This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

5737 

Vol. 89, No. 20 

Tuesday, January 30, 2024 

1For this rulemaking, ‘‘salary history’’ or ‘‘pay 

history’’ refer to the salary or pay a job candidate 

is currently receiving (i.e., their existing salary or 

pay) or the salary or pay the candidate has been 

paid in a previous job (i.e., prior salary or pay). The 

terms are used interchangeably. 

2 In this final rule, the terms ‘‘applicant’’ and 

‘‘candidate’’ are used interchangeably to refer to an 

individual under consideration for appointment to 

a Federal civil service position. 

3 Data on the national pay gap is available on the 

Department of Labor Women’s Bureau website at 

https://www.dol.gov/agencies/wb/data/earnings. 

4See 86 FR 34593 (June 25, 2021). 

5See 87 FR 15315 (Mar. 15, 2022). 

OFFICE OF PERSONNEL 

MANAGEMENT 

5 CFR Parts 531, 532, 534, and 930 

RIN 3206–AO39 

Advancing Pay Equity in 

Governmentwide Pay Systems 

AGENCY: Office of Personnel 

Management. 

ACTION: Final rule. 

SUMMARY: The Office of Personnel 

Management is issuing final regulations 

governing the criteria for making salary 

determinations based on salary history 

to advance pay equity in the General 

Schedule, prevailing rate, 

Administrative Appeals Judge, 

Administrative Law Judge, Senior 

Executive Service, and senior-level and 

scientific or professional pay systems. 

For individuals receiving their first 

appointment as a civilian employee of 

the Federal Government (or a 

reappointment after a break in service) 

in one of these pay systems, agencies 

will not be able to set pay based on a 

job candidate’s non-Federal salary or 

pay history, which could vary between 

equally qualified candidates, or based 

on a competing job offer. Agencies will 

also be required to have policies 

regarding setting pay based on a 

previous Federal salary for employees 

who have previous civilian service in 

the Federal Government. 

DATES: This final rule is effective April 

1, 2024. Agencies must be in full 

compliance with this final rule not later 

than October 1, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Carey Jones by telephone at (202) 606– 

2858 or by email at paypolicy@opm.gov. 

SUPPLEMENTARY INFORMATION: 

Overview 

The Federal Government strives to be 

a model employer that values diversity, 

equity, inclusion, and accessibility 

(DEIA). After consideration of public 

comments on the proposed rule, OPM is 

issuing a final rule that amends the 

criteria for making salary 

determinations for the General Schedule 

(GS), prevailing rate, Administrative 

Appeals Judge (AAJ), Administrative 

Law Judge (ALJ), Senior Executive 

Service (SES), and senior-level and 

scientific or professional (SL/ST) pay 

systems to advance pay equity in pay 

setting for Federal employees. OPM is 

issuing this rule pursuant to its 

authority to issue regulations governing 

these pay systems in 5 U.S.C. 5333, 

5338, 5343, 5372, 5372b, 5376, and 

5382. 

Generally, when an individual applies 

for a job and is being considered for 

employment, the employer may inquire 

about the individual’s salary or pay 

history 1 and consider it as part of the 

pay-setting process, if not otherwise 

prohibited from doing so. The employer 

may ask the candidate 2 direct questions 

about salary history or the candidate 

may offer the information without 

prompting. The information can be 

solicited or shared at various points 

before an offer is accepted or rejected. 

These and other considerations of a job 

candidate’s salary history are 

permissible under current statutes and 

regulations governing the GS, prevailing 

rate, AAJ, ALJ, SES, and SL/ST pay 

systems. Consideration of salary history 

is explicitly allowed under the Federal 

Government’s GS pay system and is not 

prohibited by the prevailing rate, AAJ, 

ALJ, SES, and SL/ST pay systems. 

As described in the proposed rule and 

in this final rule, however, salary 

history is not necessarily a good 

indicator of worker value, experience, 

and expertise, and it also may contain 

or exacerbate biases. Pay setting based 

on salary history may be inequitable, 

can perpetuate biases from job to job, 

and may contribute to a pay gap 

between the earnings of men and 

women. Nationally, on average women 

earn less than men, and this pay gap is 

even greater for most women of color.3

Gender and race/ethnicity pay gaps also 

exist in the Federal Government’s civil 

service. Although such gaps are 

typically smaller than those in the 

private sector, they may represent an 

inequity as acknowledged by the 

President in Executive Orders (E.O.) 

14035 (86 FR 34593) and 14069 (87 FR 

15315). As discussed further below, by 

eliminating a factor that may contain or 

exacerbate biases inconsistent with 

merit system principles, this final rule 

seeks to promote pay equity consistent 

with the President’s Executive Orders. 

For individuals receiving their first 

appointment as a civilian employee of 

the Federal Government (or a 

reappointment after a break in Federal 

service), agencies will no longer be able 

to set pay based on non-Federal salary 

history, which could vary between 

equally qualified candidates. Agencies 

also will not be permitted to consider a 

candidate’s competing job offer when 

setting pay. Finally, agencies will be 

required to have policies regarding 

setting pay based on a previous Federal 

salary for employees who have previous 

civilian service in the Federal 

Government. 

Background 

On June 25, 2021, President Biden 

signed E.O. 14035, titled ‘‘Diversity, 

Equity, Inclusion, and Accessibility in 

the Federal Workforce.’’ 4 To address 

any pay inequities and advance equal 

pay, section 12 of E.O. 14035 requires 

the Director of OPM to review 

Governmentwide regulations and, as 

appropriate and consistent with 

applicable law, consider prohibiting the 

use of an applicant’s salary history 

when setting pay for a Federal 

employee. 

On March 15, 2022, the President 

issued E.O. 14069, titled ‘‘Advancing 

Economy, Efficiency, and Effectiveness 

in Federal Contracting by Promoting Pay 

Equity and Transparency.’’ 5 Section 1 

of that E.O., describing the policy 

objectives of the E.O., notes that OPM 

‘‘anticipates issuing a proposed rule that 

would address the use of salary history 

in the hiring and pay-setting processes 


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5738 Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 

6See 88 FR 30251 (May 11, 2023). 

7OPM determined one comment was beyond the 

scope of the proposed changes; that comment is not 

addressed below. 

8One commenter recommended that OPM extend 

the rulemaking process and do more outreach to 

Federal employees about the proposal. Comment 

23, available at https://www.regulations.gov/ 

comment/OPM-2023-0005-0023. In addition to 

publishing the proposed rule in the Federal 

Register, at the beginning of the comment period, 

OPM shared the proposed rule with numerous 

stakeholders, including Federal employee unions, 

and publicized the proposed rule in a press release. 

Multiple media sources such as Forbes, CNN, 

Axios, Gov Exec, Federal News Network, and 

Federal Times, covered the publication of the 

proposed regulatory changes. 

for Federal employees,’’ consistent with 

E.O. 14035. 

OPM reviewed the pay-setting 

regulations governing the GS, prevailing 

rate, AAJ, and ALJ, SES, and SL/ST pay 

systems. On May 11, 2023, OPM issued 

a proposed rule at 88 FR 30251 in 

response to E.O. 14035 and pursuant to 

its regulatory authorities in 5 U.S.C. 

5333, 5338, 5343(c), 5372(c), and 

5372b(b).6 As explained in the proposed 

rule, the Federal Government’s civilian 

personnel management systems are 

required to adhere to merit system 

principles established in law at 5 U.S.C. 

2301, including: 

• All employees and applicants for 

employment should receive fair and 

equitable treatment in all aspects of 

personnel management without regard 

to political affiliation, race, color, 

religion, national origin, sex, marital 

status, age, or handicapping condition, 

and with proper regard for their privacy 

and constitutional rights. 5 U.S.C. 

2301(b)(2). 

• Equal pay should be provided for 

work of equal value, with appropriate 

consideration of both national and local 

rates paid by employers in the private 

sector, and appropriate incentives and 

recognition should be provided for 

excellence in performance. 5 U.S.C. 

2301(b)(3). 

For the GS, prevailing rate, AAJ, and 

ALJ structured pay systems, generally, 

an agency must set pay at the minimum 

rate for a new entrant to the civil 

service. The GS system is designed with 

standardized classification criteria for 

determining the grade levels of 

positions, and each GS grade has a range 

of pay consisting of ten step rates. The 

prevailing rate system under 5 U.S.C. 

chapter 53, subchapter IV, is a uniform 

pay-setting system that covers Federal 

Wage System (FWS) appropriated fund 

and nonappropriated fund employees. 

Generally, a new appointment to a GS 

or a prevailing rate position must be 

made at the minimum (step 1) rate of 

the grade of the employee’s position. 

The AAJ pay system has six rates of 

basic pay—AA–1, 2, 3, 4, 5 and 6. Upon 

initial appointment, an agency generally 

must set the rate of basic pay of an AAJ 

who is new to the Federal Government 

at the minimum rate AA–1 of the AAJ 

pay system. The ALJ pay system has 

three levels of basic pay: AL–1, AL–2, 

and AL–3. Pay level AL–3 has six rates 

of basic pay. Upon appointment to a 

position at level AL–3, an ALJ is 

generally paid at the minimum rate. 

Under each of these systems, the 

default is to set pay at the minimum 

rate, but agencies have the authority to 

set pay above the minimum rate for 

newly appointed employees if specific 

factors are shown. Under the GS pay 

system, the largest of the pay systems at 

issue in this final rule, an agency has 

the authority to set pay above the 

minimum rate if it determines that the 

candidate has superior qualifications or 

that the agency has a special need for 

the candidate’s services under the 

criteria in 5 CFR 531.212(b). The current 

regulations at 5 CFR 531.212(c) state 

that an agency may consider one or 

more of nine specified factors or other 

relevant factors in making this step rate 

determination. One factor an agency can 

consider is the candidate’s existing pay, 

recent salary history, or a salary 

documented in a competing job offer. 5 

CFR 531.212(c)(2). Similarly, the AAJ, 

and ALJ pay systems allow 

consideration of current pay when 

setting pay for an applicant with 

superior qualifications who is not a 

current Federal employee. Under those 

circumstances, an agency sets the AAJ 

or ALJ pay at the rate that is next above 

the applicant’s existing pay or earnings. 

5 CFR 534.604 (for AAJ pay system), 

930.205 (for ALJ pay system). The 

prevailing rate pay systems also allow 

setting pay above the minimum rate 

based on special qualifications. The 

prevailing rate pay systems do not 

specifically list salary or pay history as 

an allowable factor in setting pay. See 

5 CFR 532.403. 

There are also standard rules when 

setting pay for current and former 

employees upon various personnel 

actions such as reemployment, 

reassignment, promotion, transfer, or 

demotion, and the flexibility to set pay 

above the rate to which the employee 

would otherwise be entitled based on 

the employee’s Federal salary history. 

For the GS pay system, an agency may 

use the ‘‘maximum payable rate’’ rule, 

which bases pay on the employee’s 

highest previous rate of pay in a Federal 

civilian position. 5 CFR 531.221. The 

prevailing rate pay system also allows 

an agency to set an employee’s pay at 

any rate (of the relevant grade) that does 

not exceed the employee’s highest 

previous rate. 5 CFR 532.405. For the 

AAJ and ALJ pay systems, an agency 

can set pay above the minimum rate for 

an appointee with prior Federal service 

either based on superior qualifications 

as used for new entrants or based on the 

highest previous Federal rate of basic 

pay. 5 CFR 534.604 (for AAJ pay 

system), 930.205 (for ALJ pay system). 

The SES and SL/ST pay systems do 

not require an agency to set pay at the 

minimum rate and, instead, require an 

agency to consider specific factors when 

setting pay. See 5 CFR 534.404(a), (g); 

534.506. The SES and SL/ST pay 

systems are discussed in more detail in 

the SES & SL/ST Pay Systems section of 

this final rule. 

This final rule prohibits agencies from 

considering a candidate’s salary history 

as a factor in setting pay for new Federal 

civilian employees. If an agency seeks to 

set pay above the minimum rate of the 

applicable rate range under the GS, 

prevailing rate, AAJ, or ALJ pay 

systems, that adjustment must be based 

on factors other than a candidate’s nonFederal pay history, such as how pay 

has been set for employees who had 

similar qualifications (based on the 

level, type, or quality of the candidate’s 

skills or competencies or other qualities 

and experiences) and have been newly 

appointed to positions that are similar 

to the candidate’s position (based on the 

position’s occupational series, grade 

level, organization, geographic location, 

or other job-relevant factors), if 

applicable. Similarly, when setting pay 

under the SES or SL/ST pay systems, 

the agency must base the pay on 

enumerated factors and cannot consider 

a candidate’s non-Federal pay history. 

When setting pay based on prior Federal 

salary for reappointed or current 

employees, agencies must have a policy 

that supports consistency in setting pay 

for employees. 

In addition to the data summarized in 

the proposed rule, OPM considered 

comments received in response to the 

proposal. OPM received 63 submissions 

representing 512 commenters during the 

30-day public comment period from a 

variety of individuals (including Federal 

employees), organizations (including 

labor organizations), and Federal 

agencies regarding the substance of the 

proposed rule.7 8 Comments ranged from 

strong support of the proposed rule to 

categorical rejection. OPM reviewed and 

carefully considered all comments. 

They are summarized below, together 

with a discussion of the suggestions for 

revisions and OPM’s rationale for either 

adopting or declining those suggestions. 

In the first section below, we discuss 

comments that address topics related to 


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Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 5739 

9Office of Personnel Management. 

‘‘Governmentwide Strategy for Advancing Pay 

Equality in the Federal Government.’’ https://

www.opm.gov/policy-data-oversight/pay-leave/ 

reference-materials/reports/GovernmentwideStrategy-on-Advancing-Pay-Equality-in-the-FederalGovernment.pdf. 

10Office of Personnel Management. ‘‘About Our 

Data (EHRI–SDM).’’ https://www.fedscope.opm.gov/ 

datadefn/aehri_sdm.asp. 

11Foster, T., Murray-Close, M., Landivar, L., & de 

Wolf, M. ‘‘An Evaluation of the Gender Wage Gap 

Using Linked Survey and Administrative Data,’’ 

November 2020. https://www.census.gov/library/ 

working-papers/2020/adrm/CES-WP-20-34.html. 

12A reference at the end of a comment quotation 

or paraphrase provides the location of the item in 

the public record. (i.e., the two-digit number 

associated with the location in the docket). 

Comments filed in response to the proposed rule 

are available at https://www.regulations.gov/ 

comment/OPM-2023-0005-00nn, where nn is the 

comment number. 

13Office of Personnel Management. ‘‘Guidance 

for Agencies Conducting Gender Pay Data 

Analysis.’’ https://chcoc.gov/sites/default/files/ 

Attachment-Agency%20Gender%20Data%20

Analysis%20Guidance-rev_0.pdf. 

the background and context of this rule, 

including responses to questions posed 

by OPM in the proposed rule. In the 

sections that follow, we address 

comments related to specific aspects of 

this final rule. 

Comments Regarding Background and 

Context 

Federal Government Pay Gaps and 

Occupational Segregation 

OPM has been periodically updating 

its pay gap data analysis since issuing 

its 2014 Governmentwide strategy.9

Based on September 2021 EHRI 10 data 

covering nonseasonal, full-time, 

permanent Executive branch employees, 

on average for all race/ethnicity groups 

combined, women are paid 94 cents for 

every dollar paid to a man—a gender 

pay gap of six percent. This raw, 

unadjusted gender pay gap is before 

considering any factors that might 

explain the gap, such as occupation. 

As discussed in the proposed rule, 

OPM also conducted an analysis 

regarding pay gaps for groups of 

employees identified by both gender 

and race/ethnicity. This analysis 

revealed that pay gaps varied 

significantly depending on the specific 

population. OPM found that many 

factors may contribute to the overall 

gender and race/ethnicity pay gaps in 

the Federal Government. In conducting 

its data analysis, OPM observed 

evidence of the impact of other factors, 

including occupational segregation. A 

November 2020 study 11 focused on 

national pay gaps found that the gender 

pay gap varied significantly by 

occupation. OPM’s findings regarding 

Federal pay gaps are consistent with 

research on pay gaps in the national 

workforce. Comments on OPM’s pay gap 

analysis are discussed in more detail in 

the Regulatory Alternatives section. 

In instances where pay disparities are 

found, one organization recommended 

that OPM ‘‘require agencies to 

immediately scale up to raise lower 

gender and racial/ethnic median wage 

to match the higher median pay at the 

beginning of the fiscal year.’’ Comment 

64.12 Two organizations, several 

commenters, and an agency also 

suggested that OPM encourage agencies 

to conduct pay audits and raise the 

wages of individuals subject to 

inequitable pay disparities. See 

Comments 24, 27, 29, 46, 62, 64. 

Putting aside the questions of 

whether, as a policy and legal matter, it 

would be appropriate and workable to 

have automatic pay adjustments to 

achieve a zero pay gap in median pay, 

OPM has no general statutory authority 

to require agencies to increase pay of 

current employees when gender and 

racial/ethnic pay gaps are found. We 

note, however, that there are several 

authorities (e.g., the Equal Pay Act, Title 

VII of the Civil Rights Act of 1964, the 

Americans with Disabilities Act, the 

Age Discrimination in Employment Act) 

under which an agency is authorized to 

increase the salary of a Federal 

employee found to be subject to an 

inequitable pay disparity. We also note 

that there may be legitimate, nondiscriminatory factors that could 

contribute to pay disparities for selected 

categories of employees, such as 

employee seniority, performance, or 

other factors not controlled for in the 

analysis. In 2015, OPM encouraged 

agencies to conduct pay gap analyses by 

gender, race/ethnicity, or other 

characteristics for their own workforces 

to identify where potential pay 

disparities exist within an agency in 

order to develop targeted strategies to 

reduce disparities and has issued 

guidance to help agencies complete this 

exercise.13

OPM invited comments on what 

factors OPM should consider for 

positions of high occupational 

segregation (wherein women and men 

often tend to work in different 

occupations, and the occupations that 

are predominantly held by women pay 

less, compared to those predominantly 

held by men at the same level of skill 

or education). Four organizations 

responded to this request for comment. 

