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

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Rules and Regulations Federal Register

67069

Vol. 66, No. 249

Friday, December 28, 2001

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 531

RIN: 3206–AI81

Locality-Based Comparability

Payments

AGENCY: Office of Personnel

Management.

ACTION: Final rule.

SUMMARY: The Office of Personnel

Management is issuing final regulations

to clarify and redefine the limitations on

locality rates of pay for categories of

non-General Schedule employees

approved by the President’s Pay Agent

to receive locality-based comparability

payments. This change was prompted

by an Executive order that delegated the

President’s authority to establish such

limitations to the President’s Pay Agent.

The final regulations will ensure that all

employees receiving locality payments

are treated consistently.

EFFECTIVE DATE: This regulation is

effective on December 28, 2001.

FOR FURTHER INFORMATION CONTACT:

Jeanne Jacobson, (202) 606–2858, FAX:

(202) 606–0824, or e-mail:

payleave@opm.gov.

SUPPLEMENTARY INFORMATION: On March

24, 2000, the Office of Personnel

Management (OPM) published a

proposed rule (65 FR 15875) to revise

the locality pay regulations in subpart F

of part 531 of title 5, Code of Federal

Regulations. This proposed rule

clarified and redefined the limitations

on locality rates of pay for categories of

non-General Schedule employees

approved by the President’s Pay Agent

to receive locality payments. The

proposed rule had a 60-day public

comment period, during which OPM

did not receive any formal comments.

Therefore, we are adopting the proposed

rule as final without change.

Background

Locality-based comparability

payments are authorized under 5 U.S.C.

5304. By law, locality payments

automatically apply to General

Schedule (GS) employees. The

maximum rate of basic pay (excluding

locality payments) for GS employees is

the rate for GS–15, step 10, subject to a

cap linked to the rate of pay for level V

of the Executive Schedule. (See 5 U.S.C.

5303(f).) GS rates of basic pay adjusted

by locality payments are capped at the

rate of pay for level IV of the Executive

Schedule. (See 5 U.S.C. 5304(g)(1).)

The locality pay law provides that the

President may extend locality payments

to various groups outside the GS pay

system, such as members of the Senior

Executive Service (SES), administrative

law judges (ALJs), and other groups for

which basic pay is limited to no more

than the rate of pay for level IV of the

Executive Schedule. (See 5 U.S.C.

5304(h).) Executive Order 12883 of

November 29, 1993, provided that the

President’s Pay Agent (the Secretary of

Labor and the Directors of the Office of

Management and Budget and the Office

of Personnel Management) may act for

the President in exercising the authority

to extend locality payments to such

non-GS groups.

Section 5304(g)(2)(A) of title 5, United

States Code, provides that locality rates

approved for certain categories of nonGS employees specified in 5 U.S.C.

5304(h)(1)(A)–(E), including members of

the SES and ALJs, are capped at the rate

for level III of the Executive Schedule.

Section 5304(g)(2)(B) of title 5, United

States Code, provides that a level III

locality pay cap applies to ‘‘any

positions under subsection (h)(1)(F)

which the President may determine.’’

Subsection (h)(1)(F) is a catch-all

category of non-GS positions to which

locality pay may be extended. This

catch-all category includes Executive

agency positions not otherwise listed in

the law whose rates of basic pay are

limited to not more than the rate for

level IV of the Executive Schedule.

Section 8 of Executive Order 13106 of

December 7, 1998, delegated the

President’s authority under section

5304(g)(2)(B) of title 5, United States

Code, to determine such limitations for

categories of positions covered by 5

U.S.C. 5304(h)(1)(F) to the President’s

Pay Agent.

Final Regulations

These final regulations amend 5 CFR

531.604 by revising paragraph (c) to

clarify that a locality rate of pay may not

exceed the rate for level III of the

Executive Schedule for categories of

positions specified in 5 U.S.C.

