[Material Transmitted]{.underline}:

Department of Health and Human Services (HHS) Instruction 532-1, Pay
Setting-Federal Wage System (FWS), dated January 26, 2009.

[Material Superseded]{.underline}:

This Instruction supersedes HHS Instruction 532-1, Pay Setting-Federal
Wage System, issued February 12 1997.

[Background]{.underline}:

The following revisions were made:

[]{.mark}

1.  OPDIVs, in conjunction with their OHROs, are authorized to make
    appointments above the minimum rate for initial appointments based
    on special qualifications, exceptional skills or highly specialized
    expertise.

2.  Greater detail on the use of highest previous rate (HPR) in setting
    pay within the Department upon reemployment, reassignment, transfer,
    promotion and change to lower grade.

3.  Setting pay upon removal during a probationary period.

4.  The requirement for OPDIVs, in conjunction with their OHROs to: 1)
    institute wage schedules on the effective date specified by the lead
    agency (i.e., DOD) for each wage area in which HHS has employees; 2)
    initiate requests to change or establish special rates when
    warranted and pursue special salary rate request(s) with the lead
    agency; and 3) recognized labor organizations.

5.  An Environmental Differential Pay (EDP) section was added to reflect
    OPDIV responsibility for paying EDP when warranted and to identify
    local situations when new or revised categories are needed.

6.  Premium pay language was added to underscore its importance in pay
    setting.

7.  The proposed instruction covers movements between the GS and FWS pay
    schedules.

This issuance is effective immediately. Implementation under this
issuance must be carried out in accordance with applicable laws,
regulations, bargaining agreements, and Departmental policy.

Antonia T. Harris

Deputy Assistant Secretary for Human Resources

INSTRUCTION 532-1

**SUBJECT: PAY SETTING - FEDERAL WAGE SYSTEM (FWS)**

532-1-00 Purpose

532-1-10 References

532-1-20 Definitions

532-1-30 Coverage and Exclusions

532-1-40 Responsibilities

532-1-50 FWS Pay Setting

532-1-60 Within-Grade Increases

532-1-70 Application of Wage Schedules

532-1-80 Movements between Pay Systems, Wage Schedules, and Wage Areas

532-1-90 Environmental Differential Pay

532-1-100 Premium Pay

532-1-110 Wage Committee

532-1-120 Documentation and Accountability

**532-1-00 PURPOSE**

This Instruction promulgates the Department of Health and Human Services
(HHS) pay setting policy for employees covered by the Federal Wage
System (FWS). The FWS is a uniform pay-setting system applicable to
Federal appropriated and non-appropriated fund blue-collar or wage grade
employees paid by the hour.

The FWS establishes pay rates for employees whose pay is fixed and
adjusted periodically in accordance with the prevailing wage rates in
local wage areas. This pay system covers Federal trades, crafts,
laborers, and other blue-collar or wage grade jobs.

The Department is responsible for ensuring prevailing rates of pay,
established during the wage survey process, are applied to prevailing
rate employees in accordance with this Instruction and OPM requirements.
Prevailing rates of pay will be established for each wage area in which
the Department has employees. In accordance with existing statute, the
wage survey process must involve the participation of labor
organizations representing prevailing rate employees.

**532-1-10 REFERENCES**

A.  5 USC Chapter 53, Subchapter IV (Law - Pay Rates and Systems)

B.  5 USC Chapter 55, Subchapter V (Premium Pay)

C.  5 CFR Part 315, Subpart I (Regulations - Probation on Initial
    Appointment to a Supervisory or Managerial Position)

D.  5 CFR Part 532 (Regulations - Prevailing Rate Systems)

E.  5 CFR Part 536 (Regulations - Grade and Pay Retention)

F.  5 CFR Part 550 (Regulations -- Pay Administration)

G.  5 CFR Part 551 (Pay Administration under the Fair Labor Standards
    Act)

H.  HHS Instruction 430-1 (Performance Management and Appraisal Program)

I.  HHS Collective Bargaining Agreements

J.  Operating Manual - Federal Wage System

**532-1-20 DEFINITIONS**

A.  [Highest Previous Rate (HPR).]{.underline} The highest rate of basic
    pay previously received by a person employed in a civilian position
    in any part of the Federal Government. This includes service with
    the government of the District of Columbia for employees first
    employed by that government before October 1, 1987.

