[House Report 108-733]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 108-733
======================================================================
FEDERAL WORKFORCE FLEXIBILITY ACT OF 2004
_______
October 5, 2004.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Tom Davis of Virginia, from the Committee on Government Reform,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 129]
[Including cost estimate of the Congressional Budget Office]
The Committee on Government Reform, to whom was referred the
bill (S. 129) to provide for reform relating to Federal
employment, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
Committee Statement and Views.................................... 11
Section-by-Section............................................... 12
Explanation of Amendments........................................ 22
Committee Consideration.......................................... 22
Rollcall Votes................................................... 22
Application of Law to the Legislative Branch..................... 22
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 23
Statement of General Performance Goals and Objectives............ 23
Constitutional Authority Statement............................... 23
Federal Advisory Committee Act................................... 23
Unfunded Mandate Statement....................................... 23
Committee Estimate............................................... 23
Budget Authority and Congressional Budget Office Cost Estimate... 23
Changes in Existing Law Made by the Bill as Reported............. 28
Additional Views................................................. 47
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Federal Workforce
Flexibility Act of 2004''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--REFORMS RELATING TO FEDERAL HUMAN CAPITAL MANAGEMENT
Sec. 101. Recruitment, relocation, and retention bonuses.
Sec. 102. Streamlined critical pay authority.
TITLE II--REFORMS RELATING TO FEDERAL EMPLOYEE CAREER DEVELOPMENT AND
BENEFITS
Subtitle A--General Provisions
Sec. 201. Agency training.
Sec. 202. Annual leave enhancements.
Sec. 203. Compensatory time off for travel.
Subtitle B--Provisions Relating to Retirement
Sec. 211. Civil Service Retirement System computation for part-time
service.
Sec. 212. Retirement service credit for cadet or midshipman service.
TITLE III--PROVISIONS RELATING TO PAY ADMINISTRATION
Sec. 301. Corrections relating to pay administration.
Sec. 302. Technical corrections.
TITLE I--REFORMS RELATING TO FEDERAL HUMAN CAPITAL MANAGEMENT
SEC. 101. RECRUITMENT, RELOCATION, AND RETENTION BONUSES.
(a) Bonuses.--
(1) In general.--Chapter 57 of title 5, United States Code,
is amended by striking sections 5753 and 5754 and inserting the
following:
``Sec. 5753. Recruitment and relocation bonuses
``(a)(1) This section may be applied to--
``(A) employees covered by the General Schedule pay system
established under subchapter III of chapter 53; and
``(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an Executive
agency.
``(2) A bonus may not be paid under this section to an individual who
is appointed to or who holds--
``(A) a position to which an individual is appointed by the
President, by and with the advice and consent of the Senate;
``(B) a position in the Senior Executive Service as a
noncareer appointee (as such term is defined under section
3132(a)); or
``(C) a position which has been excepted from the competitive
service by reason of its confidential, policy-determining,
policy-making, or policy-advocating character.
``(3) In this section, the term `employee' has the meaning given that
term in section 2105, except that such term also includes an employee
described in subsection (c) of that section.
``(b) The Office of Personnel Management may authorize the head of an
agency to pay a bonus under this section to an individual only if--
``(1) the position to which such individual is appointed (as
described in paragraph (2)(A)) or to which such individual
moves or must relocate (as described in paragraph (2)(B)) is
likely to be difficult to fill in the absence of such a bonus;
and
``(2) the individual--
``(A) is newly appointed as an employee of the
Federal Government; or
``(B)(i) is currently employed by the Federal
Government; and
``(ii)(I) moves to a new position in the same
geographic area under circumstances described in
regulations of the Office; or
``(II) must relocate to accept a position in a
different geographic area.
``(c)(1) Payment of a bonus under this section shall be contingent
upon the employee entering into a written service agreement to complete
a period of employment with the agency, not longer than 4 years. The
Office may, by regulation, prescribe a minimum service period for
purposes of this section.
``(2)(A) The agreement shall include--
``(i) the commencement and termination dates of the required
service period (or provisions for the determination thereof);
``(ii) the amount of the bonus;
``(iii) the method of payment; and
``(iv) other terms and conditions under which the bonus is
payable, subject to the requirements of this section and
regulations of the Office.
``(B) The terms and conditions for paying a bonus, as specified in
the service agreement, shall include--
``(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has been
completed; and
``(ii) the effect of the termination.
``(C) The required service period shall commence upon the
commencement of service with the agency or movement to a new position
or geographic area, as applicable, unless the service agreement
provides for a later commencement date in circumstances and to the
extent allowable under regulations of the Office, such as when there is
an initial period of formal basic training.
``(d)(1) Except as provided in subsection (e), a bonus under this
section shall not exceed 25 percent of the annual rate of basic pay of
the employee at the beginning of the service period multiplied by the
number of years (including a fractional part of a year, as determined
under regulations of the Office) in the required service period of the
employee involved.
``(2) A bonus under this section may be paid as an initial lump sum,
in installments, as a final lump sum upon the completion of the full
period of service required by the agreement, or in a combination of
these forms of payment.
``(3) A bonus under this section is not part of the basic pay of an
employee for any purpose.
``(4) Under regulations of the Office, a recruitment bonus under this
section may be paid to an eligible individual before that individual
enters on duty.
``(e) The Office may authorize the head of an agency to waive the
limitation under subsection (d)(1) based on a critical agency need,
subject to regulations prescribed by the Office. Under such a waiver,
the maximum bonus allowable shall--
``(1) be equal to the maximum that would be determined if
subsection (d)(1) were applied by substituting `50' for `25';
but
``(2) in no event exceed 100 percent of the annual rate of
basic pay of the employee at the beginning of the service
period.
Nothing in this subsection shall be considered to permit the waiver of
any requirement under subsection (c).
``(f) The Office shall require that an agency establish a plan for
the payment of recruitment bonuses before paying any such bonuses, and
a plan for the payment of relocation bonuses before paying any such
bonuses, subject to regulations prescribed by the Office.
``(g) The Office may prescribe regulations to carry out this section,
including regulations relating to the repayment of a bonus under this
section in appropriate circumstances when the agreed-upon service
period has not been completed.
``Sec. 5754. Retention bonuses
``(a)(1) This section may be applied to--
``(A) employees covered by the General Schedule pay system
established under subchapter III of chapter 53; and
``(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an Executive
agency.
``(2) A bonus may not be paid under this section to an individual who
is appointed to or who holds--
``(A) a position to which an individual is appointed by the
President, by and with the advice and consent of the Senate;
``(B) a position in the Senior Executive Service as a
noncareer appointee (as such term is defined under section
3132(a)); or
``(C) a position which has been excepted from the competitive
service by reason of its confidential, policy-determining,
policy-making, or policy-advocating character.
``(3) In this section, the term `employee' has the meaning given that
term in section 2105, except that such term also includes an employee
described in subsection (c) of that section.
``(b) The Office of Personnel Management may authorize the head of an
agency to pay a retention bonus to an employee if--
``(1) the unusually high or unique qualifications of the
employee or a special need of the agency for the employee's
services makes it essential to retain the employee; and
``(2) the agency determines that, in the absence of a
retention bonus, the employee would be likely to leave--
``(A) the Federal service; or
``(B) for a different position in the Federal service
under conditions described in regulations of the
Office.
``(c) The Office may authorize the head of an agency to pay retention
bonuses to a group of employees in 1 or more categories of positions in
1 or more geographic areas, subject to the requirements of subsection
(b)(1) and regulations prescribed by the Office, if there is a high
risk that a significant portion of employees in the group would be
likely to leave in the absence of retention bonuses.
``(d)(1) Payment of a retention bonus is contingent upon the employee
entering into a written service agreement with the agency to complete a
period of employment with the agency.
``(2)(A) The agreement shall include--
``(i) the length of the required service period;
``(ii) the amount of the bonus;
``(iii) the method of payment; and
``(iv) other terms and conditions under which the bonus is
payable, subject to the requirements of this section and
regulations of the Office.
``(B) The terms and conditions for paying a bonus, as specified in
the service agreement, shall include--
``(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has been
completed; and
``(ii) the effect of the termination.
``(3)(A) Notwithstanding paragraph (1), a written service agreement
is not required if the agency pays a retention bonus in biweekly
installments and sets the installment payment at the full bonus
percentage rate established for the employee with no portion of the
bonus deferred.
``(B) If an agency pays a retention bonus in accordance with
subparagraph (A) and makes a determination to terminate the payments,
the agency shall provide written notice to the employee of that
determination. Except as provided in regulations of the Office, the
employee shall continue to be paid the retention bonus through the end
of the pay period in which such written notice is provided.
``(4) A retention bonus for an employee may not be based on any
period of such service which is the basis for a recruitment or
relocation bonus under section 5753.
``(e)(1) Except as provided in subsection (f), a retention bonus,
which shall be stated as a percentage of the employee's basic pay for
the service period associated with the bonus, may not exceed--
``(A) 25 percent of the employee's basic pay if paid under
subsection (b); or
``(B) 10 percent of an employee's basic pay if paid under
subsection (c).
``(2)(A) A retention bonus may be paid to an employee in installments
after completion of specified periods of service or in a single lump
sum at the end of the full period of service required by the agreement.
``(B) An installment payment is derived by multiplying the amount of
basic pay earned in the installment period by a percentage not to
exceed the bonus percentage rate established for the employee.
``(C) If the installment payment percentage established for the
employee is less than the bonus percentage rate established for the
employee, the accrued but unpaid portion of the bonus is payable as
part of the final installment payment to the employee after completion
of the full service period under the terms of the service agreement.
``(D) For purposes of this paragraph, the bonus percentage rate
established for an employee means the bonus percentage rate established
for such employee in accordance with paragraph (1) or subsection (f),
as the case may be.
``(3) A retention bonus is not part of the basic pay of an employee
for any purpose.
``(f) Upon the request of the head of an agency, the Office may waive
the limit established under subsection (e)(1) and permit the agency
head to pay an otherwise eligible employee or category of employees
retention bonuses of up to 50 percent of basic pay, based on a critical
agency need.
``(g) The Office shall require that, before paying any bonuses under
this section, an agency shall establish a plan for the payment of any
such bonuses, subject to regulations prescribed by the Office.
``(h) The Office may prescribe regulations to carry out this
section.''.
(2) Clerical amendment.--The table of sections for chapter 57
of title 5, United States Code, is amended by striking the item
relating to section 5754 and inserting the following:
``5754. Retention bonuses.''.
(3) Sense of congress.--It is the sense of the Congress that
the Director of the Office of Personnel Management--
(A) should, each time a bonus is paid under the
amendment made by paragraph (1) to recruit or relocate
a Federal employee from one Government agency to
another within the same geographic area or to retain a
Federal employee who might otherwise leave one
Government agency for another within the same
geographic area, be notified of that payment within 60
days after the date on which such bonus is paid; and
(B) should monitor the payment of such bonuses (in
the circumstances described in subparagraph (A)) to
ensure that they are an effective use of the Federal
Government's funds and have not adversely affected the
ability of those Government agencies that lost
employees to other Government agencies (in such
circumstances) to carry out their mission.
(b) Relocation Payments.--Section 407 of the Federal Employees Pay
Comparability Act of 1990 (5 U.S.C. 5305 note; 104 Stat. 1467) is
repealed.
(c) Reports.--
(1) Recruitment and relocation bonuses.--
(A) In general.--The Office of Personnel Management
shall submit to the Committee on Governmental Affairs
of the Senate and the Committee on Government Reform of
the House of Representatives annually, for each of the
first 5 years during which section 5753 of title 5,
United States Code (as amended by subsection (a)(1)) is
in effect, a report on the operation of such section.
(B) Contents.--Each report submitted under this
paragraph shall include, with respect to the period
covered by such report, a description of how the
authority to pay bonuses under the section of title 5,
United States Code, referred to in subparagraph (A) was
used by the respective agencies, including, with
respect to each such agency and each type of bonus
under such section--
(i) the number and dollar-amount of bonuses
paid--
(I) to individuals holding positions
within each pay grade, pay level, or
other pay classification; and
(II) if applicable, to individuals
who moved between positions that were
in different agencies but the same
geographic area (including the names of
the agencies involved); and
(ii) a determination of the extent to which
such bonuses furthered the purposes of such
section.
(2) Retention bonuses.--
(A) In general.--The Office of Personnel Management
shall submit to the Committee on Governmental Affairs
of the Senate and the Committee on Government Reform of
the House of Representatives annually, for each of the
first 5 years during which section 5754 of title 5,
United States Code (as amended by subsection (a)(1)) is
in effect, a report on the operation of such section.
(B) Contents.--Each report submitted under this
paragraph shall include, with respect to the period
covered by such report, a description of how the
authority to pay bonuses under the section of title 5,
United States Code, referred to in subparagraph (A) was
used by the respective agencies, including, with
respect to each such agency--
(i) the number and dollar-amount of bonuses
paid--
(I) to individuals holding positions
within each pay grade, pay level, or
other pay classification; and
(II) if applicable, to prevent
individuals from moving between
positions that were in different
agencies but the same geographic area
(including the names of the agencies
involved); and
(ii) a determination of the extent to which
such bonuses furthered the purposes of such
section.
(d) Effective Date and Application.--
(1) Effective date.--Except as provided under paragraphs (2)
and (3), this section shall take effect on the first day of the
first applicable pay period beginning on or after the 180th day
after the date of the enactment of this Act.
(2) Application to agreements.--A recruitment or relocation
bonus service agreement that was authorized under section 5753
of title 5, United States Code, before the effective date under
paragraph (1) shall continue, until its expiration, to be
subject to such section as in effect on the day before such
effective date.
(3) Application to allowances.--Payment of a retention
allowance that was authorized under section 5754 of title 5,
United States Code, before the effective date under paragraph
(1) shall continue, subject to such section as in effect on the
day before such effective date, until the retention allowance
is reauthorized or terminated (but no longer than 1 year after
such effective date).
SEC. 102. STREAMLINED CRITICAL PAY AUTHORITY.
Section 5377 of title 5, United States Code, is amended--
(1) by striking ``Office of Personnel Management'' each place
it appears and inserting ``Office of Management and Budget'';
(2) by striking ``Office of Management and Budget'' each
place it appears and inserting ``Office of Personnel
Management'';
(3) in subsection (g), by striking ``prescribing regulations
under this section or''; and
(4) in subsection (h), by striking ``Committee on Post Office
and Civil Service'' and inserting ``Committee on Government
Reform''.
