New Pay Systems Proposed for Some Federal Jobs

The President’s Management Agenda calls for action to establish special occupational pay systems for some federal jobs.

In 1990, Congress passed the Federal Employee Pay Comparability Act (FEPCA). Employees in the federal workforce have become familiar with many parts of this legislation, in large part because of locality pay which is now in effect for a large portion of the federal workforce.

FEPCA and Locality Pay

As those who follow federal employment policies know, locality pay provides for different salary amounts in various localities across the country rather than having all employees making the same amount without regard to geographic location. A summary of FEPCA’s pay comparability with regard to locality pay as follows:

Directs the President to make annual adjustments in locality-based comparability payments by the amount recommended in the Pay Agent’s report or by an amount determined by the President. Sets forth provisions governing the computation of such adjustments. Requires a comparability payment to be considered part of basic pay for purposes of retirement, life insurance, premium pay, and for any other purpose provided for by law or as the Office of Personnel Management (OPM) may by regulation prescribe.

FEPCA and Special Pay Rates

There is another provision in FEPCA that is largely unknown and has never been used. This provision is described in a summary of FEPCA as follows:

Grants the President the authority to provide for special pay rates if Government efforts to recruit or retain well-qualified individuals are, or are likely to become, significantly handicapped by: (1) the remoteness of the area or location involved; (2) undesirable working conditions; (3) higher rates of pay offered by non-Federal employers; or (4) any other circumstances which the President considers appropriate.

While that provision of FEPCA may not have been common knowledge in the past, it may become more well-known in the coming year. The President’s 2020 budget proposal contains the following sentence:

In the coming year, the President’s Pay Agent (consisting of the Directors of OMB and OPM and the Secretary of Labor) intends to exercise its authority to establish special occupational pay systems for occupations where the General Schedule classification and pay system are not aligned to labor-market realities.

Emphasis on Hiring for STEM Jobs

OPM has previously said it is looking at ways to improve the capabilities of the federal workforce in some areas. Former OPM director Jeff Pon wrote in a memo last year that OPM “is aware that individuals with the knowledge, skills, and ability to perform in Science, Technology, Engineering, and Mathematics (STEM) and cybersecurity occupations are in heavy demand and that this demand could, perhaps, be affecting mission-critical functions. For this reason, OPM is exploring the feasibility, under applicable law, of issuing direct hire authority (DHA) for certain STEM and cybersecurity occupations.”

In October 2018, OPM announced new direct hire authority for “a variety of Scientific, Technical, Engineering and Mathematics (STEM) positions, as well as Cybersecurity and related positions where we have identified severe shortages of candidates and/or critical hiring needs.”

While this authority under FEPCA has never been used before, the authority to provide for special pay rates fits in with this previous emphasis under the President’s Management Agenda (PMA) on hiring federal employees to fill these types of positions.

Outlook for Change

While many initiatives coming from the Trump administration are unlikely to be implemented, in part because Congress will not approve changes, some of the initiatives do not require Congressional action.

OPM has already moved to authorize direct hire authority for some types of positions. The authority also exists to create special pay rates in order to be able to fill these positions.

The President’s Pay Agent is composed of the Directors of OMB, OPM and the Secretary of Labor. We can reasonably anticipate that in the next few months the President’s Pay Agent will be taking action necessary to authorize new pay systems for easier hiring of new employees for these STEM positions and, perhaps, other hard-to-fill government jobs.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47