Pay freeze won't stop all increases

OPM issues guidance on exclusions

The two-year federal employee pay freeze that recently became law won't affect promotion increases, in-grade step increases and other individually based pay increases, such as bonuses, according to the Office of Personnel Management.

In a Dec. 30 memo to federal agency heads, OPM Director John Berry detailed how the freeze on pay adjustments will apply to approximately 2 million federal civilian employees and what types of pay increases won't be affected. 

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Employees covered by the freeze include those under the General Schedule, Executive Schedule, Senior Executive Service, Senior Foreign Service, senior-level and scientific and professional, prevailing rate, and other executive branch pay systems and schedules.

The memo noted that United States Postal Service employees and the Postal Regulatory Commission are excluded from the freeze, along with military personnel.

President Barack Obama signed the pay freeze into law Dec. 22 and issued an executive order to implement freeze the same day.

In a presidential memorandum accompanying the order, Obama asked agency heads who have the authority to exercise administrative discretion when it comes to executive branch pay schedules not to use that discretion during the pay freeze.

The OPM memo included the following list of pay freeze exclusions:

  • Additional payments, such as performance awards and bonuses; recruitment, relocation and retention incentives; and premium payments such as  overtime pay.
  • Promotions, periodic in-grade step increased based on fully successful level of performance, and quality step increases for outstanding performance.
  • Adjustments in foreign areas to maintain a constant salary rate in U.S. dollars or local currency or to respond to foreign labor laws.
  • Pay-setting flexibilities, such as the GS superior qualifications and special needs pay-setting authority for newly appointed employees under 5 Code of Federal Regulations 531.212 and the GS maximum payable rate rule under 5 CFR 531.221.

The pay freeze will also not affect pay increases required by collective bargaining agreements that are already in effect, according to OPM.

The freeze began on Jan. 1 and will last until Dec. 31, 2012.

OPM has posted salary tables and guidance on its website for 2011 pay rates, as well as a basic question and answer sheet on the freeze.


About the Author

Alyah Khan is a staff writer covering IT policy.


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