B.  [Local Wage Areas]{.underline}. Specific geographic areas and/or
    industries surveyed during the wage surveys process.

C.  [Pay Plans.]{.underline} WG = wage grade; WL = wage leader; WS =
    wage supervisor; WT = worker trainee.

D.  [Prevailing Rates of Pay]{.underline}. Pay rates that are comparable
    to prevailing levels of pay for comparable levels of work in the
    private sector within a local wage area.

E.  [Representative Rates]{.underline}. Used to compare grades that are
    under different pay systems after applying any applicable geographic
    conversion. For FWS positions, it is the highest rate of basic pay
    that applies to the second step of the grade.

F.  [Special Pay Rates]{.underline}. OPM-approved supplements to regular
    pay rates used to address recruitment or retention issues due to
    higher non-federal pay rates, geographic remoteness of the area
    where jobs are locate, or undesirable working conditions.

G.  [Wage Survey Process]{.underline}. A market-based survey conducted
    by the Department of Defense to set rates of pay on each regular FWS
    wage schedule with the advice of a labor-management wage committee.

**532-1-30 COVERAGE AND EXCLUSIONS**

A.  Coverage. This Instruction covers HHS FWS employees. It also covers
    FWS pay-setting matters that address both regulatory and
    discretionary requirements.

B.  Exclusions. This instruction does not cover the wage survey process
    or the FWS job grading system. The survey process is sufficiently
    covered in OPM regulation and guidance. The job grading system is
    covered in OPM's Job Grading System.

**532-1-40 RESPONSIBILITIES**

Operating Human Resource Organizations (OHROs) are responsible for:

A.  Setting pay for newly appointed employees and for employees who are
    reemployed, reassigned, transferred, promoted, or changed to a lower
    grade;

B.  Making new or revised wage schedules effective on the date specified
    on the schedule for all covered employees within the local wage
    area;

C.  Paying Environmental Differential Pay (EDP) to FWS employees; and

D.  Establishing FWS apprentice schedules to cover FWS Worker Trainees.

**532-1-50 FWS PAY-SETTING**

A. New Appointments. Except as provided in 532-1-50 (B) and (C) below, a
new appointment shall be made at the minimum rate of the grade.

B. Appointments Above the Minimum Rate.

1.  Operating Human Resource Organizations (OHROs) may make new
    appointments at a rate above the minimum rate of the appropriate
    grade in recognition of special qualifications, exceptional skills
    or qualifications, or highly specialized expertise in a particular
    trade or craft critical to mission accomplishment. When an applicant
    is appointed to a step higher than the minimum, the merit promotion
    files and the remarks on the Notification of Personnel Action,
    Standard Form 50, should document the basis for the higher step.

2.  Appointments above minimum rates for jobs in specific hard-to-fill
    occupations. The lead agency (The Department of Defense) for a local
    wage area may authorize use of any scheduled rate above the minimum
    rate as the appointment rate for one or more grades of an occupation
    at one or more locations within a wage area based upon the
    following:

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a.  The hiring prevailing rate for a particular occupation and grade in
    the private sector in a specific location is higher than the minimum
    rate for the comparable grade on the local Federal wage schedule;
    and

b.  Local Federal installations and activities cannot recruit qualified
    employees at that minimum rate.

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C.  Use of Highest Previous Rate (HPR). When an employee is reemployed,
    reassigned, transferred, promoted, or changed to a lower grade, the
    OHRO may set pay at any rate of the new grade that does not exceed
    the employee's highest previous rate. However, if the rate of pay
    falls between two step-rates of the new grade, the OHRO will set pay
    at the higher of the two.

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1.  The rate or step selected for the employee should be comparable to
    the rate and step employees receive in the same or similar jobs with
    similar qualifications. The OHRO, after consultation with the hiring
    manager, will set the rate of pay at any rate between the minimum
    step of the position and the HPR.