5304(h)(1)(A)–(E). This includes seniorlevel, SES, Federal Bureau of

Investigation (FBI) and Drug

Enforcement Administration (DEA) SES,

administrative law judge, and contract

appeals board positions. This final rule

does not change the locality pay cap

applicable to members of the SES and

other categories of positions specified in

5 U.S.C. 5304(h)(1)(A)–(E). The final

rule merely clarifies the level III locality

pay cap prescribed in law at 5 U.S.C.

5304(g)(2)(A).

The final rule also amends § 531.604

by revising paragraph (c) to provide

that, for categories of non-GS employees

under 5 U.S.C. 5304(h)(1)(F) (i.e., the

catch-all category of positions

previously described), locality rates of

pay may not exceed:

(1) The rate for level IV of the

Executive Schedule, if the maximum

scheduled annual rate of pay for such

positions is less than or equal to the

maximum payable scheduled annual

rate of pay for GS–15, or

(2) The rate for level III of the

Executive Schedule, if the maximum

scheduled annual rate of pay for such

positions exceeds the maximum payable

scheduled annual rate of pay for GS–15,

but is not more than the rate for level

IV of the Executive Schedule.

The final regulations include pay

protection for any employee who

otherwise would suffer a reduction in

his or her locality rate of pay under the

locality pay cap provisions. It is

possible that the locality pay cap for a

group of non-GS employees under 5

U.S.C. 5304(h)(1)(F) could be reduced

from level III to level IV of the Executive

Schedule as GS rates of basic pay

increase. This could occur if the rate of

basic pay for GS–15, step 10, becomes

equal to or exceeds the maximum

scheduled annual rate of pay for a nonGS group. To prevent reductions in pay

that would otherwise occur,

§ 531.606(c)(3) of the final regulations

limit an affected employee’s locality pay

cap to the higher of (1) his or her

locality rate on the day before the

scheduled annual rate of pay for GS–15,

step 10, becomes equal to or exceeds the

67070 Federal Register / Vol. 66, No. 249 / Friday, December 28, 2001 / Rules and Regulations

maximum scheduled annual rate of pay

for the group of non-GS employees or

(2) the rate for level IV of the Executive

Schedule. This means that the

employee’s locality rate would be frozen

until it is exceeded by the rate for level

IV of the Executive Schedule.

The final regulations add a new

paragraph (d) to § 531.604 to exclude

experts and consultants appointed

under 5 U.S.C. 3109 from the locality

pay limitations. Unless otherwise

authorized by law, the aggregate pay

(including basic pay, locality pay, and

premium pay) for experts and

consultants appointed under 5 U.S.C.

3109 may not exceed the daily rate for

GS–15, step 10 (excluding locality pay

or any other additional pay). (See 5 CFR

304.105.)

The final regulations also clarify the

definition of employee in § 531.602 to

include positions in the FBI and DEA

SES under 5 U.S.C. 5304(h)(1)(C) and

other non-GS employee categories under

5 U.S.C. 5304(h)(1)(F) for which the

President’s Pay Agent has authorized

locality payments. The regulations also

amend paragraph (4) in the definition of

scheduled annual rate of pay in

§ 531.602 to include the rates of basic

pay for employees in the FBI and DEA

SES and other categories of non-GS

positions for which the Pay Agent has

authorized locality pay. The proposed

regulations clarify that the scheduled

annual rate of pay for such employees

must exclude any locality-based pay

adjustments, special basic pay

adjustments analogous to special salary

rates established under 5 U.S.C. 5305, or

other additional pay of any kind.

The President’s Pay Agent has

reviewed and approved this final rule.

Waiver of Delay in Effective Date

Pursuant to 5 U.S.C. 553(d)(3), I find

that good cause exists to make these

regulations effective in less than 30

days. These regulations must be made

effective prior to January 1, 2002. If they

become effective after the January 2002

statutory pay adjustments, agencies may

be forced in some scenarios to use the

pay protection provision to freeze the

pay of a few employees whose pay was

capped at level III of the Executive

Schedule.

Execute Order 12866, Regulatory

Review

This rule has been reviewed by the

Office of Management and Budget in

accordance with Executive Order 12866.

