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Chapter 1 Pay

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Chapter 1 Pay Chapter 1 Pay Section 1 Main Federal Pay Schedules and Systems General Schedule The General Schedule is the federal government’s main pay system that sets the pay rates for employees in most white-collar positions not at the senior executive or other senior levels. The General Schedule is composed of 15 grades, or salary levels. Each grade includes 10 steps through which employees advance based on satisfactory job performance and length of service. For all GS grades, the waiting periods to be advanced to each higher step (that is, qualifying for a “within-grade increase”) are as follows: 52 calendar weeks to be advanced to steps 2, 3, and 4; 104 calendar weeks to be advanced to steps 5, 6, and 7; and 156 calendar weeks to be advanced to steps 8, 9, and 10 (see 5 CFR 531.405). Performance- based “quality step increases” also are allowed. See Section 4 of this chapter. Position classification standards, developed by the Office of Personnel Management (OPM), are the legal basis for determining the series and grade—and consequently the pay—for the majority of GS positions. In most cases, a GS employee’s basic pay reflects the pay rate specified for the position’s grade and step in the locality where the worker is employed. Disputes over the classification of a GS position that cannot be resolved within the agency can be referred to OPM by either the employee or the agency. OPM is respon- sible for making the final decision on such an appeal, and its decision is final. See Position Classification Appeals in Chapter 10, Section 1. General Schedule jobs commonly are referred to according to one of the “PATCO” (for professional, administrative, technical, clerical, and other) occupational categories: Professional—Requires knowledge in a field of science or learning characteristically acquired through education or training pertinent to the specialized field, as distinguished from general education. The work of a professional occupation requires the exercise of discretion, judgment, and personal responsibility for the application of an organized body of knowledge that is constantly studied to make new discoveries and interpretations, and to improve the data, materials and methods. Administrative—Involves the exercise of analytical ability, judgment, discretion, and personal responsibility, and application of a substantial body of knowledge, principles, con- cepts, and practices applicable to one or more fields of administration or management. While these positions do not require specialized education majors, they do involve the types of skills (analytical, research, writing, judgment) typically gained through a college level general education or through progressively responsible experience. Technical—Involves work that is non-routine in nature and is typically associated with, and in support of, a professional or administrative field. Such occupations involve extensive practical knowledge gained through on-the-job experience or specific training less than by college graduation. Work in these occupations may involve substantial elements of the pro- fessional or administrative field but require less competence in the field involved. Clerical—Involves structured work in support of office, business, field, or fiscal opera- tions; duties are performed in accordance with established policies, experience or working knowledge related to the tasks to be performed. Other—Occupations that do not fall into the above categories. Supervisors of other GS employees ordinarily are classified at least one grade higher than those employees. However, this does not necessarily mean that supervisors will be paid more than each of their subordinates. Supervisory differentials are paid in some cases to keep the supervisor’s pay ahead (see Supervisory Differentials in Section 4 of this chapter). Some white-collar employees below the senior levels are under pay banding—also called broad banding—systems. In such systems, several GS grades are combined into one, and the agency has greater leeway in setting starting salaries and increasing pay for various reasons, 1 2012 Federal Employees Almanac including for performance (see Section 5 of this chapter). Pay banding systems are common in “demonstration projects” and other settings where exceptions to standard civil service rules apply (see Chapter 8, Section 7). Federal Wage System Blue-collar occupations comprise the trades, crafts, and manual labor (unskilled, semi- skilled, or skilled), including foreman and supervisory positions entailing trade, craft, or laboring experience and knowledge as the paramount requirement. The pay of the federal government’s blue-collar employees is set as an hourly rate in accordance with procedures established under 5 U.S.C. 5343. The law requires that hourly rates for these federal wage system employees—also commonly called wage grade or pre- vailing rate—be adjusted in accordance with pay rates in local markets. The most common wage system schedule—that is, the wage grade schedule used for most non-supervisory workers—contains 15 grades. Each of the grades