2.  When an employee is demoted at his or her request, with the prospect
    of repromotion back to the former grade as soon as possible under
    merit promotion rules, the HR Specialist, in consultation with the
    OPDIV hiring manager, will select a rate in the lower grade which
    upon promotion will place the employee in a rate of the higher grade
    which he/she would have attained if he/she had remained at that
    grade.

3.  The HPR remains available for use in subsequent promotions or
    movement of the employee to another position, unless the restriction
    in 532-1-50(C) (4) below applies.

4.  The HPR will not be used when an employee\'s most recent performance
    rating of record is less than fully successful or the equivalent. If
    a current performance rating is not available from the employee's
    most recently employed agency, a presumed fully successful rating
    shall be applicable.

5.  Documentation of Intended Use of the HPR. Acceptable HPR
    documentation is an SF 50 or a similar document, or the employee's
    official earnings and leave statement. When an OHRO intends to use
    the HPR but does not have sufficient proof of an applicant\'s or an
    employee's previous rate of pay, it cannot grant the HPR until it
    receives the necessary documentation. The following steps will be
    taken:

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a.  The employee\'s pay will be set at the lowest step or another
    appropriate step in the grade until documentation is received.

b.  Pending receipt of the documentation, the OHRO must annotate the
    intent to use the HPR in the remarks section of the SF 50.

c.  Upon receipt of confirmation of the HPR, the employee\'s pay will be
    adjusted retroactively to the date of appointment.

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D.  Promotion. A promoted employee is entitled to be paid at the lowest
    scheduled rate of pay which exceeds the employee's existing rate of
    pay by at least four (4) percent of the representative rate (i.e.
    normally step two of a five step regular wage schedule) of the grade
    from which s(he) was promoted. If there is no rate in grade to which
    the employee is promoted which meets this entitlement, the employee
    is entitled to:

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1.  The existing rate of pay; or

2.  The maximum scheduled rate of the grade s(he) was promoted to,
    whichever is higher.

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E.  Promotion to a Position in a Different Wage Area. The employee\'s
    pay entitlement shall be determined as if there were two pay
    actions; a promotion and a reassignment. The actions shall be
    processed in the order which gives the employee the maximum benefit.

F.  Temporary Promotion. Rates of pay earned for more than one year
    under a temporary promotion are highest previous rates. Upon return
    to a lower grade immediately following a temporary promotion, the
    employee's existing rate of pay is the rate used to set pay provided
    the temporary promotion grade in which the higher rate was earned
    was held for more than one year. When a temporary promotion is made
    permanent immediately after the temporary promotion ends, the
    employee is not returned to the lower grade in order to process the
    permanent promotion. The employee's temporary promotion is converted
    to a permanent promotion without a change in pay.

G.  Details. An appropriated fund FWS employee detailed to a position
    other than the position to which appointed shall be paid at the rate
    of the position to which appointed.

H.  Simultaneous Actions. If an employee is entitled to more than one
    pay change concurrently, the OHRO will process the pay changes in
    the order which will provide the employee the maximum pay benefit.
    If an employee is entitled to both and increase in pay and a
    personnel or appointment change at the same time, the increased rate
    of pay is deemed the employee's existing rate of pay when the
    personnel or appointment change is processed.

I.  Grade Retention. Allows an employee to retain the grade of his/her
    position for pay administration purposes for 2 years after placement
    in a lower-graded position.

1\. Employee Eligibility. The employee is entitled to grade retention if
(s)he meets the criteria indicated and has been placed in a lower-graded
position for one of the following reasons:

a.  Reduction in Force (RIF). An employee must have served for at least
    52 consecutive weeks in a permanent appointment in a position under
    the Federal Wage System at a grade or higher than the position to
    which the employee is being demoted because of the RIF. The time
    served could have been in more than one position and in more than
    one OPDIV.

> b\. Classification to a lower grade. When an employee is downgraded to
> correct a classification error or to implement a new classification
> standard, (s)he is entitled to grade retention if the position that is
> being downgraded has been classified at the higher grade for at least
> 1 continuous year immediately before the action.