Regulatory Flexibility Act

I certify 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.

List of Subjects in 5 CFR Part 531

Government employees, Law

enforcement officers, Wages.

Office of Personnel Management.

Kay Coles James,

Director.

Accordingly, OPM is amending part

531 of title 5 of the Code of Federal

Regulations as follows:

PART 531—PAY UNDER THE

GENERAL SCHEDULE

1. The authority citation for part 531

is revised to read as follows:

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

sec. 4 of Pub. L. 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), 5333, 5334(a), and 7701(b)(2);

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

5304, 5305, and 5553; sections 302 and

404 of the Federal Employees Pay

Comparability Act of 1990 (FEPCA),

Pub. L. 101–509, 104 Stat. 1462 and

1466; and section 3(7) of Pub. L. 102–

378, 106 Stat. 1356;

Subpart D also issued under 5 U.S.C.

5335(g) 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(g)(1), and 5553; 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 G also issued under 5 U.S.C.

5304, 5305, and 5553; section 302 of

FEPCA, Pub. L. 101–509, 104 Stat. 1462;

and E.O. 12786, 56 FR 67453, 3 CFR,

1991 Comp., p. 376.

Subpart F—Locality-Based

Comparability Payments

2. In § 531.602, paragraph (2) of the

definition of employee and paragraph

(4) of the definition of scheduled annual

rate of pay are revised to read as

follows:

§ 531.602 Definitions

* * * * *

Employee means—***

(2) An employee in a category of

positions described in 5 U.S.C.

5304(h)(1)(A)–(F) for which the

President (or designee) has authorized

locality-based comparability payments

under 5 U.S.C. 5304(h)(2) and whose

official duty station is located in a

locality pay area.

* * * * *

Scheduled annual rate of pay

means—***

(4) For an employee in a category of

positions described in 5 U.S.C.

5304(h)(1)(A)–(F) for which the

President (or designee) has authorized

locality-based comparability payments

under 5 U.S.C. 5304(h)(2), the rate of

basic pay fixed by law or administrative

action, exclusive of any locality-based

adjustments (including adjustments

equivalent to local special rate

adjustments under 5 U.S.C. 5305) or

other additional pay of any kind.

3. In § 531.604, paragraph (c) is

revised and a new paragraph (d) is

added to read as follows:

§ 531.604 Determining locality rates of

pay.

* * * * *

(c)(1) Locality rates of pay approved

by the President (or designee) for

employees in a category of positions

described in 5 U.S.C. 5304(h)(1)(A)–(E)

may not exceed the rate for level III of

the Executive Schedule.

(2) Locality rates of pay approved by

the President (or designee) for

employees in a category of positions

described in 5 U.S.C. 5304(h)(1)(F) may

not exceed—

(i) The rate for level IV of the

Executive Schedule, when the

maximum scheduled annual rate of pay

(excluding any retained rate) for such

positions is less than or equal to the

maximum payable scheduled annual

rate of pay for GS–15; or

(ii) The rate for level III of the

Executive Schedule, when the

maximum scheduled annual rate of pay

(excluding any retained rate) for such

positions exceeds the maximum payable

scheduled annual rate of pay for GS–15,

but is not more than the rate for level

IV of the Executive Schedule.

(3) If application of paragraph (c)(2) of

this section would otherwise reduce an

employee’s existing locality rate of pay,

the employee’s locality rate of pay will

be capped at the higher of—

(i) The amount of his or her locality

rate of pay on the day before paragraph

(c)(2) of this section is applied, or

(ii) The rate for level IV of the

Executive Schedule.

(d) Paragraph (c) of this section does

not apply to experts and consultants

appointed under 5 U.S.C. 3109 if the

pay for those experts and consultants is

limited to the highest rate payable under

5 U.S.C. 5332 (i.e., the unadjusted

maximum GS–15 rate). Pay limitations

for such experts and consultants must

be determined in accordance with

§ 304.105 of this chapter.

[FR Doc. 01–31901 Filed 12–27–01; 8:45 am]

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