includes five steps, which are set at 4 per- cent increments. If the employee’s performance is above unacceptable, advancement to the second step occurs after six months of employment, advancement to the third after an additional 18 months, to the fourth after an additional two years, and to the fifth after an additional two years. Occupations often cover more than one grade level, and many occupations typically are represented at each grade. Differences in rates of pay among wage areas reflect the fact that the prevailing cost of labor varies by region across the United States. The wage system’s prevailing rate determinations are made on the basis of surveys by a “lead agency”—the agency with the most blue-collar employees in an area, most com- monly the Defense Department—of rates paid by private employers in each local wage area for work similar to that performed by federal wage employees. Wage schedule adjustments have been capped each year since fiscal year 1979 through the budget process. Because of the pay cap, wage grade adjustments in an area cannot exceed the local General Schedule pay increase (including both base GS and locality pay adjustments); in many years prior to 2004, federal wage system raises were capped at the GS national average. Wage schedules are adjusted at different times of the year according to when the local lead agency conducts the annual wage survey in each individual wage area. U.S. Postal Service As an independent establishment, the U.S. Postal Service operates its own pay system that has two general types of salary structures, as well as a specialized structure for rural letter carriers. The two general pay structures are: the PS (Postal Service) salary structure, which covers bargaining unit personnel, such as most clerks and carriers, mail handlers, nurses, and security personnel; and the EAS (Executive and Administrative Schedule) structure, which covers executives, professionals, supervisors, postmasters, technical and administrative employees, and other workers not covered by bargaining agree- ments. See Chapter 12, Section 3. Executive Schedule, Congressional, and Judicial Pay Salary levels of certain top officials of all three branches of government are linked. The Executive Schedule, which governs the pay of Cabinet officers and other top federal executives—almost all of them political appointees—is the basic underlying structure. It includes five levels which are, in descending order: • Level I, Cabinet-Level officials; • Level II, deputy secretaries of departments, secretaries of military departments, and heads of major agencies; • Level III, under secretaries of departments and heads of middle-level agencies; • Level IV, assistant secretaries and general counsels of departments, heads of smaller agencies, members of certain boards and commissions; and • Level V, administrators, commissioners, directors, and members of boards, commis- sions, or units of agencies. Under the Ethics Reform Act of 1989, P.L. 101-194, the salaries of the Vice President, 2 Chapter 1—Pay the Chief Justice and the Speaker of the House are to be equivalent. Similarly, the salaries of Cabinet officials (Level I) and certain congressional leaders are to be equivalent, as are the salaries of those at Level II, most members of the House and Senate, and most fed- eral judges. However, the actual figures do not track exactly because in some years sala- ries for Congress were frozen while raises were paid to Executive Schedule employees, judges, or both. Various Executive Schedule rates also are used to establish certain salary limits for General Schedule employees, the Senior Executive Service, employees in senior-level and senior scientific and technical jobs, administrative law judges, and certain other highly paid positions. See the pertinent topics in this section. The Ethics Reform Act of 1989 provided for an annual salary adjustment for leaders and members of the Senate and House of Representatives, the Vice President, individuals in positions on the Executive Schedule, and federal justices and judges. The adjustment is based on the percentage change in the wages and salaries (not seasonally adjusted) for the private industry workers element of the employment cost index (ECI), minus 0.5 percent, using the December indicator. It becomes effective at the same time as, and at a rate no greater than, the annual basic pay rate adjustment (that is, the across-the-board component only and not counting the locality pay component) for federal employees under the General Schedule. The adjustment cannot, however, be less than zero or greater than 5 percent. While the Ethics Reform Act sets the rate of the judicial pay adjustment, salary increases for justices and judges must be enacted separately. While judicial raises require an annual authorization, the congressional and Executive Schedule pay raises are automatic unless Congress acts to prevent them—which has hap- pened in some years. Although refusals to accept the raise primarily occur because of sensitivity over congressional pay, the linkage often causes salaries of judges and Executive Schedule officials to be frozen as well.
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