TITLE II--REFORMS RELATING TO FEDERAL EMPLOYEE CAREER DEVELOPMENT AND
BENEFITS
Subtitle A--General Provisions
SEC. 201. AGENCY TRAINING.
(a) Training To Accomplish Performance Plans and Strategic Goals.--
Section 4103 of title 5, United States Code, is amended by adding at
the end the following:
``(c) The head of each agency shall, on a regular basis--
``(1) evaluate each program or plan established, operated, or
maintained under subsection (a) with respect to accomplishing
specific performance plans and strategic goals in performing
the agency mission; and
``(2) modify such program or plan as needed to accomplish
such plans and goals.''.
(b) Specific Training Programs.--
(1) In general.--Chapter 41 of title 5, United States Code,
is amended by adding after section 4120 the following:
``Sec. 4121. Specific training programs
``In consultation with the Office of Personnel Management, the head
of each agency shall establish--
``(1) a comprehensive management succession program to
provide training to employees to develop managers for the
agency; and
``(2) a program to provide training to managers on actions,
options, and strategies a manager may use in--
``(A) relating to employees with unacceptable
performance;
``(B) mentoring employees and improving employee
performance and productivity; and
``(C) conducting employee performance appraisals.''.
(2) Clerical amendment.--The table of sections for chapter 41
of title 5, United States Code, is amended by adding at the end
the following:
``4121. Specific training programs.''.
SEC. 202. ANNUAL LEAVE ENHANCEMENTS.
(a) Creditability of Prior Nongovernmental Service for Purposes of
Determining Rate of Leave Accrual.--
(1) In general.--Section 6303 of title 5, United States Code,
is amended by adding at the end the following:
``(e)(1) Not later than 180 days after the date of the enactment of
this subsection, the Office of Personnel Management shall prescribe
regulations under which, for purposes of determining years of service
under subsection (a), credit shall, in the case of a newly appointed
employee, be given for any prior service of such employee that would
not otherwise be creditable for such purposes, if--
``(A) such service--
``(i) was performed in a position the duties
of which directly relate to the duties of the
position to which such employee is so
appointed; and
``(ii) meets such other requirements as the
Office may prescribe; and
``(B) in the judgment of the head of the appointing agency,
the application of this subsection is necessary in order to
achieve an important agency mission or performance goal.
``(2) Service described in paragraph (1)--
``(A) shall be creditable, for the purposes described in
paragraph (1), as of the effective date of the employee's
appointment; and
``(B) shall not thereafter cease to be so creditable, unless
the employee fails to complete a full year of continuous
service with the agency.
``(3) An employee shall not be eligible for the application of
paragraph (1) on the basis of any appointment if, within 90 days before
the effective date of such appointment, such employee has held any
position in the civil service.''.
(2) Conforming amendment.--The second sentence of section
6303(a) of title 5, United States Code, is amended by striking
the period and inserting ``, and for all service which is
creditable by virtue of subsection (e).''.
(b) Other Annual Leave Enhancements.--Section 6303 of title 5, United
States Code, is amended by adding after subsection (e) (as added by
subsection (a)) the following:
``(f) Notwithstanding any other provision of this section, the rate
of accrual of annual leave under subsection (a) shall be 1 day for each
full biweekly pay period in the case of any employee who holds a
position which is subject to--
``(1) section 5376 or 5383; or
``(2) a pay system equivalent to either of the foregoing, as
determined by the Office of Personnel Management.''.
(c) Applicability.--None of the amendments made by subsection (a)
shall apply in the case of any employee holding a position pursuant to
an appointment made before the effective date of the regulations
implementing such amendments.
SEC. 203. COMPENSATORY TIME OFF FOR TRAVEL.
(a) In General.--Subchapter V of chapter 55 of title 5, United States
Code, is amended by adding at end the following:
``Sec. 5550b. Compensatory time off for travel
``(a) Notwithstanding section 5542(b)(2), each hour spent by an
employee in travel status away from the official duty station of the
employee, that is not otherwise compensable, shall be treated as an
hour of work or employment for purposes of calculating compensatory
time off.
``(b) An employee who has any hours treated as hours of work or
employment for purposes of calculating compensatory time under
subsection (a), shall not be entitled to payment for any such hours
that are unused as compensatory time.
``(c) Not later than 30 days after the date of enactment of this
section, the Office of Personnel Management shall prescribe regulations
to implement this section.''.
(b) Technical and Conforming Amendment.--The table of sections for
chapter 55 of title 5, United States Code, is amended by inserting
after the item relating to section 5550a the following:
``5550b. Compensatory time off for travel.''.
Subtitle B--Provisions Relating to Retirement
SEC. 211. CIVIL SERVICE RETIREMENT SYSTEM COMPUTATION FOR PART-TIME
SERVICE.
Section 8339(p) of title 5, United States Code, is amended by adding
at the end the following:
``(3)(A) In the administration of paragraph (1)--
``(i) subparagraph (A) of such paragraph shall apply with
respect to service performed before, on, or after April 7,
1986; and
``(ii) subparagraph (B) of such paragraph shall apply with
respect to that portion of any annuity which is attributable to
service performed on or after April 7, 1986.
``(B) This paragraph shall be effective with respect to any annuity
entitlement to which is based on a separation from service occurring on
or after the date of the enactment of this paragraph.''.
SEC. 212. RETIREMENT SERVICE CREDIT FOR CADET OR MIDSHIPMAN SERVICE.
(a) Civil Service Retirement System.--Section 8331(13) of title 5,
United States Code, is amended by striking ``or'' at the end of
subparagraph (B), by adding ``or'' at the end of subparagraph (C), and
by inserting after subparagraph (C) the following:
``(D) as a cadet at the United States Military
Academy, the United States Air Force Academy, or the
United States Coast Guard Academy, or as a midshipman
at the United States Naval Academy;''.
(b) Federal Employees' Retirement System.--Section 8401(31) of title
5, United States Code, is amended by striking ``or'' at the end of
subparagraph (B), by adding ``or'' at the end of subparagraph (C), and
by inserting after subparagraph (C) the following:
``(D) as a cadet at the United States Military
Academy, the United States Air Force Academy, or the
United States Coast Guard Academy, or as a midshipman
at the United States Naval Academy;''.
(c) Applicability.--The amendments made by this section shall apply
with respect to--
(1) any annuity entitlement to which is based on a separation
from service occurring before, on, or after the date of the
enactment of this Act; and
(2) any period of service, described in the amendment made by
subsection (a) or (b), which occurs before, on, or after the
date of the enactment of this Act.
TITLE III--PROVISIONS RELATING TO PAY ADMINISTRATION
SEC. 301. CORRECTIONS RELATING TO PAY ADMINISTRATION.
(a) In General.--Chapter 53 of title 5, United States Code, is
amended--
(1) in section 5302, by striking paragraph (8) and inserting
the following:
``(8) the term `rates of pay under the General Schedule',
`rates of pay for the General Schedule', or `scheduled rates of
basic pay' means the rates of basic pay under the General
Schedule as established by section 5332, excluding pay under
section 5304 and any other additional pay of any kind; and'';
(2) in section 5305--
(A) by striking subsection (a) and inserting the
following:
``(a)(1) Whenever the Office of Personnel Management finds that the
Government's recruitment or retention efforts with respect to 1 or more
occupations in 1 or more areas or locations are, or are likely to
become, significantly handicapped due to any of the circumstances
described in subsection (b), the Office may establish for the areas or
locations involved, with respect to individuals in positions paid under
any of the pay systems referred to in subsection (c), higher minimum
rates of pay for 1 or more grades or levels, occupational groups,
series, classes, or subdivisions thereof, and may make corresponding
increases in all rates of the pay range for each such grade or level.
However, a minimum rate so established may not exceed the maximum rate
of basic pay (excluding any locality-based comparability payment under
section 5304 or similar provision of law) for the grade or level by
more than 30 percent, and no rate may be established under this section
in excess of the rate of basic pay payable for level IV of the
Executive Schedule. In the case of individuals not subject to the
provisions of this title governing appointment in the competitive
service, the President may designate another agency to authorize
special rates under this section.
``(2) The head of an agency may determine that a category of
employees of the agency will not be covered by a special rate
authorization established under this section. The head of an agency
shall provide written notice to the Office of Personnel Management (or
other agency designated by the President to authorize special rates
under the last sentence of paragraph (1)) which identifies the specific
category or categories of employees that will not be covered by special
rates authorized under this section. If the head of an agency removes a
category of employees from coverage under a special rate authorization
after that authorization takes effect, the loss of coverage will take
effect on the first day of the first pay period after the date of the
notice.'';
(B) in subsection (b), by striking paragraph (4) and
inserting the following:
``(4) any other circumstances which the Office of Personnel
Management (or such other agency as the President may under the
last sentence of subsection (a)(1) designate) considers
appropriate.'';
(C) in subsection (d)--
(i) by striking ``President'' and inserting
``Office of Personnel Management''; and
(ii) by striking ``or by such agency as he
may designate'' and inserting ``(or by such
other agency as the President may designate
under the last sentence of subsection
(a)(1))'';
(D) in subsection (e), by striking ``basic pay'' and
inserting ``pay'';
(E) by striking subsection (f) and inserting the
following:
``(f) When a schedule of special rates established under this section
is adjusted under subsection (d), a covered employee's special rate
will be adjusted in accordance with conversion rules prescribed by the
Office of Personnel Management (or by such other agency as the
President may under the last sentence of subsection (a)(1)
designate).'';
(F) in subsection (g)(1)--
(i) by striking ``basic pay'' and inserting
``pay''; and
(ii) by striking ``President (or his
designated agency)'' and inserting ``Office of
Personnel Management (or such other agency as
the President may under the last sentence of
subsection (a)(1) designate)'';
(G) by striking subsection (h) and inserting the
following:
``(h) An employee shall not for any purpose be considered to be
entitled to a rate of pay established under this section with respect
to any period for which such employee is entitled to a higher rate of
basic pay under any other provision of law. For purposes of this
subsection, the term `basic pay' includes any applicable locality-based
comparability payment under section 5304 or similar provision of
law.''; and
(H) by adding at the end the following:
``(i) If an employee who is receiving a rate of pay under this
section becomes subject, by virtue of moving to a new official duty
station, to a different pay schedule, such employee's new rate of pay
shall be initially established under conversion rules prescribed by the
Office of Personnel Management (or such other agency as the President
may under the last sentence of subsection (a)(1) designate) in
conformance with the following:
``(1) First, determine the rate of pay to which such employee
would be entitled at the new official duty station based on
such employee's position, grade, and step (or relative position
in the rate range) before the move.
``(2) Then, if (in addition to the change in pay schedule)
the move also involves any personnel action or other change
requiring a rate adjustment under any other provision of law,
rule, or regulation, apply the applicable rate adjustment
provisions, treating the rate determined under paragraph (1) as
if it were the rate last received by the employee before the
rate adjustment.
``(j) A rate determined under a schedule of special rates established
under this section shall be considered to be part of basic pay for
purposes of subchapter III of chapter 83, chapter 84, chapter 87,
subchapter V of chapter 55, and section 5941, and for such other
purposes as may be expressly provided for by law or as the Office of
Personnel Management may by regulation prescribe.'';
(3) in section 5334--
(A) in subsection (b), by adding at the end the
following:
``If an employee's rate after promotion or transfer is greater than the
maximum rate of basic pay for the employee's grade, that rate shall be
treated as a retained rate under section 5363. The Office of Personnel
Management shall prescribe by regulation the circumstances under which
and the extent to which special rates under section 5305 (or similar
provision of law) or locality-adjusted rates under section 5304 (or
similar provision of law) are considered to be basic pay in applying
this subsection.''; and
(B) by adding at the end the following:
``(g) In the case of an employee who--
``(1) moves to a new official duty station, and
``(2) by virtue of such move, becomes subject to a different
pay schedule,
any rate adjustment under the preceding provisions of this section,
with respect to such employee in connection with such move, shall be
made--
``(A) first, by determining the rate of pay to which such
employee would be entitled at the new official duty station
based on such employee's position, grade, and step (or relative
position in the rate range) before the move, and
``(B) then, by applying the provisions of this section that
would otherwise apply (if any), treating the rate determined
under subparagraph (A) as if it were the rate last received by
the employee before the rate adjustment.'';
(4) in section 5361--
(A) by amending paragraph (4) to read as follows:
``(4) `rate of basic pay' means--
``(A) the rate of basic pay payable to an employee
under law or regulations before any deductions or
additions of any kind, but including--
``(i) any applicable locality-based
comparability payment under section 5304 or
similar provision of law;
``(ii) any applicable special pay under
section 5305 or similar provision of law; and
``(iii) subject to such regulations as the
Office of Personnel Management may prescribe,
any applicable existing retained rate of pay
established under section 5363 or similar
provision of law; and
``(B) in the case of a prevailing rate employee, the
scheduled rate of pay determined under section 5343;'';
(B) in paragraph (6), by striking ``and'' at the end;
(C) in paragraph (7), by striking the period and
inserting``; and''; and
(D) by adding at the end the following:
``(8) `retained rate' means the rate of basic pay to which an
employee is entitled under section 5363(b)(2).'';
(5) in section 5363--
(A) in subsection (a), by striking the matter
following paragraph (4) and inserting the following:
``is entitled to a rate of basic pay in accordance with regulations
prescribed by the Office of Personnel Management in conformity with the
provisions of this section.''; and
(B) by striking subsections (b) and (c) and inserting
the following:
``(b)(1)(A) If, as a result of any event described in subsection (a),
the employee's former rate of basic pay is less than or equal to the
maximum rate of basic pay payable for the grade of the employee's
position immediately after the occurrence of the event involved, the
employee is entitled to basic pay at the lowest rate of basic pay
payable for such grade that equals or exceeds such former rate of basic
pay.
``(B) This section shall cease to apply to an employee to whom
subparagraph (A) applies once the appropriate rate of basic pay has
been determined for such employee under this paragraph.
``(2)(A) If, as a result of any event described in subsection (a),
the employee's former rate of basic pay is greater than the maximum
rate of basic pay payable for the grade of the employee's position
immediately after the occurrence of the event involved, the employee is
entitled to basic pay at a rate equal to the lesser of--
``(i) the employee's former rate of basic pay; or
``(ii) 150 percent of the maximum rate of basic pay payable
for the grade of the employee's position immediately after the
occurrence of the event involved,
as adjusted by subparagraph (B).