One recommended that OPM consider 

race and ethnicity alongside gender 

when looking into the issue of positions 

of high occupational segregation. 

Comment 33. Another stated that 

‘‘[g]iven that the goal is equal pay for 

equal work, the focus of these initial 

steps to fight pay discrimination needs 

to be on ensuring fairness in pay setting 

for like positions. Ultimately, changes in 

pay between different positions will 

require modification of the classification 

standards used to adjust the scoring 

results, as those classification standards 

are the main measure OPM has in place 

for instilling uniformity in pay-setting 

across different agencies.’’ Comment 49. 

The two other organizations 

recommended that OPM consider job 

evaluations. Comments 60, 61. One of 

these organizations stated that 

conducting job evaluations is a strategy 

‘‘to identify and remedy pay inequities 

so that women and people of color 

receive equitable compensation for their 

labor. Job evaluation schemes assess 

jobs across occupations on a range of 

factors to establish fair and equitable 

pay and promotion. These schemes 

make it more likely that pay and 

promotion are based on performance 

rather than bias.’’ Comment 61. 

Occupational segregation in both the 

public and private sectors is a systemic 

and persistent issue identified in pay 

equity studies. Addressing occupational 

segregation, however, is outside the 

scope of the Federal pay and 

classification system. OPM will assist 

agencies, in exercising their delegated 

classification authority, in collecting 

metrics and other relevant agency data 

to examine classification practices based 

on a variety of factors, including gender 

analysis by occupation. OPM will also 

assist agencies to expand the use of 

skills-based hiring practices to address 

occupational segregation. 

Pay Equity in Structured Pay Systems 

OPM invited comments on whether 

there is any research we should 

consider regarding the impact that 

structured pay systems have on pay 

equity, and the impact that pay policies 

that allow organizations to set pay above 

the minimum rate of the rate range for 

new employees based on specified 

criteria have on pay equity. OPM 

received two comments that addressed 

this question. First, an agency suggested 

that OPM look at agencies that have 

converted to pay banded systems, such 

as demonstration projects under 5 

U.S.C. chapter 47, to determine the 

benefits of such systems. Comment 34. 

The GS, prevailing rate, ALJ, and AAJ 

pay systems are all structured with 

grades or work levels and defined steps 

or pay rates within each grade or work 

level. It would be difficult to draw 

direct comparisons between pay-setting 

policies for pay banded systems (that 

combine multiple grades into a single 


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5740 Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 

14Castilla, E. ‘‘Accounting for the Gap: A Firm 

Study Manipulating Organizational Accountability 

and Transparency in Pay Decisions,’’ Organization 

Science, vol 26(2), March–April 2015, pages 311– 

333. 

15Strategic Human Resource Management. 

‘‘Building a Market-Based Pay Structure from 

Scratch.’’ https://www.shrm.org/resourcesandtools/ 

tools-and-samples/toolkits/pages/buildingamarketbasedpaystructurefromscratch.aspx. 

16Office of Personnel Management. ‘‘Guidance 

Release—E.O. 13932; Modernizing and Reforming 

the Assessment and Hiring of Federal Job 

Candidates.’’ https://www.chcoc.gov/content/ 

guidance-release-eo-13932-modernizing-andreforming-assessment-and-hiring-federal-job. 

17Office of Personnel Management. ‘‘Federal 

Wage System Qualifications.’’ https://

www.opm.gov/policy-data-oversight/classificationqualifications/federal-wage-system-qualifications/ 

#url=Overview. 

work level and/or have open salary 

ranges instead of step rates within a 

range) and the effect on pay equity. We 

do not have information on agency pay 

banding policies and practices nor has 

OPM conducted any pay equity analysis 

on agency pay banding systems or their 

policies and practices. 

We also note that section 12(b) of E.O. 

14035 requires agencies to review 

regulations and guidance and, as 

appropriate and consistent with 

applicable law, revise compensation 

practices for pay systems authorized 

outside of title 5 of the United States 

Code to address any pay inequities and 

advance equal pay. OPM will ask 

agencies to report any revisions to 

compensation practices made to 

implement the President’s direction. 

Such reports may include information 

on beneficial compensation practices 

under alternative pay systems, such as 

pay banding systems. 

Second, an organization shared two 

sources and stated that structured pay 

systems can help address pay gaps and 

are essential to attracting and retaining 

a talented and diverse workforce. 

Comment 61. One article summarized 

how implementing transparency and 

accountability procedures reduced the 

extent to which women and people of 

color received lower monetary 

performance-based rewards.14 As OPM’s 

regulatory changes affect certain 

structured pay systems with specified 

salaries rather than performance award 

determinations, this article is not 

directly applicable. As discussed in the 

proposed rule, however, we agree that 

pay transparency—as exists in Federal 

pay systems—can help reduce gender 

pay gaps and that written policies 

support agencies’ consistent use of pay 

flexibilities. 

The other article stated that, in 

developing a pay structure, ‘‘grades 

enable flexibility and internal equity in 

an organization by providing a 

framework in which equivalent jobs are 

treated equally for pay purposes.’’ 15 As 

explained in the proposed rule, the GS 

classification and pay system is 

designed with standardized 

classification criteria for determining 

the grade levels of positions, and each 

GS grade has a range of pay consisting 

of 10 step rates. The GS system has 

standardized pay-setting rules that help 

promote the equitable treatment among 

employees. The FWS has three main 

pay plans (Wage Grade (WG), Wage 

Leader (WL), and Wage Supervisor 

(WS)); the WG and WL pay plans have 

15 grades and WS has 19. Each grade 

has five steps. The AAJ pay system has 

six rates of basic pay. An ALJ in level 

AL–3 also has six rates of basic pay. 

OPM agrees that these structured pay 

systems provide a framework that 

provides equal pay for work of an equal 

value, consistent with the merit system 

principle in 5 U.S.C. 2301(b)(3). Because 

structured pay systems minimize 

discriminatory influence on pay setting, 

OPM is not banning consideration of 

prior Federal pay when setting pay but 

is requiring agencies to establish 

policies that further promote equity in 

pay setting. OPM expects that, over 

time, any residual pay gaps in the 

Federal systems will shrink. 

Classification 

OPM received a few comments 

regarding how employees qualify for 

positions, how positions are classified, 

and how these decisions impact pay. 

One commenter requested that OPM 

require that agencies be more 

transparent about the pay for which new 

Federal employees qualify and 

specifically how the grade assessments 

are made or calculated. Comment 04. 

Another commenter similarly stated that 

‘‘clearly the source of inequity is in 

grade-setting, not step-setting as this 

rule targets.’’ Comment 09. A third 

commenter stated, ‘‘[t]his proposed rule 

appears to consider pay setting within a 

grade level, but it ignores another 

primary method of pay-setting in the 

government—grade level.’’ Comment 20. 

Although pay is often associated with 

position classification, position 

classification is based solely on work 

performed or the core duties and 

responsibilities of a position. The 

classification of positions recognizes 

levels of difficulty and responsibility in 

terms of the grade levels established in 

law at 5 U.S.C. 5104. While these gradelevel definitions are used to determine 

grades that are linked to ranges of basic 

pay rates, those definitions are not 

based on pay factors or pay 

relationships. All OPM GS position 

classification standards are based on the 

difficulty and responsibility of the work 

at each level and the qualifications 

required to do that work. Under 5 U.S.C. 

5107, Federal agencies are responsible 

for classifying their GS positions 

consistent with position classification 

standards issued by OPM. Similarly, 

under 5 U.S.C. 5346, agencies are 

responsible for grading their prevailing 

rate jobs consistent with the job grading 

standards issued by OPM. Therefore, 

similar or like positions and jobs across 

Federal agencies should be classified or 

graded in a consistent manner since 

they are evaluated against the same 

standards rather than position-toposition comparisons. 

An agency also stated that ‘‘a proposal 

to cease or significantly limit how 

Federal agencies can take into account 

past salary history must be paired with 

a wholesale reexamination of the GS 

pay scale and how hiring managers 

determine which qualifications meet 

which GS levels.’’ Comment 21. The GS 

pay structure of 15 grades and 10 steps 

within each grade is defined in statute 

at 5 U.S.C. 5332(a)(2) and rates are 

adjusted in accordance with 5 U.S.C. 

5303. The agency also recommended 

that OPM issue revised guidance on the 

minimum qualifications associated with 

each grade level. In May 2022, OPM 

issued updated guidance and 

qualifications policy including the 

General Schedule Qualifications 

Operating Manual.16 Qualification 

requirements are aligned with 

classification policy for an occupational 

series. Similarly, OPM’s Federal Wage 

System Qualifications provide guidance 

regarding the knowledge, skills, and 

abilities (KSAs) or job elements needed 

for jobs and provides a reference for 

assessing the qualifications of 

applicants for a particular grade.17

Candidates for Federal employment 

and/or Federal employees may qualify 

for Federal jobs based on training, 

experience, education, and/or other 

requirements aligned with the position. 

Both the Manual and the FWS 

Qualifications provide detailed 

information to assist with aligning the 

qualifications of a candidate with the 

appropriate KSAs needed for jobs by 

grade, providing consistency between 

candidates, within an agency, and 

between agencies. 

A commenter also expressed concern 

that ‘‘to the extent that agencies are 

limited in their ability to set pay within 

GS levels, they are more likely to adjust 

the GS levels such that step 1 of the 

offered GS level is closer to the market 

rate.’’ Comment 20. OPM cautions that 

the intentional misclassification of 

positions to manipulate recruitment, 


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Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 5741 

18Adler, L. ‘‘What’s a Job Candidate Worth? 

Explaining Variation in Pay-Setting Practices, 

SOCARXIV (2020). https://osf.io/preprints/ 

socarxiv/ctu8m. 

qualifications, and/or pay may be a 

prohibited personnel practice subject to 

review by the Office of Special Counsel. 

Consideration of Salary History 

Executive Order 14035 directed OPM 

to consider, as appropriate and 

consistent with applicable law, 

prohibiting the use of an applicant’s 

salary history to set pay or when setting 

pay for a Federal employee. OPM has 

authority to issue regulations governing 

the GS, prevailing rate, AAJ, ALJ, SES, 

and SL/ST pay systems in 5 U.S.C. 

5333, 5338, 5343, 5372, 5372b, 5376, 

5382, and consistent with merit system 

principles established in law at 5 U.S.C. 

2301. Relevant to this final rule is the 

requirement that all employees and 

candidates for employment receive fair 

and equitable treatment in all aspects of 

personnel management (5 U.S.C. 

2301(b)(2)) and that equal pay should be 

provided for work of equal value, with 

‘‘appropriate consideration’’ for both 

national and local rates paid by 

employers in the private sector (5 U.S.C. 

2301(b)(3)). 

Throughout the proposed rule and 

this final rule, OPM adheres to these 

authorities and merit system principles. 

We have identified the reasons—based 

on OPM data, Department of Labor data, 

examples of state salary history bans 

and their impacts on salary equity, 

research regarding the benefits of such 

bans, and other information—why 

salary history should not be a 

consideration in the pay-setting process 

for new Government employees. 

OPM administers pay systems that 

have taken a variety of approaches to 

setting initial pay. The GS pay system 

specifically allows salary history as a 

factor to be considered when setting pay 

for an initial appointment in Federal 

service (or reappointment after a break 

in service). The prevailing rate pay 

systems allow agencies to set pay above 

a minimum rate based on ‘‘special’’ 

qualifications but provide no direction 

on what factors to consider when 

determining the step at which to set pay 

within the grade. The AAJ pay system 

allows agencies to offer an AAJ 

applicant with superior qualifications a 

higher than minimum rate of pay that is 

next above the applicant’s existing pay 

or earnings, up to the maximum rate. 

The ALJ pay system allows agencies, 

with prior OPM approval, to pay an ALJ 

applicant with superior qualifications 

the rate of pay that is next above the 

applicant’s existing pay or earnings up 

to the maximum rate. The SES and SL/ 

ST pay systems provide a specific list of 

factors—which does not include salary 

history—that an agency must consider 

when setting initial pay. 

OPM has determined that salary 

history should no longer be considered 

in setting pay for new Federal 

employees entering into the GS, 

prevailing rate, AAJ, ALJ, SES, and SL/ 

ST pay systems. Accordingly, OPM is 

modifying the regulatory language for 

the GS pay system by removing salary 

history as a factor to consider in setting 

pay for newly appointed employees. 

Similarly, OPM is adding language to 

the prevailing rate systems, AAJ, ALJ, 

SES, and SL/ST pay system regulations 

to detail the factors that should be 

considered in setting pay and/or to 

make clear that salary history is no 

longer a permitted factor. 

National unions, a local union, as 

well as multiple other organizations, 

Federal employees, and members of the 

public expressed strong support for 

many of the regulatory amendments in 

the proposed rule. One commenter 

reported an academic research study in 

which a description of the proposed 

salary history ban was shared with 

1,605 Americans and found that about 

two-thirds of those surveyed favored the 

policy somewhat or strongly. See 

Comment 58. Commenters provided 

sources of information and data arguing 

against using salary history in the pay 

setting process. These commenters and 

the cited sources demonstrate multiple 

rationales supporting OPM’s decision 

not to permit continued consideration of 

salary history in setting initial pay. The 

main rationales presented by 

commenters are discussed in the 

following sections along with 

consideration of countervailing 

comments. 

Salary history does not demonstrate 

an individual’s qualifications or fitness 

for a position. Commenters argued that 

past salary in a non-Federal job is not 

indicative of ability to perform in the 

Federal position. One organization 

wrote that ‘‘prior salary is not an 

accurate measure of a job candidate’s 

qualifications, skill, or ability to perform 

a job,’’ referencing an Issue Brief from 

the Women’s Bureau of the U.S. 

Department of Labor (DOL). Comment 

56. A union commented that including 

salary history as an allowable 

consideration is at odds with the 

principles reflected in the current 

regulations. See Comment 44. The 

commenter explained that salary history 

‘‘does not directly reflect either the 

employee’s superior qualifications or 

the agency’s special needs,’’ noting that 

those are the types of interests for which 

OPM regulations allow consideration. 

Id. 

Another commenter also expressed 

concern that consideration of past salary 

information ‘‘perpetuates the flawed 

assumption’’ that a lower paid 

candidate is of lower quality. Comment 

60. That commenter cited a study, 

which found that ‘‘salary history is not 

an effective tool for assessing a 

candidate’s value . . . because 

organizations do not accurately match 

pay to an employee’s productivity’’ and 

‘‘there [is] too much variation on the 

relationship between pay and 

performance.’’ 18 Id. For example, 

candidates who have had a break in 

their career to serve as full-time 

caregivers to children or other family 

members may have a salary history that 

is lower than market value, but the 

candidate is well-qualified to perform 

the duties of the position. Id. Several 

other commenters also cited the 

example of lower pay for caregivers not 

being indicative of lower quality 

employees. See, e.g., Comments 20, 33, 

56. 

Commenters raised the issue that 

variability in current pay may reflect the 

aspects of the current employer rather 

than any factors relevant to Federal 

employment. For example, an 

organization commented that ‘‘those 

who take lower-paying jobs, such as 

those at non-profits or state and local 

government . . . should not be 

penalized [compared to those working 

for private sector employers].’’ 

Comment 46. 

Several commenters disagreed, 

contending that past pay can be 

indicative of superior skills and/or high 

performance. An agency recommended 

that OPM expand the criteria for 

determining an employee’s salary based 

on qualifications to allow agencies to 

consider the ‘‘whole of the individual 

and their experience’’ rather than 

banning agencies from considering a 

candidate’s salary history. Comment 34. 

An individual commented that the 

rule was arbitrary and capricious 

because it is inconsistent with merit 

system principles at 5 U.S.C. 2301(b)(1) 

and 2301(b)(3), calling for equal pay for 

work of equal value. Comment 28. The 

commenter argues that the 

determination of ‘‘relative ability, 

knowledge, and skills’’ in ‘‘fair and 

open competition’’ means comparing 

individuals with others in a market, or 

competitive, economy, and that this 

requires a review of salary history 

because it is ‘‘the price of a worker’s 

labor per unit time.’’ 

OPM disagrees with this analysis. As 

an initial matter, ‘‘fair and open 

competition’’ in 5 U.S.C. 2301(b)(1) does 


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19See Bessen, James E., Chen Meng, and Erich 

Denk. 2020. ‘‘Perpetuating Inequality: What Salary 

History Bans Reveal About Wages.’’ https://papers.

ssrn.com/sol3/papers.cfm?abstract_id=3628729. 