2\. Termination of Grade Retention. Grade retention terminates after 2
calendar years. It also terminates if the employee:

> a\. Has a break in service of one workday or more;
>
> b\. Is demoted for personal cause or at his or her own request from
> the grade actually occupied;
>
> c\. Moves to a position under a covered pay system with a grade that
> is equal to or higher than the retained grade, excluding a temporary
> promotion;
>
> d\. Declines a reasonable offer of a position at or above the retained
> grade;
>
> e\. Elects in writing to have grade retention terminated; or
>
> f\. Moves to a position not under a covered pay system.

J. Pay Retention. Allows an employee to keep his/her former rate of pay
when that pay is higher than the maximum rate of the grade in which the
employee is placed. *(Note: 'Pay retention' is similar to 'saved rate'
which was applicable to the Federal Wage System prior to the Civil
Service Reform Act of 1978).*

1\. Employee Eligibility. Pay retention must be provided to an employee
in a position under a covered pay system whose payable rate of basic pay
otherwise would be reduced as a result of:

> a\. The expiration of the 2-year grade retention period;
>
> b\. A RIF or reclassification that places the employee in a
> lower-graded position when the employee does not meet grade retention
> eligibility requirements;
>
> c\. A management action that places an employee in a government-wide
> training program, such as upward mobility, apprenticeship, or career
> intern;
>
> d\. A reduction or elimination of special rate schedules or a
> management action that places an employee in a non-special rate or
> lower-paid special rate position;
>
> e\. A management action that places an employee in a different (lower)
> pay schedule; or
>
> f\. An entitlement to a payable rate upon promotion that exceeds the
> top step of the grade to which (s)he is promoted.

2.  Pay Rate Setting

> a\. Geographic Conversion Rule. The rule must be applied before
> determining pay if the employee's official worksite is covered by a
> different locality schedule as a result of a pay retention entitlement
> action. The employee's rate of basic pay must be converted to the
> applicable schedule in the new location before the demotion.
>
> b\. The employee receives the rate of pay before placement in the
> lower grade on whichever is higher:
>
> i\. Locality schedule for the new official worksite; or
>
> ii\. Special rate schedule that applies to the former position.
>
> c\. An employee entitled to pay retention is entitled to the lowest
> rate of basic pay in the employee's grade after the action is taken
> which equals or exceeds his or her current rate of basic pay. If there
> is no such rate, then the employee retains either his or her current
> rate of basic pay or 150 percent maximum rate of basic pay for the
> employee's grade after the action is taken, whichever is less.

3\. Pay Increases While on Pay Retention. An employee receiving pay
retention is entitled to 50% of any change in the maximum rate for the
employee's position of record. This change may occur as a result of
adjustments to nationwide, locality, or special salary rate schedules.

4.  Termination of Pay Retention. Pay retention terminates when an
    employee:

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a.  Has a break in service of one work day or more;

b.  Is demoted for personal cause or at his or her own request;

c.  Becomes entitled to a rate of basic pay which is equal to or greater
    than the retained rate;

d.  Declines a reasonable offer to a position with a rate equal to or
    greater than the retained rate; or

e.  Moves to a position not under a covered pay system.

K. Pay Setting upon Removal from Position during Probation

1\. A supervisor or manager who fails to successfully complete the
required supervisory/managerial probationary period will be placed in a
position of no lower grade step than the job (s)he left to accept the
supervisory or managerial position.

2\. A nonsupervisory or non-managerial employee who is demoted into a
position in which a probationary period is required, and who, for
reasons of managerial/supervisory performance, does not complete the
probationary period is entitled to be reassigned to a position at the
same grade and pay as the position in which he/she was serving during
the probationary period.

L. Change to Lower Grade. An employee is paid as follows when reduced in
grade:

1.  Change to Lower Grade at an Employee's Request. When an employee
    initiates a request, the employee's pay will be determined by
    placing his/her HPR in the lower grade. If the HPR falls between two
    steps, the employee's maximum payable rate is set at the lower step.