``(B) A rate to which an employee is entitled under this paragraph
shall be increased at the time of any increase in the maximum rate of
basic pay payable for the grade of the employee's position by 50
percent of the dollar amount of each such increase.
``(3) For purposes of this subsection, the term `former rate of basic
pay', as used with respect to an employee in connection with an event
described in subsection (a), means the rate of basic pay last received
by such employee before the occurrence of such event.
``(c)(1) Notwithstanding any other provision of this section, in the
case of an employee who--
``(A) moves to a new official duty station, and
``(B) in conjunction with such move, becomes subject to both
a different pay schedule and (disregarding this subsection) the
preceding provisions of this section,
this section shall be applied--
``(i) first, by determining the rate of pay to which such
employee would be entitled at the new official duty station
based on such employee's position, grade, and step (or relative
position in the pay range) before the move, and
``(ii) then, by applying the provisions of this section that
would apply (if any), treating the rate determined under clause
(i) as if it were the rate last received by the employee before
the application of this section.
``(2) A reduction in an employee's rate of basic pay resulting from a
determination under paragraph (1)(ii) is not a basis for an entitlement
under this section.
``(3) The rate of basic pay for an employee who is receiving a
retained rate at the time of moving to a new official duty station at
which different pay schedules apply shall be subject to regulations
prescribed by the Office of Personnel Management consistent with the
purposes of this section.
``(d) A retained rate shall be considered part of basic pay for
purposes of this subchapter and for purposes of subchapter III of
chapter 83, chapters 84 and 87, subchapter V of chapter 55, section
5941, and for such other purposes as may be expressly provided for by
law or as the Office of Personnel Management may by regulation
prescribe. The Office shall, for any purpose other than any of the
purposes referred to in the preceding sentence, prescribe by regulation
what constitutes basic pay for employees receiving a retained rate.
``(e) This section shall not apply, or shall cease to apply, to an
employee who--
``(1) has a break in service of 1 workday or more;
``(2) is entitled, by operation of this subchapter, chapter
51 or 53, or any other provision of law, to a rate of basic pay
which is equal to or higher than, or declines a reasonable
offer of a position the rate of basic pay for which is equal to
or higher than, the retained rate to which the employee would
otherwise be entitled; or
``(3) is demoted for personal cause or at the employee's
request.''; and
(6) in section 5365(b), by inserting after ``provisions of
this subchapter'' the following: ``(subject to any conditions
or limitations the Office may establish)''.
(b) Special Rates for Law Enforcement Officers.--Section 403(c) of
the Federal Employees Pay Comparability Act of 1990 (5 U.S.C. 5305
note) is amended by striking all after ``provision of law)'' and
inserting ``and shall be basic pay for all purposes. The rates shall be
adjusted at the time of adjustments in the General Schedule to maintain
the step linkage set forth in subsection (b)(2).''.
(c) Repeal.--Section 4505a(a)(2) of title 5, United States Code, is
amended--
(1) by striking ``(2)(A)'' and inserting ``(2)''; and
(2) by striking subparagraph (B).
(d) Effective date; conversion rules.--
(1) Effective date.--This section shall take effect on the
first day of the first applicable pay period beginning on or
after the 180th day after the date of the enactment of this
Act.
(2) Conversion rules.--
(A) Individuals receiving a retained rate or a rate
greater than the maximum rate for the grade.--Subject
to any regulations the Office of Personnel Management
may prescribe, an employee under a covered pay schedule
who, on the day before the effective date of this
section, is receiving a retained rate under section
5363 of title 5, United States Code, or is receiving
under similar authority a rate of basic pay that is
greater than the maximum rate of basic pay payable for
the grade of the employee's position shall have that
rate converted as of the effective date of this
section, and the employee shall be considered to be
receiving a retained rate under section 5363 of such
title (as amended by this section). The newly
applicable retained rate shall equal the formerly
applicable retained rate as adjusted to include any
applicable locality-based payment under section 5304 of
title 5, United States Code, or similar provision of
law.
(B) Definition.--For purposes of this paragraph, the
term ``covered pay schedule'' has the meaning given
such term by section 5361 of title 5, United States
Code.
SEC. 302. TECHNICAL CORRECTIONS.
(a)(1) Section 5304 of title 5, United States Code, as amended by
section 1125 of the National Defense Authorization Act for Fiscal Year
2004 (Public Law 108-136), is amended--
(A) in subsection (g)(2)(A), by striking ``(A)-(D)'' and
inserting ``(A)-(C)''; and
(B) in subsection (h)(2)(B)(i), by striking ``or (vii)'' and
inserting ``or (vi)''.
(2) The amendments made by this subsection shall take effect as if
included in the enactment of the National Defense Authorization Act for
Fiscal Year 2004 (Public Law 108-136).
(b) Section 5314 of title 5, United States Code, is amended by adding
at the end the following:
``Administrator of the Office of Electronic Government.''.
Committee Statement and Views
BACKGROUND AND NEED FOR LEGISLATION
S. 129, the Federal Workforce Flexibility Act, will
modernize and update personnel flexibilities and authorities
available to agencies of the Federal government. This
legislation not only enhances existing statutory authorities,
but provides additional flexibilities as well that will assist
in the management of our most important resource--human
capital. The federal government is not unlike any other
organization in this respect--the most important asset is our
people, and we must be able to recruit, retain and reward them.
The legislation amends current law with regard to critical pay
authorimty, computation of annuities for certain individuals
with part-time service, agency training activities, annual
leave, and recruitment and retention bonuses. In addition, the
legislation codifies retirement service credit for individuals
enrolled at the military service academies.
LEGISLATIVE HISTORY
S. 129 was introduced on January 9, 2003 by Senator George
Voinovich, and referred to the Senate Committee on Governmental
Affairs. On January 27, 2004, the bill was reported favorably
with an amendment in the nature of a substitute, and was agreed
to in the Senate on April 8, 2004 by unanimous consent.
On May 18, 2004, the Subcommittee on Civil Service and
Agency Organization referred S. 129 to the Full Committee with
an amendment in the nature of a substitute, offered by
Chairwoman Jo Ann Davis. The Committee on Government Reform
reported the bill favorably by voice vote on June 24, 2004.
Section-by-Section
Sec. 101. Recruitment, relocation and retention bonuses
Subsection (a)(1) replaces existing sections 5753 and 5754
of title 5, U.S. Code, with entirely revised sections
concerning recruitment and relocation bonuses (Sec. 5753) and
retention allowances (Sec. 5754).
New Sec. 5753 is entitled, ``Recruitment and relocation bonuses''
Subsection (a) of new Sec. 5753 defines the class of
employees to whom the section may be applied as those who are
covered by the General Schedule and others as may be approved
by OPM at the request of an agency head. Bonuses under this
section may not be paid to an individual appointed by the
President with the advice and consent of the Senate, a non-
career appointee in the Senior Executive Service, or an
individual in a position excepted from the competitive service
due to its confidential, policy-determining, policy-making, or
policy-advocating character. The term ``employee'' means an
employee as defined in sec. 2105 of title 5, U.S. Code (the
generally applicable definition of ``employee'' for purposes of
title 5), including those paid with non-appropriated funds.
Subsection (b) of new Sec. 5753 states that OPM may
authorize the head of an agency to pay a bonus to an individual
appointed or moved to a position that is likely to be difficult
to fill in the absence of a bonus. Also, a bonus may be paid
only if the individual is newly appointed to a position in the
civil service or is currently employed and moves to a new
position in the same geographic area or must relocate to accept
a position in a different area.
Subsection (c)(1) of new Sec. 5753 states that the bonuses
shall be contingent upon the employee entering into a written
service agreement to complete a certain period of employment,
not to exceed four years.
Subsection (c)(2) of new Sec. 5753 states that the written
service agreement must include the length of the required
service period; the amount of the bonus; the method of payment;
and other terms and conditions under which the bonus is
payable, including the beginning and ending dates of the
required service, or provisions for termination. The required
service period begins upon employment or movement to a new
position or geographic area, unless an exception is made under
circumstances such as tying the beginning of the required
service period to completion of an initial period of formal
basic training.
Subsection (d) of new Sec. 5753 states that, unless an
exception is authorized under subsection (e), bonuses shall not
exceed 25 percent of the annual rate of basic pay of the
employee at the beginning of the service period multiplied by
the number of years of the service period, not to exceed 4
years. The bonus is not considered basic pay, may be paid in a
variety of ways, including an initial lump sum, installments,
or a final lump sum at the end of the required period of
service and, for recruitment bonuses, may be paid before the
individual enters on duty.
Subsection (e) of new Sec. 5753 states that the Office of
Personnel Management may authorize an agency head to waive the
25 percent cap, based on a critical agency need. The amount of
the bonus may not exceed 50 percent of the employee's annual
rate of basic pay multiplied by the number of years of the
service period, or 100 percent of the employee's annual rate of
basic pay at the beginning of the service period.
Subsection (f) of new Sec. 5753 states that the Office of
Personnel Management shall require that each agency establish a
plan for paying recruitment and relocation bonuses before such
bonuses are paid.
Subsection (g) of new Sec. 5753 authorizes the Office of
Personnel Management to issue regulations to carry out Sec.
5753, including regulations relating to the repayment of
recruitment or relocation bonuses when the agreed upon service
period has not been met.
New Sec. 5754 is titled ``Retention bonuses''
Subsection (a) of new Sec. 5754 defines the class of
employees to whom the section may be applied as those who are
covered by the General Schedule and others as may be approved
by OPM at the request of an agency head. Bonuses under this
section may not be paid to an individual appointed by the
President with the advice and consent of theSenate, a non-
career appointee in the Senior Executive Service, or an individual in a
position excepted from the competitive service due to its confidential,
policy-determining, policy-making, or policy-advocating character. The
term ``employee'' means an employee as defined in sec. 2105 of title 5,
U.S. Code (the generally applicable definition of ``employee'' for
purposes of title 5), including those paid with non-appropriated funds.
Subsection (b) of new Sec. 5754 states that the Office of
Personnel Management may authorize the head of an agency to pay
a retention bonus to an employee if the employee's unusually
high or unique qualifications, or a special need of the agency
for the employee's service, make the employee's retention
essential. Additionally, the agency is required to make a
determination that in the absence of a retention bonus the
employee would be likely to leave Federal service or take a
different position in Federal service, as described in
regulation.
Subsection (c) of new Sec. 5754 states that the Office of
Personnel Management may authorize the head of an agency to pay
retention bonuses to a group of employees in one or more
categories of positions in certain geographic areas, if the
agency perceives a high risk that a significant portion of
employees in the group would be likely to leave without such
bonus.
Subsection (d) of new Sec. 5754 states that payment of a
retention bonus is contingent upon the employee entering into a
written service agreement with the agency to complete a period
of employment. The agreement must include the length of the
required service period; the amount of the bonus; the method of
payment; and the terms and conditions under which the bonus is
payable, including the conditions under which the agreement may
be terminated before the agreed-upon service period has been
completed and the effect of termination. A written service
agreement is not required if the agency pays a retention bonus
in biweekly installments and sets the installment payment at
the full bonus percentage rate established for the employee,
with no portion of the bonus deferred; if the bonus is being
paid in biweekly installments, the agency must notify the
employee before it terminates the payments and must pay the
bonus through the end of the pay period in which the notice is
provided. A retention bonus for an employee may not be based on
any period of service that is the basis for a recruitment or
relocation bonus under 5 U.S.C. 5753.
Subsection (e) of new Sec. 5754 states that a retention
bonus may not exceed 25 percent of the employee's basic pay if
the bonus is paid to an individual under subsection (b), or 10
percent of the employee's basic pay if the bonus is paid to a
group of employees under subsection (c). The retention bonus
may be paid to an employee in installments after completion of
specified periods of service or in a single lump sum at the end
of the full period of service required by the service
agreement. An installment rate may not exceed the bonus
percentage rate for the employee (that is, up to 25 percent
under subsection (b) or up to 10 percent under subsection (c)),
and if the payment percentage is less than the bonus percentage
rate, the unpaid portion of the bonus is payable as part of the
final installment under the service agreement. A retention
bonus is not part of the basic pay of an employee.
Subsection (f) of new Sec. 5754 states the Office of
Personnel Management may, at the request of the head of an
agency, waive the percentage limit applicable under subsection
(e) and permit the agency head to pay an otherwise eligible
employee or group of employees retention bonuses of up to 50
percent of basic pay, based on a critical need of the agency.
Subsection (g) of new Sec. 5754 states that the Office of
Personnel Management shall require that, before paying a bonus
under this section, an agency must establish a plan for paying
retention bonuses.
Subsection (h) of new Sec. 5754 authorizes the Office of
Personnel Management to issue regulations to carry out this
section.
Paragraph (a)(2) of Sec. 101 makes a clerical amendment to
the table of section for chapter 57 of title 5, U.S. Code.
Paragraph (a)(3) of Sec. 101 states the sense of Congress
concerning bonuses paid by one agency to recruit or relocate a
Federal employee from another Government agency in the same
geographic area or to retain an employee who might otherwise
leave to work for another Government agency in the same
geographic area. It is the sense of Congress that an agency
paying a bonus in this circumstance should notify the Office of
Personnel Management within 60 days after the bonus is paid.
Also, the Office should monitor such payments to ensure they
are an effective use of funds and have not harmed the ability
of agencies that lost employees to carry out their mission.
Subsection (b) of Sec. 101 repeals a section of the Federal
Employees Pay Comparability Act of 1990. Section 407 of that
Act allows payment of up to $15,000 as a relocation bonus for a
law enforcement officer whose basic pay is less than $60,000.
New Sec. 5753 of title 5, U.S. Code, as created in section
101(a)(1) of this Act, will authorize payment of up to 100% of
basic pay as a recruitment or relocation bonus in cases of a
critical agency need. Therefore, if S. 129 is enacted, the
authority in section 407 of the 1990 Act, which creates a
special rule allowing certain law enforcement officers to
receive bonuses that exceed 25% of basic pay, will no longer be
needed.