20The White House. ‘‘Governmentwide Strategic 

Plan to Advance Diversity, Equity, Inclusion, and 

Accessibility in the Federal Workforce,’’ November 

2021. https://www.whitehouse.gov/wp-content/ 

uploads/2021/11/Strategic-Plan-to-AdvanceDiversity-Equity-Inclusion-and-Accessibility-in-theFederal-Workforce-11.23.21.pdf. 

not mean the Government should 

compare salaries vis-a`-vis others in a 

market economy. It refers to the 

recruitment, selection, and 

advancement of qualified individuals 

based on merit (as opposed to, for 

example, political favor). More 

significantly, OPM disagrees that salary 

history is a consistently accurate proxy 

for worker value. Non-Federal 

employers can have widely varying 

compensation structures, policies, and 

funding. Lower paying jobs, such as 

non-profit organizations or entry-level 

professional positions, could have 

compensation packages that include 

non-salary benefits (e.g., more generous 

leave or childcare flexibilities) that 

would be difficult to capture by only 

looking at past salary. Also, many 

higher paying jobs have an expectation 

or requirement of longer hours (as many 

are exempt from the overtime pay 

provisions of the Fair Labor Standards 

Act), such that the salary per hours 

worked would more closely resemble 

that of a lower paying job with a lower 

hours expectation or requirement. See 

Comments 20, 33, 44, 62, 68. But that 

nuance would not be captured by 

looking only at a monetary figure. In 

addition, OPM’s regulations already 

allow—and will continue to allow— 

agencies to consider several factors 

including the level, type, or quality of 

the candidate’s skills or competencies. 

Agencies do not typically have access 

to the information that a previous nonFederal employer used to determine a 

job candidate’s salary, whether the 

previous employer conducted any salary 

survey or labor market analysis when 

making pay-setting determinations, or 

how a candidate’s employment history 

may have affected the previous 

employer’s salary decisions. Under this 

final rule, agencies will set pay above 

the minimum of the rate range based on 

factor(s) such as the level, type, or 

quality of the candidate’s skills or 

competencies, which will be more 

equitable and relevant than salary 

history. 

Salary history bans break the cycle of 

pay discrepancies arising from 

discrimination and inequity and have 

positive impacts on pay gaps. 

Commenters noted that setting starting 

pay based on salary history can 

contribute to inequitable pay gaps. 

Citing a DOL Issue Brief, an 

organization noted that salary history 

may ‘‘reflect past pay discrimination or 

other factors with gender-based 

implications.’’ Comment 56. Therefore, 

setting starting pay based on past pay 

can compound the ‘‘effects of 

discrimination and inequity,’’ in part 

because starting salary can affect 

subsequent salary increases. Id. That 

commenter, citing a Harvard Business 

Review study, noted that ‘‘nearly twothirds’’ of businesses found that pay 

disparities ‘‘stemmed from reliance on 

salary history.’’ Id. Another commenter 

also noted that prior salary history may 

reflect ‘‘prior economic downturns in 

which women and minority workers are 

often harder hit.’’ Comment 44. 

Several commenters referenced a 2020 

paper showing that implementing a 

salary history ban results in greater 

increases in salary for job changers for 

populations that have historically 

experienced discrimination. See, e.g., 

Comments 51, 56, 61.19 A Federal 

employee union expressed the view that 

the proposed approach would likely 

lead to an increase in pay for women 

and people of color. Comment 59. 

Another commenter argued that 

implementing a salary history ban 

would ‘‘increase the diversity of our 

workforce and leadership.’’ Comment 

22. That commenter also argued that the 

proposed ban would ‘‘provide greater 

footing to women and minority groups.’’ 

Id. A Federal employee-run organization 

commented that ‘‘in eliminating the use 

of salary history when setting pay the 

Government will emphasize its 

commitment to gender and racial 

equality while also reducing costly legal 

challenges to pay disparities.’’ Comment 

62. Similarly, an organization 

commented that the proposal would 

help to ‘‘ensure that the Federal 

Government is in compliance with the 

Equal Pay Act.’’ Comment 56. 

In contrast, an agency expressed 

concern that prohibiting the 

consideration of salary history was not 

in line with the November 2021 

Governmentwide DEIA Strategic Plan,20

which discouraged ‘‘solely’’ relying on 

salary history to set pay. OPM believes 

the rule is consistent with the DEIA 

strategic plan. The DEIA strategic plan 

listed this suggestion among many 

policy examples the Government could 

adopt to ensure fair outcomes. Further, 

the President, through E.O. 14035 and 

E.O. 14069, directs OPM to consider 

prohibiting setting pay based on salary 

history, which OPM has concluded is 

appropriate. 

Many of the comments arguing that 

salary history bans can reduce pay gaps 

cited the experiences of states and 

localities, noting that 21 states and 22 

localities have enacted laws prohibiting 

the use of salary history in setting pay. 

See, e.g., Comments 33, 56, 59, 60, 61. 

One organization cited to data from 

Colorado, Nevada, and Rhode Island in 

support of implementing a prohibition 

on considering a candidate’s salary 

history. Comment 33. Several 

organizations further noted, citing 

multiple studies, that these salary bans 

have helped narrow pay gaps. See, e.g., 

Comments 33, 60, 61. One of those 

organizations asserted that OPM’s 

proposed changes would help bring the 

Federal Government in line with these 

states, localities, and private firms that 

have already taken steps to limit or ban 

employers from using an applicant’s 

prior or current salary in determining 

pay. Comment 33. 

In contrast, an agency commented 

that, OPM should not ‘‘ban any pay 

flexibility across the board’’ based on 

pay gaps specific to an agency, to 

certain occupations within an agency, or 

a limited number of agencies. Comment 

34. It stated that agencies with such 

issues should ‘‘seek to remedy those 

gaps or impose their own limits based 

on OPM authorities.’’ Id. Further, some 

commenters questioned the existence of 

pay gaps (Comment 16) or the 

effectiveness of a salary history ban 

(Comments 18, 23), and argued that a 

salary history ban could harm women 

who earn a competitive wage (Comment 

23). OPM does not believe that these 

comments warrant consideration of 

prior salary. The governing merit system 

principles are not unique to one agency, 

and OPM believes that eliminating 

consideration of prior salary is most 

consistent with those principles 

regardless of whether any agency or 

occupation currently has an inequitable 

pay gap. Additionally, even if a 

particular agency or occupation does 

not currently have a pay gap, that does 

not eliminate the possibility that a pay 

gap could develop if new hires have 

differing starting salary ranges for 

reasons unrelated to any merit system 

principles (including but not limited to 

prior discrimination); eliminating 

consideration of prior salary can help 

prevent inequities from developing in 

the future. No commenters provided 

data showing that a salary history ban 

is not an effective tool for eliminating 

inequitable pay gaps or preventing such 

gaps from occurring. OPM concludes 

that, based on the evidence, prohibiting 

consideration of salary history has been 

demonstrated to reduce pay gaps and, 

thus, is a valid tool for the Federal 


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Government to implement for these pay 

systems. 

Additional Considerations Regarding 

Setting Pay 

Commenters raised several other 

considerations regarding the pay-setting 

processes at issue in this rule. 

OPM proposed that, when setting pay 

above the minimum rate for an 

employee newly appointed to a GS, 

prevailing rate system, AAJ, and ALJ 

position, an agency would be required 

to consider how pay has been set for 

employees who had similar 

qualifications (based on the level, type, 

or quality of the appointee’s skills or 

competencies or other qualities and 

experiences) and who have been newly 

appointed to positions that are similar 

to the appointee’s position (based on the 

position’s occupational series, grade 

level, organization, geographic location, 

or other job-relevant factors), if 

applicable. A commenter noted that 

‘‘this may have the effect of locking in 

low pay and creating disparities across 

teams or across agencies.’’ Comment 20. 

The commenter suggested OPM 

‘‘provide a type of pay-setting authority 

that would allow an agency to remedy 

this by raising the pay for current 

employees to achieve equity with 

incoming employees.’’ Id. There is no 

statutory authority for this suggested 

change. For example, 5 U.S.C. 5334 

provides OPM with the authority to 

prescribe regulations regarding setting a 

GS employee’s pay when an employee 

transfers from a non-GS position or 

another GS position, or upon demotion, 

reinstatement, reappointment, change in 

type of appointment, change in 

employment status, or change in grade. 

The law does not allow OPM to 

prescribe regulations regarding 

adjusting pay for existing employees to 

achieve equity. 

An organization recommended that 

‘‘OPM provide additional guidance, 

including examples, to agencies about 

what constitutes ‘similar work,’ and 

how agencies should make 

determinations for employees doing 

‘similar work’ who have different levels 

of experience.’’ Comment 56. This final 

rule specifies that determinations 

regarding whether work is similar 

would be based on the position’s 

occupational series, grade level, types of 

duties, or other job-relevant factors. 

While agencies will be responsible for 

making these determinations within 

these parameters, OPM will consider the 

need to provide further agency 

assistance on this issue in future 

implementing guidance. 

Commenters noted that OPM 

proposed only banning the 

consideration of salary history in setting 

pay. Several organizations 

recommended that OPM explicitly ban 

agencies from asking for and discussing 

salary history with job candidates. See, 

e.g., Comments 33, 56, 60, 61. The 

organizations also recommended that 

OPM guidance should clarify that 

agencies should not instead ask about 

an individual’s salary expectation and 

that agencies should appropriately train 

relevant staff to ensure effective 

implementation of OPM’s proposal. Id. 

The regulations that OPM is 

amending relate to the factors agencies 

use in setting pay, not to agencies’ 

conduct in the hiring process, but OPM 

agrees that agencies should not solicit 

salary history from job candidates. As 

an initial matter, agencies are prohibited 

from using this information, so there is 

simply no reason why agencies should 

request it, as there is no use for this 

information, if acquired. Moreover, 

doing so could suggest to a candidate 

that the agency intended to consider the 

information in violation of the 

regulation, which further militates 

against an agency from asking. 

Therefore, agencies should not request a 

candidate’s salary history, and OPM 

will issue guidance saying the same. 

OPM will consider the scope and 

content of implementation guidance, 

trainings, and other means of sharing 

best practices following the publication 

of this rule. 

We note, of course, that an agency has 

no control over what information a 

candidate may volunteer to provide and 

that a candidate could disclose their 

prior salary during the interview 

process. In the event of voluntary salary 

disclosure, agencies will continue to be 

prohibited from considering that 

information to set pay, regardless of 

how they learn that information. 

With respect to candidates providing 

salary expectations, OPM notes that 

nothing in this rule limits candidates’ 

ability to offer this information. Under 

this final rule, agencies can still set pay 

above the minimum rate (using factors 

other than salary history or a competing 

job offer). Information regarding 

candidates’ salary expectations may 

help agencies effectively recruit and 

onboard these candidates by increasing 

minimum pay based on factors other 

than salary history or a competing job 

offer. 

An agency was concerned that not 

allowing Federal agencies to consider 

salary when setting initial pay ‘‘could 

lead to a biased pay-setting process and 

have unintended consequences.’’ 

Comment 48. The commenter suggests 

that salary is a factor that helps to 

remove subjective bias. OPM disagrees 

that the changes could lead to a biased 

pay-setting process. Under the current 

regulations, agencies may consider one 

or more of the factors listed in the 

regulations when setting pay for a GS 

appointee with superior qualifications 

or for which the agency has a special 

need. Under the revised regulations for 

the GS pay system, agencies must 

consider the step at which pay has been 

set for employees who had similar 

qualifications and who have been newly 

appointed to positions that are similar 

to the candidate’s position and at least 

one other factor listed in the regulations. 

Similarly, under the current prevailing 

rate regulations, an agency applying the 

special qualifications authority 

currently has no limitations. Under the 

revised regulations, OPM provides 

specific factors for an agency to 

consider, which will make pay setting 

less subjective and less prone to bias. 

Under the AAJ and ALJ pay systems, 

adjustments from the minimum rate for 

superior qualifications are currently 

based primarily on current pay. With 

the revisions in this final rule, AAJs and 

ALJs that are new to Federal 

employment or reappointed after a 

break in service may have pay set based 

on qualifications with consideration 

given to the pay received by AAJs or 

ALJs, respectively, with similar 

qualifications and in similar positions. 

This means that we expect a lower risk 

of bias because salary history, a factor 

known to perpetuate gender and racial/ 

ethnic biases, is being removed from 

consideration. 

Pay Systems Outside of Title 5 

An agency noted that the proposed 

revisions would not apply to pay 

systems under authorities outside of 

title 5 of the United States Code and 

implied that implementing these 

changes for the title 5 pay systems but 

not for other pay systems would result 

in some sort of inequity. Comment 52. 

Another agency asked whether OPM’s 

proposed regulatory changes would 

apply to employees under the 

Department of Defense Civilian 

Acquisition Workforce Personnel 

Demonstration Project (AcqDemo) or 

Science and Technology Reinvention 

Laboratories (STRL). Comment 57. OPM 

proposed revising the GS, prevailing 

rate system, AAJ, and ALJ regulations 

because OPM has authority to regulate 

pay setting for these systems under 5 

U.S.C. 5333, 5338, 5343(c), 5372(c), and 

5372b(b). The regulatory changes do not 

apply to AcqDemo, which is authorized 

under 10 U.S.C. 1762, or to STRL, 

which is authorized under 10 U.S.C. 

4121, as the Department of Defense 

waived provisions of title 5 pertaining 


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5744 Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 

to setting pay for GS employees under 

these demonstration projects’ 

authorizing legislation and 5 U.S.C. 

chapter 47. See 82 FR 52104 and 87 FR 

72462. 

We note, however that under section 

12(b) of E.O. 14035, the head of each 

agency that administers a pay system 

other than one established under title 5 

of the United States Code must review 

the agency’s regulations and guidance 

and, as appropriate and consistent with 

applicable law, revise compensation 

practices to address any pay inequities 

and advance equal pay. OPM will be 

requesting agency reports on any 

revisions to compensation practices 

made to implement the direction in E.O. 

14035. 

Impact on Recruitment 

The commenters who categorically 

disagreed with the proposed rule and 

those commenters who only cited 

opposition to portions were largely 

concerned that prohibiting agencies 

from using a candidate’s salary history 

to set pay would hurt the Federal 

Government’s ability to recruit 

employees, especially for occupations 

for which non-Federal salaries exceed 

Federal salaries. See, e.g., Comments 6, 

8, 9, 18, 21, 23, 26, 35, 52, 57, 61. 

Conversely, several commenters 

argued that prohibiting consideration of 

salary would improve recruitment 

because it forces consideration of more 

equitable factors in setting pay. See, e.g., 

Comments 17, 33, 44, 51, 56. For 

example, one union noted that 

eliminating salary history refocuses 

‘‘consideration on . . . factors such as 

the nature and necessity of the job to the 

agency, disparities between Federal and 

non-Federal salaries for similar 

positions’’ and comparability to pay 

received by similarly qualified 

candidates for similar positions. 

Comment 44. An organization, citing a 

working paper summarizing a field 

experiment, noted that ‘‘[r]esearch 

shows that when employers are not able 

to rely on salary history to set pay, 

employers collect more information 

from candidates and ask more 

substantive and probing questions to 

evaluate an applicant for the job.’’ 

Comment 56. Many commenters cited as 

a benefit the stronger emphasis on a 

candidate’s knowledge and skills. See, 

e.g., Comments 10, 57. 

An organization commented that 

changing Federal Government hiring 

practices to be more equitable ‘‘will 

likely result in economy-wide gains as 

the federal government will be better 

able to attract and hire a wider pool of 

workers.’’ Comment 33. The 

organization also noted that the revised 

practices could improve retention, 

noting that ‘‘removing salary history 

from the application and interview 

process can contribute to a sense of a 

fair and equitable organization culture 

that can lead to increased retention and 

talent attraction’’ since ‘‘workers who 

report a sense [of] unfairness in the 

workplace are more likely to voluntarily 

leave their job.’’ Id. 

An agency suggested that the salary 

history ban would improve its ability to 

recruit and retain ‘‘highly skilled 

employees with specific technical 

expertise’’ due to the perception of the 

Federal Government as an ideal 

employer. Comment 51. It argued that 

the ‘‘halo effect’’ of a salary history ban 

was an important tool for competing in 

tight labor markets. Id. 

OPM agrees that this rule will have a 

positive impact on recruitment and 

believes that any recruitment challenges 

resulting from this rule will be minimal. 

Agencies will still be able to set pay 

above the minimum of the rate range to 

recruit new employees based on other 

applicable factors. For example, one of 

the factors agencies will be able to 

consider when setting pay under 5 CFR 

531.212(c) is whether there are 

significant disparities between Federal 

and non-Federal salaries for the skills 

and competencies required in the 

position to be filled. 

Several commenters, including an 

agency, expressed concern that the 

changes would slow down the paysetting process or that agencies will be 

discouraged from using pay flexibilities 

because of the additional work required 

if use of salary history is prohibited in 

setting pay. See Comments 26, 41, 52. 

OPM disagrees that agencies will be 

discouraged from using the pay 

flexibilities that are being revised. 

Instead of being allowed to consider a 

candidate’s salary history, an agency 

can, where a candidate’s superior 

qualifications or an agency’s special 

need merits setting pay above the 

minimum rate, consider one or more 

factors directly related to the position to 

be filled and how pay has been set for 

employees who had similar 

qualifications and who have been newly 

appointed to positions that are similar 

to the candidate’s position, if 

applicable. This information should be 

readily available to agencies and will 

give agencies the ability to increase a 

candidate’s starting pay as appropriate. 

Competing Job Offers 

OPM’s proposal to allow agencies to 

consider a competing job offer when 

setting pay within limitations specified 

in the proposed rule received a 

significant number of comments. 

One commenter said that it was 

‘‘arbitrary and capricious to propose 

that agencies may consider a competing 

offer but to ignore an applicant’s current 

salary or salary history’’ because ‘‘their 

current compensation represents a 

competing offer to the Government’s 

offer.’’ Comment 20. That commenter 

argued that there are racial disparities 

with respect to who ‘‘may be able to 

wait out longer for a competing [job] 

offer than others due to higher wealth.’’ 

Id. Another commenter stated that 

allowing consideration of private sector 

job offers would be ‘‘more available to 

beneficiaries of private sector 

discrimination than to those that have 

been treated unfairly, and those offers 

would precisely reflect the private 

sector salary history that the proposed 

rule disallows directly.’’ Comment 32. A 

commenter expressed that relying on 

competing job offers in negotiation of 

pay ‘‘only serve[s] to perpetuate pay 

disparities and should be eliminated.’’ 