2.  Change to Lower Grade When Beneficial to the Department.

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a.  When an employee is placed in a lower-graded position because of a
    management action such as reduction in force or reclassification,
    the employee's pay will be set by placing his/her maximum payable
    rate in the lower grade. If the maximum payable rate falls between
    two steps, the employee's rate is set at the higher step. The
    employee may be eligible for grade and/or pay retention upon meeting
    specific eligibility requirements enumerated in 532-1-50 I. and J.

b.  The pay setting action must be documented in writing, demonstrating
    a benefit to the Government by reflecting management\'s need for the
    employee\'s knowledge and skills and the avoidance of costs
    associated with recruitment, reduction in force, training, etc. When
    the higher grade from which the employee is being changed to lower
    grade is covered by special salary rates, the higher graded position
    must also be within HHS and the appointing authorities covering both
    positions must agree that the lower graded assignment is in the best
    interest of the Government.

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3.  Change to Lower Grade to Enter a Developmental Position. When an
    employee requests a change to a lower grade to accept a position
    which is less than the top of a career ladder, the highest rate that
    may be used in setting the employee's salary is the rate in the
    lower grade which, upon repromotion, will place the employee at the
    rate of pay he/she would have attained if the employee had remained
    in the higher grade, unless the employee is covered by grade and/or
    pay retention. This includes any step increases the employee would
    have received if he/she had remained at the higher grade during the
    period of time used to qualify for repromotion. For example, if an
    employee would have received step 3 of the former grade during that
    period, the rate of pay at step 3 is used in determining the
    employee's pay at the lower grade.

4\. Change to Lower Grade for Personal Cause. Employees changed to lower
grades for personal cause shall not have their pay set in accordance
with the HPR. When an employee is changed to a lower grade for personal
cause (e.g., inefficiency, less than fully successful performance,
misconduct, etc.), his/her pay will be reduced the equivalent of at
least two within-grade increases of the higher grade from which reduced.
If the two-step equivalent computation (based on an hourly rate) falls
between two steps of the lower grade, the lower step rate must be used.
Management may set the employee\'s pay as low as the first step of the
grade to which the employee is demoted. However, when an employee\'s
pay, using the above computation, falls above step 5 of the lower grade,
the rate of pay will be set at step 5. An employee who is reduced in
grade for personal cause is not eligible for grade or pay retention.
However, in situations where an employee is unable to perform the duties
of the position assigned due to a physical or medical condition beyond
the employee's control, the reduction in grade is not considered for
personal cause.

**532-1-60 WITHIN-GRADE INCREASES (WGIs)**

A. Entitlement. A FWS employee will be automatically advanced to the
next higher within-grade step (following completion of the required
period of creditable service) provided the employee has a work
performance rating of satisfactory or better and has not received an
equivalent increase in pay during his or her waiting period.

B. However, consistent with the HHS performance management regulations
and collective bargaining agreements, supervisors and managers should
consult with OHROs as soon as an employee's performance falls below the
satisfactory level to determine the appropriate course of action.

C. Within-grade increases---waiting periods.

1\. Nonsupervisory and leader employees.

> a\. For a full-time nonsupervisory or leader employee, and for a
> part-time nonsupervisory or leader employee with a prearranged
> regularly scheduled tour of duty, the waiting periods for advancement
> to the second, third, fourth, and fifth rates in all grades are:

i.  Rate 2 -- 26 calendar weeks of creditable service in rate 1.

ii. Rate 3 -- 78 calendar weeks of creditable service in rate 2.

iii. Rates 4 and 5 -- 104 weeks of creditable service in each of steps 3
     and 4.

> b\. For a part-time nonsupervisory or leader employee without a
> prearranged regularly scheduled tour of duty, the waiting period for
> advancement to the second, third, fourth, and fifth rates in all
> grades are:

i.  Rate 2 -- 130 days of creditable service in a pay status in rate 1
    over a period of no less than 26 calendar weeks.

ii. Rate 3 -- 390 days of creditable service in a pay status in rate 2
    over a period of no less than 78 calendar weeks.

iii. Rate 4 -- 520 days of creditable service in a pay status in rate 3
     over a period of no less than 104 weeks.

iv. Rate 5 -- 520 days of creditable service in a pay status in rate 4
    over a period of no less than 104 weeks.