Subsection (c) of Sec. 101 places two reporting
requirements upon the Office of Personnel Management. The
Office must report annually, for the first five years after the
effective date of sec. 101, a report on the operation of the
new Sec. 5753 of title 5, U.S. Code and another report on the
operation of new Sec. 5754. Each report must include the number
and dollar-amount of bonuses paid and a determination of the
extent to which the bonuses furthered the purposes of the new
provisions.
Subsection (d) of Sec. 101 establishes the effective date
for the section as the first day of the first applicable pay
period beginning on or after the 180th day after the date of
enactment. However, a service agreement relating to a
recruitment or relocation bonus under prior law shall remain in
effect until its expiration, subject to the provisions of Sec.
5753 of title 5, U.S. Code as in effect on the day before the
effective date of the new Sec. 5753. Also, a retention
allowance authorized under Sec. 5754 of title 5, U.S. Code
beforeeffective date of Sec. 101 continues in effect, subject
to Sec. 5754 as in effect on the day before the effective date of Sec.
101, until the allowance is reauthorized or terminated, but no longer
than one year after the effective date of Sec. 101.
Sec. 102. Streamlined critical pay authority
This section would amend 5 U.S.C. Sec. 5377, to switch the
respective roles of the Office of Management and Budget and the
Office of Personnel Management concerning the authority to
approve requests to fix pay for critical positions at a rate up
to level I of the Executive Schedule. OPM would be authorized
to approve requests, in consultation with OMB. Also, OPM would
issue implementing regulations, after consulting with OMB, and
would be responsible for reporting to the Government Reform
Committee of the House and the Governmental Affairs Committee
of the Senate concerning the operation of Sec. 5377.
TITLE II--REFORMS RELATING TO FEDERAL EMPLOYEE CAREER DEVELOPMENT AND
BENEFITS
Subtitle A--General Provisions
Sec. 201. Agency training
Subsection (a) would amend 5 U.S.C. Sec. 4103 to require
each agency to evaluate, on a regular basis, its training
programs and plans so as to ensure that its training activities
are linked to the accomplishment of its specific performance
plans and strategic goals, and to modify its training plans and
programs as needed to accomplish the agency's performance plans
and strategic goals.
Subsection (b)(1) would add a new Sec. 4121 to title 5,
U.S. Code, to require agencies to work with the Office of
Personnel Management to institute comprehensive management
succession programs designed to develop future managers for the
agency. Subsection (b) would also require agencies, in
consultation with the Office of Personnel Management, to
provide special training to managers regarding how they relate
to employees with unacceptable performance, mentor employees
and improve their performance and productivity, and conduct
employee performance appraisals. Subsection (b)(2) is a
clerical amendment to the table of sections for chapter 41 of
title 5, U.S. Code.
Sec. 202. Annual leave enhancements
Subsection (a) would amend 5 U.S.C. Sec. 6303 to reform the
policy on accrual of annual leave for newly-hired Federal
employees. A new subsection (e) would authorize the Office of
Personnel Management to issue regulations (no later than 180
days after enactment) under which a newly-hired employee's
prior work experience may be credited in determining the amount
of annual leave the employee will earn. To be creditable, the
employee's past service must have been performed in a position
with duties that directly relate to the new position to which
he or she is being appointed and must meet other requirements
as OPM regulations may prescribe. Before granting such credit,
the head of the new employee's agency must determine that it is
necessary in order to achieve an agency mission or performance
goal. Once credited upon the effective date of the employee's
appointment, the past experience remains creditable for this
purpose unless the employee does not complete one continuous
year of service with the same agency. An individual who has
been employed in the Federal civil service within 90 days
before an appointment to an agency is not eligible for leave
system service credit under this subsection.
Subsection (b) would amend section 5 U.S.C. Sec. 6303 by
adding a new subsection (f) providing that members of the
Senior Executive Service whose pay is set under Sec. 5383 of
title 5, U.S. Code, and the senior level and scientific and
professional employees whose pay is set under Sec. 5376 of
title 5, U.S. Code, accrue annual leave at the maximum rate:
one day (eight hours) for each bi-weekly pay period. New
subsection (f) of Sec. 6303 would allow the same leave accrual
rate for other employees in positions subject to an equivalent
pay system, as determined by OPM.
Subsection (c) states that an employee occupying a position
under an appointment made before the effective dating of the
implementing regulations is not eligible for the enhanced leave
accrual rate provided by Sec. 202(b).
Sec. 203. Compensatory time off for travel
Subsection (a) of this section would amend title 5, U.S.
Code, by creating a new Sec. 5550b. Subsection (a) of new Sec.
5550b requires an employing agency to grant an employee
compensatory time off for time spent in travel status away from
his or her official duty station, if the time is not otherwise
compensable.
Subsection (b) of new Sec. 5550b states that an employee
whose travel time is credited as compensatory time off is not
entitled to pay for those hours.
Subsection (c) of new Sec. 5550b requires OPM to issue
implementing regulations not later than 30 days after
enactment.
Subtitle B--Provisions Relating to Retirement
Sec. 211. Civil Service Retirement System computation for part-time
service
This section would amend section 5 U.S.C. Sec. 8339(p) by
adding a new subsection (3) to amend the special annuity
computation formula for employees who performed part-time
service after April 7, 1986. For these employees, this section
would extend application of full-time rates of pay in computing
average salary to all service, regardless of when it was
performed.
New Sec. 8339(p)(3) would state that subparagraph (A) of
8339(p)(1) (providing for use of full-time rates of pay in
computing average salary) would apply to service performed
before, on or after April 7, 1986; subparagraph (B) of
8339(p)(1) (providing for proration of the annuity benefit to
reflect part-time service) would apply only to service
performed on or after April 7, 1986.
Sec. 212. Retirement service credit for cadet or midshipman service
Subsection (a) would amend 5 U.S.C. Sec. 8331(13) to
include an individual's service as a cadet or midshipman for
the purposes of calculating an annuity under the Civil Service
Retirement System.
Subsection (b) would amend 5 U.S.C. Sec. 8401(31) to
include an individual's service as a cadet or midshipman for
the purposes of calculating an annuity under the Federal
Employees Retirement System.
Subsection (c) provides the effective date and
applicability of this section. The section shall apply to (1)
any annuity, eligibility for which is based upon a separation
before, on, or after the date of enactment; and (2) any period
of service as a cadet or midshipman at the military service
academy of the Army, Air Force, Coast Guard, or Navy occurring
before, on, or after enactment.
TITLE III--PROVISIONS RELATING TO PAY ADMINISTRATION
Sec. 301. Corrections relating to pay administration
Section 301(a) amends the following sections of chapter 53
of title 5, U.S. Code: Sec. 5302 (definitions), Sec. 5305
(special pay authority), 5334 (rate on change of position or
type of appointment), Sec. 5361 (definitions) and Sec. 5363
(pay retention). The following analysis refers to those
sections.
Sec. 301(a)(1) revises Sec. 5302 to define the terms
``rates of pay under the General Schedule,'' `` rates of pay
for the General Schedule,'' and ``rates of basic pay'' to mean
the General Schedule rates, excluding comparability pay under
Sec. 5304, and any other additional pay. The current definition
of these terms includes retained rates under Sec. 5363, which
are rates above step 10 of any grade in the General Schedule.
Under this amendment, locality pay would not be paid on top of
a retained rate. This change, in combination with other changes
in section 5361 and 5363 would prevent an unnecessary and
unintended windfall increase in pay for employees who become
entitled to pay retention because their special rates are
terminated or reduced.
Sec. 301(a)(2)(A) revises Sec. 5305(a) to provide that (1)
OPM may establish special pay rates. A minimum special rate
could not exceed the maximum General Schedule basic pay rate
(excluding locality-based comparability payments) for the grade
or level by more than 30% and no rate could exceed level IV of
the Executive Schedule, which is higher than the current level
V cap on special rates. The higher level IV cap would put
special rates on the same footing as locality rates, which are
subject to a level IV cap for GS employees. For individuals not
subject to title 5 provisions governing appointment in the
competitive service, the President could designate another
agency to authorize special rates under this section; and (2)
the agency head could determine that a category of agency
employees would not be covered by a special rate authorization.
The agency head would provide written notice to OPM (or other
agency designated by the President to authorize special rates
under the last sentence of paragraph (1)), which identifies the
specific category or categories of employees that will not be
covered by special rates. If the agency head removes a category
of employees from coverage after the special rate authorization
takes effect, the loss of coverage would take effect on the
first day of the first pay period after the notice date. This
amendment would allow the head of an agency to opt out of a
special rate authorization. The agency head could provide a
formal written notice to OPM (or other agency that is
authorized by the President to establish special rates) that
identified the specific category or categories of employees
that would not be covered by a particular special rates
authorization. Agencies could decide to use this authority when
they determined that they did not need to pay higher rates of
pay to recruit or retain employees in certain occupations or
locations, or they did not have the additional funds needed to
pay the higher special rates. If an agency removed employees
from coverage after a special rate authorization took effect,
the employees would be covered by the pay retention provisions
of Sec. 5363, as applicable.
Sec. 301(a)(2)(B) would amend Sec. 5305(b)(4), which
currently lists as one of the circumstances under which the
special rates authority in Sec. 5305(a) may be exercised: any
other circumstances which the President (or an agency duly
authorized or designated by the President in accordance with
the last sentence of subsection (a)) considers appropriate. To
conform to the change made to Sec. 5305(a), Sec. 5305(b)(4)
would be revised to provide that the authority could also be
used in any other circumstances which OPM (or such other agency
as the President may under the last sentence of subsection
(a)(1) designate) considers appropriate. Subparagraphs (C), (E)
and (F) of Sec. 301(a)(2) make similarly conforming changes to
subsections (d), (f) and (g)(1), respectively, of Sec. 5305.
Sec. 301(a)(2)(D) would amend Sec. 5305(e), which now
states than an increase in a rate of basic pay established
under Sec. 5305 is not an equivalent increase in pay within the
meaning of Sec. 5335 of title 5, U.S. Code, which governs
periodic step increases under the General Schedule. The amended
language would change ``basic pay'' to ``pay,'' in order to
clarify that special rates authorized under Sec. 5305 are not
necessarily ``basic pay'' for all purposes. A similar change to
replace ``basic pay'' with ``pay'' is incorporated in the
amendment made by Sec. 301(a)(2)(F).
Sec. 301(a)(2)(E) amends Sec. 5305(f), which addresses
adjustment of special pay rates, under conversion rules
prescribed by the President or such agency he designates, when
statutory pay rates increase. The revised subsection (f) would
provide that when special rates are adjusted under subsection
(d), a covered employee's special rate would be adjusted in
accordance with conversion rules prescribed by OPM (or by such
other agency as the President may under the last sentence of
subsection (a)(1) designate. This amendment would clarify that
the reference to conversion rules applies to the conversion of
an employee's pay to a new special rate schedule and not to the
adjustment of the special rate schedule itself, as provided in
Sec. 5305(d). This amendment would make clear that the
Government has full authority to adjust or not to adjust
special rate schedules based on staffing needs. It also would
allow the Government to discontinue mandatory annual review of
all special rate schedules (currently over 400), which poses an
unnecessary administrative burden. Instead the Government would
be allowed to pursue a targeted approach.
Sec. 301(a)(2)(G) would amend Sec. 5305(h), which now
provides that pay cannot be less than basic pay (including
locality pay) payable if special pay were not available. The
new Sec. 5305(h) would provide that an employee would not for
any purpose be considered to be entitled to a rate of pay
established under this section with respect to any period for
which such employee is entitled to a higher rate of basic pay
under any other provision of law. ``Basic pay'' would include
any applicable locality-based comparabilitypayment under 5
U.S.C. Sec. 5304 or similar provision of law. This amendment is
intended to clarify that an employee's entitlement to a special rate is
eliminated if that employee is entitled to a higher locality rate.
Under current law, an employee's special rate is not automatically
terminated when surpassed by a locality rate, but remains as an
underlying rate of basic pay that is used for certain pay
administration purposes. Thus, different pay rules may apply to two
employees being paid the same rate of pay. Under current law, the
underlying special rate cannot be terminated without triggering pay
retention and a windfall pay increase. The revised Sec. 5305(h), in
combination with other changes in Sec. 301(a), is intended to prevent
such illogical and inequitable results.
Sec. 301(a)(2)(H) would amend Sec. 5305 by adding a new
subsection (i) which would provide that if an employee who is
receiving a rate of pay under this section becomes subject, by
virtue of moving to a new official duty station, to a different
pay schedule, such employee's new rate of pay would be
initially established under conversion rules prescribed by OPM
(or such other agency as the President may under the last
sentence of subsection (a)(1) designate) in conformance with
the following: (1) First, determine the pay rate to which such
employee would be entitled at the new official duty station
based on such employee's position, grade, and step (or relative
position in the rate range) before the move. (2) Then, if (in
addition to the change in pay schedule) the move also involves
any personnel action or other change requiring a rate
adjustment under any other provision of law, rule, or
regulation, apply the applicable rate adjustment provisions,
treating the rate determined under paragraph (1) as if it were
the rate last received by the employee before the rate
adjustment. This amendment is intended to clarify that local
special rates are a Government tool to address a local labor
market problem, not an employee entitlement that employees
should be allowed to carry to another area where there is no
such problem. The new subsection would make it clear that an
employee with the same work history as another employee will
not have higher pay simply because he or she came from an area
where higher pay rates applied, while also ensuring consistency
between the treatment of locality rates and special rates. An
employee who moves from a higher locality rate area to a lower
locality rate area would not be entitled to pay retention even
if the move is involuntary.
Sec. 301(a)(2)(H) would also amend Sec. 5305 by adding a
new subsection (j), which would provide that a rate included in
a special rates schedule would be part of basic pay for
purposes of civil service retirement, federal employees'
retirement system, life insurance, premium pay, miscellaneous
allowances, and for such other purposes as may be expressly
provided for by law or as OPM could prescribe by regulation.