Comment 40. An organization 

commented that a competing job offer 

could be ‘‘another reflection of past pay 

discrimination, bias, negotiation bias, or 

other factors with gender-based 

implications that are irrelevant to a 

candidate’s skills, qualifications, or 

experience.’’ Comment 56. Another 

organization stated that ‘‘women and 

people of color likely have lower 

competing offers or may have none. 

Therefore, using this information to 

determine compensation could 

perpetuate inequality.’’ Comment 61. 

An organization recommended 

revising the regulations ‘‘to require that 

the competing job offer be 

contemporaneous to the Federal offer at 

issue, and to require that the competing 

job offer be bona fide (as certified in 

writing by the applicant) and not, for 

example, be an offer that is made at the 

request of the applicant with no real 

intention of resulting in actual hiring for 

the purpose of affecting pay-setting in 

the hiring agency’s job offer.’’ Comment 

49. 

In contrast, one agency supported 

allowing agencies to consider competing 

job offers as necessary for the agency to 

compete with the private sector. 

Comment 57. 

OPM is persuaded that the same 

principles that apply to consideration of 

salary history apply to consideration of 

a competing job offer. A competing job 

offer could, itself, be based on salary 

history. And, as noted by multiple 

commenters, an individual’s current pay 

is effectively a competing offer. Setting 

pay based on the factors enumerated in 

this final rule is better suited to 

establishing equitable pay than 

comparison to a competing offer. 


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Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 5745 

Because of the rationales for removing 

consideration of salary history and 

based on the comments received, OPM 

is revising this element of its proposed 

rule and, in this final rule, is removing 

a salary documented in a competing job 

offer from the list of factors that an 

agency may consider when setting pay 

above the minimum rate. OPM reiterates 

that agencies will be able to consider 

other applicable factors when setting 

pay above the minimum rate, such as 

significant disparities between Federal 

and non-Federal salaries for the 

required skills and competencies. 

Comments Regarding Specific Pay 

Systems 

SES & SL/ST Pay Systems 

OPM’s proposed rule explained that, 

although the SES and SL/ST pay 

systems are among the pay systems 

administered by OPM, OPM believed 

that it was not necessary to prohibit 

consideration of salary history in the 

SES and SL/ST pay systems because the 

regulations governing those pay systems 

provide a specific list of factors to 

consider when setting pay that does not 

include salary history. Further, the 

gender pay gap for these positions, 

based on September 2021 data, is less 

than one percent. OPM requested 

comments, however, on a wide range of 

topics to inform how OPM could best 

promote pay equity in its pay systems. 

OPM received several comments 

objecting to OPM’s proposal not to 

revise SES and SL/ST pay systems and 

advocating that these positions be 

treated the same as those in the GS, 

prevailing rate, AAJ, and ALJ pay 

systems. See Comments 07, 32, 47, 56, 

62. After further consideration, OPM 

agrees and is amending the regulations 

for the SES and SL/ST pay systems to 

make explicit that salary history and 

competing job offers cannot be 

considered when setting pay for new 

entrants to Federal civilian positions. 

The commenters that disagreed with 

excluding SES and SL/ST pay systems 

from these new rules argued that this 

exclusion created arbitrary 

inconsistency. Id. One commenter 

stated that ‘‘exempting these [SES and 

SL/ST] positions from the strict 

prohibition on considering an 

applicant’s salary history appears 

arbitrary and would create unnecessary 

inconsistencies in the regulations.’’ 

Comment 56. Another commenter 

voiced support for the use of salary 

history, generally, describing it as ‘‘a 

factor that is helpful for setting the 

starting pay’’ but supported either a 

total inclusion or total exclusion of the 

use of salary history across pay systems, 

stating that the exclusion of SES and 

SL/ST ‘‘shows prejudice in applications 

of this policy.’’ Comment 07. 

Commenters also objected to the 

exclusion of SES and SL/ST from this 

rule on the basis that any gender/racial 

pay gap, even below one percent, 

should be addressed. Comments 56, 62. 

A Federal employee-run organization 

stated that ‘‘[t]he salary history ban is a 

critical step towards shrinking unjust 

and inequitable salary gaps, which is 

why we encourage OPM to include all 

positions (including Senior Executive 

Service jobs) unless OPM can provide 

compelling reasons for their exclusion.’’ 

Comment 62. Similarly, when 

commenting on the existing pay gap for 

SES and SL/ST positions, an 

organization stated that ‘‘[a]bsent 

evidence that prohibiting consideration 

of salary history for SES, SL, and ST 

positions would increase the pay gap for 

those positions, the fact that the pay gap 

is small does not provide an adequate 

justification for failing to apply rules 

designed to promote equity to these 

positions.’’ Comment 56. OPM did not 

receive any comments in support of this 

aspect of the proposed rule. 

OPM agrees with the commenters that 

the SES and SL/ST pay regulations 

should be revised consistent with 

changes being made to the pay-setting 

rules for other pay systems. Although 

the SES and SL/ST systems currently do 

not include salary history as a factor 

when setting pay for individuals 

receiving their first appointment as a 

civilian employee of the Federal 

Government, they also do not specify 

that the list of factors is exhaustive. That 

is, the SES and SL/ST pay regulations 

mandate what must be considered when 

setting an initial rate of pay—to include 

merit-based factors such as the nature 

and quality of the individual’s 

experience, qualifications, 

accomplishments, and current 

responsibilities, which could be read to 

allow for the consideration of additional 

factors such as salary history. 5 CFR 

534.404; 5 CFR 534.506. Similarly, 

agencies currently have broad discretion 

in setting pay for an individual being 

reappointed to the SES following a 

break in SES service and for 

reappointment to an SL or ST position. 

5 CFR 534.404(i); 5 CFR 534.506(c). 

OPM agrees with commenters that 

consideration of salary history for SES 

and SL/ST positions presents the same 

concerns as for the GS, prevailing rate, 

AAJ, and ALJ pay systems. Further, 

even though the SES and SL/ST pay 

systems do not have a significant pay 

gap, eliminating consideration of salary 

history information, as discussed above, 

is most consistent with merit system 

principles and can help prevent 

inequitable pay discrepancies from 

arising. Salary history also is unlikely to 

reflect an individual’s qualifications or 

fitness for a position relative to the 

qualifications of other new appointees. 

Therefore, we are adding language to the 

SES and SL/ST pay regulations 

explicitly prohibiting the use of salary 

information for appointees who are 

entering the Federal Government for the 

first time and prohibiting the use of 

non-Federal salary information upon 

reappointment to an SES, SL, or ST 

position. 

Unlike the GS, prevailing rate, AAJ, 

and ALJ pay systems for which OPM is 

adding a requirement for agencies to 

implement policies for setting pay for 

current and former Federal employees, 

OPM is not adding a similar provision 

for the SES and SL/ST pay systems. The 

regulations for SES pay already require 

agencies to have a plan for setting and 

adjusting rates for SES members. 5 CFR 

534.404(g). With respect to setting 

initial pay, plans must provide for 

transparency in pay setting, may 

consider the executive’s scope of 

authority and level of responsibility in 

the agency, and must consider the 

distribution of pay rates within the SES 

rate range. Id. Similarly, the SL/ST pay 

system regulations require an agency to 

have written procedures for setting pay. 

5 CFR 534.505. The procedures must 

provide for transparency in pay setting. 

Id. These written SES and SL/ST plans 

already address the pay-setting issues 

this final rule requires agencies to 

develop for the GS, prevailing rate, AAJ 

and ALJ pay systems. 

General Schedule Pay Setting 

OPM received a number of comments 

related specifically to the General 

Schedule pay system and the General 

Schedule regulations. While some of 

these comments implicate issues that 

affect each of the pay systems at issue 

in this final rule, we address the General 

Schedule-specific comments here. 

An agency suggested modifying or 

eliminating 5 CFR 531.211(a), which 

requires that pay be set at the minimum 

rate. Comment 30. OPM cannot 

eliminate this regulation because it 

implements the law in 5 U.S.C. 5333. 

The statute states, ‘‘New appointments 

shall be made at the minimum rate of 

the appropriate grade’’ and provides 

OPM with authority to prescribe 

regulations to allow setting pay above 

the minimum rate of the grade based on 

considerations such as existing pay, the 

candidate’s unusually high or unique 

qualifications, or a special need of the 

Government for the candidate’s services. 

While the statute authorizes regulations 


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5746 Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 

21OPM has a fact sheet on NAFI employees 

moving to GS positions, which is based on the law 

in 5 U.S.C. 5334(f). 

that provide pay-setting flexibility, the 

default is to have pay set at the 

minimum of the grade. Also, while the 

statute refers to consideration of 

‘‘existing pay,’’ it is listed as an example 

of what OPM regulations may consider. 

As discussed in this final rule and the 

proposed rule, OPM has determined to 

prohibit consideration of existing pay or 

salary history when setting pay above 

the minimum rate of a GS grade. 

An agency questioned the 

applicability of 5 CFR 531.212 to 

nonappropriated fund instrumentality 

(NAFI) employees who move to GS 

positions. Comment 52. As stated in 5 

CFR 531.212(a)(4), employees who 

move from a NAFI position to a GS 

position with a break in service of 3 

days or less and without a change in 

agency are not eligible to have pay set 

under 5 CFR 531.212 because their 

NAFI employment is considered 

employment by the Federal 

Government. Such NAFI employees are 

covered by the regulations in 5 CFR 

531.216, which allow consideration of a 

NAFI employee’s highest previous rate 

when setting pay. NAFI employees who 

are not covered by 5 CFR 531.216 (i.e., 

those who have a break in service of 

more than 3 days or a change in agency 

upon movement to a GS position) may 

be eligible to have their pay set under 

the GS superior qualifications and 

special needs pay-setting authority at 5 

CFR 531.212, as revised by this final 

rule.21

An agency was concerned that OPM 

does not ‘‘have the agency data to 

accurately state whether salary history 

was the basis for justifying [setting pay 

above step 1 in the GS system] or 

whether it was one of the other eight 

factors considered.’’ Comment 45. The 

agency recommended ‘‘[mandating] . . . 

that setting pay above step 1 cannot be 

based solely on salary history,’’ that 

agencies ‘‘communicate to applicant/ 

candidate/selectee that they are not 

required to provide any salary history,’’ 

and that ‘‘OPM request the data/ 

information they are lacking to make a 

more informed decision regarding the 

proposed removal of this factor.’’ 

Comment 52. Another commenter also 

suggested that OPM collect more data. 

OPM does not believe that it is practical 

to ask agencies to submit the written 

documentation of their justifications to 

use the superior qualifications and 

special needs pay-setting authority that 

is required by 5 CFR 531.212(e) when it 

was used for over 9,000 GS employees 

in fiscal year 2021. In 2013, some 

agencies reported that their policy on 

this authority required the use of a job 

candidate’s existing salary, or that 

existing salary must be considered when 

setting pay of a new GS employee. 

While OPM revised its fact sheet on the 

authority in 2015 to remind agencies 

that existing salary is only one factor an 

agency may use when setting pay under 

this authority, the regulations have not 

changed since that time so agency 

policies may not have changed either. 

OPM will update its guidance on setting 

pay to reflect the changes made by this 

final rule. 

A Federal employee-run organization 

‘‘agree[d] that it is prudent for agencies 

to consider the wages of existing 

comparable peers when setting a new 

employee’s pay’’ but encouraged ‘‘OPM 

to clarify that agencies should not look 

at the actual salary a comparable peer 

made when starting, but rather the grade 

and step the peer was originally given.’’ 

Comment 62 (emphasis added). The 

organization suggested revising 5 CFR 

531.212(c)(1) to replace ‘‘How pay has 

been set for’’ with ‘‘Which grade and 

step had been given to’’ and replacing 

‘‘have’’ with ‘‘had’’ in the paragraph 

reading ‘‘How pay has been set for 

employees who had similar 

qualifications (based on the level, type, 

or quality of the candidate’s skills or 

competencies or other qualities and 

experiences) and who have been newly 

appointed to positions that are similar 

to the candidate’s position (based on the 

position’s occupational series, grade 

level, organization, geographic location, 

or other job-relevant factors), if 

applicable.’’ Id. Another organization 

similarly supported ‘‘requiring the 

hiring agency to search comparative pay 

of current employees at the hiring 

agency when setting pay for new hires, 

with measures taken to account for 

differences in locality pay and post-hire 

merit-based pay increases, such as 

within-grade increases and quality step 

increases.’’ Comment 49. The proposed 

rule accounts for the grade level and 

geographic location (which would 

account for differences in locality pay 

and other location-based payments 

applicable to GS employees) of the 

position. However, OPM has clarified in 

this final rule that agencies must 

consider the step at which pay has been 

set for employees who had similar 

qualifications and who have been newly 

appointed to positions that are similar 

to the candidate’s position. 

Another organization commented that 

consideration of labor market factors to 

set a higher than minimum rate can 

maintain pay inequities. The regulations 

in 5 CFR 531.212 allow an agency to 

consider ‘‘existing labor market 

conditions and employment trends, 

including the availability and quality of 

candidates for the same or similar 

positions.’’ Comment 61. The 

organization writes that ‘‘workers who 

enter during a competitive labor market 

could earn a higher wage than workers 

who perform the same job but entered 

during a less competitive labor market’’ 

and that ‘‘this is fundamentally at odds 

with the notion of equal pay,’’ and 

‘‘when the affected workers are women 

or people of color, this approach can 

exacerbate gender and racial pay 

inequities.’’ Id. We are not revising the 

regulations in response to this comment. 

This factor—which an agency has 

discretion to consider—recognizes that 

it may be difficult to recruit employees 

during a competitive labor market, 

especially when the agency has a 

special need for the candidate’s services 

and may need to set pay at a higher rate 

in the rate range. Agencies will be 

required to consider how pay has been 

set for employees who had similar 

qualifications (based on the level, type, 

or quality of the candidate’s skills or 

competencies or other qualities and 

experiences) and who have been newly 

appointed to positions that are similar 

to the candidate’s position (based on the 

position’s occupational series, grade 

level, organization, geographic location, 

or other job-relevant factors), if 

applicable. This required factor will 

better advance pay equity. 

A commenter asked, with respect to 5 

CFR 531.212(e) for the GS pay system, 

whether it would be permissible for 

agencies to create a uniform policy by 

which a certain step is always assigned, 

such as step 4, for candidates with 

similar qualifications for similar 

positions. Comment 14. The commenter 

suggested that this would ensure that all 

candidates that benefit from the 

regulation always have their pay set the 

same to reduce variability in outcomes. 

Id. OPM notes that agencies may create 

such policies if the agency also 

approves and documents each 

determination to use the authority 

consistent with 5 CFR 531.212(e). 

OPM proposed adding in 5 CFR 

531.221 that an agency must establish a 

policy regarding use of the GS 

maximum payable rate (MPR) rule that 

included elements specified in the 

proposed rule, such as considering how 

pay has been set for employees 

performing similar work in the 

organization (based on the position’s 

occupational series, grade level, types of 

duties, or other job-relevant factors). 

One agency suggested requiring 

agencies in most circumstances to 

provide a salary offer no lower than the 

highest rate of pay the employee 


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Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 5747 

22 83 FR 32755 (July 10, 2018). 

previously received in another Federal 

job (the employee’s highest previous 

rate or HPR). OPM is not making this 

change. An agency’s decision to use the 

MPR rule or how to set pay under the 

MPR rule may be influenced by 

different factors, such as budget, and 

under this final rule must reflect 

consideration of how pay has been set 

for employees performing similar work 

in support of pay equity. Under the 

regulations, agencies will list these 

factors in their policies. Agencies may 

establish policies under which they will 

always set pay at the employee’s MPR. 

A commenter recommended 

additional revisions, including that 

OPM require that agencies post and 

maintain their MPR policies on their 

websites and that agency decisions 

regarding any exceptions to these 

policies be made on a centralized basis. 

OPM declines to add these requirements 

to the rule. OPM will be issuing 

implementation guidance separately, 

which will include best practices. 

The same commenter also 

recommended that OPM permit 

agencies to set an employee’s salary up 

to 15 percent higher than an employee’s 

highest previous rate in recognition that 

some Federal agencies have the 

independent statutory authority to 

provide benefits that are greater than 

those provided under title 5 of the 

United States Code to most Federal 

employees. This recommendation is 

beyond the scope of this rulemaking. 

This rule is not intended to address pay 

discrepancies resulting from 

independent agency authority to 

provide alternative compensation and 

benefits. 

Prevailing Rate Pay Setting 

OPM did not receive any comments 

specific to the prevailing rate pay 

systems regulations. Accordingly, OPM 

is adopting its proposals with two 

changes, as described above. First, as 

discussed in the Competing Job Offers 

section, in this final rule, an agency will 

not be able to consider a competing job 

offer when setting pay for a new 

prevailing rate pay system employee. 

Second, we are also clarifying that 

agencies must consider the ‘‘step’’ at 

which pay has been set (instead of 

‘‘pay’’) for employees who had similar 

qualifications and who have been newly 

appointed to positions that are similar 

to the candidate’s position. 

Administrative Appeals Judge Pay 

Setting 

Under 5 CFR 534.604, an agency may 

offer an AAJ applicant with prior 

Federal service a rate up to the lowest 

rate of basic pay of the AAJ pay system 

that equals or exceeds the employee’s 

highest previous rate of basic pay in a 

Federal civil service position, not to 

exceed the rate of basic pay for AA–6. 