> Any day on which a part-time service is performed constitutes a full
> day.

2\. Supervisory employees.

> a\. For a full-time supervisory employee, and for a part-time
> supervisory employee with a prearranged regularly scheduled tour of
> duty, the waiting periods for advancement to the second, third,
> fourth, and fifth rates in all grades are:

i.  Rate 2 -- 26 weeks of creditable service in rate 1;

ii. Rate 3 -- 78 weeks of creditable service in rate 2;

iii. Rate 4 -- 104 weeks of creditable service in rate 3; and

iv. Rate 5 -- 104 weeks of creditable service in rate 4.

> b\. For a part-time supervisory employee without a prearranged
> regularly scheduled tour of duty, the waiting period for advancement
> to the second, third, fourth, and fifth rates in all grades are:

i.  Rate 2 -- 130 days of creditable service in a pay status in rate 1
    over a period of no less than 26 calendar weeks;

ii. Rate 3 -- 390 days of creditable service in a pay status in rate 2
    over a period of no less than 78 calendar weeks;

iii. Rate 4 -- 520 days of creditable service in a pay status in rate 3
     over a period of no less than 104 calendar weeks;

iv. Rate 5 -- 520 days of creditable service in a pay status in rate 4
    over a period of no less than 104 calendar weeks.

> Any day on which a part-time service is performed constitutes a full
> day.

3.  Start of waiting period*.* A waiting period starts:

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a.  At the beginning of a new appointment as an employee of the Federal
    Government or the government of the District of Columbia;

b.  After a nonpay period or a break in service when the non-pay period
    or break in service exceeds 52 calendar weeks; or

c.  Upon receiving an equivalent increase.

NOTE: For purposes of this section, a calendar week is a period of any 7
calendar days.

D. Effective Date. A within-grade increase is made effective at the
beginning of the first applicable pay period following the date an
employee becomes eligible for the increase.

**532-1-70 APPLICATION OF WAGE SCHEDULES**

A. The lead agency shall issue nonsupervisory, leader, and supervisory
regular wage schedules for the local wage area, showing the rates of pay
for all grades and steps. The wage schedules shall have a single
effective date for all employees in the local wage area. The Assistant
Secretary for Administration and Management (ASAM) shall authorize the
application of the wage schedules issued by the lead agency for HHS
employees in the local wage areas.

B. Delayed Application of a Wage Schedule. No employee will be required
to suffer a hardship because of a delayed application of a pay schedule.
Hence, no retroactive change will be made if the actions taken and
payments made during the period of retroactivity are more advantageous
to the employee than the rate from the new schedule.

**532-1-80 MOVEMENTS BETWEEN PAY SYSTEMS, WAGE SCHEDULES AND WAGE
AREAS**

A.  Movements from General Schedule (GS) to FWS. In order to determine
    the appropriate rate of pay, these steps should followed:

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1.  Convert the annual rate of GS pay to an hourly rate of pay by
    dividing the annual rate by 2,087.

2.  Compare the representative rates for GS and FWS grades to determine
    the appropriate nature of action (i.e., the second rate on a
    five-rate regular wage schedule, the fourth rate on the General
    Schedule).

3.  Set pay at the maximum payable rate of the grade in which placed as
    appropriate.

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B.  Movement from GS to FWS in a non-foreign overseas area (i.e., travel
    to or within Alaska or Hawaii). Any non-foreign area differential or
    cost-of-living allowance an employee is receiving in the General
    Schedule job is added to his/her scheduled rate of pay for
    establishing the rate of pay in the FWS position. The non-foreign
    area differential or cost-of-living allowance is not added to the
    representative rate when determining the nature of the action.