Sec. 301(a)(3)(A) would amend Sec. 5334(b), which covers
employee entitlement to basic pay rates upon promotion or
transfer to a higher grade, by adding new text providing that
if an employee's rate after promotion or transfer is greater
than the maximum rate of basic pay for his or her grade, that
rate would be treated as a retained rate. OPM would prescribe
regulations on the circumstances under which and the extent to
which special rates or locality-adjusted rates would be
considered to be basic pay in applying this subsection. This
amendment would authorize OPM to determine how special rates
and locality rates should be used in applying the two-step
promotion rule (upon promotion to a higher General Schedule
grade, an employee is generally eligible for a pay increase at
least equal to two steps in the grade from which he or she is
promoted) in order to remedy existing pay administration
problems arising in situations involving promotions, special
rates, and retained pay when locality pay is not considered to
be basic pay. This amendment would also allow OPM to prescribe
regulations to avoid current windfalls resulting from employees
receiving a two-step promotion (based on the higher special
rate schedule) and then receiving locality pay on top of the
adjusted rate. In addition, OPM could prescribe regulations to
prevent unwarranted pay reductions when an employee receiving a
retained rate plus a locality pay adjustment is promoted to a
grade at which special rates apply, causing the employee to
lose the locality pay adjustment.
Sec. 301(a)(3)(B) would amend Sec. 5334, by adding a new
subsection (g) providing that in the case of an employee who
(1) moves to a new official duty station, and (2) by virtue of
such move, becomes subject to a different pay schedule, any
rate adjustment under the preceding provisions of this section,
with respect to such employee in connection with such move,
would be made (A) first, by determining the rate of pay to
which such employee would be entitled at the new official duty
station based on such employee's position, grade, and step (or
relative position in the rate range) before the move, and (B)
then, by applying the provisions of this section that would
otherwise apply (if any), treating the rate determined under
subparagraph (A) as if it were the rate last received by the
employee before the rate adjustment. See also the above
description of the amendment made by Sec. 301(a)(2)(H).
Sec. 301(a)(4)(A) would amend Sec. 5361 by amending
paragraph (4) to provide that ``rate of basic pay'' would mean
(A) the rate of basic pay payable to an employee under law or
regulations before any deductions or additions of any kind, but
including (i) any applicable locality-based comparability
payment or (ii) any applicable special pay and (iii) subject to
such regulations as OPM could prescribe, any applicable
existing retained rate of pay; and (B) in the case of a
prevailing rate employee, the scheduled rate of pay determined
under Sec. 5343.
Sec. 301(a)(4)(B)-(D) would amend Sec. 5361 by adding at
the end the following: (8) ``retained rate'' would mean the
rate of basic pay to which an employee is entitled under Sec.
5363(b)(2).
Sec. 301(a)(5)(A) would amend Sec. 5363(a) by striking the
matter following paragraph (4) and inserting: ``is entitled to
a rate of basic pay in accordance with regulations prescribed
by OPM in conformity with the provisions of this section. The
four paragraphs in current Sec. 5363(a), which establish the
conditions under which an employee may qualify for pay
retention, are unaffected by this amendment. However, the
amendment sets out that OPM regulations are needed to clarify
the various types of situations under which pay retention may
apply. The material deleted from current Sec. 5363(a), which
sets out the general formula for determining the amount of
retained rate, is moved to a revised Sec. 5363(b). OPM
regulations could establish additional limitations and
conditions for employees to whom pay retention eligibility is
extended. For example, this provision would allow OPM to limit
adjustments of retained rates forformer members of the Senior
Executive Service who are involuntarily downgraded to General Schedule
positions.
Sec. 301(a)(5)(B) would also amend Sec. 5363 by striking
subsections (b) and (c) and inserting new subsections (b) and
(c) addressing pay administration in pay retention cases when
an employee moves to a new official duty station. See also the
above description of Sec. 301(a)(2)(H), concerning pay setting
in similar circumstances involving a move to a new official
duty station.
Sec. 301(a)(5)(B) would also add a new subsection (d) of
Sec. 5363 to provide that a retained rate would be considered
part of basic pay for purposes of this subchapter and for
purposes of civil service retirement, federal employees'
retirement system, life insurance, premium pay, miscellaneous
allowances, and for such other purposes as could be expressly
provided for by law or as OPM could prescribe by regulation.
Sec. 301(a)(5)(B) would also clarify, in a new Sec.
5363(e), that the currently specified conditions that terminate
entitlement to pay retention also operate to deny initial
entitlement to pay retention. Those conditions are: a 1-day
break in service, entitlement to an equal or higher rate of
basic pay or declining a reasonable offer of a position with
such pay; and demotion for personal cause or at the employees
request.
Sec. 301(a)(6) would amend Sec. 5365(b), which authorizes
OPM to prescribe regulations to administer grade and pay
retention, to provide that OPM regulations could provide for
the application of all or portions of the provisions on grade
and pay retention (subject to any conditions or limitations the
Office may establish).
Sec. 301(b) amends Sec. 403(c) of the Federal Employees Pay
Comparability Act of 1990 (5 U.S.C. 5305 note) to clarify that
the special statutory pay rates for law enforcement officers
authorized by the 1990 Act are basic pay for all purposes and
must be adjusted when General Schedule rates are adjusted, so
as to maintain these rates' linkage to the General Schedule
steps, as provided in Sec. 403(b)(2) of the 1990 Act. These
adjustments are automatic, unlike the special rate increases
under Sec. 5305(f), which OPM administratively determines.
Sec. 301(c) repeals section 4505a(a)(2)(B), to ensure that
performance-based cash awards may be based on an employee's
rate of basic pay, including locality payments under Sec. 5304,
as may be provided in OPM regulations.
Sec. 301(d)(1) provides that Sec. 301 takes effect on the
first day of the first applicable pay period beginning on or
after the 180th day after the act's enactment.
Sec. 301(d)(2) provides for conversion rules. Subject to
OPM regulations, an employee under a covered pay schedule (as
defined by Sec. 5361) who is receiving a retained rate under
Sec. 5363, or is receiving under similar authority a rate of
basic pay that is greater than the maximum rate of basic pay
payable for the grade of the employee's position, would have
that rate converted to a retained rate under Sec. 5363 (as
amended by Sec. 301), which would equal the formerly applicable
retained rate as adjusted to include any applicable locality-
based comparability payment.
Sec. 302(a) amends Sec. 5304 of title 5, U.S. Code, to make
technical corrections in subsections (g) and (h), effective as
if included in Pub. L. 108-136, the National Defense
Authorization Act for Fiscal Year 2004.
Sec. 302(b) amends Sec. 5314 of title 5, U.S. Code, by
adding: ``Administrator of the Office of Electronic
Government,'' a position created under authority of Pub. L.
107-347, the E-Government Act of 2002. The salary of this
position would therefore be set at level III of the Executive
Schedule.
Explanation of Amendments
The provisions of the substitute are explained in this
report.
Committee Consideration
On June 24, 2004 the Committee met in open session, and by
voice vote, ordered reported favorably the bill, S. 129.
Rollcall Votes
No rollcall votes were held.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill modernizes and updates personnel flexibilities and
authorities available to agencies of the Federal government.
Some of the benefits of this bill will not be available to
all legislative branch employees. The pay and certain benefits
of Legislative branch employees are not subject to the same
rules and regulations as the Federal civil service. To the
extent that the provisions of this bill regulate pay and time
off, Legislative branch employees would not necessarily benefit
from this legislation
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the descriptive portions of this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
Constitutional Authority Statement
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by S. 129. Article I, Section 8, Clause 18 of the
Constitution of the United States grants the Congress the power
to enact this law.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement whether
the provisions of the reported bill include unfunded mandates.
In compliance with this requirement the Committee has received
a letter from the Congressional Budget Office included herein.
Committee Estimate
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
S. 129. However, clause 3(d)(3)(B) of that rule provides that
this requirement does not apply when the Committee has included
in its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for S. 129 from the Director of
Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 13, 2004.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 129, the Federal
Workforce Flexibility Act of 2004.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Geoffrey
Gerhardt.
Sincerely,
Douglas Holtz-Eakin,
Director.
Enclosure.
S. 129--Federal Workforce Flexibility Act of 2004
Summary: S. 129 would amend laws affecting civilian
employees of the federal government. Major provisions of the
bill would increase federal retirement benefits for some
workers who performed part-time service and would effect the
way time spent at a U.S. military academy is credited for
retirement purposes. The legislation also would amend current
laws related to recruitment, relocation, and retention bonuses,
as well as agency training.
CBO estimates that enacting S. 129 would increase direct
spending by $2 million in 2005, $60 million over the 2005-2009
period, and $196 million over the 2005-2014 period. Enacting
the bill would increase revenues by less than $500,000 annually
starting in 2005. In addition, CBO estimates that implementing
S. 129 would cost $361 million over the 2005-2009 period and
$786 million over the 2005-2014 period for various
administrative requirements--assuming appropriation of the
necessary amounts.
S. 129 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 129 is shown in the following table. The
direct spending costs of this legislation fall within budget
function 600 (income security); the spending subject to
appropriation would fall across multiple budget functions.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING \1\
CSRS Retirement Benefits for Part-Time
Service:
Estimated Budget Authority............ 3 8 11 14 17 19 21 22 23 24
Estimated Outlays..................... 3 8 11 14 17 19 21 22 23 24
Retirement Benefits for Service Academy
Credits:
Estimated Budget Authority............ * 1 2 2 3 4 5 5 6 7
Estimated Outlays..................... * 1 2 2 3 4 5 5 6 7
Refunds of Payments Made to CSRDF:
Estimated Budget Authority............ -1 0 0 0 0 0 0 0 0 0
Estimated Outlays..................... -1 0 0 0 0 0 0 0 0 0
---------------------------------------------------------------------
Total Changes:
Estimated Budget Authority............ 2 9 13 16 20 23 26 27 29 31
Estimated Outlays..................... 2 9 13 16 20 23 26 27 29 31
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Enhanced Recruitment, Relocation, and
Retention Bonuses:
Estimated Authorization Level......... 69 70 72 74 77 79 82 85 88 91
Estimated Outlays..................... 69 70 72 74 77 79 82 85 88 91
----------------------------------------------------------------------------------------------------------------
\1\ The bill also would increase revenues, but by less than $500,000 a year, beginning in 2005.
Notes.--CSRS = Civil Service Retirement System; CSRDF = Civil Service Retirement and Disability Fund. * = less
than $500,000.
Basis of estimate: For this estimate, CBO assumes that S.
129 will be enacted late in 2004.
Direct Spending and Revenues
Civil Service Retirement Benefits for Part-Time Service.
Section 211 would alter the way retirement benefits under the
Civil Service Retirement System (CSRS) are calculated for
workers with part-time service. The act would apply to workers
who performed work priorto April 7, 1986, have some part-time
service, and retire after the legislation is enacted. Based on
information from Office of Personnel Management (OPM), CBO estimates
that this provision would cost $3 million in 2005, $53 million over the
2005-2009 period, and $162 million over the 2005-2014 period.
Under current law, benefits for CSRS workers with part-time
service are calculated using a two-step process. For workers
with service prior to April 7, 1986, the current formula uses
the highest salary the worker actually earned to reflect the
part-time employment. For work on or after April 7, 1986, the
formula uses a deemed salary (what the worker would have been
earning if the worker had been working full time) to determine
benefits and applies a pro-rata factor to adjust for part-time
service. In effect, the current formula often treats new
retirees with part-time service early in their careers more
favorably than those whose part-time service comes at the end
of their careers.
Section 211 would calculate CSRS benefits for all part-time
service according to the formula currently used to determine
benefits for service performed on or after April 7, 1986. The
legislation also contains a hold-harmless provision to ensure
that no one receives a smaller annuity under the proposal than
they would get under current law. CBO estimates section 211
would affect benefits for several thousand new CSRS retirees
each year. Depending on an individual employee's work history,
benefits for those retirees could be more than 30 percent
higher than they would be if calculated under the current
formula.
Allow Time Spent at Service Academies to Be Creditable For
Civilian Retirement. Section 212 would continue to allow time
spent at any of the four U.S. military academies be considered
creditable service under CSRS and the Federal Employees'
Retirement System (FERS). These two pension program, which
cover most civilian federal workers, allow time served as an
active-duty member of the U.S. armed forces to be used as
creditable service provided that it is not already being
credited toward military retirement benefits and a deposit to
purchase the credits is made to the Civil Service Retirement
and Disability Fund (CSRDF). Virtually all civilian employees
who have performed military service and are not collecting
military retirement benefits choose to have their military
service credited toward their civilian pensions.
Although current law is silent about whether time spent at
a military service academy--typically four years--should be
treated as creditable military service under CSRS and FERS, OPM
historically has allowed such service to be credited. Following
several court rulings, however, OPM has indicated that it no
longer believes such treatment is permissible under the law. As
a result, at some point in the near future, time spent at
military academies will no longer be creditable under either
civilian retirement program. CBO assumes this change will take
place in early 2005.
Based on data from OPM and the Department of Defense, CBO
estimates that, of the current federal civilian workforce
(including Postal Service employees), approximately 2,200
employees or just less than 0.1 percent have graduated from a
U.S. service academy. We estimate an average of 120,000 federal
employees will begin collecting retirement benefits annually
over the next 10 years, of whom about 100 will have graduated
from a service academy. For those retiring with CSRS benefits,
four years of creditable service represents 8 percentage points
of their annuity. For those retiring under FERS, four years of
service represents between 4.0 percentage points and 4.4
percentage points of their annuity. By allowing time spent at a
service academy to continue being used a creditable service
under CSRS and FERS, this bill would increase retirement
benefits above what they would be once OPM stops crediting such
service. CBO estimates this section of the bill would increase
direct spending on retirement benefits by less than $500,000 in
2005, $8 million during the 2005-2009 period, and $35 million
over the 2005-2014 period.
In order to have military service credited toward civilian
retirement benefits, a deposit must be made by the employee
into the CSRDF. For those under the CSRS program, the deposit
equals 7 percent of the basic pay received while performing the
service, and under the FERS the deposit equals 3 percent of
basic pay. Once OPM stops crediting time spent at an academy as
military service, refunds will be made to employees who already
made such deposits. Under this legislation, those refunds would
not be made, which CBO estimates would reduce direct spending
by $1 million in 2005. By continuing to allow time spent at
academies to be purchased as creditable service, S. 129 also
increase future deposits into the CSRDF. We estimate these
deposits would increase federal revenues by less than $500,000
annually over the 2005-2014 period.
