CPM 2004-22 - November 1, 2004
MEMORANDUM FOR HEADS OF EXECUTIVE
DEPARTMENTS AND AGENCIES
FROM:
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KAY COLES JAMES
Director
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SUBJECT:
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Federal Workforce Flexibility Act of 2004
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This is to inform you of several changes in pay and leave administration, benefits,
and other human resources policies resulting from the enactment of the Federal
Workforce Flexibility Act of 2004, which was signed into law by President George
W. Bush on October 30, 2004. We have listed the changes in the order in which
they will become effective.
SES and SL/ST Annual Leave Accrual (Effective October 30, 2004)
Section 202(b) of the Act adds a new paragraph (f) to 5 U.S.C. 6303 to provide
that members of the Senior Executive Service (SES), employees in senior level
(SL) and scientific or professional (ST) positions, and employees covered by
an equivalent pay system, as determined by the Office of Personnel Management
(OPM), will accrue annual leave at the rate of 1 day (8 hours) for each full
biweekly pay period. This provision became effective on October 30, 2004. Since
the accrual rate changes during the October 17-30 pay period, the higher accrual
rate will become effective as of the end of that pay period. Agencies are responsible
for crediting annual leave at the 8-hour accrual rate for affected employees
for the full pay period. OPM will issue conforming regulations to reflect this
new provision in the near future. In addition, OPM will issue a separate memorandum
regarding the extension of the higher annual leave accrual rate to employees
covered by equivalent pay systems.
Critical Pay Authority (Effective October 30, 2004)
Section 102 of the Act shifts primary responsibility for the Federal Government's
critical pay authority from the Office of Management and Budget (OMB) to OPM
to facilitate increased application of this underutilized flexibility as a means
of attracting talented individuals to critical positions in the Federal Government
who would not otherwise accept or stay in Government jobs at lower rates of
pay. This provision became effective on October 30, 2004.
Under the critical pay authority, OPM may, upon the request of an agency head,
and after consultation with OMB, grant authority to fix the rate of basic pay
for one or more critical positions in an agency at not less than the rate that
would otherwise be payable for that position, up to the rate for level I of
the Executive Schedule ($175,700 in 2004). Under this same provision of law,
a higher rate of pay may be established upon the President's written approval.
In order to apply the critical pay authority, the position must require a very
high level of expertise in a scientific, technical, professional, or administrative
field and be crucial to the accomplishment of an agency's mission. Until regulations
or other guidance is provided, agencies wishing to use the critical pay authority
should continue to use the criteria provided by OMB Bulletin 91-09, "Critical
Pay Position Authority," dated March 7, 1991, except that all requests
must be submitted to OPM, and OPM, in consultation with OMB, will make the determination
to approve such a request.
Agency Training (Effective October 30, 2004)
Section 201 of the Act amends 5 U.S.C. 4103 and adds a new section 4121. These
changes require Federal agencies to regularly evaluate and modify training programs
or plans in order to promote a more strategic approach to agencies' integration
of training programs into overall mission accomplishment, and provide specific
training to develop managers as part of a comprehensive management succession
program. The new provisions became effective on October 30, 2004.
The Act adds the requirement that each agency, on a regular basis, evaluate
each of its training plans or programs as to how that plan or program accomplishes
or effectively promotes the agency's specific performance plans and strategic
goals. Agencies will modify those training plans or programs, as needed, to
ensure that they continually meet and support specific agency established performance
plans and strategic goals.
Under the Act, agency heads, in consultation with OPM, must establish a comprehensive
management succession program that includes training of employees to develop
managers. This program will include training for managers on actions, options,
and strategies managers may use to address mentoring employees, improving employee
performance and productivity, conducting performance appraisals, and unacceptable
performance.
Compensatory Time Off for Travel (Effective no later than January 28, 2005)
Section 203 of the Act amends 5 U.S.C. chapter 55, subchapter V, by adding
a new section 5550b to establish a new form of compensatory time off for time
spent by an employee in a travel status away from the employee's official duty
station if the travel time is not otherwise compensable. OPM will issue implementing
regulations in the near future. This amendment will take effect on the earlier
of (1) the effective date of OPM's implementing regulations or (2) January 28,
2005.
Annual Leave Enhancements (Effective no later than April 28, 2005)
Section 202(a) of the Act adds a new paragraph (e) to 5 U.S.C. 6303 to provide
that a newly appointed employee's prior non-Federal work experience may be creditable
in determining the amount of annual leave the employee will earn each biweekly
pay period. Qualified non-Federal work experience must have been performed in
a position with duties that directly relate to the position to which he or she
is being appointed and must meet other requirements as prescribed by OPM. Additionally,
the head of the agency to which the new employee is appointed must determine
that the granting of such service credit is necessary in order to achieve an
agency mission or performance goal. Section 202 provides that not later than
180 days after enactment of the Act (April 28, 2005), OPM must prescribe regulations
to allow the credit of non-Federal service for the purpose of determining an
employee's annual leave accrual rate.
Recruitment, Relocation, and Retention Bonuses (Effective May 1, 2005)
Section 101(a) of the Act establishes significantly enhanced recruitment, relocation,
and retention bonus authorities that will provide Federal agencies with the
flexibility to use such bonuses in more strategic ways to help the Federal Government
improve its competitiveness in recruiting and maintaining a high quality workforce.
