part 591, subpart
(2) Annual premium pay under 5
and Post Differential—Nonforeign B, remove the words ‘‘official duty
U.S.C. 5545(c) or availability pay under
Areas station’’ and ‘‘duty station’’ and add in
5 U.S.C. 5545a;
their place the words ‘‘official worksite’’
(3) Straight-time pay for regular ■ 51. The authority citation for subpart throughout the subpart, as amended.
overtime hours for firefighters under 5 B of part 591 continues to read as
U.S.C. 5545b (as provided in follows: PART 630—ABSENCE AND LEAVE
§ 550.1305(b)); and Authority: 5 U.S.C. 5941; E.O. 10000, 3
(4) Night differential for prevailing CFR, 1943–1948 Comp., p. 792; and E.O. ■ 54. The authority citation for part 630
rate employees under 5 U.S.C. 5343(f). 12510, 3 CFR, 1985 Comp., p. 338. is revised to read as follows:
* * * * * ■ 52. In § 591.201, remove the definition Authority: 5 U.S.C. 6311; § 630.301 also
of official duty station, add in issued under Pub. L. 103–356, 108 Stat. 3410
Subpart L—Lump-Sum Payment for and Pub. L. 108–411, 118 Stat 2312;
alphabetical order the definitions of § 630.303 also issued under 5 U.S.C. 6133(a);
Accumulated and Accrued Annual official worksite and position of record, §§ 630.306 and 630.308 also issued under 5
Leave and revise the definition of rate of basic U.S.C. 6304(d)(3), Pub. L. 102–484, 106 Stat.
pay to read as follows: 2722, and Pub. L. 103–337, 108 Stat. 2663;
■ 46. The authority citation for subpart subpart D also issued under Pub. L. 103–329,
§ 591.201 Definitions. 108 Stat. 2423; § 630.501 and subpart F also
L continues to read as follows:
* * * * * issued under E.O. 11228, 30 FR 7739, 3 CFR,
Authority: 5 U.S.C. 5553, 6306, and 6311. 1974 Comp., p. 163; subpart G also issued
Official worksite means the official
■ 47. In § 550.1202, revise the definition location of an employee’s position of under 5 U.S.C. 6305; subpart H also issued
record as determined under 5 CFR under 5 U.S.C. 6326; subpart I also issued
of rate of basic pay to read as follows: under 5 U.S.C. 6332, Pub. L. 100–566, 102
531.605. Stat. 2834, and Pub. L. 103–103, 107 Stat.
§ 550.1202 Definitions. Position of record means an 1022; subpart J also issued under 5 U.S.C.
* * * * * employee’s official position (defined by 6362, Pub. L. 100–566, 102 Stat. 2834, and
Rate of basic pay means the rate of grade, occupational series, employing Pub. L. 103–103, 107 Stat. 1022; subpart K
pay fixed by law or administrative agency, law enforcement officer status, also issued under Pub. L. 105–18, 111 Stat.
and any other condition that determines 158; subpart L also issued under 5 U.S.C.
action for the position held by an 6387 and Pub. L. 103–3, 107 Stat. 23; and
employee, including any applicable coverage under a pay schedule (other
subpart M also issued under 5 U.S.C. 6391
locality payment under 5 CFR part 531, than official worksite)), as documented
and Pub. L. 102–25, 105 Stat. 92.
subpart F; special rate supplement on the employee’s most recent
Notification of Personnel Action Subpart L—Family and Medical Leave
under 5 CFR part 530, subpart C; or
(Standard Form 50 or equivalent) and
similar payment or supplement under
the current position description, ■ 55. In § 630.1204, revise paragraph
other legal authority, before any
excluding any position to which the (d)(1) to read as follows:
deductions and exclusive of additional employee is temporarily detailed. For an
pay of any other kind. employee whose change in official § 630.1204 Intermittent leave or reduced
* * * * * position is followed within 3 workdays leave schedule.
■ 48. In § 550.1205, revise paragraph by a reduction in force resulting in the * * * * *
employee’s separation before he or she (d) * * *
(b)(1) to read as follows:
is required to report for duty in the new
position, the position of record in effect (1) An equivalent grade or pay level,
§ 550.1205 Calculating a lump-sum
immediately before the position change including any applicable locality
payment.
is deemed to remain the position of payment under 5 CFR part 531, subpart
* * * * * F; special rate supplement under 5 CFR
record through the date of separation.
(b) * * * part 530, subpart C; or similar payment
* * * * * or supplement under other legal
(1) An employee’s rate of basic pay (as Rate of basic pay means the rate of
defined in § 550.1202); authority;
pay fixed by statute for the position held
* * * * *
* * * * * by an individual, including any
supplement included as part of basic ■ 56. In § 630.1208, revise paragraph
Subpart M—Firefighter Pay pay under this subpart by law or (b)(2) to read as follows:
regulation (e.g., a special rate § 630.1208 Protection of employment and
■ 49. The authority citation for subpart supplement under 5 CFR part 530, benefits.