Spending Subject to Appropriation
Recruitment, Relocation and Relocation Bonuses. Section 101
would allow OPM to authorize agencies to pay enhanced
recruitment and relocation bonuses for new or existing career
employees (not political appointees). Unlike the current
bonuses of 25 percent of basic pay, the enhanced bonuses could
total up to 25 percent of annual basic pay for up to four
consecutive years. Current law provides for retention
allowances of up to 25 percent of basic pay over the period of
service. Section 101 would allow OPM to authorize agencies to
pay enhanced retention bonuses to individual career employees
(25 percent of basic pay) or groups of employees (10 percent of
basic pay). With a waiver from OPM, all three of these bonuses
could be further increased to up to 50 percent of basic pay in
a given year.
Unlike the current bonuses and allowances, these enhanced
bonuses could be paid in installments or in lump sums (or any
suitable combination) and require the employee to enter into a
written service agreement with the employing agency.
The cost of these enhanced bonuses depends on how
extensively the agencies use the new authorities, and that
information is not available. Based on information from OPM, in
2002 the existing authorities were used to pay bonuses totaling
$129 million to just under 20,000 new and existing employees
across the government. Granting the maximum allowable level of
enhanced bonuses to this number of employees could roughly
double to quadruple this cost over time. CBO assumes that
agencies paying recruitment bonuses would, on average, double
the amount of these bonuses they award to new employees, and
also would increase outlays for retention bonuses by one-
quarter. CBO estimates that such actions would cost $361
million over the 2005-2009 period and $786 million over the
2005-2014 period, assuming the appropriation of the necessary
funds.
Streamlined Critcal Pay Authority. Section 102 would make
OPM (instead of OMB) the lead agency for fixing the rate of
basic pay for positions in an agency, in accordance with
existing authorities governing pay for critical positions. CBO
does not expect this provision would significantly affect
federal spending.
Agency Training. Section 201 would require each agency to
establish a comprehensive management program to train employees
and develop managers. According to OPM, the legislation would
codify and expand current agency practices regarding employee
training. Based on information from OPM, CBO does not expect
that these requirements would have any significant cost.
Annual Leave Enhancements. Section 202 would allow an
agency head to deem nonfederal career experience prior to
employment with an agency as federal employment for purposes of
placing new hires in leave accrual categories, and would allow
agencies to automatically place Senior Executive Service and
other senior-level employees in the 8-hour leave accrual
category.
Compensatory Time Off for Travel. Section 203 would allow
employees to earn compensatory time off for any time spent in
travel status, if that time is not otherwise compensable.
Section 301 includes provisions that would correct several
pay administration anomalies associated with the current rules
pertaining to special rates, locality pay, and pay retention.
According to OPM, the provisions would, on net, have no effect
on the amount of pay for affected employees, but would make the
current pay administration system more effective.
Intergovernmental and private-sector impact: S. 129
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Previoius CBO cost estimate: On December 1, 2003, CBO
transmitted a cost estimate of S. 129, as ordered reported by
the Senate Committee on Governmental Affairs on October 22,
2003. At that time, CBO estimated that the legislation would
increase direct spending by $233 million over the 2004-2013
period, with new spending subject to appropriation totaling
$756 million over the same period. The difference between that
estimate and the current estimate reflect changes in
assumptions about the number of workers with part-time service
who will retire over the next decade and a later assumed
enactment date.
Estimate prepared by: Federal Costs: Federal Employment
Recruitment Benefits: Geoffrey Gerhardt; Federal Employee Pay
and Bonuses: Ellen Hays; and Agency Training: Matthew Pickford.
Impact on State, Local, and Tribal Governments: Sarah Puro.
Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 5, UNITED STATES CODE
* * * * * * *
PART III--EMPLOYEES
* * * * * * *
Subpart C--Employee Performance
CHAPTER 41--TRAINING
Sec.
4101. Definitions.
* * * * * * *
4121. Specific training programs.
* * * * * * *
Sec. 4103. Establishment of training programs
(a) * * *
* * * * * * *
(c) The head of each agency shall, on a regular basis--
(1) evaluate each program or plan established,
operated, or maintained under subsection (a) with
respect to accomplishing specific performance plans and
strategic goals in performing the agency mission; and
(2) modify such program or plan as needed to
accomplish such plans and goals.
* * * * * * *
Sec. 4121. Specific training programs
In consultation with the Office of Personnel Management, the
head of each agency shall establish--
(1) a comprehensive management succession program to
provide training to employees to develop managers for
the agency; and
(2) a program to provide training to managers on
actions, options, and strategies a manager may use in--
(A) relating to employees with unacceptable
performance;
(B) mentoring employees and improving
employee performance and productivity; and
(C) conducting employee performance
appraisals.
* * * * * * *
CHAPTER 45--INCENTIVE AWARDS
* * * * * * *
SUBCHAPTER I--AWARDS FOR SUPERIOR ACCOMPLISHMENTS
* * * * * * *
Sec. 4505a. Performance-based cash awards
(a)(1) * * *
[(2)(A)] (2) A cash award under this section shall be equal
to an amount determined appropriate by the head of the agency,
but may not be more than 10 percent of the employee's annual
rate of basic pay. Notwithstanding the preceding sentence, the
agency head may authorize a cash award equal to an amount
exceeding 10 percent of the employee's annual rate of basic pay
if the agency head determines that exceptional performance by
the employee justifies such an award, but in no case may an
award under this section exceed 20 percent of the employee's
annual rate of basic pay.
[(B) For purposes of computing a percentage of a rate of
basic pay under subparagraph (A), the rate of basic pay used
shall be determined without taking into account any
comparability payment under section 5304.]
* * * * * * *
Subpart D--Pay and Allowances
* * * * * * *
CHAPTER 53--PAY RATES AND SYSTEMS
* * * * * * *
Sec. 5302. Definitions
For the purpose of this subchapter--
(1) * * *
* * * * * * *
[(8) the term ``rates of pay under the General
Schedule'', ``rates of pay for the General Schedule'',
or ``scheduled rates of basic pay'' means--
[(A) the rates of basic pay set forth in the
General Schedule; and
[(B) in the case of an employee receiving a
retained rate of basic pay under section 5363,
the rate of basic pay payable under such
section; and]
(8) the term ``rates of pay under the General
Schedule'', ``rates of pay for the General Schedule'',
or ``scheduled rates of basic pay'' means the rates of
basic pay under the General Schedule as established by
section 5332, excluding pay under section 5304 and any
other additional pay of any kind; and
* * * * * * *
Sec. 5304. Locality-based comparability payments
(a) * * *
* * * * * * *
(g)(1) * * *
(2) The applicable maximum under this subsection shall be
level III of the Executive Schedule for--
(A) positions under subparagraphs [(A)-(D)] (A)-(C)
of subsection (h)(1); and
* * * * * * *
(h)(1) * * *
(2)(A) * * *
(B) A request by an agency head or exercise of authority by
the President under subparagraph (A) shall cover--
(i) with respect to the positions under subparagraphs
(A) through (C) of paragraph (1), all positions
described in the subparagraph or subparagraphs involved
(excluding any under clause (i), (ii), (iii), (iv),
(v), [or (vii)] or (vi) of such paragraph); and
* * * * * * *
Sec. 5305. Special pay authority
[(a) Whenever the President finds that the Government's
recruitment or retention efforts with respect to 1 or more
occupations in 1 or more areas or locations are, or are likely
to become, significantly handicapped, due to any of the
circumstances described in subsection (b), he may establish for
the areas or locations involved, with respect to individuals in
positions paid under any of the pay systems referred to in
subsection (c), higher minimum rates of basic pay for 1 or more
grades or levels, occupational groups, series, classes, or
subdivisions thereof, and may make corresponding increases in
all step rates of the pay range for each such grade or level.
However, a minimum rate so established may not exceed the
maximum pay rate prescribed by statute for the grade or level
by more than 30 percent, and no rate may be established under
this section (disregarding any amount payable under subsection
(g)) in excess of the rate of basic pay payable for level V of
the Executive Schedule. The President may authorize the
exercise of the authority conferred on him by this section by
the Office of Personnel Management or, in the case of
individuals not subject to the provisions of this title
governing appointment in the competitive service, by such other
agency as he may designate.]
(a)(1) Whenever the Office of Personnel Management finds that
the Government's recruitment or retention efforts with respect
to 1 or more occupations in 1 or more areas or locations are,
or are likely to become, significantly handicapped due to any
of the circumstances described in subsection (b), the Office
may establish for the areas or locations involved, with respect
to individuals in positions paid under any of the pay systems
referred to in subsection (c),higher minimum rates of pay for 1
or more grades or levels, occupational groups, series, classes, or
subdivisions thereof, and may make corresponding increases in all rates
of the pay range for each such grade or level. However, a minimum rate
so established may not exceed the maximum rate of basic pay (excluding
any locality-based comparability payment under section 5304 or similar
provision of law) for the grade or level by more than 30 percent, and
no rate may be established under this section in excess of the rate of
basic pay payable for level IV of the Executive Schedule. In the case
of individuals not subject to the provisions of this title governing
appointment in the competitive service, the President may designate
another agency to authorize special rates under this section.
(2) The head of an agency may determine that a category of
employees of the agency will not be covered by a special rate
authorization established under this section. The head of an
agency shall provide written notice to the Office of Personnel
Management (or other agency designated by the President to
authorize special rates under the last sentence of paragraph
(1)) which identifies the specific category or categories of
employees that will not be covered by special rates authorized
under this section. If the head of an agency removes a category
of employees from coverage under a special rate authorization
after that authorization takes effect, the loss of coverage
will take effect on the first day of the first pay period after
the date of the notice.
(b) The circumstances referred to in subsection (a) are--
(1) * * *
* * * * * * *
[(4) any other circumstances which the President (or
an agency duly authorized or designated by the
President in accordance with the last sentence of
subsection (a)) considers appropriate.]
(4) any other circumstances which the Office of
Personnel Management (or such other agency as the
President may under the last sentence of subsection
(a)(1) designate) considers appropriate.
* * * * * * *
(d) Within the limitations applicable under the preceding
provisions of this section, rates of pay established under this
section may be revised from time to time by the [President or
by such agency as he may designate] Office of Personnel
Management (or by such other agency as the President may
designate under the last sentence of subsection (a)(1)). The
actions and revisions have the force and effect of statute.
(e) An increase in a rate of [basic] pay established under
this section is not an equivalent increase in pay within the
meaning of section 5335.
[(f) The rate of basic pay established under this section and
received by an individual immediately before a statutory
increase, which becomes effective prior to, on, or after the
date of enactment of the statute, in the pay schedule
applicable to such individual of any pay system specified in
subsection (c) of this section, shall be initially adjusted,
effective on the effective date of the statutory increase,
under conversion rules prescribed by the President or by such
agency as the President may designate.]
(f) When a schedule of special rates established under this
section is adjusted under subsection (d), a covered employee's
special rate will be adjusted in accordance with conversion
rules prescribed by the Office of Personnel Management (or by
such other agency as the President may under the last sentence
of subsection (a)(1) designate).
(g)(1) The benefit of any comparability payments under
section 5304 shall be available to individuals receiving rates
of [basic] pay established under this section to such extent as
the [President (or his designated agency)] Office of Personnel
Management (or such other agency as the President may under the
last sentence of subsection (a)(1) designate) considers
appropriate, subject to paragraph (2) and subsection (h).
* * * * * * *
[(h) The rate of basic pay payable to an individual under
this section may not, at any time, be less than the rate which
would then be payable to such individual (taking comparability
payments under section 5304 into account) if this section had
never been enacted.]
(h) An employee shall not for any purpose be considered to be
entitled to a rate of pay established under this section with
respect to any period for which such employee is entitled to a
higher rate of basic pay under any other provision of law. For
purposes of this subsection, the term ``basic pay'' includes
any applicable locality-based comparability payment under
section 5304 or similar provision of law.
(i) If an employee who is receiving a rate of pay under this
section becomes subject, by virtue of moving to a new official
duty station, to a different pay schedule, such employee's new
rate of pay shall be initially established under conversion
rules prescribed by the Office of Personnel Management (or such
other agency as the President may under the last sentence of
subsection (a)(1) designate) in conformance with the following:
(1) First, determine the rate of pay to which such
employee would be entitled at the new official duty
station based on such employee's position, grade, and
step (or relative position in the rate range) before
the move.
(2) Then, if (in addition to the change in pay
schedule) the move also involves any personnel action
or other change requiring a rate adjustment under any
other provision of law, rule, or regulation, apply the
applicable rate adjustment provisions, treating the
rate determined under paragraph (1) as if it were the
rate last received by the employee before the rate
adjustment.
(j) A rate determined under a schedule of special rates
established under this section shall be considered to be part
of basic pay for purposes of subchapter III of chapter 83,
chapter 84, chapter 87, subchapter V of chapter 55, and section
5941, and for such other purposes as may be expressly provided
for by law or as the Office of Personnel Management may by
regulation prescribe.
* * * * * * *
SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES
* * * * * * *
Sec. 5314. Positions at level III
Level III of the Executive Schedule applies to the following
positions, for which the annual rate of basic pay shall be the
rate determined with respect to such level under chapter 11 of
title 2, as adjusted by section 5318 of this title:
Solicitor General of the United States.
* * * * * * *
Administrator of the Office of Electronic Government.
* * * * * * *
SUBCHAPTER III--GENERAL SCHEDULE PAY RATES
* * * * * * *
Sec. 5334. Rate on change of position or type of appointment;
regulations
(a) * * *
(b) An employee who is promoted or transferred to a position
in a higher grade is entitled to basic pay at the lowest rate
of the higher grade which exceeds his existing rate of basic
pay by not less than two step-increases of the grade from which
he is promoted or transferred. If, in the case of an employee
so promoted or transferred who is receiving basic pay at a rate
in excess of the maximum rate of his grade, there is no rate in
the higher grade which is at least two step-increases above his
existing rate of basic pay, he is entitled to--
(1) * * *
* * * * * * *
If an employee's rate after promotion or transfer is greater
than the maximum rate of basic pay for the employee's grade,
that rate shall be treated as a retained rate under section
5363. The Office of Personnel Management shall prescribe by
regulation the circumstances under which and the extent to
which special rates under section 5305 (or similar provision of
law) or locality-adjusted rates under section 5304 (or similar
provision of law) are considered to be basic pay in applying
this subsection.