    90. **ENVIRONMENTAL DIFFERENTIAL PAY (EDP)**

> OHROs are responsible for paying FWS employees an EDP when the
> employee is performing assigned duties which expose him/her to an
> usually severe hazard, physical hardship, or working condition in the
> following circumstances:

A.  Hazard which could result in significant injury, illness, or death.

B.  Hardship under circumstances which cause significant physical
    discomfort or distress; or

C.  Working condition involving exposure to fumes, dust, or noise which
    causes significant distress or discomfort.

Efforts to avoid and/or protect employees from such hazards, physical
hardships, or working conditions is of utmost priority. EDP is paid only
where such exposure is unavoidable.

B.  Authorized environmental differentials for exposure to various
    degrees of hazards, physical hardships, and working conditions are
    enumerated in 5 CFR, Part 532, "Appendix A to Subpart E-Schedule of
    Environmental Differentials Paid for Exposure to Various Degrees of
    Hazards, Physical Hardships, and Working Conditions of an Unusual
    Nature". An employee will not be paid for more than one EDP for a
    particular period of work. EDP is computed based on the highest EDP
    rate authorized for the period of entitlement. The hours covered by
    EDP shall not exceed the number of hours worked by the employee on
    the day of exposure except as required by 5 CFR § 532.511(b)(3).

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C.  Relationship to other Pay. EDP is included as part of an employee's
    basic rate of pay and must be used to compute premium pay (e.g. pay
    for overtime, holiday, or Sunday work) and deductions for retirement
    and life insurance. However, it is not part of basic pay for
    purposes of lump-sum annual leave payments and severance pay nor is
    the loss of this pay an adverse action.

**532-1-100 PREMIUM PAY**

A. The Fair Labor Standards Act (FLSA) of 1938 (as amended) covers any
employee of an agency who is not specifically excluded by another
statute and is not FLSA exempt (meaning not covered by the overtime
provisions of the FLSA). Generally, FWS employees are presumed to be
FLSA nonexempt (meaning covered by the overtime provisions of the FLSA)
unless management proves otherwise." See 5 C.F.R. 551.202(a). The
section on Premium Pay addresses HHS policy as it relates to FLSA
non-exempt employees, unless otherwise stated.

B. Overtime Pay. FWS non-exempt employees are entitled to be paid for
authorized and approved overtime worked in excess of 8 hours in a day or
in excess of 40 hours in an administrative week, whichever results in
the greater number of overtime hours including irregular and occasional
overtime work and regular overtime work.

1.  Nonsupervisory FWS Employees. A nonsupervisory FWS employee is
    presumed to be nonexempt under the Fair Labor Standards Act of 1938
    (FLSA) and shall be paid for overtime work performed at the rate of
    1.5 times the employee's normal wage rate. A nonsupervisory FWS
    employee is considered exempt if (s)he is performing temporary work
    or duties that meet FLSA exemption criteria.

2.  Supervisory FWS Employees. A supervisory FWS employee is presumed to
    be non-exempt under the FLSA and shall be paid for overtime work
    performed at the rate of 1.5 times the employee's normal wage rate.
    A supervisory FWS employee is considered exempt if the employee
    meets the FLSA executive, administrative**,** or foreign exemption
    criteria, or performs temporary work or duties that meet FLSA
    exemption criteria.

3\. Exempt employees may be paid overtime on an hour-for-hour basis
(that is 1.0 times the hourly rate). An employer may require an exempt
employee to accept compensatory time instead of overtime premium pay.
However, non-exempt employees must be given the choice between 1.5
overtime pay or compensatory time off.

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C. Compensatory Time Usage.

1\. At a non-exempt employee's request, OPDIVs may grant compensatory
time off from an employee's tour of duty instead of overtime payment,
for an equal amount of irregular or occasional authorized and approved
overtime. OPDIVs cannot require non-exempt FWS employees to receive
compensation for overtime with an equal amount of compensatory time off
from his/her tour of duty.

2.  If accrued compensatory time off is not used within 26 pay periods
    or if employees transfer to another agency or separate from Federal
    service before the expiration of the 26 pay period time limit,
    employees must be paid for the earned compensatory time off at the
    overtime rate in effect when earned.

