[Federal Register: March 3, 2006 (Volume 71, Number 42)]
[Proposed Rules]
[Page 10913-10914]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03mr06-15]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 10913]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 534
RIN 3206-AL01
Senior Executive Service Pay
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing proposed
regulations to provide agencies with the authority to increase the
rates of basic pay of certain members of the Senior Executive Service
(SES) whose pay was set before the agency's senior executive
performance appraisal system was certified for the calendar year
involved. The proposed regulations would allow an agency to review the
rate of basic pay of these SES members and provide an additional pay
increase, if warranted, up to the rate for level II of the Executive
Schedule upon certification of the agency's senior executive
performance appraisal system for the current calendar year.
DATES: Comments must be received on or before April 3, 2006.
ADDRESSES: Send or deliver comments to Donald J. Winstead, Deputy
Associate Director for Pay and Performance Policy, Office of Personnel
Management, Room 7H31, 1900 E Street, NW., Washington, DC 20415-8200;
by FAX at (202) 606-0824; or by e-mail at
pay-performance-policy@opm.gov.
FOR FURTHER INFORMATION CONTACT: Jo Ann Perrini by telephone at (202)
606-2858; by FAX at (202) 606-0824; or by e-mail at
pay-performance-policy@opm.gov.
SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is
issuing proposed regulations to provide agencies with the authority to
increase the rates of basic pay of certain members of the Senior
Executive Service (SES) whose pay was set before the agency's senior
executive performance appraisal system was certified under 5 CFR part
430, subpart D, for the calendar year involved. The proposed
regulations would allow an agency to review the rates of basic pay set
for these SES members, which was capped at the rate for level III of
the Executive Schedule, and provide an additional pay increase, if
warranted, up to the rate for level II of the Executive Schedule upon
certification of the agency's senior executive performance appraisal
system for the current calendar year.
The National Defense Authorization Act for Fiscal Year 2004 (Pub.
L. 108-136, November 24, 2003) authorized a new performance-based pay
system for SES members. Under the new SES pay system, an agency must
set and adjust the rate of basic pay for an SES member on the basis of
the employee's performance and/or contribution to the agency's
performance, as determined by the agency through the administration of
its performance management system(s) for senior executives. On December
6, 2004, OPM issued final regulations on the administration of the SES
performance-based pay system and prescribed the criteria for
establishing and adjusting SES rates of basic pay and paying
performance awards (69 FR 70355).
Agencies have had experience administering pay under the new SES
performance-based system for 2 years. During this period, we have
identified a recurring problem that occurs at the beginning of each
calendar year and that prevents an agency from setting pay above the
rate for level III of the Executive Schedule because its senior
executive performance appraisal system has not yet been certified for
that calendar year.
Under 5 U.S.C. 5307(d), an agency's senior executive performance
appraisal system is certified on a calendar year basis. (The
regulations in 5 CFR part 430, subpart D, provide the requirements for
obtaining certification of a performance appraisal system for senior
executives.) Under 5 U.S.C. 5382(b), the maximum rate of the SES rate
range may not exceed the rate for level III of the Executive Schedule
unless the agency's senior executive performance appraisal system is
certified under 5 U.S.C. 5307(d). Therefore, an agency may not set pay
for an SES member at a rate above the rate for level III until its
senior executive performance appraisal system is certified for the
calendar year involved. Since many agencies' senior executive
performance appraisal systems are not certified at the beginning of a
calendar year, there is a gap from the time an agency may set SES pay
above level III (in the previous calendar year) to the time an agency
may again set SES pay above level III upon certification of its senior
executive performance appraisal system (in the next calendar year).
In one limited circumstance, OPM authorized the extension of
provisional certification into the following calendar year--i.e., for
the sole purpose of adjusting pay on the basis of official ratings
determined during the calendar year for which their appraisal system
was certified. (See 5 CFR 430.405(c)(2).) However, this limited
exception does not help affected agencies in other situations--e.g.,
recruiting individuals with superior leadership skills into the SES,
reassigning current SES members into positions with substantially
greater responsibility, or retaining an SES member who is critical to
the mission of the agency--because non-certified agencies may not set
SES pay above the rate for level III in these situations. Moreover, the
statutory prohibition against adjusting SES pay more than once during
any 12-month period (except in unusual situations as described in OPM's
regulations) results in these individuals receiving lower rates of
basic pay than individuals in the same situations whose rates of basic
pay were or are set during a period when the agency's senior executive
appraisal system has been certified.