* * * * * * *
(g) In the case of an employee who--
(1) moves to a new official duty station, and
(2) by virtue of such move, becomes subject to a
different pay schedule,
any rate adjustment under the preceding provisions of this
section, with respect to such employee in connection with such
move, shall be made--
(A) first, by determining the rate of pay to which
such employee would be entitled at the new official
duty station based on such employee's position, grade,
and step (or relative position in the rate range)
before the move, and
(B) then, by applying the provisions of this section
that would otherwise apply (if any), treating the rate
determined under subparagraph (A) as if it were the
rate last received by the employee before the rate
adjustment.
* * * * * * *
SUBCHAPTER VI--GRADE AND PAY RETENTION
Sec. 5361. Definitions
For the purpose of this subchapter--
(1) * * *
* * * * * * *
[(4) ``rate of basic pay'' means, in the case of a
prevailing rate employee, the scheduled rate of pay
determined under section 5343 of this title;]
(4) ``rate of basic pay'' means--
(A) the rate of basic pay payable to an
employee under law or regulations before any
deductions or additions of any kind, but
including--
(i) any applicable locality-based
comparability payment under section
5304 or similar provision of law;
(ii) any applicable special pay under
section 5305 or similar provision of
law; and
(iii) subject to such regulations as
the Office of Personnel Management may
prescribe, any applicable existing
retained rate of pay established under
section 5363 or similar provision of
law; and
(B) in the case of a prevailing rate
employee, the scheduled rate of pay determined
under section 5343;
* * * * * * *
(6) ``position subject to this subchapter'' means any
position under a covered pay schedule; [and]
(7) ``reduction-in-force procedures'' means
procedures applied in carrying out any reduction in
force due to a reorganization, due to lack of funds or
curtailment of work, or due to any other factor[.]; and
(8) ``retained rate'' means the rate of basic pay to
which an employee is entitled under section 5363(b)(2).
* * * * * * *
Sec. 5363. Pay retention
(a) Any employee--
(1) * * *
* * * * * * *
[is entitled to basic pay at a rate equal to (A) the employee's
allowable former rate of basic pay, plus (B) 50 percent of the
amount of each increase in the maximum rate of basic pay
payable for the grade of the employee's position immediately
after such reduction in pay if such allowable former rate
exceeds such maximum rate for such grade.]
is entitled to a rate of basic pay in accordance with
regulations prescribed by the Office of Personnel Management in
conformity with the provisions of this section.
[(b) For the purpose of subsection (a) of this section,
``allowable former rate of basic pay'' means the lower of--
[(1) the rate of basic pay payable to the employee
immediately before the reduction in pay; or
[(2) 150 percent of the maximum rate of basic pay
payable for the grade of the employee's position
immediately after such reduction in pay.
[(c) The preceding provisions of this section shall cease to
apply to an employee who--
[(1) has a break in service of one workday or more;
[(2) is entitled by operation of this subchapter or
chapter 51 or 53 of this title to a rate of basic pay
which is equal to or higher than, or declines a
reasonable offer of a position the rate of basic pay
for which is equal to or higher than, the rate to which
the employee is entitled under this section; or
[(3) is demoted for personal cause or at the
employee's request.]
(b)(1)(A) If, as a result of any event described in
subsection (a), the employee's former rate of basic pay is less
than or equal to the maximum rate of basic pay payable for the
grade of the employee's position immediately after the
occurrence of the event involved, the employee is entitled to
basic pay at the lowest rate of basic pay payable for such
grade that equals or exceeds such former rate of basic pay.
(B) This section shall cease to apply to an employee to whom
subparagraph (A) applies once the appropriate rate of basic pay
has been determined for such employee under this paragraph.
(2)(A) If, as a result of any event described in subsection
(a), the employee's former rate of basic pay is greater than
the maximum rate of basic pay payable for the grade of the
employee's position immediately after the occurrence of the
event involved, the employee is entitled to basic pay at a rate
equal to the lesser of--
(i) the employee's former rate of basic pay; or
(ii) 150 percent of the maximum rate of basic pay
payable for the grade of the employee's position
immediately after the occurrence of the event involved,
as adjusted by subparagraph (B).
(B) A rate to which an employee is entitled under this
paragraph shall be increased at the time of any increase in the
maximum rate of basic pay payable for the grade of the
employee's position by 50 percent of the dollar amount of each
such increase.
(3) For purposes of this subsection, the term ``former rate
of basic pay'', as used with respect to an employee in
connection with an event described in subsection (a), means the
rate of basic pay last received by such employee before the
occurrence of such event.
(c)(1) Notwithstanding any other provision of this section,
in the case of an employee who--
(A) moves to a new official duty station, and
(B) in conjunction with such move, becomes subject to
both a different pay schedule and (disregarding this
subsection) the preceding provisions of this
section,this section shall be applied--
(i) first, by determining the rate of pay to which
such employee would be entitled at the new official
duty station based on such employee's position, grade,
and step (or relative position in the pay range) before
the move, and
(ii) then, by applying the provisions of this section
that would apply (if any), treating the rate determined
under clause (i) as if it were the rate last received
by the employee before the application of this section.
(2) A reduction in an employee's rate of basic pay resulting
from a determination under paragraph (1)(ii) is not a basis for
an entitlement under this section.
(3) The rate of basic pay for an employee who is receiving a
retained rate at the time of moving to a new official duty
station at which different pay schedules apply shall be subject
to regulations prescribed by the Office of Personnel Management
consistent with the purposes of this section.
(d) A retained rate shall be considered part of basic pay for
purposes of this subchapter and for purposes of subchapter III
of chapter 83, chapters 84 and 87, subchapter V of chapter 55,
section 5941, and for such other purposes as may be expressly
provided for by law or as the Office of Personnel Management
may by regulation prescribe. The Office shall, for any purpose
other than any of the purposes referred to in the preceding
sentence, prescribe by regulation what constitutes basic pay
for employees receiving a retained rate.
(e) This section shall not apply, or shall cease to apply, to
an employee who--
(1) has a break in service of 1 workday or more;
(2) is entitled, by operation of this subchapter,
chapter 51 or 53, or any other provision of law, to a
rate of basic pay which is equal to or higher than, or
declines a reasonable offer of a position the rate of
basic pay for which is equal to or higher than, the
retained rate to which the employee would otherwise be
entitled; or
(3) is demoted for personal cause or at the
employee's request.
* * * * * * *
Sec. 5365. Regulations
(a) * * *
(b) Under such regulations, the Office may provide for the
application of all or portions of the provisions of this
subchapter (subject to any conditions or limitations the Office
may establish)--
(1) * * *
* * * * * * *
SUBCHAPTER VII--MISCELLANEOUS PROVISIONS
* * * * * * *
Sec. 5377. Pay authority for critical positions
(a) * * *
* * * * * * *
(c) The [Office of Management and Budget] Office of Personnel
Management, in consultation with the [Office of Personnel
Management] Office of Management and Budget, may, upon the
request of the head of an agency, grant authority to fix the
rate of basic pay for 1 or more positions in such agency in
accordance with this section.
* * * * * * *
(e) The authority to fix the rate of basic pay under this
section for a position shall terminate--
(1) whenever the [Office of Management and Budget]
Office of Personnel Management determines (in
accordance with such procedures and subject to such
terms or conditions as such Office by regulation
prescribes) that 1 or more of the requirements of
subsection (b) are no longer met; or
* * * * * * *
(f) The [Office of Management and Budget] Office of Personnel
Management may not authorize the exercise of authority under
this section with respect to more than 800 positions at any
time, of which not more than 30 may, at any such time, be
positions the rate of basic pay for which would otherwise be
determined under subchapter II.
(g) The [Office of Management and Budget] Office of Personnel
Management shall consult with the [Office of Personnel
Management] Office of Management and Budget before [prescribing
regulations under this section or] making any decision to grant
or terminate any authority under this section.
(h) The [Office of Management and Budget] Office of Personnel
Management shall report to the [Committee on Post Office and
Civil Service] Committee on Government Reform of the House of
Representatives and the Committee on Governmental Affairs of
the Senate each year, in writing, on the operation of this
section. Each report under this subsection shall include--
(1) * * *
* * * * * * *
CHAPTER 55--PAY ADMINISTRATION
SUBCHAPTER I--GENERAL PROVISIONS
Sec.
5501. Disposition of money accruing from lapsed salaries or unused
appropriations for salaries.
* * * * * * *
SUBCHAPTER V--PREMIUM PAY
5541. Definitions.
* * * * * * *
5550b. Compensatory time off for travel.
* * * * * * *
SUBCHAPTER V--PREMIUM PAY
* * * * * * *
Sec. 5550b. Compensatory time off for travel
(a) Notwithstanding section 5542(b)(2), each hour spent by an
employee in travel status away from the official duty station
of the employee, that is not otherwise compensable, shall be
treated as an hour of work or employment for purposes of
calculating compensatory time off.
(b) An employee who has any hours treated as hours of work or
employment for purposes of calculating compensatory time under
subsection (a), shall not be entitled to payment for any such
hours that are unused as compensatory time.
(c) Not later than 30 days after the date of enactment of
this section, the Office of Personnel Management shall
prescribe regulations to implement this section.
* * * * * * *
CHAPTER 57--TRAVEL, TRANSPORTATION, AND SUBSISTENCE
SUBCHAPTER I--TRAVEL AND SUBSISTENCE EXPENSES; MILEAGE ALLOWANCES
Sec.
5701. Definitions.
* * * * * * *
SUBCHAPTER IV--MISCELLANEOUS PROVISIONS
5751. Travel expenses of witnesses.
* * * * * * *
[5754. Retention allowances.]
5754. Retention bonuses.
* * * * * * *
SUBCHAPTER IV--MISCELLANEOUS PROVISIONS
* * * * * * *
[Sec. 5753. Recruitment and relocation bonuses
[(a) The Office of Personnel Management may authorize the
head of an agency to pay a bonus to an employee who is newly
appointed to a position under the General Schedule, or to an
employee under the General Schedule or under any other pay
authority in the executive, legislative, or judicial branch who
must relocate to accept a position under the General Schedule,
if the Office determines that the agency would be likely, in
the absence of such a bonus, to encounter difficulty in filling
the position.
[(b)(1)(A) The amount of a bonus under this section shall be
determined by regulations of the Office, but may not exceed 25
percent of the annual rate of basic pay of the position to
which the employee is being appointed or relocated.
[(B) For purposes of computing a percentage of a rate of
basic pay under subparagraph (A), the rate of basic pay used
shall be determined without taking into account any
comparability payment under section 5304.
[(2) Payment of a bonus under this section shall be
contingent upon the employee entering into an agreement with
the agency to complete a period of employment with the agency,
with the required period determined pursuant to regulations of
the Office. If the employee voluntarily fails to complete such
period of service or is separated from the service before
completion of such period of service for cause on charges of
misconduct or delinquency, the employee shall repay the bonus
on a pro rata basis.
[(3) A bonus under this section shall be paid as a lump sum,
and may not be considered to be part of the basic pay of an
employee.
[(4) Under regulations of the Office, a recruitment bonus may
be paid to a newly-hired employee before the employee enters on
duty.
[(c) For the purposes of this section--
[(1) the terms ``agency'' and ``employee'' have the
meanings given them by section 5102; and
[(2) any reference to ``a position under the General
Schedule'' or ``an employee under the General
Schedule'' shall be considered to be a reference to any
position or employee to which subchapter III of chapter
53 applies.
[(d) The Office shall prescribe such regulations as it
considers necessary for the administration of subsections (a)
through (c).
[(e) At the request of the head of an Executive agency, the
President may authorize the application of the preceding
provisions of this section with respect to 1 or more categories
of employees within such agency who would not otherwise be
covered by this section (including authority under subsection
(d) to prescribe any necessary regulations).
[Sec. 5754. Retention allowances
[(a) The Office of Personnel Management may authorize the
head of an agency to pay an allowance to an employee under the
General Schedule if--
[(1) the unusually high or unique qualifications of
the employee or a special need of the agency for the
employee's services makes it essential to retain the
employee; and
[(2) the agency determines that the employee would be
likely to leave in the absence of a retention
allowance.
[(b)(1) A retention allowance, which shall be stated as a
percentage of the rate of basic pay (excluding any
comparability payments under section 5304) of the employee, may
not exceed 25 percent of such rate of basic pay.
[(2) A retention allowance may not be considered to be part
of the basic pay of an employee, and the reduction or
elimination of a retention allowance may not be appealed. The
preceding sentence shall not be construed to extinguish or
lessen any right or remedy under subchapter II of chapter 12 or
under any of the laws referred to in section 2302(d).
[(3) A retention allowance shall be paid at the same time and
in the same manner as the employee's basic pay is paid.
[(c) For the purpose of this section--
[(1) the terms ``agency'' and ``employee'' have the
meanings given them by section 5102; and
[(2) any reference to ``an employee under the General
Schedule'' shall be considered to be a reference to any
employee holding a position to which subchapter III of
chapter 53 applies.
[(d) The Office shall prescribe such regulations as it
considers necessary for the administration of subsections (a)
through (c).
[(e) At the request of the head of an Executive agency, the
President may authorize the application of the preceding
provisions of this section with respect to 1 or more categories
of employees within such agency who would not otherwise be
covered by this section (including authority under subsection
(d) to prescribe any necessary regulations).]
Sec. 5753. Recruitment and relocation bonuses
(a)(1) This section may be applied to--
(A) employees covered by the General Schedule pay
system established under subchapter III of chapter 53;
and
(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an
Executive agency.
(2) A bonus may not be paid under this section to an
individual who is appointed to or who holds--
(A) a position to which an individual is appointed by
the President, by and with the advice and consent of
the Senate;
(B) a position in the Senior Executive Service as a
noncareer appointee (as such term is defined under
section 3132(a)); or
(C) a position which has been excepted from the
competitive service by reason of its confidential,
policy-determining, policy-making, or policy-advocating
character.
(3) In this section, the term ``employee'' has the meaning
given that term in section 2105, except that such term also
includes an employee described in subsection (c) of that
section.
(b) The Office of Personnel Management may authorize the head
of an agency to pay a bonus under this section to an individual
only if--
(1) the position to which such individual is
appointed (as described in paragraph (2)(A)) or to
which such individual moves or must relocate (as
described in paragraph (2)(B)) is likely to be
difficult to fill in the absence of such a bonus; and
(2) the individual--
(A) is newly appointed as an employee of the
Federal Government; or
(B)(i) is currently employed by the Federal
Government; and
(ii)(I) moves to a new position in the same
geographic area under circumstances described
in regulations of the Office; or
(II) must relocate to accept a position in a
different geographic area.