OPM proposed adding that an agency 

must establish a policy regarding use of 

this provision that includes elements 

specified in the regulations, including 

that the policy must require 

consideration of how pay has been set 

for other AAJs if the agency decides to 

use this authority. 

Also under the AAJ pay-setting 

regulations, an agency may offer an AAJ 

applicant with superior qualifications 

who is not a current Federal employee 

a higher than minimum rate when such 

a rate is clearly necessary to meet the 

needs of the Government. An agency 

may pay a higher than minimum rate of 

pay that is next above the applicant’s 

existing pay or earnings, up to the 

maximum rate AA–6. OPM proposed 

several revisions to this authority, 

including allowing agencies to set pay at 

any rate within the AAJ pay system. 

OPM proposed adding language 

requiring an agency to document the 

superior qualifications of the applicant, 

the need of the Government for the 

applicant’s services, consideration of 

how pay has been set for AAJs who had 

similar qualifications (based on the 

level, type, or quality of the appointee’s 

skills or competencies or other qualities 

and experiences) and have been newly 

appointed to positions that are similar 

to the applicant’s position (based on the 

position’s occupational series, grade 

level, organization, geographic location, 

or other job-relevant factors), if 

applicable, and an explanation of the 

factors that were used to justify the rate 

at which the employee’s pay is set. 

Factors an agency could consider 

include the success of recent efforts to 

recruit for the same or similar AAJ 

positions or significant disparities 

between Federal and non-Federal 

salaries for the skills and competencies 

required in the position to be filled. 

This documentation would allow an 

agency to evaluate for equity purposes 

how pay has been set and reconstruct 

the action if necessary. 

An organization supported OPM’s 

proposal to require agencies to 

document the superior qualifications of 

AAJs when setting pay above the 

minimum rate. Comment 61. 

As discussed in prior sections, in this 

final rule, an agency will not be 

permitted to consider an applicant’s or 

former AAJ’s salary history or a salary 

documented in a competing job offer. 

OPM is modifying its proposed 

regulatory text to make clear that, when 

setting pay for a former AAJ, an agency 

may set pay using either the highest 

previous Federal rate of pay (which 

necessarily considers salary history) or 

the superior qualifications authority; 

however, if an agency uses the superior 

qualifications authority, then the agency 

may not consider salary history. OPM is 

adopting the remainder of its proposal 

without change. 

Administrative Law Judge Pay Setting 

Under 5 CFR 930.205, upon 

appointment to a position at level AL– 

3, an ALJ is paid at the minimum rate 

unless the agency chooses to set pay at 

a higher rate based on prior service or 

superior qualifications. OPM proposed 

revising § 930.205 to add that, before an 

agency sets pay based on the ALJ’s 

highest previous Federal rate of basic 

pay, the agency must establish a policy 

that includes certain elements specified 

in the regulations, including that the 

policy must require consideration of 

how pay has been set for other ALJs if 

the agency decides to use this authority. 

OPM also proposed revisions to the 

regulations on setting pay based on the 

ALJ applicant’s superior qualifications 

in § 930.205. Agencies would be able to 

submit a request to OPM to set pay at 

any rate within the AL–3 level. 

Agencies’ requests to OPM would be 

required to include: (1) the applicant’s 

or former ALJ’s superior qualifications; 

(2) how pay has been set for ALJs who 

had similar qualifications (based on the 

level, type, or quality of the appointee’s 

skills or competencies or other qualities 

and experiences) and have been newly 

appointed to positions that are similar 

to the ALJ’s position (based on the 

position’s occupational series, grade 

level, organization, geographic location, 

or other job-relevant factors), if 

applicable; and (3) the proposed rate of 

basic pay and justification for that rate. 

Agencies would not be able to consider 

an applicant’s or former ALJ’s salary 

history or the salary in a competing job 

offer. Other factors an agency could 

consider include the success of recent 

efforts to recruit for the same or similar 

ALJ positions or significant disparities 

between Federal and non-Federal 

salaries for the skills and competencies 

required in the position to be filled. 

OPM also proposed minor revisions to 

reflect changes resulting from Executive 

Order 13843 ‘‘Excepting Administrative 

Law Judges from the Competitive 

Service,’’ signed July 10, 2018.22 For 

example, OPM proposed to modify the 

language of § 930.202 to remove the 

reference to a ‘‘certificate of eligibles’’ to 

reflect that ALJ positions are now 

excepted service. 


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23Office of Personnel Management. ‘‘Goal 1: 

Position the federal government as a model 

employer.’’ https://www.opm.gov/about-us/ 

strategic-plan/goal-1-position-the-federalgovernment-as-a-model-employer./ 24 65 FR 79433 (Dec. 19, 2000). 

An organization noted that ‘‘the past 

practice of relying upon salary history 

has, in certain instances, limited the 

starting salary potential of newly hired 

ALJs without fairly considering the 

experience and expertise these newly 

hired individuals would bring to the 

position.’’ Comment 36. The 

organization stated it supports the goal 

of ‘‘[increasing] pay equity by removing 

reliance on salary history as a central 

factor for setting pay, while retaining 

the use of past Federal salary as the 

minimum starting salary for a newly 

hired ALJ with a history of Federal 

employment.’’ Id. The organization also 

requested that OPM consider ‘‘taking 

steps to adjust. . . the maximum salary 

of a Federal ALJ [to be] equivalent to the 

salary paid to a Federal magistrate or 

bankruptcy judge.’’ Id. OPM is not 

adopting this recommendation. The 

President determines the appropriate 

adjustment for each level in the ALJ pay 

system by executive order. See 5 U.S.C. 

5372(b)(4). 

Another organization supported 

OPM’s proposal to require agencies to 

document the superior qualifications of 

ALJs when setting pay above the 

minimum rate. Comment 61. 

As discussed in prior sections, in this 

final rule, an agency will not be able to 

consider an applicant’s or former ALJ’s 

salary history (defined as existing salary 

or prior salary) or a salary documented 

in a competing job offer when setting 

pay based on an applicant’s superior 

qualifications. OPM is adopting the 

remaining aspects of its proposal 

without change. 

Expected Impact of This Final Rule 

A. Statement of Need 

OPM is issuing this rule pursuant to 

its authority to issue regulations 

governing the GS, prevailing rate, AAJ, 

ALJ, SES, and SL/ST pay systems in 5 

U.S.C. 5333, 5338, 5343, 5372, 5372b, 

5376, and 5382. The purpose of this 

final rule is to advance pay equity 

consistent with merit system principles 

and position the Federal Government as 

a model employer while reaping the 

benefits that this policy will have for the 

economy and efficiency of the 

Government workforce. This rule is also 

consistent with diversity, equity, 

inclusion, and accessibility principles. 

Based on September 2021 EHRI data 

covering nonseasonal, full-time, 

permanent Executive branch employees, 

gender and racial pay gaps persist. On 

average for all race/ethnicity groups 

combined, women are paid 94 cents for 

every dollar paid to a man—a gender 

pay gap of 6 percent. This raw, 

unadjusted gender pay gap is before 

considering any factors that might 

explain the gap, such as occupation. 

Because salary history is not always a 

good proxy for worker value, 

experience, and expertise and setting 

pay based on a candidate’s salary 

history could perpetuate a pay rate that 

was inequitable, the Federal 

Government is taking steps to address 

the treatment of salary history and 

establish policies that support equitable 

pay determinations anticipating that 

these policies in turn will also support 

certain economies and efficiencies for 

the Federal Government. Currently, 

certain regulations allow agencies to 

consider a candidate’s salary history or 

use a competing salary offer as a factor 

in setting initial pay. Agencies are not 

required by OPM’s current regulations 

to consider the assigned grades and 

steps for employees performing similar 

work or candidates who had similar 

qualifications, if applicable, when using 

pay-setting flexibilities. Nor are agencies 

required to have policies regarding use 

of an employee’s highest previous 

Federal rate to set pay. 

OPM invited comments on whether 

there are additional ways that the 

Federal Government can be a model 

employer with respect to pay equity and 

received several responses. A union 

recommended that OPM ‘‘emphasize 

pay equity and ensure employee 

qualifications and the needs of agencies 

struggling to hire and retain qualified 

employees are both adequately 

considered in pay-setting decisions.’’ 

Comment 44. The union’s 

recommendations are generally 

consistent with this final rule. An 

organization recommended that OPM 

‘‘add language formally stating that the 

Federal Government intends to serve as 

a model employer with respect to pay 

equity. . . maintain oversight and track 

how these pay-setting authorities are 

employed. . . [and] continue to use the 

General Schedule or other similar 

regimented pay schedules.’’ Comment 

49. We note that OPM’s strategic plan 

for fiscal years 2022–2026 already states 

that ‘‘OPM strives for the Federal 

Government to be a model employer 

where every Federal job provides fair 

pay and benefits that reflect the diverse 

needs of the workforce.’’ 23 This final 

rule does not modify OPM’s current 

oversight responsibilities regarding the 

use of pay-setting flexibilities and does 

not eliminate any Governmentwide pay 

system, such as the GS system, which 

would require a statutory change. 

Several commenters offered other 

suggestions for ways the Federal 

Government could improve pay equity. 

These included examining veterans’ 

preference, ‘‘performing a market 

analysis and paying civil servants fair 

wages,’’ and shortening the required 

waiting period that is required to 

advance to the next higher step or rate 

or reducing the number of steps in the 

GS pay system or, more generally, 

reforming how agencies set pay upon 

promotion. Comments 58, 02, 08, 48, 

respectively. 

These suggestions would require a 

statutory change— 

• Veterans’ preference is provided by 

5 U.S.C. 2108 and 2108a. 

• GS, FWS, AAJ, and ALJ pay 

schedules are typically adjusted 

annually as provided by the statutes that 

govern those pay systems, which 

include consideration of changes in the 

cost of labor or, in the case of the FWS, 

prevailing rates (5 U.S.C. 5303, 5304, 

5304a, 5343, 5372b, and 5372). 

• The waiting periods that are 

required to advance to the next higher 

step or rate and the number of steps in 

the GS pay system are specified in 5 

U.S.C. 5335. 

• Pay setting upon promotion for GS 

employees is governed by 5 U.S.C. 5334. 

Commenters also suggested regulating 

pay-banding systems more strictly, fully 

implementing the Federal Employees 

Pay Comparability Act (FEPCA) of 1990, 

allowing agencies to establish 

developmental programs that allow for 

‘‘retained pay’’ when changing career 

fields, and providing current Federal 

employees with more information on 

promotions including specific 

benchmarks that employees must 

achieve to move between pay levels. 

Comments 09, 18, 34, 56, respectively. 

OPM does not administer any pay 

banding systems—they are administered 

by the agency that has the pay banding 

system under its independent statutory 

pay authority or under a demonstration 

project authority, following provisions 

under 5 U.S.C. chapter 47. OPM has 

prescribed criteria under 5 U.S.C. 9509 

for the U.S. Department of the Treasury 

to follow in exercising its authority to 

establish one or more pay banding 

systems covering all or any portion of 

the Internal Revenue Service 

workforce.24 Any such system is 

administered by the U.S. Department of 

the Treasury and is outside the scope of 

this final rule. 


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Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 5749 

25The White House. ‘‘Letter to the Speaker of the 

House and President of the Senate on the 

Alternative Plan for Pay Adjustments for Civilian 

Federal Employees.’’ https://www.whitehouse.gov/ 

briefing-room/presidential-actions/2023/08/31/ 

letter-to-the-speaker-of-the-house-and-thepresident-of-the-senate-on-the-alternative-plan-forpay-adjustments-for-civilian-federal-employees-2/. 

26Office of Personnel Management. 

‘‘Classification and Qualifications.’’ https://

www.opm.gov/policy-data-oversight/classificationqualifications/. 

27Nonappropriated fund FWS prevailing rate 

employees are not reported to EHRI. 

28Agencies must seek OPM pre-approval to use 

this pay-setting flexibility for ALJs. 5 CFR 930.205. 

Several other of the above 

recommendations are also outside the 

scope of this final rule— 

• With regard to the FEPCA 

recommendation, on August 31, 2023, 

the President determined that it was 

appropriate to exercise his authority to 

set alternative pay adjustments for 2024 

pursuant to 5 U.S.C. 5303(b) and 5 

U.S.C. 5304a. These alternative pay 

adjustments mean FEPCA will continue 

to not be implemented fully.25

• OPM regulations at 5 CFR 

536.301(a)(5) provide for retained pay 

when an agency places an employee in 

a formal employee development 

program that is generally utilized 

Governmentwide, such as the Recent 

Graduates Program. Agencies have 

discretion to determine whether to use 

formal employee development programs 

generally utilized Governmentwide to 

fill their positions. 

• Information on classification and 

qualifications for GS and FWS positions 

is available on OPM’s website.26

Commenters also suggested 

prohibiting applicants from placing pay 

on their resumes, prohibiting agencies 

from asking about gaps in employment, 

and considering how many hours a 

candidate works in a non-Federal 

position when setting pay. See, e.g., 

Comments 09, 23, 60, 20. 

This final rule does not address what 

topics may be discussed during salary 

negotiations, including what 

information a job candidate may share 

with an agency on an employment 

application or resume, as an agency 

cannot completely control what 

information a job candidate may 

provide. See the ‘Additional 

Considerations Regarding Setting Pay’ 

section for further discussion. Instead, 

this final rule focuses on the agency’s 

action by removing from consideration 

any salary history information it may 

receive. Because OPM is requiring 

agencies not to consider salary history, 

the number of hours a candidate works 

in a non-Federal position becomes 

irrelevant, since there is no reason to 

standardize salary information (for 

example, annualizing a non-Federal 

hourly rate to compare with annual 

salaries). 

Another suggestion was to take strong 

disciplinary action against managers 

who discriminate when setting pay to 

deter deliberate pay discrimination from 

occurring. Comment 49. An employee’s 

violation of an agency’s regulations or 

policies may cause the employee’s 

agency to take disciplinary or corrective 

action using well-established tools 

available to agencies for addressing 

performance issues and misconduct. If 

an individual fails to follow pay-setting 

policy, it could be a performance or 

misconduct issue addressable under 5 

U.S.C. chapters 43 or 75. 

B. Impact 

The rule will impact pay setting for 

new Federal hires in the affected pay 

systems when agencies exercise 

discretionary authority to set pay within 

the rate range. The rule may also impact 

pay setting for current Federal 

employees for certain personnel actions 

as agencies review or develop policies 

addressing use of an employee’s highest 

previous rate of pay received in a 

previous Federal civilian position. 

Based on data regarding non-seasonal, 

full-time permanent Executive branch 

employees reported to OPM’s EHRI 

database as of September 2021, there 

were more than 1.3 million GS 

employees, approximately 160,000 FWS 

(the largest pay system under the 

prevailing rate systems) appropriated 

fund employees,27 8,000 SES, 900 SL 

positions, 400 ST positions, 1,700 ALJs, 

and 63 AAJs in the Federal Government. 

This included approximately 97,000 

new hires in the GS pay system, 13,000 

new FWS appropriated fund hires, 700 

new hires in the SES pay system, 24 

new SL hires, 10 new ST hires, 17 new 

hires in the ALJ pay system, and 3 new 

hires in the AAJ pay system. 

In fiscal year 2021, 9.5 percent of new 

GS employees (9,216 individual pay 

actions/authorizations) had their pay set 

using the superior qualifications and 

special needs pay-setting authority in 5 

CFR 531.212. With respect to the 

prevailing rate pay system, agencies 

used the authority in 5 CFR 532.403(b) 

to set pay above the minimum rate of 

the appropriate grade for around 210 

appointees with special qualifications. 

During the same period, one agency set 

pay above the minimum rate for an ALJ 

applicant based on their superior 

qualifications under 5 CFR 930.205(f)(2) 

with OPM approval.28 No agencies 

reported setting pay under 5 CFR 

534.604 based on an AAJ’s superior 

qualifications. 

Because this pay authority is 

delegated to agencies and agencies’ 

written justifications for its use are not 

reported to EHRI, OPM does not have 

information regarding which factor or 

factors were used to justify the rate at 

which each new employee’s pay is set 

under the GS superior qualifications 

and special needs pay-setting authority 

or similar prevailing rate, ALJ, and AAJ 

pay-setting authorities. As a result, we 

are not able to predict with specificity 

how the regulations will affect the rate 

at which pay is set for candidates based 

on their special or superior 

qualifications or a special agency need. 

Although OPM does not have data on 

the specific factors agencies used to 

justify use of these pay-setting 

authorities, OPM reviewed hiring and 

pay data from fiscal year 2021, which 

demonstrated the extent to which 

agencies set pay under the GS superior 

qualifications and special needs paysetting authority, the occupations for 

which these pay authorities are used, 

and how use of these authorities varied 

by gender. Looking more specifically at 

the 9.5 percent of new GS employees 

(9,216 individual pay actions/ 

authorizations) who had their pay set 

using the superior qualifications and 

special needs pay-setting authority in 5 

CFR 531.212, 21.5 percent of those were 

authorized for employees in the 06XX 

Medical, Hospital, Dental, and Public 

Health occupational family, 17.4 

percent were authorized for employees 

in the 08XX Engineering and 

Architecture occupational family, 12.1 

percent were authorized for employees 

in the 03XX General Administrative, 

Clerical, and Office Services 

occupational family, and 10.6 percent 

were authorized for employees in the 

22XX Information Technology 

occupational family. The authority was 

used more frequently (on a percentage 

basis) for men than for women: 11.2 

percent of non-seasonal full-time 

permanent GS new hires who were men 

had their pay set using the superior 

qualifications and special needs paysetting authority, but only 7.9 percent of 

non-seasonal full-time permanent GS 

hires who were women had their pay set 

using the superior qualifications and 

special needs pay-setting authority. 