The requirement in 5 U.S.C. 5307(d) that senior executive
performance appraisal systems be certified on a calendar year basis may
be changed only by legislation. We are proposing regulations to allow
agencies that obtain certification of their senior executive
performance appraisal system(s) to review the rates of pay they set
earlier in the calendar year for certain SES members and provide an
additional pay increase, if warranted, up to the rate for level II of
the Executive Schedule. Under this proposal, the determination to
provide an additional pay increase could not be made effective before
the date the agency's senior executive performance appraisal system is
certified under 5 CFR part 430, subpart D, or after December 31st of
the calendar year for which the agency's system is
[[Page 10914]]
certified. The additional pay increase would not be considered a pay
adjustment for the purpose of applying 5 CFR 534.404(c) (the ``12-month
rule'').
Waiver of 60-Day Comment Period for Proposed Rulemaking
Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists to
waive the 60-day comment period for general notice of proposed
rulemaking. Limiting the comment period for the proposed regulations to
30 days will enable OPM to issue final regulations in 2006, which will
give practical effect to these regulations at the earliest possible
moment. The final regulations will permit agencies to review the rates
of basic pay set previously in early 2006 for SES members and provide
an additional pay increase, if warranted, later in 2006 upon
certification of the agency's senior executive performance appraisal
system.
Regulatory Flexibility Act
I certify that these regulations would not have a significant
economic impact on a substantial number of small entities because they
would apply to only Federal agencies and employees.
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with E.O. 12866.
List of Subjects in Part 534
Government employees, Hospitals, Students, and Wages.
Office of Personnel Management.
Linda M. Springer,
Director.
Accordingly, OPM proposes to amend part 534 of title 5 of the Code
of Federal Regulations as follows:
PART 534--PAY UNDER OTHER SYSTEMS
1. The authority citation for part 534 continues to read as
follows:
Authority: 5 U.S.C. 1104, 3161(d), 5307, 5351, 5352, 5353, 5376,
5382, 5383, 5384, 5385, 5541, 5550a, and sec. 1125 of the National
Defense Authorization Act for FY 2004, Public Law 108-136, 117 Stat.
1638 (5 U.S.C. 5304, 5382, 5383, 7302; 18 U.S.C. 207).
Subpart D--Pay and Performance Awards Under the Senior Executive
Service
2. In Sec. 534.404, redesignate paragraphs (c)(3)(v) and (vi) as
(c)(3)(vi) and (vii), respectively, add new paragraph (c)(3)(v), and
revise paragraph (e) to read as follows:
Sec. 534.404 Setting and adjusting pay for senior executives.
* * * * *
(c) 12-month rule. * * *
(3) * * *
(v) A determination to provide an additional pay increase under
paragraph (e)(2) of this section when an agency's senior executive
performance appraisal system is certified under 5 CFR part 430, subpart
D, after the beginning of a calendar year;
* * * * *
(e) Adjustments in pay after certification of applicable
performance appraisal system.
(1) In the case of an agency that obtains certification of a
performance appraisal system for senior executives under 5 CFR part
430, subpart D, an authorized agency official may increase a covered
senior executive's rate of basic pay up to the rate for level II of the
Executive Schedule, consistent with the limitations in Sec.
534.403(a)(3). The authorized agency official may provide an increase
in pay if warranted under the conditions prescribed in paragraph (b) of
this section and if the senior executive is otherwise eligible for such
an increase (i.e., he or she did not receive a pay adjustment under
Sec. 534.404(c) during the previous 12-month period). An adjustment in
pay made under this paragraph is considered a pay adjustment for the
purpose of applying Sec. 534.404(c).
(2) In the case of an agency that was prevented from establishing
or adjusting a rate of basic pay above the rate for level III of the
Executive Schedule for an individual upon initial appointment to the
SES under Sec. 534.404(a) or for a current SES member using one of the
exceptions to the 12-month rule in Sec. 534.404(c)(4)(i), (ii), or
(iii) because the agency had not yet obtained certification of its
performance appraisal system for senior executives under 5 CFR 430,
subpart D, in the current calendar year, an authorized agency official
may increase such a senior executive's rate of basic pay up to the rate
for level II of the Executive Schedule upon certification of the
agency's senior executive performance appraisal system, consistent with
the limitations in Sec. 534.403(a)(3). The authorized agency official
may review the previous determination to set or adjust the pay of a
senior executive to determine whether, and to what extent, an
additional pay increase may be warranted based on the same criteria
used for the previous determination. The determination to provide an
additional pay increase may not be made effective before the date the
agency's senior executive performance appraisal system is certified
under 5 CFR 430, subpart D, or after December 31st of the calendar year
for which the agency's system is certified. An adjustment in pay made
under this paragraph is not considered a pay adjustment for the purpose
of applying Sec. 534.404(c) and does not begin a new 12-month period
for that purpose.
* * * * *
[FR Doc. E6-3016 Filed 3-2-06; 8:45 am]
BILLING CODE 6325-39-P