Recently a reader sent me a question asking whether or not he would be entitled to overtime and certain other kinds of payments. He was concerned because he was paid at the GS-15 step 6 level.
So I searched FedSmith and found that no one had written about this topic. With this article I hope to share information about statutory provisions that can cause your pay to be much less than you expect after you’ve worked overtime or other premium hours, such as work at night, on a holiday or on a Sunday.
Title 5 of the United States Code, the provisions under which General Schedule and many other Federal employees are paid, provides for limits on the amount of cash payments and premium pay a federal employee may receive. These limits, among other things, help to assure that the relationship between pay and responsibility is maintained by assuring General Schedule employees do not earn more than Executive Schedule employees.
This article will discuss two limits: the aggregate limit on pay; and the limit on the payment of premium pay.
Aggregate Limitation on Pay
The first limitation is the aggregate limit on pay. This states that during any calendar year, an Executive Branch employee (or GS employee in the Legislative or Judicial Branches) may not receive any cash payment, when the employee’s basic pay (under Title 5 or other authority) plus the cash payment combined would exceed the rate payable at Level I of the Executive Schedule on the last day of that calendar year. This limit prevails even when a calendar year has 27 pay periods.
The cash payments covered by this limitation include: locality based comparability payments or special law enforcement pay adjustments; premium pay for FWS employees, and for GS employees; incentive awards and performance based cash awards; recruitment and relocation bonuses; retention incentives; supervisory differentials; post differential; danger pay allowances; allowances based on environmental conditions outside the United States or in Alaska; physicians comparability allowances; continuation of pay under the OWCP program; other similar payments authorized under Title 5.
Cash payments NOT covered by this limitation include: overtime pay under the FLSA; back pay for an unjustified personnel action; severance pay; lump sum payment for accumulated and accrued annual leave on separation; advancements, allotments and assignments of pay, and payments to missing employees; travel, transportation and subsistence payments; and, allowances under chapter 59 other than those noted above. Thus, these payments may be made without regard to the aggregate pay limitations.
Amounts that are not provided to an employee in one calendar year because of the aggregate limitation can be deferred and paid to the employee in a lump sum at the beginning of the following calendar year.
There are two exceptions to the requirements to pay the excess amount at the beginning of the following calendar year. These are:
- When an employee dies, the excess amount is payable immediately when accounts are settled under 5 U.S.C. § 5582.
- When an employee separates from federal service, the entire excess amount is payable following a 30 day break in service.
For calendar year 2016, the aggregate annual limit that cannot be exceeded is $205,700.
Limitation on the Payment of Premium Pay
The second limitation is the limit on the payment of premium pay. These provisions establish two limits on the payment of premium pay. The first is the one most frequently encountered and limits premium pay on a biweekly basis. The second occurs under unusual circumstances and limits premium pay on an annual basis.
Biweekly Premium Pay Cap
Under this cap an employee can be paid premium pay only to the extent that, when combined, the premium pay and basic pay does not exceed the greater of:
- the maximum rate payable for GS-15 during any biweekly pay period; OR,
- the rate payable for Level V of the Executive Schedule during any biweekly pay period. (See 5 U.S.C. § 5547(a); and 5 C.F.R. § 550.105)
The forms of pay covered by this biweekly premium pay limitation include: the dollar value of earned hours of compensatory time off, and 5 overtime pay earned under Title 5 provisions; premium pay for night, Sunday and holiday work; and premium pay for standby duty, administratively uncontrollable overtime work and availability duty.
This limitation does not apply: to overtime pay earned by FLSA Nonexempt employees and compensatory time off earned in lieu of FLSA overtime pay; and premium pay paid under 5 USC 5546a to certain FAA and DOD air traffic control and related employees.
The website for the U.S. Office of Personnel Management contains a listing for the biweekly pay cap, by locality pay area, as a link from the pay administration webpage.
Annual Premium Pay Cap
Under this cap the head of an agency or the Office of Personnel Management may declare an emergency when a temporary condition poses a direct threat to human life or property, including a forest wildfire emergency. This cap also applies when the head of an agency determines that an employee is needed to perform work that is critical to the mission of the agency. When one of these two conditions are recognized and declared, an employee can be paid premium pay in a calendar year to the extent that the payment does not cause the total of the employee’s basic pay and premium pay to exceed the greater of:
- the maximum annual rate payable for GS-15 in effect on the last day of the calendar year; OR,
- the annual rate payable for Level V of the Executive Schedule in effect on the last day of the calendar year. (See 5 U.S.C. § 5547(b); and 5 C.F.R. § 550.106)
This limitation is effective even when the calendar year has 27 pay periods. Agencies may want to consider adjusting schedules and premium pay to ensure the limit is not exceeded.
Premium pay covered by this limitation means: the dollar value of earned hours of compensatory time off and overtime pay earned by GS employees under Title 5 provisions; premium pay for night, Sunday and holiday work; and premium pay for standby duty, administratively uncontrollable overtime work and availability duty. This premium pay cap does not apply to FLSA overtime and overtime earned by FWS employees.
Earnings Limitation for Certain Premium Payments
Current regulations instruct us to handle certain premium payments differently. Under these regulations, the following types of premium pay always have the biweekly premium pay cap applied even when the employee is performing work under the annual premium pay cap for other forms of premium pay.
- Standby premium pay;
- Annual premium pay for administratively uncontrollable overtime;
- Law enforcement availability pay for criminal investigators; and
- Overtime pay for hours that are part of a firefighter’s regular tour of duty when the firefighter is covered by 5 U.S.C. § 5545b (See 5 U.S.C. § 5547(c); and 5 C.F.R. § 550.107)
This means that when an employee is performing under an annual premium pay cap, the forms of premium pay listed in the preceding paragraph may be paid only to the extent that they do not exceed the biweekly premium pay cap. All other types of premium pay for which the employee is eligible may then be paid so long as these other forms of premium pay do not exceed the annual premium pay cap. In determining whether or not the employee reaches or exceeds the annual premium pay cap, the forms of premium pay listed in the preceding paragraph must be included.
In this article I tried to cover the main provisions of the two limitations on pay that may affect Executive Branch employees. These are: the limit on total compensation; and the limit established on the payment of premium pay. Federal employee pay is complicated and it my hope that this article will help to make it more understandable.
Wayne Coleman is a federal pay expert available to help your agency avoid premium pay claims through on-site training. Contact him for more information.