Of the four occupational families that 

had the majority of the superior 

qualifications and special needs paysetting authorizations, the two 

occupational families that were 

overwhelmingly male dominated (08XX 

Engineering and Architecture and 22XX 

Information Technology) are also the 

occupational families that had the 


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5750 Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 

29Equal Employment Opportunity Commission. 

‘‘Overview of Federal Sector EEO Complaint 

Process.’’ https://www.eeoc.gov/federal-sector/ 

overview-federal-sector-eeo-complaint-process. 

30Equal Employment Opportunity Commission. 

‘‘Federal Sector Reports’’. https://www.eeoc.gov/ 

federal-sector/reports. 

31Equal Employment Opportunity Commission. 

‘‘Instructions to Federal Agencies for EEO MD– 

715.’’ https://www.eeoc.gov/federal-sector/ 

management-directive/instructions-federalagencies-eeo-md-715-1. 

greatest percentage of new hires with 

pay set under the superior qualifications 

and special needs pay-setting authority. 

In the 08XX occupational family 

(Engineering and Architecture), 21 

percent of new hires were women, and 

79 percent of new hires were men. 

About 29 percent of new hires in the 

08XX occupational family had their pay 

set using the superior qualifications and 

special needs pay-setting authority. In 

the 22XX occupational family 

(Information Technology), 24 percent of 

new hires were women, and 76 percent 

of new hires were men. About 22 

percent of new hires in the 22XX 

occupational family had their pay set 

using the superior qualifications and 

special needs pay-setting authority. 

Conversely, in the 06XX occupational 

family (Medical, Hospital, Dental, and 

Public Health), 79 percent of new hires 

were women, and 21 percent of new 

hires were men, but only about 9 

percent of new hires had their pay set 

using the superior qualifications and 

special needs pay-setting authority. 

Similarly, in the 03XX occupational 

family (General Administrative, 

Clerical, and Office Services), 54 

percent of new hires were women, and 

46 percent of new hires were men, but 

only about 8 percent of new hires had 

their pay set under the superior 

qualifications and special needs paysetting authority. 

OPM does not collect data on agency 

use of the other pay flexibilities that this 

regulation will revise (that is, the GS 

maximum payable rate rule in 5 CFR 

531.221–223, the authority in 5 CFR 

532.405 to set pay for a prevailing rate 

employee based on their highest 

previous rate, the authority in 5 CFR 

534.604 to set pay based on an AAJ 

applicant’s Federal highest previous rate 

of basic pay, or the authority in 5 CFR 

930.205(f)(1) to set pay based on an ALJ 

applicant’s highest previous Federal rate 

of basic pay). Because OPM is not 

prohibiting the use of an employee’s 

highest previous Federal rate of pay to 

set pay, OPM does not anticipate that 

the regulatory changes in this final rule 

will result in a change in how 

frequently these pay flexibilities are 

used. 

OPM invited comments on what data 

the Federal Government should 

consider when measuring the effects of 

greater pay equity achieved through a 

salary history ban, including effects on 

Federal worker turnover. 

A professional organization stated 

that OPM should consider possible data 

sources such as exit interviews and 

Equal Employment Opportunity 

Commission (EEOC) data on pay 

discrimination cases. Comment 49. 

OPM does not collect exit interview 

data or data on EEO complaints, which 

are collected and maintained at 

agencies. An overview of the Federal 

Sector EEOC complaint process is 

available on EEOC’s website.29

Employees can appeal agency decisions 

to EEOC, but such data would not be 

complete and may not be readily 

available. EEOC provides annual reports 

on the Federal Workforce,30 but it is 

summary-level data that is not specific 

enough to inform OPM’s analyses of 

these regulatory changes. The 

organization also suggested that OPM 

should consider latitudinal studies 

across a sample of agencies to determine 

if there are differences between different 

hiring agencies and between different 

facilities on how frequently these 

authorities are invoked, and if there are 

any demographic disparities for subject 

employees in when and how these 

authorities are invoked. Id. As 

explained in the proposed rule, OPM 

analyzes the use of pay flexibilities by 

occupation and gender. OPM could also 

examine the use of pay flexibilities by 

racial/ethnic group. Pay flexibilities are 

discretionary so there may be 

differences between agencies’ use of 

these authorities. 

Also in response to OPM’s request for 

comment, an agency suggested that the 

Federal Government should consider 

labor costs. Comment 57. The agency 

stated that ‘‘agencies may be paying 

more without salary history’’ and that 

‘‘the Federal Government should focus 

on career progression or upward 

mobility and associated pay increases 

after a person enters civil service rather 

than starting salary.’’ Id. When 

completing Management Directive 715 

for the EEOC, agencies already explore 

all levels of the workforce to determine 

if EEO groups have the same 

opportunities for career advancement.31

An organization recommended 

comparing the salaries of newly hired 

Federal employees after OPM’s proposal 

is enacted, with a control group of 

employees that would have been subject 

to the rule had it been in effect at time 

of hire, to isolate the effects of a salary 

history ban on wages, pay equity, and 

worker turnover. Comment 33. As these 

are discretionary pay authorities, it 

would be unworkable to identify a 

control group of employees that could 

be appropriately compared to 

employees in which the discretionary 

pay authorities had been used. 

C. Costs 

This rule will affect the operations of 

more than 80 Federal agencies—ranging 

from cabinet-level departments to small 

independent agencies—that have 

employees under the GS, prevailing 

rate, ALJ, AAJ, SES, and SL/ST pay 

systems. We estimate that this rule will 

require individuals employed by these 

agencies to spend time reviewing the 

rule and updating agency policies and 

procedures for the pay flexibilities. For 

this cost analysis, the assumed average 

salary rate of Federal employees 

performing this work will be the rate in 

2023 for GS–14, step 5, from the 

Washington, DC, locality pay table 

($150,016 annual locality rate and 

$71.88 hourly locality rate). We assume 

the total dollar value of labor, which 

includes wages, benefits, and overhead, 

is equal to 200 percent of the wage rate, 

resulting in an assumed labor cost of 

$143.76 per hour. 

We estimate that, in the first year 

following publication of this final rule, 

compliance with this rule would require 

an average of 160 hours of work by 

employees with an average hourly cost 

of $143.76 per hour. This would result 

in estimated costs in that first year of 

implementation of about $23,000 per 

agency, and about $1.8 million 

Governmentwide. There are costs 

associated with administering the pay 

flexibilities in this rule, such as 

surveying and comparing similar 

positions, but not necessarily an 

increase in administrative costs for 

agencies that are already using these pay 

flexibilities. 

A labor organization expressed 

concern that agency HR professionals 

may not have the necessary training to 

set pay based on the factors enumerated 

in the regulations. Comment 41. The 

organization recommended that OPM 

provide mandatory training and 

generate detailed worksheets to help 

generate justifications for pay setting. Id. 

OPM appreciates this suggestion and 

will consider the scope and content of 

implementation guidance, trainings, and 

other means of sharing best practices 

following the publication of this rule. 

Another individual commented that 

OPM did not account for the cost of the 

increased wages that the commenter 

expects will be paid out because of the 

proposal. Comment 28. The commenter 

suggested that the cost impact of the 

proposed rule could be in excess of 

$570 million if the rule is successful in 


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32National Women’s Law Center. ‘‘Asking for 

Salary History Perpetuates Pay Discrimination from 

Job to Job.’’ March 2022. https://nwlc.org/wpcontent/uploads/2020/12/Asking-for-SalaryHistory-2022.pdf. 

33Small, D., Gelfand, M., Babcock, L., and 

Gettman, H. ‘‘Who Goes to the Bargaining Table? 

The Influence of Gender and Framing on the 

Initiation of Negotiation.’’ Journal of Personality 

and Social Psychology, 2007, Vol. 3, No. 4, 600– 

613. 

34 Dallanls, J., Zlatev, J., Halevy, N., and Neale, M. 

‘‘The Dynamics of Gender and Alternatives in 

Negotiation.’’ Journal of Applied Psychology, 2021, 

Vol. 106, No. 11, 1655–1672. 

35Bowles, H., Babcock, L., and Lai, L. ‘‘Social 

Incentives for Gender Differences in the Propensity 

to Initiate Negotiations: Sometimes it Does Hurt to 

Ask.’’ Organizational Behavior and Human Decision 

Processes, 2007, Vol. 103, 84–103. 

36Equal Employment Opportunity Commission. 

‘‘Fact Sheet: Notable EEOC Litigation Involving Pay 

Discrimination.’’ https://www.eeoc.gov/fact-sheetnotable-eeoc-litigation-involving-paydiscrimination. 

37National Academies of Sciences, Engineering, 

and Medicine. ‘‘Evaluation of Compensation Data 

Collected Through the EEO–1 Form.’’ https://nap.

nationalacademies.org/catalog/26581/evaluationof-compensation-data-collected-through-the-eeo-1- 

form. 

eliminating pay gaps. The commenter 

seems to assume that the rule would 

directly result in increases in pay for 

existing employees to close pay gaps. As 

noted in the prior section, the purpose 

of this rule is consistent with Executive 

Orders and OPM statutes and 

regulations, to remove from the paysetting process consideration of a 

variable the agency has found to be 

inequitable. OPM, however, does not 

have authority to raise the pay for 

current employees to achieve equity 

with incoming employees. This rule 

does not purport to systematically 

increase existing pay and therefore 

cannot be the proximate cause of 

commenter’s claimed increased costs to 

the Government. 

D. Benefits 

This final regulation provides the 

opportunity for the Federal Government 

to experience the benefits that certain 

states have found after enacting salary 

history bans, which includes benefits in 

economy and efficiency such as 

promoting equitable pay, improving 

wages and job mobility for workers who 

began their careers during a recession, 

and creating hiring efficiencies such as 

improved recruitment and retention. 

The Federal Government may also 

experience benefits related to increased 

equity and fairness within the Federal 

workforce. 

Salary history bans can help close 

inequitable pay gaps that disadvantage 

women, workers of color, and workers 

who began their career during a 

recession. By enhancing equal treatment 

and compensation of similarly situated 

workers, salary history bans could lead 

to increased job satisfaction, 

commitment, and motivation among 

workers. This may help attract and 

retain a diverse and qualified workforce, 

and result in improved job performance 

and enhanced productivity for the 

employer. In addition to these economic 

gains, the Federal Government may see 

cost savings through reduced turnover, 

saving time and money from avoiding 

new hiring searches and new employee 

trainings. Salary history bans can also 

increase efficiencies by enhancing 

employers’ talent pools.32 In addition, 

by curbing inequitable pay decisions, a 

salary history ban can promote the 

values of equity, human dignity, and 

fairness within the Federal workforce 

described in E.O. 13563. Salary history 

bans can also promote more equitable 

and fairer pay-setting practices that are 

based on workers’ skills, experience, or 

meeting a special agency need and 

eliminate reliance on the pay decisions 

of previous employers for which there is 

no context and that may have been 

arbitrary or potentially discriminatory. 

OPM invited comments on whether 

there is any social science research or 

other evidence OPM should consider 

that suggests that limiting reliance on 

salary history advances equity and/or 

has other workplace benefits including 

for the employer. 

Many commenters referenced a 

variety of social science research papers 

and data that show positive effects of 

salary history bans. See, e.g., Comments 

31, 33, 56, 61, 68. One commenter 

shared three articles regarding gender 

differences in negotiations. The first 

article reported on an experiment that 

found significant gender differences 

when men and women asked for more 

money as compensation for playing a 

game in the absence of overt 

prescriptions to negotiate.33 Framing the 

situations as opportunities for 

negotiation was particularly 

intimidating to women. By contrast, 

framing situations as opportunities for 

asking was much less intimidating to 

women, as this language is viewed as 

more polite and role-consistent. The 

next article reported on an experiment 

that found that men benefitted more 

than women from having a strong 

alternative when negotiating a 

compensation package, which 

supported the author’s hypothesis that 

women suffer a backlash from male and 

female negotiation partners when 

women negotiate assertively.34 The 

authors suggest that ‘‘managers looking 

to reduce gender gaps in the workplace 

may want to install guidelines and 

processes to minimize the possibility 

that such backlash occurs.’’ Id. The 

third article reported on experiments in 

which ‘‘evaluators penalized female 

candidates more than male candidates 

for initiating negotiations [for higher 

compensation].’’ 35 These articles 

suggest that removing consideration of 

salary history may advance gender pay 

equity because it will help promote a 

level playing field between men and 

women in salary negotiations. 

An organization and an individual 

suggested that OPM review pay 

discrimination litigation relating to 

Federal employees and data regarding 

private sector pay discrimination to 

determine the potential benefit of this 

rule in helping to avoid a category of 

pay lawsuits. Comments 27, 62. The 

EEOC has a fact sheet on notable EEOC 

litigation involving pay 

discrimination.36 The commenters did 

not identify specific precedents, but 

OPM identified several cases that 

resulted in restrictions on considering 

prior salary in various contexts. In Rizo 

v. Yovino, the Ninth Circuit found that 

relying on prior wages when setting pay 

would perpetuate a wage disparity 

between men and women. 950 F.3d 

1217 (9th Cir. 2020) (en banc). In a 

consent decree settling a pay 

discrimination suit, a bank agreed not to 

inquire about applicants’ prior earnings 

history during the hiring process. EEOC 

v. First Metropolitan Financial Services, 

Inc., 1:18–cv–177 (N.D. Miss. March 18, 

2021). Similarly, in EEOC v. Cummins, 

Inc., d/b/a Cummins Business Services, 

the company agreed not to rely solely on 

prior salary in determining 

compensation. 3:17–cv–01306 (M.D. 

Tenn. Mar. 29, 2019). EEOC v. Covenant 

Medical Center, Inc., resulted in a 

consent decree to equalize pay where a 

woman had been paid less than two 

male peers based on one man’s prior 

salary history and the other man’s 

negotiation of pay (where the woman 

had not been permitted to negotiate 

pay). EEOC v. Covenant Medical Center, 

Inc., 2:20–cv–10662 (E.D. Mich. Sept. 2, 

2020). 

Similarly, the organization referenced 

an academic report, which noted that 

asking candidates to disclose their 

salary history can ‘‘embed any 

previously encountered pay inequities 

into an employee’s starting pay with a 

new employer.’’ 37 These cases and 

report provide further information 

indicating that limiting reliance on 

salary history to set pay has positive 

benefits. 

E. Regulatory Alternatives 

Executive Orders 12866, 13563, and 

14094 direct agencies to assess available 


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38Payscale. ‘‘Is Asking for Salary History . . . 

History?’’ https://www.payscale.com/research-andinsights/salary-history/. 

39 88 FR 30251, 30253 (May 11, 2023). 

40Foster, T., Murray-Close, M., Landivar, L., & de 

Wolf, M. ‘‘An Evaluation of the Gender Wage Gap 

Using Linked Survey and Administrative Data,’’ 

November 2020. https://www.census.gov/library/ 

working-papers/2020/adrm/CES-WP-20-34.html. 

regulatory alternatives and to select 

regulatory approaches that maximize 

net benefits. 

As discussed, agencies are required to 

set pay at the minimum of the rate range 

for new GS, prevailing rate, AAJ, and 

ALJ employees unless the agency 

chooses to set pay above the minimum 

based on one of the pay flexibilities that 

are available in regulations. To advance 

pay equity for new hires, one regulatory 

alternative OPM considered was 

eliminating pay flexibilities to set pay 

above the minimum rate of the 

applicable rate range. This option, 

however, would have been detrimental 

to agencies and job candidates. Agencies 

use pay flexibilities to set pay above the 

minimum rate to recruit candidates with 

superior qualifications or when agencies 

have a special need for the candidate’s 

services. Agencies risk candidates 

rejecting employment if the offered 

salary does not meet their expectations. 

Another option was to allow agencies 

to set pay based on a candidate’s salary 

history if provided voluntarily and 

without prompting. OPM invited 

comments on what the advantages and 

disadvantages would be of prohibiting 

Federal agencies from relying on prior 

salary history, if the candidate 

voluntarily provided it, and possible 

justifications for allowing an exception 

to the prior salary history prohibition. 

OPM asked whether such an exception 

would be consistent with the goals of 

this regulation. OPM received many 

comments in response. 

Most commenters were in favor of 

prohibiting Federal agencies from 

relying on prior salary history even if 

the candidate voluntarily provides it. 

One commenter stated that allowing an 

exception would be ‘‘counterproductive 

[to] the goal of reducing or eliminating 

the gender pay gap . . . [because] many 

academic studies have shown that males 

will engage in salary negotiation about 

four times as often as females.’’ 

Comment 18. Organizations similarly 

commented that men are more likely to 

disclose their salaries than women. 

A commenter said that ‘‘allowing 

private sector compensation to be 

considered when a candidate 

voluntarily supplies that information 

replicates private sector discrimination 

because candidates treated unfairly in 

the private sector will have no helpful 

salary history information to volunteer.’’ 

Comment 32. A union and an 

organization stated that allowing 

voluntary disclosure of salary history 

would ‘‘perpetuate current inequalities 

in the Federal workforce.’’ Comment 44. 

An organization stated that allowing an 

exception would make the rule 

‘‘pointless’’ and would provide ‘‘no 

added independent benefit.’’ Comment 

46. 

Two organizations agreed with OPM 

that ‘‘a strict prohibition on considering 

salary history allows for more effective 

administration of the regulations and 

avoids confusion.’’ Comment 56. An 

organization stated that ‘‘allowing 

reliance on voluntary disclosure would 

tend to benefit those who have 

sufficient awareness of Federal hiring 

processes to know that this flexibility is 

potentially available and is likely to 

harm those who have less extensive 

experience or networks, a group that 

likely disproportionately includes 

women, people of color, and other 

traditionally marginalized candidates.’’ 

