Pay Flexibilities

Pay flexibilities for superior qualifications and special needs appointments

Under 5 U.S.C. 5333 and 5 CFR 531.203(b), general pay flexibilities allow agencies to set the rate of basic pay of a newly appointed employee at a rate above the minimum rate of the appropriate general schedule grade because of the superior qualifications of the candidate or a special need of the agency for the candidate’s services. This applies to any GS position, including permanent and temporary positions in either the competitive or the excepted service.

Agencies may use this authority upon a new appointment, meaning the first appointment as an employee of the federal government, or upon reappointment to a general schedule position with a 90-day break in service. (See 5 CFR 531.203(b)(2) for exceptions to the 90-day break in service requirement.)

Before using the superior qualifications appointment authority, agencies must establish documentation and recordkeeping procedures sufficient to allow reconstruction of the action taken in each case.

Documentation must include a description of the superior qualifications of the individual or special need of the agency that justified use of the authority; factor(s) considered in determining the individual’s existing pay and the reason for setting pay at a rate higher than that needed to match existing pay; and reason(s) for authorizing an advanced rate instead of or in addition to a recruitment bonus.

Note: Pay flexibilities affecting starting rates must be used in a gender-neutral manner, for example to not disadvantage someone who has had a break in employment due to child-rearing responsibilities. Further, agencies must not put excessive emphasis on past salaries since they may have been artificially depressed.

Highest previous rate

Upon reemployment, transfer, reassignment, promotion, demotion, or change in type of appointment, agencies may set the rate of basic pay of an employee by taking into account a rate of basic pay previously received by the individual while employed in another civilian federal position (with certain exceptions), up to the maximum of the grade.

Waiver of dual pay limitation

Agencies have authority to waive the limitation (40 hours per week) on aggregate basic pay, when “required services cannot be readily obtained otherwise” and “under emergency conditions relating to health, safety, protection of life or property, or national emergency.” This authority enables an agency to employ a full-time federal employee in a second job or to schedule a part-time agency employee with multiple part-time appointments to work more than an aggregate of 40 hours during a week. The agency pays overtime only when an individual works more than eight hours per day or 40 hours per week for the same agency.

Supervisory differential

The head of an agency may pay a supervisory differential to a general schedule employee who has supervisory responsibility for one or more civilian employees not covered by the general schedule if one or more of the subordinate civilian employees, in the absence of such a differential, would be paid more than the supervisory employee.

General Schedule Pay Flexibilities

Premium pay ceiling exceptions

The head of an agency may make an exception to the GS-15, step 10, biweekly limitation on premium pay during emergencies involving a direct threat to life or property. If the head of an agency determines that such an emergency exists, the premium pay paid to an employee performing work in connection with that emergency, when added to the employee’s rate of basic pay (including any locality payment or special salary rate), must not cause his or her total pay to exceed the rate for GS-15, step 10 (including any locality payment or special salary rate), on an annual basis. A different limitation applies to law enforcement officers. This limitation does not apply to overtime pay earned under the Fair Labor Standards Act.

Critical position pay authority

The Office of Personnel Management may increase the rate of basic pay for a position for a position that requires expertise of an extremely high level in a scientific, technical, professional, or administrative field or one that is critical to the agency’s successful accomplishment of an important mission. Critical pay may be granted only to the extent necessary to recruit or retain an individual exceptionally well qualified for the position. Agencies are encouraged to request the authority where appropriate; see an October 8, 2014 memo at www.chcoc.gov/transmittals.

Physicians comparability allowances—Agencies may pay physicians comparability allowances to recruit and retain highly qualified physicians. In return, the physician must sign a service agreement with the agency.

Wage system pay flexibilities

Increased minimum hiring rate

The increased minimum hiring rate authority allows a lead agency to establish any wage system scheduled rate above step 1 as the minimum rate at which a new employee can be hired. When there is an increased minimum rate authorization for an occupation and grade at a particular location, all appointments must be made at the authorized increased minimum rate.

Special schedules

The special schedule authority allows a lead agency, with the approval of OPM, to establish a wage system schedule of rates that are broader in scope than would normally be authorized under the special rates program. Special schedules are established for specific occupations within a geographic area.

Unrestricted rate authority

Upon the request of an agency, OPM may approve exceptions to a statutory limitation on wage system pay adjustments for an occupation or group of occupations in a wage area or part of a wage area. The lead agency for the wage area must coordinate an employing agency’s request for this exception with other agencies, as necessary, and submit a consolidated request to OPM. The consolidated request must include any available supporting wage survey data and a formal recommendation by the lead agency to approve or disapprove the request.

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