D. Night Shift Differentials, Holiday Pay, and Sunday Pay.

1.  Night Shift Differentials. Employees may be entitled to be paid a
    night shift differential for the circumstances enumerated below:

> a\. Absence on holidays. An employee regularly assigned to a shift for
> which a night shift differential is payable shall be paid the night
> shift differential for a period of excused absence on a legal holiday
> or other day off from duty granted by Executive or administrative
> order.

b\. Travel status. An employee regularly assigned to a shift for which a
night shift differential is payable shall be paid the night shift
differential for hours of the employee\'s tour of duty while in official
travel status, regardless of whether the employee is performing work.

c\. Temporary tour of duty. An employee regularly assigned to a:

> i\. Night shift who is temporarily assigned to a day shift or to a
> night shift having a lower night shift differential shall continue to
> receive the regular night shift differential, a temporary detail for
> training purposes is also included (5 CFR 410.602).
>
> ii\. Night shift, who is temporarily assigned to another night shift
> having a higher differential, shall be paid the higher differential if
> a majority of the employee\'s regularly scheduled non-overtime hours
> of work on the temporary shift fall within hours having the higher
> differential.
>
> ii\. Day shift who are temporarily assigned to a night shift shall be
> paid a night shift differential.

d\. Leave with pay. An employee:

> i\. Regularly assigned to a night shift shall be paid a night shift
> differential during a period of leave with pay.
>
> ii\. Regularly assigned to a day shift who is temporarily assigned to
> a night shift shall be paid a night shift differential for any leave
> with pay taken when scheduled to work night shifts.
>
> iii\. Assigned to regular rotating schedule involving work on both day
> and night shifts shall be paid a night shift differential only for any
> leave with pay taken when scheduled to work night shifts.
>
> iv\. Who is not regularly assigned to a day shift or a night shift but
> whose shift is changed at irregular intervals shall be paid a night
> shift differential during leave with pay if the employee received a
> night shift differential for the last shift worked preceding leave
> with pay.

2.  Holiday Pay. Employees who are entitled to holiday premium pay and
    who perform work on a holiday which is not overtime work shall be
    paid the employee's rate of basic pay plus premium pay at a rate
    equal to the rate of basic pay for holiday work that is not in
    access of 8 hours.

> a\. Employee shall be paid for overtime work performed on a holiday at
> the same rate as for overtime paid on other workdays.
>
> b\. Employees entitled to holiday premium pay and required to report
> for work on a holiday shall be paid at least two hours of holiday pay
> whether or not work is actually performed.

3.  Sunday Pay. An employee whose regular work schedule includes an
    8-hour period of service that is not overtime work, a part of which
    is Sunday, is entitled to additional pay at the rate of 25 percent
    of his hourly rate of basic pay for each hour of work performed
    during that 8-hour period of service. For employees serving outside
    the United States in areas where Sunday is a routine workday and
    another day of the week is officially recognized as the day of rest
    and worship, the Secretary of State may designate the officially
    recognized day of rest and worship as the day with respect to which
    the preceding sentence shall apply instead of Sunday.

Full-time employees whose regular tours of duty include Sunday must be
paid up to 8-hours of Sunday premium while in a paid leave or excused
absence status during that Sunday tour. (U. S. court of Appeals for the
Federal Circuit -- Armitage, et. Al. v. United States).

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**532-1-110 WAGE COMMITTEE**

A. The lead agency would have the responsibility for establishing an
agency wage committee for the purpose of considering matters relating to
the conduct of wage surveys, the establishment of wage schedules, and
making recommendations thereon to the lead agency.

B. If the lead agency terminates a wage schedule, the OHRO servicing the
OPDIV in which the wage schedule applies shall discuss the termination
with the appropriate official or officials of exclusively recognized
employee organizations representing employees in the affected
occupation.

**532-1-120 DOCUMENTATION AND ACCOUNTABILITY**

All regulatory discretionary actions should be documented on the SF-50.
This includes (but is not limited to) appointments above the minimum
rate, use of highest previous rate, grade and pay retention and change
to lower grade.