Comment 56. The organization also 

shared results from a study that found 

that women are disproportionately 

penalized for declining to disclose their 

salaries whereas men are 

disproportionately rewarded.38 Id. 

Another organization stated that 

reliance on prior salary is unnecessary 

because ‘‘the Federal Government’s paysetting practices allow for consideration 

of a broad range of factors in 

determining appropriate pay setting.’’ 

Comment 60. 

One agency suggested that possible 

justifications for allowing an exception 

to the prior salary prohibition are that 

5 U.S.C. 2301(b)(3) allows for 

‘‘appropriate consideration of both 

national and local rates paid by 

employers in the private sector’’ and 

‘‘allows for competitiveness in hiring.’’ 

Comment 09. The agency suggested 

limiting agencies to setting pay at the 

lowest step that equals or exceeds the 

candidate’s salary history. Id. Another 

agency also stated that ‘‘salary history, 

if available, should be factored when 

setting initial pay for an external 

candidate’’ because otherwise 

‘‘individual hiring managers [may] 

randomly select a step or salary rate’’ 

and setting a candidate’s salary above 

their salary history would result in an 

‘‘increase in costs to taxpayers.’’ 

Comment 57. 

We find the reasons for prohibiting 

Federal agencies from considering prior 

salary history even if the candidate 

voluntarily provides it more compelling 

than the reasons for allowing an 

exception to the prior salary history 

prohibition. Agencies would still be 

able to set pay above step 1 to be 

competitive based on factors specified 

in the regulations, including significant 

disparities between Federal and nonFederal salaries for the skills and 

competencies required in the position to 

be filled. OPM is retaining its proposed 

approach of prohibiting agencies from 

considering prior salary history even if 

the candidate voluntarily provides it. 

Lastly, OPM could maintain the status 

quo and not propose regulations to 

change salary determinations based on 

salary history. As explained throughout 

the proposed rule and this final rule, 

banning salary history as a 

consideration when setting pay 

promotes greater pay equity consistent 

with merit system principles. Because 

the Federal Government should serve as 

a model employer in establishing 

policies that advance pay equity, 

regulatory change is needed to help 

advance pay equity for Federal 

employees. 

In evaluating the regulatory 

alternatives, OPM considered the 

information it had available regarding 

the pay gaps in Federal employment. 

Many factors, including disparities in 

salary history, may contribute to the 

overall gender and race/ethnicity pay 

gaps in the Federal Government. For 

example, more women than men occupy 

positions classified at lower GS grades 

with lower pay, while more men than 

women occupy positions classified at 

higher GS grades with higher pay and in 

higher-paying Senior Executive Service 

positions. Data indicated that, for each 

GS grade, women and men had close to 

the same average position in range 

(average step position). Factors such as 

length in service, quality step increases, 

and—most significantly for this 

regulation—how pay is set upon 

personnel actions such as appointment 

or promotion affect an employee’s step 

position. OPM also found that the size 

of the gender pay gap varied by 

occupation.39

OPM’s findings regarding Federal pay 

gaps are consistent with research on pay 

gaps in the national workforce. A 

November 2020 study 40 focused on 

national pay gaps and found that the 

gender pay gap varied significantly by 

occupation. There was no gender pay 

gap in some occupations, but gender 

pay gaps as large as 45 percent in others. 

The researchers found larger gender pay 

gaps in occupations that were more 

competitive and hazardous, occupations 

that reward longer hours of work, and 

those that have a larger proportion of 

women workers. 

OPM’s discussion in the proposed 

rule regarding the calculation and 


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41https://www.fedscope.opm.gov/. 

42See the FedScope Data Release Policy at 

https://www.fedscope.opm.gov/download_

Data%20Release%20Policy.pdf. 

43Office of Personnel Management, ‘‘About Our 

Data (EHRI–SDM).’’ https://www.fedscope.opm.gov/ 

datadefn/aehri_sdm.asp. 

presentation of Federal Government pay 

gaps received multiple comments. One 

commenter requested more detailed 

data, such as data by occupational 

series. Comment 15. The commenter 

expressed that the public should have 

access to more detailed data behind our 

calculations in the proposed rule. A 

national union that supported the 

proposed rule asked OPM to examine 

‘‘potential clusters of inequity, whether 

it is within certain position series or 

grades, or individual agencies’’ as part 

of its pay equity analyses. Comment 59. 

An agency commented that the Federal 

Government already has a diverse 

workforce and that women earn salaries 

that are the same as or higher than 

salaries earned by men when comparing 

both genders in the same position. 

An organization cited international 

pay equity regulations, such as those in 

the European Union, as an example of 

a ‘‘comprehensive approach,’’ which 

requires reporting pay gap data in an 

open and transparent manner. Comment 

31. OPM reviewed the European Union 

pay transparency regulations but 

concluded that requiring agencies to 

conduct and report on pay gap analyses 

is not within the scope of this 

rulemaking. 

Another organization had several 

recommendations including that OPM: 

(1) update its multivariate regressiondecomposition analysis using 2022 or 

2023 data; (2) take an intersectional 

approach when updating its analysis; (3) 

break out Asian and Native Hawaiian/ 

Pacific Islander employees into separate 

groups rather than combining them; (4) 

use medians instead of means; and (5) 

examine worker characteristics 

including supervisory status, education 

level, geography, tenure, age, and 

disability status. Comment 33. An 

international professional and technical 

union asked OPM to ‘‘undertake an 

annual review of gender-based and 

racial/ethnic-based bias in median pay, 

matched for positions and seniority.’’ 

Comment 64. 

These data analysis recommendations 

raise several issues that are beyond the 

scope of this rule. Certain data from 

EHRI is available to the public on 

FedScope.41 However, complete raw 

data is not available due to concerns 

about identifying employees at the 

individual level.42 OPM has been 

reviewing 2022 data and plans to release 

a report in the coming months that will 

summarize pay gap information by 

gender and race/ethnicity and will 

present pay gap data for key worker 

characteristics such as pay system, 

grade (where applicable), occupation, 

agency, and age. OPM also plans to 

release detailed 2022 pay gap data with 

that report. OPM combines Asian and 

Native Hawaiian/Pacific Islander ethnic 

groups due to small sample sizes. OPM 

uses average, instead of median, 

salaries, in part, because means are 

readily available in OPM’s EHRI 43 data 

system. Average salaries are an 

appropriate metric because a mean 

reflects the salary of all employees 

rather than focusing on a typical 

employee. OPM notes that the risks 

normally associated with using an 

average salary as a metric are minimal 

because Federal salaries have statutory 

pay limitations, which decrease the 

occurrence of outliers that would 

influence average salaries. Although 

OPM will continue to monitor and 

evaluate data regarding pay gaps based 

on gender or race/ethnicity, this final 

rule is not being promulgated simply to 

address potential pay gaps; this final 

rule is based on OPM’s broader 

determination that eliminating 

consideration of prior salary history is 

the best way to implement the 

governing merit system principles. 

F. Implementation 

OPM invited comments on what 

information agencies should provide on 

the pay-setting flexibilities and at what 

stage in the hiring process agencies 

should provide this information. A 

union stated that ‘‘information on how 

pay-setting flexibilities influence the 

final salary a candidate may be offered 

in job announcements and on agency 

websites helps candidates make better 

informed decisions when deciding 

whether to apply for such opportunities 

and what information to disclose during 

the application process.’’ Comment 44. 

Similarly, several commenters 

recommended that OPM require 

agencies to provide this information in 

job announcements. Comments 44, 56. 

An agency stated that ‘‘agencies should 

not solicit candidates to negotiate pay 

when hiring.’’ Comment 57. An 

organization suggested that ‘‘hiring 

agencies should be required to give 

applicants notice and the opportunity to 

submit to [the] agency pay-setting 

authorities documentation of any job 

offers or data on comparative pay for 

non-Federal positions that the applicant 

may have’’ at the initial offer stage. 

Comment 49. Then ‘‘only after receipt 

and review of any response from the 

applicant (or the passing of the deadline 

with no response) should the hiring 

agency finalize the starting pay offer 

grade and step for the position being 

offered.’’ Id. OPM appreciates the 

responses received but declines to 

impose specific requirements for job 

announcements. OPM will consider 

these comments and suggestions in 

developing recommended best 

practices. In addition, as discussed in 

the Competing Job Offers section, OPM 

is revising the regulations in this final 

rule such that an agency will no longer 

be able to set pay based on a competing 

job offer. 

Commenters recommended that OPM 

address other implementation issues. 

An agency, an organization, and a union 

recommended that hiring managers and 

human resources staff be trained on 

these regulatory changes. Comments 33, 

41, 43. The union also recommended 

that OPM ‘‘develop a standard form that 

would guide HR practitioners and/or 

hiring managers in developing a wellsupported justification for pay-setting.’’ 

Comment 41. The union suggested that 

agencies should provide service credit 

for the non-Federal work experience 

towards determining the step or rate at 

which to set the candidate’s pay. Id. An 

organization suggested that OPM 

provide guidance ‘‘on standards for 

what constitutes an effective 

comparative pay information search.’’ 

Comment 49. The organization 

recommended that OPM ‘‘modify the 

USAJOBS website and its standard 

forms for Federal job applications to 

eliminate rote requests for . . . prior 

salaries for non-Federal positions as part 

of detailing their employment 

histories.’’ Id. OPM will review the 

USAJOBS website as OPM supports 

implementation of this final rule. 

This final rule covers approximately 

1.5 million Federal employees in the 

GS, prevailing rate, AAJ, ALJ, SES, and 

SL/ST pay systems combined who are 

employed in more than 80 Federal 

agencies. OPM’s pay-setting regulations 

for the pay systems covered by this final 

rule prescribe broad criteria and 

limitations that agencies must apply in 

developing and implementing their own 

agency-specific pay-setting policies and 

procedures. OPM’s regulations do not 

address the form or content of offers of 

employment that agencies make to 

candidates, nor do they address the 

process by which agencies engage with 

candidates. For these reasons, agency 

pay setting, job offer, and candidate 

communication policies, procedures, 

and practices may vary widely. 

This final rule has a 60-day effective 

date. OPM recognizes, however, that 

agencies may need implementing 


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5754 Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 

guidance and additional time to modify 

their own policies and procedures and 

provide new instructions to their human 

resources professionals and hiring 

managers regarding setting pay and 

making pay offers in compliance with 

this final rule. To accommodate the 

scope of coverage and range of agency 

policies and practices this final rule will 

affect and to minimize disruptions to 

ongoing agency hiring processes where 

offers of pay have already been made to 

candidates, OPM is allowing additional 

time for agencies to implement this final 

rule. During this time, agencies should 

take steps to revise their policies and 

procedures. As soon as practicable, any 

new offers for employment including 

salary information for GS, FWS, ALJ, 

AAJ, SES, SL, ST positions and new 

pay-setting decisions for such positions 

based on an employee’s previous 

Federal salary should reflect the 

requirements in this final rule. Agencies 

must be in full compliance with the 

final rule by October 1, 2024. OPM 

considers ‘‘full compliance’’ to refer to 

the pay setting decision as documented 

in the required justifications for use of 

these pay flexibilities—not necessarily 

the final processing of the personnel 

action. Therefore, these justifications 

that are approved on or after October 1, 

2024, must be in full compliance. In 

accordance with 5 U.S.C. 7116(a)(7), 

this final rule cannot override any 

collective bargaining agreement in effect 

prior to the effective date of this 

regulation. Such collective bargaining 

agreement would need to come into 

compliance with this government wide 

regulation when the agreement is due to 

be renegotiated or expires. 

G. Severability 

If any of the provisions of this final 

rule is held to be invalid or 

unenforceable by its terms, or as applied 

to any person or circumstance, it shall 

be severable from its respective 

section(s) and shall not affect the 

remainder thereof or the application of 

the provision to other persons not 

similarly situated or to other dissimilar 

circumstances. For example, if a court 

were to invalidate any portion of this 

proposed rule as finalized imposing 

procedural requirements on agencies 

with respect to one pay system, the 

other portions of the rule—including the 

portions applying to each of the other 

affected pay systems—would 

independently remain workable and 

valuable. In enforcing the pay equity 

provisions of this rule, OPM will 

comply with all applicable legal 

requirements. 

Regulatory Flexibility Act 

The Director of OPM certifies that 

these regulations will not have a 

significant economic impact on a 

substantial number of small entities 

because they will apply only to Federal 

agencies and employees. 

Regulatory Review 

OPM has examined the impact of this 

rule as required by Executive Orders 

12866, 13563, and 14094, which direct 

agencies to assess all costs and benefits 

of available regulatory alternatives and, 

if regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public, 

health, and safety effects, distributive 

impacts, and equity). This rule is 

considered a ‘‘significant regulatory 

action’’ under section 3(f) of Executive 

Order (12866). 

E.O. 13132, Federalism 

This regulation will not have 

substantial direct effects on the States, 

on the relationship between the 

National Government and the States, or 

on distribution of power and 

responsibilities among the various 

levels of government. Therefore, in 

accordance with Executive Order 13132, 

it is determined that this final rule does 

not have sufficient federalism 

implications to warrant preparation of a 

Federalism Assessment. 

E.O. 12988, Civil Justice Reform 

This regulation meets the applicable 

standards set forth in section 3(a) and 

(b)(2) of Executive Order 12988. 

Unfunded Mandates Reform Act of 

1995 

This final rule will not result in the 

expenditure by State, local or tribal 

governments of more than $100 million 

annually. Thus, no written assessment 

of unfunded mandates is required. 

Congressional Review Act 

OMB’s Office of Information and 

Regulatory Affairs has determined this 

is not a major rule as defined by the 

Congressional Review Act (5 U.S.C. 

804(2)). 

Paperwork Reduction Act of 1995 (44 

U.S.C. Chapter 35) 

This regulatory action will not impose 

any reporting or recordkeeping 

requirements under the Paperwork 

Reduction Act. 

List of Subjects in Title 5 CFR Parts 531, 

532, 534, and 930 

Administrative practice and 

procedure, Computer technology, 

Freedom of information, Government 

employees, Hospitals, Law enforcement 

officers, Motor vehicles, Reporting and 

recordkeeping requirements, Students, 

Wages. 

Office of Personnel Management. 

Stephen Hickman, 

Federal Register Liaison. 

Accordingly, OPM is amending 5 CFR 

parts 531, 532, 534, and 930 as follows: 

PART 531—PAY UNDER THE 

GENERAL SCHEDULE 

■ 1. The authority citation for part 531 

continues to read as follows: 

Authority: 5 U.S.C. 5115, 5307, and 5338; 

sec. 4 of Public Law 103–89, 107 Stat. 981; 

and E.O. 12748, 56 FR 4521, 3 CFR, 1991 

Comp., p. 316; Subpart B also issued under 

5 U.S.C. 5303(g), 5305, 5333, 5334(a) and (b), 

and 7701(b)(2); Subpart D also issued under 

5 U.S.C. 5335 and 7701(b)(2); Subpart E also 

issued under 5 U.S.C. 5336; Subpart F also 

issued under 5 U.S.C. 5304, 5305, and 

5941(a); E.O. 12883, 58 FR 63281, 3 CFR, 

1993 Comp., p. 682; and E.O. 13106, 63 FR 

68151, 3 CFR, 1998 Comp., p. 224. 

Subpart B—Determining Rate of Basic 

Pay 

■ 2. In § 531.212— 

■ a. Revise paragraph (c) introductory 

text; 

■ b. Remove paragraph (c)(2); 

■ c. Redesignate paragraph (c)(1) as 

(c)(2)(i) and paragraphs (c)(3) through 

(c)(10) as (c)(2)(ii) through (c)(2)(ix); 

■ d. Add a new paragraph (c)(1) and 

new paragraph (c)(2) introductory text; 

■ e. Revise newly redesignated 

paragraph (c)(2)(ix); and 

■ f. Revise paragraph (e)(2)(ii). 

The revisions and additions read as 

follows: 

§ 531.212 Superior qualifications and 

special needs pay-setting authority. 

* * * * * 

(c) Pay rate determination. To 

determine the step at which to set an 

employee’s payable rate of basic pay 

using the superior qualifications and 

special needs pay-setting authority, an 

agency must consider: 

(1) The step at which pay has been set 

for employees who had similar 

qualifications (based on the level, type, 

or quality of the candidate’s skills or 

competencies or other qualities and 

experiences) and who have been newly 

appointed to positions that are similar 

to the candidate’s position (based on the 

position’s occupational series, grade 

level, organization, geographic location, 

or other job-relevant factors), if 

applicable; and 


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(2) One or more of the following 

factors, as applicable in the case at 

hand: 

* * * * * 

(ix) Other relevant factors, except that 

an agency may not consider the 

candidate’s salary history (i.e., existing 

salary or prior salary) or a salary from 

a competing job offer. 

* * * * * 

(e) * * * 

(2) * * * 

(ii) An explanation of the factors and 

supporting documentation under 

paragraph (c) of this section which were 

used to justify the rate at which the 

employee’s pay is set. The written 

documentation must explain how the 

factors directly relate to the rate 

approved; and 

* * * * * 

■ 3. In § 531.221, add paragraph (a)(6) to 

read as follows: 

§ 531.221 Maximum payable rate rule. 