(c)(1) Payment of a bonus under this section shall be
contingent upon the employee entering into a written service
agreement to complete a period of employment with the agency,
not longer than 4years. The Office may, by regulation,
prescribe a minimum service period for purposes of this section.
(2)(A) The agreement shall include--
(i) the commencement and termination dates of the
required service period (or provisions for the
determination thereof);
(ii) the amount of the bonus;
(iii) the method of payment; and
(iv) other terms and conditions under which the bonus
is payable, subject to the requirements of this section
and regulations of the Office.
(B) The terms and conditions for paying a bonus, as specified
in the service agreement, shall include--
(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has
been completed; and
(ii) the effect of the termination.
(C) The required service period shall commence upon the
commencement of service with the agency or movement to a new
position or geographic area, as applicable, unless the service
agreement provides for a later commencement date in
circumstances and to the extent allowable under regulations of
the Office, such as when there is an initial period of formal
basic training.
(d)(1) Except as provided in subsection (e), a bonus under
this section shall not exceed 25 percent of the annual rate of
basic pay of the employee at the beginning of the service
period multiplied by the number of years (including a
fractional part of a year, as determined under regulations of
the Office) in the required service period of the employee
involved.
(2) A bonus under this section may be paid as an initial lump
sum, in installments, as a final lump sum upon the completion
of the full period of service required by the agreement, or in
a combination of these forms of payment.
(3) A bonus under this section is not part of the basic pay
of an employee for any purpose.
(4) Under regulations of the Office, a recruitment bonus
under this section may be paid to an eligible individual before
that individual enters on duty.
(e) The Office may authorize the head of an agency to waive
the limitation under subsection (d)(1) based on a critical
agency need, subject to regulations prescribed by the Office.
Under such a waiver, the maximum bonus allowable shall--
(1) be equal to the maximum that would be determined
if subsection (d)(1) were applied by substituting
``50'' for ``25''; but
(2) in no event exceed 100 percent of the annual rate
of basic pay of the employee at the beginning of the
service period.
Nothing in this subsection shall be considered to permit the
waiver of any requirement under subsection (c).
(f) The Office shall require that an agency establish a plan
for the payment of recruitment bonuses before paying any such
bonuses, and a plan for the payment of relocation bonuses
before paying any such bonuses, subject to regulations
prescribed by the Office.
(g) The Office may prescribe regulations to carry out this
section, including regulations relating to the repayment of a
bonus under this section in appropriate circumstances when the
agreed-upon service period has not been completed.
Sec. 5754. Retention bonuses
(a)(1) This section may be applied to--
(A) employees covered by the General Schedule pay
system established under subchapter III of chapter 53;
and
(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an
Executive agency.
(2) A bonus may not be paid under this section to an
individual who is appointed to or who holds--
(A) a position to which an individual is appointed by
the President, by and with the advice and consent of
the Senate;
(B) a position in the Senior Executive Service as a
noncareer appointee (as such term is defined under
section 3132(a)); or
(C) a position which has been excepted from the
competitive service by reason of its confidential,
policy-determining, policy-making, or policy-advocating
character.
(3) In this section, the term ``employee'' has the meaning
given that term in section 2105, except that such term also
includes an employee described in subsection (c) of that
section.
(b) The Office of Personnel Management may authorize the head
of an agency to pay a retention bonus to an employee if--
(1) the unusually high or unique qualifications of
the employee or a special need of the agency for the
employee's services makes it essential to retain the
employee; and
(2) the agency determines that, in the absence of a
retention bonus, the employee would be likely to
leave--
(A) the Federal service; or
(B) for a different position in the Federal
service under conditions described in
regulations of the Office.
(c) The Office may authorize the head of an agency to pay
retention bonuses to a group of employees in 1 or more
categories of positions in 1 or more geographic areas, subject
to the requirements of subsection (b)(1) and regulations
prescribed by the Office, if there is a high risk that a
significant portion of employees in the group would be likely
to leave in the absence of retention bonuses.
(d)(1) Payment of a retention bonus is contingent upon the
employee entering into a written service agreement with the
agency to complete a period of employment with the agency.
(2)(A) The agreement shall include--
(i) the length of the required service period;
(ii) the amount of the bonus;
(iii) the method of payment; and
(iv) other terms and conditions under which the bonus
is payable, subject to the requirements of this section
and regulations of the Office.
(B) The terms and conditions for paying a bonus, as specified
in the service agreement, shall include--
(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has
been completed; and
(ii) the effect of the termination.
(3)(A) Notwithstanding paragraph (1), a written service
agreement is not required if the agency pays a retention bonus
in biweekly installments and sets the installment payment at
the full bonus percentage rate established for the employee
with no portion of the bonus deferred.
(B) If an agency pays a retention bonus in accordance with
subparagraph (A) and makes a determination to terminate the
payments, the agency shall provide written notice to the
employee of that determination. Except as provided in
regulations of the Office, the employee shall continue to be
paid the retention bonus through the end of the pay period in
which such written notice is provided.
(4) A retention bonus for an employee may not be based on any
period of such service which is the basis for a recruitment or
relocation bonus under section 5753.
(e)(1) Except as provided in subsection (f), a retention
bonus, which shall be stated as a percentage of the employee's
basic pay for the service period associated with the bonus, may
not exceed--
(A) 25 percent of the employee's basic pay if paid
under subsection (b); or
(B) 10 percent of an employee's basic pay if paid
under subsection (c).
(2)(A) A retention bonus may be paid to an employee in
installments after completion of specified periods of service
or in a single lump sum at the end of the full period of
service required by the agreement.
(B) An installment payment is derived by multiplying the
amount of basic pay earned in the installment period by a
percentage not to exceed the bonus percentage rate established
for the employee.
(C) If the installment payment percentage established for the
employee is less than the bonus percentage rate established for
the employee, the accrued but unpaid portion of the bonus is
payable as part of the final installment payment to the
employee after completion of the full service period under the
terms of the service agreement.
(D) For purposes of this paragraph, the bonus percentage rate
established for an employee means the bonus percentage rate
established for such employee in accordance with paragraph (1)
or subsection (f), as the case may be.
(3) A retention bonus is not part of the basic pay of an
employee for any purpose.
(f) Upon the request of the head of an agency, the Office may
waive the limit established under subsection (e)(1) and permit
the agency head to pay an otherwise eligible employee or
category of employees retention bonuses of up to 50 percent of
basic pay, based on a critical agency need.
(g) The Office shall require that, before paying any bonuses
under this section, an agency shall establish a plan for the
payment of any such bonuses, subject to regulations prescribed
by the Office.
(h) The Office may prescribe regulations to carry out this
section.
* * * * * * *
Subpart E--Attendance and Leave
* * * * * * *
CHAPTER 63--LEAVE
* * * * * * *
SUBCHAPTER I--ANNUAL AND SICK LEAVE
* * * * * * *
Sec. 6303. Annual leave; accrual
(a) An employee is entitled to annual leave with pay which
accrues as follows--
(1) * * *
* * * * * * *
In determining years of service, an employee is entitled to
credit for all service of a type that would be creditable under
section 8332, regardless of whether or not the employee is
covered by subchapter III of chapter 83[.], and for all service
which is creditable by virtue of subsection (e). However, an
employee who is a retired member of a uniformed service as
defined by section 3501 of this title is entitled to credit for
active military service only if--
(A) * * *
* * * * * * *
(e)(1) Not later than 180 days after the date of the
enactment of this subsection, the Office of Personnel
Management shall prescribe regulations under which, for
purposes of determining years of service under subsection (a),
credit shall, in the case of a newly appointed employee, be
given for any prior service of such employee that would not
otherwise be creditable for such purposes, if--
(A) such service--
(i) was performed in a position the
duties of which directly relate to the
duties of the position to which such
employee is so appointed; and
(ii) meets such other requirements as
the Office may prescribe; and
(B) in the judgment of the head of the appointing
agency, the application of this subsection is necessary
in order to achieve an important agency mission or
performance goal.
(2) Service described in paragraph (1)--
(A) shall be creditable, for the purposes described
in paragraph (1), as of the effective date of the
employee's appointment; and
(B) shall not thereafter cease to be so creditable,
unless the employee fails to complete a full year of
continuous service with the agency.
(3) An employee shall not be eligible for the application of
paragraph (1) on the basis of any appointment if, within 90
days before the effective date of such appointment, such
employee has held any position in the civil service.
(f) Notwithstanding any other provision of this section, the
rate of accrual of annual leave under subsection (a) shall be 1
day for each full biweekly pay period in the case of any
employee who holds a position which is subject to--
(1) section 5376 or 5383; or
(2) a pay system equivalent to either of the
foregoing, as determined by the Office of Personnel
Management.
* * * * * * *
Subpart F--Labor-Management and Employee Relations
* * * * * * *
CHAPTER 83--RETIREMENT
* * * * * * *
SUBCHAPTER III--CIVIL SERVICE RETIREMENT
Sec. 8331. Definitions
For the purpose of this subchapter--
(1) * * *
* * * * * * *
(13) ``military service'' means honorable active
service--
(A) * * *
(B) in the Regular or Reserve Corps of the
Public Health Service after June 30, 1960; [or]
(C) as a commissioned officer of the
Environmental Science Services Administration
after June 30, 1961; or
(D) as a cadet at the United States Military
Academy, the United States Air Force Academy,
or the United States Coast Guard Academy, or as
a midshipman at the United States Naval
Academy;
* * * * * * *
Sec. 8339. Computation of annuity
(a) * * *
* * * * * * *
(p)(1) * * *
* * * * * * *
(3)(A) In the administration of paragraph (1)--
(i) subparagraph (A) of such paragraph shall apply
with respect to service performed before, on, or after
April 7, 1986; and
(ii) subparagraph (B) of such paragraph shall apply
with respect to that portion of any annuity which is
attributable to service performed on or after April 7,
1986.
(B) This paragraph shall be effective with respect to any
annuity entitlement to which is based on a separation from
service occurring on or after the date of the enactment of this
paragraph.
* * * * * * *
CHAPTER 84--FEDERAL EMPLOYEES' RETIREMENT SYSTEM
* * * * * * *
SUBCHAPTER I--GENERAL PROVISIONS
Sec. 8401. Definitions
For the purpose of this chapter--
(1) * * *
* * * * * * *
(31) the term ``military service'' means honorable
active service--
(A) * * *
(B) in the commissioned corps of the Public
Health Service after June 30, 1960; [or]
(C) in the commissioned corps of the National
Oceanic and Atmospheric Administration, or a
predecessor entity in function, after June 30,
1961; or
(D) as a cadet at the United States Military
Academy, the United States Air Force Academy,
or the United States Coast Guard Academy, or as
a midshipman at the United States Naval
Academy;
* * * * * * *
----------
FEDERAL EMPLOYEES PAY COMPARABILITY ACT OF 1990
* * * * * * *
TITLE IV--FEDERAL LAW ENFORCEMENT PAY REFORM
SEC. 401. SHORT TITLE.
This title may be cited as the ``Federal Law Enforcement Pay
Reform Act of 1990''.
* * * * * * *
SEC. 403. SPECIAL RATES FOR LAW ENFORCEMENT OFFICERS.
(a) * * *
(c) The higher minimum rates and corresponding higher rates
for each step rate of each designated grade shall apply to
every law enforcement officer in the designated grades (except
in the case of any law enforcement officer for whom a higher
rate is authorized under section 5305 of title 5, United States
Code, as amended by section 101 of this Act, or similar
provision of law) [in the same manner as rates established
under section 5305 of such title, as so amended, and may be
increased in accordance with subsection (f) of such section
5305.] and shall be basic pay for all purposes. The rates shall
be adjusted at the time of adjustments in the General Schedule
to maintain the step linkage set forth in subsection (b)(2).
* * * * * * *
[SEC. 407. RELOCATION PAYMENTS.
[Notwithstanding section 5753(b)(1)(A) of title 5, United
States Code, as added by this Act, a law enforcement officer
whose rate of basic pay is less than $60,000 may receive a
relocation payment of up to $15,000 under section 5753.]
* * * * * * *
ADDITIONAL VIEWS
We support S. 129, the ``Federal Workforce Flexibility
Act.'' S. 129 provides federal agencies with additional tools
for recruiting employees for difficult-to-fill positions and
for retaining employees with unusual qualifications. We are
pleased that the flexibilities in this bill apply
governmentwide. We think this is a far better approach than the
agency-specific reform bills that Congress has passed in recent
years.
We want to highlight a few important provisions of this
bill. During the Civil Service and Agency Subcommittee mark up
on March 18, 2004, a minority amendment was offered, and
accepted, that would prohibit recruitment, relocation and
retention bonuses from being paid to political appointees.
There is no evidence that the federal government is having a
difficult time recruiting or retaining political appointees.
In addition, the amendment requires the Office of Personnel
Management (OPM) to report the number of bonuses paid under the
bill. This will allow Congress to evaluate whether these
bonuses are effective in improving the recruitment and
retention of high-quality employees. Too often, the proper
information is not collected in order to determine whether
Congress should have granted additional personnel
flexibilities. Congress also needs to know whether federal
agencies are taking full advantage of the flexibilities.
Earlier this month, a Government Accountability Officer (GAO)
report found that agencies are not using all the hiring
flexibilities that Congress has given them over the years. This
troubling GAO finding deserves this Committee's further
oversight. After all, it does no good to authorize recruiting
tools that are never used.
Furthermore, the minority amendment recommends that OPM
monitor recruitment bonuses paid by one federal agency to hire
an individual working in another federal agency in the same
geographic area. OPM will also have to study bonuses that are
used to keep current employees from leaving to go work at
another federal agency. It is generally not in the government's
best interest for agencies to engage in bidding wars over each
others employees. OPM should ensure that bonuses paid to
employees moving within the federal government are an effective
use of the governments resources and do not negatively impact
the human capital needs of the entire federal government.
Finally, we also want to highlight one provision in this
bill that provides compensatory time to federal employees when
they travel on official business during non-working hours. If
an employee has to travel on a Sunday to attend an out-of-town
meeting on Monday, that employee should receive some type of
credit for giving up his weekend to travel for the government.
We are pleased that the majority was unsuccessful in its
efforts to place caps on this compensatory time.
Henry A. Waxman.
Danny K. Davis.