M of part 550 continues to read as subpart C), before any deductions and
* * * * *
follows: exclusive of additional pay of any other
kind, such as overtime pay, night (b) * * *
Authority: 5 U.S.C. 5545b, 5548, and 5553.
differential, extra pay for work on (2) An equivalent grade or pay level,
§ 550.1305 Treatment as basic pay. holidays, or other allowances and including any applicable locality
differentials. For firefighters covered by payment under 5 CFR part 531, subpart
■ 50. In § 550.1305, amend paragraph (e) 5 U.S.C. 5545b, straight-time pay for F; special rate supplement under 5 CFR
by removing the reference ‘‘§ 531.606(b) regular overtime hours is basic pay, as part 530, subpart C; or similar payment
of this chapter’’ and adding in its place provided in § 550.1305(b) of this or supplement under other legal
‘‘5 CFR 531.610’’. chapter. authority;
* * * * * * * * * *
PART 831—RETIREMENT also issued under section 11004(c)(2) of Pub. 1321–102; Sec. 842.107 also issued under
L. 103–66, 107 Stat. 412; Sec. 831.682 also sections 11202(f), 11232(e), and 11246(b) of
■ 57. The authority citation for part 831 issued under section 201(d) of Pub. L. 99– Pub. L. 105–33, 111 Stat. 251, and section
251, 100 Stat. 23; Sec. 831.912 also issued 7(b) of Pub. L. 105–274, 112 Stat. 2419; Sec.
continues to read as follows: under Appendix C to Pub. L. 106–554, 114 842.108 also issued under section 7(e) of Pub.
Authority: 5 U.S.C. 8347; Sec. 831.102 also Stat. 2763A–125; subpart V also issued under L. 105–274, 112 Stat. 2419; Sec. 842.213 also
issued under 5 U.S.C. 8334; Sec. 831.106 also 5 U.S.C. 8343a and section 6001 of Pub. L. issued under 5 U.S.C. 8414(b)(1)(B) and
issued under 5 U.S.C. 552a; Sec. 831.108 also 100–203, 101 Stat. 1330–275; Sec. 831.2203 section 1313(b)(5) of Pub. L. 107–296, 116
issued under 5 U.S.C. 8336(d)(2); Sec. also issued under section 7001(a)(4) of Pub. Stat. 2135; Secs. 842.604 and 842.611 also
831.114 also issued under 5 U.S.C. L. 101–508, 104 Stat. 1388–328. issued under 5 U.S.C. 8417; Sec. 842.607 also
8336(d)(2), and section 1313(b)(5) of Pub. L. issued under 5 U.S.C. 8416 and 8417; Sec.
107–296, 116 Stat. 2135; Sec. 831.201(b)(1) Subpart E—Eligibility for Retirement 842.614 also issued under 5 U.S.C. 8419; Sec.
also issued under 5 U.S.C. 8347(g); Sec. 842.615 also issued under 5 U.S.C. 8418; Sec.
831.201(b)(6) also issued under 5 U.S.C. § 831.503 [Amended]
842.703 also issued under section 7001(a)(4)
7701(b)(2); Sec. 831.201(g) also issued under ■ 58. In § 831.503, amend paragraph of Pub. L. 101–508, 104 Stat. 1388; Sec.
sections 11202(f), 11232(e), and 11246(b) of (b)(3)(iv) by removing the reference 842.707 also issued under section 6001 of
Pub. L. 105–33, 111 Stat. 251; Sec. 831.201(g) ‘‘§ 536.102’’ and adding in its place Pub. L. 100–203, 101 Stat. 1300; Sec. 842.708
also issued under sections 7(b) and 7(e) of ‘‘§ 536.103’’. also issued under section 4005 of Pub. L.
Pub. L. 105–274, 112 Stat. 2419; Sec. 101–239, 103 Stat. 2106 and section 7001 of
831.201(i) also issued under sections 3 and PART 842—FEDERAL EMPLOYEES Pub. L. 101–508, 104 Stat. 1388; subpart H
7(c) of Pub. L. 105–274, 112 Stat. 2419; Sec. also issued under 5 U.S.C. 1104; Sec. 842.810
831.204 also issued under section 102(e) of
RETIREMENT SYSTEM—BASIC
ANNUITY also issued under section 636 of Appendix C
Pub. L. 104–8, 109 Stat. 102, as amended by to Pub. L. 106–554 at 114 Stat. 2763A–164.
section 153 of Pub. L. 104–134, 110 Stat.
1321; Sec. 831.205 also issued under section
■ 59. The authority citation for part 842
continues to read as follows: Subpart B—Eligibility
2207 of Pub. L. 106–265, 114 Stat. 784; Sec.
831.301 also issued under section 2203 of Authority: 5 U.S.C. 8461(g); Secs. 842.104 § 842.206 [Amended]
Pub. L. 106–265, 114 Stat. 780; Sec. 831.303 and 842.106 also issued under 5 U.S.C.
also issued under 5 U.S.C. 8334(d)(2) and 8461(n); Sec. 842.104 also issued under ■ 60. In § 842.206, amend paragraph
section 2203 of Pub. L. 106–235, 114 Stat. sections 3 and 7(c) of Pub. L. 105–274, 112 (c)(3)(iv) by removing the reference
780; Sec. 831.502 also issued under 5 U.S.C. Stat. 2419; Sec. 842.105 also issued under 5 ‘‘§ 536.102’’ and adding in its place
8337; Sec. 831.502 also issued under section U.S.C. 8402(c)(1) and 7701(b)(2); Sec. ‘‘§ 536.103’’.
1(3), E.O. 11228, 3 CFR 1964–1965 Comp. p. 842.106 also issued under section 102(e) of
317; Sec. 831.663 also issued under sections Pub. L. 104–8, 109 Stat. 102, as amended by [FR Doc. 05–10793 Filed 5–26–05; 9:37 am]
8339(j) and (k)(2); Secs. 831.663 and 831.664 section 153 of Pub. L. 104–134, 110 Stat. BILLING CODE 6325–39–P

Rule: Pay Under General Schedule: Special, Locality, and Retained Rates Revision

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