The enhanced authorities will replace the current recruitment and relocation
bonus and retention allowance authorities under 5 U.S.C. 5753 and 5754. For
example, under regulations to be prescribed by OPM, the recruitment, relocation,
and retention bonus enhancements provided by the Act include the authority to —
- Pay larger recruitment and relocation bonuses based on the length of an
agreed-upon service period, capped at 25 percent of the employee's annual
salary multiplied by the number of years the employee agrees to serve in the
position (up to a maximum of 4 years).
- Waive the normal cap on recruitment and relocation bonuses because of a
critical agency need in order to pay higher amounts over shorter periods of
time (not to exceed a total of 100 percent of the employee's starting salary).
- Pay recruitment bonuses to current Federal employees under conditions prescribed
in OPM regulations.
- Pay retention bonuses to employees who are likely to leave for other Federal
positions under conditions prescribed in OPM regulations.
- Pay recruitment, relocation, and retention bonuses in alternative ways,
such as in installments or in a lump sum at the end of a service period.
- Request that OPM waive the limitation on an individual retention bonus (25
percent of salary) or a group retention bonus (10 percent of salary) to allow
retention bonus payments of up to 50 percent of salary based on a critical
agency need.
Under the amended provisions in 5 U.S.C. 5753 and 5754, agencies may not pay
new recruitment, relocation, and retention bonuses to individuals appointed
by the President, by and with the advice and consent of the Senate; noncareer
appointees in the Senior Executive Service; or individuals in positions excepted
from the competitive service by reason of their confidential, policy-determining,
policy-making, or policy-advocating character. In addition, section 101(b) of
the Act repeals the special relocation bonus limitation for law enforcement
officers. This special limitation is no longer needed because the new relocation
bonus authority in 5 U.S.C. 5753 provides a higher payment limit for all employees.
Section 101(d) of the Act provides that the new recruitment, relocation, and
retention bonus provisions will become effective on the first day of the first
pay period beginning on or after April 28, 2005 (i.e., May 1, 2005). However,
a recruitment or relocation bonus service agreement that is authorized before
this effective date will continue until its expiration. Also, a retention allowance
authorized before this effective date will continue until the retention allowance
is reauthorized or terminated, but not longer than 1 year after the effective
date of the new provisions. OPM will issue implementing regulations to reflect
the new recruitment, relocation, and retention bonus authorities before the
effective date. Finally, section 101(c) of the Act requires OPM to submit an
annual report to Congress on the operation of the new recruitment, relocation,
and retention bonus authorities. OPM will provide additional information to
agencies on the data needed for this report at a later date.
Corrections Relating to Pay Administration (Effective May 1, 2005)
Section 301 of the Act amends provisions in 5 U.S.C. chapter 53 relating to
special pay rates, locality rates, and retained rates. These changes are designed
to restore logic and fairness in individual pay determinations and improve the
effectiveness of the special salary rates program as a recruitment and retention
tool. These new provisions will become effective on the first day of the first
pay period beginning on or after April 28, 2005 (i.e., May 1, 2005). OPM will
issue necessary implementing regulations before the effective date.
The section 301 amendments, along with OPM's implementing regulations, will
correct a variety of pay administration anomalies resulting from the interaction
of special rates, locality pay, and retained rates and the current application
of complex pay administration rules. These changes will allow OPM to treat special
rates and locality rates in similar ways for the purpose of promotions, pay
retention, and movements between pay systems and schedules.
Among the changes made by section 301 are the following:
- When an employee's special rate is surpassed by a locality rate, the underlying
special rate will no longer be used for any purpose.
- Locality rates may be taken into account in applying the GS promotion rule
in circumstances specified in OPM regulations. For example, OPM's regulations
may provide that if an employee is being promoted from a special rate position
to a higher-graded non-special rate position, the former special rate will
be increased by two steps and slotted into the appropriate rate on the higher
locality pay schedule.
- Locality rates will be taken into account in applying pay retention rules.
Locality pay will no longer be paid on top of a retained rate. Retained rates
will be compared to the highest applicable rate range (as adjusted to include
any locality pay or special rate supplement).
- The reduction of a special rate because of a geographic move will not trigger
pay retention (i.e., the same treatment as applies to a locality rate).
- Saved rates of pay established by an authority other than the pay retention
provisions of 5 U.S.C. 5363 (i.e, by the promotion rule in 5 U.S.C. 5334(b)
or the grade retention provisions of 5 U.S.C. 5362) will be deemed to be retained
rates under section 5363 and will be adjusted accordingly.
- The maximum special salary rate will be increased from level V to level
IV of the Executive Schedule (the same cap that applies to locality rates
for GS employees).
- Agencies will be authorized to determine that their employees will not be
covered by a proposed or an existing special rate schedule.
Additional Information
For additional information, agency Chief Human Capital Officers and/or Human
Resources Directors should contact their assigned OPM Human Capital Officer.
Employees should contact their agency human resources office for assistance.
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Chief Human Capital Officers |
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Human Resources Directors |