(a) * * * 

(6) Before setting pay under this 

section, an agency must establish a 

policy on its use of the maximum 

payable rate rule that includes— 

(i) Designation of officials with the 

authority to approve and set pay under 

this section; 

(ii) Any situations in which the 

agency must use the authority; 

(iii) Any situations in which the 

agency may exercise its discretion in 

using the authority; 

(iv) Consideration of the step at which 

pay has been set for other employees 

performing similar work in the 

organization (based on the position’s 

occupational series, grade level, types of 

duties, or other job-relevant factors) and 

any other factors the designated 

official(s) may or must consider in 

determining the step at which to set the 

employee’s pay between the employee’s 

entitlement under any other applicable 

pay-setting rule and the employee’s 

maximum payable rate; and 

(v) Documentation and recordkeeping 

requirements sufficient to allow 

reconstruction of the action. 

* * * * * 

PART 532—PREVAILING RATE 

SYSTEMS 

■ 4. The authority citation for part 532 

continues to read as follows: 

Authority: 5 U.S.C. 5343, 5346; § 532.707 

also issued under 5 U.S.C. 552. 

Subpart D—Pay Administration 

■ 5. In § 532.403, revise paragraph (b) to 

read as follows: 

§ 532.403 New appointments. 

* * * * * 

(b) An agency may make a new 

appointment at a rate above the 

minimum rate of the appropriate grade 

in recognition of an appointees’ special 

qualifications. In determining the rate at 

which to set the appointee’s pay: 

(1) An agency must consider how the 

step has been set for employees who 

had similar qualifications (based on the 

level, type, or quality of the appointee’s 

skills or competencies or other qualities 

and experiences) and who have been 

newly appointed to positions that are 

similar to the appointee’s position 

(based on the position’s occupational 

series, grade level, organization, 

geographic location, or other jobrelevant factors), if applicable; 

(2) An agency may not consider the 

appointee’s pay history (i.e., existing 

pay or prior pay) or a pay rate from a 

competing job offer; and 

(3) An agency must consider other 

relevant factors (e.g., the level, type, or 

quality of the appointee’s skills or 

competencies; or significant disparities 

between Federal and non-Federal 

salaries for the skills and competencies 

required in the position to be filled). 

* * * * * 

■ 6. In 532.405, add paragraph e to read 

as follows: 

§ 532.405 Use of highest previous rate. 

* * * * * 

(e) Before setting pay under this 

section, an agency must establish a 

policy regarding use of employees’ 

highest previous rates. The policy must 

include the following elements: 

(1) Designation of officials with the 

authority to approve and set pay under 

this section; 

(2) Any situations in which the 

agency must use an employee’s highest 

previous rate; 

(3) Any situations in which the 

agency may exercise its discretion in 

using an employee’s highest previous 

rate; 

(4) Consideration of the step at which 

pay has been set for other employees 

performing similar work in the 

organization (based on the position’s 

occupational series, grade level, types of 

duties, or other job-relevant factors) and 

any other factors the designated 

official(s) may or must consider in 

determining the step at which to set the 

employee’s pay between the employee’s 

entitlement under any other applicable 

pay-setting rule and the employee’s 

highest previous rate; and 

(5) Documentation and recordkeeping 

requirements sufficient to allow 

reconstruction of the action. 

PART 534—PAY UNDER OTHER 

SYSTEMS 

■ 7. The authority citation for part 534 

continues to read as follows: 

Authority: 5 U.S.C. 1104, 3161(d), 5307, 

5351, 5352, 5353, 5376, 5382, 5383, 5384, 

5385, 5541, 5550a, sec. 1125 of the National 

Defense Authorization Act for FY 2004, Pub. 

L. 108–136, 117 Stat. 1638 (5 U.S.C. 5304, 

5382, 5383, 7302; 18 U.S.C. 207); and sec. 2 

of Pub. L. 110–372, 122 Stat. 4043 (5 U.S.C. 

5304, 5307, 5376). 

Subpart D—Pay and Performance 

Awards Under the Senior Executive 

Service 

■ 8. In § 534.404— 

■ a. Amend paragraph (a) by adding a 

sentence to the end of the paragraph; 

and 

■ b. Amend paragraph (i)(1) by adding 

a sentence to the end of the paragraph. 

The revisions read as follows: 

§ 534.404 Setting and adjusting pay for 

senior executives. 

(a) * * * When making a first 

appointment (regardless of tenure) as a 

civilian employee of the Federal 

Government, an agency may not 

consider the individual’s salary history 

(i.e., existing salary or prior salary) or a 

salary from a competing job offer. 

* * * * * 

(i) * * * 

(1) * * * When setting pay upon 

reappointment to the SES, an agency 

may not consider the individual’s nonFederal salary history (i.e., existing 

salary or prior salary) or a salary from 

a competing job offer. 

* * * * * 

Subpart E—Pay for Senior-Level and 

Scientific or Professional Positions 

■ 9. In § 534.506, revise paragraphs (a) 

and (c)(1) to read as follows: 

§ 534.506 Setting a rate of basic pay upon 

appointment. 

(a) An authorized agency official may 

set the rate of basic pay of an individual 

who is not currently an SL or ST 

appointee of the agency at any rate 

within the applicable rate range under 

§ 534.504(a) upon appointment to an SL 

or ST position in the agency, subject to 

the requirements of this section. In 

setting a new senior professional’s rate 

of basic pay, an agency must consider 

the nature and quality of the 

individual’s experience, 

accomplishments, and any unique 

skills, qualifications, or competencies 

the individual possesses as they relate 

to requirements of the senior 

professional position and its impact on 


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the agency’s performance. When making 

a first appointment (regardless of 

tenure) as a civilian employee of the 

Federal Government, an agency may not 

consider the individual’s salary history 

(i.e., existing salary or prior salary) or a 

salary from a competing job offer. Rates 

of basic pay above the rate for level III 

of the Executive Schedule, but less than 

or equal to the rate for level II of the 

Executive Schedule, generally are 

reserved for those newly appointed 

senior professionals who possess 

superior leadership, scientific, 

professional or other competencies 

necessary to address key program and 

mission requirements, as determined by 

the agency through its strategic human 

capital planning process. 

* * * * * 

(c)(1) Consistent with the agency’s 

written procedures and paragraph (a) of 

this section, except as provided in 

paragraph (c)(2) of this section, an 

authorized agency official may set pay 

upon reappointment of a former SL or 

ST employee at any rate of basic pay 

within the pay range that applies to the 

SL or ST position under § 534.504(a). 

When setting pay, the agency may not 

consider the individual’s non-Federal 

salary history (i.e., existing salary or 

prior salary) or a salary from a 

competing job offer. 

* * * * * 

Subpart F—Pay for Administrative 

Appeals Judge Positions 

■ 10. In § 534.604— 

■ a. Revise paragraph (b); 

■ b. Redesignate paragraphs (c) and (d) 

as paragraphs (f) and (g), respectively; 

and 

■ c. Add new paragraphs (c) and (d) and 

paragraph (e). 

The revision and additions read as 

follows: 

§ 534.604 Pay administration. 

* * * * * 

(b) Upon initial appointment, an 

agency must set the rate of basic pay of 

an administrative appeals judge at the 

minimum rate AA–1 of the 

administrative appeals judge pay 

system, except as provided in 

paragraphs (c), (d), and (e) of this 

section. 

(c) An agency must set the pay of an 

employee under the General Schedule 

pay system who is appointed to an 

administrative appeals judge position 

without a break in service at the lowest 

rate of basic pay of the administrative 

appeals judge pay system that equals or 

exceeds the rate of basic pay the 

employee received immediately prior to 

such appointment, not to exceed the 

rate of basic pay for AA–6. If the 

resulting basic pay increase is less than 

one-half of the dollar value of the 

employee’s next within-grade increase, 

the agency must set the employee’s rate 

of basic pay at the next higher rate of 

basic pay in the basic rate range of the 

administrative appeals judge pay 

system, not to exceed the rate of basic 

pay for AA–6. 

(d) An agency may offer an 

administrative appeals judge applicant 

with prior Federal service a rate up to 

the lowest rate of basic pay of the 

administrative appeals judge pay system 

that equals or exceeds the employee’s 

highest previous rate of basic pay in a 

Federal civil service position, not to 

exceed the rate of basic pay for AA–6. 

Before setting pay under this paragraph, 

an agency must establish a policy that 

includes the following elements: 

(1) Designation of officials with the 

authority to approve and set pay under 

this paragraph (d); 

(2) Whether use of this authority is 

discretionary or mandatory; 

(3) The factors the designated officials 

may or must consider in determining 

the rate at which to set the applicant’s 

pay and which must include 

consideration of the rate of basic pay set 

for other administrative appeals judges 

(based on the level, type, or quality of 

the appointee’s skills or competencies 

or other qualities and experiences); and 

(4) Documentation and recordkeeping 

requirements sufficient to allow 

reconstruction of the action. 

(e) An agency may offer an 

administrative appeals judge applicant 

(including a former administrative 

appeals judge) with superior 

qualifications who is not a current 

Federal employee a higher than 

minimum rate up to the maximum rate 

AA–6 when such a rate is clearly 

necessary to meet the needs of the 

Government. Superior qualifications for 

applicants include, but are not limited 

to, having legal practice before the 

hiring agency, having practice in 

another forum with legal issues of 

concern to the hiring agency, or having 

an outstanding reputation among others 

in the field. An agency must document 

all of the following: 

(1) The superior qualifications of the 

applicant; 

(2) The need of the Government for 

the applicant’s services; 

(3) Consideration of how pay has been 

set for administrative appeals judges 

who had similar qualifications (based 

on the level, type, or quality of the 

applicant’s skills or competencies or 

other qualities and experiences) and 

who have been newly appointed to 

positions that are similar to the 

applicant’s position (based on the 

position’s occupational series, 

organization, geographic location, or 

other job-relevant factors), if applicable; 

and 

(4) An explanation of the factors 

which were used to justify the rate at 

which the employee’s pay is set, except 

an agency may not consider the 

applicant’s salary history (i.e., existing 

salary or prior salary) or a salary from 

a competing job offer. 

* * * * * 

PART 930—PROGRAMS FOR 

SPECIFIC POSITIONS AND 

EXAMINATIONS (MISCELLANEOUS) 

Subpart B—Administrative Law Judge 

Program 

■ 11. The authority citation for subpart 

B continues to read as follows: 

Authority: 5 U.S.C. 1104(a), 1302(a), 1305, 

3105, 3301, 3304, 3323(b), 3344, 4301(2)(D), 

5372, 7521, and E.O. 10577, 3 CFR, 1954– 

1958 Comp., p. 219. 

■ 12. In § 930.201, revise paragraph 

(e)(5) to read as follows: 

§ 930.201 Coverage. 

* * * * * 

(e) * * * 

(5) Approve personnel actions related 

to pay for administrative law judges 

under § 930.205(c), (g), (h), and (k); 

* * * * * 

■ 13. In § 930.205— 

■ a. In paragraph (e), remove the words 

‘‘paragraph (f)’’ and add ‘‘paragraphs (f) 

and (g)’’ in their place; 

■ b. Revise paragraph (f); 

■ c. Redesignate paragraphs (g) through 

(j) as paragraphs (h) through (k), 

respectively; and 

■ d. Add a new paragraph (g). 

The revision and addition read as 

follows: 

§ 930.205 Administrative law judge pay 

system. 

* * * * * 

(f) When an applicant to an 

administrative law judge position at 

AL–3 has prior Federal service, the 

agency may set pay at a higher than 

minimum rate up to the lowest rate of 

basic pay that equals or exceeds the 

applicant’s highest previous Federal rate 

of basic pay, not to exceed the 

maximum rate F. Before setting pay 

under this paragraph, an agency must 

establish a policy regarding use of this 

pay-setting authority that includes the 

following elements: 

(1) Designation of officials with the 

authority to approve and set pay under 

this paragraph; 

(2) Whether use of this authority is 

discretionary or mandatory; 


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Federal Register / Vol. 89, No. 20 / Tuesday, January 30, 2024 / Rules and Regulations 5757 

(3) The factors the designated officials 

may or must consider in determining 

the rate at which to set the applicant’s 

pay, which must include how the rate 

of basic pay has been set for other 

administrative law judges; and 

(4) Documentation and recordkeeping 

requirements sufficient to allow 

reconstruction of the action. 

(g) With prior OPM approval, an 

agency may offer a higher than 

minimum rate, up to the maximum rate 

F, to an administrative law judge 

applicant or a former administrative law 

judge with superior qualifications who 

is eligible for appointment to a position 

at AL–3. An agency request to OPM 

must include: 

(1) A description of the superior 

qualifications (as defined in § 930.202) 

of the applicant or former 

administrative law judge; 

(2) How pay has been set for 

administrative law judges who had 

similar qualifications (based on the 

level, type, or quality of the applicant’s 

or former administrative law judge’s 

skills or competencies or other qualities 

and experiences) and who have been 

newly appointed to positions that are 

similar to the administrative law judge’s 

position (based on the position’s 

occupational series, organization, 

geographic location, or other jobrelevant factors), if applicable; and 

(3) The proposed rate of basic pay and 

a justification for that rate, except an 

agency may not consider an applicant’s 

or former administrative law judge’s 

salary history (i.e., existing salary or 

prior salary) or a salary from a 

competing job offer. 

* * * * * 

[FR Doc. 2024–01337 Filed 1–29–24; 8:45 am] 

BILLING CODE 6325–39–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Part 984 

[Doc. No. AMS–SC–23–0030] 

Walnuts Grown in Califfornia; 

Decreased Assessment Rate 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Final rule. 

SUMMARY: This rule implements a 

recommendation from the California 

Walnut Board (Board) to decrease the 

assessment rate established for the 

2023–2024 and subsequent marketing 

years. The assessment rate will remain 

in effect indefinitely unless modified, 

suspended, or terminated. 

DATES: Effective February 29, 2024. 

FOR FURTHER INFORMATION CONTACT: 

Joshua R. Wilde, Marketing Specialist, 

or Barry Broadbent, Acting Chief, West 

Region Branch, Market Development 

Division, Specialty Crops Program, 

AMS, USDA; Telephone: (503) 326– 

2724, or Email: Joshua.R.Wilde@

usda.gov or Barry.Broadbent@usda.gov. 

Small businesses may request 

information on complying with this 

regulation by contacting Richard Lower, 

Market Development Division, Specialty 

Crops Program, AMS, USDA, 1400 

Independence Avenue SW, STOP 0237, 

Washington, DC 20250–0237; 

Telephone: (202) 720–8085, or Email: 

Richard.Lower@usda.gov. 

SUPPLEMENTARY INFORMATION: This 

action, pursuant to 5 U.S.C. 553, 

amends regulations issued to carry out 

a marketing order as defined in 7 CFR 

900.2(j). This rule is issued under 

Marketing Agreement and Order No. 

984, both as amended (7 CFR part 984), 

regulating the handling of walnuts 

grown in California. Part 984 (referred to 

as the ‘‘Order’’) is effective under the 

Agricultural Marketing Agreement Act 

of 1937, as amended (7 U.S.C. 601–674), 

hereinafter referred to as the ‘‘Act.’’ The 

Board locally administers the Order and 

is comprised of growers and handlers of 

California walnuts operating within the 

area of production, and a public 

member. 

The Agricultural Marketing Service 

(AMS) is issuing this rule in 

conformance with Executive Orders 

12866, 13563, and 14094. Executive 

Orders 12866 and 13563 direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. Executive Order 

14094 reaffirms, supplements, and 

updates Executive Order 12866 and 

further directs agencies to solicit and 

consider input from a wide range of 

affected and interested parties through a 

variety of means. This proposed action 

falls within a category of regulatory 

actions that the Office of Management 

and Budget (OMB) exempted from 

Executive Order 12866 review. 

This rule has been reviewed under 

Executive Order 13175—Consultation 

and Coordination with Indian Tribal 

Governments, which requires Federal 

agencies to consider whether their 

rulemaking actions would have Tribal 

implications. AMS has determined that 

this rule is unlikely to have substantial 

direct effects on one or more Indian 

Tribes, on the relationship between the 

Federal Government and Indian Tribes, 

or on the distribution of power and 

responsibilities between the Federal 

Government and Indian Tribes. 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. Under the Order now in effect, 

California walnut handlers are subject to 

assessments. Funds to administer the 

Order are derived from such 

assessments. It is intended that the 

assessment rate will be applicable to all 

assessable California walnuts for the 

2023–2024 marketing year, and 

continue until amended, suspended, or 

terminated. 

The Act provides that administrative 

proceedings must be exhausted before 

parties may file suit in court. Under 

section 608c(15)(A) of the Act, any 

handler subject to an order may file 

with the U.S. Department of Agriculture 

(USDA) a petition stating that the order, 

any provision of the order, or any 

obligation imposed in connection with 

the order is not in accordance with law 

and request a modification of the order 

or to be exempted therefrom. Such 

handler is afforded the opportunity for 

a hearing on the petition. After the 

hearing, USDA would rule on the 

petition. The Act provides that the 

district court of the United States in any 

district in which the handler is an 

inhabitant, or has his or her principal 

place of business, has jurisdiction to 

review USDA’s ruling on the petition, 

provided an action is filed not later than 

20 days after the date of the entry of the 

ruling. 

This rule decreases the assessment 

rate for California walnuts handled 

under the Order from $0.0125 per 

inshell pound, the rate that was initially 

established for the 2023–2024 and 

subsequent marketing years, to $0.011 

per inshell pound. 

Section 984.68 authorizes the Board, 

with the approval of AMS, to formulate 

an annual budget of expenses and 

collect assessments from handlers to 

administer the program. The members 

of the Board are familiar with the 

Board’s needs and with the costs of 

goods and services in their local area 

and are able to formulate an appropriate 

budget and assessment rate. The 

assessment rate is formulated and 

discussed in a public meeting, and all 

directly affected persons have an 

opportunity to participate and provide 

input. 

On September 21, 2021, at the request 

of the Board, AMS issued a temporary 


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